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Teladoc grows Texas services with Gov’s OK

May 31, 2017

Texas, a large healthcare market and the home state of Teladoc (NYSE: TDOC), has been a relatively small market for the telemedicine firm.

But now with Texas Gov. Greg Abbott’s signature on a new law that makes operating in the state easier, Teladoc is poised to expand its business here. Lewisville, TX-based Teladoc had been involved in a six-year lawsuit with state health authorities over whether a patient-physician relationship can be established online without an in-person visit first. The company, which has three million members in Texas (out of a total of 20 million across the U.S.), will now resume care consultations via video.

“Getting to the doctor is not easy; it’s not easy to get an appointment,” Jason Gorevic, Teladoc’s CEO, told me in an interview last week. “As a result, people end up going for expensive or inappropriate care. Fifty percent of our visits are on nights and weekends and holidays when the average doctor’s office is closed. We’re available 24-7 every day.”

While most people associate telehealth with rural communities, Gorevic says the need also exists in urban areas. Thirty-five counties in Texas do not have a primary care physician and Texas ranks 46th among the states in terms of primary care physicians per capita, he added.

On Monday this week, HealthTap, a startup based in Palo Alto, CA, announced that Abbott’s signature meant it would launch its telehealth service in the state. The health IT company has raised nearly $40 million in funding and, in December, launched its Doctor A.I. service, an artificial intelligence “doctor” that connects users to physician-recommended insights. The company says its software analyzes data gained in these interactions in order to continually teach itself.

Other companies like Pager, Spruce, and Sensely—which offers Molly, a virtual nurse avatar—are also using machine learning to expand access to care.

Teladoc began offering telehealth services in 2005, but in 2010 the Texas Medical Board imposed rules that restricted video conferencing without first establishing an in-person relationship between a doctor and a patient. In the years since, Teladoc—as well as a few other competitors such as MDLive and Doctor on Demand for mental health services—offered services over phone calls, but that prompted further regulatory scrutiny. Shortly after going public in 2015, Teladoc sued the state.

Abbott’s signature this weekend, as the Texas Legislature winds up its regular biennial session, makes the suit moot.

Gorevic, a longtime health plan executive, said that artificial intelligence tools are likely to be the next frontier for telehealth companies. He first got into the field in the mid-1990s when telehealth services consisted of nurse advice lines he helped to put into place when he worked for Oxford Health plans.

Teladoc’s primary customers are large companies and health plans, which pay a per-member per-month fee to access telehealth services for treating more quotidian problems such as cuts, rashes, and urinary tract infections. Recently, the company began to provide its services to hospitals and health systems providing care for remote populations. Gorevic says Teladoc now cares for more than 20 million people nationwide and will host 1.5 million telehealth conversations this year.

“We see a greater integration with biometric devices, digital thermometers, and the like that send the information directly into our platform, and enables our physicians to see a longitudinal record of the encounter,” he says. “This gives us an opportunity to treat more complex patients who have more challenging clinical conditions.”

Gorevic says Teladoc has introduced other services in the last 18 months, such as those related to behavioral care, tobacco cessation, sexual health, and a program that enables caregivers to be connected with a healthcare provider along with an aging family member without having to be in the same physical location.

The proliferation of smartphones in the last decade has meant expanded opportunities for patient-physician interaction, Gorevic says. “That may be a consumer taking a picture of pink eye or a rash from being in the yard over the weekend, and uploading [them] that so a physician can review prior to or during an interaction,” he says.

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