Expanded Telehealth coverage across Canada would be a boon for WELL Health Technologies (WELL Health Technologies Stock Quote, Chart, News TSX:WELL), according to Stiffel Canada analyst Justin Keywood, who in a Friday update to clients draws a connection between the United States’ response to the coronavirus outbreak and the potential success of WELL’s own telehealth platform.
US President Donald Trump is expected on to sign an $8-billion emergency spending package into law as the country takes greater measures to protect citizens and prevent the spread of the virus known as COVID-19.
The US Senate on Thursday almost unanimously passed the package which will see funds go towards health experts, hospitals, health care providers and state and local governments, with an added provision
to allow Medicare beneficiaries to access telehealth programs so that physicians can assess symptoms from a distance.
"To protect public health, the bill will allow Medicare providers to extend telemedicine services to seniors regardless of where they live, at an estimated cost of $500 million," House Speaker Nancy Pelosi said in a written statement.
Keywood says that approving the spending package could have ramifications for WELL Health, which recently announced the launch of VirtualClinic+, a telehealth program for connecting patients and physicians by video, phone and secure messaging.
“We see the news as a positive read-through for WELL that launched a Telehealth program, VirtualClinic+, earlier this week. Currently, Telehealth is only publicly reimbursed in British Columbia but expanded coverage across Canada could act as a positive catalyst for WELL that is in a strategic position to execute,” Keywood wrote.
“More broadly, we continue to see WELL as executing on an aggressive but disciplined M&A plan in health-tech, where additional assets, like Telehealth makes the platform offering more valuable,” he said.
In a press release on Monday, WELL said that its VirtualClinic+ is an ideal platform for potential episodic care for the 4.8 million Canadians currently without a family physician.
“With the recent COVID-19, or Coronavirus outbreak, telehealth offers Canadians an alternative to lengthy waiting room visits in brick and mortar medical clinics. Patients can now schedule an appointment online and connect directly with a physician on their phone, tablet, or computer without the need to download or configure an app. BC residents with a valid BC MSP4 health card can use the service for no cost5. Patients in other provinces will receive a receipt that may be reimbursed through a health spending
account or other private insurance plans,” said WELL in the press release.
Keywood said Canada has lagged the US in terms of adoption of Telehealth services and that modernizing healthcare in this fashion with put WELL in a position for capturing incremental growth.
On the M&A front, the analyst said WELL is currently evaluating over 100 assets, while its current acquisition count stands at ten since 2018.
With the update Keywood maintained his “Buy” rating and $2.60 target, which is based on a 6x multiple of his fiscal 2021 sales estimate and, at press time, represented a projected 12-month return of 55 per cent.
Disclosure: Nick Waddell and Jayson MacLean are shareholders of WELL and the company is a sponsor of Cantech Letter.