The US is the only developed nation in the world that does not provide healthcare as a human right through a national health system. However, most of the people on this board live in the US. As a result, our US centric views on telehealth (and thereby Teladoc) are informed by our experiences with (or as) doctors and nurses, and especially by our experiences with insurance companies.
Much of that experience is not relevant to situation faced by the majority of the world’s healthcare recipients, or to the challenges and opportunities that combine to form Teladoc’s TAM.
I just realized this this morning. The Economist published an article today on how Covid-19 has accelerated Telehealth in Australia.
'Created by The Economist Intelligence Unit and sponsored by Vocus, this series looks at how COVID-19 has provided a powerful impetus to accelerate innovation and positive change in key industries, enabling them to bring forward significant benefits for customers, communities and the industries themselves.
In our first piece, we look at the healthcare sector, and how telehealth has been a slow-motion revolution transforming conventional healthcare systems around the world. That is until now, thanks to the COVID-19 push.’ Do take a grain of salt before reading this. Vocus sponsored this article describing their business model. https://www.vocus.com.au/healthcare-solutions So it’s a bit of a fluff piece. Despite that it makes some very good points.
It’s clear that widespread adoption of Telehealth in the US faces great barriers. Our patchwork approach to healthcare, the complexity of getting doctors paid, variations in medical regulations and privacy laws from state to state, and the existing insurance company-based approach to resource allocation, all conspire to make the story of how widespread adoption of Telehealth in the US, at best, complicated.
For Teladoc to expand into other nations the problem is very different than the situation described in most of the discussions we’ve had on their board…since they have mostly been focused on the US side of the story. In most other countries the situation is dramatically different.
On one side, it’s easy because you’ve got one nation, with a healthcare system administered by one agency, following one set of laws, and no insurance companies: Eureka!! The Economist article notes ‘As elsewhere, telehealth is proving to be effective in Australia in two key ways: it is helping bring down costs, and it is enabling the delivery of healthcare services and expertise to the country’s remote and rural areas.’ Sounds pretty great!
On the other hand it’s complicated for Teladoc because they are themselves the healthcare providers (as many great posts have pointed out), and not just a provider of video communication software. So that puts Teladoc in direct competition with the various National Health Services of the countries they wish to expand into. That is a serious problem if they hope to grow their customer base in Europe, etc.
Does anyone know how they are addressing this? I know they plan to expand into many other countries, but is their TAM limited to the provision of concierge type health care? Or are they flexible enough in their approach to let the UK’s National Health supply doctors, nurses and therapists who then use their service?
It’s easy to see how telehealth could become ubiquitous in the world via national healthcare systems. It’s difficult to see how Teladoc benefits from that transformation.
So what is their real TAM? Is it limited to the US patchwork landscape of providers? Or could they actually expand throughout the EU and the rest of the developed world?
Alternatively, could they as providers find their niche in Africa and South America where the national systems are not well provisioned and hard to access? Of course in these continents, telehealth expansion will be limited by both healthcare spending, and bandwidth and internet accessibility.
I’m finding the Teladoc story forward to be very complicated and will probably sell my Livongo shares today.