The nation’s employers are signing hundreds of contracts with telehealth vendors that link patients to doctors online for consultations designed to avoid an expensive trip to the emergency room or an unnecessary office visit.
A glimpse into this trend can be seen in the third-quarter earnings of Teladoc (TDOC), the first publicly-traded telehealth company, which Monday evening reported an 83% increase in revenue to $21 million. Total membership jumped 56% to 12.6 million and helped earnings top Wall Street’s estimates.
Teladoc said it has signed more than 500 new accounts for 2016 with clients that includes Starbucks SBUX -0.82%, Dell , Merck , Marriott and Mercedes Benz. “Our business is hitting on all cylinders,” Jason Gorevic told analysts and investors on the company’s third-quarter earnings call.
Barista Andy Lotton reaches for an empty coffee cup so he can fill an order at a Starbucks coffee shop in the Pike Place Market, Sept. 29, 2015, in Seattle. The shop, referred to as the "original Starbucks," is just blocks from where the first Starbucks opened in 1971.
Teladoc is part of a wave of telehealth vendors with the technology platform and relationship with doctors to provide more convenient care to patients via video or online consultations. Teladoc’s consultations were up 89% to 117,213 compared to the prior year.
Other telehealth vendors include Doctor on Demand, American Well and MDlive, which have raised tens of millions of dollars from private investors in recent years. These providers are also signing up more subscribers from health plans like Anthem WLP +0%, Aetna AET -0.06%, Cigna CI -1.02% and UnitedHealth Group UNH -0.55%.
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The market has huge potential, Gorevic told analysts, and it’s clear from employers that they are likely to continue.
Nearly 50% of employers polled by the Midwest Business Group on Health view telemedicine as a “means of increasing access and reducing unnecessary absences in order to get care.” The business coalition polled 119 national “mid- to large-sized employers” from industries that included manufacturing, financial services and health care.
“To ensure they are getting the most value for their health care dollars, employers are implementing a number of key strategies to manage their company’s health benefits and taking steps to encourage their employees to better manage their health,” said Larry Boress, president and chief executive officer of Midwest Business Group, which includes Ford MotorF -1.48% Company, Target TGT -0.34% and Procter & Gamble.
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