Amwell is weighing a mental health acquisition, highlighting how big players are turning to consolidation as a means to differentiate from the pack.
| | | | Amwell could hop on the telehealth M&A bandwagon as the industry turns to consolidation to stay competitive
Telehealth bellwether Amwell may be weighing a mental health acquisition: When asked about the possibility after its latest earnings call, CEO Ido Schoenberg told Business Insider Premium: "You cannot do everything yourself…and I see behavioral health needs growing in the foreseeable future."
Schoenberg explained that Amwell's top criteria for a mental health deal would be one that matches its company culture and also differentiates its provider and patient offerings from the rest of the telehealth space.
Telemental health could become the new norm for mental health treatment, so it makes sense that Amwell is looking to expand its behavioral healthcare offerings.
The pandemic is exacerbating the US' mental health crisis. More than 1 in 4 US individuals have noted symptoms of anxiety or depression due to pandemic-related stressors, per a November NBC analysis. What's more, experts believe that many of these negative impacts on mental health will outlast the pandemic.
The bulk of US individuals are tapping telemental health to contend with their worsening mental health, and they seem to be warming to the shift to virtual-only visits for the long haul. A whopping 62% of consumers said they'd choose a virtual visit for their mental health—even after it's safe to book an in-office appointment, according to Amwell data. It's likely this number will rise as the US witnesses a shrinking pool of mental health specialists and consumers turn to easily accessible, on-demand services—which means that the inclusion of mental health tools will be a highly valuable add-on for virtual players.
This story appeared in a recent Digital Health Briefing, the subscriber-only daily newsletter from Insider Intelligence.
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Amwell's latest indications highlight how big players are turning to consolidation as a means to differentiate from the pack—and it's likely that they'll ramp up M&As in the next year to retain consumers. This isn't the first time we've seen a massive virtual care player ink plans to build out its mental health services. For example, earlier this month, Talkspace scooped up Lasting, a direct-to-consumer couples' counseling app.
Combining services—like telehealth, mental health, and digital therapeutics—should make telehealth vendors a one-stop shop, luring in convenience-hungry consumers and payers alike. As such, it wouldn't be surprising if Amwell is considering snapping up Talkspace itself: the $1 billion startup is reportedly weighing a sale of its mental health platform, according to Bloomberg Tech.
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