Perhaps no industry benefited from COVID-19 tailwinds like virtual care, and no virtual care vendor capitalized on those tailwinds like Teladoc, experts say.
Along with notching considerable growth in consumer visits, Teladoc has spent much of the past year and a half investing in its clinicial and software capabilities both organically and through M&A to differentiate itself in an increasingly cluttered field of competitors.
However, the New York-based telehealth provider has yet to post a profit, and its stock has experienced major fluctuations of late amid market uncertainty as to the stability of the virtual care sector post-COVID-19.
Healthcare Dive caught up with Joe DeVivo, Teladoc's president of hospitals and health systems, on the sidelines of the HIMSS healthcare conference in Las Vegas, to talk about the state of the market and the company's ambitions.
DeVivo, who joined Teladoc when the vendor acquired hospital platform InTouch last year, shared how Teladoc's working with its hospital clients on at-home care, whole-system software integration and managing risk — and also hinted at joint R&D with tech behemoth Microsoft, a future API marketplace and where Teladoc sees virtual visits stabilizing post-pandemic.
Teladoc forecasting greater hospital interest in at-home care
Following some successful early pilots, Teladoc is aiming to take advantage of the ongoing push to hospital-at-home. In 2020, the vendor partnered with Missouri system Blessing Health to provide virtual health services to rural schools, to reduce absentee rates for children, while reducing the burden on the nation's "deluged" primary care system, DeVivo said.
Hospitals are increasingly looking to establish nodes in the community to maintain patient access outside of their four walls, especially as consumers, facing the sticker shock of inpatient medical bills, avoid acute care in favor of retail clinics, telemedical consultations and other low-cost options, experts say.
"I think we're going to see health systems care for patients more and more in their home. We're going to see more points of care, whether it's a school, whether there's a large manufacturing facility, instead of their employees taking off a day of work to go to an hour's appointment, that they'll set up clinics, in the manufacturing or in the work facilities," DeVivo said.
The sector is already seeing this push. Home health companies are reporting rising interest from traditional hospital operators in their services, following early movers like Intermountain. CommonSpirit in Nebraska, UnityPoint Health in Iowa and SSM Health in Missouri are all trialing providing skilled nursing services at home, for example, while in May, Kaiser Permanente and Mayo Clinic invested $100 million in a hospital-at-home company, Boston-based Medically Home.
The trend is even backed by regulators in Washington, looking to ensure access as COVID-19 stresses inpatient capacity. And Teladoc doesn't see it going anywhere soon.
"Health systems are going to push their ability to take the easy consultation out of brick-and-mortar, and develop a better experience and hopefully reduce healthcare costs," DeVivo said.
Bullish on working with hospital systems on risk
Teladoc is creating partnerships to help health systems with at-risk patient populations manage that risk, DeVivo said. That includes diabetic, hypertensive, chronic kidney disease and heart failure patients.
In 2019, accountable care organizations managed some 44 million lives, according to research published in Health Affairs. Teladoc is working with health systems with their risk profile inside those ACOs, DeVivo said. On its second quarter earnings call, the vendor disclosed it had signed a large deal with a Florida health system to help ring-fence risk for its diabetic and hypertensive patients.
The contract was Teladoc's first outside of the health system employees, as historically Livongo — its chronic care management business acquired for $18.5 billion last year — markets to health systems to help manage risk for their employee population alone.
Managing risk for chronic care patients is a lucrative space, as that population makes up the lion's share of healthcare costs in the U.S. In 2016, the total costs for direct medical treatment for chronic health conditions in the U.S. totaled $1.1 trillion — equivalent to nearly 6% of the nation's GDP, according to the Milken Institute.
And the disease burden is likely to rise. According to Rand, around 60% of adults have at least one chronic condition, while 42% have multiple conditions. That percentage is only expected to grow as the population skews older, further stressing the healthcare system and federal payer programs constructed to cover them like Medicare.
"That is probably the biggest impact item economically, for health systems and for Teladoc," DeVivo said. "I think the the fee-for-service model has its negative impacts, and the economics do need to change."
