Teledoc (TDOC)

My son (in his 50’s) had a severe allergic reaction to a hornet sting, and felt he should have an epinephrine syringe with him when he was working outdoors, as the next one could be fatal. He sent me the following text:

“I used Teladoc last night to get an epinephrine prescription. Not saying the service is the best thing since sliced bread, but for $45 I spoke to a guy who had a prescription sent to my pharmacy within a few minutes. That’s without having to wait a week for a doctor appointment, a higher office visit cost, and at 8:00 in the evening. Still not buying the stock but for my purpose it was convenient. They can not prescribe FDA controlled items.”

That’s all well and good, but JAF’s post trumps that with:… Exited TDOC earlier this year as revenue growth fell from 62% to 59% to 43% to 38% in the last four quarters respectively.

No way I’d buy with that string of numbers.

Best,

Saul

A link to the Knowledgebase for this board is at the top of the Announcements panel that is on the right side of every page on this board.
For some additions to the Knowledgebase, bringing it up to date, I’d advise reading several other posts linked to on the panel, especially “How I Pick a Company to Invest In,” and “Why My Investing Criteria Have Changed,” and “Why It Really is Different.”

32 Likes

Saw this article from a couple of days ago - Amazon launching telehealth services for its own employees:

https://www.bloomberg.com/news/articles/2019-09-25/teladoc-i…

Cuts both ways for TDOC - could be a great long term partnership opportunity or it could mean AMZN about to launch its own service to compete w TDOC. I held a small starter position in TDOC earlier this year but got out of it when I concluded how many capable competitors there are out there (my own company has started to offer teleheath services with a TDOC competitor).

If I’m the ZOOM CEO I’m thinking about how I get into this field.

2 Likes

Some have raised concerns about low barriers to entry and other competitive threats from Amazon, Zoom and others. A few comments for consideration to counter these concerns, much of which is summarized in compelling fashion in a recent article entitled “HOW TELADOC IS TRANSFORMING ACCESS TO HEALTHCARE” (https://www.roboglobal.com/insights/how-teladoc-is-transform…:slight_smile:

  1. Telemedicine, while at an early stage of adoption from a user and reach perspective, is not new.

  2. Telemedicine both improves access to healthcare (as Saul’s son noted in his experience) AND reduces costs. “Telemedicine addresses two of the most critical unmet needs in our economy: access to care, and healthcare cost reduction.”

  3. Teladoc is the market leader, and has built a wide moat of competitive barriers.
    “Teladoc was first to market with telemedicine and…continues to maintain its market position by innovating and expanding into new markets, both domestically and internationally. Today the company has over 37 million members through its client base. The client base itself boasts marquis accounts such as Aetna, United Healthcare, and several of the Blue Cross Blue Shield plans, as well as 40% of the Fortune 500 companies, thousands of small employers, and over 300 hospitals and counting. They are also becoming a global market leader, with clients in over 130 countries driving 20% of Teladoc’s revenue.

Although competition is intensifying, the industry has high barriers to entry. For example, there are extensive regulatory hurdles that need to be achieved in order to practice medicine remotely while securing the patients’ privacy. Additionally, in order to ensure an adequate supply of physician time, the company needs an extensive network. Teladoc has amassed a network of over 3,000 certified clinicians, similar to the way Uber has built its supply of drivers. Teladoc also uses a sophisticated predictive analytics system to ensure that the appropriate level of help is on hand and able to fill an appointment quickly, depending on the peak times and seasonal variability. It’s this level of service that helps Teladoc generate member satisfaction of 95%. Telemedicine companies also need a scalable platform that they can leverage to meet the growing needs of consumers. To put this in perspective, Teladoc invested over $100M over the course of a decade to build its platform to scale. This year the company expects to conduct four million virtual visits, up from one million just two years ago. It has additional capacity that would enable it to take on 10x its peak volume at any given time. It would be very difficult for another company to replicate this scale without a high degree of capital investment.

