Teladoc Health, a leading telehealth company, is making strides to expand insurance coverage for its direct-to-consumer mental health unit, BetterHelp. CFO Mala Murthy announced on a recent earnings call that they anticipate BetterHelp’s insurance availability to be “largely national” by the end of next year. This initiative is crucial for Teladoc to revitalize the financial performance of BetterHelp, which has experienced a decline in earnings and revenue in recent quarters.
Currently, the insurance option for BetterHelp has been launched in seven states and Washington, D.C. While this expansion is viewed positively, analysts suggest that it may take some time for significant contributions to materialize. Despite challenges, Teladoc reported $626.4 million in revenue in the third quarter, showing a 2% decrease year over year. The company also reported a net loss of $49.5 million, compared to $33.3 million in the same quarter last year.
Although Teladoc is undergoing a strategy shift to prioritize international expansion and optimize its mental health assets, the company remains focused on enhancing the performance of BetterHelp. The segment experienced a 75% decrease in adjusted earnings before interest, taxes, depreciation, and amortization, with revenue falling by 8% to $236.9 million. To improve affordability and attract new customers, Teladoc has introduced new weekly pay options and expanded insurance coverage for BetterHelp.
Despite these efforts, BetterHelp primarily operates on a cash-pay basis, facing competition from other market participants that offer insurance coverage for virtual mental health services. Teladoc recently acquired UpLift, a virtual mental health firm, to facilitate the acceptance of insurance at BetterHelp. Additionally, Teladoc’s integrated care unit, which includes business-to-business virtual care offerings, saw a 2% increase in revenue to $389.5 million in the third quarter.
However, the company recorded a $12.6 million non-cash goodwill impairment charge in the third quarter related to its acquisition of Australian telehealth company Telecare. As Teladoc continues to navigate challenges and opportunities in the virtual care space, the company remains committed to driving innovation and expanding access to quality healthcare services for all.
