Virtual care provider Doctor On Demand has scooped up $75 million in a series D round led by General Atlantic, with participation from existing investors. The funds are earmarked to fuel the company’s growth and expand access to comprehensive telehealth services across the U.S.
Combined with earlier financings, the San Francisco-based company has raised nearly $240 million to date.
Rapid rise in telehealth use
The injection of funds comes as telemedicine is gaining new momentum during the COVID-19 pandemic. With surges in patient demand, hospitals and providers are looking for ways to triage, evaluate and care for patients while minimizing transmission to patients and clinicians.
The Coronavirus Aid, Relief and Economic Security (CARES) Act, enacted in late March, provided the U.S. Federal Communications Commission with funds for a $200 million telehealth program to support health care providers battling the COVID-19 outbreak. This includes supporting purchases of devices and other items needed to provide virtual care. The FCC had already been working to increase telehealth for low-income patients and veterans through the $100 million Connected Care pilot program.
Recent policy changes have also spurred telehealth use. In March, the Centers for Medicare and Medicaid Services announced a telehealth waiver that covers hospital, office and other visits. The waiver covers professional services to Medicare beneficiaries anywhere in the U.S., in any facility and their home, for the duration of the public health emergency. The scope of the waivers covers a number of health care professionals, including nurse practitioners and clinical psychologists, and pays telehealth services on a par with in-person visits.
The following month, CMS announced more than 30 policy changes, including elimination of the “originating site” rule. During a June 17 hearing of the Senate Health, Education, Labor and Pensions Committee, lawmakers called for many of the temporary policy changes to remain after the crisis is over.
“COVID-19 awakened the industry to the benefits of virtual care as a means to reach all patient populations and, at the same time, demonstrated the high quality of care that can be delivered in a virtual-first setting,” said Hill Ferguson, Doctor On Demand’s CEO. “Doctor On Demand will remain dedicated to delivering high-quality, compassionate care to our patients and innovative, cost-effective solutions to our partners as we continue to expand access and launch new capabilities.”
Build out technology platform, services
Ferguson said the new funds will be used to build out Doctor On Demand’s technology platform, expand its behavioral health practice and increase investment in its virtual primary care offering, which is seeing early traction and growing interest from health plan and employer partners.
“We’ll also be scaling up our product and engineering teams to support our accelerated roadmap to offer enhanced and new product and feature offerings to our customers and growing patient population,” he told BioWorld.
Founded in 2012, Doctor On Demand currently has more than 98 million covered lives, more than twice the number it had six months ago. The company – which offers virtual primary care, urgent care and behavioral care encounters – recently hit the 3 million virtual visits milestone. In addition to demands for urgent care, Ferguson said requests for behavioral health visits have increased markedly during the pandemic, growing 150% year over year from 2019.
However, the company is also experiencing strong demand for primary care services. “While COVID-19 drove a sharp increase in utilization of Doctor On Demand’s urgent care and behavioral health services, more than half of our 2020 future growth is focused on our virtual primary care offering,” Ferguson said. The comprehensive service includes integrated behavioral health, 24/7 routine and urgent care, as well as chronic care management.
Positioned for growth
“Doctor On Demand is a virtual care pioneer in both video-based consults and virtual primary care, with a differentiated clinical model and behavioral health offering that allows the company to efficiently scale and provide value to patients, providers and payers alike,” said Robbert Vorhoff, managing director and global head of health care at General Atlantic. “We believe virtual care has reached an inflection point, with significantly increased adoption levels, and that Doctor On Demand is well-positioned to capture the sustained growth of the broader industry.”
In a recent interview with BioWorld, Peter Micca, partner and national health tech practice leader at Deloitte, said the uptick in telehealth usage, coupled with the loosening of regulatory restrictions on licensing across state borders and willingness of payers to cover virtual visits, bodes well for future investment in the space. “The genie’s out of the bottle,” he said. “The general consensus is telehealth, post-COVID-19, will demand greater usage.”
Doctor on Demand’s leaders hadn’t planned on raising a series D at this time, “but we saw tremendous interest from the market and made the decision to take this investment ahead of schedule to meet the demand from our health plan and employer partners and patients nationwide,” Ferguson said. “Our pipeline is healthy, we have a long financial runway and are going to be heads-down scaling out the operations and clinical teams and rolling out new services in new markets.”
As for an exit strategy, she said the privately held company doesn’t have a timeline for an IPO.