Put simply, Teledoc’s market position is not easy to establish, and it will be difficult for others to do what they have done.

Finally, “Teladoc is also cross-selling new products to its existing base. For example, it offers specialties such as behavioral health and dermatology. It also offers second opinion services for those who want to speak to another provider about a serious condition before undergoing surgery. The company has been actively selling these additional services to its existing client base and, as a result, is increasing its average revenue per client. Today, 40% of the base uses more than one product (up from 10% two years ago), and only 13% of the base uses 3 products, so there is a large runway for cross-selling. Finally, the company is growing internationally. Thus far, much of that growth has been inorganic, but as global demand for telemedicine increases, Teladoc is well positioned for that trend.”

Hope this additional context is useful. This may not have the 50%+ growth rates other companies enjoy, but it is expected to continue growing rapidly for the forseeable future with an enviable market and strategic position. Growing revenue 20%-40% for the foreseeable future with growing EBITDA and industry-leading levels of customer satisfaction means it passes the rule of 40 for an attractive growth company investment. It also provides exposure to health care with a model that offers more access, more efficient usage of specialist & excess supply, and significant cost savings.

Sounds like a winning formula amd a very solid entry point for sustained market-beating returns.

–Rockleppard

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I have been involved in this arena for a number of years. I have helped to grow a “telemedicine” company in small rural communities on the east coast. These small “telemedicine” clinics are staffed by a nurse or nurse practitioner who is on site to provide the typical patient intake and then patient triage function; a DO or MD is then invited into the medical consultation via computer/video interaction. The thesis here is to reduce the barrier to entry for healthcare in rural communities while still providing a patient experience with a medical professional. For a number of years, the push has been to move these episodic care events down the ladder of healthcare professional/patient interaction. Thereby reducing cost of care, reducing reimbursable rates to medical professionals, while maintaining or growing health insurance premium rates. All of the major health insurance providers have been extremely effective in pushing this agenda. You only need to note the rapid expansion of the Urgent Care Clinic platform (I built 150 of these that were eventually sold to the largest healthcare company in the U.S.), the growth of telemedicine and now companies such as TDOC is evidence of this continuing strong push to minimize the cost of delivering care to the patient while continuing to increase the cost of healthcare.

My point here is that while it may not be sexy, the investment thesis should be on the health insurance companies that continue to grow patient base, insurance premiums and gross profit, while working aggressively every day to reduce the cost of providing care.

Be on the lookout for the next wave; Ambulatory Infusion Centers (AICs). No longer will patients sit in a hospital or hospital affiliated out-patient center to receive their monthly infusion of medicines to address disease states such as: MS, Crohn’s Disease, Colitis, etc. They will be referred out of the more expensive hospital network to cost effective, freestanding infusion clinics; once again reducing the insurance companies costs (i.e. lower reimbursable rates) of delivering healthcare.

Regarding TLDOC specifically…I have seen this arc play out in the Urgent Care industry. Insurance companies, doctors’ groups, hospital networks, etc. are very protective of their patient population base (i.e. customers). They will do what is necessary to keep these patients (protect their market share) in their health services orbit and will not stand by while other independents or unaffiliated groups chip away at their base…i.e. staying at home and going on line for healthcare services. The barrier to entry for these groups is very low. They will eventually enter this marketplace. Don’t underestimate the intent of the large health insurance providers that have signed on to TLDOC. Some say, “IF YOU CAN’T BEAT’EM; JOING EM!” and some say “IF YOU WANNA BEAT’EM; JOIN EM…” figure out what they are doing and then go do it better for yourself and by yourself. Large healthcare companies today are a huge umbrealla of vertically and horizontally integrated healthcare services. Telemedicine, provided this healthcare delivery model eventually proves out, will simply be their next vertical.

Looking under the hood; you will see that the big guys already do insurance, prescription drugs, urgent care, surgical centers, dialysis, etc. Telemedicine is simply the next step.

