Credit Suisse https://www.credit-suisse.com hosted Charles Jones, Chairman and CEO, MDLive at the virtual 29th Annual Credit Suisse Healthcare Conference. MDLive offers convenient and affordable access to virtual healthcare by leveraging technology and artificial intelligence to streamline connecting providers and patients.
MDLive’s business is structured around three end markets, to include 1) Enterprise (i.e., payers and employers, 2) Health Systems, 3) Direct-to-Consumer (DTC). The Enterprise segment has made up 93% of revenue, while Health Systems and DTC have made up 3% and 4% of overall revenues, respectively. While the Enterprise segment includes both payers and employers, the bulk of the overall business is coming from health plans (i.e., +80% of total revenues).
MDLive’s notable health plan clients include Cigna, Aetna, HCSC, Humana, etc. while the company’s notable employer clients include Auto Zone, LabCorp, Walgreens, NFL, Hyatt, etc.
Just in the past year MDLive’s U.S membership has increased from 50 million members to now +60 million with growth coming from 1) Expansion in existing clients and 2) Members from net new clients. MDLive serves ~25 health systems across the U.S including the University of Miami Health System, Saint Luke’s Sentara etc.
When asked about the impact that the COVID-19 vaccine might have on telehealth utilization in 2021, Mr. Jones noted that even with the massive increase in the number of telehealth visits, most of the visits are for standard medical and urgent care situations.
As a result, Mr. Jones does not see a vaccine as interfering too much with the use cases that telemedicine has proven to be effective at handling and does not expect there to be a big swing backwards. By way of background, MDLive conducted 1.21 million telehealth visits through September 2020, a Y/Y growth of 101%.
However, Mr. Jones did note that telemedicine adoption has likely been pulled forward by 3-5 years, and also for the degree of competition. For example, the brick-and-mortar healthcare companies that large telemedicine vendors have been taking business away from, have also accelerated digital health initiatives.
Going forward, Mr. Jones notes that MDLive will explore the provider market when an investment (organically or through M&A) will benefit the process of cutting costs for the company’s core focus area (i.e., payers).
Overall, Mr. Jones compares the opportunities in the provider market relative to other portfolio opportunities is what MDLive could focus on. For instance, for current growth opportunities, MDLive sees outside of the provider market includes 1) Membership upside in the government space (e.g., Medicaid, Medicare Advantage) 2) Cross-selling other products (e.g., behavioral health, dermatology, virtual primary care), and 3) Driving higher utilization into the existing membership base.
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