according to chatgtp, compensation for lifemd's clinicians:
Nurse Practitioners may earn around $68 per hour, according to estimates.
Physicians and senior medical roles might see higher earnings, potentially up to $145 per hour.
as a physician [psychiatrist] and employer of therapists and nurse practitioners, i've got to tell you this is pretty poor. it raises 2 issues: employee churn and/or the quality of the employees they retain. poor quality clinicians, if that is the case. raises the possibility of malpractice actions.
in terms of compensation re physicians, for example, newly trained psychiatrists can get jobs at hospitals treating inpatients for up to ~$300k plus benefits, paid vacation, etc. newly trained specialists in internal medicine earn $180-250k outside of academic settings. newly trained family medicine docs earn $170-240k. add on the value of benefits, retirement plans, and so on.
3 other issues raised by the national telehealth model:
1. licensing- matching clinician licenses to the states in which their patients are located. without this you are practicing medicine without a license, a criminal offense.
2. related is the necessity of clinicians becoming credentialed by the various insurance carriers in each state. this can be a burdensome and time consuming process, and must be done with each insurance carrier separately. this is necessary if a patient wishes to use their health insurance to help defray the cost of treatment.
3. lifemd's avoidance of controlled drugs because of fear of regulatory issues is somewhat limiting. some patients need controlled drugs to treat their illnesses. i assume [hope?] lifemd screens for comorbid or underlying conditions prior to treating obesity. what do they do if they discover type 2 diabetes, endocrine disorders, and so on? do they evaluate and if appropriate treat, or do they refer?
of course the potential demand for weight loss drugs is immense. problems might be lack of any insurance coverage at all for the best drugs depending on the insurance plan, or tiering of copays and/or required trials on cheaper meds to get insurance coverage if in fact available. without insurance semaglutide [ozempic/wegovy] costs $1300-1400/month, and tirzepitide [mounjaro/zepbound] costs $1000-1100/month. [btw, the latter is more effective than the former.]
all of these issues may conspire to limit the growth of lifemd, as attactive as it may appear in the abstract.
State licensing and credentialing for insurance is a major topic of conversation on earnings calls for TDOC and TALK. Medical liability is always a big deal, that's why my best friend's mom retired early, she couldn't stomache the insurance premiums. Regarding pay, work from home and control over hours is going to be attractive to a lot of people. And telehealth can monitor quality much more tightly than in-person medicine. Your expertise in this area is very valuable, I don't see any deal breakers, just position size limiting risks
pay is going to be a bigger issue than you think. people are ALREADY practicing via telehealth and can easily generate 3-4 times what lifemd is paying. deduct some overhead, and it’s still way higher.
they have several verticals besides weight loss, but i would expect weight loss to generate more than all the others combined.
one market that would be ripe for the other services is rural populations. there are large swaths of the country that are severely under served medically. is the company making any particular effort to develop that kind of practice, or are they really just focused on the weight loss with the other services just add-ons?
the biggest problem for the weight loss practice will be the cost of the drugs and insurance companies limiting their coverage to avoid hemorrhaging cash.
I'm not sure which segment is responsible for how much revenue, there is "men's health" aka erection pills, similar to HIMS. There is also heart disease and diabetes management. The focus on weightloss seems mostly driven by Medifast who needs LFMD more than LFMD needs Medifast. LFMD was growing 40% annually well before the Medifast partnership. Weight Watchers WW just came out with a competing semaglitude drug for $189 a month. I think prices will come down with competition plus health insurance coverage. Your point on medical salaries is well received, but I still believe that there are plenty of dual income households where one spouse would prefer to work from home with flexible hours, and gets benefits from the spouse with the anchor career. The gig economy is a very strong movement. Emphasis on rural populations was not mentioned on any conference calls, but I have to assume that Medifast's multilevel marketing operates everywhere. Patients who get on the LFMD app through medifast might be sticky for other medical services as well. The big challenge will be converting weight loss patients into long term patients. Still, the difference in size between the companies should inflate LFMD like a balloon in the near term.
weight watchers is selling compounded semaglutide. compounding the drug depends on it being classified as in shortage. tirzepatide has just been declared no longer in shortage. semaglutide is still officially in shortage but that won’t last. it is possible that ww will still be able to compound it by mixing it with e.g. vit b12, thus making it something different than straight semaglutide. i’m not sure of the rules around that.
Here’s why I believe $TALK was, at least when I wrote about it, a stronger choice than $LFMD:
-Valuation: TALK was trading at 2x sales, but if you subtract the net current asset value (NCAV), the true valuation was around 1x sales, similar to LFMD.
-Cash position: TALK has a $100M net cash position, which LFMD lacks. This gives TALK the flexibility to deploy capital for buybacks or to accelerate growth, especially now that it’s no longer burning cash. On the other hand, LFMD has a negative NCAV.
-Niche focus: I prefer TALK’s psychology-focused telehealth niche over broader telehealth services. I believe specialized telehealth has stronger tailwinds compared to general telehealth, which I don’t see as the future.
In my view, the valuation at the time of my purchase was roughly the same, but TALK offered significantly more cash reserves to operate and buy back stock, plus it operates in a more promising niche with better growth potential.
I think I put more value on the multi level marketing coming from the Medifast partnership. BetterHelp and TALK have big customer acquisition costs, and LFMD got paid to partner with MED. But yeah, I didn't mention the cash or buybacks. Thank you for your work
according to chatgtp, compensation for lifemd's clinicians:
Nurse Practitioners may earn around $68 per hour, according to estimates.