18 Likes

I used Teledoc when my private health insurance covered it and even encouraged using it by prompting e-mails (presumably because Teledoc was cheaper than a doctor’s office visit bill). I liked the service. Now that I am on Medicare, I was dismayed to find that Medicare does not cover Teledoc. So I stopped using it.

If you are investing in Teledoc, keep an eye on whether Medicare changes policy to cover it. If that policy ever changes, millions of Medicare customers could be added to their base.

Wendy

7 Likes

So patient visits have quadrupled in 2 years and yet revenue growth is dramatically slowing?

Call me skeptical (perhaps the counter indicator needed) for the investment to flourish.

I don’t trust management of this company. Trust is even more important when the company is built on large acquisitions of networks of treatment providers. Aggregating then all.

There is a limit as to how much they can ratchet down fees demanded by their well educated and qualified contractors (the doctors).

Clearly leverage in this business model has yet to be found if you quadruple patient visits but revenue growth slows.

Yes, Medicare may come on board next year if I recall.

In the end how does this company create new increasing returns as its patient demand grows?

Further, the care they provide is very limited. They do not have your medical records, you don’t get the same doctor each time, and frankly there are companies out there that their rhetoric does not match their results.

They quadrupled patient visits, how large do patient visits have to get to make any difference ? And yes, I know that patient visits are a small portion of their revs. Licensing to corporations and insurance companies is their main line of business, w software licensing a small segment of that.

Someone put into perspective where business leverage kicks in when quadrupling of patient visits is a non-issue to top line, much less the bottom line.

Tinker

7 Likes

There has been a justifiably high volume of Zoom posts on this board, but amazingly barely anything on concept of telehealth and specifically Teledoc Health (TDOC; the industry leader). As many of you may know, Teledoc and Zoom have been among the top performing stocks YTD 2020.

As I and others posted in October, a new reality of health delivery was coming of age. As we are now seeing with full intensity, telehealth is becoming an essential and more cost effective part of routine medical delivery.

When I purchased TDOC at $60 on 10/2, I did so believing that its market-dominant position was at an early stage and would accrue disproportionate benefits to Teledoc over the long-term. Never did I think this would happen with the enormous intensity it has during the past 6 months with the stock trading now at $164. Obviously the COVID-19 pandemic has brought telemedicine into focus in a way never imagined in the short term, but I believe, as others in this thread have stated, that telemedicine is a new reality and that Teledoc is here to stay as the market leader for a very long time.

Given all of this, I thought the following bears repeating as I feel Teledoc REMAINS a very attractive investment opportunity even after nearly tripling since October. It’s market cap is still <$12B.

Per the Aug 2019 article, “HOW TELADOC IS TRANSFORMING ACCESS TO HEALTHCARE” (https://www.roboglobal.com/insights/how-teladoc-is-transform…)

  1. Telemedicine, while at an early stage of adoption from a user and reach perspective, is not new.

  2. Telemedicine both improves access to healthcare (as Saul’s son noted in his experience) AND reduces costs. “Telemedicine addresses two of the most critical unmet needs in our economy: access to care, and healthcare cost reduction.”

  3. Teladoc is the market leader, and has built a wide moat of competitive barriers.

"Teladoc was first to market with telemedicine and…continues to maintain its market position by innovating and expanding into new markets, both domestically and internationally. Today the company has over 37 million members through its client base. The client base itself boasts marquis accounts such as Aetna, United Healthcare, and several of the Blue Cross Blue Shield plans, as well as 40% of the Fortune 500 companies, thousands of small employers, and over 300 hospitals and counting. They are also becoming a global market leader, with clients in over 130 countries driving 20% of Teladoc’s revenue."

