M&A Announcement

Aug 5, 2020

Good morning, everyone, and welcome to the Teladoc Health and Livongo Merger Call. Please note that all lines are in a listen only mode. After the presentation, we will open up the call for questions. Please note that this call is being recorded today, Wednesday, August 5, 20 20 at 8 am Eastern Daylight Time. I would now like to turn the meeting over to your host for today's call, Patrick Feeley, Teladoc Health's Vice President, Investor Relations. Mr. Feehley, you may begin. Thank you. This morning we are pleased to announce the merger agreement between Teladoc Health and Livongo. Bringing together our 2 innovative companies will create an organization that possesses a depth and breadth of services that is unmatched by any other company in the digital health space and will allow us to unlock the true potential of virtual healthcare. On the call today, we will first discuss the strategic and financial aspects of this combination, followed by a question and answer session. On the call with me today are Jason Gorevic, Teladoc Health's CEO Glenn Talman, Livongo's Founder and Executive Chairman Mala Murthy, Teladoc Health's CFO Zane Burke, Livongo's CEO and Lee Shapiro, CFO of Livongo. In our remarks today, we will be discussing certain non GAAP financial measures that we believe are important in evaluating the performance of Teladoc Health and Livongo, Details on the relationship between these non GAAP measures and the most comparable GAAP measures and reconciliations thereof can be found posted on our website. Also, please note that certain statements made during this call will be forward looking statements as defined by the Private Securities Litigation Reform Act of 1995. Such forward looking statements are subject to risks, uncertainties and other factors that could cause the actual results for Teladoc Health and Livongo to differ materially from those expressed or implied on this call. For additional information, please refer to our cautionary statement in our press release and our filings with the SEC, all of which are available on our website. I would now like to turn the call over to Jason. Thanks, Patrick, and thank you everyone for joining us this morning on short notice. I'm incredibly excited to announce that we have entered into a definitive agreement to combine with Livongo, the industry leader in digital consumer centered healthcare for people with chronic conditions and the pioneer in applying data science and behavioral change to deliver improved health outcomes. This is a transformative moment that will set a new standard for the delivery, access and experience of healthcare. This combination creates an organization that has an unmatched depth and breadth of product and service offerings, allowing us to redefine the categories of virtual care, digital health and healthcare delivery. The combined company will be the only virtual care organization to deliver and enable the full spectrum of whole person care from primary care to chronic condition management and critical care needs from the home to the hospital worldwide. This new combined company focused on delivering a new and different user experience will be truly unique in healthcare. Our combined scale, technology leadership position and breadth of capabilities will create a significant competitive advantage in this enormous and vastly underpenetrated market. For consumers, payers and employers, the newly formed organization will uniquely offer a full range of integrated virtual care services, creating substantial value across the healthcare by increasing access to care, enhancing the consumer experience, improving health outcomes and lowering costs across the system. Enabled by technology and analytics and by the combination of fully digital interactions with virtual connections to physicians, together we will establish a deeper and more complete level of personalized care relationships, all fully integrated into the physical delivery system. The combined company's unique capabilities are a step change forward in our collective commitment to generating better health outcomes and delivering cost savings. For shareholders, this merger offers a number of strategic benefits in addition to significant revenue growth synergies that will drive meaningful shareholder value. This combination, which brings together 2 of the fastest growing and most innovative companies in healthcare, is a natural evolution for each organization. Teladoc Health and Livongo share a common mission, complementary cultures and shared values. We both have a passion for improving the healthcare experience and a proven ability to drive meaningful results, while each company also brings a diverse and complementary set of core competencies. I'll now provide some context for what each of Teladoc Health and Livongo has achieved and how the combination sets a standard for personalized technology enabled longitudinal care that will continue to improve clinical outcomes and deliver uniquely empowering member experiences, all while reducing the cost of care. As standalone companies, Teladoc Health and Livongo have each delivered significant value for our clients and members. As the global leader in virtual care, Teladoc is transforming the way that people access and experience healthcare around the world. We provide a broad platform of virtual care solutions through our network of thousands of physicians and medical experts with a global leadership position across multiple channels and a proven ability to increase patient engagement and improve clinical quality through our diverse set of products. Our solutions are available to over 70,000,000 individuals in the U. S. Alone in addition to tens of millions internationally. We have long been admirers of the Livongo team and my admiration has only grown as I've gotten to know their group of incredibly talented leaders through this process. Their impressive track record of innovation delivers value by empowering people with chronic conditions to live better and healthier lives, addressing diabetes, hypertension, prediabetes, weight