American Well Corp. hopes to use a telehealth acquisition it made in 2021 to help it capture a slice of an estimated $52 billion annual opportunity in behavioral health.
Better known as Amwell (NYSE: AMWL), the Boston-based telehealth and tech company points to its acquisition of SilverCloud Health as a critical part of its growth strategy to go international, according to its latest filing with the Securities and Exchange Commission.
The behavioral health segment is the largest single area of annual opportunity that the company has identified for itself. Just in the U.S. digital market, its core market, Amwell’s annual filing states that $29 billion of the roughly $77 billion total addressable market (TAM) it has identified is in behavioral health.
Amwell estimates that the total addressable market in international behavioral health is about $52 billion.
Amwell is building out a full spectrum of telehealth and automated health services for health care stakeholders, largely health systems and insurers. This includes services with a wide range of engagement — from automated and self-directed content to asynchronous and synchronous engagement with providers.
SilverCloud is a digital mental health provider. Amwell acquired SilverCloud in August 2021 as well as the virtual automation and patient engagement platform Conversa Health. In aggregate, Amwell paid about $320 million for SilverCloud and Conversa Health.
Amwell CEO and Chairman Ido Schoenberg said that SilverCloud landed a contract with the United Kindom’s National Health Service to provide nationwide behavioral health services in Wales, which has about 3 million residents.
Schoenberg also projected that Amwell would see upside on the company’s subscription revenue through the automated care and behavioral health programs of Conversa Health and SilverCloud Health in 2022.
“When you think about behavioral health in a much broader scale, the opportunity is to really serve [an] enormous unmet need in the market by connecting and amplifying the available therapies and other types of providers in the market so they can go ahead and do a much better job,” Schoenberg said on the call according to a transcript, adding that SilverCloud’s NHS contract win was an example of this.
The company jumped into providing behavioral health care services in earnest in 2019 after it acquired Aligned Telehealth Inc., which helped the company grow its roster to over 1,600 behavioral health providers. Across all specialties, the Amwell Medical Group employs over 6,500 providers.
Amwell is far from the only large telehealth player to say its future includes telehealth and international markets.
Last week, Teladoc Health Inc. (NYSE: TDOC) disclosed that its d2c mental health platform BetterHelp was a big driver of the company’s growth in 2021. BetterHelp generated $700 million in global revenue in 2021, the company said.
“Mental health remains another key priority for us and an area where we continue to see tremendous demand for care,” Teladoc CEO Jason Gorevic told analysts during its annual earnings. “Our BetterHelp brand continues to drive significant growth, both in the U.S. and international markets.”
In its annual financial report, TelaDoc also says there is greater potential for growth in behavioral health. The company’s total revenue was about $2.03 billion. When excluding the impact of acquisitions, Teladoc’s revenue increased by 40% and was “driven primarily by mental health specialties.”
“Even with our strong historical growth, we believe there is substantial untapped growth potential, both domestically and internationally, as almost half of BetterHelp members have never sought therapy before,” Teladoc’s annual report states.
Companies featured in this article:
American Well Corp., Amwell, BetterHelp, Conversa Health, SilverCloud Health, Teladoc Health
