Teladoc Health, Inc. (TDOC)

Investor Day 2018

← View all transcripts

Sep 27, 2018

Welcome to Investor Day. For those of you still standing, we are going to start promptly. So if you can find a seat, that would be great. We very much appreciate you joining us. It's a big time commitment. I hope that you'll find that this today goes, you'll learn a lot. So I appreciate it. During the breaks and Jason will discuss this, there's a lot of executive teams here, so you'll have an opportunity to mingle and talk to people. It is my job to provide the obligatory safe harbor. I'm sure you can read the very small print. Logistically, there are restrooms right outside the door. And we will be serving a box lunch during the midday break. So with that. Teladoc Health is transforming how people access and experience health care. So having an option like Teladoc is a game changer. I can talk to a doctor anytime, 247, from anywhere, whether I'm at home or in the office or even in the car driving my kids around. Now with Teladoc, people can access and navigate a broad spectrum of care and expert advice anytime, anywhere around the world, all from one app. If you rewind a year ago, we acquired Best Doctors. That gave us a full suite of services. Which were the best doctors from this standpoint. That's exactly right. I mean, I'm very excited And that really gave us a full scope of services ranging from coughs and colds and the flu all the way through chronic conditions, cardiac conditions, oncology. Advanced Medical had the same vision. They were doing it mostly outside the U. S. So this makes us the global leader and the only really comprehensive global virtual care provider. When Dan recently changed jobs as we moved, first thing I look forward does it have French doctors, it did and then for the capital insurance that we have is irrelevant. Hi there. Welcome. I appreciate everybody coming on this awesome UN Security Day. Thanks everybody for braving the bomb squads and the inspections coming down Fifth Avenue. We didn't exactly plan that, but we appreciate that it's impressive security. We have very important people here. So we want to make sure everybody is safe. Happy to introduce Mark Hirshhorn. I'm sure most of you know him and I'm Jason Goravik, our CEO. So, we figure that you mostly hear from the 2 of us. So, the day is designed actually for you to hear mostly from other people. You'll hear from some of our colleagues. As Kelsey said, we have a number of them sitting in the cheap seats in the back and we'll be here over the course of the day. As you can see, you'll hear more formally from some of them as well as you'll hear from some great guest speakers. So, I'll introduce them over the course of the day, but I'm very, very happy you'll get to hear from Senator Bill Frist, who's been a Board member of ours for some time now and we'll give, I think, unique perspective. You'll hear from Ryan Weiss from Great West Life. That'll give an excellent perspective of client, longtime client of BEST doctors from outside the U. S, so a little bit of the international perspective. And then we are very, very pleased that Troy Brennan has made time. He is actually in San Francisco. So we are going to beam him in via video and you will get to hear from him to talk a little bit about our partnership with CVS Health. So over the course of the day, we will sprinkle in question and answer sessions. We're not going to do Q and A every speaker. It just ends up being too much and we can't fit in everything in the agenda. So, but you will have opportunity to ask questions of all of the speakers, I think, except Troy, the whole video conference Q and A thing ends up being too much. Okay. So, but you will have opportunity to ask questions of all of the speakers, think except Troy, the whole video conference Q and A thing ends up being kind of difficult. So with that, I'm going to launch into at least my section. I'm going to try to keep my remarks relatively brief. And then from me, I'll go to Bill Frist and then we'll do a short Q and A after the 2 of us speak. So you're welcome to sit. You don't have to stand there the whole time. You're like my bodyguard there. Yes. Security. It's more UN security, right? Okay. So hopefully everybody is really familiar with the investment highlights, but it wouldn't be an appropriate investor conference if I didn't start with that. And these should provide some of the themes for what you're going to hear about over the course of the day. We are truly the only truly comprehensive virtual care provider in the world. You heard me talk about it on Cramer. I sort of talk about it every chance I get because it is a massive differentiator for us. It's very, very hard to replicate and it is where the puck is going. So, if you think about where virtual care started and where it's going, you're going to hear a lot over the course of the day about our vision for the product, our vision for the healthcare system and the role of virtual care in that healthcare system. And it is only a comprehensive solution that can be at the core of that. With the acquisitions of Best Doctors and then Advance Medical, we have a truly global footprint. You'll have the opportunity to hear from Carlos Nuevo over the course of the day. He was the CEO of Advance Medical. He is now leading our efforts internationally. So, you'll get to hear a little bit from him about the background of Advanced Medical and more importantly about our international opportunity. Having a global footprint is more and more important. There are U. S. Multinational companies who have about 28,000,000 people employed in the U. S. And those same companies have another 14,000,000 people employed outside the U. S. Having a global solution is critical. And so, you look at our clients like Salesforce, for example, they've been a Teladoc client for quite some time. They just purchased service expert medical service for their 10,000 employees outside the U. S. Because more and more people are recognizing that the issues facing people in the U. S. From a healthcare perspective also face the workforces outside the U. S. We are and I think we will try to impress this upon you over the course of the day, not only the industry leader, but we have incredibly strong competitive positioning and I'll walk through a little bit about what our competitive moat is because from the time I got to the company almost 10 years ago and went out to raise my very first round of venture capital, people ask me, what's your competitive moat? What's your secret sauce? What's your defensible sort of unfair advantage? The lawyers don't like me to say unfair advantage. But I have Peter Gruy sitting here from HLM, my very first check of venture capital And Peter asked the same question. What's that competitive moat that makes it so that others can't do this? And so I'm going to try to impress that upon you and over the course of the day, we'll hit on all of the components of that. Accelerating utilization rates, we have a new slide that we'll show you that I think really illustrates that very well. And you will hear from Stephanie Verstra and from Dan Trencher talk about our engagement capabilities and our product and how that drives greater utilization. And finally, at the end of the day, we're going to hold it for last because we know that you're all waiting with bated breath for the financials and Mark is going to go through why we have such a compelling financial model, really one that gives us predictability, visibility, strong gross margins and long term financial opportunity. So, starting with that comprehensive solution, it's important to understand the full spectrum of products and services that we now have. Some of these we've built, right? If you invested in us 3 plus years ago at our IPO, you were focused on the bottom left corner of that, of this rainbow of products and services because that's essentially what we had, right? But over the course of the last 3 plus years, we've built, partnered or acquired multiple capabilities that give us a full spectrum of services that's unique in the marketplace, gives us a unique value proposition for our clients who buy from us and a unique experience for the consumer who can now get everything taken care of ranging from coughs and colds to very complex cardiac and oncology situations and everything in between. And you'll continue to see us fill out this array of products and services because we think that this is where the market is going and will enable us to serve a unique role in people's healthcare experiences. With the introduction of Advanced Medical, we now have a truly global footprint. You can see the offices and locations that we have all around the world. You'll hear from Carlos talk about our global perspective, our global reach, but our local presence because healthcare is ultimately delivered locally. So having global scale, having global technology, having global expertise, but the ability to deliver it on a local level is really critical. And I think you'll hear a little bit from Ryan talk about how we do that in Canada with Great West Life. Okay. Here's the competitive moat and here's where I'm going to spend a little bit more time walking through the components of this. Because over time, I have constantly heard the question. I think probably the most frequent question that Mark and I get is, what is the barrier to entry, right? What is the competitive moat that prevents other competitors or health plans or health systems from just doing this themselves and essentially not needing you, disintermediating you. Well, we think that the reason that we have a sustainable competitive position and that it is incredibly difficult to replicate what we do is because it's not a single molecule, right? It is not a single piece of IP. It's not a single algorithm. It's a complex system of capabilities that all work together in order to deliver market leading value and is I won't say it's unreplicable because that's probably never true, but it's incredibly time intensive, capital intensive and intellectually intensive to be able to do this. So I'm going to walk through the parts of it. I talked about the global reach. Having a global reach is very, very difficult. The market is littered with single market solutions, whether that's single market from a geography perspective or single market across channels. And you're going to hear from Peter McLennan talk about the second one, which is our entrenched distribution channels, where we are in all of the channels necessary to get to the end consumer. And I always say, I'm not smart enough to actually know where the consumer is ultimately going to get their healthcare, whether that's going to come through the hospital, the primary care doc, the health plan, the employer, the retail setting. I don't really like to place a single bet. I'd rather be in all of the markets across the market. And the stronger we are in those distribution channels, the harder it is to be displaced. The scope of our clinical products and services, you're going to hear more from Dan Trencher about how we integrate those to deliver a seamless experience for the consumer that's intuitive for them, that makes it so that they don't have to know every single one of those products and services that I just described in that rainbow, right, because the consumer can't figure all of that out. But our ability to make it intuitive and easy for them to navigate is a true competitive advantage. You're going to hear from Senator Frist who chairs our quality committee of our Board of Directors and you're going to hear about the depth of our clinical capabilities and why quality really matters, right? We are not just a technology company. We're certainly a technology enabled healthcare service, right, who has proprietary technology enabled operations and scalable technology for the consumer, but without the quality of healthcare that's delivered, it's only part of the puzzle, right? This is not an app that you can just go deploy somewhere and hope that somebody takes care of themselves. It's a complex service. It's a complex set of capabilities and it's on a foundation of high quality healthcare. Mark is going to go into some details about our technology enabled operations and where we get leverage by using technology and where scale gives us leverage both in terms of the operations and financial leverage as we spread our investment over more and more population with more and more visits that generates more and more revenue with the same infrastructure. And finally, you're going to hear from Stephanie about our engagement science and the results that it yields in driving consumers to go through the awareness, understanding and then adoption as they get comfortable with moving from the traditional sort of well worn pathways of I'm sick, I have to go to the doctor's office to I'm sick, what's the best way for me to get care, can I turn to Teladoc? So again, I want to emphasize that the competitive advantage and our competitive moat is very complex. It is a complex system of capabilities that are very, very hard to replicate because a competitor may try to do one of these things, but doing all of them really well is what makes Teladoc different. And so that drives how we look at the competitive landscape. So, we think about the competitive landscape in terms of global access. And again, I want to emphasize that's both geographically global as well as globally across all of the different market channels and segments and comprehensive in terms of the services that we offer and that we bring to the consumer and very importantly to the buyer, right, to the client who is ultimately selecting our service and writing a check for our services because in the end, they want one solution provider who can provide a full array of services as long as those services are integrated and the highest quality. And as a result, you can see that Teladoc really stands alone in the competitive landscape. So I said I would go into a little bit and show you a new slide about how we think about engagement. Since before we went public, Mark and I have been saying consistently visit volume has outpaced or the growth of visit volume has outpaced membership. And then people ask all the time, as we sit down with investors, they ask all the time, is utilization accelerating? Is the growth of utilization accelerating? And I think you can see here from this slide, as we sort of superimpose visit growth over membership growth and the CAGR of those two things, how not only is visit volume growing faster than membership is, but very importantly, that gap is widening, right? So if the question is, is it accelerating? The answer, I think, very well displayed here is yes. Utilization and the growth of utilization is accelerating. And you see that based on our utilization rates year over year, which I think Stephanie and then Mark will touch on later. It is a very, very compelling financial model. So, as I said, I'm actually a pretty conservative guy. I like predictable revenue streams. I like having multiple levers in order to be able to meet our goals and drive our financials. So, we have multiple levers that we can rely on in order to drive our financial results. So we get revenue from adding new customers, new members, and that helps to drive some of those PM. PM revenues gives us larger memberships to go after in terms of driving visit volume. And so obviously, more customers and deeper penetration into those customers is one of those levers. But as you've seen, we now have a broad array of products and services, which enables us to also sell additional services and products into those customers. So just like I mentioned with Salesforce, they added a new population, they added a new product, we get to continue to expand our next point revenue per client, right. So the more we acquire, partner, build, the more we can sell into that same customer base, the greater our revenue per client. And then lastly, driving higher utilization drives higher visit volume, higher visit volume drives higher revenue. So multiple levers for growth, which gives Mark and I the confidence and the predictability and the visibility into hitting our short term and long term revenue targets. So I'm going to shift from sort of the bigger picture to let me sort of jump ahead and try to answer some of your questions, some of the questions that I hear about what's what is the future going to bring, what do we see coming down the pike. So important developments going on in Washington, D. C. Again, you're going to hear from Bill Fritz. He's going to give you a little bit of an inside view of what's happening inside the Beltway. And one of the key players there is CMS. So CMS has taken a much more active, the Center For Medicare and Medicaid Services, for those of you who are not healthcare wonks like me. So, the Center For Medicare and Medicaid Services has taken a much more active and much more favorable view recently toward virtual care. So you've heard us talk about and I think you've probably seen, there's some seats upfront if we have people who just came in recently. We're going to have a packed house. So, I suggest finding a seat before somebody else comes in and takes it. So, CMS has signaled very strongly their support for virtual care. So we had always expected because they had said we're going to include virtual care as part of the 2020 plan year for Medicare Advantage Services. They actually accelerated relative to Medicare fee for service, where they came out with some draft rules that would indicate that they will pay for virtual care telehealth visits. Those are still in draft form. We expect sometime in the next 60 days ish for those rules to be finalized. And although that's a very, very strong signal from CMS, I would say the Medicare fee for service population is unlikely to be a significant driver of short term revenue for us because that's really more of a direct to consumer. There isn't an aggregator like a health plan to enable us to go after that population. However, it's a very strong signal for 2 primary reasons. One is it portends the or sort of previews what we're going to get in the Medicare Advantage population, which does have those aggregators and we're very, very comfortable and have a lot of experience working with those aggregators. And 2, second reason it's really important is the state Medicaid agencies tend to look to CMS payment rules from Medicare in order to model the state Medicaid payment policies. And as you see here from the volumes of populations, Medicaid has driven actually faster toward privatization than Medicare because the states are trying to essentially offload that risk onto the private payers. Now, we're already playing in these markets. So, I just want to be clear. We frequently say we have over 35 health plans. Actually, 17 of those health plans have us in some portion of Medicare, Medicaid or exchange business. So, we're already playing in some of those populations, but in almost all of those cases, it's a small pilot, right, because they're paying for it out of the value added services, out of their sort of 15% of the healthcare dollar that they spend on administrative services. This will enable them to shift to paying for it out of the 85% of the healthcare dollar that's spent on actual healthcare services. So we do think that this is a significant opportunity. I would look at it though as a sort of 2020 beyond significant tailwind in terms of revenue, real hard revenue opportunity for us. So you'll see us over the course of 2019 building out capabilities, investing in that channel so that we can really hit the ground running and maximize the opportunity in 2020. So people have asked a lot about the pipeline. Everybody is looking for a big pipeline update. Lisa, I'm not going to give you quantitative metrics of this year versus last year on the pipeline. But I will say what I've said before, which is the pipeline is very strong. We're very, very happy with where it is this year relative to last year. We are at that stage of the year where we're doing sort of weekly and biweekly pipeline reviews and we're really pleased with how things are shaking out. So, I want to just highlight a few clients, new client wins. I am going to and I really would chose 1 per segment because we could go through a laundry list of them which would not be a productive use of time. ExxonMobil, phenomenal opportunity we've been working on for a long time. This is one where we've been banging on the door on a direct basis. So trying to sell to them directly for many, many years. They just bought from us and in fact just went live September 1st with General Medical and Behavioral Health. And so we're very, very happy. It was when we came to them with a fully integrated solution and they could see the vision for a full integrated capability across a wide spectrum of services that they said, yes, we're in. And in fact, in the end, they ended up buying through they're an Aetna client and they ended up buying through the Aetna channel. So, that's an example of where our multiple channel strategy actually works in our favor, right. We were banging on the door directly and then they ended up coming in through our Aetna relationship. That's about 150,000 numbers in one single client. I'm going to go to the other side with Partners Healthcare, leading medical institution in the Boston area. This is a thought leader, a market leader in innovation and engaging consumers and their patients. Again, one that we've been working on for a long time. This is an example of somebody who was an early adopter or at least planned to be an early adopter and several years ago actually went to contract with a competitor of ours. As it turns out, for a variety of reasons that I won't go into, they never actually launched with that competitor and this was a displacement. So, it was a very, very competitive process. This is one where we went head to head with multiple competitors and in the end, we're successful. We were selected because of the operational capability, maybe has something to do with the fact or the reasons that they never launched in the 1st place with that competitor, and our vision for how we can partner together to bring a differentiated service to their patient population. And then lastly, in the center, we're very, very pleased to have a significant expansion with Centene. We had small relationship with Centene actually that dated back to the Health Net relationship where we had a small population. Centene for its commercial population was actually with a competitor. We displaced that competitor. We're going to roll out to their exchange population January 1 and we're going to start with 2 initial populations, 1 in Medicare Advantage and 1 in Managed Medicaid. So again, sort of playing off the last slide where you see the movement in the government programs, Centene, I'd call an early adopter, they're getting ahead of the curve in both of those populations and starting the rollout. So, I think about this as a couple of million members coming in from Centene and both of us in strong partnership looking to expand throughout their population. I can't do an investor presentation without going back to this slide, which we showed on our roadshow. So, Mark and I running around the country said, without the check marks, here's what our growth strategy is going to look like. Here's what we're going to do. We pride ourselves on being a company that keeps its promises. And so we like to come back to this. We revisit it with our management team all the time and we like to be a company that says here's where we're going to go, here's what we're going to do and then to be able to come back and say we've checked a lot of the boxes. Some of those we've built organically, some of those we've acquired and some of them we tried and maybe they didn't work so well. So, like health kiosks is something we put our foot in the water, we tried, it didn't really gain adoption and so we backed off a bit. We didn't take it off the slide because we want to acknowledge that it was there 3 years ago without doctoring up the slide. But it is important to say, look, we have growth opportunities across all of these and we're going to continue to invest in them. So we're not done on most of these, right. This isn't a sort of check the box and go away, we're all done. It's a continued evolution, a continued development and but it also should give you some sense of where we're going to continue to invest, both in terms of development, partnership as well as potential M and A in the future. Virtual care has become the new gateway to medical care. Virtual care has now become a central pillar of healthcare delivery. When the doctor first called me, he let me share what was going on and he was listening and then he started asking questions. After I talked with the physician at Teladoc, he told me there's a chance it can be what you think it is. Maybe you pulled a muscle. Maybe you said, what I'm concerned about is that some of the symptoms that you have shared with me are consistent with a blood clot, you really need to go get this check. I would recommend you go get this check today. So I went to the emergency room at the hospital, which is near the urgent care. I was leaning toward pneumonia. Now, I wasn't in a great amount of pain this time. I was just experiencing some discomfort, a little shortness of breath. And this is where Teladoc, the physician of Teladoc really made a difference. He told me that when I went to be examined make sure I mentioned that possibility because those can be misdiagnosed very easily, the pulmonary. So I mentioned that. I said, can you test and see if there's something else? So I think CT scan and he said, well, we're surprised you've got multiple PEs in your left lung. And we're really lucky that you came in and that this was caught. Had it not been for virtual care and the trust that Shane placed in the Teladoc provider, he could easily have been discharged from the emergency room with a life threatening medical condition. In fact, I was so impressed with quality of care that I received from Teladoc. I went on Facebook and Twitter, and I shared my story about what I've been through, and I gave a shout out to Teladoc. And people had a very positive response. And a number of people I've told the story to found out they had Teladoc as part of the benefits at work and they just heard about it and they never used it. And now they're going to look into getting the app. I believe that Shane's story is the Teladoc health story. It's the story of physicians delivering medical care of the highest order around the globe. So, it's hard to follow that. So, I think Lou said it really well, Lou Levy, Doctor. Lou Levy at the back of the room, our Chief Medical Officer, that that really is the Teladoc Health story. Think a little differently than maybe you've thought before about what Teladoc Health is and the role that Teladoc Health can play in someone's life. So virtual care can be and maybe should be the first point of care, right, the entry point into the healthcare system and the first place that you go for direction, for guidance and ideally for resolution. But if it can't be resolved, you want someone who's integrated, you want a partner who's integrated with the rest of the healthcare system so that they can send you to the right place to get the right care. So as we use that as maybe a jumping off point to the rest of the day, think about the breadth of services that we offer, the breadth of clinical capabilities. Think about Shane's experience as using Teladoc Health as an entry point into the healthcare system. And then as you sort of think through the discussion of where the healthcare system is going and then we get to Dan Trencher's discussion of where our product vision is going and the role that we can play with our partners, my hope is that that sort of opens your mind to the opportunity in front of us and the role that Teladoc Health can play not as a virtual urgent care provider, but as a comprehensive suite of virtual services and an integrated integral part of the overall healthcare system. So with that, it is my great pleasure to welcome my good friend, my Board member and a guy who gets a tremendous amount of respect. I was teasing him that I was going to blame him for the security on Fifth Avenue. So, Senator Bill Frist, I always want to call him Senator, Doctor, the Honorable Bill Frist. As probably you know, hopefully, 12 years in the U. S. Senate, 4 of those as Senate Majority Leader, an absolute icon in terms of national and global healthcare policy, also a cardiothoracic surgeon who not only takes care of people, but also volunteers his time working on primates in Africa. So without further ado, Bill, if you can come on up. And if we can give Bill a little round of applause. Thank you, Jason. And it's a real honor for me to be with you today and I do come with you to be with you kind of with several of those hats on. But I think picking up on the video and I think it's appropriate that we're beginning the day really and the following sessions on quality. And I say that as a reflection of what goes on in our board meetings, what we talk about, what we begin every meeting about. And that's ultimately the face, the individual at the other end of that video, telephone, text line. It all comes back to that quality. And I think the video that we saw really captured it in almost a pitch perfect way, because you heard the words trust and that's really what you want when you have something that scares you about you or your family member and you're making that call. You've heard the words making a difference. And again, that's what we expect from any impact that we have, but