management and behavioral health through a personalized member centric approach. Combining cellular connected devices and data science, Livongo's AIAI engine aggregates information from across the healthcare ecosystem, interprets that information to understand what it means to members, applies personalized insights exactly when and where most useful and then iterates based on those learnings. This approach has delivered meaningful improvement in clinical outcomes and cost savings for Livongo's clients, which include more than 30% of the Fortune 500 and a number of large health plans, while creating differentiated experiences and better quality of life for the people living with chronic conditions. Together, we will take a giant leap forward for the consumer, revolutionizing their experience with healthcare, driven by predictive analytics and data science extended by connected health devices and rooted in compassionate expert driven care. The combined company will enable whole person care when and where the member needs it. Livongo's ability to collect and interpret data and use that data to deliver actionable personalized insights for members in real time significantly accelerates Teladoc's ability to leverage its clinical expert driven care model to create a new seamless continuum of care ranging from fully digital interactions to virtual visits with leading medical experts all across one platform. The ability to use real time health data to create appropriate interventions at the right time and the right care level will significantly increase the frequency and quality of interaction with the healthcare system, while meeting consumers where they are, resulting in better outcomes and lower costs. These newly combined capabilities will enable us to create the next generation of healthcare delivery models, characterized by deep longitudinal relationships and facilitated by the seamless combination of digital, virtual and physical care delivery. All of this together has the potential to revolutionize care delivery around the world, driving lower costs and better outcomes. There are significant unmet needs in the healthcare system, including the growing prevalence of chronic conditions, which traditional healthcare systems are not designed to manage. Further, there's a lack of access to quality healthcare for millions of consumers in rural and lower income communities across the globe. The combined company will be well positioned to address these challenges head on. In fact, both of our respective client bases have been asking us for solutions exactly in line with what the combined company will deliver. Regarding the first challenge, the combination of these two organizations leaves us uniquely positioned to deliver a full service stack of care to people living with a chronic condition. In the U. S, nearly 147,000,000 people live with a chronic condition and 40% have 2 or more. 90% of healthcare spending is attributable to people with chronic conditions, costing the U. S. Economy over $3,700,000,000,000 per year. Internationally, 1 in 3 adults is living with 1 or more chronic conditions. Combining our virtual network of physicians and clinical experts, our member engagement capabilities and integrated suite of virtual services with Livongo's data driven approach to providing actionable, personalized and timely digital health insights will enable us to provide an integrated care experience for the people living with chronic conditions that just doesn't exist today. Our members will not only have access to real time data driven actionable digital insights, but will now also be able to seamlessly connect with a virtual network of medical experts and caregivers with the ability to directly link with the broader healthcare system as necessary. This new stepped care model will drive efficiencies and create value for all stakeholders. From a financial perspective, this transaction accelerates Teladoc Health's growth rate over the next several years by leveraging the scope and footprint of our combined platform. We see tremendous opportunity for revenue growth synergies, including the ability to cross sell Livongo's products and services across Teladoc's existing customers and channels and vice versa. This is particularly attractive with only an estimated 25% overlap in the combined client base. We also expect to meaningfully increase Livongo's already strong member penetration within clients by leveraging Teladoc Health's numerous interactions across our 70,000,000 lives served and approximately 10,000,000 annual virtual visits. This is a new opportunity to leverage the Teladoc flywheel, where every member interaction across the platform creates a new opportunity for us all to cross sell solutions and drive increased utilization of products and services. This is a strategy that has been highly successful over the past several years and we feel very confident in our ability to activate it for Livongo's leading capabilities. This merger will also create the ability to leverage Teladoc Health's existing distribution channels to expand Livongo's solutions to an underpenetrated international marketplace, as we've recently demonstrated with our early success expanding the InTouch Health platform internationally. In addition, the combined engagement capabilities will allow each of us to leverage each other's technology to drive enhanced member enrollment and utilization while improving outcomes. Mala will discuss these synergies in further details later in the call. Looking beyond these already identified synergies, we see significant additional opportunities for revenue accretion. Virtual Care has become an integral part of the healthcare landscape. McKinsey recently estimated that $250,000,000,000 of healthcare could be virtualized in the U. S. Alone. These secular trends are being accelerated by the current global pandemic and we expect to see elevated demands as we set the standard for the next generation of virtual care. As I discussed moments ago, the combined scaled platform enables the introduction of innovative new products, including