Virtual care leader Teladoc Health has entered into an agreement to acquire another company in the telemedicine space, InTouch Health, for $600 million, according to a Jan. 12 press release.
The $600 million deal will include $150 million in cash and $450 million of Teladoc common stock. The deal is expected to close by mid-2020. What’s more, InTouch Health is expected to generate 2019 revenues of approximately $80 million, growing approximately 35 percent year-over-year.
InTouch Health, based in Santa Barbara, Calif., develops telehealth solutions for hospitals and health systems and currently partners with more than 450 hospitals and health systems with more than 14,500 physician users globally, and supporting 40+ clinical use cases, according to officials. Together with Teladoc Health, “the newly combined entity will be uniquely equipped to meet the growing needs of the provider market with one single, integrated solution spanning both consumer and provider-to-provider applications,” officials said.
Indeed, officials of Teladoc, a Texas-based developer of consumer-to-provider telehealth solutions, now believe it has positioned itself “as the partner of choice for health systems seeking a single solution for their entire virtual care strategy, and establishes the company as the only virtual care provider covering the full range of acuity – from critical to chronic to everyday care – through a single solution across all sites of care worldwide.”
A spring 2019 survey of 800 U.S. physicians from telehealth company American Well revealed that physician adoption of telehealth has increased significantly, though for most specialties, barriers to adoption do still exist. A total of 22 percent of physicians said they have used telehealth to see patients, up 340 percent from 2015 when only 5 percent of physicians reported having ever used telehealth, according to that research.
It’s expected that the demand for virtual care services within the provider market will continue to grow, as favorable reimbursement tailwinds increasingly equip hospitals and health systems to fully realize the value of virtual care. According to 2019 JPMorgan research, 40 percent of hospitals surveyed reported planning to increase their budgets for telemedicine solutions. With 61 percent of hospital revenue forecasted to come from managed and value-based care models by 2021, according to the 10th annual hospital study from L.E.K., virtual care will be a crucial strategy to improve consumer engagement, ensure consistent quality and manage health care’s rising costs.
‘‘Today marks a bold leap forward in Teladoc Health’s mission to transform how high-quality healthcare is accessed and experienced, making virtual care available for patients with even the most critical care needs,” Jason Gorevic, CEO, Teladoc Health, said in a statement. “Bringing these companies together will make Teladoc Health the clear virtual care leader across every front door of healthcare, further accelerating the adoption and impact of virtual care for millions of people around the world.”
Joseph M. DeVivo, CEO at InTouch Health, added, Now is the perfect time for us to join together with Teladoc Health and deliver to hospitals and health systems everywhere what they've been asking for – a single, enterprise solution to support their virtual care strategies and enable them to better engage with patients at every point along their healthcare journey.”