Teladoc predicts between 20% to 30% of all visits will be virtual post-pandemic
The telehealth industry enjoyed unprecedented tailwinds last year as the coronavirus accelerated adoption of virtual care. Data maintained by EHR provider Epic found telemedicine visits peaked in April 2020, making up a whopping 69% of total encounters that month.
However, a big question mark hanging over the sector is what percentage of all medical visits will end up being virtual after the pandemic fades. One analysis published in July from McKinsey found telehealth visits stabilized at between 13% to 17% of visits across all specialties — about 38 times higher than pre-pandemic levels.
Teladoc's forecast is slightly higher.
"I'd say, on my own personal survey of probably conversations with 50 different CIOs from large health systems, it's going to rest between 20% and 30%. And we're seeing that going forward," DeVivo said.
Hospitals calling for integrated solutions interwoven throughout their facilities
Hospitals' technological needs shifted rapidly during the pandemic, and Teladoc's conversations with its clients mirrored that evolution, DeVivo said. While providers quickly onboarded consumer-facing solutions like Zoom just to meet the demand for video visits, they're now "looking at permanent solutions that are a part of their workflow," DeVivo said.
"So the first conversation we're having is, how can we embed systemwide solutions that every physician can use and be a part of the permanent workflow?... And then second of all, we are helping them with a strategy that allows them to manage patients virtually even inside the four walls of the hospital. What does that mean? That means taking our technology and extending it to every single screen in the hospital, every patient room, every ICU, every bed," DeVivo said.
Integrating Teladoc's platform can also help with the worker shortage, DeVivo argues, by helping doctors and nurses use their time most efficiently. For example, a nurse can beam into a patient's room remotely to answer questions, instead of running across the floor and losing valuable time.
"We are working with health systems to build completely wired internal facilities that help them maximize their manpower," DeVivo said.
As part of this push, Teladoc is also helping clients outsource their services to rural providers that may not have access to specialty care, in a bid to move capacity almost like a power grid.
Already underserved rural communities in particular have had difficultly maintaining access to care during the pandemic.
"If a municipality has excess energy, they can't store it. It has to move it to where that demand is needed. Well, if you think of the healthcare ecosystem, every hour of a nurse's time or every hour of a physician's time that's not used efficiently, you lose forever," DeVivo said. "So if we could move capacity and balance it, so where we improve access to care, we reduce the cost of having that visit."
Regulatory barriers like state licensure laws will remain, but Teladoc hopeful on payment parity
As telehealth went mainstream last year, many state governments rolled back interstate restrictions to virtual care delivery, including geographic licensure restrictions.
Some telemedicine advocates are hopeful those laxer policies will remain after the public health emergency expires, currently scheduled for the end of this year. As of late July, 17 states and the District of Columbia still had some form of telehealth waivers in place, according to the Federation of State Medical Boards.
However, DeVivo noted such regulations were an important quality check on medical services, and are more of a speedbump than a roadblock for virtual care, especially for a vendor with Teladoc's resources that's been providing care nationwide for years and has an extensive credentialing process for its physicians and hospital clients.
"I think a lot of the statewide barriers are going to exist. I don't think they're going to want to give up that quality control measure. But it's not a permanent barrier," DeVivo said.
However, he did call for regulators to codify payment parity, wherein federal payers reimburse for telehealth visits the same as in-person visits for the same service, following the pandemic. That's a long-held dream of the virtual care space, but looks increasingly unlikely as lawmakers in Washington have raised concerns about the potential for greater fraud and overuse if virtual and in-person visits are paid the same.
"What we need is equal reimbursement for virtual care to in-person visits. Even if a facility is receiving a facility fee, then there needs to be a virtual care technology fee, because it costs money to stand up these virtual platforms as well," DeVivo said. "So we can't lax on security, but we do need reimbursement."
But many budget hawks are fearful telehealth could add cost onto the system, if patients consume more virtual visits instead of using them in place of an in-person consultation. Additionally, it could cause fee-for-service physicians to prioritize delivering telehealth services over in-person ones.
There's little evidence that would be the case, though it's an understudied area, according to researchers.
"I believe now, with the private payer experience, and the pandemic experience, there's a new bipartisan realization that virtual care is more a solution to reduce costs, than a risk of overconsumption of healthcare," DeVivo said.
