Twilio (NYSE:TWLO) stock has given shareholders an incredible ride, returning over 750% in the last three years. Its communication platform for generating text, voice, video, and email via software is now used by over 190,000 customers in 180 countries.

Data from the last three years through July 23, 2020. TWLO data by YCharts

It may not be a household name, but you've probably experienced Twilio's capabilities. If you've received a computer-generated text message saying your prescription is ready or an automated phone call reminder that your medical appointment is upcoming, these messages were likely created by its platform's tools.

Recently the company has reached a key milestone that allows it to more fully serve the needs of the healthcare industry, and it's driving fast to capture new business. Let's check out what the company is up to on the healthcare front and what it means for investors.

After 18 months of development efforts, Twilio achieved HIPAA compliance on a set of its tools in February. HIPAA is short for the Health Insurance Portability and Accountability Act, passed in 1996, that protects personal healthcare information (PHI) and provides a standard for PHI transmitted or stored in electronic form. This milestone enables Twilio's network to handle PHI under a business associate agreement (BAA), which will allow healthcare entities to use its products and network for many new use cases.

This is not just a localized capability, but crosses a broad base of its products, including voice, text, video, and call center building blocks. This is a valuable service for healthcare entities, and a number of new customers have already jumped on board.

As the coronavirus started to spread, many healthcare providers looked to telehealth technology to perform non-critical or even COVID-19-related visits. The demand for these services skyrocketed in a short period of time, and Twilio's easy-to-implement and cloud-scalable tools were ready.

In the past few months, three large healthcare software platforms added Twilio's video capabilities to enhance their services. Epic, one of the largest healthcare record companies, implemented video to interact with patients, and allow virtual updates of clinical records. ZocDoc's medical appointment service was enhanced to allow the scheduled appointment to happen virtually over video chat. Doximity added video capability to its dialer service for its 100,000 physician customers to allow them to see the patient when calling.

Healthcare customers are using Twilio to power virtual doctor visits. Image source: Getty Images.

But it's not just video services that healthcare-related customers are using. New York City contracted with the company to help get their coronavirus contact tracing capabilities in place. The solution includes contact center software, voice communications, and text messaging capabilities. CipherHealth added COVID-19 interactive voice and text screening questions for its patients. Over 500 hospitals and healthcare systems using CipherHealth's platform have been issuing more than 430,000 outbound screenings per week.

This budding opportunity caused the company to add a key executive to its ranks.

In February, the company hired Susan Lucas Collins as its global head of healthcare services. Collins has been in healthcare-related roles her entire 33-year career and spent five years at Salesforce leading healthcare marketing efforts.

Andrew Zilli, vice president of investor relations, spoke about this role in a recent interview:

And so bringing somebody like Susan in who knows the healthcare world really, really well can really meaningfully up-level our ability to play a significant role there. And so it's kind of the first time that we've hired somebody in a role like that to really own a vertical, but I think it shows the importance of healthcare and what we think we can do with that.

Collins contributed to the recent customer wins and will be a great resource for the company to enhance its presence in this important industry.

Healthcare isn't a material part of Twilio's business yet, so these deals aren't going to cause the stock to move. But there have been some promising trends with this customer set. Since February, it's seen a doubling of healthcare customers' usage and a more than doubling of the number of healthcare customers utilizing the video services. Since its revenue is primarily usage-based, this is an encouraging development for investors. But the really exciting part is how these tools play a key role in helping this industry meet the challenge of reducing costs while also improving outcomes and increasing patient satisfaction. This capability could make the recent trend the start of something much bigger.

It may be a while until these new HIPAA-compliant capabilities make a meaningful difference in the company's topline, but shareholders should be comforted that this innovative tech company is continuing to expand its market opportunity.

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Twilio Moves Into Healthcare: What It Means for the Stock - The Motley Fool