a seamless integration of virtual primary care and chronic care models in both the payer and provider markets. Post acute and hospital at home models opening opportunity for real time intervention, medication optimization and programs aimed at closing gaps in care. We expect these new capabilities to open up a novel economic model that reduces cost in the system while providing our company with the opportunity to share in the value we create. Finally, but perhaps most importantly, I've always talked about cultural fit as a top priority in all of our partnerships. As many of you already know, our 2 companies share very similar values and both cultures are based on a common mission, focused on improving the lives of the people we serve. Together, we will accelerate the pace of innovation to achieve this goal. I couldn't be more excited to bring these 2 great organizations together. And now, I'd like to turn the call over to Glenn to offer his perspective on the combination of our two businesses. Glenn? Well, thank you, Jason, and good morning, everyone. Wow, many of you heard the great results of Livongo's quarter just before this call. I'm really excited to be here with you this morning as we announce what's next, the creation of a new leader in health and care by bringing together these 2 great organizations. At Livongo, our mission is to empower people with chronic conditions to live better and healthier lives. By combining with Teladoc Health, we are accelerating that mission by reaching even more people. As Jason mentioned already, Teladoc is available to 70,000,000 people in the U. S. Alone. We know giving them access to better information and services will enable them to live better and healthier lives. Adding virtual care is the natural evolution of our solutions and Teladoc Health is the clear leader and a perfect partner for us. The combined company will use technology and data science, the broadest virtual care network in the world and our shared obsessive focus on our users and members to deliver better care to everyone we serve. I'm immensely proud of the Livongo team's work to build such an innovative platform, which including advanced care management solutions and data science enabled insights will continue to help millions of people manage their chronic conditions. Livongo's platform meets consumers where they are, delivering measurable improvements to clinical care and patient outcomes. Our clients benefit from the satisfaction of our members, the improved clinical outcomes and year 1 provable return on investment. But perhaps most important, whether we sell direct to large self insured employers or through other channels, we always establish a trusted and very personal relationship with our members, which is key to their satisfaction, their health results and our ability to deliver more cost effective care. The positive reactions from our clients and members continue to motivate our team. Our more than 400,000 members tell us that they don't just like us, they love us, and that's rare in healthcare. People have the same reaction to Teladoc. Our solutions are now used by more than 30% of the Fortune 500 and our channel partners include 4 of the top 7 payers, pharmacy benefit managers and we are recommended by the leading employee benefit or employer benefit consultants. We helped save over 900 $1,900 annually in healthcare cost for our typical Livongo member or their employers. More importantly, we're empowering people with information, health guidance and insights, what we call health nudges and the tools they need to get and stay happy and healthy. Our business is very personal to us and we've never stopped working to improve our flexible and robust technology engine in order to serve even more people. From our conversations, I know that Jason shares that same passion about people and also the same commitment to transform healthcare as we know it today. We have pushed innovation to translate valuable information for our members into actionable solutions to address complex needs that were not adequately addressed before Livongo. Our AI AI engine, which you've heard about earlier, leverages data science and the latest technology, creates a new personalized experience for people with chronic conditions and helps them to make sustainable behavior changes that leads to better outcomes and lower cost. While the technology might be advanced, the result is simple. Livongo makes it easier for people to stay healthy. Our dedication to the health of our members and our drive to stay at the forefront of healthcare innovation were key components of our success and will serve both companies well as we join the future together. With Teladoc Health, we will be better positioned to deliver our advanced solutions at scale across their leading platform to more people across the U. S. And internationally. Virtual Care and Telemedicine are capabilities that our customers have long been asking for. And we are pleased to combine our data driven capabilities with Teladoc's platform. As a combined company, we will bring the complementary strengths of our platforms together to form the first of its kind virtual care organization to deliver the full spectrum of care. We will be able to unite Teladoc's best in class virtual care platform with Livongo's highly sophisticated capabilities to collect data and provide useful insights to patients in real time that will help to improve outcomes and deliver quantifiable cost savings. In addition, we will continue to focus on chronic conditions and enable better outcomes for under resourced, diverse and underserved communities that otherwise would not have access to advanced solutions to help manage their care. Teladoc Health and Livongo will be able to combine clinical excellence and engagement expertise with a data driven consumer centric platform to deliver the highest quality care and best outcomes from wellness to the most complex cases. As demonstrated in our Q2 results we released this morning, Nivongo has made tremendous progress in expanding our enrollment across multiple channels and