American Well Raises $80 Million Series C To Scale Up Its Telehealth Platform

image 

Boston, MA-based American Well announces that it has raised an $80 million Series C, adding a significant exclamation point at the end of an already spectacular year of funding for the digital health sector. The funding round was oversubscribed as investors from unnamed private equity and corporate partners, including some of the largest health plans and academic medical centers in the country, lined up for the opportunity to investment in the emerging telehealth market. The new round brings American Well’s total funding to $128 million since its launch.

Founded in 2006, American Well is now the largest provider of telehealth services in the US. The company will connect a patient with a doctor through its smartphone app or on a computer. The sessions cost $49 each and provides a 10-minute doctors visit, which includes a diagnosis and prescription, when possible. While $49 is expensive, compared to an office visit, its about on par with the co-pay most insurances require for a visit to an urgent care center or emergency department. There is also the cost of convenience to consider. For many people, the last thing they want to do when they are truly sick is get out of bed, get dressed, and go to the doctors office. For routine care scenarios, there is a lot to like about the telehealth care delivery model.

While the number of consumers taking advantage of telehealth services is steadily increasing, many industry experts suggest that telehealth’s true tipping point will come when insurance companies reimburse for the service. Medicare has already made some progressive changes to its reimbursement policies to allow for expanded telehealth use. Effective January 1, 2015, doctors will be able to bill Medicare as much as $100 per month for providing telehealth to patients in support of chronic disease management. What is notable about this change is that unlike past telehealth allowances, Medicare is not requiring the patient live in a remote area to qualify for telehealth services any longer.

As CMS continues to promote ACOs and value-based care, telehealth’s ability to provide an effective but low cost alternative to emergency room care is pushing it to the forefront of healthcare reform. Now that Medicare is embracing the service, it is only a matter of time before private insurers follow suit, which is likely why American Well’s planned $25 million Series C so quickly ballooned into an oversubscribed $81 million Series C – it appears that telehealth is finally going to get its day in court.


Enjoy HIStalk Connect? Sign up for update alerts, or follow us at @HIStalkConnect.

↑ Back to top

Founding Sponsors

Platinum Sponsors