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A Conversation with Jason Gorevic, CEO of Teladoc Health, Part 2

Article

Summary: In this second installment of his interview with Managed Healthcare Executive®, Gorevic discusses ambitious goals for increasing per-participant, per-month revenues to $68.

Second of three parts

Jason Gorevic has been CEO of Teladoc Health ($TDOC) since 2009 overseeing the company before it went public in 2015 and well before the COVID-19 pandemic fueled a large increase in telehealth use. The company’s stock price soared to above $290 per share in February 2021 as telehealth finally caught on, but it has fallen sharply since. Today it closed at $66.71 per share.

In a recent interview with Managed Healthcare Executive® Managing Editor Peter Wehrwein, Gorevic discussed a wide range of issues, including the company’s deal with Amazon to provide telehealth services through Amazon’s smartspeaker technology, Alexa; its ambitions to increase per-participant revenues by 27-fold by providing “whole person virtual care”; and whether Teladoc is a threat to primary care and bricks-and-mortar healthcare system.

Before Teladoc, Gorevic had considerable experience working for insurers. He started his healthcare career at Oxford Health Plans where, according to Gorevic’s LinkedIn page, he “designed, built and managed a first-of-its-kind telephone medical advice service staffed by registered rurses to ensure appropriate utilization of health care resources.”

Second of three parts

This transcript has been edited for clarity.

In a recent interview, you talked a lot about growth on a per-participant basis. You used a figure of $2.50 per participant, and you referenced increasing that 27-fold, as I recall, to something like $65 per participant. So could you just unpack those numbers for us a little bit?

Pretty close. $68. Well done

When we talk about whole-person care, you have to understand the full breadth of our product portfolio and capabilities. It’s easy to think of the legacy Teladoc from 2015, when we went public and we were really doing virtual urgent care.

But today, we deliver everything from episodic acute care all the way to chronic care, from basic sort of everyday things to complex physical and mental health — and we do it through multiple channels, including direct-to-consumer through health plans, directly to employers, both in the U.S. and outside the US. And. of course, we sell products and services and technology to hospitals as well.

We have an incredibly broad array of products and services. And increasingly, we're bringing those to our clients and consumers in a fully integrated bundle that includes all of those capabilities to take care of the whole person because somebody doesn't actually think of themselves as just a diabetic, or just somebody suffering from depression, or just somebody who has hypertension, or just somebody who's dealing with flu symptoms. They think of themselves as a person who has multiple dimensions to them and needs care for their whole person.

And, of course, taking care of the different aspects of a person are all complementary. So someone who is dealing with diabetes or hypertension and is suffering from anxiety or depression, if those things are untreated, then they're likely to exacerbate.

So when we walk about $68, we think about the prevalence of various conditions that we treat within a population, the population that doesn't have a primary care relationship who may engage with us and our Primary 360 product on a virtual primary care relationship. And we think about the incidence of bringing things like mental healthcare as well as episodic acute care to a consumer, and what the total opportunity is based on that prevalence. And it really does go from where we are today, which is about $2.50, all the way up to $68, on a sort of population adjusted basis.

So those dollar figures, this is what you anticipate health plans paying you for the provision of the services? You will be in the market with this bundle of services and you'll go (for instance) to United Healthcare or Empire BlueCross BlueShield with this bundle on you, you will say to that them, sign up with us, we'll provide the service to your members for $68 per member per month?

Not exactly. Our products, like our chronic care programs are on a per-participant, per-month basis. We get paid for the consumers who engage with us and are using our connected blood glucose monitor, connected scale, connected blood pressure cuff, and engaging with us.

So we go to a payer and we say, hey, we'd love to provide a virtual primary care relationship like Primary 360. We think it would be great if you [were to] roll out a virtual-first plan design that incents someone to engage virtually and you'll pay us a base fee for that, and we have all different structures that we work with health plans on for that.

And then as we engage the population, we'd love to get access to claims data so that we know who the people with diabetes are in the population so that we can target them, reach out to them, with offers around our diabetes program, maybe our prediabetes program or hypertension program.

We only want to be paid when we engage those people and they're actually using those services.

So it's not exactly a single, all-in bundled price that’s on a population basis. It is variable, depending on engagement.

One of the values that we bring to a health plan is our expertise in engaging consumers. We've been doing that for years, even if you go back to when we were just a virtual urgent care company, we were always driving higher utilization rates and engagement rates than anyone else in the market, because we've always focused on that as part of value proposition because, ultimately, it's only beneficial to the consumer and the client if people actually use it.

You have this suite of services and you've referenced tying them all together. But they're also separate services. There's mental health, there's chronic care. And there's Primary Care 360.In 2022, where do you see the strongest growth in terms of getting more revenue on a per-participant basis?

Mental health continues to be the fastest growing part of our business and has been now for a couple of years.

