Amwell CEO on economic challenges, CVS Health partnership
The most recent financial statement from telehealth company Amwell isn’t pretty.
Amwell posted an annual net loss of $272.1 million, or $0.99 per share. In its 2022 annual report, the company said expects to pay higher costs this year to scale its business and increase revenue. The company said it may have to raise additional capital through debt or equity financing
At the ViVE digital health industry conference last week, CEO Roy Schoenberg struck a more positive tone.
“We’re bullish,” said Schoenberg, who co-founded the Boston-based company with his brother Ido in 2006. “We are a technology company and we’re sitting on amazing technology [capabilities] that’s going to sustain us for many, many years to come. We’re extremely well capitalized through our (September 2020) initial public offering…That’s a recipe that I’ll bet on every day.”
Schoenberg did not make any predictions on profitability but said Amwell’s pricey investments into the research and development of its back-end technology are nearly over, which will help boost income. He also spoke about economic challenges, data privacy and its deal with CVS Health. The interview has been edited for length and clarity.
Health systems, which represent one of your major buying segments, are struggling financially. How is Amwell dealing with economic challenges?
The current reality for health system is really challenging for them. We need to not only be aware of it, but we also need to be good partners. We need to be there for them. It isn’t just a matter of pricing. It’s about whether you can really deliver value. If you put away the dollar signs, what health systems are saying is, “It’s not that we don’t want to buy technology…it’s that we have to make the right case for it.” It has to make sense for everyone. We have to talk about how it makes live easier for patients and clinicians. We have to talk about clinician burnout and staffing issues…because these technologies can deliver value in those areas.
Are you pursuing any potential merger or acquisition opportunities?
There are no IPOs going on. There are no investments going on. There are companies with great products out there that are becoming available. There are companies that you can acquire with reasonable value. We believe that if we acquire companies, whatever they deliver to us, it’s not just about the sales numbers. It needs to change the narrative. We need to be able to say how we’re delivering value better because of what was added to our portfolio.
How has your partnership with CVS Health gone?
We’re helping them realize the vision they have where medical care is balanced between physical and digital environments. They are exceptionally impressive in the way that they’re thinking about that vision. I’m astounded by how forward their vision is and how pragmatic they are in realizing it. They are mobilizing their strengths to essentially [give] a completely different healthcare experience to people. We are a cog in that wheel.
Some digital health companies have gotten in trouble with authorities for violating patients’ data privacy. What’s your take?
The growing supervision by government agencies and regulators around how digital health companies are maintaining their data is warranted. I don’t like the nuisance, but it’s warranted because it is a new industry, and it is new territory. Most people care about their family, money, and healthcare and their family’s healthcare. That’s what allows us to sleep at night. Now all of this healthcare information is moving into the digital care world. If we don’t set it right at the beginning, we’re going to be doing ‘Whack a Mole’ and chasing fires all over the place.