"Although competition is intensifying, the industry has high barriers to entry. For example, there are extensive regulatory hurdles that need to be achieved in order to practice medicine remotely while securing the patients’ privacy. Additionally, in order to ensure an adequate supply of physician time, the company needs an extensive network. Teladoc has amassed a network of over 3,000 certified clinicians, similar to the way Uber has built its supply of drivers. Teladoc also uses a sophisticated predictive analytics system to ensure that the appropriate level of help is on hand and able to fill an appointment quickly, depending on the peak times and seasonal variability. It’s this level of service that helps Teladoc generate member satisfaction of 95%. Telemedicine companies also need a scalable platform that they can leverage to meet the growing needs of consumers. To put this in perspective, Teladoc invested over $100M over the course of a decade to build its platform to scale. This year the company expects to conduct four million virtual visits, up from one million just two years ago. It has additional capacity that would enable it to take on 10x its peak volume at any given time. It would be very difficult for another company to replicate this scale without a high degree of capital investment."

Put simply, Teledoc’s market position is not easy to establish, and it will be difficult for others to do what they have done.

Finally, “Teladoc is also cross-selling new products to its existing base. For example, it offers specialties such as behavioral health and dermatology. It also offers second opinion services for those who want to speak to another provider about a serious condition before undergoing surgery. The company has been actively selling these additional services to its existing client base and, as a result, is increasing its average revenue per client. Today, 40% of the base uses more than one product (up from 10% two years ago), and only 13% of the base uses 3 products, so there is a large runway for cross-selling. Finally, the company is growing internationally. Thus far, much of that growth has been inorganic, but as global demand for telemedicine increases, Teladoc is well positioned for that trend.”

Unfortunately I did not combine my TDOC investment with a position in Zoom, but I am considering it despite the significant recent run-up in Zoom. Both companies becoming growth monsters in a global environment where the rules of interaction are being redefined.

The market-beating returns of TDOC and TSLA has helped drive my YTD returns to +2% vs the double digit (-12 to -21%) negative returns in the various market indices. I am continuing to actively evaluate my portfolio below based on all of your valuable input. (That will not include selling TSLA in case you were wondering… :))

Fool on, and best wishes for health and happiness.

–Rockleppard
Long AYX, TTD, TSLA, TDOC, OKTA, DDOG, MDB, TLRA, MELI, LVGO,

17 Likes

Regarding Teladoc;

All of the huge extremely sticky and extremely profitable healthcare/health insurance providers continue to increase their margins by constantly increasing health insurance premiums; while simultaneously reducing quality of service and reducing costs to deliver healthcare services by a.) altering what is commonly referred to in this industry as “site of service” or “site of care” and b.) moving to the NP/PA (Nurse Practitioner/Physician Assistant) model and away from the M.D./D.O. model.

Over the past 20 years (I choose 20 years because that marks the beginning of the rush to market for the urgent care healthcare delivery platform); health insurance companies have been the driving force behind the astronomical expansion of the ubiquitous freestanding urgent care facilities that now dot the landscape like fast food restaurants. This has been no accident. While they hide behind the veil of convenience and ease of access, it is driven by the increased profit margin by keeping patients out of emergency rooms but also out of doctors’ offices. Quite simply, the reimbursable rate paid out to the healthcare provider is often substantially less at an urgent care than the reimbursable rate that would be paid to your primary care physician, and magnitudes less than an emergency room visit.

This is carried one giant leap forward as, once again, health insurance companies are the driving force behind the “site of service” move to telemedicine. Convenience increases for the patient (all the while your premiums are increasing), the quality of medical care decreases, the reimbursable rate paid to the NP/PA/MD/DO decreases due to “site of service” (limited patient engagement and limited overhead) and the whole time the health insurance provider is enjoying even higher margins on these telemedicine patient visits.

Now, what does this have to do with investing? For me, quite a bit. I enjoy multi-baggers as much as the next guy, but with so many other options out there today, I feel better about myself and my investing philosophy steering clear of something I am just philosophically opposed to.

For a bit of irony; I was involved in the expansion of urgent care facilities across many states and most likely put one in your neighborhood.

5 Likes

HMC,

I understand your post and sure there is some degree of greed I guess you could call it.

