Telemedicine vendor Teladoc is acquiring InTouch Health, a competitor, for $600 million. For that price it gets only about $80 million in revenue. This is a typical trajectory and one that should concern investors. Telemedicine has potential and can add value to the system but it is highly hyped. So companies feed on that hype, get a high value, can't really generate the revenue, or certainly the profit expected, and then start doing acquisitions to divert attention and try to create something that can generate a return.
The Healthy Skeptic is a website about the health care system, and is written by Kevin Roche, who has many years of experience working in the health industry through Roche Consulting, LLC. Mr. Roche is available to assist health care companies through consulting arrangements and may be reached at khroche@healthy-skeptic.com.