Teladoc is working with Microsoft on AI capabilities as next step in partnership
In July, Teladoc announced it would be integrating its platform for hospitals and health systems with Microsoft Teams in a bid to streamline clinician telehealth access within their existing workflows. The partnership stemmed from many Teladoc clients asking for video-conferencing-like capabilities, like the option to raise their hand, on Teladoc's platform, DeVivo said.
Integrating Teladoc's Solo platform within the Teams environment means physicians can access clinical data within their EHR, via Solo, without leaving Teams by early 2022. At the time of the announcement, Teladoc and Microsoft said the integration was the first of new tools they planned to bring to market to try to improve care quality and health system efficiency, though the companies declined to share more details.
But DeVivo hinted at some of the capabilities Teladoc and Microsoft are exploring. As health systems aggregate more of their data in the Microsoft Azure cloud, that should enable the two companies to bring more intelligence into the virtual consultation to try to improve the experience for the provider and patient.
"It would be decision support, it would be sentiment analysis, it would be natural language processing — anything that you need big data for, to be able to provide that intelligence — yes, those are the areas that we think, together with our healthcare expertise, and the mass computing and cloud expertise, Teladoc and Microsoft can make a big difference in healthcare," DeVivo said.
Boston-based telemedicine vendor Amwell is currently undergoing similar R&D with Google Cloud.
Teladoc isn't sharing utilization numbers as COVID-19 cases rise, but hospital clients are 'very concerned'
DeVivo declined to share numbers on how Teladoc's utilization is shifting as COVID-19 cases rise once again in the U.S. Driven by the highly infectious delta variant, daily caseloads have increased tenfold since late June, according to a tracker maintained by the New York Times, while more coronavirus patients are hospitalized than at any point since February.
"I really can't share any of that," DeVivo said. "But every one of my conversations with our partners today, they're very concerned. They're seeing a lot of inpatient volume, especially over the last several weeks."
The rising strain on capacity has caused some hospitals to once again delay elective procedures. On Monday, Texas Gov. Greg Abbott asked hospitals to defer non-emergent services as COVID-19 patients strain their capacity, mirroring high-case states like Florida, Arkansas and Alabama, among others.
Telehealth utilization traditionally parallels COVID-19 case rates, rising as they rise and falling as they fall. There's some early data that, despite dropping off early in 2021 as vaccinations increased and outbreaks were (briefly) wrangled under control, Americans are once again turning to virtual care to avoid virus transmission in doctor's offices and other healthcare settings.
"I think many of them are seeing a lot more inpatient volume than they would like, and they're concerned," DeVivo reiterated.
Teladoc wants to create an API marketplace, as competition rises
As record amounts of dollars flooded into the telehealth sector spurred by the COVID-19 boom, existing players and new entrants alike have scrambled to nab a slice. That's resulted in significant concerns about competition and disruption for market leaders like Teladoc, Amwell and Doctor On Demand, as deep-pocketed giants like Amazon, Microsoft and Walmart also look to provide virtual care.
But a rising tide lifts all boats, argues DeVivo.
"I think it's very premature to worry about market share at this stage. I think we literally have not even scratched the surface, I mean, and now the pandemic has created all this awareness," DeVivo said. "So the market opportunity has accelerated for us, and it's much larger, quicker than we would have ever thought."
DeVivo pointed to Teladoc's breadth of offerings and its ability to integrate that into the hospital setting as key differentiators for its business. The vendor has been laser-focused in recent years on positioning itself as a single access point to a variety of virtual care products in a bid to entice clients inundated with point solutions.
But Teladoc aspires for its platform to be "an asset for health systems, and even an asset that individual solutions can integrate to," DeVivo said. "So if there is a unique application, we hope to have an API marketplace that allows for those applications to come into our ecosystem."
DeVivo said creating that application programming marketplace, a public hub where Teladoc can integrate with third parties who might offer complementary tools, is something Teladoc wants to accomplish over the next several years.
"But no, I wouldn't say that competition is concerning to us in the near term. Because the market is so big, and it's just so crazy," DeVivo said. "Our success is completely in our own hands and in our own execution. It's not in someone else's."