BetterHelp Rakes in $1B in 2022, as Teladoc Plans to Integrate Behavioral Health into Its Chronic Care Strategy

Despite a somewhat rocky 2022, Teladoc Health Inc.’s (NYSE: TDOC) direct-to-consumer behavioral health subsidiary, BetterHelp, raked in over $1 billion in revenue. That’s a $300 million increase from 2021, according to company leadership.

More than 1 million people received therapy from BetterHelp in 2022, Teladoc CEO Jason Gorevic revealed at the JP Morgan Healthcare conference Monday morning. Last year, BetterHelp had more than 50 million interactions between patients and therapists, with more than 25,000 therapists on its platform.

“This is an incredible scale and incredible impact. More than 50% of people in this country who are in need of mental health don’t get it,” Gorevic said. “And BetterHelp is a better modality. It’s more accessible, and it breaks down barriers to getting care that people need.”

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Ultimately, Teladoc and BetterHelp benefit from that scale, he continued.

Photo Credit: Teladoc Health

“More data, more innovation leads to better matching between a therapist and a consumer, which we know drives better outcomes and stickier relationships,” Gorevic said. “And better engagement leads to better retention.”

Throughout 2022, Teladoc struggled with its advertising yield, or how much it spends on advertising to acquire a new customer, for BetterHelp. Gorevic previously blamed this difficulty on venture-backed behavioral health startups making “economically irrational decisions” in regards to advertising spend.

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The D2C business, which does not prescribe medications, has also had to compete with newcomers offering prescription services. But Teladoc Chief Financial Officer Mala Murthy noted that BetterHelp’s business model has paid off.

“The way we approach this business is in a way that we will drive sustainable revenue growth – and at attractive margins,” Murthy said at the conference. “We do so taking advantage of our scale, our experience. And importantly… with our high quality standards.”

Teladoc acquired BetterHelp in 2015 for $17.2 million.

Going into 2023’s bear market is a double-edged sword for the BetterHelp business.

“There are a couple of different, somewhat opposing dynamics at play,” Murthy said.

For example, factors such as inflation and economic uncertainty may lead to more consumers turning to BetterHelp for mental health support. BetterHelp also provides a cheaper alternative to traditional brick-and-mortar care. At the same time, consumers with tighter wallets may hold themselves to stricter budgets.

Photo Credit: Teladoc Health

Teladoc’s B2B behavioral health strategy 

In addition to BetterHelp, Teladoc is focusing on behavioral health as part of its B2B service offerings, in an effort to address whole-person health.

Last week, the company announced its new app that will integrate behavioral health and primary care. The tool is positioned as a way for Teladoc patients to easily navigate across its spectrum of services.

“We’ve been talking about whole-person care for a couple of years now,” Gorevic said. “This is where it all comes to life in a single experience for the consumer. And most importantly, it delivers better clinical outcomes, because it’s all together in one experience.”

Addressing a patient’s behavioral health could also be key to treating its chronic care patients, according to Gorevic. Over the last few years Teladoc has increased its foothold in the chronic care space. Notably, it purchased digital diabetes management company Livongo for $18.5 billion in 2020.

It appears Teladoc is now working to integrate its behavioral health efforts into its chronic care program.

“Mental health is a critical component of helping someone manage their chronic conditions,” Gorevic said. “They achieve almost a 2% increase in weight loss when they engage with our mental health programs, and a significantly larger impact on their A1C level when they engage with our mental health programs. Delivering great health care isn’t just about the physical; it has to incorporate the mental health components of it.”

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