Telemedicine provider Teladoc to spend USD18.5B on Livongo

AP – One of the United States’ (US) biggest telemedicine providers will spend more than USD18 billion to stoke an approach to care that grew explosively during the pandemic and recently received an endorsement from US President Donald Trump.

Teladoc Health Inc plans to dive deep into managing the health of patients with diabetes and high blood pressure with a cash-and-stock deal for Livongo Health that is expected to close later this year.

Telemedicine involves the remote care of patients, often through a live video connection. Millions of patients were forced to try it for everything from routine care to check-ups with specialists after COVID-19 shut down much of the economy earlier this year.

Teladoc said late last month its total visits tripled in the recently completed second quarter to 2.8 million, and revenue grew 85 per cent.

The company also said it expects gains to spill over into 2021, when it projects revenue growth of between 30 per cent and 40 per cent.

Telemedicine has been around for years, and a growing number of employers offered it to their workers as a way to save money and improve their access to care.

The practice was relatively slow to catch on with many patients before COVID-19, but now there is growing momentum to keep telemedicine’s gains after the pandemic finally fades.

The Trump administration announced on Monday that it was taking steps to give telehealth a broader role under Medicare.

Healthcare researchers also said they expect telemedicine to play a greater role in healthcare once the pandemic finally fades in part because people have become more used to the practice, and they may be more wary now of sitting in waiting rooms filled with other sick patients.

Doctors also see a greater role for the practice in monitoring people with chronic conditions like hypertension or diabetes. That’s the speciality of Mountain View, California-based Livongo Health Inc.

The companies said yesterday their boards unanimously approved their deal.

Once complete, Teladoc Health Inc CEO Jason Gorevic will run the combined company, and Teladoc shareholders will own a 58 per cent stake.

Teladoc shares slipped five per cent to USD237 before markets opened yesterday, while Livongo Health Inc’s stock jumped nine per cent to USD153.65.