News roundup: Proteus dissolves with Otsuka, EHRs add 16 min. per patient, DrChrono mobile EHR raises $20M, CareBridge LTSS launches, ‘flyover healthtech’ soars

The much-touted partnership of Proteus Digital Health with Otsuka Pharmaceutical of Japan for a digital version of Abilify has ended prematurely. Abilify MyCite was the first drug cleared by FDA with a digital tracking system in November 2017 [TTA 14 Nov 17]. Otsuka was also going to fund Proteus for further development of drug tracking.

In the payout for the Proteus license, Otsuka has the right to use Proteus’ technology for its own mental illness drug research. Proteus will abandon its research in mental illness and cardiovascular conditions and concentrate on digital meds in cancer and infectious disease. Before the holidays, we saw reports that ‘Proteus may be no-teous‘ and that layoffs and office closures were in the works. STAT reports that the Proteus-Otsuka breakup is one of several recently: Sandoz and Pear Therapeutics, Sanofi and Alphabet’s Onduo.

Where does a doctor’s time go? EHR use, for one. A study of 155,000 ambulatory medical subspecialists and primary care physicians in 2018 clocked EHR use per encounter at over 16 minutes on average, with chart review, documentation, and ordering functions accounting for most of the time (33, 24, and 17 percent, respectively). Percentages changed by subspecialty. PhysiciansWeekly,  ACP Annals of Internal Medicine (abstract only

Speaking of EHRs, DrChrono, one of the first mobile-friendly EHRs/practice management/revenue cycle platforms, raised $20 million in a Series B led by ORIX Growth Capital. Its total funding in nine years tops $48 million. Crunchbase, Mobihealthnews

Long term care (LTC) has been ‘about to be hot’ for at least 10 years. Where the real money may be made is in the ‘back end’. This week, a new long-term support services (LTSS) firm, CareBridge launched out of Nashville, backed with $40 million in fresh funding with a BOD helmed by a former US senator and physician, Bill Frist. Created in part through the acquisition of two other companies, HealthStar and Sinq Technologies, it will concentrate on electronic visit verification by caregivers for in-home service delivery, provide real-time sharing of clinical information, support members with enhanced tablet-based telehealth services, and is building a predictive model for service support. BusinessWire

Flyover tech soars, indeed. We note that CareBridge is in Nashville, which snobs on both coasts demeaningly call ‘flyover country’. Well, there’s gold in Middle America’s hills when it comes to health tech, with some of the choicest high flyers at this week’s JP Morgan Healthcare Conference from places like Nashville, Minneapolis, Ann Arbor, Denver, and Iowa. Utah alone has enough tech to earn it the nickname ‘Silicon Slopes’. Utah’s highlighted company is one this Editor found back in 2013Owlet–still (baby) socking it to them, cutely. Others, unfortunately, are wince-worthy–the prize goes to the Ōmcare med dispenser, which makes darn sure via two Wi-Fi-enabled interactive cameras that those pills are not only being taken, but also being swallowed. Really. Observer

Femtech’s huge potential global healthcare market–but needs to connect with payers and employers

‘Femtech’ is one of those newish umbrella terms that corrals health tech that enables women to manage their health better. Most of women’s health products cluster in birth control, fertility, pregnancy, and early maternity, with little outside this area or for older women. A number have gotten substantial funding rounds–in Q3, Nurx (birth control, $52M), The Pill Club ($51M, ditto), and Cleo (pregnancy and post-partum coaching, $27.5M). Rock Health

Research2Guidance has dug a little deeper in its new study,
The Global Market Of Digital Women’s Health Solutions 2017-2024
  and discovered 3,000 app-based solutions, 151M annual downloads and millions of active users globally. 20 percent of US women in the femtech core demographic use a health app, and R2G projects global market revenue will reach $297 million. Global market expansion is likely to be greatest in countries like India and China

What femtech lacks, according to R2G’s Ralf Jahn’s is validation. Those 3,000 companies haven’t quite concentrated on their user case and benefits which could lead to validation and payer/employer reimbursement. And strategies haven’t quite jelled yet.

Consolidation crunch time in telehealth: Teladoc acquires InTouch Health for $600 million

Announced on Sunday just in time for Monday’s start of the annual, breathlessly awaited JP Morgan healthcare conference where ‘middle America’ ‘flyover’ companies are now the hot thing, was the acquisition by decidedly not-flyover Teladoc (Purchase, NY) of InTouch Health (Santa Barbara CA). InTouch is a mid-sized company for primarily hospital and health system-based telehealth. The purchase price was $150 million in cash and the remainder in Teladoc common stock, scheduled to close next quarter.

InTouch had made acquisitions of its own in 2018: REACH Health (enterprise telehealth) and TruClinic (DTC telehealth). Unusually, it also came fairly unencumbered by outside funding–only $49 million to date.

