09 Apr Ontrak Inc – Leveraging Artificial Intelligence to transform Behavioral Health Landscape!
Ontrak Inc (NASDAQ: OTRK), a virtual provider of AI-powered Telehealth solutions announced the signing of an updated contract with Health Alliance Medical Plans that extends their partnership, which originally began in 2015, to offer uninterrupted access to critical behavioral healthcare for the Medicare and commercial members of Health Alliance.
Terren Peizer, Ontrak Chairman and CEO, commented,
“We are honored to continue our 6-year partnership with Dr. Ho and his team at Health Alliance. As pioneers in the behavioral healthcare market, we focus on identifying and engaging those who are most reluctant to seek care and least likely to sign up for a self-help app. In a 2020 Milliman study those with untreated behavioral health conditions and chronic disease represented 5.7% of the total population and 44% of total healthcare costs. This vulnerable population of “overlooked patients” are our focus and the cost savings for Health Alliance Medical Plans are consistent with the 40-50% cost reduction results that we see across our book of business. We are delighted to be able to provide much needed behavioral healthcare and lasting clinical outcomes for Health Alliance Commercial and Medicare members.”
Ontrak leverages its PRE™ (Predict-Recommend-Engage) platform, that is powered by Artificial Intelligence, to offer behavioral change solutions for substance use disorder, depression, anxiety and lifestyle disorders such as diabetes, hypertension, coronary artery disease, COPD, and congestive heart failure that can benefit by effective care pathways.
The Company has recently signed a national contract with LifeStance Health, one of the largest providers of outpatient mental health care, to offer insights for addressing behavioural health comorbidities, through its analytics and patient engagement platform. The deal adds more than 3,000 behavioral health clinicians, both virtually and in-person at 370 centers nationwide, and translates to over 15,000 contractual relationships, which is the largest behavioral health specialist network in the country.
Ontrak Inc (NASDAQ: OTRK)
Market Cap: $589.79M; Current Share Price: 31.96 USD
Data by YCharts
The U.S Healthcare system is estimated to be a $3.2 trillion market comprising various stakeholders such as hospitals, insurance companies, medical equipment suppliers and pharmacies to name a few. The world is moving towards digitization at a fast pace, and healthcare is one industry where online services are making swift inroads, owing to their promise of convenience, transparency and cost –efficiency.
Online medical consultation is set to dominate the healthcare e-commerce segment in the coming years according to a report by adroit market research, which estimates that the Global healthcare e-commerce market will be worth over USD 435.8 billion by 2025. The growth in this sector will primarily be fuelled by an increase in geriatric population, rise in lifestyle related diseases such as diabetes, the advent of the Smartphone, the increasing internet penetration even in developing countries and efforts by governments to increase awareness and provide inclusive healthcare.
Ontrak, formerly known as Catasys, a leading AI and technology-enabled healthcare company uses advanced data analytics to address untreated behavioral health conditions that can cause chronic medical diseases. The Company’s integrated, multimodal, longitudinal OnTrak™ program not only helps with behavioral changes but also creates significant savings in medical expenses. By combining predictive analytics with human engagement, the Ontrak PRE™ (Predict-Recommend-Engage) platform is able to improve chronic medical diseases such as diabetes, hypertension, coronary artery disease, COPD, and congestive heart failure. This is achieved by leveraging its cutting-edge analytics platform that analyzes billions of data points from national and local health plans.
The treatment is delivered either in-person or through telephone and is combined with care coaching and in-market Community Care Coordinators, specially trained psychosocial and medical providers. The plan is available to members of health plans in 31 states and in Washington, D.C. The Company’s clients include industry leaders such as Centene Corporation and Cigna.
Ontrak recently acquired LifeDojo Inc, a science-based behavior change platform that will facilitate Ontrak’s engagement with high-tech, high-growth organizations that use LifeDojo’s 32 behavior change modules. In addition, the acquisition brings onboard digital tools that enhance member value and lower cost.
The Company estimates that its total addressable market (TAM) is worth over $33.7B and believes that even a 20 percent enrollment would mean a $6.7 billion revenue opportunity for the Company. The recent acquisition of LifeDojo and other intended acquisitions will most likely expand the TAM by up to 100 percent as per the company estimates. Ontrak seeks to expand its services to newer geographical regions and lines of business and pursue acquisitions that will enable it to grow rapidly.
– COVID-19 has caused severe limitations and challenges in the delivery of healthcare. The added pressure of lockdowns and social distancing has made physical visits to the clinic a cumbersome process that involves an inordinate amount of time and effort. Telemedicine is poised to be the future of healthcare with over 70 percent of retail prescription drugs shifting online within the next 7 years according to AllianceBernstein. On the other hand the global telemedicine market is expected to reach USD 191.7 billion by 2025, growing at a CAGR of 37.7 percent, from USD 38.7 billion in 2020 as per a report by Markets and Markets.
– The sudden shift and dependence on online consultations owing to COVID-19 have caught many companies unawares. While building an infrastructure that can provide a safe, reliable and cost-effective experience for the patient and healthcare provider involves time and money, Platforms such as Ontrack Inc that have already built an impressive telehealth infrastructure that provides scalability and agility have a great chance of capitalizing on the opportunity.
– Ontrack lost one of its largest customers, Aetna, with the contract likely to be terminated with effect from June 26, 2021, which led to a revision of its revenue guidance for 2021 from $160 million to $100 million. However, the Company is upbeat about tailwinds such as rapid enrollment under Ontrak-CI contract, increase in contractual relationships, extensions and expansions of other customer contracts, a record Net Promoter Score of 80 for its programs in Q4, 2020 and the anticipated launch of Ontrak tiered care programs for behavioral health conditions among others.
– The Company reported record quarterly revenue of $29.3 million in Q4 2020, representing an increase of 149% year over year, while the revenue for fiscal year 2020 stood at $82.8 million, representing a 136% increase from prior year.
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