Physicians and senior medical roles might see higher earnings, potentially up to $145 per hour.
as a physician [psychiatrist] and employer of therapists and nurse practitioners, i've got to tell you this is pretty poor. it raises 2 issues: employee churn and/or the quality of the employees they retain. poor quality clinicians, if that is the case. raises the possibility of malpractice actions.
in terms of compensation re physicians, for example, newly trained psychiatrists can get jobs at hospitals treating inpatients for up to ~$300k plus benefits, paid vacation, etc. newly trained specialists in internal medicine earn $180-250k outside of academic settings. newly trained family medicine docs earn $170-240k. add on the value of benefits, retirement plans, and so on.
3 other issues raised by the national telehealth model:
1. licensing- matching clinician licenses to the states in which their patients are located. without this you are practicing medicine without a license, a criminal offense.
2. related is the necessity of clinicians becoming credentialed by the various insurance carriers in each state. this can be a burdensome and time consuming process, and must be done with each insurance carrier separately. this is necessary if a patient wishes to use their health insurance to help defray the cost of treatment.
3. lifemd's avoidance of controlled drugs because of fear of regulatory issues is somewhat limiting. some patients need controlled drugs to treat their illnesses. i assume [hope?] lifemd screens for comorbid or underlying conditions prior to treating obesity. what do they do if they discover type 2 diabetes, endocrine disorders, and so on? do they evaluate and if appropriate treat, or do they refer?
of course the potential demand for weight loss drugs is immense. problems might be lack of any insurance coverage at all for the best drugs depending on the insurance plan, or tiering of copays and/or required trials on cheaper meds to get insurance coverage if in fact available. without insurance semaglutide [ozempic/wegovy] costs $1300-1400/month, and tirzepitide [mounjaro/zepbound] costs $1000-1100/month. [btw, the latter is more effective than the former.]
all of these issues may conspire to limit the growth of lifemd, as attactive as it may appear in the abstract.
State licensing and credentialing for insurance is a major topic of conversation on earnings calls for TDOC and TALK. Medical liability is always a big deal, that's why my best friend's mom retired early, she couldn't stomache the insurance premiums. Regarding pay, work from home and control over hours is going to be attractive to a lot of people. And telehealth can monitor quality much more tightly than in-person medicine. Your expertise in this area is very valuable, I don't see any deal breakers, just position size limiting risks
pay is going to be a bigger issue than you think. people are ALREADY practicing via telehealth and can easily generate 3-4 times what lifemd is paying. deduct some overhead, and it’s still way higher.
they have several verticals besides weight loss, but i would expect weight loss to generate more than all the others combined.
one market that would be ripe for the other services is rural populations. there are large swaths of the country that are severely under served medically. is the company making any particular effort to develop that kind of practice, or are they really just focused on the weight loss with the other services just add-ons?
the biggest problem for the weight loss practice will be the cost of the drugs and insurance companies limiting their coverage to avoid hemorrhaging cash.
I'm not sure which segment is responsible for how much revenue, there is "men's health" aka erection pills, similar to HIMS. There is also heart disease and diabetes management. The focus on weightloss seems mostly driven by Medifast who needs LFMD more than LFMD needs Medifast. LFMD was growing 40% annually well before the Medifast partnership. Weight Watchers WW just came out with a competing semaglitude drug for $189 a month. I think prices will come down with competition plus health insurance coverage. Your point on medical salaries is well received, but I still believe that there are plenty of dual income households where one spouse would prefer to work from home with flexible hours, and gets benefits from the spouse with the anchor career. The gig economy is a very strong movement. Emphasis on rural populations was not mentioned on any conference calls, but I have to assume that Medifast's multilevel marketing operates everywhere. Patients who get on the LFMD app through medifast might be sticky for other medical services as well. The big challenge will be converting weight loss patients into long term patients. Still, the difference in size between the companies should inflate LFMD like a balloon in the near term.
weight watchers is selling compounded semaglutide. compounding the drug depends on it being classified as in shortage. tirzepatide has just been declared no longer in shortage. semaglutide is still officially in shortage but that won’t last. it is possible that ww will still be able to compound it by mixing it with e.g. vit b12, thus making it something different than straight semaglutide. i’m not sure of the rules around that.
Here’s why I believe $TALK was, at least when I wrote about it, a stronger choice than $LFMD:
-Valuation: TALK was trading at 2x sales, but if you subtract the net current asset value (NCAV), the true valuation was around 1x sales, similar to LFMD.
-Cash position: TALK has a $100M net cash position, which LFMD lacks. This gives TALK the flexibility to deploy capital for buybacks or to accelerate growth, especially now that it’s no longer burning cash. On the other hand, LFMD has a negative NCAV.
-Niche focus: I prefer TALK’s psychology-focused telehealth niche over broader telehealth services. I believe specialized telehealth has stronger tailwinds compared to general telehealth, which I don’t see as the future.
In my view, the valuation at the time of my purchase was roughly the same, but TALK offered significantly more cash reserves to operate and buy back stock, plus it operates in a more promising niche with better growth potential.
I liked the write up though! Congrats!
I think I put more value on the multi level marketing coming from the Medifast partnership. BetterHelp and TALK have big customer acquisition costs, and LFMD got paid to partner with MED. But yeah, I didn't mention the cash or buybacks. Thank you for your work
you win.