Teladoc CEO Is Leading a Virtual Health Care Revolution

Jason Gorevic was early to see the value of providing health care services remotely. Now his experience is paying off at Teladoc.


In the mid-’90s, it was hard to imagine using the Internet to order pet food or calling a nurse on a mobile phone to talk about whether or not an emergency room visit was needed. Two decades later many people prefer online shopping over the live version, and they’re increasingly warming to virtual appointments with their physicians. Jason Gorevic, CEO of Purchase, New York–based Teladoc, has played an active role in making the latter a reality. His company — the largest telemedicine business in the U.S., whose revenue grew 77 percent last year — has been at the core of a segment of the health care industry being touted as both a cost saver and a much needed convenience.

Gorevic was expected to be the fourth generation to run his family’s antique silver, sculpture and jewelry business. After graduating in 1993 from the University of Pennsylvania with a degree in international relations, he wanted to do something that would have a larger social impact than antiques. Intrigued by the health care debate during the Clinton administration, Gorevic landed a job in marketing at Oxford Health Plans, a fast growing managed care system at the time. At Oxford, he built and ran the first medical advice line, which was staffed by registered nurses. In 1998, he joined Internet e-mail company, helping to take it public.

In 2002, he joined Empire BlueCross BlueShield and, among other things, implemented RelayHealth, one of the early e-visits companies. Gorevic rose to president with responsibility for the New York region. When WellPoint acquired the company in 2005, Gorevic stayed on, ultimately becoming WellPoint’s chief marketing and product officer. He also implemented a partnership with Zagat Survey, providing a platform for consumers to rate physicians.

Gorevic joined Teladoc as CEO in 2009. Although the company had launched in 2002 in Dallas (it still has offices in Texas) and offered its first product three years later, it was still tiny. But Gorevic felt the time was right for telemedicine. He went out on the road to raise money during one of the worst years for capital markets, and ultimately brought in $13 million from health care venture capital firms HLM and Cardinal Partners. Teladoc went public in 2015.

Gorevic believes there is plenty of opportunity for his company, which has 12.2 million members and offers medical care via teleconferencing and phone consultations. In 2014, 28 percent of large employers offered remote health care. Last year, 48 percent did. The National Business Group on Health expects 74 percent of large employers to offer telehealth services this year. Between 2014 and 2015, the number of Teladoc visits has grown from 299,000 to 575,000, or 92 percent. Senior Writer Julie Segal recently talked to Gorevic about trends in health care that are behind the growth in telemedicine, why consumers have decided to finally embrace virtual doctors’ visits and what’s next for the company.

INSTITUTIONAL INVESTOR: Earlier in your career at Oxford, you built and ran a service that was a precursor to what Teladoc is offering today. Tell us about that effort.

GOREVIC: I started in the marketing department and had the opportunity to explore a nurse advice line that was being piloted with the Kaisers of the world, but hadn’t been brought to any of the more traditional managed care companies. The point was to give people the opportunity to learn about their conditions without having to run to the doctor’s office or emergency room.

How did you get that opportunity at the age of 24?

Oxford was a very strong meritocracy. My chief marketing officer threw a brochure and a proposal from one of these companies that was offering nurse advice lines and he said, “Check this out, tell me what you think about it and let’s meet tomorrow.” I pulled an all-nighter, pouring through the proposal so I would be an expert. When I went to his assistant the next morning for the meeting, she told me he was in New York City. He told me he wanted to meet but hadn’t looked at his schedule. So I went into my boss’s office. As I was complaining about it, in walks the CEO, Steve Wiggins, and he says, “Hey, I know that you’ve been looking at this space, what do you think?” That was the beginning.

You’ve been involved in several versions of telemedicine. What did you take from these experiences?

Over the years I learned that to get a telehealth program to work, you need three things. You need a great technology platform that can match the supply of physicians with demand from patients in real time and that is very consumer-friendly in its usability. You need a clinical program that puts quality at the top of the food chain. And you need a consumer engagement strategy that ensures that they know about the telemedicine program and know when to use it.

Teladoc had been around for seven years before you joined as CEO in 2009. It hadn’t gotten a lot of traction at that point. What made you take the job?

All the macro trends were lined up behind telemedicine to bring it from a promise to reality. Those trends included the divergence of supply and demand for primary care. Although demand is increasing because of an aging population and the Affordable Care Act, which was at that time just on the horizon, the supply of primary care physicians was shrinking. That was causing significant access and cost problems because people end up in emergency rooms and urgent care centers when they don’t really need to be there. Combine those forces with technology trends like mobile and video usage, broadband proliferation, and I thought that the time was ripe for telehealth.

Are there drivers of Teladoc’s growth that have surprised you?

