As telehealth giant Teladoc Health strikes more contracts with customers that span primary care, chronic care and other products, it’s been moving toward more value-based payment arrangements, the company’s Chief Executive Officer Jason Gorevic said Tuesday at the J.P. Morgan Healthcare Conference.
Gorevic said Teladoc’s conversations with potential customers have shifted from being done with a purchasing manager to the C-suite level, since Teladoc is positioning itself not as a vendor that provides a single service, but as a “strategic partnership” that plays various roles in patient care.
“As a result of these dynamics, we’re also able to begin shifting toward more value-based arrangements,” Gorevic said.
So far, that’s involved taking on risk for diabetes management and other areas of chronic care, as well as considering value-based arrangement for Teladoc’s new virtual primary-care service.
Telehealth companies that provide single solutions—like video visits for urgent care or a single specialty—tend to work in fee-for-service contracts, according to Gorevic. Since Teladoc sells services related to primary, mental health and chronic care, that gives them the opportunity to contract in other ways.
In 2021, three-quarters of sales were for multiple products, according to Gorevic.
Teladoc’s vision is to provide care across a patient’s health needs—not a one-off product that only addresses a small segment of patient care.
“We’ve been building for that for many, many years,” Gorevic said. “Our product offering has evolved from a suite of point solutions to a whole-person offering.”
Teladoc in recent years has extended its capabilities through acquisitions of companies like Livongo and InTouch Health; competitors like Amwell have also been pursuing acquisitions. Teladoc may acquire more companies as it expands into new areas of specialty care, as well as partnering with other organizations and developing capabilities in-house, Gorevic said.
Teladoc estimates it hit $2.03 billion in revenue for full-year 2021, according to a preliminary review of financial results—surpassing its expected outlook of $2.015 billion to $2.025 billion. The company expects to reach $2.6 billion in revenue for full-year 2022.
Teladoc’s primary strategies for growth are adding new members to its platform, both through signing new customers and adding more members from its existing customers; cross-selling additional products to customers who have already signed contracts for one of the company’s products; and increasing engagement among existing members, according to Gorevic.
As of 2021, more than 40% of telehealth members with Teladoc have access to at least one other company product, compared to less than 10% in 2017, according to Teladoc’s presentation. Teladoc plans to continue that trend—expecting to expand revenue per member by roughly 25% each year.