clients. While COVID-nineteen has certainly accelerated the transformation to more virtual healthcare, it's clear that this delivery model is here to stay. As a result, we're confident that this merger is the right decision for the future of Livongo and our many different stakeholders as it recognizes Livongo's significant progress and future growth trajectory. Livongo's shareholders will have the opportunity to benefit from long term upside as the combined company leverages each business' unique and complementary strengths to serve an even larger addressable market. Livongo employees will have the opportunity to be part of a larger team addressing a significantly broader range of healthcare solutions. Members and clients in the United States and now around the world will have the opportunity to access an expanded range of capabilities supporting their desire to live better healthier lives. I'm confident that this highly strategic combination will accelerate our ability to meet the evolving demands of our customers and will advance our mission to help people manage chronic conditions alongside Teladoc Health. Before I conclude, I want to emphasize my thanks to the entire Livongo team for their commitment and caring about making a difference in the lives of our members and those who care for them. I often say that every day is the most important day to drive the company forward, empower more people and improve our existing healthcare system. Never has that been more true than today. As our team spent time with Jason and his team throughout this process, we quickly realized that we found the right partners who shared our vision and who could help us accelerate the growth of Livongo's technology and data driven solutions. We really can't wait to get started. Finally, I'm excited to join the Board of the combined company along with a number of our existing Board members from Livongo as we together guide the company into this next exciting phase of growth and success. And with that, I'd like to turn the call over to Mala. Thank you, Glenn, and good morning, everyone. We are tremendously excited about the combination of these 2 innovative companies and the significant value it creates for our combined consumers, clients, employees and shareholders. As Jason indicated, this is a transformative moment in healthcare and the combined organization will be the clear differentiated leader in the virtual care space. Under the terms of the agreement, Livongo shareholders will receive $0.592 per share in Teladoc Health stock, plus consideration of $11.33 in cash for each Livongo share. For total consideration of approximately $18,500,000,000 including the assumption of $550,000,000 in Livongo convertible debt. The merger agreement has been unanimously approved by the Boards of Directors of both companies. We expect the transaction to close by the end of this year, subject to the required regulatory approval and customary closing conditions, including the approval of Teladoc Health and Livongo shareholders. After closing, Teladoc Health shareholders will own approximately 58% of the combined company, while Livongo shareholders will own approximately 42%. This transaction will create a new leader in digital health with pro form a expected revenue of over $1,300,000,000 and more than $120,000,000 in adjusted EBITDA this year. In addition to the strategic benefit of the transaction, it offers significant financial benefits to our shareholders. This combination has the potential to deliver $500,000,000 in run rate revenue synergies by 2025 from cross selling and increased penetration into each other's respective client bases, accelerating Livongo's international expansion through Teladoc Health distribution footprint and the benefit of improved churn and enrollment from an integrated offering. We expect to realize $100,000,000 of these identified revenue synergies on a run rate basis by the end of year 2. In addition, as Jason discussed, we see meaningful opportunities for revenue synergies beyond those quantified from next generation opportunities. We expect cost synergies of $60,000,000 by the end of the 2nd year after close, primarily related to activities such as vendor consolidation, streamlining corporate functions and eliminating redundancies, enabling us the flexibility to drive the bottom line and invest in growth. Excluding synergies, we expect to deliver annual pro form a revenue growth in the range of 30% to 40% over the next 3 years, driven by the broad based momentum each company has sustained on a standalone basis and the secular trends towards more virtualization of healthcare. Upon closing of the transaction, our pro form a debt outstanding will be $1,900,000,000 and our pro form a cash on hand will be in excess of $650,000,000 leaving the balance sheet in a strong position to continue investing in the combined business. The combined organization will feature a 13 member Board, comprising of 8 representatives from the current Teladoc Health Board and 5 from the Longo Board, ensuring that we capitalize on the complementary assets that the 2 organizations bring together. With that, I will turn it back over to Jason for closing remarks. Thanks, Mala. As you've heard this morning, this new platform will unlock the power of virtual care for consumers, clients and shareholders by bringing together 2 of the most innovative and fastest growing companies in healthcare today. This combination offers many strategic and financial benefits, delivering tremendous opportunity for revenue accretion for the combined entity. Together, we will offer a breadth of virtual health services unrivaled in the marketplace, creating a complete end to end virtual care solution for consumers regardless of health status, socioeconomic status or physical location. The combination of these two companies will create substantial value across the healthcare ecosystem by increasing access to care, improving patient outcomes and lowering costs across the system. And with that, we'll open the call for questions. Operator? Thank you, sir. At this time, we will open up the call