Doctor on Demand, Grand Rounds merge into yet another telehealth giant

Grand Rounds, an employer-focused telehealth navigation firm, is merging with telemedicine vendor Doctor on Demand to form a multibillion-dollar telehealth giant that aims to provide more user-centric care and address the US’ $300 billion uncoordinated care problem.

Both digital health companies saw massive growth amid the pandemic-induced virtual care boom:

• Grand Rounds’ membership grew 55% annually last year, and it now boasts over 130 employer partners, including big names like Walmart, Home Depot, Salesforce, and Uber. And the firm has been hinting at a bigger move into telehealth: In September 2020, it nabbed $175 million in funding, which it said it wanted to siphon toward expanding its telehealth capabilities. Grand Rounds serves over 6 million members, which is still a fraction of the 49.6% of US adults covered under employer-sponsored health insurance, per the Kaiser Family Foundation—meaning there’s plenty of market opportunity for it to grow.
• Doctor on Demand’s total visit volume shot up by 59% from March to April 2020, according to a 2020 Harvard study published in the Journal of Medical Internet Research. Further, Doctor on Demand has over 400 employer customers and serves over 45 million US users—and now that it’s tapping Grand Rounds’ care navigation capabilities, it can augment its own telehealth platform to retain and reel in customers.

The birth of this new, integrated telehealth giant should incite further consolidation in digital health.

• The $2 billion-plus merger will heat up competition among other telemedicine giants like Teladoc and MDLive—both of which have been involved in M&As of their own in the last year. Teladoc underwent its blockbuster $18.5 billion merger with Livongo in August 2020, and MDLive was just acquired by Cigna last month. It wouldn’t be surprising to see fast-growing digital health companies like Amwell, Dispatch Health, or GoodRx use M&As to level the playing field in the near future.
• What’s unique about the Grand Rounds-Doctor on Demand merger is the emerging company integrates care navigation with telehealth. That means users are able to search for the kind of personalized care they need and directly get connected to it virtually, all in one go. Though this is still a nascent practice in healthcare, it’s one that will surely pick up speed as the demand for efficient solutions persists.
• This will make the combined entity especially attractive to US employers—which cover around half of the US population. Health plan costs are projected to rise this year, and coordinated care solutions can potentially help cut spending down the road: 52% of employers said telemedicine will be an important benefits priority post-pandemic, and 26% plan to offer care navigation services, per an October 2020 Willis Towers Watson Health Care Delivery Survey of 397 US employers.