Telehealth providers look to capitalize on a rapidly expanding market | FierceHealthcare

Teladoc is on pace to hit its goal of 2 million visits in 2018, and Doctor on Demand says it saw a triple-digit increase in visits last year. The trends underscore telehealth's growth in the mainstream, even as telehealth providers look for ways to make the newfound popularity profitable.

Teladoc saw massive increases in total revenue, visits and paid membership in the first quarter of 2018. But the national telehealth company is still operating in the red.

Total revenue for the first quarter was $89.6 million, up 109% from the same period last year and beating expectations. Subscription access fees made up the bulk of those earnings at $71.7 million, while revenue from visits hit $17.9 million, according to a Securities and Exchange Commission filing Tuesday.

Likewise, total paid membership increased 41% compared to the same quarter last year. Total visits from paid membership reached 554,000, up from 385,000 last year. The quarter was buoyed by a strong flu season that drove 8,000 visits per day at its peak. That offered a positive sign for the company’s technical infrastructure, which can handle “several times the volume we see today,” CEO Jason Gorevic said on a Tuesday earnings call.

RELATED: With 89% revenue growth in 2017, Teladoc looks to deepen partnerships with large insurers  But gains to membership didn't translate to profits. Teladoc reported a net loss of $23.9 million in the first quarter, up from $15.7 during the same time last year. Adjusted earnings before interest taxes and amortization (EBITA) came in at a loss of $1.4 million, although that compared favorably to the $9.1 million adjusted EBITA the company reported last year.  Earnings per share were down 39 cents.

Part of that is attributed to higher operating expenses. In the first quarter alone, Teladoc spent $47 million on advertising and marketing, sales, and technology and development.

Wells Fargo analysts said the company “seems to be executing extremely well,” and the business model could “drive 50x growth” over the next decade.

Reimbursement issues with CMS continue to inhibit telemedicine except in rural areas. In the present environment of cost containment, CMS  has taken a hard look at telemedicine in metro environments where distance is not a factor in obtaining health care.

Teladoc serves a patient to provider business model. There are other opportunities in the provider to provider market for consultation and sharing of imaging results.

Gorevic touched briefly on the CVS-Aetna merger that could be a significant windfall for the company. Teladoc has contracts with both companies and Gorevic said the company has had “great discussions with them about how Teladoc can be part of a 'bricks and clicks' environment.”

Telehealth providers look to capitalize on a rapidly expanding market | FierceHealthcare: