April 30, 2021 at 08:41PM

Despite announcing strong revenue growth for the first quarter on Thursday (April 29), as well as a modest revenue growth outlook for the year, shares of Teladoc Health fell, albeit a modest 5 percent. In fact, the company even delivered an earnings surprise, beating the Zacks Consensus Estimate of a $0.57-per-share loss, with earnings of $0.13 per share adjusted for non-recurring costs. It also posted revenues of $453.68 million, more than doubling its year-over-year number of $180.8 million. Teladoc had a growth of 20 percent in paid membership, which translates to 51.5 million people. Income from membership fees were up 183 percent to $388.2 million, and income from per-visit fees grew 25 percent to $54.5 million.

“After a transformational year, Teladoc Health continues to show strong momentum by delivering record results across the business,” said Jason Gorevic, chief executive officer of Teladoc Health. “Consumers are embracing our whole-person virtual care offerings, engaging with multiple products and coming to us for more of their health needs. As our integration accelerates, we are leading the way in whole-person care, unlocking the full spectrum of healthcare in one unified and personalized consumer experience.”

Overall, though, the company did post a first-quarter net loss of $199.6 million compared to $29.6 million a year ago. Much of that loss was due to Teladoc’s acquisitions of remote healthcare monitoring service Livongo and telehealth platform provider InTouch Health last year. The company said it took a hit in paying out Livongo stock awards that continued to vest after the merger, and that the loss reflects higher amortization of acquired intangible assets from the two purchases.

Broader Learnings

Despite the gains, the fact that Teladoc’s stock slipped slightly points out two trends that are affecting the telemedicine field at large: a world that is gradually getting back to normal and no longer afraid to visit doctors and hospitals in person, and increasing competition in the telemedicine field.

According to the Epic Health Research Network, while a 300-fold increase in telemedicine usage was seen early on in the pandemic, the long-distance healthcare delivery method reached a plateau in mid-April. At that point, telehealth visits accounted for 69 percent of all medical visits. By August, virtual visits comprised just 21 percent of all visits.

Even so, the telemedicine outlook is strong, and there are some indicators that it will remain at around 20 percent going forward. During the pandemic, people may have avoided healthcare facilities because of caution about the virus, but now that vaccines are rolling out, it’s looking like they will embrace telemedicine not for its safety, but for its convenience.

According to an estimate by Grand View Research, the telehealth market is expected to experience a 22.4 percent compound annual growth rate from now until 2028. Other research puts the growth of the field at 37.7 percent by 2025 from $38.7 billion in 2020, and to $191.7 billion just four years from now.

There’s also the idea that telehealth providers will change the healthcare landscape in a profound way, so today’s estimates on the future usage of virtual care may even be underinflated. One such example comes from Forward, a platform that encourages long-term health, combining a physical visit with long-term services to deliver health rather than just healthcare to its customers. Its disruptive policy of not taking health insurance is designed to deliver better care. In an interview with Co-founder Rob Sebastian earlier this month, he said that doctors currently aren’t incentivized to provide the best care, an issue he hopes the insurance-free Forward can help address.

“And the reason is that they aren’t paid by you as a patient, they’re paid by insurance companies,” he said. “And that means they’re not actually motivated by whether or not you thought it was a fantastic experience, or whether or not you thought that your health outcomes were better. They’re motivated by whether or not they filled every slot in the calendar with billable events. The byproduct of that is, I think, that we as consumers have [been] conditioned to accept scraps from the table.”

Competition Climbing

While telemedicine usage might be stabilizing on the new, higher plateau set by the pandemic, competition in the field is certainly increasing.

There are now more standalone telemedicine companies than ever, including at least four that are publicly traded: Teladoc, GoodRx, Amwell and Talkspace. On top of those, there is a good portion of startups and other standalone telemedicine providers that have seen the spotlight come their way throughout the pandemic, including Babylon, K Health, 98point6, Doctor On Demand, Zocdoc, My TeleMed, BetterHelp and MDLIVE. Plus, major companies are also getting in on the game. Earlier this month, Verizon announced the launch of its virtual care platform, BlueJeans Telehealth. That follows on from Amazon’s announcement that it is making its own telehealth service, Amazon Care, available for use by employers nationwide.

It’s a crowded field indeed, which investors were no doubt aware of as Teladoc reported its earnings and it’s an issue they’ll be keeping an eye on as more telehealth companies reveal Q1 earnings going forward.

Teladoc’s Earnings Reactions Point To Crowded Market …

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