Breaking news confirmed: Bosch exiting healthcare and telehealth in US–UPDATED

Breaking News–UPDATED with Bosch response

Bosch has confirmed they are closing their telehealth business in the US. Please see their statement at the end of this article.

A home care industry newsletter, along with our own reliable industry sources, have confirmed the recent industry discussion that Bosch Healthcare, since January a solely US operation, is winding down its business without a definite turnover to a buyer. This Editor, in calling various departments in their Palo Alto, California offices for confirmation on Thursday, was (when she reached a human being) forwarded to HR where she could leave only voice mail. An email to marketing also received no response. All sources indicate that staff layoffs took place last Monday.

Editor’s Note: Bosch’s official press response follows this article. We have also made certain corrections to this article (see in red).

  1. The Home Care Technology Report, published by industry consultant Tim Rowan, on Wednesday posted two articles stating that Bosch laid off nearly all of its staff on Monday (15 June) save for customer service and some key operating areas. His information indicated that Health Buddy sales–new and existing orders–have been terminated. This includes orders placed through its McKesson partnership. Non-VA service will be terminated in 60 to 90 days.
  2. Home Care Technology also reported that Bosch’s business with the Veterans Health Administration (VA) will be maintained through April 2016, which is near to the contract end in May, but no new units will be delivered. The original contract was with Health Buddy hub developer Health Hero Network, sold to Bosch in 2008With the later acquisition of ViTel Net, Bosch developed into one of the two leading VA Home Telehealth remote monitoring hub suppliers–the other being Cardiocom. VA Home Telehealth is the largest telehealth program in the US with over 156,000 patients (Federal Year 2014) (Ed. Note: VA has a third authorized and active VA supplier, Viterion).

As Mr Rowan did, this Editor will speculate on the reasons why there is this reported exit without a sale or spinoff, despite the substantial VA and other healthcare placements of Health Buddy. Our take is somewhat different than his:

* Bosch Healthcare exited Europe in January. As Editor Charles reported in January, Bosch turned over social alarm, nurse call and telecare business in Europe to a former acquisition, TeleAlarm (Quantum), leaving the US operation to fend on its own. In practice, losing home country ties is often a leading indicator of a sale or spinoff of the unit.

Bosch’s marketing activity was also at a low ebb, with little presence at trade shows and in retrospect, an odd refocusing in the past few months on telemental health.   Your Editor’s misconception has been corrected by an anonymous source. The company had a very active marketing presence up until this week, with a large booth at ATA, a well-attended webinar in late April and had just published a white paper on telehealth and the Triple Aim. Bosch was also staking out a logical and unique position in addressing the role of health management in mental illness, with or without chronic medical illness.

* Why no sale or spinoff? Mr Rowan cites a drop in revenues which our sources cannot independently corroborate, but we will agree with him on the outcome–and more–on the drama around Bosch’s patents in the context of what the Editors have viewed as a fractured US patent system.

Starting in 2008, Bosch adopted an aggressive patent defense strategy that ultimately had Unintended Consequences.

Bosch challenged seemingly all comers on telehealth patent infringement. In 2008-10, it brought Alere Medical to court, with Alere settling. In 2012, Bosch upped the ante with multiple actions that gained a great deal of notice at the time. It got off to early success by forcing licensing agreements with MedApps (acquired by Alere Health now Optum) and tiny but promising Waldo Health, which pivoted and renamed itself not long after that. Reportedly a sizable list of companies, including Express MD Solutions (parent of Authentidate, another former VA provider, now CyberCare) and Philips, were sued as well, with mixed results. Patent and IP defense have no bigger advocate than this Editor, but Bosch’s approach which seemed to pick on early-stage companies with court as a first resort was controversial and openly disliked in the industry. The whole sector was struggling with building a reputation and business.

This month, that strategy came to a dramatic, undesired end. In August 2012, Bosch also sued Cardiocom. At the time, Cardiocom was early-stage, independent and vulnerable to a long court fight. But a year later, when acquired by Medtronic, industry observers predicted a fight to the wire. This January, the US Patent Trial and Appeal Board invalidated three Bosch Health Buddy patents related to telehealth technology as ‘obvious’ which in US patent-speak means they were ‘rendered obvious by prior inventions.’ (Law360 report). Other Bosch patents went under review by the Board–and all were decided against the company this month (Home Care Technology).

It now appears that Bosch has been left with a patent portfolio of limited if any value, subject to challenge by and licensing from other companies (like Cardiocom).

Other financial factors coming into play would be development costs to transfer its platform from the early-generation hub technology to tablet and smartphone-based hardware. It’s not known whether its new web (in conjunction with Remedy Health) and mobile (flip phone in conjunction with GreatCall) based systems had gained any traction with customers, nor whether they were built on separate patents.

With the VA and a 2016 contract renewal/bid, the loss of patent rights would likely have put them into an uncomfortable position in a Government bid.

The fate of ViTel Net, owned by but marketing separately from Bosch via its own website and system identity (with no visible ties to the ownership) is unknown, but presumed to be independent.

For those Grizzled Pioneers and others in the Telehealth Wars, it’s a mixture of regret in seeing a major player with a long history depart the scene (in Early Days, you had to admire the sheer scrappiness of Health Hero) and schadenfreude (see above re patents).

We empathize with their employees and wish them the best in the future. Many have built long term relationships within the field; they are talented and dedicated to the ideal of improving health in the home and outside the hospital.

We also look forward to more details. Stay tuned….

Please see below for Bosch’s statement to the media issued today. Thank you to Tim Rowan for the initial forward and to Bosch for their direct response.

Bosch is currently realigning its business in the medical and healthcare sector, and is examining its options in this market. The company is currently analyzing future opportunities in this field. Its deliberations center on the company’s key competence in sensor technology, which results in improved diagnostics. To this end, Bosch has established an organizational unit in Germany at the beginning of 2015. It currently employs 50 people.

As part of this realignment, Bosch has agreed to close its telehealth business in the U.S. Despite early entry to the telehealth market, the strategic and economic targets associated with Bosch’s telehealth business did not develop as expected.

Robert Bosch Healthcare Systems Inc. develops, manufactures and distributes business-to-business telemedicine systems, including patient interfaces, software and platforms for patient care, in the healthcare sector.

Approximately 125 associates are currently employed by Robert Bosch Healthcare Systems Inc. at sites in Palo Alto, CA, and Utica, NY. Impacted associates will have the opportunity to apply for open positions in the Bosch organization. In the event that a qualified position is not available, impacted associates will receive a severance package and outplacement services.

29 June–Following our coverage in the past few days: mHealthNews and Mobihealthnews

Categories: Latest News.

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