Loblaw expands bet on telehealth

TORONTO • Loblaw Companies Ltd. is investing $75 million in virtual health provider Maple Corp. as the grocer continues to expand its footprint in health care.

The investment in Maple, the largest virtual-care provider in Canada, gives Loblaw a minority stake in the company.

Shoppers Drug Mart president Jeff Leger said COVID-19 has shown that Canadians need alternatives to traditional health care.

“The COVID-19 pandemic has proven that Canadians need new ways, particularly virtual ways, to get access to care,” said Leger. “We know that the future of health care is digitally enabled. We believe that our store network and infrastructure, combined with Maple's technology can help better connect Canadians to the health care support they need, whenever and wherever they are.”

The two companies partnered to provide telemedicine to Canadians in the early stages of the pandemic. In a month, Maple and Shoppers provided more than 20,000 virtual care visits to Canadians under lockdown, including screenings for the virus. Only last month, they expanded that relationship by making Maple services available on iPads at 160 Shoppers stores in B.C.

“We've watched virtual care solve some of the most complex health care issues around the globe, as well as right here in Canada through our own programs,” said Dr. Brett Belchetz, CEO and Co-Founder of Maple.

The telehealth sector has seen incredible growth since March as thousands of patients in both the U.S. and Canada looked for alternatives to in-person meetings during lockdowns.

Investors caught onto the trend and bought into leading publicly traded telehealth companies such as Teledoc Health Inc., which is up more than 50 per cent since the beginning of March. The company saw an unprecedented surge in patient visits, up more than 200 per cent in the second quarter of 2020 in comparison to the same time last year. Teledoc's rapid growth allowed it to enter the M&A space, where it announced it would be merging with Livongo Health Inc. in a US$18 billion deal.

In a survey published in April, McKinsey and Co. found that 46 per cent of U.S. consumers were using telehealth services when only 11 per cent had accessed them in 2019. Pre-COVID, revenues for the U.S. space only reached $3 billion. Now, McKinsey believes the potential “US$250 billion of current U.S. health care spend could potentially be virtualized.”

It's the latest in a series of health care investments made by Loblaw, beginning with its acquisition of Shoppers Drug Mart in 2014. Two years later, it acquired QHR Corp., which was at the time a leader in the electronic medical records market, for $170 million.