The flipside I see with telemedicine and cheaper easier neighborhood health centers like Urgent Care is there is also market demand for these types of services. They are easier, cheaper, and more convenient. This greatly increases the reach of health care particularly to the disadvantaged or for conditions that some people may not get checked out otherwise. Say somebody has a lump that they would feel more comfortable with having a TeleDoc look at first before taking a day off from work to go to their doctor across town. They get looked at now as opposed to procrastinating for months when it might be too late. Or find out it’s nothing and don’t take up valuable inpatient space.

We could discuss forever about the pluses or minuses of Urgent Care type facilities or telemedicine but another benefit is that many of the patients that would use those services may also otherwise go to an emergency room to get care for non emergency issues. They can free up some of those resources for those that truly need them.

Healthcare is a finite resource. TeleDoc seems like one of those things that can help providers manage those finite resources, bringing down total resources needed to treat the public they are serving, and help control the total cost of a finite resource.

Definitely interested in TDOC again. Owned and sold it a few times and currently no position. Seems still undervalued at PS of 21 in this environment despite a recent run. TeleDoc will benefit from the WFM SAH event. And probably permanently as providers will want to have a network permanently set up for the same. And this will more normalize telemedicine and accelerate adoption similar to Zoom and video communication.

Darth

3 Likes

Darth,

Those are all very valid points. We are veering a bit OT when talking about healthcare policy vs. healthcare investing, but in this particular instance, I think the two are dramatically intertwined.

I got into the UC business with many of the advantages you describe in you post in mind (greater access to underserved, convenience of care, care to uninsured or under insured, and pressure release off of the ER.)

All of those planks remain in place in my mind and are further advanced by telemedicine.

FWIW, I believe TDOC is a very solid company and will be a solid winner. As part of my experience in the space, we moved from the UC platform to a smaller neighborhood walk-in clinic platform in smaller, rural, under-served communities in late 2017; utilizing what is commonly referred to as the Nurse Practitioner Model. In these smaller clinics in small towns run by a NP or PA, we supplemented the quality of care on-site by using a similar service like TDOC whereby we were able to have an MD participate in the triage or in the exam room via remote access. The MD monitor was part of the C.O.W. (medical Cart On Wheels) and the MD could literally be rolled around the clinic on wheels, going from exam room to exam room on a busy day…typically during flu season or high school football season when visits are at their peak.

Please do not conflate my personal opinion outlined in my previous post with my opinion on TDOC as a company or about the runway ahead of TDOC as the healthcare system continues to evolve, as it should.

Harley

2 Likes

Darth…reading back my post, the last sentence sounds a bit “snarky”, but not as intended. Sorry for this post, but thought I needed to put it out there.

Teladoc has amassed a network of over 3,000 certified clinicians, similar to the way Uber has built its supply of drivers. Teladoc also uses a sophisticated predictive analytics system to ensure that the appropriate level of help is on hand and able to fill an appointment quickly, depending on the peak times and seasonal variability. It’s this level of service that helps Teladoc generate member satisfaction of 95%. Telemedicine companies also need a scalable platform that they can leverage to meet the growing needs of consumers. To put this in perspective, Teladoc invested over $100M over the course of a decade to build its platform to scale. This year the company expects to conduct four million virtual visits, up from one million just two years ago. It has additional capacity that would enable it to take on 10x its peak volume at any given time. It would be very difficult for another company to replicate this scale without a high degree of capital investment."

Being compared to Uber is not very encouraging to me. The holy grail for Uber is driverless cars, I guess Teledoc is going to squeeze its providers and gradually shift patients to lower cost providers?

Many of my friends had to start offering “telehealth” visits when their clinics were closed or non urgent visits discouraged. None of them are using Teledoc. They just use the phone, FaceTime, or some proprietary videoconferencing. One is using Zoom. These are established patients in a clinic but my point is that any clinic can just set up telehealth if they want nearly for free.

I get that Teledoc is going after insurance companies and convincing them they can save the company money but I just don’t see where they can ever turn the corner and start printing money.