especially when we're frightened or something is wrong, is our eye infection a sty or is it a staph aureus infection that will make me go blind. You hear those words of sharing information, I think it was or talked about the sharing, which again is what it's all about and that empowerment of being able to have information when you have it when you need it, empowers you to take care of yourself and to direct your own care. So, I thought the video was great in terms of a setup, but really what follows the rest of the day. I, Bill, first, as Jason mentioned, had the real privilege of spending 20 years taking care of thousands of patients in the field of the heart and the lung. And when I lost my mind, I went to the United States Senate and spent 12 great years there at 6 foot President Clinton, 6 foot President Bush, concentrating a lot on healthcare, healthcare policy, Medicare Choice, which became Medicare Advantage, the Medicare Modernization Act. So what I'd like to do is really from that perspective is to spend my little bit of time with you sharing three thoughts. One is why would somebody such as myself choose to focus on Teladog, become a Board member, become an advocate as of I was just telling Jason before in the last 4 days, I've used Teladoc twice or my wife has and then I have and really was challenged, congratulating him saying, it works, it works well. And because we were in California and had just that, my wife had a sty and that quality. She talked a little bit about why Bill Press in Teledon. And then secondly, we'd like to move to what's behind it. You heard Jason say it, you'll hear this quality, this absolute unrelenting, focused, concern, address, everything centers on quality. Why is that? And third, as one who knows Washington well, we'll just reflect and I spent a lot of time in Washington and spent the last few days with a number of the Washington people. We'll share with you some trends and there are many, many trends you can pick. I picked 5 that are very current over the next few years. And then as Jason said, maybe a little inside baseball if we have time. First, why Bill Press and why Teladoc? As a heart and lung specialist, my wife very much was in the bricks and mortar world and that's where so much and that's why this both the pipeline and where we're going in the future is so exciting and explains a lot of the momentum that we feel in the field of virtual care. But the bricks and mortar world is sort of the dominant world today. It is where if a patient has a problem, wherever they are, they have to get in their car and if they have a bad problem, but can't see because of their eye, they have to have somebody driving, they'd have to come to my office or to the emergency room in my office, might be 10 or 15 other sick people. Sometimes you'd have to wait a week or 2 weeks just for my schedule to open up to be able to see them. I would do my very best to getting the information and the history, doing a diagnosis in as rapid a time as I can and giving them a treatment plan and then sending them off. And that's the bricks and mortar world. That is the world as it is today and it works okay. But it is very much behind why we have the inconvenience, the excessive waste that we all hear about, a fragmented system, a lack of continuity of care. It was in these old days of bricks and mortar that we knew that the patient was important, but we were more focused on the disease and what that patient brought in as a disease instead of holistically, if the patient's life, how to get there, the convenience, the affordability, all the things that ultimately, less a part of the disease, but much more on the patient and the quality of life and the fulfillment in life that they will get out of that interaction. I asked myself, again, remember, I'm the whole medical, I was a doctor, is there in this world of advancing technology and in the world where you can accumulate data and we did have advancing analytics, was there a better way? And clearly, the answer is that, yes, there is a better way. And as I asked myself, I said, where would you go for that better way? And of course, it was Teladoc. Teladoc at the time stressed 1st and foremost the quality, the quality issues we're talking about. It was always on the tip of the tongue. It's the way the meetings were open. They stressed lowering the barriers that are inherent in bricks and mortar and transportation and a requirement for absolute presence. They stressed affordability and that means transparency. We hear that word a lot out of Washington, D. C. Today. The transparency in what you're getting, but even more importantly in some ways is what you're going to pay upfront. And then they stressed scale. They said basically that we can take an interaction, get the highest quality, the highest value add at interaction, but by doing 100 and 1000 and indeed millions of these transactions, we have a certain consistency to use that data in a very special way. A special way, I'll come back and talk about how it can actually change medical practice, not just for that individual, but for the rest of the potential millions of recipients in the future as well as change the medical practice of the Doctor. Herself or himself. Let me shift to sort of the second thing I want to talk about and that is the quality issues and the quality, why this absolute unrelenting focus. As a reflection of that, again, it's everybody's going to talk quality. They're going to talk of value in this trend towards value based care. And value is nothing but outcomes and results divided by cost or some dollar figure underneath. So people will talk it. Teladoc institutionalizes it, not just with the doctors and the training of the doctors and the protocols and the focus on the dignity and respect of individuals as they call in, but also at the board level. Teladoc is equal to our audit committee and all of our other committees has a quality committee. We established a quality committee for a purpose, a quality committee of board members and it filters all the way down through that organization. The purpose of that quality and I chair it, the purpose of that quality committee is to oversee that quality throughout the organization, not just compliance, but in fact compliance is important and that can be done by other people. It is good to be done, has to be done, should be done, but we focus our quality on that interaction. From the initiation of that first button that's actually pushed all the way through to resolution of the treatment plan, that is the focus and it comes all the way up to that quality of committee. I should also add, because Shane in there or the word I am not sure if Doctor. Levy or Shane, basically where trust was used. What quality does, it establishes and reinforces and embodies a trust that again a doctor thinks about all the time in a doctor patient or a nurse patient relationship or provider patient relationship. But if you can put good quality out there that is measurable, that is scalable, it builds trust. In the video, it was trust of being able to go into another doctor's office and say, just let's look at this because I trusted somebody who told me something. That trust builds a whole element of control over one's destiny, I'm speaking about the patient themselves. And then that means better compliance. And all of us know the stories of being told something in the treatment plan, prescription drugs aren't taken. But if you have this trust built upfront, as part of quality, it improves compliance and that improves value and that improves outcomes, which actually improves the value equation. So, it becomes a circular iterative process of quality and trust and empowerment coming back to rebuild that quality. The Teladoc and the virtual care model has a lot of advantages when it comes to quality that bits and mortar just doesn't have. And again, these incremental advantages as we move ahead in a very chaotic, not very good overall healthcare system, good care in America, but the system is not that good. So, how do we improve that? Number 1, the virtual world that we play in with Teladoc and telemedicine, number 1, you can leverage the data, as I said, from these millions and millions of interaction and use very sophisticated analytics to make the quality of our virtual interaction superior, yes, superior to that of traditional one off bricks and mortar type traditional interaction. And I think the best example of that is one that if you click on the Teladoc app, you'll see some mention of antibiotics upfront. The fact that we have these millions of interactions, we can educate people, but we can also educate physicians to the appropriate use of antibiotics. And increasingly, we have moved in a direction where today we're very comfortable saying that our prescribing rates of antibiotics and corticosteroids are better than what you get in the traditional private practice bricks and mortar experience. Well, as you know, antibiotics and corticosteroids are overused to the detriment of populations and individuals. And we are very comfortable because we have standards and we have protocols and we have evidence based medicine. We can educate doctors and bring them up to date instantly and that's something a bricks and mortar operation cannot do. Secondly, an advantage is the scale in every state across the country. I mean, I already mentioned this, we can actually improve medical practice. And in Jason's slide, we will come back to it again, Teladoc's proprietary platform allows us to do that because we can provide physicians who many in America today practice the way they learned 10 years ago in medical school, we can provide them instantaneously from a trusted source the very best proprietary information on how to treat, how to interact, how to manage, how to achieve compliance. They get that current medical practice and they find it incredibly useful and important and they can treat with confidence. The art of medicine is improved. The science of medicine is improved. Medical errors are greatly, greatly reduced. And most of all, physicians will have up to date best in class state of the art practice information before them. Thirdly, an advantage in the virtual space is that we can ensure continuity of care. It's built into our system. And many of you have hopefully been able to see our facilities. And again, as Jason said, people think that it is just an app of a sort, but in truth that background, this continuity of care rises to the top. We have an expanded collection and integration of electronic medical records that we can actually infiltrate and share with and we do it automatically with the rest of the healthcare system. And that avoids the cost associated with unnecessary duplication, missed records and actively reduces waste. And the 4th area that the virtual space has has in terms of an advantage is the scale and breadth. I live in Tennessee and Appalachia is sort of on the edge of Appalachia and literally anybody no matter where they are in America today within a few minutes in Appalachia in the middle of the night can contact a board certified physician in their state licensed by the federal government and licensed by the state wherever you are. And that scale and breadth means better quality of care. The third thing I said that I would mention is and discuss with you is the policy arena. And I'll come to these issues a little bit about the trends and how the winds are blowing and maybe a little inside baseball. First trend that I have here is a whole value based care. The transition from volume care, which has traditionally been a fee for service and fee for service will continue and fee for services, you always have a role with a major role. But when we talk about moving to value based care, we really are saying how do you improve results and outcomes divided by some sort of cost number in there. This trend to go to value based care will continue and it's being pushed by the private sector, it's being pushed by payers. It's increasingly being pushed by clinical practice and of course, it's being pushed by the federal government. Telemedicine and virtual care will play an increasingly important role. I am certain, in this acceleration and transition. And how does Teladoc actually do that? It's because around the clock, we have this access and affordable cost to the service itself. We have improved outcomes. We reduce unnecessary emergency room visits. Those who don't normally see a primary physician or don't have a primary physician will come and do come to Teladoc. In Congress, there is huge strong bipartisan support for telemedicine. I'll come a little bit into the elections themselves, but there were over 70 telemedicine virtual care bills introduced in this Congress. The Congress is 2 years. And it's almost an equal number by Democrat and by Republican, and many of those 70 bills are bipartisan. In the executive branch, again, Jason mentioned the support there and the trends there, Alex Azar, who I've known the Secretary of Health and Human Services and I've known in the Bush administration in the private sector and now is Secretary of HHS. And I talk to him frequently and his commitment absolutely is to value based care and one of the leading points he leads that he emphasizes when he talks about value based care is the move to telemedicine. Adam Bowler, who runs the Innovation Center, the CMMI, Again, I spent the last 48 plus 72 hours with. And again and again, he comes back to as we move into this value based world, telemedicine is going to play a primary role. So at the very top of HHS, same environment, the same thing. As you look, it's basically Medicare Advantage, as Jason mentioned, and then there's sort of fee for service, traditional Medicaid. Medicare Advantage clearly and all the legislation and all the bills is progressing aggressively towards telemedicine and virtual care and comprehensive virtual care and in fee for service. In my conversations with Sigma Bona, it is basically the same thing. It may not even be called telemedicine, but it is virtual health coming in. And so when you have that kind of emphasis with the current administration, it is going to continue in a very strong and steady way. Price transparency, which is number 2 there, I won't spend a lot of time on, but needless to say, people, consumers in this sort of consumer driven world want to know how much things cost. The number one issue if you poll people today is not what's on television with the ads for the campaigns actually. The number one issue today in the affordability arena is getting surprise bills, unexpected bills, and that's number 1. And I'll bet some of the campaigns pick up on that. But the idea of knowing what something is going to cost to upfront specifically with full price parenthesis is inherent to what we do at Teladot. Alex Azar says and I quote, because this is one of his top three priorities, I believe you ought to have the right to know what a healthcare service will cost before you get that service. This is a pretty simple principle. We'll work with you to make it happen and lay out more powerful incentives if it doesn't. Clearly Teladoc gives that price transparency to the consumer, to the patient right upfront. The third issue I have and we'll spend time on it, which is obvious even from yesterday's news with HR7 is combating the opioid epidemic. There will be bipartisan work and continued work on this over the next couple of years in an aggressive way. The Trump administration has prominently proposed, and I quote, expanding access to telemedicine services, including services involving remote prescribing of medicines commonly used for substance abuse or mental health treatment. I quote him only because these big massive trends affecting society that are almost insurmountable in magnitude and size. Where it's a very, very specific role of being able to reach people who are not going to normally come in to see Doctor. Crist in his office or in an emergency room. And people at the highest levels are saying that we haven't figured it out yet. We don't know exactly what that role will be. But at top of mind is the role of virtual care of being able to reach them wherever they are in telemedicine. The 4th I have is Medicare Advantage. Medicare Advantage is going to be the testing ground for new models of care. It's where we in the telemedicine field and the virtual healthcare field have been able to blossom and will continue to explode, I'll use those words, continue to explode because of the value of being able to reach people in an affordable way and in a convenient way and where they are. It just makes sense. Medicare Advantage will continue to grow. There's huge support. Medicare Advantage started with a program that as majority leader we passed in 2003 called Medicare Plus Choice and with that's gone from $5,000,000 to $10,000,000 to $15,000,000 to 20,000,000 dollars to $25,000,000 and it will continue to grow other no matter what the administration is. It's where the flexibility is. It's where the innovation is. It's where people can try new things. It's where what can drive value. And so we will see that Medicare Advantage and it will continue to grow. But the word is not on there of innovation, it's where innovation in healthcare will continue to be applied. Jason mentioned the 5th bullet on here. In the current climate and things will probably slow down in Washington, the importance of the states and Medicaid programs as innovators and as be where the action at is will continue. It will be continued by waivers from the federal level, efficient overall concept of federalism, but they will be the crucibles of innovation. And increasingly, as Jason said, we are in those markets where state the legislation regulation used to be a huge problem. Now that those problems have gone down, the huge opportunity and what comes in these crucibles of innovation at the state level will be before us. So we'll answer baseball, then I'll sit watching my clock, so we have some time for questions. Howard Baker, who was majority leader before me, was also from Tennessee and he said, Bill, whenever you look into a crystal ball, always be ready to eat crushed glass. And so, as I come to sort of the little bit of inside baseball, I'm ready to eat Quest class. But let me give it to you pretty straight. In 8 weeks, we are likely to see a whole bunch of change in Congress. And I guess fundamentally for this, will that change alter the course of the direction of where we are with telemedicine or with the virtual healthcare? And I'll come back to that. So, the inside baseball, Democrats will take back the House of Representatives almost certainly. There are 425 sort of seats that are out there. Every 2 years, all of those seats are up. All of you know the red and blue states, most of those people get sort of elected again and again. Only 24, 23 seats need to shift. 2 dozen seats need to shift. Most betting people would say they will shift if you just look at the maps to become Democrat. But will it be 24 or 25 seats or will it be 60 or 70 seats? It's a really hard sell. The House of Representatives is a majoritarian body, so it really doesn't matter. Whoever has one vote more is going to rule the place and rule it strongly. Probably 90% chance will go Democrats or most people will say it is. In my body, the United States Senate, there are 51 Republicans, there are 49 Democrats. So 2 seats have to switch. The states to watch would be Arizona, Mississippi, a special election, Texas, Tennessee, probably put Nevada in there. The Tennessee race is a great race to watch by the way. There, if you took all posters today, the elections were today, it would stay Republican with about a 7 out of 10 chance, about a 70% chance it will be Republican. So that's sort of where we are today. But what does this mean for policymakers? It means that in all likelihood, it will be if you had to predict right now, we will be split. It will be House Democrat, Republican Senate with a very narrow majority on the side. Well, it means 2 things. Number 1, there will be a lot more investigations. People are tired of the investigations, but there will be a whole lot more investigations. The House will be investigating everybody and pulling up Secretary Azar and Alan Boehler and Secretary Farma. So a lot more sort of inertia thrown into the system. Number 2, fewer healthcare bills will pass. There haven't been a lot of healthcare bills recently, but by its very nature, if you have Democrat and Republican, they've got to come together before you get a bill to send to the President, there'll be fewer overall bills. Despite all the poisoning around healthcare in the environment, however, remember that 21st Century Cures Act, which was a pretty big act, did pass in a split government. MACRA, which a lot of people say what will happen to MACRA, MACRA passed in a bipartisan a split Congress. The Medicare Advantage didn't pass Medicare Advantage didn't pass in a bipartisan, but didn't pass in that split environment, but there's continued support for that. So NAPA, Medicare Advantage, even in a split conference are going to continue and be on the same trajectory that they are today. And then there will be areas of bipartisan support, things like I mentioned, the opioid crisis, drug pricing, support of telemedicine, which has been very bipartisan. So in summary, I expect that the support for policies to advance telemedicine will essentially be unchanged. It may even be augmented with time in a split Congress. As Jason pointed out, being the market leader offering comprehensive virtual care and with the expansiveness of the market potentially as we continue this plan that he has laid out really puts us, I believe, in an excellent position to capitalize all of the advances that we're seeing at the federal policy level and huge new opportunities as a lot of the reform moves to the state level as that occurs in the next couple of years. In summary, midterm elections in November, whatever the outcome, we're not going to alter the landscape significantly. Thank all of you for coming today and letting us begin with really what we start every meeting with and that is a absolute unrelenting resolute focus on quality and quality to the individual patient and family for which we give that care. And I spent my whole life in health and healthcare and I've really never been more excited about these new tools in virtual care that we have and that we can now put forward for you and for your family and for the literally millions of people that we will engage with on Teladoc this year and in years to come. Thank you very much. With that, let's turn to questions and answers. Thank you all very much. You can answer that. So we just came back literally a week and a half ago from a board strategy session, 2 days together with the board. And you can imagine with voices like that and perspectives like that at the table, we have very dynamic, very interesting and very insightful conversations. And that's sort of how we've tried to construct the Board with that kind of unbelievable perspective. So we are privileged to have Senator Frist here to answer a couple of questions. I'm happy to answer a couple of questions. I'll be back a few times over the course of the day. So if you don't get your question answered now, we can take it later. We have to start with Sandy. Thanks, Jason. So to first, the question as a physician, an active physician and watching the industry transform, how often do you come across other doctors who are resistant to this? What are their pushbacks? Why do they not like it? And how do you address those concerns of doctors who are like, I don't want to go there. This isn't best practice. We shouldn't be moving in this direction. That's a great it's a great question and you're going to hit it at several levels. Doctors, were trained to see a patient, take care of a patient, treat a patient and that's just about it. The way medical training is, you go straight through, you're taught by mentors, you end up reproducing what they teach you. You do some 40 hours of continuing education, but that's the trajectory you're sat on. To have instead of that linear, more exponential thinking is new to the culture of physicians. And they don't want to change. They've been taught not to change. They've been taught to stick with a body of knowledge and apply that body of knowledge going forward. So it's mainly cultural. Younger physicians, it's much, much, much easier because they're growing up in a world that's sort of the millennial type world where exponential thinking is routine. So most of it is cultural and the best education is basically demonstration. And then with that, doctors see that it empowers them, gives them the opportunity to reach more people in a more time effective way. Imagine being a doctor. Right now you have to check boards outside and you have things passed coming all the way through and with Teladoc within 3 to 4 minutes you have information that through this very sophisticated data and analytics that we provide in our proprietary platform within a few minutes have the patient teed up the pertinent information and you can focus entirely on the patient. So it's mainly culture and acceptance is, I think, taking off in a very positive way. Hi, Steve Wardell with Chardan. I think one of the big changes in the healthcare landscape of our lifetimes is the shift from fee for service to fee for value. But I think investors are having trouble understanding this shift. How do you look at it? What stage do you think we are in, in this shift? What are some milestones that we should look for? Just how can we better understand this shift? I think most recently, the investors I spoke with are think that it's been kind of come and go or slower than expected in terms of a shift. So looking at the healthcare landscape and seeing it still mostly being fee for service? Yes, it's a great question. And Jake, you can answer it from your perspective. But from the medical perspective, fee for service, you'd start with the value equation. And we used to say volume to fee for to value. And I said it once, but I usually don't say it very much, but it's kind of lingo. The volume is a fee for service system, and that's what doctors tend to like. You like to do a service, you like to be paid for that service. And the problem with that is the fragmentation because it's not one doctor treating a patient, it's usually a doctor and a nurse and a nurse practitioner, it might be a chaplain, it might be a physical therapist, it might be a rehab specialist, it might be a social worker. You put all those together, fee for service for all of those people added up without forcing some sort of coordination that gets into the value means there's a lot of waste, a lot of duplication, medical records all over the place. They're not forced to communicate. So that's the fee for service world. And for simple things, the fee for service is good, it's simple, it's straight. For care of a patient, generally, you need to go to a value model that basically looks at the outcome of that patient. What are the results of that patient? Do they get better? Do they get worse? But the endpoint and then have anybody coordinate around that and that's value and you put a price on that. It's easiest to think about in terms of bundling. You have a bundle for an episode of care or a bundle for a heart transplant. It forces those 5 people to get together. You need both worlds. We used to be 100% volume based fee for service, more fragmented. Now that 18% of our economy today and that's starting trading off food and rent and mortgage and people don't have the money to buy it. Now we're looking much more at value coming back to the value. So if you say how far are we going, you don't want to go entirely fee for service to value. You want most to be valued because that by definition is outcomes, getting patients better. Fee for service says nothing about outcomes and therefore the quality is there. That transition, we're probably 20% of the way along there of where it's going to end up. So it's very, very early. We are in both worlds. I told you the transparency for X number of dollars, you get sort of unlimited talking to a doctor who is going to take care of your problem with 90% certainty after just trying to find them in with 8 or 9 or 10 minutes. That's been for service, but it fits into the value equation because we are maximizing what was talking about, the quality, the outcomes. We are not a $2,000 emergency room visit that took 2 hours in the waiting room and 2 hours to get there, but in 10 minutes at a fraction of the cost. So the cost is low and then the value is high. So it's about 20% along there. What did you add? That's a long answer. That was a great answer. I think you nailed it. I would say the only thing I would add is more and more we're seeing the payers want performance in the contracts. So I think about value in terms of having some sort of a performance indicator that's tied to your reimbursement, right? And more and more, our payers are coming to us and saying, and this maybe gets to the how do you measure it, what are you looking for in terms of milestones. They all have goals in terms of how much of their payment is tied to some sort of a performance indicator. Literally, they measure it in terms of what percentage of our claims, what percentage of our spend is tied to a performance indicator. And more and more, they want us performance tied in terms of our remuneration. And we like that because that means we get paid for performing. We measure it with millions of interactions, not just a doctor with 2,000. Lisa? I just really want to follow-up to that point. When you think about your conversations with CMS, how are they thinking