for questions. Our first question comes from Lisa Gill with JPMorgan. Lisa, please ask your question. Can you hear me? Hi, Lisa. I can hear you. Okay, great. Jason, congratulations. Just want to better understand just two quick things. One, you talked about the customer overlap today at 25%. Is that the number of customers or the number of members would be first? And then second for you or Mala, the 30% to 40%, how do we think about that? Is that the new long term growth rate over the next several years? Is that just the next few years? I just want to better understand how you're thinking about growth longer term. Sure. Molly, you want to take those? Sure. So the way I would think about the 30% to 40% is as follows. Think about it for the next 2 to 3 years. And remember, the synergies that we are talking about is in addition to the 30% to 40%. And the reason we wanted to provide that context obviously is we are bringing together 2 organizations, 2 businesses with tremendous momentum. And so we that is sort of what is underpinning the outlook that we have. In terms of your first question, it's clients. Operator, do we have our next question? Yes, I apologize. Our next question is from Sean Wieland with Piper Sandler. Please go ahead and ask your question, sir. Can you hear me? Sean, I can hear you. All right. There we go. Let me add my congrats too. Can you just get us inside your head a little bit and tell us how you were thinking about valuation when you were proposing the transaction with Livongo? And what percentage of Teladoc members have a chronic condition that would be applicable for Livongo? Yes. So I'll take the second one first. Our population mirrors the overall population. So as we look at 100 and 47,000,000 or so Americans, that's just shy of 50% of Americans are living with a chronic condition, 40% with 2 or more, and our population is very much representative of that. So as we think of the opportunity to penetrate that 70,000,000 member population who have access to our platform, there's just tremendous opportunity. And of course, our frequency of interaction due to the sort of wider funnel of conditions that we serve gives us the opportunity to engage them and refer into Livongo's leading chronic condition programs? Nala, you want to take the question about valuation? Yes. So as we were thinking about valuation, obviously, what we were thinking about is 2 things, right? 1 is, what is the unsynergized pro form a combination of these 2? And how do we see it from a revenue acceleration, accretion to gross margins and opportunity for adjusted EBITDA expansion. So obviously that is what informed part of our valuation. But the other most important thing is the synergies that we see. So as I mentioned, this is an opportunity for us to drive significant synergies over the next several years. I talked about the $500,000,000 by 2025. I talked about the $100,000,000 by year 2. These are run rate numbers. And the way we have thought about achieving these synergies, we've done it with a fair amount of specificity. It's around the opportunities for cross sell. It is the opportunity to drive international expansion. It is the opportunity with every sort of member engagement opportunity to have our physicians recommend the products and services of Livongo. So there are many opportunities for us to drive revenue synergies. There are many further unquantified opportunities that we think are truly exciting. And Jason talked about several of them in his prepared remarks. We also see opportunities for cost synergies. Those are in the areas of vendor consolidation, back office, these are 2 public companies. There is definitely some rationalization and efficiencies that we can go at. So it's all of those things that informed the valuation. Our next question is from Stephanie Davis with SVB. Your line is open. So thinking about your forward, Livongo has long talked their AI engine, they'll tell it after more of a connectivity platform. So what changes can we expect on your back end? Is there an opportunity to leverage this business model for maybe a better marketplace dynamic and what we see in the existing telehealth solution? Yes, absolutely. I appreciate the insight there. We are both leading in sort of respective engagement strategies. Our surround sound engine at Teladoc helps to put people into the top of the funnel, if you will, and then the flywheel effect of our multiple capabilities and virtual care conditions that we treat increases the utilization within the flywheel. On the Livongo side and maybe Glenn can talk to this more, they've used advanced data science to create what he referred to as health nudges that create a frequency of interaction with the platform that's really unmatched. And we see the combination as being highly synergistic and complementary. Glenn, do you want to add to that? Yes. Thank you, Jason. The only thing I would add is right now, in a typical transaction, what you get if you call any telehealth provider, but of course the Teladoc provider, they have a piece of the story, but they don't always have all of the story. And what we've talked about is how to create a transaction that is information about the people they're talking with. So let's say that someone calls up and says, I'm a little busy and I'm not feeling well. If you knew that they had diabetes, the specificity and the quality of your answer would be dramatically better. And as we've talked about blending the platforms together, what we see is we can increase the quality of the transaction. And when you increase the quality of the transaction, you get better results that drives the finances. So we might say to somebody, okay, you don't need additional tests. We already have the information, saving lab tests. We might say, here's you don't need to go, what you need to do is drink a sugary drink because you need to bring up your blood sugar because we're looking at the real results. So we think that we can improve the Teladoc physician experience as well as the individuals who are calling those numbers by using the AIAI engine. And we also