LVGO+TDOC: Telehealth is dead. Long live Telehealth!

While telehealth is booming, the pandemic has made video calls an essential commodity. With “Tele” becoming a commodity, what is the trajectory for the telehealth vendors? And what will the next phase in the industry growth be about?

Note: This blog entry is from Ram Fish, 19Labs Founder & CEO.


Telehealth is having its moment in the limelight. Covid19 has moved the industry “Five years in five weeks” as usage has grown more than six-fold. Expanded reimbursements and new CPT codes help drive revenues and margins. And though some of those regulatory changes are still “temporary” for Covid19 duration only, “Tele” is now an integral part of healthcare.


So why in the midst of such an industry boom would the industry transform? What was driving the $38B merger between Teleadoc and Livongo?

The answer has multiple layers, but in its core, the most fundamental part of Teladoc and today’s telehealth industry is the video call. But video calls have become a commodity. Be it WebRTC, Twilio, Vidyo, Zoom, or others — it is now trivial to add video calls to any web or mobile app. Kaiser has integrated video calls into their app more than a year ago.


As a result, the Electronic Medical Record (EMRs) vendors such as EPIC or Cerner are quickly expanding and adding video to their offering. They already have access to physician schedules, workflow, reimbursement codes, and healthcare data. For EMRs to add support for video meetings is trivial — and they are actively pursuing this.


At the same time, Video calls are now an integral part of enterprise and consumer daily life. Zoom was the top downloaded app on the playstore in the first few months of the pandemic and almost all hospitals and health care systems use Zoom, Skype, or other tools for internal communication between physicians, nurses, and staff. So why not expand and communicate with the patients using Zoom or Skype for Business? From a hospital perspective, what is the benefit of a dedicated vendor for Patients-Clinician video call if you already have Zoom deployed?


In the last eight years, the Telehealth vendors, who pioneered implementing the video call with your doctor experience, have built extremely valuable business relationships with the health systems, employers, providers, and consumers. That's an amazing asset and leverage point. But, by 2020, the value in the video call itself has commoditized. Somebody moved the industry cheese, and Teladoc is leading the race to find it and reclaim the cheese.


The closest “cheese” in telehealth is Chronic Disease Management (CDM). After all — chronic diseases represent over 75% of healthcare costs and require frequent patient inspection and monitoring. This becomes even more significant as reimbursements move from fee-for-service to outcome-based compensation. From a patient perspective, it doesn’t make sense to have one solution to contact “regular” doctors and another solution to contact their chronic disease specialist. Teladoc’s CEO Jason Gorevic told CNBC made it clear “Our two companies were either on a path of convergence or collision” The same applies to the other players in CDM, Remote Patient Monitoring (RPM) or Wellness programs. Having one vendor for telehealth and video calls, another for specific health care scenarios doesn’t make sense — these need to be on the same platform, or at least interoperable.


Some of the cheese is now with the new smart diagnostics device vendors. To make a remote visit on par with in-person, remotely examining the patient and collecting vital signs are essential. Devices to capture vital signs are becoming cheaper and easier to use — and this is how Livongo built their CDM business. Even capturing the patient ECG or auscultation can easily be done at home by a layperson — no need for a trained professional anymore. Urine, blood and viral tests are going through FDA approval or already approved (with some analyzable by smartphone). Other vendors are creating completely new devices and sensing technologies for specific medical conditions.


While these new technologies greatly enhance the type of care that physicians can effectively offer remotely, can they be a stand-alone business? How does a healthcare system get to leverage those amazing technologies from multiple different vendors into their workflow, EMR, and IT system? The same forces that led to the Livongo — Teladoc merger apply in this segment. From a patient or healthcare system, it doesn’t make sense to have each one of those amazing new technologies connect to its own group of physicians or its own workflow and back-end system.

The other large chunk of the cheese is with the different Chatbots / “A.I. triage” or Smart Intake vendors. As Covid19 “Screening” tools proliferate, they have become an integral part of the healthcare experience, enabling quick informative advice and scheduling. Patients love the experience and convenience, and the healthcare organizations benefit from more efficient use of clinicians' time. But to be effective, these technologies work much better when integrated with the patient and physician schedule, the quality of the care is improved if they have access to the patient medical records and the patients still might need to engage in a video call with a clinician as part of the care journey.


Will the Cerner and Epic of the world become the industry new platform for all those new technologies and services to integrate with? Can EPIC/Cerner work with all the different small vendors effectively? Will today’s telehealth vendors expand beyond video calls to create a viable alternative platform where the new care technologies interconnect? What does it take to build an open platform that brings those amazing, meaningful healthcare innovations together and delivers effective remote care?


We shall see. What we can all agree on is that we “live in interesting times” Telehealth is here to stay but the industry structure behind it is going to be transformed.