Amwell co-CEO: ‘We don’t see Amazon as competition’


The global pandemic catapulted telehealth into the mainstream, with companies like Amwell (AMWL) seeing a massive spike in users — despite existing for nearly a decade.

“This is not an overnight switch. We just came out from a once-in-a-century crisis … where the entire rule of telehealth has changed,” said Amwell’s co-CEO Ido Schoenberg.

In its latest earnings, Amwell saw total year-end active providers hit 72,000, a 950% increase from the prior year. In addition, total annual visits increased 400% to 5.9 million. But revenue increase was more modest, at 34%. Following earnings, the company’s stock declined on Thursday.

That imbalance, Schoenberg told Yahoo Finance, is in large part because revenues haven’t caught up to the costs required for the sudden and swift build-up of the platform’s infrastructure.

“What we’ve done is … take a three- to four-year development program and condense it into this year,” Schoenberg said.

Chief financial officer Keith Anderson said on the earnings call Wednesday that the extra expenses are also in part due to the company going public in the fall of 2020 and noted that the company is on track to become profitable.

Anderson also noted that the surge in telehealth is “not just episodic” as a result of the pandemic.

But it’s a metric Schoenberg doesn’t see as a key to growth value.

People keep talking about visits, he said, but telehealth’s ultimate goal is to “spend less time with doctors and get services much more quickly using automation.”

An Amwell teleheath visit

As the country faces a physician shortage, and primary care is seen as a key to better health management, technology has the potential further transform the industry.

“There is enormous waste in the interaction between patients and doctors today,” he said.

Trying to eliminate waste in health care is something Big Tech has also been focused on. It’s why with Amazon’s (AMZN) recent announcement to expand its own virtual care offerings to employees isn’t a concern for Amwell.

“We don’t see Amazon as a competitor,” Schoenberg said, noting Amwell already partners with Google (GOOG, GOOGL).

In fact, Schoenberg pitched the idea that Amazon should plug into Amwell’s platform and combine the duo’s strengths: an operating system and customer service.

“When big tech companies try to move into incredibly complicated, regulated, convoluted world of health care, that doesn’t work really well,” Schoenberg said.

But, he added, the way other telehealth companies operate, providing more of a product and service-driven company than a platform, could put them in direct competition with Amazon.

“They should be incredibly concerned when someone so incredibly sophisticated as Amazon is trying to compete (on) their turf,” Schoenberg said.

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