As coronavirus exposes humanity to its most challenging health crisis in recent time, it inadvertently introduced an economic opportunity in the health sector.
Tech companies have been vying for stakes in medical-tech companies offering a range of health services including telehealth.
Google has become the latest big name to delve into the health sector economy. The web-search company’s cloud division is investing $100 million in Amwell, a company that builds technology for virtual doctors’ visits.
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Amwell connects and enables providers, insurers, patients and innovators to deliver greater access to more affordable, higher quality care.
CNBC reported that the deal will require Amwell to move parts of its business from Amazon Web Services, which it currently uses, to Google cloud. Amwell, formerly known as American Well is choosing Google as its “preferred global cloud partner,” and will move some of its video performance capabilities to the platform, according to the statement issued by the company.
Amwell said it will be working with Google on technology to expand its footprints in the health sector through dedicated sales efforts.
The company has filed to go public and is counting on Google’s cloud partnership to provide efficient service to the increasing number of virtual healthcare seekers.
“Google LLC has agreed to purchase $100 million of our Class C common stock in a private placement concurrent with the consummation of this offering, with the price per share to be equal to the purchase price to the public in this offering,” the company said in its IPO statement.
With the pandemic still spreading in the United States, people are choosing telehealth over in-seeking medi-care at hospitals and clinics; companies like Amwell, Livongo and Teladoc are experiencing a revenue boom and need expansion.
Google Cloud’s Aashima Gupta, the director of global healthcare solutions said she’s expecting further growth in telehealth because of “more favorable reimbursement coverage and consumers looking into this as a viable.” She added that the two companies will introduce more machine learning to the service.
“Imagine you’re in a virtual waiting room, and instead of a clipboard there’s a conversational AI helping you,” she said.
CNBC reported Mayo Clinic and Ascension as Google Cloud’s largest customers in the $3.5 trillion medical sector. Some of their customers also use Amwell for their telehealth services.
Amwell said that coronavirus spurred a surge in the months ended June 30. The average monthly visit volumes and average monthly active providers delivering healthcare on its platform increase over 300% and 400%, compared to the first quarter of 2020.
The company said in its IPO statement that it has powered the digital care programs of 55 health plans as of June 30, 2020. And the plans support more than 36,000 employees and collectively represent more than 80 million covered lives, as well as 150 of the nation’s largest health systems, encompassing more than 2,000 hospitals.
Amwell has been partnering with remote monitoring device makers, such as Philips, to deliver targeted programs for chronic disease management and sleep therapy. It also partners with TytoCare to power an affordable home kit for patient-driven medical exams as part of a primary or urgent care visit.
The company said there is a huge market for its services that necessitated the partnership with Google Cloud.
“We estimate the current subscription revenue market opportunity for health plan and health system customers to be approximately $8.7 billion and $3.7 billion, respectively. There are over 290 million lives enrolled in insurance plans that we have identified as potential subscribers to our platform. We have also identified 802 health systems who would potentially benefit from Amwell platform,” the company said.
Amwell supported the Apple Heart Study conducted by Stanford University. The study produced the Apple Watch heart rate data which is being shared by more than 400,000 consumers for the detection of atrial fibrillation which AMG will follow in case of emergency to refer patients to needed care.
The company estimates the AMG urgent care and telepsychiatry visit revenue market opportunity to be approximately $18.2 billion and $3.9 billion, respectively.