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 Today in Health it, this story is digital health consolidation continues with MDLives acquisition by Cigna's ever North. My name is Bill Russell. I'm a former CIO for a 16 hospital system and creator of this week Health IT at Channel dedicated to keeping Health IT staff current. And engaged VMware was one of the first sponsors of this week in Health it, and now they are the first sponsor of Today in Health it.

They have committed to our mission of providing relevant content to health IT professionals since the start, and they continue to do that for the industry as well. They recently completed an executive study. With MIT on the top, healthcare trends shaping it, resilience, covering how the pandemic drove unique transformation in healthcare.

This is just one of many resources they have for healthcare professionals. For this and several other great content pieces, check out vmware.com/go/healthcare. Alright, today's story to be acquired by Cigna's ever North. Well, we know, well, not really a a heck of a lot, to be honest with you. This happened on Friday.

Telehealth provider, MD Live is being acquired by Cigna Health Service subsidiary ever North. The two companies announced this morning. The deal is expected to close sometime in Q two. The terms of the deal were not disclosed, so forth and so on. They're gonna tell us more on March 8th at an investor day event.

Let's dig into this a little bit. So, MD Live is among the largest telehealth vendors in the US and delivers services including urgent care, dermatology therapy, psychiatry via its network of certified clinicians, and that is the key right there. Over the years, it's marketed its 24 7 virtual care services directly to consumers, while also partnering with health systems, employers and payers, including Cigna, to either extend hospital care to provide virtual care as a member benefit.

Well, let's break that down a little bit 'cause I did receive an investor note in my email box, and this is MD Lives Makeup, MD lives enterprise payers and employers. Business represents 93% of the company's revenues. Okay, so that's a little bit more color on that. Payers and employers, 93% of the company's revenues, health systems, and direct to consumer, made up three to 4%.

And the bulk of the enterprise business is coming from health plans, 80% of the total revenues. So that will tell you a lot. And it's Cigna, Aetna, it's Humana, it's, it's all the the normal players, right? While the company company's notable employer clients include AutoZone, LabCorp, Walgreens, the NFL Hyatt, so pretty good list of employer clients.

Just in the past year, MDLives US membership has increased from 50 million members to now 60 million plus. With Grow, with Growth coming from both expansion into existing clients, members from Net new clients, in addition to urgent care, behavioral health and dermatology business. MD Live launched in earnest a virtual primary care product, which has been rolled out with a number of customers, including Cigna.

All right, so that's, that's, that just provides a little bit more color on the business that they're in. Analysts pegged the company's valuation at more than a billion. As of that funding. Alright, so I share this paragraph only to say, you know, it's roughly a billion when they were looking to go public.

Those plans are now scrapped as you would imagine in favor of this acquisition. A move that Cigna's ever North hopes will form the backbone of an end-to-end virtual care offering for its customers. Again, a key covid to 19 has increased customers appetite. For virtual offerings ever North CEO. Tim Wentworth said in a statement, let's see what else Tim has to say.

Combining MD Lives platform and strong network for virtual providers with our comprehensive care solutions will better position us to optimize the care journey to improve affordability. And accessibility and deliver superior support to health plans as they advance their own care delivery models for the future.

All right, so that'll give you a little bit more color into how they're thinking about this and where they're going. Let's get to the so what on this? So I have three aspects of this. So what if you are with a health system, the, these are the things I would be thinking about this morning. And the first is the payers want to direct care.

They want to get into that continuum of care and they want to be a major part of it. They want to own the relationship and they want to direct care in order to maximize their contracts with the insured, either the direct to employers or with the payers. They are a competitor to health systems. You may partner with them, but never forget they are a competitor.

At the end of the day, anyone that gets between you and your customer and wants to direct their activities with regard to their engagement with you should be considered a competitor. Not that you don't partner with them from time to time, but they're a competitor nonetheless. Number two. You have to know your digital company's exits, and part of this is a tangent.

I looked at their business model and I just couldn't figure out why they would want to do that. They were hoping that by putting our docs on their platform, they might generate more business for. Our docs because the docs would be present on their platform and, and that would put them in the mix of the deal flow.

Do you plan to exit and and go beyond the the pat answers? You know, figure out what are they gonna do? Are they looking to be acquired? Are they looking to go public? All of those have ramifications. Know and understand them. And integrate them into your plans. I would say the final thing is. When evaluating these kinds of technologies break out the business model and the technology, the tech for telehealth was never that hard to figure out.

And we talk about remote consults and so of, right now we're talking about virtual visits. Virtual visits essentially from a tech platform is scheduling digital, waiting room, education, delivery of education over a digital means, video visit and messaging. That's it. You can build that out yourselves. And we've proven that and we are building that out ourselves.

Post Covid, COVID sort of forced our hand on it and we are building it out. And so you have to break out the decision because once you say, okay, look, this is the tech tech stack, we can get it in a lot of different ways now. Now ask yourself, does the business model fit into our business model? Does it make sense for us to partner with this organization?

So those are the three things I have for the So what for this deal? It's interesting. It's going to be interesting to see what happens in this space. If I was just spectating and wanting to. Talk about the deal itself. I, I think it says a lot about what's gonna go on in the industry, where funding's gonna come from, and where the, uh, acquiring players are sitting right now.

Who's, who's the ones with cash on the sidelines looking to expand and to enhance their offerings? That's all for today. If you know of someone that might benefit from our channel, please forward them a note. They can subscribe on our website this week, health.com, or wherever you listen to podcasts. Apple, Google Overcast, Spotify, Stitcher, you get the picture.

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