Accolade to buy telehealth startup 2nd.MD for $460M
Health concierge startup Accolade announced this week that it will buy the telemedicine vendor 2nd.MD for about $460 million.
According to a Thursday press announcement, Accolade intends to strengthen its ability to provide users second opinions through the acquisition of Innovation Specialists, the Houston-based parent company of 2nd.MD. The company will also continue to offer 2nd.MD’s service on a stand-alone basis.
“Bringing 2nd.MD’s world-class Care Team and digital approach with expert medical consultation into Accolade, and continuing to offer it on a stand-alone basis, will have an immediate and measurable impact for our customers, their employees, and the health plans we work with,” said Rajeev Singh, chief executive officer at Accolade, in a statement.
WHY IT MATTERS
Seattle-based Accolade acts as an on-demand healthcare concierge tool, allowing employers to offer employees and their families personalized health and benefits solutions.
2nd.MD, meanwhile, works to connect patients with board-certified experts around the country for a medical consultation via video call or phone within three to five days. Currently, the company says it serves more than 300 employer-customers and more than 7 million employee-members, and that employer-customers save an average of $5,000 per consultation and $27,000 per consultation when a surgery is involved.
“Both companies have built deep relationships with employers and health plans by helping employees navigate the increasingly complex and inconsistent healthcare system,” said Singh.
The transaction is expected to close by the end of February, with a purchase price of $230 million in cash, $130 million in Accolade common stock and up to $100 million in Accolade common stock contingent on revenue milestones.
“We are enthusiastic about the business benefits that 2nd.MD will bring to Accolade. In addition to the expanded services and clinical capabilities we will be able to offer our customers, 2nd.MD brings new industry distribution relationships to help grow our business and expands our addressable market by an estimated $22 billion,” said Steve Barnes, chief financial officer at Accolade.
THE LARGER TREND
It’s been a busy year or so for telehealth from a merger and acquisition perspective.
In August of last year, Teladoc Health announced that it would absorb chronic care company Livongo to the tune of $18.5 billion, following its absorption of InTouch Health’s enterprise telehealth business valued at $600 million eight months prior.
Teladoc and Livongo’s leaders said in October that they see the deal as a way to offer a longitudinal relationship between clinicians and patients.
“Rather than a checkup once a year or two visits for sore throat or the flu and no interactions in between that, this becomes a longitudinal relationship that brings [together] multiple professionals, digital assets and data science all to bear for the consumer,” said Teladoc CEO Jason Gorevic.
ON THE RECORD
“Combining our Care Teams and technology with Accolade will enhance the reach and quality of support to members from the moment of crisis to the other side of treatment on the path to wellness,” said Jason Melton, chief executive officer, 2nd.MD.
“We share a common business vision, our cultures are highly aligned around employee purpose and we share a common mission to change healthcare for the benefit of all consumers,” Melton continued.
Kat Jercich is senior editor of Healthcare IT News.
Email: [email protected]
Twitter: @kjercich
Healthcare IT News is a HIMSS Media publication.
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