- American Well signed a definitive agreement to acquire acute care telehealth vendor Avizia for an undisclosed sum.
- The deal, set to close in the second quarter of this year, will create a “single, end to end offering” for telehealth customers, Ido Schoenberg, chairman and CEO of American Well, said in a Monday press release.
- Reston, Virginia-based Avizia offers comprehensive acute care capability, including hospital cart lineup and customized workflows for more than 40 specialties, including telestroke and telebehavioral health.
By joining forces, American Well and Avizia will create an enterprise platform of services ranging from urgent care to chronic disease management, acute care and post-acute care.
As the digital health market matures, companies are snapping up competitors to broaden their product offerings and customer footprint. Allscripts leveraged this business strategy when it bought McKesson’s hospital IT portfolio in August.
During the first quarter of 2018, Rock Health recorded 37 mergers and acquisitions in the digital health space —putting it on track to best 2017’s 119 deals and 2016’s 146. Of note were Allscripts’ $100 million acquisition of Practice Fusion and Roche’s $1.9 billion purchase of Flatiron Health. In addition, Fitbit bought health coaching platform Twine Health for an undisclosed amount.
Telehealth is no stranger to M&A either. Last year, Teladoc acquired medical consultation firm Best Doctors for $440 million, giving the Dallas-based company a global footprint for its virtual care offerings.
The urgent care market is also seeing M&A activity along with its steady growth. A recent MarketsandMarkets report predicted the global urgent care center market will hit $26 billion by 2023, driven by acute care as the largest segment.
Advances in technology and a more connected healthcare ecosystem have fueled provider interest in telehealth. Factors driving growth include high chronic disease rates, rising costs and increased awareness of the benefits of remote patient monitoring.
And there’s growing evidence of telehealth’s benefit in specific use cases. In one study, patients were seen six times faster at rural hospitals that used telehealth in their emergency department than at hospitals without a telehealth option.
While hospitals are seeing varying degrees of ROI on their telehealth investments, signs that the reimbursement squeeze is easing could bring more providers to invest in telehealth programs. Payers are enticed as well. “If you’re a health insurance company today and telehealth is not part of the benefit, you are the oddball,” Roy Schoenberg, president and CEO of American Well, told Healthcare Dive at HIMSS18. “You are going to be in a really tough place to compete for business by the time it gets to open enrollment.”