There is no doubt that consumer preferences are today placing evermore importance on convenience. Even during COVID-19, consumers have been prioritizing convenience and ease by buying meals through delivery apps and ordering same-day-delivery Amazon goods. The comfort that telemedicine provides makes medical visits and diagnosis no exception to this trend.
Besides its convenience, as society continues to try to stay socially distant and avoids visiting hospitals and other crowded medical centres during COVID-19, telemedicine has become top-of-mind when one starts feeling sick. As a result, Teladoc Health, Inc. (“Teladoc”), a telemedicine and virtual healthcare company based in the US, has been thrown under the spotlight in the last months.
Teladoc’s mission is to transform the way people access and experience healthcare. With over 2,400 employees, the Company delivers health in more than 175 countries. Since March, Teladoc has experienced unprecedented daily volumes in the US as COVID-19 continues to spread. This spike in demand has partly been driven by several health plans waiving consumer cost sharing. Public health officials across the US have also been encouraging the use of telemedicine to reduce community exposure.  This surge in demand has left Teladoc providing in excess of 20,000 visits per day. These virtual medical patient visits have helped ease pressure in the wider healthcare system, as patients are visited by physicians virtually (by phone, web or through Company’s app) and receive their diagnosis through Teladoc’s platform, all from the comfort of their own home.
“A community’s healthcare system can become overwhelmed and virtual care can help provide needed relief,” said Lew Levy, MD, Chief Medical Officer at Teladoc Health. “We have the unique ability to immediately connect with the CDC and other government agencies, to add the right screening tools and clinical quality protocols, and most importantly, to keep patients – particularly those most at risk with underlying health conditions – out of care settings where they can face exposure.”
In order to be able to cope with this unprecedented surge in demand, Teladoc has put in place significant initiatives to adapt its business model. These initiatives include simplifying the onboarding process to expand doctor capacity, improving the Company’s algorithms to manage patient visit queues, and temporarily increasing doctor compensation to ensure high-quality and timely care.
Exhibit 1: How Does Teladoc Help You Feel Better? (Source: Teladoc Health Company Website)
Teladoc’s business model was also relevant before COVID-19, as its digital platform is beneficial for all participants in its system:
- Insurance Providers: Telemedicine patient visits are beneficial for payer economics as the cost of virtual visits is lower. It can also help avoid unnecessary emergency department visits.
- Patients: Telemedicine patients benefit from the platform’s convenience and time-savings. Through Teladoc, patients can book appointments with the next available physician and receive diagnosis from the comfort of their own home.
- Family Caregivers: Caregivers also benefit directly from Teladoc’s convenience and ease. Telemedicine lets them avoid the time, travel costs, and hospital admissions process associated with accompanying patients to their visits.
- Physicians: Although physicians are generally paid less per telemedicine visit than they would be in a traditional in-person visit, telemedicine allows them to increase their income by visiting patients during times that they would have otherwise been idle.
As a result of the COVID-19 outbreak and Teladoc’s ability to offer low-cost high-quality virtual care, the Company has been able to capture a significant number of new patients, the majority of which had never used telemedicine before. In particular, more than 60% of Teladoc’s current visit are with members that are new to the platform.
Although the ultimate impact of COVID-19 in the Company’s volumes and growth in unclear, given the uncertainty around the long-term effects and duration of the pandemic, demand could remain long after COVID-19. In fact, several Harvard disease experts predict that some sort of social distancing might continue until 2022. Although telemedicine has historically struggled to win widespread acceptance before the pandemic, patients who were previously skeptical might recognize its benefits after experiencing this digital platform during the COVID-19 period. Also, insurance companies who previously didn’t cover telemedicine have amended their policies to include its services. Experts agree that it is unlikely that they will change it back.
Apart from being convenient and reducing the pressure on the US healthcare system during COVID-19, telemedicine presents many other advantages over traditional medical visits. One clear advantage is its low-cost services. For instance, while Teladoc’s cost per visit depends on the patient’s insurance plan, their Everyday Care visits never exceed $49 (according to the Company’s website). Not only does this provide high-quality low-cost care, but it also helps solve many of the hassles of traditional in-person visits. For example, it helps reduce the time that patients have to take off their schedule to travel and attend a medical visit. Patients also avoid having to spend time in a waiting room and experiencing delays before seeing their doctor. Other benefits include the comfort of using telemedicine from home (which is particularly relevant for people who suffer iatrophobia, or fear of doctors and hospitals) and having 24/7 year-round access to US certified doctors by web, phone or the Company’s mobile app. Teladoc’s account can be set up in just a couple of minutes, making the overall process extremely smooth and convenient.
These clear advantages and the expectation that telemedicine will continue to be relevant going forward have made Teladoc’s and other telemedicine stocks experience a significant jump in prices. The chart below shows how Teladoc’ share price has evolved in the last year: doubling in the last month and rising from $60 to almost $200 in the last twelve months.
It is clear that Teladoc and other telemedicine providers are clear winners during today’s global pandemic. The question is: Will they continue to be winners when COVID-19 is over and societies go back to normal? Probably. It wouldn’t be a surprise that after what we’re currently experiencing, people continue to prefer staying away from crowded centres, especially those with sick people in them. This “new normal,” coupled with society’s evermore pursuit of convenience and ease, will change the way patients think about their medical visits.
 Teladoc Health Fourth Quarter and Full Year 2019 Results.
 “Teladoc Health Sees Daily Virtual Medical Visits Up 50% in Past Week,” Teladoc Health March 13, 2020 Press Release.
 Teladoc Health First Quarter 2020 Results Preview.