The dramatic rise in virtual health care has made telehealth stocks one of the biggest growth stories of this past year.
With the outbreak of the COVID-19 pandemic, patients were forced to seek out alternatives to traditional brick-and-mortar doctor visits in order to help curb the spread of the virus.
This led to a sharp increase in the use of telehealth for patients over the last year.
Telehealth, or telemedicine, companies allow people to see doctors and other medical professionals remotely through phone calls, video calls, and digital channels.
This new method of providing healthcare allows for long-distance patient and clinician contact and can provide a range of other services including care, advice, reminders, education, intervention, monitoring, and remote admissions.
But with the vaccine rollout gaining momentum and with the economy set to return to some level of normalcy in the fall of 2021, what will the future telemedicine look like? Will the industry shrink once people begin in-person doctors visits again?
The answer is no.
According to market research firm Grandview Research, the global telehealth market is set to grow much larger in the future due to the lack of access to care, rising provider adoption of telemedicine, rising consumer demand and patient acceptance, and enhanced quality of care.
In fact, the global telemedicine market size was estimated at USD 55.9 billion in 2020.
However, this is projected to expand at a compound annual growth rate (CAGR) of 22.4% over the next few years and reach a staggering USD 298.9 billion in market value by 2028.
This creates an enormous opportunity for investors to gain exposure to this booming industry today.
If you don’t want to miss out on the future of medicine, here are 3 exciting stocks that should be on the top of your watchlist right now: Teledoc Health (NYSE:TDOC), Amwell (NYSE:AMWL), and Amazon.com (NASDAQ:AMZN).
You can’t talk about telehealth stocks without mentioning the leader in the space, which is Teladoc Health.
Founded in 2002, this Purchase, New York-based company is a multinational telemedicine and virtual healthcare company that provides a platform for people to get healthcare from a variety of health professionals including mental health care providers and specialists.
Some of its products and services include telehealth, medical opinions, AI and analytics, and licensable platform services. Its brands include Teladoc, Livongo, Advance Medical, Best Doctors, BetterHelp, and HealthiestYou brands.
The company’s telephone and video conferencing software provides remote medical care, and allows patients to log on to the service at any time and be connected with a board-certified, state-licensed physician within several minutes.
Teladoc generates revenues through subscription fees and copays for its services. However, although the company’s revenues have essentially doubled YOY from $553 million in 2019 to $1.094 billion in 2020, the company has yet to generate a profit - reporting a loss of $485 million for the 12 months ended December 31, 2020.
Amwell, formerly American Well, is a telemedicine company that was founded in 2006 and is headquartered in Boston, Massachusetts.
Similar to Teladoc, it focuses on the digital delivery of healthcare for patients and offers a single, comprehensive platform to support all telehealth needs from urgent to acute and post-acute care, as well as chronic care management and healthy living. Amwell powers telehealth solutions for over 2,000 hospitals and 55 health plan partners with over 36,000 employers, covering over 80 million lives.
Some of Amwell’s services include urgent care, pediatrics, therapy, menopause nutrition, menopause counseling, telestroke, population health management, telepsychiatry, pregnancy and postpartum care, pregnancy and postpartum therapy, breastfeed support, and menopause care.
In addition to telemedicine, the company also provides equipment, which includes telemedicine carts, peripherals, TV kits, tablets, and kiosks.
AMWL’s revenues have grown from just $114 million in 2018 to $245.3 million in 2020. However, the company has lost money each year and recently reported a net loss of $224.4 million in 2020.
The stock has fallen sharply since the beginning of the year - bringing the company’s market cap to around $4 billion today.
The biggest story in telehealth today is Amazon’s move into the business.
Amazon Care was originally launched in 2019 to provide its employees immediate access to high-quality medical care. The service enables employees to connect with medical professionals via chat or video conference (typically in less than 60 seconds) and eliminates lengthy wait and travel times to get medical attention.
It provides virtual care, which connects patients to medical professionals using live chats through the Amazon Care app, and it also provides in-person care, where the service can dispatch a medical professional to a patient’s home for additional care, ranging from routine blood draws to listening to a patient’s lungs, and also offer prescription delivery right to a patient’s door.
The service was previously only available to the company's employees in Washington state.
However on March 17, Amazon sent shockwaves throughout the industry when it announced that it would be expanding its Amazon Care app-based services to its employees in all 50 states and to other companies across the United States. They also announced that Amazon Care’s in-person service will expand to Washington, D.C., Baltimore, and other cities as well.
The move will offer “millions of individuals and families immediate access to high-quality medical care and advice—24 hours a day, 365 days a year.”
This is a gamechanger. Although it will take some time for the service to ramp up, look for Amazon to continue gaining market share in the telehealth space in the weeks and months ahead.