Aug 6, 2020 - Health

Teladoc and Livongo merge into virtual care giant

A doctor on an iPad being held by a mom and her child.

The coronavirus has increased demand for remote care. Photo: Teladoc Health

Teladoc's $18.5 billion acquisition of Livongo creates the health care industry's largest company devoted to multiple forms of digital care.

The big picture: The coronavirus has accelerated the shift toward virtual doctors' visits.

How it works: Teladoc and Livongo make money by selling subscriptions to their remote technology to employers and health insurers.

  • Teladoc focuses on regular doctor visits and non-emergent care. Livongo's main technology is for diabetes management, among other chronic conditions.
  • The two companies are on track to register $1.3 billion of revenue this year, a more than 80% increase from last year due almost entirely to the surge in demand stemming from the COVID-19 outbreak.

Between the lines: The appeal of telehealth comes down to convenience (people waste less time traveling, waiting and taking off work) and the potential to save money (remote visits are cheaper than having to go to the emergency room).

Yes, but: Virtual visits cannot replace all in-person visits. And there aren't any cost savings if telehealth simply acts as a precursor to an in-person visit, which has concerned some federal health analysts.

  • And while these options seem like free benefits with a job or health plan, the costs are ultimately borne by workers through health insurance premiums.

Worth noting: Even though Teladoc has only been a public company since 2015, it has had several financial irregularities.

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