about reimbursing for this? Is this going to be the traditional model that you have today where you're paying, maybe a per member per month and then for the visit? Or is it going to move more towards the other side where Doctor. Christ is talking about more all encompassing where they'll be bundled into some episodic care. So how do we think about that, 1, for those future opportunities? And 2, in the business that you signed this year, can you just talk about, is it the traditional model or new type of pricing mechanisms? So I think you gave like 3 different potential payment mechanisms. I think the answer is yes. So we're going to see all of those. And it's going to take different forms. So if you think about Medicare fee for service, that's moving to bundled payments for hospitals and ACOs. The virtual care that's delivered as an overall bundle of service to a consumer as part of the care that they're being delivered by that system will be part of the bundle and then will get reimbursed as a component of that. The health plans like Centene are likely going to pay us on a more traditional basis. So that's an example of one that there's a PMPM, there's a visit fee, it's a more traditional contract structure to what we've done in the past. And you're likely going to see some plans go more toward some sort of a performance orientation, which may be tied to the overall utilization that we drive. It may be tied to sort of the percentage of savings that we drive. So as our whole book continues to evolve in terms of meeting the needs of our clients, I think you're going to see the same thing out of those government programs. This flexibility of having data, being able to measure the value added and translate that into dollars and cents, the antibiotics thing, which is huge with the development of Methotillin resistant stat, When we show we can use antibiotics more appropriately, people translate that very directly to dollars and cents of unnecessary infection, super infection, methicillin resistant staff, readmissions to our hospital and we can do it because we have millions and millions of data. So we can adapt very quickly to a fee for service to a value. Our inherent advantage is because we are virtual and we are perfecting, have perfected our way far ahead of anybody else, way far ahead, we will be on the cutting edge. Nothing in my mind, and I do I've done the gamut, nothing in my mind can add more value to an equation or a bundled equation if you're one of those 5 people sitting at the table in virtual health. And if we think about the dollar and cents from the Wall Street perspective, Mark, when we think about these new programs that we're all talking about, will the profitability look similar, will it look better, will it be that you'll have to have more volume because it's less profitable? I mean, generally, we think about Medicare programs as being less profitable than the commercial market. Less profitable for the traditional providers. But the structure that we see today, especially those in the contract phase and those prospects, we are still vastly into the traditional model. But as Jason noted, we're now talking to payers and we talk to and believe that in CMS, it will be a bit of a change from the traditional. We will have likely other models, but much more performance based. When we project that several years, I mean, we'll wait till the end of the presentation to see where some of our modeling would suggest that this is going to assist us in protecting our very strong margins and continue to give some great visibility into the future years. So I think we can take maybe 2 more, and then we will come back for questions after the next couple of sections. So yes, you've got a mic coming. I'll wait on the mic. Comment, Charles. Yes. Thanks. Just wanted to maybe follow-up a little bit there. When we think about we're still largely fee for service. It looks like when you look at reimbursement parity, virtual care is still underpaid relative to physical visits. It seems like it's mostly a state by state kind of issue. Is there anything that we can think about, Senator, in from the federal level that could help alleviate some of that? And do you think that's a barrier to quicker adoption at least from the provider community? In terms of payment for things like individual visits or physicians? Yes. So the reimbursement for virtual visits relative to minor some more years, sometimes the doctor will say, hey, I've got someone come in, I'm still going to get more. Yes, first of all, it's a great question. The federal versus state, as I said, most things most will be directed at the state. But I'll give you an example From a policy level, when at least I'm talking to the leadership in the Senate in the House, they will say, if you've got the data, if you've got the analytics, you can bring it to me and you can show that there is a huge value to the system coming in in terms of better results, better outcomes, lower cost, more affordability, convenience, that we are willing to reimburse both fairly and at times to accelerate to that environment, reimburse more. The real challenge has been that nobody has had the data, we have the data because of our size and our scale. So I'll keep mentioning scale to be mentioned several times here. People will come and they do come to us to be able to determine what does that data really say. I'll use the example of Medicare First Choice, which in 2000 and 3 we made is to Medicare Advantage. We took a lot of heat, we meeting the leadership at the time, because we believe that the private sector could do better than a traditional fee for service system is locked in with a very sort of disjointed sort of chaotic system by putting a more managed care approach in. People said no, and Democrats and Republicans kind of thought about it. At the end of the day, we overpaid for about 5 years. We knew we were doing it in order to allow that infrastructure to build up. And I mentioned that, I'm not going to say it's going to be done here. But that's what I'm thinking, if you absolutely have the data, you have the analytics and it is done in a sophisticated sort of evidence driven, data driven way, the case can be made to not reimburse images sort of appropriately, but to reimburse in a way that will accelerate that over time. And Charles, just to put a fine point on that. Senator Frist joined our team as we went down to talk to the CMS leadership savings data. We shared the analysis that we've had external parties do, sort of like populations who use telemedicine and those who don't. And that helped them to get comfortable and put start to put value numbers to what their policy was looking like. Last question? Yes, great. Don, hook or key bank. Maybe a little bit more on Medicaid. Do you serve any populations there now? And maybe what milestones there are you looking for in over the next few years? Are there any states in particular that are essentially going to lead the charge? Sure. We have several Medicaid clients, managed Medicaid clients, a number of our health plans, some who are primarily Medicaid plans. Maybe they also have some exchange business, but they're primarily sort of regional local Medicaid plans and others who are big national plans where we provide service for one of their state Medicaid programs or multiple of their state managed Medicaid programs. I would say it's still small. So as a percentage of our overall membership, still small, mostly in pilot phase as CMS has been working through its payment policy and its regs because again, usually the state Medicaid agencies and the managed Medicaid companies follow CMS payment policy in terms of what they're going to pay for. So as it shifts from the administrative side of their balance sheet to the medical side, we think that opens up the floodgates in terms of more membership, more deeply embedding virtual care as a component of the overall program? I'd answer it even more strongly. What's happening in this world, the federal is, we don't have a Democrat or Republican leadership either way, is that much of the health reform transformation is going to go to the state level. The state in essence is Medicaid. It is a huge issue. And there, because of the traditional fee for service that's been imposed by the federal government, you have to do it this way, has not allowed telemedicine to really come in. It's just been too restrictive. With this move to increase 1115 waivers, the waiver system, really almost the explosion we're seeing in getting control and flexibility innovation to the state level. By definition, if you're a Medicaid director and you have a 1,000,000 Medicaid people out there, Medicaid generally being the underserved and you know that their health is more than just healthcare. The perfect way to reach the person in the corner of the state who is not going to come into some government office, who is not going to go necessarily and see a doctor because of some stigma or not, is going to be able to reach them virtually. And so one of the neat things and Jason had on his slide the use of this expansive growth, by that it really is filling out wherever we are not and the public needs it, the Medicaid directors need it, the states need it and when you've got a solution to problems of being able to get better care for the underserved of your state and you can do it where they don't have to come to you, that you can go to them in a virtual space, it is inevitable that that space will grow. All right. So join me in thanking Senator Frick. Thank you, Bill. Thank you. So, I was thinking as I was sitting up there with Mark and looking out at my team at the back of the room, it's no secret that we have a track record of acquisitions. What maybe is underappreciated is we have 4 former CEOs in the room, meaning CEOs of our acquired companies and they're all part of our management team. They've stayed with the organization and we've been able to retain them in leadership positions. Alan Roga, Carlos, you're going to hear from later, Alon at the back of the room and our next speaker, Peter McLennan, all ran their organizations and not only did they sell their companies to us, but they sold their companies to us because they buy into the vision, right? They believe in what we can do. They believe in the impacts we can have. And as you all know, the ability to retain those leaders is pretty rare. And I think from our perspective, it's a tremendous strength. So that's my introduction to Peter, who's going to come up and talk to you about our commercial strategy. Thanks, man. There's a clicker. All right. Thank you. Okay. Following Doctor. Frist, challenging. So, thank you, Jason. Great to meet many of you. My goal today is to talk about, as Jason identified a number of the key areas that make up our competitive mode, most primarily our integrated commercial strategy and entrenched distribution channels. So from last year, when I was introduced to you, talking about this in my new role as a leader of the commercial organization, I wanted to sort of fast forward and go through 4 things a little deeper than I did last time. First is to just talk about the opportunity. The opportunity is very significant. The opportunity is global. It's diverse. It's in lots of different channels. So the number one thing I'd like to get across to you is the opportunity. The second is to dig a little deeper into those entrenched distribution channels. It is a multi segment global business and enlighten you a little more into how we think about them, what the buyers are focused on and how we go ahead and approach that market. 3rd, and really through case studies, talk about 4 clients, 4 segments and how those clients are leveraging Teladoc and how we're expanding our portfolio and continuing to grow with those clients in each of the 4 key segments. And 4th, really close with some of our major new things and things that really get me excited about it. But building on what Jason said, as one of the CEOs who agreed to go ahead and sell the company and join Teladoc. That was best doctors, my company. But that really built on over 25 years as a healthcare executive. And I lived through some of the most exciting changing times in healthcare when first when devices were flooding through the world, we were introducing CAT scanners and MRIs and then following that with digital and PACS and the big transformation people saw from that, following on that with EMRs and then interoperability HIEs. Those were all really incredible transformation. Lots of you as investors would spend a lot of time looking at that. I think none of them compare to the impact, not just financial aid, but the impact a company like us can have on the industry. I deeply believe that this company will absolutely transform the industry, not just in one segment, but in all segments all around the world and have an impact on people's lives unlike almost any other technology. So with that, in the end, I'll talk about the things that I'm super excited about to build on that key vision that Teladoc can be the company that completely transforms the industry. So first, as promised, our channels, as you probably know, 12,000 clients, now 125 countries served, about 30% of Fortune 500 Companies leveraged Teladoc in some way, shape or fashion, 35 health plans, 290 hospitals. So in the broad spectrum of healthcare, if you dig a little deeper, people acquire their technology or their services in lots of different ways. This is one of the first areas where I find Teladoc very different than many, many other companies in that through the entire spectrum of where people acquire their technology, we have a very, very strong footprint, investment and execution track record in there. 1st start, where most people think about when they think about healthcare is the fully insured and ASO plans generally in the United States cover almost everybody. We just talked about Medicare and Medicaid, but also commercial both through ASOs and fully insured. 2nd is employers. Many of those times, the employers are working with carriers for their ASOs, but employers come from all shapes and sizes, small businesses, midsize and Fortune 500. Many employers take a very proactive approach to the type of services Teladoc does and others will rely on their health plans. So as Jason said earlier, depending on where that employer is going to acquire and deliver their services through the health plan or through direct, Telerac has a strong presence in each. 3rd, hospitals and health systems. Again, building on what Jason said, he doesn't really know nor do I which area will have more control of the patient, the member, the virtual delivery and our investment in hospitals and health systems to go ahead and grow and partner with organizations like partners, gives us a tremendous advantage. So whether it's through the employer, the ASO or through their health plan, we're there. And then the emerging trend of direct to consumer. This isn't for everyone and it's also not for every service. Certain types of service lines and certain types of partnerships are really starting to emerge in the direct to consumer way. I'll highlight some of them, CVS, BetterHelp and of course, we'll hear from Troy Brennan later on CVS. And then Global Insurance and Financial Services customers. More and more outside the United States, private medical insurance is growing. You'll hear from Carlos, he'll talk about that in great detail. You'll hear from Ryan, he'll talk about it in Canada. But both in the insurance and financial services business, there's an opportunity to package our services in with those organizations. So these are the macro. There's also micro segments underneath them, and I'll sort of take now the step to go a little deeper into these. So, Adsona in our world comes into 3 major buckets. We think about channel partners, okay, B2B2B2C, okay. So we sell to an organization that then partners and sells to another organization and then we get to the member. ASO would be an example. Jason talked about Exxon. Exxon is an Aetna client. We are an Aetna partner. We sell with them to Aetna. We then market to the members B2B2B2C. Then when you get B2B Direct, you think of employers and hospitals and health systems who have lots of business in this area, but it's different than the channel partners. And the 3rd, as I mentioned, is the direct to consumer. And again, in this world, people are always wondering when is the consumer going to take off? How are they going to take off? How is it going to go? I think what's been exciting about what we're doing is we're able to tailor certain solutions in the areas that consumers want to receive them in the commercial way. Not the whole spectrum, it's very, very tailored solutions through partnerships. Staying with the theme of those major three areas, what is important to them, what are the differentiators they're looking for, Hospitals and health systems, number 1, are looking for differentiation. They're past the point of a checkbox where they just want to have a service to say they have a service. They now want to have a service that has strong impact in the community and really differentiates their offering when they're competing for their business. Access, you heard Doctor. Frist talk a lot about access. This is an important area as they cover people all around their regions and of course cost of care. As you get into hospitals and health systems, patient acquisition is one of the most important areas that they think about. How do they market in their community? How do they grow in their community? How are they represented in a digital way? 2nd is efficiency. As everybody knows, hospitals operate in ratio thin margins, the more they can do to be efficient. And the third is provider alignment. This is a very important tool when they look to purchase it to align with their providers. Many of their providers are independent contractors in their own businesses and as they offer technology solutions to them, it really helps knit the community together with that hospital and health system at the core. As you get to employers, engagement is very, very important. ROI, being on top of just cost of care, but they're really looking at what is the return on investment, how can this program make an impact on my bottom line. And a lot of that also manifests in what we call workplace presence. Are you bringing solutions that help my employees stay at work both mentally and physically until they can build a better company? All of this is backed in ROI. Every area we are, we lead with ROI. We'll talk about that in more detail. And all of it is backed in quality. The quality services is critical when we're in any of these segments. And with all of these buyers, they're always looking, is your organization bringing the level of quality that will make an impact regardless of the distribution channel. So, all of those different distribution channels, okay, slightly different key priorities for the buyers, but with our service, we package these solutions into Altum. So then how do we go after it? So we have a large distribution, marketing, client management team all around the world, but we largely follow the same methodology across all the segments. The first is we have dedicated sales forces in each one of these segments. Some of them, I would call micro segments, where we have a dedicated sales force in small medium business. We have a dedicated sales force in PAs. We have a dedicated sales force in brokers and all of that rolls up under employers or health plans. So the first key is a dedicated sales force with assigned quotas and metrics in each one. Again, a deal could move from an employer to a health plan and we want to make sure we're covered with dedicated focus in each one. The third is a white space approach. I'll talk about in my case studies and as illustrated earlier, once we land a logo in a client, that's the beginning of the journey. If it's a B2B2B2C like the health plans, we're going to do a lot of selling alongside them to their employer group clients, but there's also the opportunity for visits to grow, for products to expand. And so every single time we land a new client, we're also thinking about what's the white space created, what are the additional services that we can add and grow with this client. They don't always buy everything all at once, but having that portfolio and the mentality around it's not just landing that first logo, it's expanding and growing is key. And as I said before, the whole focus of our selling proposition is proven quality and a proven ROI. So, in almost every opportunity we walk into, our solution will save them money and bring higher quality. And that's a really, really strong win win when you're out having a good fortune to present these great services. In each segment then, we break it down into the reasonably normal selling type things. This may be super obvious to everybody, but I figured I'd go through it. We have an inside and business development sales teams where we're targeting all of these various areas. So when we talk about health plans, we're obviously targeting the ones we don't have. We talk about employers, we're targeting the ones we don't have. We're marketing to them. We use inside sales. We're continuing to apply pressure. The Teladoc is the solution of choice. Then Big Deal Hunters, they're out, they're landing at Centene, they're landing at Exxon and you've got these folks that are primary, 100% focus is new logos, new deals. Then right behind them, we instantly assign client management. So once we land an account, we want to grow with that account. We want to bring them more valuable services. So the concept of farming is very important to us and strategic client management. The more larger complex organizations need strategic client managers that are more solution focused and we can go ahead and grow and build services with them. Cross sells and upsells, we've talked about that before in Investor Days and Jason and Mark with all their investor meetings they hold, this is very important to us. As we add a new service, we want to run it through the organization and I'll show that in some of my case studies. And then that just keeps going around in a circle with product management, with marketing, always supporting. I would say no major rocket science here. I think the big takeaway is dedicated focus in each one, with the dedicated quotas and measurements in each one, a white space approach always backed with ROI and quality as the primary message. So then moving on, we're going to do the case studies. And so here I will profile 4 or 3 organizations in one segment with 2 organizations in that segment and talk about sort of how we acquire a client, how we move through that process, how we grow with them, how we expand with them. We'll first talk about health plans and financial insurers. And in this one, we're going to profile a regional Blues plan in the Southeast. 2nd, we'll talk about an employer. In that, we'll talk about a Fortune 500 employer. 3rd, hospitals and health systems. We'll talk about our prestigious academic medical center. And 4th, as I mentioned, in direct to consumer, it's more about solutions and delivery. And so in that, we'll talk about behavioral health and direct to consumer work that we've already started with CVS. So first, the story of a Blues plan. And so when you think of a large health plan, you don't really go in and just sell every single thing to them on day 1. That would be great if that's how it worked. Sometimes it sort of works like that, but it's more about a partnership and growing together. And so in that, your value and your quality and your everyday work really, really shine. So with this Blues plan in 2014, we signed them and their ASO population. When you signed someone with your ASO population, you usually start with 0. And so you get the opportunity to work side by side with them, partner with them and sell to their self insured clients. Follow on that, good success with that. 2 years later, we get the fully insured and that creates a broader partnership with this health plan. So, on top of the hunting license, as I said, we have the big deal person who went in and got it and then we've got the farmer that goes and works the hunting license. We've now got the enterprise fully insured for general medical only. So as we said, when Jason started, we have the rainbow, we only had that one little icon and that's what we went out and sold and that went very well. Through the years, if you fast forward all the way to today, for this health plan, we are 42% of their ASO companies. So when I talk about opportunity and white space, I'm deeply looking at 58% more growth of this just in the ASO book. So over these 4 years, all the growth and execution with this client has been driving through, grabbing more ASO membership and through that driving utilization. As we always highlight the utilization, it's the reason people keep coming back to us because the solution works and we've got the engagement science to get those members on to using it. Through all these years, utilization growing at 100%. Then in 2018, as a summary, we've got about 1,200,000 members, both between the ASO and fully insured, and as I said, 120 ASO clients, which is about 42% of the book. Fast forward to acquisition of Best Doctors, building internally of behavioral health. We've now got more services to bring to this organization. And in 2018, they contracted with us for 3 really important new services, dermatology, mental health, expert services, be a best doctors. So now we just sort of play this all the way through again. The first thing we're going to do is obviously go to the 120 ASOs that already have us. Things are going well. We've got an integrated application. We can do all these things. So we've gone ahead and started to do that. We're now bringing more services to those ASO clients that hadn't chosen us yet, all with the goal value, ROI, drive utilization, etcetera. So that's the story of a Blues plan. This same story you could probably apply to all 35 of our health plans. And as we said, we're out trying to secure new health plans all the time, such as Centene that Jason mentioned. 2nd, Fortune 500 Employer. This is different. This story here through this case study isn't we just added more big things. This was an organization that went separately to bid for general medical telehealth and expert second opinion. Teladoc won, general medical, best doctors won, expert second extra second opinion, both were competitive, both were direct, fine, no problem. Both organizations then were integrating with their health plan partners of choice. But it wasn't until the organizations came together and built the integrated mobile app where you could really unlock the value and see the opportunity to grow with this organization. Late last year, we announced in 2017, we announced and delivered the new integrated best doctors Teladoc global app. We brought this to the client who had relationships on both sides and with that they had massive improvements in engagement, almost 5x increase in Extra Second Opinion and General Medical. That worked so well with them that they said, what else do you have? What else can we bring to you? That then added mental health and dermatology. So this type of it's on a smaller scale, even though it is a Fortune 500 organization, but where the organizations came together and brought more services, drove more engagement, gave us the opportunity to develop our in house services such as dermatology and mental health and then bring that service to this client, again, which will drive more value, more utilization. I hope to be able to bring global care to them because this is an organization with people all around the world. Okay. 3rd, academic medical center. This is a very, very logical segment to be using telemedicine services, But it's really been applied unevenly across all the hospitals and health systems. As I mentioned, I spent 25 years in the healthcare space, of which 22 until I came to Best Doctors was in the hospitals and health system business. What's incredible about this is when they put their energy behind a new initiative, they can really, really do great things. So this is an organization, one of the pioneers and leaders in early telemedicine had a service with a competitor, was probably going okay. They're one of the leaders in population health, but they decided they needed to switch horses. They had to go with a more powerful platform, which is also backed with medical services. So not long ago, just about a year and a half ago, they switched over to Teladoc. One of the things that's special about us is with our cloud license platform we deliver to them, they're able to create 300 distinct different configurations and programs so they can customize it for their needs. It feels like their solution, not per se Teladoc. And 3 stats, 1 early in the year and 2 now, I think really stand out and are some of the most important statistics that these organizations are looking for. Number 1, 40% of the visits were numbers without a primary care physician. So when I talked about consumer engagement, patient acquisition, connecting with the community, 40% of the people that they were now serving in this strategy did not have a primary care physician. 