Constant movement and change is the nature of innovation. Merger and acquisition activity has been part of the healthcare point solution and start-up world from the beginning, but COVID-19 may well be accelerating the pace of change. Certainly, with new demands for healthcare in an adapted, socially distant environment, digital health has become a booming business. Telemedicine’s utilization has increased by a stunning 4,347% between March 2019 and March 2020, and telemed’s share of medical claims has jumped from 0.2% to 7.5%.
Rapid utilization growth is not the only change occurring in the digital health world. Major headlines in the marketplace have included Omada’s acquisition of Physera, Interactive Health’s abrupt bankruptcy filing and Teladoc’s recent acquisition of Livongo.
What does this increase in market movement mean for employers and their members? On the one hand, all this instability in healthcare can be a source of annoyance, something employers typically try to avoid, for their employees’ sake as well as their own. When analyzing new partners in an economically challenging environment, it’s important for employers to assess the market and complete some due diligence.
At the same time, this type of instability has its benefits. While we may be more sensitive to the negative impacts, we should not forget the positive impacts either. A partner’s acquisition of another company may add on services automatically or may open an opportunity to re-negotiate a contract to include the new services to your members in a seamless way. Integration may become easier, and your vendor partner may have access to resources they did not have before.
In the event that one of your vendor partners is subject to acquisition, or makes a significant acquisition, it’s important to have a conversation with them as soon as possible to explore the impact it will have on your partnership and your members. A proactive approach will allow you to have ample time for proper planning and communication to members. At a time when we must deal with disruption on a daily basis, it’s good to know you can take steps to manage change in your interactions with the churning digital healthcare marketplace.