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Amwell, Teladoc race to expand virtual care platforms

The pandemic gave telehealth vendors a foothold in care delivery. Now Amwell and Teladoc are making strategic moves to sustain usage.

The pandemic has pushed telehealth adoption to new lengths, and Amwell and Teladoc Health Inc., two of the most prominent telehealth vendors, are capitalizing on the momentum.

In one fell swoop this week, Amwell announced it was filing an IPO and that it had entered into a multiyear strategic partnership with Google Cloud. Google has also pledged to invest $100 million into the company and to provide AI and machine learning capabilities to help create a comprehensive virtual care experience for patients and providers -- one that goes beyond video visits and includes services such as self-triage or remote patient monitoring (RPM) capabilities.

The Amwell-Google partnership gives Amwell a competitive edge during a time when virtual care services beyond video visits are in demand. Indeed, just weeks before Amwell announced its strategic partnership and IPO, Teladoc announced its plans to merge with Livongo, a virtual care vendor focused on chronic disease management and RPM. 

Kate McCarthy, senior research director at Gartner, said Amwell's IPO filing and Google partnership reflect the growing demand for cloud-enabled virtual care and digital health tools, as well as how telehealth vendors are evolving to maximize the moment and to stay competitive. 

"Amwell customers should expect this partnership to result in more virtual care options, especially those that leverage AI [and machine learning] technologies," she said. "This move helps position Amwell and Google to remain competitive and innovative as Microsoft, Teladoc/Livongo and others seek to take advantage of the market dynamics resulting from COVID-19, which have spurred rapid growth and adoption of virtual care around the globe."

Making a competitive virtual care platform

The COVID-19 pandemic caused an immediate, massive shift to virtual care, which highlighted both the capabilities of telehealth and its gaps, according to Chilmark Research analyst Alex Lennox-Miller.

Traditional face-to-face video appointments no longer suffice. Healthcare organizations want additional capabilities. The demand has caused telehealth vendors to step up their game, starting with the recent Teladoc-Livongo merger, Lennox-Miller said.

Alex Lennox-MillerAlex Lennox-Miller

"Amwell, Teladoc and others, their big clients are employers, and these services are offered as basically an employee benefit, but the value proposition is in saving costs on their insured population and the best way to do that is keeping them healthy, keeping them out of the hospital," Lennox-Miller said. "RPM does that much better than telehealth does. So, as they're competing for customers, whether they are employers, payers or healthcare systems, Teladoc now has a much more compelling package of services."

It wouldn't surprise me to see them leverage that [money] into acquiring something similar so that they're at least competing on the same level.
Alex Lennox-MillerAnalyst, Chilmark Research

With the Google Cloud strategic partnership, Amwell has a chance to put itself in a more competitive position, Lennox-Miller said. Google Cloud will bring its analytics and scalability strengths to the table.

But for Amwell to compete with the likes of Teladoc, it will need to build out additional services, Lennox-Miller said. That's where the $100 million Google investment and the influx of cash from its IPO will help. What Amwell does with the money will make or break its success in creating a more comprehensive virtual care platform, according to Lennox-Miller.

"It wouldn't surprise me to see them leverage that [money] into acquiring something similar so that they're at least competing on the same level," he said. "Right now, the difference between what Teladoc will offer once the acquisition goes through and what Amwell will offer are orders of magnitude different in terms of effectiveness."

Scalability and analytics

Amwell saw a 400% increase in use of its platform in March and April and struggled to keep up with the demand.

Arielle TrzcinskiArielle Trzcinski

Although peak usage has gone down since May, the surge in patient volume signaled to Amwell that it was experiencing a tipping point for virtual care, according to Forrester senior analyst Arielle Trzcinski. The vendor has also realized interest will likely continue even after the pandemic, she said.

"I think they recognize that this is not going anywhere, and to truly scale and support the broad provider network they support today, they need some more scalability, and I think Google will help bring that to the table," Trzcinski said.

Additionally, Google Cloud's AI capabilities will help improve Amwell's virtual care services, from the intake process such as symptom checkers to follow-up. Trzcinski said Amwell has fallen short on the analytics front compared to its competitors and that Google Cloud's analytics tools will be important for Amwell to continue to develop and advance its virtual care platform.

"They do have some capabilities today, but when we compared them to other competitors in the market, they fell behind," she said. "So, they do need some additional support, and where they can leverage some of the incredible assets Google has developed, that will help them hit the ground running."

Aashima Gupta, global director of healthcare strategy and solutions at Google Cloud, said Google plans to work closely with Amwell to integrate its AI capabilities into Amwell's virtual care platform, particularly in natural language processing and medical transcription services. Gupta said transitioning from a video visit to a more comprehensive service is the "opportunity in front of all of us."

"We were brought together by a shared vision, and the shared vision is to advance mobile access to quality, affordable care and virtual care to every home and every hospital," she said.

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