Two things come to mind. First, the trend in health care toward consumerism, driven in large part by the share of the health care dollar that’s being borne by the consumer as opposed to the employer or the health plan. A lot of us are running around now with $3,000 deductibles for individuals and $5,000 family deductibles, higher co-pays. Those plans of the ’90s with $5 or $10 physician co-pays don’t exist anymore. That has forced consumers to pay attention to costs in a way they never did before. A Teladoc visit is $45. And many employers and health plans subsidize that. That’s cheaper than an office visit and certainly cheaper than the emergency room.

Then there’s this movement toward convenience and catering to consumers’ preferences. We shop for everything at home and even in the middle of the night. We expect all of our products and services to come to us. Consumers are beginning to expect that the health care system should come to them too, and they should be able to get care on their terms rather than having to make a pilgrimage to the physician’s office or the hospital.

I would have thought that many Teladoc appointments would be people looking for an alternative to the ER. But you’re saying it’s also people looking for convenience.

The truth is that people have a hard time getting access to care regardless of what time of day or night it is, and they realize that they don’t always have to go to the doctor and be seen in person in order to receive excellent, high quality care. About 50 percent of our visits are nights, weekends and holidays, and the other 50 percent are during office hours. But let me clarify something. In a lot of places, it’s hard to get into a doctor’s office or get an appointment when you really need it. A doctor’s office might say, “You’ll have to sit in the waiting room and I can’t really tell you how long it will be until someone sees you.” That’s not acceptable to most people in this day and age.

Teladoc is a one-product company. Talk about where you want to take the company from here.

Yes, we came into 2015 really with a single product, one focused on acute, episodic medical conditions. You know, the stuff that occurs every day in everybody’s families, say flu symptoms and upper respiratory issues and skin rashes and pink eye. But over the course of last year, we introduced behavioral health, dermatology, sexual health and a smoking cessation program. We continue to look to expand that product portfolio because we think that there are a whole plethora of clinical services that we can bring to bear for our clients and that consumers really have a demand for.

Isn’t it difficult to provide behavioral health services remotely?

Our experience says otherwise. We launched January 1, 2015, and we closed the year with behavioral health representing about 7 percent of our revenue. We’re tapping into massive demand in the market for better access to behavioral health care services. Our service allows consumers access through unlimited, secure e-messaging back and forth with a therapist of their choice.

This is your first direct-to-consumer product. What else could you offer consumers?

We’ve done a number of pilots in the direct-to-consumer market with respect to our core medical business, and they’ve had sporadic success. I think you’ll see us over the course of 2016 launch some innovative partnership programs in the direct-to-consumer medical space that will change the dynamic of how that product is marketed and accessed and what the features of that product are. It’s too early to say more about these programs.

What are your biggest challenges in getting people to use Teladoc?

The biggest is awareness and consumer engagement. We do a lot to communicate with our populations about the program and the value of telehealth and why you should engage as a consumer with it, but we have generations of well-worn neural pathways that make us drive down to the emergency room or to an urgent care center or a doctor’s office, even when we don’t necessarily need to be there.

Every health care company is talking about the value of data analytics in lowering costs and raising the quality of care. How does Teladoc use the data it collects?

We have almost 3,000 providers across the U.S. working off of a single platform. That gives us great analytics to see what’s going on in terms of population health across the country. For example, we actually have insight into the cold and flu seasons that’s about two weeks ahead of what the CDC reports because the CDC doesn’t get it in real time. They get data from all the hospitals across the country, and then they have to compile that data and turn it into meaningful information. We get 50-state data in real time. Over the last couple of years, we’ve been able to chart the course of the flu season across the country and see where it’s peaking and how severe it is.

What can you do with that information?

We’ve thought about whether we can market the data — de-identified, of course — similar to how ADP distributes payroll data as a leading economic indicator. There’s certainly a market for that kind of data. We’re brainstorming now as we know we’re unique in that we collect information from across the country.

How do you use that data internally?

We communicate with our physician network about what we’re seeing. So, for example, when there was the Ebola scare, we knew people would reach out to our physicians with concerns and questions. We did an educational program with our physicians about Ebola and how to answer questions, what the CDC protocols were and what we could do to best serve our membership.

How much can you save an insurance company or an employer?

We’re the only telehealth company that has brought in an outside resource, given them full access to claims data and had them determine what we save every time someone uses the Teladoc platform. They found that every time someone uses the Teladoc platform, they’re saving on average over $700 per visit. It works like this: There’s the obvious savings of a $45 visit rather than a $100-plus office visit or $1,000-plus ER visit.

But equally important, it turns out that with that a 92 percent resolution rate, people who use Teladoc are much less likely to end up back in the doctor’s office or back in the emergency room for the same issue within the next 30 days. In multiple studies, including one that was done by the RAND Corp. and published in Health Affairs, it’s been proven that people who use the doctor’s office or go to the ER are much more likely to end up back in the health care system for a follow-up visit regardless of whether they need it or not. That makes the Teladoc platform significantly more cost efficient, to the tune of $700-plus per visit.

Visit Julie Segal’s blog and follow her on Twitter at @julie_segal.