Michael Gorton, who co-founded and led Teladoc Health two decades ago, is betting his next venture, Recuro Health, is going to be as transformative to the healthcare delivery system as Teladoc, a now-$23 billion company which set off a wave of innovation in the telehealth space in recent years.
The Dallas-based startup, which is set to close on a $12 million Series A round of venture capital financing this month, is posited on the view that the healthcare system could save billions of dollars a year through the extensive use of digital health monitoring to catch potential diseases before they appear, says Gorton.
The basic concept of Recuro is to use regular patient monitoring of essential body functions like blood pressure and sugar levels, cardiac function and body weight trends, bolstered by genomic testing to determine the patient’s propensity for diseases like cancer, the CEO says. He compares it to the evolution of sensor technology in modern automobiles that help an owner know when to take their vehicle in for servicing before it develops serious mechanical problems.
“We take care of our cars, but not our bodies,” says Gorton. “We should be applying technology that we have today to stay ahead of the curve and keep people healthy a lot longer.”
Gorton has little doubt that his new venture could be as disruptive as Teladoc, which was met with skepticism and opposition from Texas state regulators after its formation in the early 2000s. “Texas said you shouldn’t treat a patient you can’t touch,” recalls Gorton.
Fast forward to 2020, Teladoc and a slew of rivals like American Well, MeMD, Doctor on Demand, MDLive and dozens of smaller telehealth providers set a new standard for giving patients unable or unwilling to leave their homes much needed medical care. It also unleashed a wave of consolidation in the teleheath industry, as companies like Walmart, Cigna and others made multibillion dollar acquisitions to gain a foothold in the telehealth space.
Although investors have cooled to telehealth, as reflected in the declines in share prices this year for the two major publicly traded companies in the space, Teledoc and American Well, Gorton says the industry is poised for extended growth by employing new patient monitoring and genomic technology. In the long run, new advances in remote patient monitoring and genetics will cut billions of dollars in costs out of the $3.6 trillion U.S. healthcare industry and help patients stay healthy longer.
Much of modern medicine, he says, is highly inefficient in that it is designed to treat sick people, rather than help the healthy avoid diseases. Such conditions could be caught early with advanced digital and genetic markers that assess a patient’s “trend lines” of biometric markers.
“We want really simple gauges that keep people on trend lines,” that can be tested bi-annually with at-home testing kits. He calls these “digital medical home” assets. “We are getting to the point where we understand the things that age us.”
Recuro, which was founded in January 2020, is putting together a tool chest to build a new kind of digital health platform through acquisitions to serve customers including health plans and self-insured corporations looking to save money. They include Recuro’s “Covid back to work” kits that help employers and staff remain Covid-free in the workplace.
The company over the last year looked at 160 potential acquisition candidates and settled on a handful, including buying the Cleveland Clinic’s genomic assets, which Gorton says was “a huge coup for us.” The company is set to announce the purchase of a large benefits broker to help sell its services to clients, particularly self-insured employers, he says.
The company, which has already signed up its first clients, including a handful of corporations, health plans and one state, is a work in progress. It expects to generate some $10 million in revenue this year, says Gorton, but with acquisitions and in-house development, the company hopes to reach a billion-dollar plus unicorn status in coming years.
“We are going to find the small problems that we can solve that will ultimately make people stay healthier,” Gorton says. “We are going to learn the things that are working and things that don’t.”
The reason Teladoc was so successful, he adds, is not only because patients and doctors liked virtual care, but because it made the healthcare system more productive and efficient, since doctors can see patients virtually any time. “If you want to know how to solve a problem, follow the money.”
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