3 Plays in Telemedicine

03/26/2020 5:00 am EST


Eddy Elfenbein

Editor, Growth Stock Advisor

Many of the large insurers have moved into the telemedicine arena. While not a large part of their business yet, I believe it will grow much larger, with coronavirus acting as an accelerant to this new business line, explains Eddy Elfenbein, editor of Growth Stock Advisor.

Here are three large companies that are already providing a telemedicine option. 

Anthem (ANTM) delivers doctor visits to your phone through its telemedicine platform called LiveHealth Online. Anthem has set up a clean, easy to use website that provides visitors with short videos on how LiveHealth works, and what the process is like to “see” a doctor. 

This is an important piece of the puzzle for customers who may be elederly and not be as familiar with technology as younger users. 

The process is very much like seeing a doctor in person. The patient tells the doctor what their symptoms are, the doctor conducts an exam via the telephone or tablet, and then a treatment plan is devised. This can include a prescription if that is what is needed.

Anthem, like other stocks, has been volatile the past month but has held up well overall. The company trades at a PE of 15.5 and yields 1.3%. Full year 2019 revenue grew 12.9% year-over-year to $103.1 billion.

UnitedHealth Group (UNH) offers its Virtual Visits to anyone needing to see a doctor with a wide range of symptoms and afflictions, from seasonal flu to fever to pinkeye.

And, the platform offers the opportunity to speak directly with a doctor in 20 minutes or less, from the time you initiate the visit. I don’t know about you, but I don’t remember the last time I spent less than a half-hour in any waiting room for a doctor’s visit.

Like the other companies here, if your insurance plan covers a doctor visit, it also covers a telemedicine visit. Even mental health visits, if covered under your plan, are also available using the Virtual Visit.

UnitedHealth had revenue of $242 billion last year, which was a 7% year-over-year increase. Fourth-quarter earnings came in at $3.90 per share, representing 19% year-over-year growth for the company.

A few years ago, Humana (HUM) accelerated its technology push across a broad range of areas. This includes building a customer’s health history into a cradle to grave system, and a focus on areas such as telemedicine.

Humana emphasizes in its virtual visit that the doctor you are visiting on their telemedicine platform is board certified and that the connection for your virtual visit is secure.

This is an important selling point to an elderly clientele that wants assurances they are seeing the same caliber of doctor via a virtual visit. And, to both the elderly and younger market that wants a secure way to provide their confidential medical information. 

Humana earned $3.84 per share in Q4 2019, a 48% year-over-year increase. The company is expected to grow it’s Medicare Advantage membership base by between 7.5% and 9.2% in 2020, which should provide a nice boost to 2020 earnings. 

Each of these three companies has held up well in this market, have outstanding growth overall, and should continue to benefit from telemedicine offering long after coronavirus is a distant memory.

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