John Palumbo: It’s really difficult for the average American family to get access to primary care physicians. Now, you have about 80% of the adult emergency room visits happen because there’s no access to a physician. Our members basically get access to a nurse, on an average, in about 12 seconds and are able to have a consult with a physician in under 30 minutes. That physician can help write orders, guide them to the appropriate care they should have, whether they should go to an emergency room or an in-person visit.
The interesting part is 80% of those adult visits, 47% are not emergency cases. That’s a good example of how when you have immediate access with a trusted provider, you’re able to get the kind of care when you need, how you need, and at the best price that you can get.
Sramana Mitra: Let me ask a couple of question to see if I got this right. You are running, essentially, a virtual network or call centre of nurse practitioners and physicians and these are available on-demand for a fee to either your B2C customers or customers who come in through corporations or other hospital systems.
John Palumbo: That’s correct. It’s a network of healthcare providers. There are pharmacy providers. There are laboratory testing services. There are imaging services. There are durable medical equipment services. It’s a variety of providers and we serve all 50 states on a 24/7 basis.
Sramana Mitra: What is the backend? The backend is physician offices who become part of your network somehow? Is that how it works?
John Palumbo: We have a network of physicians that do virtual consults. They can either do a video or a tele-consult.
Sramana Mitra: They don’t work for you. These are people who run their own practices and they essentially are part of your network and are willing to do certain amount of video consultation or phone consultation.
John Palumbo: It’s actually both. There’s actually somewhat of a new model where you do have physicians specializing in remote care and also physicians who do have a practice.
Sramana Mitra: But these are third parties. They’re not employees.
John Palumbo: None of the physicians are employed by us. They’re a network of physicians.
Sramana Mitra: You said one of the ways you go to market is through corporations. What is the level of adoption in the corporate for this kind of service?
John Palumbo: It’s been rather explosive over the past three or four years. It’s estimated by most executives that more than 60% of all companies will be offering tele-health. You now have the Department of Defense that is the largest user of remote care models. Virtually, every major insurance company has some form of telemedicine or telehealth in place for both their indemnity population as well as their self-insured population.
Quite candidly, if you talk about some of the macro trends, there’s a second event that will happen to the Affordable Care Act which his called the Cadillac Tax which will force more and more corporations to deliver alternative means of getting access to care because they’re going to have to put more and more of their employees in these high-deductible programs. Health systems are doing it. Part of that is due to some of the new reimbursements that are coming out by CMS.
It’s expected to be, basically, a $30 billion industry. Right now, there’s about five or six Tier 1 companies. Most of us are private. There’s only one public company. We’re arguably the second or third largest provider or remote services in the United States. We have about four million members.