As COVID Testing Wanes, Mobile Health Providers Seek Next Big Thing to Extend Momentum

Mobile healthcare is clearly on trend as providers bringing medical services to patients in at-home and non-traditional settings in what’s proving to be a feel-good prescription for growth for some providers.

Last-mile mobile healthcare service provider DocGo, for example, reported a strong first quarter 2022, as executives spoke of the business now moving away from heavy COVID-19 testing and related services and into a post-pandemic phase focusing on new partnerships and service expansion.

“During the first quarter, we began the transition of some COVID related services to longer term non-COVID related work with new and existing customers,” DocGo CEO Stan Vashovsky said on an earnings call with analysts Tuesday (May 10), adding that DocGo had secured licenses and assets to offer medical transportation services in Maryland and Delaware.

In addition, the New York-based company said its clinicians interacted with 1.1 million patients in Q1, an 80% increase over the same period in 2021.

Differentiating Mobile Docs

Vashovsky said the DocGo model is differentiated from other mobile health providers is its use of “highly trained, licensed practical nurses and paramedics who work under physician’s license in our network of medical practices across the United States.”

That model permits clinicians to offer “a much broader scope of service at a lower cost to the overall healthcare system” than “expensive nurses, physician assistants, and medical doctors.”

On the innovation front, Vashovsky said the DocGo On Demand direct to consumer is seen as a winner, “offering as medical copays and deductibles continue to increase. We see an opportunity to provide cost effective treatment alternatives directly to patients and employees who are seeking medical treatment for non-emergency conditions,” he said.

That pilot is in “early stages” and will be used to expand DocGo On Demand to new markets.

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DocGo’s medical transportation business, which Vashovsky described as an “Uber-like prescheduled on demand ambulance patient transfer solution between clinical settings,” is undergoing a utilization shift as hospitals and health systems leverage its pricing options.

Noting that the company leases vehicles through GE Capital on five-year terms with no money down, Vashovsky said, “Our customers are increasingly moving towards a least-hour model where we provide vehicles, equipment, and staff for a daily fee, away from the traditional fee for service model. Not only does this provide our customers with dedicated resources, but it creates recurring predictable revenue and strong, gross margin performance to our company.”

DocGo plans to have an all-electric medical transportation fleet by 2032.

After COVID

Chief Financial Officer Andre Oberholzer noted that mobile health revenue including COVID testing accounts for 76% of Q1 2022 revenue of $117.9 million, with medical transportation providing the balance. As COVID testing lessens, DocGo is expanding other models.

For those looking for clues in earnings about the end of the pandemic, Oberholzer responded to one analyst saying, “For COVID testing we’ve estimated that Q2 should be around $20 million, and then the guidance we’ve given said starting July 1 we assume COVID testing will be $0.”

Vashovsky added that “a lot of our contracts actually are for the same municipalities or same customers that we did COVID testing for. So, as COVID testing winds down, we have new programs that are with the same customers that start up.”

Elsewhere in post-pandemic planning, in January, DocGo signed a multi-year contract with Aetna on at-home healthcare services for commercial and Medicare Advantage members in New York and New Jersey. Vashovsky said, “This gives us the opportunity to provide a range of at home healthcare services to 2.5 million lives, including episodic and emergency care.”

Additionally, the company expanded its agreement with Carnival Corporation, adding 15 more ships, while also expanding its business in the U.K., which is small but growing.

DocGo is also launching a new direct-to-consumer offering in 2023. Vashovsky said “we feel very bullish on our direct-to-consumer offering, side by side with our business-to-business offering.”

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