9 Likes

Pre and early pandemic I was bullish on TDOC. But here is the thing, TDOC use to have very little competition in a potentially huge market. All that is totally changed. Every major medical system that I know has implemented a decade of chance in the course of two or three weeks. Institutions that were strongly against telehealth now have embraced it for EVERYTHING . We are doing exams by video, consults by video, initial visits by video, inpatient visits by video. Regulations, reimbursement have both been changed to allow the organizations to rapidly make these changes. Things that I thought would take a generational change in medicine are now being pushed by the very people who were holding back the change.

I guess my point is why would anyone sign up for teledoc now that your physician is offering the same services. Heck, why teledoc when Stanford, kaiser, harvard etc are offering better and more service and you are already in network and you get to talk to your own doc? TDOC stock has momentum behind it but my thinking about TDOC has totally changed and I think its days are numbered.

-e

21 Likes

“…why would anyone sign up for teledoc now that your physician is offering the same services. Heck, why teledoc when Stanford, kaiser, harvard etc are offering better and more service and you are already in network and you get to talk to your own doc? TDOC stock has momentum behind it but my thinking about TDOC has totally changed and I think its days are numbered.”

-ethan1234

Ethan,

Well, for startes, are you disputing the ‘high barriers to entry’ summarized on the article I posted?

Although competition is intensifying, the industry has high barriers to entry. For example, there are extensive regulatory hurdles that need to be achieved in order to practice medicine remotely while securing the patients’ privacy. Additionally, in order to ensure an adequate supply of physician time, the company needs an extensive network. Teladoc has amassed a network of over 3,000 certified clinicians, similar to the way Uber has built its supply of drivers. Teladoc also uses a sophisticated predictive analytics system to ensure that the appropriate level of help is on hand and able to fill an appointment quickly, depending on the peak times and seasonal variability. It’s this level of service that helps Teladoc generate member satisfaction of 95%. Telemedicine companies also need a scalable platform that they can leverage to meet the growing needs of consumers. To put this in perspective, Teladoc invested over $100M over the course of a decade to build its platform to scale. This year the company expects to conduct four million virtual visits, up from one million just two years ago. It has additional capacity that would enable it to take on 10x its peak volume at any given time. It would be very difficult for another company to replicate this scale without a high degree of capital investment.”

Put simply, Teledoc’s market position is not easy to establish, and it will be difficult for others to do what they have done. In addition, I believe more than ever that Teledoc can now FURTHER monitize its industry-leading base of 37 million members on an accelerated basis given the swift worldwide movement to telehealth. Please note that Teledoc was already increasing their cross-selling in significant fashion before the current pandemic. Here is more from the August 2019 article I originally cited:

“Teladoc is also cross-selling new products to its existing base. For example, it offers specialties such as behavioral health and dermatology. It also offers second opinion services for those who want to speak to another provider about a serious condition before undergoing surgery. The company has been actively selling these additional services to its existing client base and, as a result, is increasing its average revenue per client. Today, 40% of the base uses more than one product (up from 10% two years ago), and only 13% of the base uses 3 products, so there is a large runway for cross-selling. Finally, the company is growing internationally. Thus far, much of that growth has been inorganic, but as global demand for telemedicine increases, Teladoc is well positioned for that trend.

I have no issue with and very much welcome alternative views, but please do offer support for your anecdotal claims for competition and marginalization to Teledoc’s very significant telehealth leadership position. To me, all indications are for Teledoc Health to undeniably remain the top dog best positioned to be the long-term winner.

-Rockleppard

2 Likes

I guess my point is why would anyone sign up for teledoc now that your physician is offering the same services. Heck, why teledoc when Stanford, kaiser, harvard etc are offering better and more service and you are already in network and you get to talk to your own doc? TDOC stock has momentum behind it but my thinking about TDOC has totally changed and I think its days are numbered.