think, as Jason talked about, in terms of recruiting, Teladoc has done an amazing job getting people in the front of the funnel. I think we've done a very good job of retaining people through the health nudges, through the insights that we give, through the what we call empowerment, what a lot of people refer to as engagement. So we think we can be helpful there as well. So the more people go to one platform to get their healthcare starting with digital, but giving them access to the entire healthcare continuum, the more they're going to go to Teladoc as their solution for all of healthcare. And that's what both of us are betting on. Thank you. Our next question is from George Hill with Deutsche Bank. Your line is now open, sir. Please ask your question. Good morning, guys, and thanks for taking the question. And Jason and Glenn, congrats on what you guys are building there. I guess, Jason, my question is around what I'll call coopetition. And over the last few years, you've gone from building a business that was a nice niche part of the care delivery process to a very large, very valuable component of the healthcare delivery system. How do you think about how other competitors in the space are going to look at what you've built and the value that's being attributed to it and decide that they want a piece of it for themselves and kind of how do you preserve the partnerships and the relationships and kind of like how do you maintain the competitive position that you have as a lot of people are now going to kind of increasingly train their sites on the value of what you've built? Yes. Thanks, George. I appreciate that. This has always been part of our vision. If you go back to even our roadshow slides from 5.5 years ago, chronic care was front and center. And so I would say that the combination of these two companies was an inevitability. I just I think it did get accelerated substantially by the current situation, which has thrust virtual care into the forefront and rapidly accelerated the adoption among consumers as well as among providers. And I think that putting the 2 leaders together is the best way to preserve the competitive advantage. When Glenn and I sat down together and talked the first time, it became very clear that we were either going to team up to create the greatest virtual care platform in the market or we were going to end up competing with each other. And we thought that putting the leading assets together with the greatest scale would ultimately deliver the most value to consumers and clients alike. And certainly, that's true for shareholders as well. George, I will also add, we have talked about our strategic moat, be it our leadership across every channel, be it our global footprint, our membership engagement. Those modes will strengthen, will enable the success of this transaction in many more powerful ways. And the other thing I would say is, I really do believe this union will allow us to continue to deliver true savings in the healthcare ecosystem. Our next question is from Sean Dodge with RBC. Your line is open. Thanks. Good morning and congratulations everyone on the transaction. Going back to what Glenn you were talking about just a moment ago about helping to better inform the doc. As you push now more into longitudinal chronic condition management, the mechanics are delivering that care or providing a good experience for the patient. Can you continue to do that using an independent contractor network of physicians? Or does this change the model a bit, meaning you're going to have to start employing docs directly? Well, I'll take the first part of that. And Glenn, if there's anything you want to add. Sean as we've been moving toward virtual primary care and more longitudinal relationships, we will continue and we've talked about this at our Investor Day and even before that to evolve the model by which we engage with physicians. And we think it will be ultimately multimodal. So we will certainly have a network of independent contractors and we will use data science and AI in order to ensure the highest quality and the best consumer satisfaction from those interactions. We will also employ either on a part time or a full time basis professionals to engage with those consumers just like Livongo does with their health coaches. And lastly, we feel like it's very important for us to be there enabling the healthcare system and enabling providers with the technology to deliver care that's better than they can deliver today. And so we will look to continue to bring advanced technologies that ultimately make hospitals and health systems perform better and better meet the needs of their consumers. Glenn, anything you want to add to that with respect to the longitudinal relationship with a chronically ill patient? Yes. I think that, again, what you want to move away from is traditionally a chunk of telehealth was considered for a one time interaction. And again, our vision is to have this as a continuum where you always start from a digital perspective and you have kind of a step function to increase the level of care where the consumer, the health consumer, is actually helping to make those decisions along with very informed kind of insights that are delivered along the way. And so one, we think that by using better technology, we can improve the experience of the people going through it, as well as improve the quality of care and reduce the cost. But I think the goal longer term, there was a statistic that Jason quoted earlier and that was 147,000,000 Americans have a chronic condition. And it's basically one out of every 2 adults. And because of that, that's the target that we would want to go after to say whatever you need, you come to Teladoc and we've got it for you. And that's ultimately where we want to be that front end digital front door that opens the path in a seamless and easy to use way to all of your healthcare needs. And so I think that's kind of the approach that we're taking and that's the longitudinal relationship that we're searching for. We have that at Livongo. One of the really exciting