More on Mergers & Acquisitions

Cigna's Evernorth subsidiary purchasing MDLive in bid to expand telehealth services

Given telehealth's popularity, executives see the acquisition as part of a broader long-term growth strategy.

Jeff Lagasse, Associate Editor

Telehealth has come of age during the COVID-19 pandemic, and major insurer Cigna is betting on it continuing, with its healthcare services subsidiary Evernorth poised to purchase telehealth provider MDLive.

Financial terms were not disclosed, but the deal is expected to close in the second quarter of this year. When it does, it will bring telehealth capabilities in-house, whereas typically insurers pay for virtual care services through contracts.

Cigna and Evernorth executives promised an affordable and convenient experience. They also noted an opportunity to serve millions more people, a prediction that may have some weight to it given the numbers: With more and more people latching onto remote care platforms, virtual care was expected to account for more than 20% of all medical visits in the U.S. in 2020, which in turn was projected to drive $29 billion in total healthcare services, according to Doximity.

Up to $106 billion of current U.S. healthcare spend could be virtualized by 2023. This highlights the high rates of adoption among both patients and physicians, and the impetus felt among providers to offer safe, secure and easy-to-use virtual services as demand for telehealth continues to grow.

MDLive, for its part, sees the deal as a catalyst for its future growth, a view shared by Cigna and Evernorth execs, who see the acquisition as critical to the company's larger strategy.

"Together, we can accelerate MDLIVE's growth strategy and ability to serve more customers, while also building new services that will benefit our existing stakeholders, including employees, partners, patients, customers, health plans and providers," said MDLive Chairman and CEO Charles Jones.


Jointly, the companies said the deal would help to complement, not replace, the way customers and patients interact with their existing providers. Goals include faster referrals to specialists and behavioral health clinicians, convenient access to drugs and care sites and earlier identification and diagnosis of care needs.

Cigna continues to expect to deliver 2021 adjusted earnings per share of at least $20, accounting for the impact of the acquisition of MDLIVE. The company plans to provide additional information pertaining to the proposed acquisition of MDLIVE during its upcoming Investor Day event scheduled for Monday, March 8.


According to Doximity, Medicare, Medicaid and privately insured office visits will likely be virtualized in coming years, and telehealth will divert a significant percentage of emergency department visits to become an important adjunct to home healthcare support.

Patients are largely on board with this paradigm shift. Prior to the pandemic, just 14% of Americans had tried telehealth at least once. Since the coronavirus outbreak, that number has increased by 57%, and for those with a chronic illness, the number has increased by 77%.

More than a quarter of patients said they feel more comfortable using virtual care platforms since before the public health emergency, and nearly the same percentage said they plan on using telehealth even when the pandemic ends. Doximity expects that number to rise as technology improves and more hospitals add it to their offerings.

Increasingly, patients report having a positive experience, with 28% saying they feel telehealth is the same or better quality than an in-person visit. Those with a chronic illness feel even more positive, with 53% saying it's the same or better.

In August, the National Poll on Healthy Aging found that patient comfort levels with telehealth have increased. Back in 2019, most older adults expressed at least one serious concern about trying a telehealth visit. But by mid-2020, the percentage with such concerns had eased, especially among those who had experienced a virtual visit between March and June of this year.

Yet hurdles remain. A September report from research firm KLAS found that nearly half of the 19 healthcare executives surveyed say that either telehealth functionality or capacity has been their primary problem to solve during the early stages of the COVID-19 crisis. Other major challenges include remote patient monitoring, interoperability, real-time data analytics, work-from-home resources and patient surveillance.

Twitter: @JELagasse
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