- Teladoc and Livongo have made their first combined sale, Teladoc CEO Jason Gorevic and Livongo founder Glen Tullman said at the HLTH virtual conference on Monday.
- Guidewell Health, a mutual insurance holding company and parent of the Florida Blue plan, has been a Teladoc customer for several years. It will now offer Livongo's diabetes platform to 50,000 Florida Blue members with no co-pay, representing the first commercial cross-selling agreement for the two companies since their merger was announced in August.
- The executives contend there's been more client interest behind the scenes in the combined entity that hasn't yet been made public. "There's a lot of takers. There's a lot of interest," Tullman said. "This happens to be the biggest, most prestigious one we've announced so far."
Virtual care giant Teladoc bought Livongo, a chronic care management company, for $18.5 billion in August. The deal has not yet closed, but Livongo signed a reseller agreement with Teladoc to accelerate sales, per a press release.
Florida Blue currently offers Teladoc's virtual care to its members. But now, select members will be able to access Livongo's diabetes platform through Guidewell's consumer engagement and health coaching platform, Onlife Health, including connected devices like blood glucose monitors and telehealth visits.
Gorevic and Tullman said Monday they're seeing a positive reaction from existing customers about the conjoined offerings.
And there's room for Teladoc and Livongo to scale within the plan to other conditions and members. Nonprofit plan Florida Blue covers about 4 million members across 16 states, according to payer lobby America's Health Insurance Plans. And its parent company, Jacksonville-based Guidewell, reaches some 27 million people in 35 states through multiple subsidiaries.
The largest digital health merger in U.S. history initially spooked Wall Street, with many investors arguing Livongo's valuation was inflated, the deal was rushed and the long-term sustainability of telehealth use wasn't a sure bet. Teladoc's stock has recovered somewhat since then, though it hasn't yet returned to early August's record high.
Top executives at both companies said in August they needed more time to prove the value proposition of the combined entity, which expects revenue of $1.3 billion this year and is valued at about $37 billion, according to Piper Sandler.
The companies' overlap in client base is just 25%, as they operate in entirely different markets, or in the same market with different clients. That gives rise to significant cross-selling opportunities for Purchase, New York-based Teladoc among most of its 70 million U.S. members.
As of August, Livongo has more than 1,300 clients, including more than 30% of Fortune 500 companies and four of the top seven health plans. That's up from about 1,250 in March.
Analysts also predict the massive deal could serve as a starter pistol for bigger deals in the digital health space as telehealth competitors look to catch up with Teladoc and chronic care companies try to expand their suite of use cases.