Having said that, on per-consumer, per-month basis, when we go to a health plan, we generally find that the chronic care programs are for us the highest revenue, because for the payer, it's the highest value. Everyone knows that those populations tend to drive an outsize portion of the health care costs. So we go to them with a strong value proposition around the return on investment.

It's an intensive program. We're shipping out a device to the consumer. We apply data science against the readings that we get. So if you're taking your blood sugar [measurement] every day, we're applying data science against that, giving you digital nudges, so reminders about behavior change, or exercise, or your diet, and a coaching program that goes along with that, in case you're not responding to the digital nudges.

Most recently, we've integrated the legacy Livongo capabilities with the legacy Teladoc capabilities, so we also now bring a physician to bear and what we call our chronic care complete program, such that if you need not only some coaching, but also your care plan modified or your medication titrated, we can bring a physician to bear for you, virtually, to do that.

You referenced getting claims data. If you are to have success in this realm, it would seem like it would hinge, critically on, as you start the relationship, that you know, for that health plan, who their people with diabetes are, or, in the case of mental health services, the people with depression, right from the start. Otherwise, you’re sort of sitting around waiting for business, right?

Certainly we work with the health plan from the beginning to get access to that claims data to identify the populations who could most benefit from our services.

And, in addition to that, if you think about our Primary 360 product, we're acting in a longitudinal relationship with the consumer, doing a full workup on the consumer, sending them for lab tests. And ,therefore, we're able to identify people who may be either prediabetic or diabetic or have a blood pressure issue or are overweight and could benefit from our weight management and nutrition programs. What we find actually is about half of the people who are in our Primary 360 product and are engaging with us for chronic condition management programs are newly diagnosed by our Primary 360 programs. So that's our real value.

Remember, a lot of these people didn't have a primary care relationship previously. This could have gone unidentified or undiagnosed for years. And we're rapidly accelerating that diagnosis and therefore treatment. as we engage the population, we'd love to get access to claims data so that we know who the people with diabetes are in the population so that we can target them, reach out to them, with offers around our diabetes program, maybe our prediabetes program or hypertension program.

We only want to be paid when we engage those people and they're actually using those services.

So it's not exactly a single, all-in bundled price that’s on a population basis. It is variable, depending on engagement.

One of the values that we bring to a health plan is our expertise in engaging consumers. We've been doing that for years, even if you go back to when we were just a virtual urgent care company, we were always driving higher utilization rates and engagement rates than anyone else in the market, because we've always focused on that as part of value proposition because, ultimately, it's only beneficial to the consumer and the client if people actually use it.

You have this suite of services and you've referenced tying them all together. But they're also separate services. There's mental health, there's chronic care. And there's Primary Care 360.In 2022, where do you see the strongest growth in terms of getting more revenue on a per-participant basis?

Mental health continues to be the fastest growing part of our business and has been now for a couple of years.

Having said that, on per-consumer, per-month basis, when we go to a health plan, we generally find that the chronic care programs are for us the highest revenue, because for the payer, it's the highest value. Everyone knows that those populations tend to drive an outsize portion of the health care costs. So we go to them with a strong value proposition around the return on investment.

It's an intensive program. We're shipping out a device to the consumer. We apply data science against the readings that we get. So if you're taking your blood sugar [measurement] every day, we're applying data science against that, giving you digital nudges, so reminders about behavior change, or exercise, or your diet, and a coaching program that goes along with that, in case you're not responding to the digital nudges.

Most recently, we've integrated the legacy Livongo capabilities with the legacy Teladoc capabilities, so we also now bring a physician to bear and what we call our chronic care complete program, such that if you need not only some coaching, but also your care plan modified or your medication titrated, we can bring a physician to bear for you, virtually, to do that.

You referenced getting claims data. If you are to have success in this realm, it would seem like it would hinge, critically on, as you start the relationship, that you know, for that health plan, who their people with diabetes are, or, in the case of mental health services, the people with depression, right from the start. Otherwise, you’re sort of sitting around waiting for business, right?

Certainly we work with the health plan from the beginning to get access to that claims data to identify the populations who could most benefit from our services.

And, in addition to that, if you think about our Primary 360 product, we're acting in a longitudinal relationship with the consumer, doing a full workup on the consumer, sending them for lab tests. And ,therefore, we're able to identify people who may be either prediabetic or diabetic or have a blood pressure issue or are overweight and could benefit from our weight management and nutrition programs. What we find actually is about half of the people who are in our Primary 360 product and are engaging with us for chronic condition management programs are newly diagnosed by our Primary 360 programs. So that's our real value.

Remember, a lot of these people didn't have a primary care relationship previously. This could have gone unidentified or undiagnosed for years. And we're rapidly accelerating that diagnosis and therefore treatment.

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