2nd, 80% of the cases did not require additional follow ups. So they were able to deliver the full service in a digital way as part of a broader bricks and mortar strategy, but really execute on 80% of them with the member never having to come in. And perhaps more impressive is 90% of their post surgical discharges are covered virtually now. If you know, post surgical discharge is one of the most important things that happens in a hospital. Being able to do it virtually is a huge efficiency gain, but it also helps the community because you're doing better, you don't have to go out of work, you can do it virtually with your same doctor, very, very powerful. Again, this story is playing out. We talked about partners earlier. They were a switch to our platform. We're seeing more and more organizations move to our platform, not just because it's a great technology platform, but because it's also built with a service backing where our network physicians can help augment the staff of these organizations. 4th is direct to consumer. Direct to consumer is sort of the thing if you've been in healthcare that everybody thought at some point all the consumers are going to light up and everybody's just going to move, and that never really seems to happen. What we've seen is with very focused approaches on very, very focused service lines, backed up by strong digital marketing and targeting techniques, you can build a very strong healthcare DTC business. So, 2 examples, one is BetterHelp. BetterHelp is our DTC mental health service, growing fast, truly helping and taking care of members that leverages the Teladoc infrastructure. It's a distribution channel and a product packaging that really makes sense for consumers because it reduces the stigma of going for mental health and it reduces the barriers to access. You can access it text, video, telephone, anywhere you are, 20 fourseven, anywhere in the world. Very powerful, and this is an area where consumers are interested in subscribing to a service outside of their traditional means of healthcare. The second is our partnership with CVS. I'll let Troy Brennan really talk about that. But this is a very, very powerful consumer brand and we leveraged our infrastructure technology and we completely fused ourselves, our telemedicine general medical into their workflow. So we are a white labeled approach where you're leveraging our technology, leveraging our network and we're working in partnership with this very powerful brand to bring it. We look at DTC and we look at service lines and we think about what other service lines that we currently have or could build could we package in a way that makes consumers want to go ahead and buy it? I think this is a very important channel for us because we are learning, we are growing and then we can use those same techniques on either side, whether it's on the B2B side or the direct to consumer side. So lastly, just to wrap up, as I said, I'd like to sort of talk about what I'm excited about. I've used, I think, every service Teladoc, Best Doctors, Advanced Medical has. I use our service in multiple states like many of you guys. I'm a traveler. I can find myself in one state one day, another state the next day, another country. I've got loved ones that can use expert medical services. I have teenagers that definitely can use some of our new introductions in mental health. I'm excited. I have a new empty nester somewhere between the teenager and the mom. That's good. All those services are very real and strong and you guys should all be Teladoc customers if by the end of today you haven't ran to your HR departments. We've done a terrible job. And those are sort of the core, but the 4 things that are really exciting me that are sort of bigger than what I think about in our day to day thing is the expanding product portfolio. As a former CEO, virtual care at Doctors was just what we did. We did expert second opinions all around the world, always virtually. But being part of an expanding product portfolio where a member, a customer, a hospital and health system can come to one place with 1 sales team, 1 client management team, one app, one phone number and have that full range of services is truly a game changer. In my view, we're really just getting started from the products and services that we can bring in there. Of course, we've done a lot of the big ones, but there's so many more services that we can bring. Right now, it's about selling expert medical services and our new global care acquired from Advanced Medical that we're now promoting. But we'll continue to grow and expand this. The second big trend that everybody follows and knows is the bricks to clicks and it could be bricks to clicks in stores, transport, whatever it is. That is now real in hospitals and health systems and that rapid adoption for them to embrace we need to jump on these technologies is a big transformational shift. As they mainstream it, it also mainstreams it through hospitals and health systems, employers, DTC, etcetera. Everybody knows this is happening, and I now feel it as a mainstreaming in this entire segment. Then the third is that mainstreaming of adoption. As I mentioned, I use every one of the services. I recommend all of you do too. It was great to hear hospital and health system and a health plan, that's just powerful. A hospital and health system and a health plan, that's just powerful for us. Nobody anymore thinks about this isn't something that is going to work for me and deliver for me. It's more mainstream. It just makes sense. And then the 4th is the rapid movement of behavioral health to an online virtual setting. I am the stories that come back through how we can help people because they wouldn't have sought care before because the barriers, the stigma, the confusion, the complete challenge of scheduling. Now those people can seek help from us, whether it's a DTC or through the employer, the transformational change that virtual health can bring to behavioral health, I think has a very, very powerful impact on people's lives. So with that, that's the commercial end to end spectrum, segments, focus, client value they're looking for, case studies, how we get 1, we expand it, we grow it, we add more products and then some of the things that I'm excited about. So with that, I conclude and I get to introduce my Canadian friend, Brian Rice, if you want to come on up. I'll have to clap for you. Just a quick introduction of Ryan and then I'll hand it over to him. Ryan represents Great West Life, which has been an international client of ours for 17 years. What's incredible about their organization, it's a global organization headquartered in Canada, but owning assets in England and others, is they really start with a partnering approach. So when I talk about financial and health insurers, they represent really the pinnacle of how they partner with vendors and how we can grow together. So with that, let me introduce Ryan. Thank you. Thank you. Thank you very much, Peter, for the introduction. And thank you very much for having me here today. I'm very excited to speak today. I'm going to split my time really in 2 ways. First, spend a little bit of time talking about one of the new initiatives we're very excited with partner with Invest Doctors on the international market, give a little bit of a flavor of how that's going to fit in there. And then probably conclude with a few minutes on the success we've had in the past and our partnership and how we think that's going to fuel us going forward. So, as Peter noted, Great West Life, of course, headquartered in sunny Winnipeg, Manitoba, smack in the middle of Canada. We are a full service pension and benefits carrier, but we do have operations globally. And most importantly, we've been, as he said, a partner with Best Doctors and Nautela for the last 17 years. Now I come representing our group customer per space, which is really the employer sponsored program. That was one of the segments Peter had up on his slide there. And through our line of business, we have about 3,200,000 members in group plans all across Canada. And when you add up our dependents and spouses on that, that's about 9,000,000 Canadians or roughly 1 quarter of our country. Now, I want to go a little bit into the last point as well there because I think everyone talks about being proactive and using holistic strategies. Personally, it's a little bit of an overused term in our industry. But I think it's nuanced here and important to talk about for a very particular reason. Now, I'm sure everyone here is familiar in Canada, the healthcare system operates a little bit differently. And that I heard some laughs at the back of the room. It wasn't meant to elicit laughs, but it's really more about the cost curve, right. So, in our countries and many other countries in the world, primary care services delivered through your doctor, services delivered in a hospital, all covered by the government. And so, I say that because what it leads to private insurance is really more the transactional nature of expenses on the healthcare side. So, things like drugs, dental, massage therapies, and of course, the very significant dollars that come with disability claims and the risk of a disability claim. And so, I mentioned this for a couple of reasons. First, it does bend the cost curve or changes the cost curve. When you strip out the cost of primary care, the biggest drivers of expense for private insurance, the biggest things we're concerned with are drug spend and disability spend, as I said. And more importantly from that, what that means is we really do have to take a holistic approach to making sure that we're maximizing utilization of both of these types of spend. Quite specifically, that means we're going to try and reduce utilization and waste on the drug side and also make sure that, that drug spend is going to maximize our chances that people won't get on disability and will stay productive and at work. So that's a little bit about Upjohn. Of course, more globally, everyone will be very familiar with the explosion in drug costs that have happened, both on the high cost and ultra high cost segments, as well as the increase in the incidence of mental health issues on the disability side. So, no surprises there. That was something that was preoccupying quite a lot of our time and led us to look for a partner that could potentially bring some solutions to that. We wanted someone that could bring an innovative program to us that led us to be a little bit more proactive on that. That started to look at things pre disability, that started to use data platforms to potentially target users that could benefit from these services and where we could focus our resources to get the best results. We wanted to also leverage the rich source of data that we had and through the claiming patterns, through the claims details that we got, through the millions of transactions we processed every day and make sure that we could get the right members to the front of that queue to help them as soon as they needed it. And perhaps most importantly, we were looking for better outcomes for our members. Now, in and of itself, that's certainly an admirable goal, but there's some significant financial gains for us as a carrier as well as for our plan sponsors to make sure that we continue to bend that cost curve. So, this led us to the Best Doctors Predictive Analytics solution. And this was, of course, something pioneered here in the United States, but that we've been working with best doctors and partnering with them and customizing to the Canadian market over the last year. Now here's really how I like to think about that. We're all very familiar, I think, with the great solutions and support that come from the expert medical second opinion, the inter consultation services. In our block of business over the last 17 years, we've seen about over 50% of people actually have their diagnosis changed when they come through an expert medical second opinion, and almost 80% of people have their treatment plan changed. Those are really life changing results. But the classic problem with these products is one of utilization. So, how do we make sure members know that they have these products? How do we make sure our members know how to get to these products? And most importantly, how do we make sure members know when to get to these products? And so this is where this solution comes in. Really, we're going to work with best doctors. They've helped us to with their best doctors in telemedicine, Teladoc. What they've helped us do is comb through our data and target individuals who are at the really top of that cost pyramid, so that they have the highest spend on a per month basis or a per year basis, as well as overlaying risk factors on top of that, that let people that indicate they might benefit from an expert medical second opinion and a case of medical professionals reviewing their file. And then we're going to work to reach out to these people proactively, proactively versus waiting for them to call the Teladoc services reactively. We're going to reach out to them, bring them into a concierge process and make sure that they've got the right medical records gathered, that we assemble a team of medical experts through the Teladoc and Best Doctor network and get them on that case trial to optimize their care and their treatment plan to make sure they're working with the attending physician to implement that program and to follow-up after to make sure that they've actually got meaningful results. Really what's most exciting to us about this, not only the better health outcomes, but as I mentioned at the beginning, bending that cost curve, making sure we're helping to lower long term spend and get people more likely to be back at work and productive. It's truly proactive case management. And for us, it's a differentiator versus our competitors. We believe that as a multi line carrier, so someone that takes both the disability and the healthcare side, we can differentiate ourselves by looking at a proactive approach versus some of the more specialty carriers in our market. But I think what's truly, truly, truly amazing about this is it starts twofold. The big data analytics side is really exciting because it helps us hyper target our resources. That's something that technology, over the last 20 years hasn't really allowed us to do and we're getting there now. But most importantly, what this program brings and what Teladoc really brings the table is to layer on top of that something that we can do about it, right? It's a network of experts that can actually implement the treatment program and help to enact on it. In my opinion, there's really lots of data and analytics providers on the market, but they really produce reports. What we like about this the most is that they can actually enact on that and it's a holistic solution that helps engage and encourage a treatment program that can actually change results. So we started this pilot, as I said, with Best Doctors just a few scant days ago at the beginning of September, and we're very excited to keep moving forward and expanding the cases and the use cases that we can use. We think mental health is probably one of the biggest next steps that we can use data to leverage the right people into that. Now, it's easy, of course, to perhaps understate some of the success we've had over the last 17 years. And so, I did want to maybe spend the rest of the time talking about that. So, as I mentioned, 17 year partnership, through our block of business, we've been able to bring best doctor services to about 2,500,000 Canadians across the country, and that's increased by about 40% over the last 5 years. So, some good and significant growth there. We will close over 2,000 individual cases in Canada that have come through the Best Doctors platform this year. And of those, I mentioned before, really impressive results. Over 50%, so over 50% had a change in diagnosis and close to 80% actually had a change in treatment. From a customer satisfaction perspective, when we survey out numbers, the best doctors in Teladoc services are consistently ranked as some of the highest services that we offer for a couple of reasons. Everyone, if you've talked to anyone who's gone through the service, myself included, rave about the professionalism, the quality of care, the comprehensiveness that they get from their team of medical experts. Of course, the icing on the cake to them is it's all available out of pocket for no additional expense. But that's really the last 17 years. And as I said before, these results are indicative of a more reactive approach. What makes me most excited is that the best doctors in Teladoc team have been able to give us a solution that helps take these results and bring them out to members who perhaps need them the most and using that data and analytics platform to target them to make sure that they can achieve this type of care. We're quite confident this is going to help bend the cost curve. We're quite confident that it's going to lower our spend. So, there's a demonstrated ROI from ourselves and from our planned sponsor perspective. But I think most importantly, we're quite confident that it's going to help the health outcomes of Canadians and the members that we serve. So, just a quick overview from our perspective, from the international perspective, I've talked enough today. Perhaps if there's a few minutes, we can take some questions, but that's really what's going on, on our end in Canada. So thanks, Ryan. That was awesome. And the data sort of speaks for itself. We're going to take a few questions for Ryan and then Carlos is going to tell you about our non North American international opportunities and then we'll bring Carlos and Peter back up for Q and A on the commercial business and international. So if we can focus questions for Ryan while we have him here, it's a rare opportunity to get to talk to one of our primary customers and one that's outside the U. S. So we'll open up the floor. Yes, it's a great question. So, that kind of comes back to the comment about that cost curve, and I probably could have gone a little bit further into that. So certainly, we've got to balance the cost of the service with the potential ROI and outcomes. And one of the filters that is applying is really we're starting at the top of that cost pyramid. So ones where there's so much spend already going into that individual that it's easy to justify perhaps another look and that expert's medical second opinion. So that is a filter that's layered on top of that. And that the ROI again, in our market, it's being piloted this year. We do believe there's a significantly positive ROI, but that's definitely one of the things we want to prove out through the pilot basis as well. And one of the points of the analytics program is to focus the resources where they can have the biggest impact, right? Yes, absolutely. Other questions? Thanks. Sandy Draper, SunTrust. I appreciate the presentation. Thinking about a country like Canada where you've got socialized medicine and you've got the you said the basics of primary care hospital paid for, can you foresee an opportunity for the more traditional telemedicine business as opposed to just expert opinion where it could be a supplement that and I don't know if it'd be something that government would pay for or that you guys would add as, here's something, it's going to take you 3 weeks to get your primary care appointment because you're in a queue, but we can get you this and you can at least get an initial assessment today. Is that something that would even be in a consideration or in a market like Canada that just doesn't fit? Thanks. We're going to hire Sandy as a sales rep. No, it's an excellent question. I mean, as a general comment about the Canadian market, all the same issues that Senator Frist talked about, about waste, about inefficiency, about access, about 20 fourseven support, they all exist up in Canada as well, which is pretty obvious statement. I think layered on top of that is an even worse issue with geographic disparity or access. So we would have vast areas of Canada, which driving to a doctor might take 3, 4 hours, require airlifting, like that is a huge expense on the government. So you can see that the ROI actually just starts to multiply in cases like that. Now we may be a little bit slower on that market because you have to move a socialized system. But certainly, I think the numbers add up even more so in that space. And there is a lot of opportunity that we're starting to move down that path. I think I'm familiar with some of the international plans that are for expansion. I think that's something we're going to keep our eye on as well because we think from a private insurance perspective, it's definitely captivating. Question here in front. Patients. But at the same time, the framework for thinking about the data privacy, data protection, and how do you think that framework might evolve over time as these either results come in? It's a good question. It's probably a Canadian one and there's probably a U. S. Of the answer. Principle is probably very similar though. So, the way we structure the pilots that we're working on is to we've called it anonymize or tokenize a lot of the data, which removes a lot of that, I would say anxiety from a lot of regulations perspective. So when we look at macro views of the data, perspective. So, when we look at macro views of the data to try and identify those trends, we're doing it on a fairly anonymous basis. And then when we reach out to an individual level, that consent is obtained at that point from that individual's basis. I think the advantage of that is you've got brand recognition of best doctors, which is very strong in our uptake rates are very, very high. So, individuals opt into the service, but it's done at the point where we've targeted you on an anonymous basis, and now we're reaching out to you to explain to you the value of the service. So far, we've really had no pushback or any issues from that. I think we probably have time for one more question if there is. Otherwise, hearing none, we will say thank you to Ryan. Thank you. And now it's my pleasure to welcome Carlos Nuevo. Carlos, as I mentioned, was the CEO of Advance Medical. He flew in yesterday from Barcelona. We made him go to sleep instead of joining us for dinner last night, which makes him fresh and ready to talk. We've asked Carlos to talk about 2 things. 1 is a little bit background on Advanced Medical, so that everybody comes from sort of a level set in terms of information and then the international opportunity. All yours. Thank you, Jason. The clicker is there. Great. Thank you, Jason. Thank you, everyone. It's a pleasure to be here today at the Investors Day. My name is Carlos Uno. I'm CEO of Advanced Macomb, co founder as well of the company. So I'm going to drive you a little bit through Advance Medical, who we are, our experience, and then I'll talk about the international market. I'll give you some data based on our experience, almost 20 years developing market with very similar services as Teladet Health. I'll follow with our growth strategy, which are the regions and the countries where we plan to spend. And I'll finish with a case study, case study of 1 of our largest health insurance clients outside of the U. S. But let me start with some what I believe are the main building blocks of Advanced Medical. We share with Teladoc many of them like strong medical teams. I'll show you a little bit about our medical teams, our technical capabilities, our capability to adapt to our clients' needs, our member engagement and high utilization through different services and some services that complement very well the breadth of services that Telehealth has and our comprehensive service portfolio. But on top of all of them, I place the global capabilities and the international knowledge of the different markets. I think that's what really differentiates us as a global player in the market. Now talking about Advanced Medical, I personally have been the last almost last 20 years developing this company from scratch, and we developed the company internationally also in the U. S, Europe, Asia Pacific and Latin America. This experience leads me to say that the health care is a global need. As you know, health care is pretty good, but if you want to succeed in the international markets, you have to understand them. You have to be local. You have to really understand the challenges, the opportunities, the different payers. And that's the only way to provide a solution that fits for every client. We have over 800 dedicated professionals within Advanced Medical, over 300 medical doctors. We have experienced in over 125 different markets. And we have people speaking more than 20 different languages and more than 3 30 different clients that we work with. I'll tell you a little bit more about them in a minute. But we also share the same vision that Teladoc Health has, and that was personally one of the things that motivated more to continue working with Teladog Health and to do the deal because we come from different angles, but we do exactly the same. We started with experiential opinion services. We move all the way to primary care. If we think about the services that we are adding onto the law of health, we add things services like medical triage. I'll tell you a little bit more on the case study. Also, we have global care on demand, the capability to help employers, companies, insurance companies to become global and to provide a global service to their patients and other services in all the different segments. We also serve a diverse set of clients. We work with domestic health insurance companies, pretty big, large domestic health insurance companies in different markets. We work with international private medical insurance companies, leading companies, some of them already working with Tavoloft. We work with for life insurance companies, financial services in different regions, Latin America, for instance, for pharmaceutical companies and medical device, and finally, as well for employers in those markets that there is an employer based health care system, like for instance in Brazil. So we combine those service capabilities and our experience. We develop long term relationships with our clients, and we have services that have a high engagement and utilization. And this is, I think, what makes us very powerful going forward. Let's just show you some examples. And as you know, the response after the announcement has been very positive from our clients. These are examples of clients that we work for many different services and for different time periods. We have companies like local domestic leading players in health insurance like Adesla is number 1 player in the Spanish market or Fidelidade, which is the number 1 player in the Portuguese market with almost 30% market share. We also work with companies like Aetna, where we are their global provider for exact same type of services that Kellogg Health does in the U. S. And many others that I think the announcement was a very positive news for them. Number 1, it validated the decision to work with Advanced Medical. Number 2, it gave them access to more technology and a scalable platform. And of course, it gave access to a wider scope of services as well. But what was more interesting for them, they are all now in their process of digital transformation. And now they see an opportunity to work with a provider that has the capability, not only the capability, but the global experience and specifically the U. S. Experience to provide and to help them move into this digital transformation. And that's very timely and provides a lot of opportunities for us. Now let me tell you a little bit about the international markets. I'll start with Europe. You are very familiar with the U. S. Healthcare market, and you probably know how the international market works. Well, we have the same trends, exactly the same trends. I would say And to the question I hear I heard before about state sponsored health insurance markets. Well, we have a bigger opportunity, I believe. Why? Because there are those state sponsored health care markets have limitations and constraints that provide a bigger opportunity for the private market but as well for the public market. I can give you some facts that you probably know in the U. K, for instance, to see a GP, there is a waiting time of about 13 days. And when you have a consultation, the time for consultation is about 9 to 10 minutes. So that is less time than a U. S. Patient would see their primary care doctor. We know also that threefour of specialties has shortage of doctors and especially within psychiatry and emergency medicine. We look at other countries within Europe, we see the same trends. In Spain, for instance, 40% of primary care doctors are going to face retirement age in the next 2 years. And in Italy, we see the same thing. We see 45,000 physicians, primary care doctors that are going to take retirement age within the next 5 to 8 years. That will leave millions of patients in Europe without their primary care doctor. And that's again a huge opportunity. We know that European population is an early adopter of technology. 