How does Amwell make money?

Health systems use the platform to facilitate consultations between patients and providers, and health plans, which use it to provide better access to care, better coordination of care and the ability to direct care referrals to providers owned or affiliated with the respective health plan. 

Subscription fees for health systems are determined based on the initial forecasted number of overall consultations, and they include a maximum number of consultations that can be delivered on the platform, which is "similar to a cellular phone plan, when consultations exceed the contractual maximum, overages result in higher subscription fees in the following annual period," the company wrote in its S-1 filing with the SEC.

For health plans, they sign a contract with Amwell that includes a recurring subscription fee based on the number of members who have access to the platform, plus additional subscription fees associated with the various programs that Amwell offers.

When it comes to revenue from visits, those are made on a fee-for-service basis through the Amwell Medical Group (AMG), a physician owned and operated medical practice that provides telehealth care exclusively on the American Well platform. AMG earns revenue for each episode of care delivered on the Amwell Platform by its 5,000 providers, with fees varying by physician specialty or clinical program.

AMG includes specialists in family medicine, psychology, psychiatry, gynecology, pulmonology, urology, and gastroenterology, among others. 

The company has a third revenue stream, which it calls services & carepoints, though it's significantly smaller than its other two streams. 

"We offer a full suite of paid, supporting services to our clients to enable their telehealth offerings, including professional services to facilitate telehealth implementation, workflow design, systems integration and service expansion. To help our clients promote adoption and utilization, we offer patient and provider engagement services through our internal digital engagement agency," the company wrote.

Telemedicine is deployed through Carepoints, which are medical carts and kiosks that are designed for various clinical and community settings.

"These Carepoints enable providers to deliver digital care into clinical care locations, such as the ED and clinics, as well as into community settings such as retail stores, community centers, employer sites, skilled nursing facilities and schools. Carepoints consist of hardware integrated into our Platform but can also be deployed independent of our software solution."

In the first half of 2020, Amwell saw a total of $122.3 million in revenue, up 77 percent from $53.2 million for the same period in 2019. The company attributes that rise mostly to an increase in visit revenue: the amount earned from AMG patient visits came to $62.5 million, up 237 percent from $18.5 million a year prior. In all, this segment accounted for 51 percent of revenue.

Subscription revenue totalled $46.2 million, up 18.8 percent from $38.9 million in the first half of 2019, or 38 percent of total reveue, while revenue earned from services and carepoints was $13.6 million, up 16.3 percent from 11.7 million, for 11 percent of revenue.