Market Share Up for Grabs as Telehealth Players Look to Go Public

After demonstrating the value of virtual care for routine primary care services, telehealth startups are rapidly diversifying services and forming strategic partnerships to expand market share.

In a flurry of recent moves, telehealth companies Amwell, MDLive, Doctor on Demand and 98point6 have either announced plans to go public or are considering it. All are trying to make gains against Teladoc, which has 70 million customers worldwide, after its recent $18.5 billion merger with Livongo, a digital health company that helps patients manage chronic diseases such as diabetes and hypertension.

Amwell, the Boston-based telehealth company, recently announced its plans for a $100 million initial public offering and that it has received a $100 million investment from Google, motivated in part by virtual care growth during the pandemic. Amwell plans to migrate its telehealth video traffic to Google Cloud by January while the companies collaborate on strategic technology.

Telemedicine rival MDLive, which reportedly has 40 million members, is planning a public offering next year, according to Business Insider, which also notes that MDLive’s behavioral health visits rose nearly 90% in May compared with January averages.

Meanwhile, Doctor on Demand and 98point6 recently received $75 million and $43 million in funding, respectively, as their telehealth businesses continue to expand.

How these rivals will fare over the long haul remains to be seen, but there are important implications in these moves for hospitals and health systems.

Market segmentation may be critical to growth.

Although utilization of virtual primary care greatly increased over the past several months, other settings and use cases have not been as widespread. Health systems may want to double down on virtual primary care, or explore new ways and partnerships that could enable the expansion of virtual. Hospitals and health systems will need to carefully evaluate the resources they commit to this area of care.

Consumers will demand more.

Ongoing telehealth platform advancements and integration with data from digital devices have added value to the patient experience and have been shown to improve health outcomes. Companies like Teladoc and Livongo have shown how virtual care can meet or exceed patients’ expectations on convenience, price and value. Health care providers can benefit from this rising tide, but they’ll need to provide a competitive user experience.

The herd will thin out.

With the large number of commercial players in telehealth, financial analysts expect more mergers and acquisitions. This will lead to fewer but larger companies, which could give them more leverage when negotiating/partnering with health care systems.