Episode Details

This is episode 1 of a two-part show about the potential impact of the Teladoc acquisition of Livongo. To get started here, in deference to the fact that we're all in the health care industry, let's agree on an acronym, shall we—because I can't keep saying Teladoc-Livongo. So, I'm going to go with T&L heretofore that will refer to the Teladoc acquisition of Livongo.

What is the general merged T&L pitch? Here it is (I looked at their investor deck): T&L is going to use technology to transform the experience of living with a chronic condition and provide a differentiated consumer experience. The merger will also create a consumer-first, data-driven digital health experience that puts the consumer in charge. T&L will also translate deep consumer data to improve member outcomes and cost savings.

Here's why I think that whole slide is the tip of a disruptive iceberg. First of all, we're in the middle of a land grab for patients. For my full land grab observational analysis, you can read the show notes of the Labor Day 2020 encore episode with Dr. Joe Selby or listen to it. But consider these intertwined points from the T&L investor deck: 80% of large employers believe virtual care will significantly impact the delivery of health care in the future—80%! Also, implementing more virtual care solutions is the number one priority for large employer health initiatives. That's something.

In the T&L investor slide deck, slide 14 shows the TAM—otherwise known as total available market—that T&L thinks they're going to get. Spoiler alert: It's a $121 billion market, and they're coming for you. Anybody who thinks you're going to continue to care for patients with chronic conditions all by yourselves, at a minimum, enter your new frenemy.

Here's another reason why I think the T&L merger is the tip of the iceberg of disruption: They talk about, again in their investor deck, how they're going to be fully scalable across multiple conditions, including CHF (chronic heart failure) and CKD (chronic kidney disease), plus integrated behavioral health; and also, they've been rumored to be courting MSK (musculoskeletal) outfits like Hinge Health. So, it's not just diabetes anymore.

Here's another point: the referral flow. T&L are looking to start to disrupt the referral flow of traditional models. I mean, think about this. If they intercept the patient at the PCP level with Teladoc, then they can refer to a provider in the cloud, like Hinge Health or Livongo or one of the many behavioral health/mental health services lighting up our skies right now.

Or consider this: Say I'm in Pennsylvania. I might not want my prostate specialist to be a few hours away if I have to go there on the regular. But let's just say the specialist offers telemedicine appointments and now I only have to go there, like, once a year. Here's the point I'm making: Vertical integrations like the one that Teladoc created by acquiring Livongo is a model that has all the potential of vertical integrations in the traditional sphere. Captive populations are a goal for a reason. And having a digital front door could enable all kinds of very geographically dispersed competitors that traditional health systems may not have realized are competitive.

Is this my hypothesis? Nope. T&L say it flat out in their investor deck. Their goal is to increase enrollment and utilization by referring individuals across Teladoc and Livongo products.

Here's some other facts to throw in the stew that I thought were interesting: You've got consolidated health systems right now who, some studies show, have raised their rates 23% higher than in markets with competition. And the outcomes of said consolidated health systems in patient satisfaction and quality—pick a measure—aren't any better as a trend line than health systems in competitive marketplac