90% of the population has mobile phones. And eHealth is pushed not only on the private sector as well from the government as well. Let's see some numbers regarding this potential in Europe. We know that the 30 biggest economies in Europe account for more or less 530,000,000 people. We know that the percentage of private payer market is about 30%. So 30% of this population would have access to a private insurance company, where health care would be managed through one of the leading local health insurance companies. This gives you a potential of 155,000,000 people privately insured that want access to quality health care and they are paying for it. If you compare with the U. S, it would be equivalent to the U. S. Commercial insurance population, which is about $175,000,000 And this is growing at a 3% rate on a yearly basis. On top of that, the European market is heavily concentrated. As you may know, big countries like the U. K, France or Germany have a concentration of about 50% of the market, of the private market in the hands of 4, 5 different players. These are big companies, large professional insurance companies, sometimes belonging to international groups as well. So we are seeing that there is a great potential within the private sector. Of course, on top of that, you have the public system. The national health systems are already pushing virtual care as one of the solutions. So what is the competitive landscape? I would say it's an earlier stage than in the U. S, which is an advantage to a global group like Telehealth. We see the competitive landscape also given the high concentration in the market. These leading companies have a high preference to work with a company that has international experience or global experience. We are talking about companies that are in different markets, not just in Europe, but in other markets. So we have a preference to work with companies that have gone through this experience, international experience. So companies that can help them develop not just in their own countries, but as well internationally. Also on top of that, local regulations in many European countries tend to be harmonized, and this is helping as well the deployment and the development of virtual health in those countries. Let me go to the other side of the world and also areas where we have experience and where we have offices and where we see the biggest growth potential in the private payer markets. Asia Pacific with a 16% growth on a yearly basis of the private payer market and Latin America with around 30% growth. Those regions have the biggest growth potential, but they also have big challenges in accessing health care. We have obviously for instance, that in China, primary care is really not developed, So patients would use the hospital for care. That creates long waiting times, but as well as a expensive management of health care. On the other hand, we know that the population in Asia and in China specifically is an early adopter of technology, Internet, smartphones. And so it's a huge opportunity to use virtual care, which again government is pushing for this, to provide better access to health care in countries like China or in Asia Pacific in general. RULO as Latin America and probably the biggest economy in terms of healthcare potential is Brazil. With Brazil, we have offices in Sao Paulo. We have experience. We work with health insurance companies. We work with employers locally. This is a country of about 210,000,000 people with a 25% market share of private payer market. So it's about 50,000,000 that have access to private health care. And basically, this is a market that is very concentrated as well in large insurance companies, many local as well as some big international companies. And it's about 10 companies that concentrate 70% of this market. So again, it's a process it's the development of these markets is an easier process due to the concentration And the challenges are bigger because in Brazil, there is only 2 doctors per 1,000 inhabitants, and they are long waiting times, usually in the private sector, 70 days to get a consultation. So in Brazil, we also work with employers, employers that are similarly to the U. S, the big employers are self insured as well, and they also manage their health care. So they need services like extra medical opinion, like global care on demand or telehealth. And there are for instance, one of our clients has over 100,000 employees. So there's a big potential as well to work with employers in Brazil. Now if we talk about the international growth and what's going to be our focus, our focus has been mainly on those regions that either have the greatest potential or the greatest growth. We're talking about Europe, Latin America or Asia Pacific. We also plan on leveraging our client relationships. As I said, we work with leading companies in every segment. These are big companies that have a lot of potential to grow. And with the suite of services that we have now, we plan to have a land and expand strategy and a long term strategy to develop those services with our clients. Operationally, we have a lot of experience servicing these multiple countries with multiple language in a very efficient way, being able to provide services to our clients, whatever they are. And also, we know how important it is to adapt to our clients' needs, both in terms of technology, in terms of language, in terms of service. To give you some examples of 6 cases around the world, in the Middle East, working with 1 of the leading health insurance companies He's out of Abu Dhabi. This is Daman, living group, where we are providing extra medical premium services for their population. In France or in Portugal, where we are working for the leading health insurance company called MultiCare, belonging to a big group called Fideligade, where we are providing, I would say, almost all the suite of services that telehealth has, spanning from expert medical opinion to telehealth, including other behavioral health services, etcetera. Latin America working with a financial services organization that's covering several countries with expert medical opinion or Brazil working with a huge employer in Brazil offering both expert medical opinion and general medical services or Asia Pacific working with a leading health insurance company in different countries. So these are examples of how we are able to adapt our virtual care platform to their needs, both technically in language and as well in service. We have operational hubs or offices in different countries where we can use our physician capability to deliver the service. And all that would not be possible without a great management team. And with our experience, we know how critical it is to build companies with great management capabilities. I'm very happy to say that we have a great medical team as well as great management team all around the world that share the same values of the company. They have a great global experience, a great local knowledge and a deep understanding of the challenges in every single market. They come from different backgrounds and they are leaders in their specific countries. I would use Myra. I have three examples, but Myra Yu, our Country Manager in Shanghai, and she's overseeing as well Asia Pacific. She would be an example. She's been with Advanced Vehicles since 2015. She's had 25 years of working experience. She comes from working for our Cisco Systems in China. She was responsible for cloud services and managed services for Greater China. But she has experience in many different environments. She's had working experience in the U. S, in Europe, in Asia. In fact, she speaks several languages, including Mandarin, Spanish and English. She is an example, and I think an example that mirrors the management capabilities that all our country managers have around the world. And let me continue with a case study. And I think the case study will try to show how we are able to move from a single service to the full scope of services. With the living health insurance company in Spain with over 3,000,000 more or less 3,000,000 insured members. We started several years ago, and we provided expert medical opinion to them. We saw the same results, a big impact on patient care, being able to change treatment dramatically and correcting the misdiagnosis as well. With several hundreds of cases on a yearly basis, we grew the relationship. But then we saw an opportunity to provide telehealth or to provide virtual care to the same population. We were able to develop what we call today a medical triage solution. Medical triage allows patients to have access to a primary care physician 20 fourseven. And also patients are following what we call a symptom guided protocol to help patients do the right thing. One of the keys here was how we integrated the solution within the insurance company so that we maximize the engagement and the utilization rate. Well, that allow us to move from 100 of cases to 100 thousands of virtual cases. And touching not just the complex cases, but as well the primary care, the family medicine or orthopedics or pediatrics with immediacy, with a very high engagement, more than 15% and with an impact to the insurance company and a very important impact for the patients, which is we were able to reduce the number of patients going to urgent care for unnecessary things, again, with very high satisfaction rates. The other thing that was very important is that the impact reduced as well in terms of costs. So this service becomes critical for the insurance company. When you provide explanatory opinion, of course, you are critical, but when you are able to provide the full scope of services, you become key for the strategy of the health insurance company, especially if you are able to engage patients in such a level. So in this study, we had over 1,000 cases where we were asking patients what they did after speaking with one of our physicians. In 71% of the times, patients said they would have gone to hospital for urgent care. After using our services, only 7% of them ended up going to the hospital. In fact, using as well home care services, we were able to keep 67% of the patients at home. And so that has a huge impact on patient behavior, but as well, it has a huge impact as well on cost for the health insurer. These type of services are widely used as it happens in the U. S. We have patients using them from all the geography, from big cities with the highest population densities to rural areas that have less access to quality health care. If we add the wide use of services geographically plus the high engagement, this becomes a critical service for the health insurance, a service that is critical for their strategy in the long term. And with that, I will just finish going back to my initial remarks. I believe that we share very similar values with Telog Health. On top of them, we place our global experience, our deep local knowledge of how the medical systems work internationally. And I believe that this is what puts us apart as a global player in the virtual care space. So with that, thank you. Thank you, Carlos. You can see why we were so excited to bring the 2 companies together with leadership like Carlos and the global perspective. Peter, if you want to join me up here, we'll go to a Q and A session now for 10 or 15 minutes before we then break to grab lunches, and I'll walk you through logistics before we do that. So I think we have a first question here. Yes. It's Shantais, Jefferies. On Strong in consumer, as I said, but equally as strong in uptake in all of those other channels. Every one of those channels, you even heard Ryan talk about the opportunity with behavioral in Canada. It's now sort of mainstream, as I said, in that. So as a cross sell opportunity, it's significant within the base, but it's also one of the leading value propositions when we hunt a new deal. So it's really just sort of become part of that core fabric of the multiple services we offer in virtual health. I don't really I like to always have it together, because I feel like it takes care of that member services in a much more comprehensive way. And I sort of see most of our opportunities around the world, whether it's here, Canada or Europe, almost always including that full service. Now, a vendor may have something and they can pull something out, then it's our job to continue to upsell and grow. So, I think of it as core mainstream. Yes, absolutely. And I would say we see most of our health plan prospects looking at the at least the full suite of general medical dermatology behavioral health as a package. It's we're not quite yet at the stage where they're all saying we want the entire suite of services that you have, although there are some on the leading edge of doing that as they think about virtual as a bigger part of their strategy. John? Carlos, can you give us your perspective on the competitive landscapes on each of these international markets that you're participating in? And in particular, as a U. S.-based company, do you see any impediments to access to these markets? Yes, sure. Yes, I think the competitive landscape was we've seen over these years of experience is pretty local. So you find local competitors that offer technological solutions that are developed locally. But in general, we don't find any that have global experience or global capabilities. And these markets are usually dominated by large companies. The leaders in the space in the markets are pretty large professional companies, usually with international experience as well. So they expect a provider that understands this and that is able to follow them internationally as well. And so I believe that in that sense, there is no company internationally that has the global capabilities that we have now together. I would just add as former best doctors, there was 2 global healthcare services companies that I knew of in my 25 years, Advanced Medical and Best Doctors. They're the only ones that operate a unified service, both in expert medical opinion. And then there was only one that I was aware of that did telemedicine and that was advanced around the world with global care and demand. So now with them together, it is very, very unique. There's not another service provider that I'm aware of that opposite in as many countries with the same scalable platform anywhere a member is. Yes, I would say that competitive matrix that I showed in my section that maps out the different players is true both domestically and internationally, right? The scope of services plus the global reach is unique to Teladoc Health. In the back, Lisa, you can hold on. You want to talk about distribution? And you can Carlos is very, very familiar with the Chinese market, so he can specifically talk to that, but maybe talk macro first and then a little bit about China. Yes, absolutely. I think what we see in Asia Pacific, in general, China specifically, it is no different from what we see in other countries. The only thing is probably the as I said, technology, early adoption of technology, which is an additional opportunity for companies like us. Our distribution model is through insurance companies at this stage. We are working with insurance companies that know us from our international experience and but also companies that appreciate the fact that we are local. So in China, we have local operations, we have local management, we have medical capabilities locally as well. So that I think puts us apart in China specifically. We are also providing services in Southeast Asia. We see a lot of potential in Southeast Asia. Countries like Thailand or Malaysia, Indonesia, Philippines, countries like Thailand or Malaysia, Indonesia, Philippines. These are countries that we already have clients and that we plan to expand with the same model, working with insurance companies primarily. You want to add something? No, I think you covered it. Lisa, wait for the mic so everyone can hear you. Correct. We do not give out product line things. I think things are going very well. Peter got a small bonus last year. The doctors had delivered upon its their internal numbers, the numbers that we obviously purchased them on and our expectation for their growth, which had been low teens and our estimate was to bring them up to the traditional 20% to 30% Teladoc organic growth rate. They've slowly made their way up there. What we saw is that cross sell opportunities, while apparent to us at the end of 2017, those decisions were actually made in 2018. So as we see now the pipeline and we saw those prospects turning to sign deals, we see now the natural evolution of that traditional business, which is, of course, now sold on a broader spectrum of all everything from the Triage services with expert medical opinions, expert medical services. The growth has now brought it's been brought up to a level that is close to the traditional Teladoc 20% to 30%. Because we're not selling these services on a standalone basis, we don't track it monitor as a separate segment of the business. We're looking to sell as many services into populations as possible. As Peter noted, he will, at certain times, just sell that one service in order to land and expand. And we believe that the value created from that single service will enable us to then upsell additional services over time. And I guess I would just say, as I listen to all of the case studies, the unifying thing across all of the case studies is land and expand, right, both in terms of population as well as the number of services, including Ryan's discussion of Great West Life's experience in starting with a product or a couple of products and expanding the scope of what we bring into that population. And then you want to talk about reimbursement and how these are paid for? Yes, very similar to the U. S. It would be a membership fee at PMPM where most of our service is exactly the same that works in the U. S. Well, one thing in my slide, if you remember, one of the primary drivers of those organizations is differentiation. So, whether it's the markets Carlos represented, Canada, others, differentiation in these large organizations rises much higher than cost of care and things like that. And so bringing a comprehensive suite of services is a big deal in those organizations. Charles? Can you give us a sense, I don't know if Mark or someone about the since bringing on Advanced Medical, sort of the activity from clients with global presences? I know you talked about the multinational company opportunity, but how much more activity in terms of that being in the discussion for, let's say, 2019 or should we think about more in 2020? Yes, I can take a swing at that. So global care that came in with Advanced Medical, first is we had to integrate the product. The approach we don't take is just take the product and put it out there. So all our members can access it through an integrated mobile app with a strong operational delivery and quality behind it. So that was 60 or 90 days, I think a very intense work. And you can see that same scenario played out with best doctors acquired, integrated into the application, create a very strong member experience. So for these large multinationals, having that integrated member experience was our primary focus from integration and product technology, etcetera. That I can tell you, in almost every conversation in Advanced Medical and then the launch of Global Care, which was just 2 weeks ago, is in every single conversation, especially with that direct employer segment. So being employer of choice all around the world, very, very important, traveling expats, traveling executives, very concerning when you don't feel well and you're in a country outside your home. So I feel good. It will be a 2019, 2020 plan year type thing because it takes time to work it in. But incredible uptake and also a very unique offering where people are intrigued by finally having this opportunity to have something that was essentially never available before. I think the other thing is with the much larger distribution that Teladoc Health has than, say, Advanced Medical would have, the ability to bring it to masses of markets is greatly enhanced. Yes. I mean, we almost couldn't get Global Care out fast enough. Right? When we announced the transaction, we did a webinar with over 300 clients, and we generated like 30 inquiries from very large customers who wanted it now. My team was ready to kill me because I talked about it and all of a sudden everybody wanted to talk about it with us and understand what the pricing was and how is it going to work and when can we get it. And so we almost couldn't get it out fast enough. So the demand is clearly there. Now we just have to sort of turn the crank on running it through the selling process. Well, the Advanced Medical has a model that allows us to provide service to our clients in very much adapting to their needs, so in both in language and in technical capabilities. Regarding language, we use physicians that are native, and so we contract positions both in house and external. And I think that's the key. When I was mentioning the case of China, we have Chinese doctors in our offices in Shanghai, So we have doctors in many other countries. Portugal is now a country where we have an operation. We have local physicians in Portugal as well. We do have doctors in the U. K. As well. So in total, more than 300 physicians that we are able to use to provide services to our clients, sometimes extra medical opinion services. As you know, we would use then the consultants, the experts around the world and leveraging with our more than 50,000 experts that we have now. And in other areas where more primary care solutions, we would use our in house physicians to provide service to our clients. Yes. So and that's not only the case for that insurance company. That's quite, I would say, average engagement rate we have when we provide the full scope of services. And I think, well, it took once we there are a couple of things that are important. One is the level of integration with the insurance company, how you are able to integrate this service within their normal service delivery within their workflows. 2nd is find the different channels and opportunities to use our capabilities to help the patients. And every company might be a little different, but embedding the service in those points where patients will benefit, and that requires some process and some training. And finally, also in our case, the white label approach that we have. So we embedded our services, but somehow patients don't see this as a disruption. They just use the service very normally. So with all that, in our case, it took us about, I would say, from the day we started with Axon Medical Premium, probably in a couple of years, we were able to develop a full scope and being able to deliver the service that we call medical triage that allows patients to call 20 fourseven and provide this high level of experience. This is a that case study within more than 10 years now with the insurance company, very typical for them. Wow, we almost got to lunchtime before somebody asked that question. Yes, traditional models for both of those clients. I would say we continue to see the biggest health plans looking at multiple hybrid models and our depth of data and understanding and ability to predict utilization and the impact that we have makes us comfortable going in multiple different directions. And what we really want, as I said before, is we want to be paid for our performance because we know that we'll deliver significant value. Having said that, the vast majority of our pipeline is traditional PMPM plus visit fee For the extra medical services, the bigger PMPM that covers the full suite. So as I look at the pipeline, and Peter, you can check me on this, the vast majority is what it has looked like over the last several years. 100% correct. So, I think we'll take maybe one more question if there is before lunch. Otherwise, I will give instructions. Instructions it is. So we have box lunches at the back of the room. We're going to ask you to grab a boxed lunch, maybe take a bio break first, but come back to your seats. We're going to do a working lunch and the incentive for all of you is at 1 o'clock, Troy Brennan, Chief Medical Officer of CVS Health is going to pop up on the video screen. So my job is to get everybody back in their seats and ready to listen to Troy when he comes online. So thanks for paying attention through the morning and we'll promise a good afternoon. Hello, Doctor. Brennan. We just wanted to do a quick audio test with you. Are you receiving our audio? Yes, I hear your audio. Yes, can you hear us? Can you crank it up a little bit? A little, could you guys give us any more audio level? It's really noisy in the room right now though. 8, 9, 10. Perfect. Thank you. You're welcome. All right. We're all good to go. Are you going through any clearer? Yes, yes. We raised the levels. And also I think once the room settles down, it's going to be perfect. Okay, great. So, yes, you guys are ready to go. You'll get the hand off once they're up on stage. And yes, we should be going in about 15 minutes or yes. So 1 Thank my God. I was so not feeling well yesterday. You get bananas when I cook these. No. I know, but I did a KIND bar. Courtney gave me a KIND bar. I was like, okay, I can I said to Mark, I don't know what things you've committed in a prior life, but whenever a penny she got that was 4 hours The music was good? Hopefully lunch was good. We're going to try to get started. So if we can find seats, we are very, very fortunate, as I said, to have an amazing guest. So we're very, very fortunate to have Troy Brennan. Troy is do we have somebody's mic on? Hopefully, they're not in the bathroom. So Troy, as you may very well know, MD, Miles per hour, JD, just about every degree after his name that I can think of and is the Chief Medical Officer of CVS Health and before that was the Chief Medical Officer at Aetna. Interesting vantage point. So, we're going to get to hear from Troy. As you hopefully know, we have a wonderful partnership with CVS. It's been an evolving relationship over time, over several years actually. And so Troy is going to give a little bit of the CVS Health overview of how they see healthcare and their role in healthcare and then talk about our partnership and a little bit about what we're doing together, what the vision is for the future. I am told we have a pleasant surprise that you will there will be a little bit of moderated Q and A session that I'll moderate for Troy from the video. The one thing I will ask just and I think you should all understand this is that we try to avoid questions about the Aetna CVS merger. It's just it's an area that you can't really talk about and I don't want to put him on the spot. So, with that Troy, are we connected to you in San Francisco? Yes, I hope so. Your team's done a great job here. Can you hear me okay? Yes, we can hear you perfectly. Okay. Well, I want to talk a little bit about our partnership with Teladoc today. It's been a great one so far and we see a lot of opportunity for growth. So I did bring some slides that we'll walk through And there's a nice picture of me, but let's not dwell on that. So let's talk a little bit about retail management of population health as we call it. So how we go about the most important subject of the day in healthcare, population health management. How can we bring sort of a retail focus to that. And I'd like to highlight how we would view telemedicine and our relationship with Teladoc as part of that. So without any further introduction, the way where you see it is that we want to develop capabilities that are to help us manage population health. And so we see this developing a new chassis as it were. And we think we can do that by combining data driven insights and combining that with the convenience that we have at retail to be able to really drive people's engagement. So it's really 2 different approaches. 1 is digital intelligence, taking you making great use possible of information that we can obtain both data about patients that's available on a digital basis, including claims and information from EMRs and then integrating with people on a virtual basis and then complementing that in many ways with face to face interactions, which our pharmacists, our nurse practitioners are very good at. So taking the 3,000 nurse practitioners and 30,000 pharmacists we have and turning them into agents for improving people's health and as a result of that reducing overall healthcare costs. And the way in which we think about it, we break it down pretty simply and if I had more time I'd go into more detail on each of these with you, but I would just mention them here and then focus somewhat on issues that have to do with telemedicine. But at least the way we think about it initially, we're looking at 3 major targets. 