Amwell (NYSE: AMWL), a leading hybrid care delivery platform, has announced the sale of its virtual psychiatric business, Amwell Psychiatric Care (APC), to clinician-to-clinician telehealth provider Avel eCare for $21 million. The transaction represents a significant strategic move for both companies, as they aim to streamline their operations and concentrate on their core areas of expertise. The deal not only reshapes the future direction for both organizations but also highlights the evolving landscape of behavioral health telemedicine services and behavioral health offerings.
According to Avel eCare’s CEO, Doug Duskin, this deal enables both companies to focus on what they do best. “Amwell is focusing on technology as their primary service, while we are a technology-enabled service company,” Duskin said in a statement to Behavioral Health Business. “It made sense for them to focus on their core, and it made sense for us to focus on our core.” The sale allows Amwell to further concentrate on enhancing its digital platform, while Avel eCare can strengthen its service offerings in behavioral health telemedicine, particularly emergency department assessments and inpatient services.
Amwell’s Strategic Shift: Focusing on Core Operations
Based in Boston, Amwell is a hybrid care delivery enablement platform offering products for providers, payers, and employers. Since its inception, Amwell has focused on building technology solutions that enable virtual care. However, with the sale of APC, the company is pivoting to enhance its core platform offerings and accelerate its goal of achieving cash flow positivity by 2026.
The divestment of Amwell Psychiatric Care, which the company acquired in 2019, is a key move in streamlining Amwell’s portfolio. The psychiatric care business, which offered virtual mental health services, was a significant component of the company’s behavioral health division. However, as Amwell looks to grow its digital platform and offer more comprehensive solutions, divesting APC allows the company to focus more on its strengths in technology and care delivery innovation.
Amwell will continue to serve the behavioral health market through its affiliated clinical partner, Amwell Medical Group. This partnership provides therapy, psychiatry, and SilverCloud, a digital on-demand mental health solution. In addition, the company remains committed to supporting behavioral health telemedicine through its digital platform, which continues to evolve to meet the needs of patients and providers.
Angela Vogen, Amwell’s head of communications and content, discussed the rationale behind the decision in an email to Behavioral Health Business. She emphasized that the company is focusing on “longitudinal-based care,” which is where they are seeing the most significant demand in behavioral health telemedicine. “Divesting APC allows us to focus on what we do best—enabling longitudinal-based care, which is where we’re seeing the greatest demand in behavioral health,” Vogen stated. This strategic move reflects Amwell’s commitment to refining its digital health offerings and pursuing profitable growth in the future.
Avel eCare’s Expansion: A New Customer Demographic
For Avel eCare, the acquisition of Amwell Psychiatric Care presents an exciting opportunity for growth and expansion. Avel, based in Sioux Falls, South Dakota, has traditionally focused on providing telehealth services to rural, critical-access hospitals. However, with the addition of Amwell’s psychiatric care business, Avel now gains access to a broader customer base, including tier-one and tier-two hospitals. This shift expands Avel’s geographic footprint from 41 to 46 states, opening up new markets and opportunities for growth.
Avel eCare is a comprehensive virtual health network that partners with over 650 hospitals, health systems, government agencies, schools, senior care communities, and law enforcement agencies. The company provides a wide array of health services, including behavioral health telemedicine, crisis care, critical care, emergency services, school health, and virtual nursing. The acquisition of Amwell’s psychiatric care business aligns well with Avel’s existing service offerings and strengthens its presence in the behavioral health telemedicine sector, especially in emergency department assessments.
The acquisition also brings a wealth of new expertise and resources to Avel. Before the deal, Amwell’s psychiatric care services were primarily focused on larger, tier-one, and tier-two hospitals, which Avel had not previously served. As a result, Avel now has access to new hospitals and healthcare providers, expanding its reach in the behavioral health telemedicine market. This strategic move further positions Avel as a leader in clinician-to-clinician telemedicine, which continues to gain traction in the evolving healthcare landscape.
Avel’s Growth Strategy: Organic and Acquisitive Expansion
This acquisition is part of Avel’s broader growth strategy, which includes both organic and acquisitive expansion. Over the past two years, Avel has completed five acquisitions, including one in December, and the company’s leadership remains focused on identifying additional opportunities to expand its service offerings. According to Doug Duskin, Avel’s growth is centered on maintaining its clinician-to-clinician model while expanding its behavioral health telemedicine services.
“We’re a clinician-to-clinician telemedicine business. We want to stay in that area,” Duskin explained. “We don’t do much outpatient because we want to maintain that clinician-to-clinician model.” As telehealth services continue to evolve, Duskin believes there will be opportunities to extend services beyond the traditional hospital setting. Avel is particularly interested in expanding its home health behavioral health telemedicine offerings, where care may be provided to patients outside of hospitals or clinics.
As the healthcare landscape continues to shift, Duskin plans to adapt to these changes while remaining true to his company’s core mission. The company’s continued focus on providing high-quality, clinician-led care positions it for continued growth and success in the years ahead.
Looking Ahead: A Shift Toward Innovation in Behavioral Health Care
The acquisition of Amwell Psychiatric Care by Avel eCare is a sign of the ongoing transformation in the behavioral health and telehealth sectors. Both companies are realigning their strategies to focus on areas with the greatest potential for growth, innovation, and profitability. For Amwell, this means a sharpened focus on its digital health platform and an emphasis on longitudinal-based care. For Avel, it’s an opportunity to expand its behavioral health telemedicine offerings and further cement its position as a leading provider of telemedicine services for hospitals and healthcare providers across the country.
As both companies evolve in response to market demands, their paths forward will likely inspire further innovation in the delivery of mental health and behavioral health services. By focusing on their core strengths and addressing the changing needs of healthcare providers and patients, Amwell and Avel are shaping the future of behavioral health telemedicine and setting the stage for new opportunities in the growing behavioral health space.