synergies is to go after the 70,000,000 people that Teladoc already has a relationship with and have our collective doctors now say to people, you're having this issue, we have a great solution for you. And that actually helps health systems and the employers because they want more of their people on it. So it's a win win. Our next question is from Richard Close with Canaccord Genuity. Please ask your question. Your line is open. Great. Thanks. Thank you. Congratulations. Two quick questions. With respect to Livongo, Glenn, I'm curious if you know how many times a member interacts with your team and you guys recommend that they go see a physician or do go see their doctor or do a visit with a clinician. So I'm curious if you have any percentages there. And then, as you think about the pricing model going forward for Livongo, will it continue to be a per enrolled member? Or is there any thoughts in terms of going back to a per member per month in terms of the entire employee base, any change in pricing? Well, I think I'd say 2 things. First of all, in terms of the number that we refer, it really depends on the cohort. And are we talking about people with a single chronic condition, diabetes or hypertension, weight management or behavioral health issues? Are we talking about people with multi chronic kinds of challenges? And then the second question is, what do they need? So if someone is talking to us and they need a change, for example, in the medications that they're using because we can tell from our data, someone is taking too much or is not using enough insulin, we would then refer to a physician. Previously, that was a broken piece of our process. We couldn't complete the process seamlessly. Now with Teladoc, we'll be able to do that. In fact, it won't even seem like 2 processes, it will be 1. So from that standpoint, kind of that's a data point. The second thing I'll say is that our health coaches, our certified diabetes educators and the like have identified 2 trends recently. More and more people call us and they ask us about other health concerns other than their chronic conditions. And when we ask them, we say, well, we're focused on chronic conditions, Why are you calling us? They typically say things like, because we trust you, because you're the only ones who will pick up the phone and because you give us real time answers when we need them. And so again, the ability to integrate and truly answer those questions with Teladoc is something that we're really excited about. Our health coaches and all the people who are directly interacting with our members love this concept. And frankly, we had started conversations with Teladoc to say, how do we refer to you and you refer to us? And the more we got into it, the more Jason and I concluded these companies needed to be together and our clients told us that. Relative to pricing, we have become known and frankly appreciated by large self insured employers and others for charging only what you use and that is per participant per month. That said increasingly as we're moving into some risk deals and as we're handling a broader whole person perspective, we're starting to look at a variety of ways to price. So I think what will happen is people on our teams, our respective teams will get together and what we will do is figure out what works best for the market segment that we're dealing with. And that's something that I think both companies will work together on as we become 1 to provide the right kind of pricing for the right markets. I don't know if you want to comment more. Yes. Yes. I would just add to that. I agree 100%. And Richard, you've heard us talk many times about the emerging virtual primary care opportunity. That opportunity continues to accelerate and our capabilities there and the value that we can add together, not only amplifies the opportunity, but opens up those other economic structures that enable us to share in the savings that we create, take a larger portion of risk because we know that we can drive better outcomes and lower costs. And we're finding our clients very receptive to that discussion because as Glenn said, that's a win win. So I think you'll see the product convergence, the member experience convergence all come together in virtual primary care and the economic models that underpin that. Our next question is from Charles Rhyee with Cowen. Your line is open. Yes. Thanks for taking the questions and congrats to both of you as well for this deal. It makes a lot of sense. But maybe following up Jason and Glen from Sean's question. Obviously, the virtual care strategy, Jason, you've talked about that for a while. And then if we think about the historical models for both of you, you've been really going to the employer offering service that's available to employees. I guess trying to drill down here, you talked about 140,000,000 Americans with a chronic condition. Jason, you've talked about a large percentage of people don't have a primary care relationship. But if we what percentage of the population with a chronic condition are without also a PCP? Because I would think that part of the strategy with Virtual First is to be that primary care relationship and basically be that patient's doctor and help them manage and monitor their chronic condition. So maybe kind of help us understand sort of what that part of the market looks like and in terms of sizing for you? And then as you think about trying to integrate into the more traditional part of the healthcare system as more of a primary care practice? What are the sort of the integration pieces and timelines we should think about realistically that you see that kind of developing for you guys? Thank you. Yes. So Charles, I don't have off the top of my head the cross section of people with chronic conditions and their incidence of having a primary care physician. What I would say that we hear from consumers and from plan sponsors, whether that's a health plan or an employer in a commercial program or a government program is that consumers are looking for a single place to go that delivers care on their