1 is the 5 common chronic diseases, so getting in-depth in the treatment of chronic diseases. The second is outreach to fragile patients. And the third is better transitions that is keeping people out of emergency departments when they don't need to be there. And then when they leave a hospital, making sure that they know what's going to happen to them and make sure they're on the right medications and that transition occurs in a very smooth fashion. So those are our targets. I'll talk a little bit about the common chronic diseases because I think that's the one that highlights how we'd be working with telemedicine and with our partner Teladoc. And then the tools that we would use, one is going to be using coordinators and people at our clinics and our pharmacists. So we have millions of people who come in through the stores every day and we want to be able to take advantage of that with a reset of what our stores would look like to address population health. We want to enhance both our digital and telemedicine outreach and I'll talk in more detail about that. We want to better monitor what's going on in people's homes so that we can understand sort of what their activity levels are, how their biometrics are shaping up and whether or not they may be in need of an intervention. I know that's especially important one. There is the report out today from the Department of Health and Human Services, identifying that Medicaid now spends more money in people's homes and outside of institutions than they do in institutions. It's just reiterate the point that there's going to be a lot more care that's going on, on a virtual basis in people's homes. We see obviously a role for telemedicine there. And then the 4th point for us is connectivity to the provider. Our approach is different than what others are doing, at least the approach that we're proposing and that we're not going to buy whole groups of providers and put them to work for us, but rather that we're going to be connecting to medical homes and to integrated delivery systems. And those connections are going to be very dependent on use of telemedicine. You can see that all the major tools that we would use, telemedicine is going to play a relatively important role as we see it going forward. And that's why we're developing this comprehensive relationship with Teladoc. The whole idea, as you can see on the right hand side, is basically sort of shrink the distance between the patient's everyday life and what's going on with care engagement. And if we can do that, then we think we can really substantially lower healthcare costs by making sure people are getting the best care possible. I thought I'd mention something about chronic diseases and this is a very busy slide. But the chronic diseases would be clear to anybody who's involved in population health management, about 60% of total costs are going to come from diabetes, hypertension, hyperlipidemia, asthma and depression. You can see that here that we've listed some of the various numbers that are associated with potential savings from just simply better care. And this is what you really want out of managed care is better care that reduces costs, not denying care, but rather making sure people are taking their medications and getting the best care possible. And as a result of that, preventing disease and preventing costs. The good thing about all of these chronic diseases is that there's a simple set of biometric measures available for them, going from a digital cuff to a digital glucometer, even to a digital PHQ-nine test for people with depression. And there are very clear outcomes that are associated with those. So insofar as we can effectuate change by taking advantage of the reach that we have, which would be a combination of both bricks and mortar reach as well as digital reach and making sure people are aware of what their goals are. We think we can substantially, as I said, affect change in the growth of cost curves associated with each of these chronic diseases. We've got some estimates of what those initial savings could be down at the bottom when we're thinking through those kinds of things right now. So the tools as I mentioned earlier and I'll go into more detail now because telemedicine is such an important part the overall tools that we always use are going to be the physical locations that is our 10,000 stores, use of digital and telemedicine outreach, better monitoring of home activity and biometrics and connectivity to the provider. Let me go into those a little bit because this is where the telemedicine starts to play. I always say when I give a presentation like this that sort of our major strategic asset is simply the fact that we're conveniently located. We spend a lot of time. So do our competitors in retail pharmacy, trying to find the best places to put our stores so that they're convenient. And the one thing I've learned after about sort of 15 years, both writing about and studying behavioral economics is that the critical thing to get people to do something as convenient. So you can drive up to our stores, you can get in them. And then what we're going to be doing is basically converting that box over towards medical care. At the first, at the outset, it won't be substantial, but over time, we expect to be 20%, 20%, 30% of the store going over to healthcare services. And telemedicine will play an important role there. We expect to have telemedicine for pharmacists and we're working on telemedicine initially for our nurse practitioners in the retail clinics. And as we expand our retail clinic reach, we think that we're going to be able to reach more and more people who can come in and see a nurse or see a pharmacist for help with their care and telemedicine is going to be an important support for that. You can see we've got CVS pharmacies within 5 miles of 75% of the U. S. Population. So we expect to take advantage of that. But point is that half of it, half of it is that kind of convenient outreach. The other half of it's going to be virtual and it's going to be digital. And this gives you an example of how we would use the digital and telemedicine outreach to work with individuals. This is completely a virtual approach where we give people an artificial intelligence powered diabetes assistant, we'd be interacting with them on text through text messaging on a device. And we know that person's also got a glucometer that's connected and we're using artificial intelligence to try to understand sort of how we intervene with those patients, what the best time to intervene is, what the best mode of intervention is going to be. And then from there, we can launch a telemedicine consultation with that individual. If we've got an individual who is too complicated for us to handle on a telemedicine basis, then we refer them into MinuteClinic or even to their primary care doctor. So we're expecting telemedicine to substantially begin to fill in gaps between digital messaging visits and to take a lot of the demand that we begin to generate as we get more aggressive about developing engagement with individual patients with these chronic diseases. So the telemedicine plays a very important role there. I might also add come up in other side, another important place for us in terms of use of telemedicine is going to be telemedicine of providers in the visits that we're having at the SOAR. So not necessarily beginning with the pharmacist, but beginning with the nurse practitioners, we can see that bringing both specialists and primary care doctors into interactions that are going in the stores are going to be able to help us lift the license, the ceiling of the license for the individual nurse practitioners and allow us to provide more sophisticated care at the store. So telemedicine is playing an important role for us in a variety of ways in which we think about our retail population health management. So we've been piloting over the course of last year. And in fact, we've had about 3 years of experience with telemedicine now and we decided to work exclusively with Teladoc and we've been very pleased with our collaboration with Teladoc. Our patient experience is very high. People are incredibly satisfied with the quality of care they're getting in the technologies, ease of use, and they also like the timeliness associated with it. I should say that our MinuteClinic are extraordinary and I'm so proud of our nurse practitioners who are working every day in terms of the overall satisfaction. Net promoter scores are running at 83% to 84%, which is higher than almost any other industry and incredibly higher than what you see in most of healthcare. And what we're finding is that these telemedicine visits are reaching that same level of satisfaction. So that is very gratifying for us. And lots of people say they prefer a telehealth visit to one with a clinician because of the convenience. And again, if I'd make a point about convenience associated with getting into our stores, that convenience is even greater if you're having the visits in your home. And we're going to be integrating our assets as we talked about. So right now what happens, the person can get on the MinuteClinic site or the CVS Caremark site and get into a telemedicine visit with an individual practitioner through our relationship Teladoc. But as I said, we'll be bringing that kind of telemedicine collaboration into the clinics and into the pharmacies eventually, so that we can also lift the height of the license with individual pharmacists. And clearly the right partner matters and we've been very pleased with the technical capabilities that we've gotten from Teladoc and the reaction, as I said, overall of our patients. And we're very excited about moving forward with our relationship with Teladoc. This is an example of the MinuteClinic video business. This was launched in August and we're focusing on minor illnesses and injuries. It's very easy to get onto from the CVS Pharmacy app and it's going direct to patients. And I think next week we'll be in 18 states and in Washington DC and we plan to continue to sort of roll this out. This provides several assets for us. There are places and states where we don't have any MinuteClinic. And so this provides us with the ability to do visits with individuals in those states, so fills in the gaps where we don't have MinuteClinic. And then in places where there are MinuteClinic, it can be the first stop for individuals and some people will be referred to the MinuteClinic. And then we highly expect as we deepen this relationship that same doctor who they had to first encounter with would be called into the discussion that occurs in the MinuteClinic because there's going to be some circumstances in which we need to extend the telemedicine visit by a real what might be considered laying on of extends what you can do with telemedicine and we're very excited about that. So we'll expand this to all 50 states And the next expansion will be in addition to visits being done by the physicians who work for Teladoc. We'll also have video visits being done by our MinuteClinic providers. And we're excited about that because every clinic is not busy every hour of the day and through the technology available through Teladoc, we'll be able to take up visits that people are interested in having with our nurse practitioners in the slack time that those individual nurse practitioners have. We are moving ahead with insurance reimbursement and as many of you know and I'm sure you've discussed today, the healthcare system has gradually, but now relatively rapidly moved to broader reimbursement for telemedicine visits. And then the third thing, as I said, in terms of expanding the clinical programs, what we'd like to do is begin to see how we can bring specialist care to bear. And I heard some of the earlier discussion today and clearly specialty care in addition to primary care is a big part of the future of telemedicine and we can see that playing out really well for us at MinuteClinic and really enabled us to sort of expand the scope of what you can do. And as you think about sort of taking care of those people with chronic diseases, there are going to be times in which we're going to need primary care doctors telemedicine into a visit with a nurse practitioner. We may even bring experts into those specialists that is into those visits as well. And we think that this is really going to enhance our cost management programs and we can see how combining Teladoc with a series of different programs that we're developing to manage population health working with insurers, this is going to be a really important collaboration. So I thought we try to take about 15 minutes as we seem to have accomplished and see if there's any questions and answers from the group in New York. So Troy, I'll moderate for you. Thanks. That was fantastic. We can now see you on the screen just so that all of you know, Troy can see you as well through that camera right there. So, first, I'm just going to say neither organization has given any projections in terms of volume. So I'll ask that we defer any of those questions, just trying to head it off, but we'll start with Steve. Steve Wardell with Chardan. So my question is, what is the referral status or coverage status of the patients that come into CVS and get care at CVS? So for example, are these patients who have a primary care physician, but they're going to CVS for care because it's more convenient and timely? Or these people who don't have a primary care physician and they sort of see their local CVS store as effectively their doctor visit or are they being referred in through some other mechanism? How do the patients sort of walk in the through some other mechanism? How do the patients sort of walk in the door for CVS, not for a toothbrush or a pharmaceutical, but rather for care? Yes. Well, just 2 things. 1, in Chile and San Francisco, so I'm sorry, I left my windbreaker here. And secondly, clearly it's a much better looking group of analysts that cover your stock and cover our stock. But in terms of the people who are coming into MinuteClinic, what we see and it's been pretty persistent over the course of the last, I'd say, 6 or 7 years is about 50% of people can identify a primary care doctor. So half of them have a primary care doctor, but they've decided to come and see us. And what they're seeing us for is relatively sort of routine things that have to do with urgent care. So we see a lot of coughs and colds, we've seen pneumonia, aches and pains and things like that. But they've just decided that it's more convenient to come in and see us and we have good insurance coverage for those business. In other words, we work with over 160 insurers, I think. The other half don't have a primary care provider and they can come in with more sophisticated ailments and we make a habit of referring in the primary care. So every MinuteClinic has a list of primary care doctors, internists and family physicians who are located in the local neighborhood and are taking patients and then we refer them. In the last 3 years, we referred over 4,000,000 people to primary care. So we think it's really important for people to have a primary care doctor and we're very supportive of that primary care relationship And we encourage people to sort of see primary care in follow-up. So that's kind of the context for most of these visits, half with primary care, half without primary care. Great. Thank you. We have a question here, Lisa. Well, there will obviously be a DTC direct to consumer component of it. And that's basically sort of how we're operating it today with insurance coverage associated with that. But the presentation was in terms of retail population health management and we do want to move into population health management. We're obviously not talking about our proposed acquisition, but we would see this as tailor made for working directly with insured individuals, the risk associated with that and using this as a format for reducing total costs. There's a lot of sort of unnecessary visits to emergency departments and a lot of lack of coordinated care that leads to incredible costs in the healthcare system. And we think that this program and programs like this can substantially reduce those costs. Everybody who's in the healthcare cognizantee will cite that 30%, 40% of the American healthcare system is waste. And this is just designed to try to reduce that waste by providing high quality care when people needed to head off problems that they otherwise might run into if they weren't treated in this fashion. So there will be a direct to consumer part of it and that's how we're advertising it right now, but there will also be a strong population health management part of it and those 2 fit together pretty nicely. Well, I mean, that'd be part of the sort of development of the relationship with Teladoc in terms sort of what the funds flow looks like. But if you push on the insured part of it and you're dealing with sort of insured individuals, then we're basically all doing it on a risk basis. And what we're doing is thinking that we're going to lower overall medical costs by undertaking these kinds of services. So in that regard, the sort of pricing underneath it just becomes sort of transfer pricing within our organization and then in terms of the relationship with Teladoc. But we do think that this kind of thing can lead to substantial growth in the use of telemedicine services. And insofar as that growth occurs, we think that overall we reduce healthcare costs and when you're working on a PMPM, obviously, that's something that's good from a business point of view. So I think we're at our time and really, really appreciate Troy if we can thank him for his time. Troy, thanks so much. Really appreciate you taking your time while you're on the West Coast. Okay. So, we're going to change gears from we still have Troy on the screen, but while we shift that, we're going to change gears. Yes, you're still there. I'm not sure why Troy. There we go. So, we're going to change gears. I'm joined by 2 of my colleagues, Stephanie Verstrais and Dan Trencher, who run marketing and product and strategy respectively. And they're going to talk about sort of 2 aspects of driving consumer engagement, 1 from our engagement science perspective and the other from developing products and strategy that meets the consumers' needs and really engages them with the services that we offer. So with that, welcome. Okay. All right. So I have a clicker here. So last year when we were here, we were talking about it being early innings when it comes to mainstream adoption of telehealth. I think that when we think about changing that, we're really focused on 3 core objectives regardless of population, regardless of geography, right? The first is eligibility awareness. How many times do I hear, oh, I didn't know I had that. The second is that top of mind moment of need awareness. I should have used Teladoc, I forgot I had it. And then the third is this resolution confidence. And that is if I'm going to take the time to actually get my care this way, I want to have confidence that I'm going to feel better at the end of it. One of the things that I think is actually more interesting today than what inning are we at is actually the rate of acceleration that we're seeing across the board when it comes to virtual care. I think of mainstream adoption of virtual care is inevitable because it reflects some of the most powerful trends that we're seeing in consumer and health behavior at this point in time. And I think what's personally very exciting for me is that Teladoc Health is uniquely positioned to be able to capitalize on these macro trends because of our engagement science, because of the breadth of the clinical services portfolio and because of an integrated experience that makes getting access to care and feeling better, easier, faster and a better option than what's out there today, right? We talked you just heard Troy talk about the importance of convenience. And we're seeing this from a traction perspective across the full breadth of our population. So when we break it out by demographics, right, our core telehealth offerings, so general medical, dermatology, it really is spanning from a relevance perspective, we're connecting across the demographics. Our early adopters are generally parents with young kids in the home. So millennials in the late 30s or our Gen Xers in the early 40s. When we look at baby boomers, we've talked a lot today about Medicare and the impact that we think about that from a growth and we fully expect that that will actually shift what this distribution looks like as we bring more of that population into our book of business. The second thing though, I just talked about the importance of the clinical, the breadth of our clinical services. Actually having multiple services helps drive mainstream adoption, it helps drive utilization because the different services actually what we're finding appeal to different demographics. So what I'm highlighting here is our direct to consumer behavioral health service and you can see how that for example skews younger, right? Not entirely surprising, but it really is we're seeing that come through from a different demographic perspective. What is common though across all of these is that all of the services and all in all of the age demographics, women over index versus men, kind of speaks to our female head of the household being kind of your Chief Medical Officer of the home. When I talk about macro trends accelerating, one of the things that's really changed significantly in the past years is how people search, right? So if one of us was sick 2 years ago here, default behavior would have been to put into your into Google, Doctor. Near the Park or New York. Today, we all expect a default behavior consumers expect that your device is location aware and you have a hyper demand and expectation around immediate access and availability. So not surprisingly, we're seeing that shift play out in how people request visits to Teladoc, right? The app today is the most common way that people access or request a visit. And that's across all of our clinical specialties. And beyond that, more than 60% of all visits are being requested through some kind of mobile device. So that may be the app, it may be mobile web or it could be someone calling us on a smartphone. And you'll see more about that trend. We expect that to continue as we go forward. Telehealth's deep scalable engagement engine and science is really engagement science is the way we're thinking about it. It's a combination of advanced analytics and data science, the Surround Town capabilities, plus our scale, our experience and our expertise, right? I talked last year a bit about an introduction to the surround sound communication capabilities. Since that time, we've really been able to dial up the effectiveness and the efficiency of those communications through our increased investment in data and analytics, right? That equips us to be able to drive utilization across all of our clinical specialties. It allow and that's especially important as you think about getting into more complex is more complex conditions or where we want to manage utilization much more closely, right, like our expert medical services. It also equips us to successfully tailor and target our investment to accelerate utilization amongst our visit fee only populations. And lastly, it allows us to optimize our yield on a much more granular basis. If I were to sort of bring to life, what do we mean when I say we've increased our capabilities as it relates to analytics and science. A couple of examples here. The first is around claims triggered campaigns, right? If you are trying to engage and drive appropriate and smart utilization of expert medical services, knowing what the condition is, is a must, right? So you can see sort of the difference here of going into a population and having very different messages. The other, we're increasingly doing claims based campaigns with clients around ER diversion, right? Pure cost savings. One that I think is really interesting, again, as we go into these fully insured populations and really try and take something that is traditionally fairly opaque and target that message, increase our relevance. And that is something that we are doing right now with our messaging, right? We're taking the breadth and scale of our analytics and we're bringing it with 3rd party data, our data, 3rd party data and developing predictive models that allow us to substantially increase the relevance of the messaging that we're putting out in front of people. So if you've talked to us, you've probably heard us talk about surround sound communications. It really is the heart of how we engage with clients directly to members to achieve our three objectives. Over the last year, the composition of these capabilities has continued to increasingly be custom and complementary in its configuration to allow us to work with the full landscape of clients and distribution landscape that Peter talked about earlier, right, domestically and in the U. S. Today, the majority of these are largely only deployed in the U. S, but we've actively in the last year started to scale these out into new markets and new geographies. So if I double click on this, if you will, a little bit, if I go into looking at some examples around what we've done from an eligibility awareness perspective, This is really where we work most closely with our clients, right? This is where the tends to peak in new benefit when new benefit years come out as well as peak seasonal times of the year. It all starts with our really our engagement with clients starts with the Teladoc Health engagement hub. This is a proprietary portal that we've developed that has client specific fully customizable engagement materials available on demand. Right. What does that mean? How does that sort of what does that happen? What happens in practice? So think about it, we start as early in the relationship where and this is predominantly today in the U. S. Where a Teladoc team member works directly with a benefits manager, with a health plan client executive to train them and orient them on how the hub can serve their population specifically, right? It is that training, it is that level of engagement that is not only sticky engagement with clients, but it's highly scalable. It's scalable both across again across the segments, but across geographies. And to give you a sense of the scale, last year, we had 75,000 client logins, at an average of about 2.5 downloads per user. And what we're excited about is that momentum is just continuing this year. Year to date, we're up 50% on the logins. Moment of need awareness. This is really where Talwalk has been paving the way in terms of marrying best in class consumer and health marketing practices to create a special suite, a unique suite of touch points that really reach people that help at that exact moment of need. These are campaigns, these are channels that we really dial up and down depending seasonality and the needs of a specific population. But the examples that you see here are all from August, right? August is when we start ramping up for our seasonality, which happens to actually apply not only to general medical, but it applies to behavioral health in a number of our specialties. So these are all live examples, right? So whether your family was bit by the back to school bug or affected by a natural disaster, At 2 in the morning, you're not thinking, what was in my benefits letter? That is exactly where our app notifications, presence on social media, presence in search engines is really either going to serve as a very impactful first touch or a strong reminder of benefit communications that you've received. And what's interesting when we look at these is in this channel, these are the kinds of touch points where people behave very differently. The propensity to share and use these ads to create word-of-mouth power for us is actually far higher than any other touch point that we have with them, which actually feeds well into our resolution confidence. These are channels that we started to layer in last fall. The purpose of these is to help bring the service to life to make it real or to create a sense of urgency, right? So, here what we're doing is taking a playbook off of sorry, taking a play from the retail playbook, right? Being able to operationalize, how do we harness in a very scalable way, word-of-mouth referrals is through a peer referral platform. The other thing that we do is, for example, work to put out messages all across the country in publications that reach small town papers to help become part of that natural disaster preparedness planning. These are all very timely, very relevant and build into what ultimately we see, which is we know we measure on an increasing number of dimensions. But one of the things that we look at from a metrics perspective is the impact we can see on web behavior, right? So when we look at the organic searches for Teladoc brands, and this excludes this chart specifically doesn't exclude our better help queries. What we see is we're making a difference, right? So year to date, our brand queries are up 26% year over year. But what we also see very clearly in this data is that when we dial up the engagement engine, we see immediate impact on web behavior, right? And we see that you could see that in January and you could see it even in August, right, versus our own benchmark and we hold ourselves to pretty high standards against our own benchmarks in both of those periods, our brand queries were up 50% year over year. This has impact both because we're reaching them on a digital basis, we're reaching them offline and we're reaching them from trusted partners and clients. What I'm going to show you next and I'm not certain if it's going to go on click, so I will wait. I talked about the fact that we're ramping up from a seasonality perspective. Increasingly eligible members on Hulu or Pandora will start to see ads that help bring make new adult health services top of mind for them. Again, hi, I'm Dan Trent, our lead product and strategy for Teladoc. And we've already covered to a great degree, there we go, our product portfolio and our product strategy around that and its importance to our go to market from an upsell and white space perspective, the ability to solve more of our clients' problems and by definition more of our members' problem. But I'm going to focus here picking up the thread from Stephanie on how the breadth of services drives engagement and supports our engagement strategy. So the first point on the right there is that it allows us having a breadth of services in an integrated way allows us to touch a greater share of the population. So critical to any population health strategy is really touching people at all stages or levels of that population health permit, and we can do that through this wide range of services. Obviously, many people here may get struck by the back to school bug. I did. Thank you. But in addition, 20% of the population has a diagnosed or undiagnosed behavioral health and a third of people will have a cancer diagnosis at some point in their lives and on and on. And so having this full suite of services allows you to touch each one of those people at different points. That's important in its own right. It's also important that it helps build word-of-mouth within a population, particularly if you think of an employer population, so different people can be talking