That’s a darn good question but how do you back the “better” assertion that I highlighted? How did they create this overnight? How long before Mr. Market finds out it’s betting on the wrong horse?

https://softwaretimes.com/pics/tdoc-03-29-2020.gif

Denny Schlesinger

1 Like

the industry has high barriers to entry

For a new comer wanting to build a competitor, yes, its high barrier.

For my current physician enabling zoom video call and overcoming HIPAA trap, that should be relatively easy. I would expect a lot of red tape in using technology in health care would come under severe pressure with this pandemic.

BTW - if you look for tele-medicine company, LVGO may be better than TDOC because its model is not to compete with your current physician, its complementing for proactive / instant support in day to day life for chronic disease patients… e.g. diabetes, mental health… and yes, both diabetes and mental health are major issues related to COVID-19 pandemic.
Here is how:
Diabetes - most of the people who are susceptible to serious illness with COVID-19 fall into two categories - underlying condition and 65+ age group. Diabetes happens to be one of those large underlying condition… so managing diabetes becomes even stronger priority in this demanding time and that’s where Livongo is uniquely positioned complement physician and help patients remotely.

Ad of course with growing stress due to pandemic and its impact on daily life, managing mental health cases become challenging which is 2nd major growing service for Livongo.

Nilvest
Long LVGO (5%+)

5 Likes

Thank you Nivest. I do think what Teledoc is doing and has assembled is much tougher than people think but enough said by me for now on that and the tailwinds that I feel will drive their future growth.

I actually do own Livongo, and think they have a wonderful opportunity for growth moving forward, led by impressive Exec Chairman/Founder/CEO with exemplary backgrounds.

Fool on.

–Rockleppard

barriers to entry are gone.

https://www.statnews.com/2020/03/17/trump-telehealth-restric…

https://www.ama-assn.org/delivering-care/public-health/key-c…

https://www.fool.com/investing/2020/03/18/white-house-remove…

about 80% of our visits are telehealth now as opposed to zero percent 3 weeks ago.

privacy requirements have been loosened, billing codes generalized, regulations relaxed. No more barriers to entry and now everyone is doing it.

15 Likes

For my current physician enabling zoom video call and overcoming HIPAA trap, that should be relatively easy. I would expect a lot of red tape in using technology in health care would come under severe pressure with this pandemic.

Most practices that I’m aware of do not consider any issues regarding HIPAA when video chatting versus a regular phone call. Many offices use some kind of VOIP service for phone calls anyway. Why would a video call be non compliant when you can call the patient on audio only and have no problem?

TDOC can probably gobble up a decent amount of market share by just selling themselves to insurers but marijuana shops and online “pharmacies” selling erectile dysfunction pills have been doing virtual or otherwise sham visits for years. Doctors offices can just ask their patients to use any video chat service they choose. Unless TDOC says they believe they can eventually replace providers with AI like Uber can with drivers, I don’t see how they have the same kind of leverage in terms of turning a massive profit that most SaaS companies have.

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Thanks Rockleppard…

LVGO is up double digits today… market seems to be catching up to this hidden gem.

Another smaller player in tele-health, Catasys (CATS) came up last week confirming they see upto 5x increase in new members signing rate. CATS did $35M last years, very small player but growing extremely fast. They were forecasting to go to $90M this year… more than 100% growth… before accounting for pandemic’s effects.
It does have some debt on balance sheet, so do you DD before jumping in closed eyes.
(Disclosure: I have small trial position).
https://finance.yahoo.com/news/catasys-telehealth-enabled-on…

LVGO summary

  • TTM revenue is $170M (so >5x of CATS size)
  • grew 138% last quarter… (compare to <30% for TDOC)
  • At the beginning of March, management guided March quarter to grow >90% before the pandemic became clear (so I am assuming upside from pandemic is not accounted for in that 90%+ growth outlook)
  • addresses two critical markets - diabetes care AND mental health care…
  • has established ties with insurers…
  • 73% gross margins

And at ~$27, even after today’s 10%+ bump, it is trading at 15x PS
which is very low for such a high growth company and potential acceleration due to pandemic.

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