terms and they can get care for whatever their clinical issue is at that time or over a longitudinal period in the event that they have a chronic condition that they're living with. And this is by far the highest satisfaction, highest net promoter score set of assets from a consumer perspective. And by bringing them together, they really cover the full range of those clinical needs. In a way, that's just a better, more consumer friendly experience because it leverages the data in order to deliver a more personalized experience than you receive in a physical setting that's just not relying on that rich data and those insights. And so we see that as the winning combination and we recognize that it's important to be able to integrate with the physical healthcare system and get someone to the right physician or facility in the event that they need to be seen in person. And that's where our deep integration and collaboration with the health plans really can deliver a much more powerful combination. And of course, you know that we are deeply integrated and embedded into hospitals and health systems, and even more so now that we've concluded the acquisition of InTouch Health. So all of those things come together into a singular strategy focused on delivering more value for the consumer. Our next question is from Daniel Grosslai with Citi. Your line is open. You are unmuted. Hi, guys. Thanks for taking the question and congrats on the deal. A lot of my questions have been asked, but maybe if we can just focus on the data aspect here, because now you guys are going to have an incredible trove of data assets with what you're capturing and what Livongo is capturing. So I was curious how you intend to further monetize that data? And in particular, how much interaction will there be between Mabongo's health coaches, Teladoc's doctors and the doctors that use Teladocs provider software, how much access to that data will each of those constituents have? How coordinated will they be? And then maybe on top of that, if I'm a Livongo member that also has access to Teladoc, will I be able to access a Teladoc doctor from Livongo connected device? Yes, there are a lot of questions in there. Good set of questions for a lot of them. So with respect to data, I think one of the really great things is as the two teams got together and started to talk about vision, priorities and values. When we talk about data, it's all about providing a better consumer experience and better healthcare. And so we're united in our view that the real purpose of the data is to drive better health for people. And we can do that by gaining insights into their behaviors, their conditions and ways that we can help them improve their lives. And so when we think about monetizing data, we always think about we do the right thing for the consumer that drives better health and a better experience and reduces cost and that will drive economic value for us and benefit to them in their lives. With respect to the providers, we see an early integration of the Livongo Health Coaches with our physicians so that they can seamlessly work together. And we've always said that our goal is to be able to bring our provider capabilities, meaning our clinical assets to bear for our hospital and health system clients in the event that they want to engage with that. And of course, many of our hospitals and health systems take advantage of our clinical resources. And Jason, I would just add two points. For those of you who are on the earlier call, you heard Livongo's President, Doctor. Schneider, talk about adding 100,000,000 new data points and a database of 750,000,000 data points. That's all fed into the AIAI engine that generates insights and the intention is to provide them across the entire TeladocLivongo network anywhere that we can provide that information to improve an experience. And so whether it's insights, whether it's background data, whether it's data that can help somebody in behavioral health, for example, interestingly, people who are using Livongo devices, the number of people who've said since COVID that they're stressed has increased 50%, 50%, 50%. So that would be a great place for us to say, hey, we have a place you can go now to address some of those issues. So that's just an example of how we might use that data. And the other thing I'd say is the Livongo model puts people in charge of all their data. So we don't use the data. We don't monetize it. We don't advertise on it. We don't sell it to a third party. Every one of our users is completely in control of their data, where they want to send it to and that's been core to our beliefs. And our next question is from Matthew Gillmor with Baird. Your line is open. Hey, thanks and congrats. I wanted to go back to the revenue synergy targets. I was hoping you could provide some details in terms of how those estimates were developed. And can you segment the $500,000,000 between cross sell international or between Livongo and Teladoc where they're coming from? Molly, you want to walk through that? Yes. So, we'll provide more detail over time. I think at this point in time, we've said, we've given enough direction. We are very confident about the things that I had outlined in terms of the cross sell opportunities, the international expansion, the opportunity for using our engagement opportunities to further drive penetration of LaMongo's products and services. I don't want to get too much more specific than that at this point in time, but we will surely provide more detail as time goes on. So thank you all for tuning in this morning. Again, I know it was short notice, so we really appreciate you're juggling your schedules. Speaking for Glenn and Mala and Zane and Jenny and Lee and everyone on both teams, we just couldn't be more excited to bring these 2 organizations together and we're thrilled with the opportunity in front of us to really make a difference in the healthcare system. So thanks again and good day. Thank you all. This concludes today's conference and thank you for participating. You may now disconnect and have a great day.