with each other about their experiences with the service. Also builds trust and loyalty, important from doing that from a communications perspective, but inevitably, the best way to build trust is a great experience with the product. And so we see that as somebody has a good experience with the product, so a mother with their small child, sick child, great general medical experience, then as new things come up in the mother's life, she'll think of Teladoc because she trusts the brand and trusts her clinical experience with us. And then lastly, integration and coordination of services. This creates great opportunities for making referrals within our platform and within our suite of services as you think about an expert medical opinion for somebody who has cancer. Many of them could also benefit from and their caregivers could benefit from behavioral health counseling, right? And so we can make that sort of suggestion and that sort of referral. And just integration of the services themselves, we've talked over time about bringing together our expert second opinion behavioral health services and our telehealth behavioral services into a cohesive whole. And that also is an opportunity that's created by this wide range. That said, one of the challenges out in the marketplace is this experience for our clients and our prospects, right? So this, if you haven't been there, this is the floor at the American Telemedicine Association annual Blast. If you haven't been there, it's super fun. But the issue is what you see here, right? It's a sea of point solution, each solving a very small problem in its own unique way. And what our clients are telling us, whether they're hospitals and health systems or employers or health plans is, while first it's great to try a few things that could be innovative, it's overwhelming, right? And so they're suffering from vendor fatigue. It's a very clear message. And so our strategy of bringing together solutions into one place from a purchaser perspective has been very successful. And the corollary to that is the consumer experience. So kudos to Century Fox for using their image there on Ice Age. This is what we worry and we see on the marketplace consumers are feeling when as a member, every one of those vendors has an app, right, that they want you to engage with and an engagement strategy they want you to engage with And it's overwhelming to the consumer. And just as an example, stats say that your average consumer on the marketplace is 60 to 90 different apps on their phone, but they only engage with 10 or fewer of them regularly, right? So expecting a whole bunch of those to be digital health apps is just unreasonable and unrealistic. And so again, bringing them together into a common integrated digital experience is critical. So what does that wind up looking like? These are sort of the bits and parts and we'll show it to you in a second. It starts with smart guidance because we've looked at that rainbow of products and while bringing together within one place is powerful, if we then expect members to know what they need at all times to think about which of those 23 things is for me right now, it will never work, right? So we have to provide that smart guidance so that they just express a need and we guide them right to the solution that will work for them in their time of need. And I'm going to give you a little preview of a digital experience that sort of picks up on that in a second. Where it's ultimately guiding people is through a few different buckets of things, right? So one is virtual care access. That's telehealth in the context of treatment, diagnosis, resolution through virtual means. Information and decision support is broad. It includes expert medical services where you're not treating the patient, but you're providing expertise and advice. It could be referrals. It could be treatment decision support. And then the 3rd bucket there are tools, right? So as an example, one of the use cases we see is we have members who are moving to a new country, a new part this country and they want to bring their medical records with them, right. And so as part of our expert medical services, we do that every day, it's collecting medical records. And so we have a feature where we can collect those and basically present them electronically for the member to then present to their new physician in whatever new country or state that they're moving to. It's a very powerful tool, just having all their medical records together in one place. So I'm going to do a quick demo second. So I'm going to show you a new virtual health assistant that we're rolling out in the Q1, which pulls together in a digital way some of this guidance that I was just talking about in concept. So hold on one second here. All right. A lot of wires, a lot of apps here. Okay. That should go on in a second. There we go. There are my lovely kids at Stonehenge. All right. So I'm opening up our Teladoc app, right. So first thing I'll point out is that's not supposed to happen. Okay. We have a faulty cable. I don't know. It definitely did not happen this morning. Good? I'm not moving. Okay. So table design. So what you're seeing here is our Telenoc app. The first thing I want to point out is, again, if a member knows what they're looking for, we want to make it very easy to get there, right? So you don't need to go through some guided experience. So for instance, you'll see schedule of fashion behavioral health, right? So if you've been seeing a therapist, just hit the button and you move forward. What I'm going to demonstrate is maybe you've got a wide range of services and you've never used AllRock before and so you want to have a little help. So I'm going to hit the chat now button there. And so there we are. So this is a uses AI, natural language processing, a lot of technology in clinical decision support in the background or clinical expertise in the background to guide what's happening here. So I think because I'll read it because I'm not sure if everybody can see that there. What can I help you with today? So I will say my daughter has the flu. Right, so I'm sorry to hear that, which daughter needs help? So this is obviously tied into our eligibility and everything we know about you as a member because you're logged in. So I know you've got 2 daughters based on that. So I will say, it's Jane. I recommend you schedule a telehealth visit. Would you like to start that process? It's very easy. I hit yes, and here's a link to request a visit. So one thing you'll first notice here is it is not a diagnosis spot. That's not what we're trying to achieve here. We're not asking you 22 questions to try to get is it really flu or not. That's what the doctor is for. So this is really getting you to the right service as quickly as possible. So exit out of there and do it again. By a few different options here. So just for fun, you can also do voice. I have a recent cancer diagnosis. All right. I'm sorry to hear that. I recommend a consultation with an expert physician. Obviously, this is tying into our expert medical opinion offering. 1 of the best in the country, would you like to start that process? So you can hit yes or no, so it will make it really easy. So pressing a button is easier than typing in yes, so do that. And then what's important here is yes, there's a link to here's a link to request an expert medical opinion. It's also suggesting something I alluded to just a few minutes ago. Maybe if you're having issues around anxiety and stress, maybe you might also want to talk to a therapist or counselor. So it sort of anticipates what your need may be, which is really important. So I'll exit out of there. I'll just do a couple more. So how about I have a rash. So this is one where it could point in a couple of different directions, right? So maybe something simple and one of our general medical providers can solve it immediately. Maybe you really need to see a have an encounter with a dermatologist, right? So it's going to ask a couple of additional clinical questions to get at that need. So I can help you with that. Have you had this condition for over a week? I have had it for over a week and I've seen a doctor about it before, right? So it recommends then a visit with a dermatologist. Would you like to start that process? But if I answered those questions differently, right, I still have a rash. Here we go. And I say, no, I haven't had it for more than a week. It's really short term. It's recommending a telehealth visit. And obviously, we're building these clinical rules into what the bot is doing. It's trained from a clinical perspective, from our clinical staff, but also from all the different encounters that we've seen through the course of our serving patients for years. One more that I'll do, just I'm not a millennial, but sometimes we might have them and they might talk differently than us. So I'll say, I have a super scary mole. Right. It recognizes there's a lot of garbage in that, right, but it really picks up on what your problem and it's kind of walking through the same flow. So I'll put it through there again. So you can tell it's got ability to sift through and really find what's critical from a clinical perspective. And it basically covers all the services that we offer. I'll just do one more. I feel really depressed all the time. I'm sorry to hear that. I can direct you to one of our behavioral health specialists. Would you like to start that process? You also may have noticed that it kind of read it and then changed the words because it kind of got a sense of where I was going. That's part of the natural language processing, trying to be smart about what I probably said. So this is something we're rolling out to piloting to some of our clients in January. Obviously, we're targeting people who've got or clients have got a broad range of services to really make a thing and be as useful as possible. So that's something we're pretty excited about. So I'm going to just put this away and then get back to my slides. All right. So the natural question after all that is kind of where are we headed? And Jason's already given away the punch line around sorry. It's how do we this leads to virtual being the first point of entry for patients and for consumers and Teladoc being that first entry point into the healthcare system. That's sort of where this is all headed. And skipping to why is that important, from a client perspective, we see this driving much higher utilization of services ultimately and then substantial cost differential for plan sponsors. We've been talking with health plan partners and clients about this. Their head is going in the same direction. To them, this could be a way to offer a lower cost literally health plan out in the market. We have employers who are going the same direction and they see it as a benefit strategy. Nonetheless, a lot of the same key components are necessary to pull it off. So in the yellow box there. 1st, full spectrum of services, we've already talked about that a great deal. Advanced data and analytics, which I'll talk about and touch on the next slide, smart plan design. So the concept there is literally the plan design of the health benefits or the insured product is really critical to driving the best outcome. So simple things and best practices are having lower co pay or 0 co pay for virtual care services. But we've also had clients who've had a lot of success with before a surgery, a knee, hip, back, musculoskeletal surgery, providing a financial incentive for somebody to have an expert medical opinion or treatment decision support before that. And even before a high priced specialty drug can be prescribed, you get an incentive if you have a review of that as well. And these are much of this is best practices and bringing them all together in one place around that plan designed to drive economic incentive for members to utilize virtual care. And then finally, the engagement strategies that Stephanie was talking about. This next slide, we call it an opportunity map. This is part of the story around analytics. And so one of the things we're doing with clients is taking their claims data. We can do we have a pool of claims data that we've modeled off of, but certainly more powerful with the clients' own claims data. And looking at the upper left there, you can map out where the opportunities are in their population. So which members how much of a problem is ER frequent flyers? How much is it about specialty drug, how much is it about musculoskeletal condition. And that's at a patient level and then also what percentage of costs that's on the bottom there are represented by people who have those conditions. And you'll notice the general medical one, which is the big purple one, it's a bigger percentage of people than it is of cost, but oncology is the opposite, which makes sense. And so what that drives is first sizing client opportunities. We can go in and say, hey, here are where your big pain points are, here's where your actually money is flowing out the door. And that then drives the focused and tailored plan design, all the elements that I was just talking about around incentives and co pay structure, etcetera. And then finally, population health, the same data can be used to pinpoint individuals for targeted outreach and engagement, right? And so this is all part of the analytics story and package that we're starting to bring to bear and is resonating with our clients who are interested in this kind of virtual first model. And then that's all been at sort of looking at it from an industry or payer or client perspective. This is thinking of what's the members experience, the care experience. And it starts with that integrated user experience and then moves through the guidance and navigation. So this is the bot is one piece of it, but there's a lot more to it. So as an example, making referrals and do we utilize what sort of information do we utilize when we do that sort of referral into community because in the end, some of it is going to be taken care of by us through telehealth services. Some of it is going to be through the expert medical advice services. And some of it is going to be doing that front door piece and then referring appropriately into community care and doing it in a way that takes into account network status with our health plan clients and centers of excellence and exchanges medical information. So you're not starting from scratch when you show up at the MinuteClinic, as an example. And so this is really part of the whole story and has been resonating well. And just wrapping it up, the point of our entire section is that, yes, there are great macro trends behind us, but there have been we make investments in these capabilities to drive the communications, our products, I mean, our experience because in the end, it's a combination of those things, which is really going to keep adoption accelerating and allow us to get to the place where members really do look at virtual as their first point access. So thanks, Dan, Stephanie. Don't worry, we're going to bring them back for Q and A at the end. So hopefully you're getting the sense that I laid out at the beginning of not only why this is a good investment opportunity, but how that competitive moat comes together and how we, A, achieve the vision of the role that Teladoc Health can play in the overall healthcare system in somebody's life, but then also how difficult it is and how much work goes into each one of the pieces of that complex system. It is very, very difficult for someone to try to catch up to the head start that we have established and that we continue to extend in terms of creating and continually reinforcing that competitive moat. So I think it was the last point on my investment highlights. Let's see. On the competitive moat, I talked about technology enabled operations at scale and the benefits of scale. And then my last investment highlight was focused on a compelling financial model. So our next section that you've all been waiting for is to hear from Mark Hirschhorn, who oversees both parts of those as our CFO and COO. Thank you, Jason. I know how many times I've said thank you, Jason, in the past 6 years, but they're all well deserved. Adding one point to that competitive moat is that I will speak for Jason as well as myself. We are really incredibly privileged to work with the colleagues that you have seen today. The depth and breadth of our colleagues goes far beyond those few individuals who had the opportunity to come up here today. We're privileged to have people like Ryan and Troy speak on our behalf and the excitement about some of the innovation that we're bringing to the market, bringing to their clients. Teladoc created this industry and Teladoc has much more innovation to introduce. And the things that Stephanie and Dan just spoke about, removing some of those barriers to utilization, helping to change behavior by making things easier. And that's exactly what we're seeing. That is what's resonating with clients. That's what's resonating with members. And I think one of the true competitive advantages for us is that you'd be hard pressed to find any management team that can come close to the institutional knowledge and the passion that you've seen a little bit of today, but you should feel comfortable knowing that it runs very, very deep. So with that, thank you for sitting patiently for the past 4 hours. We normally I recognize almost every one of you. We normally speed date for 45 minutes to an hour at most of the financial institutions when they host us. We've had much more time to spend on the real qualitative aspects of the company. But now of course, I want to get into some of the financial previews, a little, I'd say, review of where we are today and some of the operational aspects, which also help to really distinguish Teladoc from any other potential player out there that could possibly view themselves as either a competitor, but I think those companies that today are looking to enter the field would have to follow a blueprint that we've created. So we've spoken about the company's revenue. We speak about the predictability, the visibility into the company's revenue streams. And as most of you know, 85 percent or so of the company's revenue is off of subscription access fees. We spoke earlier about the fact that those traditional contracts, subscription access fees plus a visit fee have been dominating in this year's contract completions in the prospects that we've spoken to. But as Jason noted, there are a number of health plans who are talking to us about a diverse group of populations within their health plan that are looking to us for some hybrid models. So a couple of 1000000 members may come in through a traditional per member per month plus visit fee. Another couple of 1000000 members may come in on a visit fee only basis. This is great for us. It's great for the plan. There are different learnings that come out of each. Fortunately, many of these plans are now comfortable with the fact that they can see real live experiences. We have that experiential data, we have the empirical data, we have that coming from 3rd party validation and of course we have a tremendous amount of our own data that we share with clients. When you look at and there was a little bit of a preview earlier today and I know a few people were jotting down and looking to see the 2018 estimates. Yes, they've been increased a bit and I'll get to that in the end. Of course, I wouldn't be complete if I didn't give you a preview of the Q3, how it impacts the end of the year and some of our preview on some other metrics. But a 75% CAGR over the past 5 years, nearly a 30% organic CAGR. And you saw in the last quarter, we were upwards over 40%. I'd expect us to be between 30% 40% for the next couple of quarters as well. Previewing that, you could also see end of year 2018, 84.16, again, that blend of subscription access fees to visit fees. And we'd expect, of course, the growth that everybody speaks about, 20% to 30% growth. You should keep that in mind as we progress through the next few slides. We have a couple of drivers. Now, Teladox, effectively a 75% domestic revenue generator, 25% international. And let me just focus on the domestic revenue drivers. Total access in the U. S, you look at our access, what we did is we broke down visit fee only lives on a pro form a basis, so you could see how it actually grew over the last 5 years. Today, we have reached to and those individuals representing nearly 33,000,000 individuals in the U. S. Alone have access to Teladoc. The vast majority of them, of course, are paying and are under that traditional per member per month or per employee per month model. And then we have nearly 10,000,000 individuals who have access to Teladoc through their visit fee only arrangements. Of course, we'd expect that number to nearly double as the TRICARE population moves on to our platform over the next couple of quarters. Utilization, obviously, we spend a lot of time, we spend our focus and we distinguish ourselves wonderful. I'll just pause for a minute. Is it somebody's? Like an Amber. Okay. I'm making sure it wasn't for the room alone. Okay. Amber alerts aside, we will get back to utilization. So utilization for us, we have been guiding at least 100 point increase year over year. As you all know, when we look to a very strong membership year, when we get membership growth between, let's say, 2016 2017, you see utilization at 8.5%. There was no growth there. Why? Because we have nearly 60% increase in members. When you've got that large increase in members, you know what that does to the overall utilization. However, we have that nice pop from 2017 up through and what's expected to the end of this year. We'd also be very comfortable in suggesting utilization increases. We saw the scope of that increase. We'll see another 100 to 200 basis point increase between this year and the end of 2019. Visits, we spoke about visits and Jason highlighted the fact that the curve is growing. A 71% CAGR in visits and of course that's impacted by some of our acquisitions, but a 57% organic growth. Do we see that continuing? Absolutely. A lot of the initiatives that we launch, a lot of the macro trends, a lot of the things that Senator Frist spoke about are all driving. These are all tailwinds for us and will help us achieve the growth expectations that we believe are going to come to fruition over the next several years. I spoke about domestic drivers. The international drivers, while similar, are in fact specific to the business that Carlos is running today. We spoke about the European growth of just those separately insured individuals, the growth of the global private insurance market. While Europe is growing nicely, you look at the total CAGR of 8% and our points of presence, I. E, where we have physical presence in countries that we serve, you may recall that we said we can service people in 125 countries. We have serviced people in 125 countries, but only 10% of those countries, only a dozen countries have Teladoc Health physical points of presence. Why is that? As we land and expand, as we introduce our services, as we get to scale, we'll invest further in those countries, further into those populations, so we could address them with physicians, specialists, technology, in house, on the ground in those respective geographies. So we will continue to see both international and domestic grow at very similar growth rates. The revenue, as I said before, if you look at the first half of twenty eighteen pro form a, you're all familiar with the 4 years prior to twenty eighteen. If you annualize that, you've got $425,000,000 $425,000,000 but you should again look to where today you see 22%, 23%, about a quarter of the business being generated from diverse markets in Europe, in Asia Pac, in Latin America. PEPM, I would be remiss if I didn't bring up the trends in PEPM. Lisa would absolutely hit me with her first question saying, what do we see, what do we expect to see, what's the market told us? Well, the market's been loud and clear. PEPM helps to support utilization, growth of the programs, education and the overall success of Teladoc and the outcomes of what that particular client requires. PEPM has been growing. It has been growing organically. It has also been growing as a result of acquisition over the last several years. We'd expect at the end of the year to be at about $1.10 We'd expect that to increase another nickel or dime again in 2018. And do we believe it's sustainable? Absolutely. We continue to add additional depth into our existing services. The breadth of the services will either come from our organic introduction of deeper integration, additional service offerings, as well as the potential to partner or to acquire to add to that rainbow of services that Jason introduced at the beginning. We see some of the key areas and throughout 2015 to 2018, you've got the introduction of 2 different programs as well as the acquisition of certain companies, all of which have been accretive to the PEPM over the last several years. Now we get to really the heart of the matter. What's happened this point or up to this point and through the last several years has been heavy investment. It's been an investment with an underlying theme that for several years we would need to invest in technology, invest in processes, get to a point where we could scale and each incremental member, each incremental dollar would begin contributing far more to the bottom line. Last year was our last year of negative EBITDA, adjusted EBITDA. This year, we've turned that around. You can now see we've got midpoints. You don't need to do the calculations right now because the next couple of slides will illustrate those. And of course, these slides will be up on the site, on our investor site in about an hour or 2. But look at the trend, look at how we are leveraging our scale, look how all of us are witnessing what we stated was going to occur 3 years ago when we took the company public. We had our heaviest investment in 2015. We built our own service centers. We built out some of the technology that we knew we can leverage over certain markets and with diverse populations. We now are witnessing and we're appreciating what some of that scale is bringing. We're watching SG and A as a total and several components of those SG and A such as those that we see in selling OpEx as a percentage of revenue is declining much more rapidly and revenue growing considerably higher than any of the growth in those respective components of general and administrative costs. We will continue to see this decline. That convergence is what's contributing now to the 2019 expectations of a very positive adjusted EBITDA year. So, we spoke about introducing the investments we made in 2015. You've seen Stephanie talk about the progress of the migration to our app. The fact that we are continually innovating, the fact that we're offering individuals and we continue to offer individuals all the modalities of access, What we've seen and what we end up seeing at the Q1 right around the end of the Q1 of each sequential year is there's a greater adoption, a greater jump to the app and to the web. What does that result in? That results in far fewer handling costs and much greater profitability per visit for Teladoc. We now see that only 32% of visit requests are coming through the call center. Where is that best illustrated? At the bottom of this slide, Look at visit volume and the average call center staffing, 12% increase. The CAGR of staffing over the last 3 years last 3 years has only been 12%, volume increasing nearly 5 times that, a CAGR of 65% in visit requests, in visits being serviced. What's that doing? That alone has contributed to our maintenance of a great gross margin, one that we've already addressed as a result of some of the different operational aspects of our recent acquisition of Carlos' business in Europe. We bring ourselves down to about 65%. But in our estimate, that's likely our floor. We have greater opportunities to enhance that margin. We see business from the revenue side generating accretive margins and we see operational opportunities that will again provide us with the leverage that we see below the line as well. We talk about the network effect and how positive the network effect is on doctors as well as patients. We talk about the value to doctors from coming into Teladoc and how we manage. We have deterministic optimization models that manage the provider network. What does that mean? We have billions of data points each week. We get that from, again, access to tens of millions of members, but we now know the history of our providers on our platform. We know how the providers push and pull when it comes to demand. We understand that they'd like to obviously practice medicine at a time and also be fairly compensated. When can they do that? They could do that when we can provide them with a very strong predictive model to help them plan their day, their week, their month, to help them apportion some part of their practice to providing virtual care. This ends up giving us far greater feedback from the providers telling us what additional data they would like to see, what additional clinical data they'd like to see. But all aspects of our interactions with the doctors, this makes them aligned with Teladoc in so many ways that we can now rely on them in a way that most people would rely on full time staffed positions. The word-of-mouth, again, the network effect builds upon their dedication to the patients to Teladoc alone. Again, very similar, the analogies from one side of this slide to the other, they line up almost perfectly because the physicians, of course, when staffing appropriately and when mandated by us, they're there. They're there to service the clients at the time of need, bringing that estimated time in and around the under 10 minutes that we've suggested is our goal throughout the year and a number that we attend to on a daily basis, if not an hourly basis. Better care, more care, right, convenience, being there at the time of need and again improved because the feedback isn't just coming from Teladoc, it's coming from members who are experiencing with those physicians and sharing their feedback among themselves, but also bringing it back to Teladoc. We can educate our providers, help them become more effective, more efficient, certain times more compassionate with those respective members. I just spoke about some of the supply questions, right? Supply chain and demand monitoring and matching, That's one of the critical aspects of the operations of our company. When we talk about clinical quality, clinical delivery, there's also the real sort of, I'd say, the down to the level of detail to appreciate how we can deliver at scale 20 fourseven, 365 in all 50 states. Now go beyond that. We're doing the same thing in multiple countries around the globe. How can we best leverage our technology? How can we best leverage our physicians? How can we best leverage all of those assets to ensure that clients can receive Global Care On Demand? Their traveling employees, their employees' beneficiaries, wherever they are, they shouldn't have to be challenged with the complexity of the local healthcare system. They should appreciate the fact that Teladoc is available to them whenever and wherever they are. What do we do? How do we model this? Well, we have a tremendous trove of data. Most of that data is obviously usable for us and we can generate what we believe are demand based predictions for the future weeks, future months and we could then send most of our colleagues out to either recruit physicians or to engage physicians with an expectation, perhaps because of CDC pandemic data that's been updated, that they are really going to be in demand 50%, 75% more than what they have serviced the network of our patients in the past or perhaps telling them and asking them if they could help us recruit physicians in their specific specialty area or just general physicians in their respective geography because we've added such we've added either additional clients or we've introduced a new service line. All of this data is obviously the macro data that's there. What do we do? How do we dial it up and down? Well, that's the marketing team. That's the surround sound that Stephanie reviewed with you. Those are the, again, distinguishing characteristics that no other company has today. When that's blended in with all of our historical data, we have very, very refined initiatives that we can invest in clients, that we can invest in members to ensure that we could redirect them away from their more costly settings, sometimes help to change their behavior and introduce them to the breadth of services that Teladoc can offer. One of the things that we highlight here at the bottom of the page, just a couple of months ago, we initially introduced a new algorithm. Again, I spoke about 100 of 1,000,000, in fact, 1,000,000,000 of data points per week that our development teams process that we really refine in order to determine in any particular state because as we've spoken, we're running just in the U. S. Alone at a minimum of 50 provider networks. That's just for general medicine. Now talk about another 50 provider networks for dermatology. Now we can go deeper and deeper. This is all deeply, deeply engaging for our data team. But what does this really do? This helps us determine what our supply needs are. We can never possibly look at adding tens of millions of members in different geographies throughout the world and continue to deliver our services within a very narrow timeframe unless we had control of this data. Improved yields, Stephanie spoke about improved yield. We spoke about removing some of those barriers to success by making things simply easier. That is the goal in order to really change people's behavior. When we suggest to people that their wait time is going to be 10 minutes in an overall advertising approach or it's just been communicated over an employer's website or mailing or a digital initiative, that's one thing. When you're calling for your sick child or you're feeling horrible and your expectation is 10 minutes, well, it might have some impact on your decision to use Teladoc or perhaps not to use Teladoc. When you come into Teladoc and you look and visibly see that your wait time based on all of our algorithmic data is down to a specific minute. If your wait time is 3 minutes, if your wait time is 12 minutes, yes, 12 exceeds the 10, but the demand, the peak demand at that point could in fact be just that. Once we set expectations, we remove that gap, we remove the doubt that some people may have. But once we set expectations, the yield is that much better, the consumer experience is that much stronger. Wait times now for several of the states, about 90% accurate, in fact, slightly greater than 95%. Where do we think we'll be likely a year from now? Throughout all of the states, we'll have accurate readings in excess of 95%. This is a tremendous benefit for individuals because once again, we deliver on our promises. And if the expectation is such that we set it and we deliver, that too will have a reinforcing network effect on the member. Okay. You've waited 4 hours approximately to get to some numbers. And I know everybody here is number hungry. Just a quick review of the balance sheet. People are aware of the last offering we've done. My point here is we are extremely well capitalized. We have set out in our business plan with our Board over the next several years, obviously, our plans to capitalize the company in a manner which we can continue to build on the innovation, the needs of our clients and achieve some of the longer term goals that we've put out in front of you this day and several times in the past. If you think today, we have over $450,000,000 in cash. You're familiar with our debt. Our only debt that we have outstanding are 2 convertible securities, both of them relatively new, both of them obviously trading like equity today. But the net debt or the net debt position of about $100,000,000 I'm very comfortable with. So capital wise, we have plenty of cash to move forward and execute on our business plan. We talked about some of the fixed costs. You know we're going to be adjusted EBITDA positive in a big way in 2019. If you think of some of the costs, GAAP interest expense, obviously, when you're looking at our financial statements is basically 2 thirds of our interest expenses is non cash. So when you think of $12,000,000 and then again guiding to somewhere 2% to 4% of CapEx, positive cash flow for all of 2019. I want to reinforce that. Take into consideration the interest expense of about $12,000,000 CapEx 2% to 4% of revenues, which you'll all plug into your models, but we will be cash flow positive for the full year of 2019. Target operating model, we've given most of this guidance in the past and we reinforce it and confirm it multiple times. But just to make sure that this is consistent with what all of you may be expecting and what you've heard from us. We talk about our long term target maturity growth rates. We talk about 20% to 30% range. How do we intend to do that? I think 3 or 4 of these things well, 3 of the 4, I think, you've seen many times before. Clients and utilization, 2 of the core drivers, right, metrics that we've been reporting on since day 1. International expansion to us, tremendous amount of white space. Now Carlos had bootstrapped his organization for 20 years, effectively funding that organization out of cash flow, we have provided a huge capital base to him and to his team and business development opportunities are being pursued as we speak. We have great optimism about our international expansion. And now direct to consumer, you saw Troy and the CDS Teladoc Health Partnership highlighted. You're all aware of our tremendous success with the BetterHelp application. You should all expect us to go more deeply into the direct to consumer opportunity in 2019 and beyond. The market is getting ready for, if not prepared at certain points for us to invest more heavily there, for us to expect far greater opportunity from DTC. Gross margin, I think I spoke about gross margin already. What's going to enhance that? Where are we today? We're at 65%. I'm suggesting that's got some room to run. Why? Revenue mix, mix shift, some of the pricing leverage we get today, even though we have one of our very esteemed clients in the room today, it's based on ROI. If we drive that ROI, we've got pricing leverage. I'm willing to pay for ROI. Our clients are willing to pay for ROI. When a vendor sits in front of me, I view it in the same exact way that I sit in front of a potential prospect being a vendor or health partner to them. I have to substantiate my costs with an ROI. When I drive ROI, I could come back with additional asks, whether it's deeper product offerings or an increase for the ROI we're driving. Lastly, our adjusted EBITDA margin, we've spoken again 20%. We're comfortable with that as a long term mature metric that we've seen scale today bring us from high losses in 2015, reducing those losses year over year, generating now a single low single digit adjusted EBITDA margin, but we think that's going to be relatively linear. We think we're going to participate in and start benefiting from all of these other operational efficiencies and you should use this in your respective modeling. All right. So we get to nearly the end of well, I'm at the end. I knew I would never make the ticker. It was never. Yes. Hasn't happened yet? I'll get there 1 year. So we're updating our Q3 guidance. We're updating Q3. Obviously, that impacts Q4 as well. We will, on November 1, share our 3rd quarter results. At that time, we'll address any updates to the Q4 guidance, but let me just address those areas that have changed. So the revenue range has been updated accordingly to add about $3,000,000 to the high and the low. That's also consistent with the now updated fiscal year 409,000,000 to 413,000,000 dollars Those are exact the impact to Q3 is dollar for dollar impacted to the end of the year. Adjusted EBITDA, we picked up another $1,000,000 $5,000,000 to $7,000,000 range. Visits have not changed from prior members. We brought down a bit as a result of some timing. We have some health plans and other clients that we imagined we could get them started in December, in November hopefully, have them extend the Teladoc services to their respective membership pools to obviously participate in that in this 2018 flu season. Some of that's been pushed to January. Obviously, no impact on Q3 numbers as a whole because we moved up and we brought in an extra $3,000,000 into our expectations for Q3 revenue. Bottom line EPS, you're going to see that dropping again. We are now contributing to the bottom line insofar as it's reducing our loss. Dollars 0.37 to $0.39 was original guidance. We're bringing that down to $0.35 to 0.37 dollars Fiscal year 2018 results and 2019 guidance is truly best practices to ensure that as a result of the complexity of our business, the international aspects, the timing, we'll look to provide guidance for all of 2019 in February. Just to wrap it up, very well diversified company with depth in not only multiple geographies, but multiple business lines as Peter shared with you. We have a great degree of visibility. We have over 90% visibility into our 2019 plan. Scalable model, as I suggest, we'll continue to see these characteristics through 2019 and beyond. We'll start generating more to the bottom. Each incremental dollar of revenue is bringing us more to the bottom line. Balance sheet is in best position possible. We are in an excellent position to leverage all of those strengths heading into a wonderful 'nineteen with again a what I would suggest is the most opportunity this company has ever had and we're closing out the pipeline and moving all of our prospects into contract mode in the remaining, I'd say, 6 to 8 weeks of this contract year. So thank you. There's a GAAP reconciliation you'll be able to go through on your on the deck that's posted to the site. But once again, appreciate the honor to present to you over this last 4 hours plus. Thanks. Absolutely. Nice job. So we have some time allocated for Q and A. Mark ate up most of that time, so we understand if you have to excuse yourself. We asked for your time until 2:30. However, I'll ask Dan and Stephanie to come up so that you have the opportunity to pose some questions to the rest of the management team who presented in the afternoon. Bob, we have somebody here a question. So I think the question was and it seems the mic is not on, Bob, but there we go. That's better. Can you bring out the use cases between the different categories? Categories meaning And how many of the visits are behavior? How many of the visits are primary care, how many of them are different. I understand. So do you want to give the specialty versus Yes, we break out specialty visits each quarter and each year and we'll guide as well now that we have obviously a meaningful amount of specialty visits. We break down general medical and traditional Teladoc including behavioral. Those specialty visits are those that we would now suggest are delivered through the International and Expert Medical Services division. And then one last question. To get to the 20% EBITDA, what kind of revenue do we need? That's your model. You'll have a little bit of help over the next couple of months. But again, I'm suggesting it's going to be linear. Other questions? Thanks. Mark, you mentioned going more, right, kind of increasing the focus on direct to consumer over the next few years. Is that finding new partners like CVS and pursuing it that way? Or are there other offerings you have or you'd be looking to buy that you think just work better or any of what you kind of focus more on? Well, I think absolutely yes to the first part of the question with partners. We've always suggested that we would like to partner with a very strong consumer brand, somebody who could introduce our services such as CVS, whether it be white labeled, whether it come under the Teladoc brand, that will be our entry point, but we have a number of opportunities now that we're looking at for investment into 2019 and beyond, where again, we think the market is maturing to a level that we believe DTC and the timing for DTC introduction is appropriate. Lisa, I'll refrain from asking you the question. So, Amazon is a great client of ours. We're very happy with them as a client, and they achieved wonderful results from our service. We obviously have an excellent relationship with JPMorgan. We don't today work with Berkshire, but we'd certainly like to. They have been pretty clear about the fact that digital health is going to be a part of whatever it is they're going to roll out. But I think they've also been pretty clear about the fact that they're going to focus on their own employees first before they then go to market in a more general availability thing. So I think too soon to tell what exactly that's going to look like. And I'm optimistic that we'll be a part of whatever sort of next generation healthcare system comes about, whether that's from that organization or somebody else. Hey, guys. Daniel Grossley with Leerink Partners. I work with Anag Gupta. Just double clicking into the margin a little deeper, you mentioned that some revenue drivers will cause an uplift could cause an uplift to gross margins. And as I kind of look at your business, I would think that DTC behavioral and some of your SaaS based physician services are really going to help out gross margin? That's correct. Those businesses today generate a margin that is stronger than our overall consolidated margin. So that's absolutely correct. Can you talk about the growth you're seeing in both those segments going forward and how you see those 2 segments in particular adding to or uplifting gross margin? Those two components were the strongest percentage growers for Teladoc in 2018. We'd expect them to, again, while still generating the strongest growth, they will achieve beyond that 20% to 30% consolidated range. And gross margins will stay around 90% in the segments? We don't break out the segments, but again, you're in a at least for the SaaS type business, you're in the right range. Thank you. Sure. We have a question on the front. So I don't know if I already heard, but the question was what percentage of the pricing upside, variable pricing that we have and what's going to flow through to obviously the bottom line, what would we share with doctors? So we're obviously very sensitive to the scope of services that our entire physician network brings to us. We would not be capable of maintaining a network of 1,000 and 1,000 of general medical physicians here in the U. S, over 50,000 specialists globally, if we were not paying them appropriately, if they didn't believe that they were receiving value for their time. If there isn't a need, if there is an increase, that will be reflected and that will be telegraphed ahead. We do see a number of opportunities to raise our visit prices on a visit fee only basis as well as those that come along with the traditional PEPM. We are, again, sensitive to one of our greatest assets, which is our physician network. If the demand is there and if we need to adjust appropriately, that's on us as a management team to ensure that, that supply and that, I'd say, respect for the physicians' time is maintained. Hey, quick one for me. Mark, you talked a lot about the margin opportunity, but we also heard earlier that you guys are going to need to invest in 'nineteen for the CMS opportunity. How are you balancing those two sides of the margin? Because somebody on my either left or right is going to take a bit of a haircut in their budget request. So it's a question of priorities, right? There is something that comes that's something that challenges us every year at the planning phase. We fortunately are challenged by that almost quarterly because either new innovations, new markets, that's something we want to see as a management team. We want to be pressured into making these decisions frequently throughout the year. But the reality is, if we come to the market and identify an opportunity that we are so proactively involved in and that we have the empirical data to suggest will provide the type of returns that either historically we've provided or provide outsized returns, I think we'll make a good case for that additional investment. Why we didn't hear 'nineteen EBITDA guidance? We did not, but we certainly will hear that in February. I hear that. And then one quick follow-up, I have the mic for Jason. I'm always surprised that you and your peers only have about 3,000 doctors signed up on the platform. What do you think is preventing broader adoption there? I think supply matches demand. So actually, if we had 10,000 general medical providers on the platform, they'd be frustrated, right, because there wouldn't be enough volume to keep them busy, have the predictable income and opportunity to be engaged when they go on the platform. So actually on a state by state basis, we're constantly managing and balancing supply and demand so that we have the optimal mix. Thank you, guys. I'm going to actually let I got to do the demo. I'll let Dan answer that question. Yes, absolutely. And obviously, we've continued to iterate on the vision of what the virtual assistant can do. And for the moment, we have a whole lot more flexibility in what you see there in terms of what we can do through our virtual assistant. And right now, Amazon Alexa is not actually HIPAA compliant, which they'll say. So it's not really appropriate for everything that I could do here about asking for medical information and presenting clinical data that long term, it certainly couldn't be a great way to interact for many of the use cases we're creating. So incremental gross margin, I will give you as a percentage is lower than our consolidated gross margin. And it depends what specialty. It depends whether it's a behavioral visit, a derm visit, a general medical visit. It depends what the pricing is with that specific client. So there isn't a single answer for that question. No, but as you know, there's a service component attached to delivering that specific visit regardless of what specialty it is. When there's a service component attributed to it, you could always think of a guide of around 50% as what you're trying to achieve at a scale similar to Teladox. Thanks. Maybe a quick one or clarification for Mark and then a follow-up for Stephanie. Just because I know I'm going to get asked about this. On the member number, just to be clear, that was the tweaking down only due to delays of some clients or push out some clients there was I need to ask about attrition. Is there any attrition that's dropping that number? No. So there's no attrition. And I won't say delays in a particular client. At the beginning of the year and when we dial it up or down, we estimate as to how many implementations will take place mid year. If we are looking actively towards a number of clients that we think we can bring on in the Q4 really to help them achieve the maximum savings and return because they get exposure to the 2018 flu. They've moved into January. They're going to be January 1 implementations. It's as simple as that. We know each year we're going to have attrition. We know that, that attrition is most of it is known at this point. Some few additional clients will notify us over the next several weeks. But in many of the cases, we have 30 to 90 day notice provisions. So we're up to speed as to where we are. And again, we have over 90% we're somewhere between 90% 95% visibility on our 2019 revenue plan. Great. That's helpful. And then a follow-up for Stephanie, maybe a little different angle to Sean's question. You came out on board about a year ago. A lot of us in this room are healthcare analysts and with thinking about healthcare and technology a little bit oil and water, healthcare is different. Coming from a technology background or consumer background, what have been the biggest challenges or wake up calls for you as you've spent a year plus now rolling this out? What has been like, wow, that really wasn't how I thought it was going to play out type moments? Thanks. So interestingly, Elan and I were actually having this conversation earlier. I think the biggest difference that I probably underappreciated coming in was the concept of really focusing our reach around an eligible population versus sort of in direct to consumer, you have the world is your oyster and you're really trying to go out and grab as many eyeballs as possible. This to me, it's really exciting because it makes it hard. It provides barriers to entry that only scale and the analytics can really actually help us break through. And so that's something that as I look at, shockingly, I've actually been here almost well more than 2.5 years, almost 3 years. And that's really when I think about what fuels our continued growth, it really is the technology, the analytics that our increased scale and breadth of services allow us to just get smarter. Let me get to the so the first question on Q3 guidance. I'd say the similar strength all along that we had shared with people at the end of the Q2. So we continue to see a glide path of strength beyond what we had initially estimated in multiple drivers of the company, very consistent between Q2 and Q3. As most of you know, Q1 very, very strong cuter quarter for us as well as Q4. We see some of our highest demand times in December. So we'll have a lot more volume in those respective quarters. Q2 and Q3 tend to be much more predictable. We go conservatively often and what we saw in Q2 in fact continued on to Q3. The question regarding DTC behavioral, we've spoken in the past about the fact that DTC behavioral does generate a margin that's slightly stronger than our consolidated margin. There is, of course, additional costs that if you were to consider those along with the costs to the providers, If there was bottom line contribution, I would suggest to everybody today that it follows the path of where Teladoc was. In 2015, we really launched that product. If you think of a startup within a more mature business, although it's hard to call any aspect of our business a mature business at our growth rates. But that was truly a startup that had experienced growth rates of 50% to 100% plus year over year, we're going to continue to invest in any area that can provide us with outpaced growth to that extent. Question at the back? How much of your longer term plan of 20%, 30% growth is based on acquisitions? And if there is a requirement to do an acquisition, does that throw your EBITDA going positive into change in that, because I don't know, you have a different kind of patient pool that comes on with a different kind of business model that you would then have to support? I would need the emergency room if our Board was going to hear us suggest that our positive adjusted EBITDA was turning negative. The 20% to 30% growth is all organic. You saw some of the white space, you see the opportunities solely here in North America. You've heard Carlos talk about the white space in the other international regions. There's absolutely no reason we shouldn't be able to achieve 20% to 30% organically if we never do another acquisition. Matt? I want to ask about quality and that's going to be one of the themes today and the network effects around that. Doctor. Frist talked about it. But maybe give us a sense for the feedback that physicians get. I know physicians don't like being told what to do. So how do you communicate sort of what's good quality to them and get them to act accordingly? And then how far along are you in telling that story to your customer base? So thanks for the question. Doctor. Levy at the back of the room is chomping at the bit. We provide a pretty sophisticated provider dashboard that shows the providers a number of metrics, including their prescribing rates, antibiotic prescribing rates, corticosteroid prescribing rates for specific diagnoses so that they can see themselves in a normative analysis against the rest of the population. Physicians are remarkably self policing and self regulating when given the data about how they perform relative to their peers. We also provide them with member satisfaction data on a physician specific basis. So and a few other metrics. We try hard not to point the finger at them unless there's a real quality issue that we need to get deeper into and investigate. And we do that on occasion. So a handful of physicians every year will have to manage out of the network for quality reasons. But we do think that there's a substantial benefit to the, as Mark said, this trove of data that we have. And we are using that with clients. So our medical staff is sort of joined at the hip with Peter's sales team and they're frequently in front of clients, both in a presale mode, but also on an ongoing basis looking at what kind of an impact we're having and what kind of new programs we're bringing to bear. But certainly, the interaction between like a health plan's Chief Medical Officer and Doctor. Levy is very close. I was just looking for a little more clarity on the path for gross margins. So I guess those have come from mid to high 70s last year to a guide that looks like about 65% for the second half of this year. And I think on the Q2 call, you cited behavioral health growth actually as a headwind for margins. And then obviously, Advanced Medical coming online. But now it sounds like actually behavioral health is a tailwind for margins. And so what's driving that kind of 13% decline, is it all Advanced Medical? It's the mix of the business. It's Advance Medical's operating model, as you heard Carlos speak, 300 employed physicians. When scale is appropriately felt and the impact of the scale in any particular country is we benefit from obviously more members, more clients, more action. As Carlos has built out some of the newer countries, those countries aren't yet operating at scale and that model is going to continually improve their margins. But today, they operate at a margin that's a significant decrease to the overall and consolidated 70% pre Q2 margin of Teladoc. So that's coming in exactly where we had expected it. We know we have significant opportunity to improve that. And coming back to the behavioral side, behavioral is again, it's a tailwind. It operates at margins that are stronger than 65%. I think we have time for maybe one last question, but it seems that we've exhausted them. So I just want to wrap up by saying thank you to Kelsey and Jay and Linda, if she's here, for helping us to put this together. As you might imagine, it's sort of a monumental task to pull everything together. Hopefully, you found it valuable. I think last year, I started our Investor Day by saying thank you. This year, I'm going to finish by saying thank you. We went public 3 plus years ago as the leader and telling a story that said we could really become something that's a lot bigger than what we were at that time. And in part, it's the capital that investors like yourselves provide that has enabled us to do it. So, we're going to continue to work hard to make that put that capital to work and provide returns and we really, really appreciate you're joining us on this ride. So thank you again.

• Slides