Telehealth and telemedicine are both rapidly consolidating and growing horizontally into payers (Teladoc and Aetna), corporate, and health systems.

An analysis over at Seeking Alpha emphasizes InTouch’s enterprise business as the charm for Teladoc, leading to a purchase price 7.5x revenue based on InTouch Health’s 2019 revenue of $80mm. InTouch had, with TruClinic, built itself up into a comprehensive system for over 450 hospitals reaching to the patient, but also developed specialty telehealth areas in stroke, behavioral health, critical care, neonatology, and cardiology. In their view for investors, the news is quite positive for Teladoc as–returning to JP Morgan–40 percent of hospitals expect to increase their telemedicine budgets. Release, MedCityNews

European Patient Experience and Innovation Congress (EPIC 2020) invites world health tech to Croatia

European Patient Experience and Innovation Congress (EPIC 2020)
19-21 March
Valamar Lacroma Hotel
Dubrovnik, Croatia

One of our Readers from Croatia is the CEO of the Bagatin Clinic in Zagreb. In cooperation with the Cleveland Clinic, they are organizing this first-ever pan-European conference focusing on health tech and how it will impact the patient experience. This Editor has previously noted the growth of medical and healthcare tech in Central and Eastern Europe in places like Hungary and Estonia–and now, Croatia.

Ognjen Bagatin was kind enough to write me before the holidays and has since filled in some of the highlights.

  • Centered on the patient experience, it will explore the relationships among healthcare delivery, technology, private enterprise and the human beings who need and want these services.
  • Encompassing the scientific, clinical, behavioral and social perspectives, ranging from the futuristic, highly theoretical to current, best-in-class practice.
  • A high-energy, stimulating event for everyone, from c-suite executives, to clinical practitioners, clinic owners, scientists, and investors, EPIC will bring together some of the most influential physicians, med-tech startups and health professionals from Europe and beyond to the table to improve how your patients will experience healthcare in the near future.
  • As technology continues to help us achieve previously unattainable results in healthcare, the conference will bring an insiders’ look at which technologies, ideas, and innovations are improving the patient experience 
  • And, of course, there’s Dubrovnik
  • Speaker list here

Early registration closes on 19 January. More information here.

Texas Healthcare Challenge WISH-es on women in February hackathon (Dallas TX)

The latest phase of the Dallas-based Health Wildcatters Texas Healthcare Challenge series is the Women in Science & Healthcare (WISH) Hackathon, taking place Friday and Saturday, 21-22 February at the Health Wildcatters office in Dallas. The program includes keynote talks, problem pitching, mixing, team forming, hacking, mentorship, feedback, idea iteration, pitch practice sessions, final presentations, judging panel, and prizes. Teams will use design thinking to create products, iterate business models, map out go-to-market strategies, and potentially build new healthcare ventures. It’s not for existing companies; you can register your group individually to form a team working on a problem that may result in a new product or company. There are several tiers of prizes, with the top prize of $1000, with four finalist teams winning $250 per team.

This women-only event is partnered with the Small Business Association and SoGal. Registration deadline is 14 February. FAQs are here. More about WISH.

News roundup for the New Year: NHS £40m diet on login times, Germany’s ‘cheesy’ health ID security, Livongo and Higi partner, MTBC picks up CareCloud

NHS investing £40 million to cut health service login times, £4.5 million on digital assists for independent living. Announced by secretary Matt Hancock, the objective is to move to reduce the time to log in over the 15 systems NHS clinicians and staff may have to use with a patient. The test of a single sign-on system at Alder Hey hospital in Liverpool reduced it from 105 seconds to 10. The Department of Health and Social Care is also providing £4.5m to local authorities to fund digital programs aimed at aiding independent living for recipients of adult social care. Guardian

Germany’s health data network security is ‘swiss cheesy’. Germany’s physicians are in the process of being networked into the national health system through an electronic doctor’s card and practice ID card which identify and sign them in. Similarly, patients will have their own chipped ID card. A special research project by NDR, Der Spiegel, and  IT security experts belonging to the Chaos Computer Club (CCC), found that they could send all three to a cheese monger’s shop in Lüneburg. Looks like their security has a few ‘holes’ in it. Tagesschau.de

Livongo’s diabetes/chronic condition management platform and health kiosk Higi are partnering in 500 retail pharmacies in Michigan for a Livongo-branded health screening and tracking program, using Higi’s measurement, tracking, and Livongo’s wellness programs. Mobihealthnews

CareCloud acquired by MTBC for $17 million cash and about $41 million in total consideration such as warrants and perpetual preferred stock. Both companies are in similar businesses related to medical practice management, EHR integration, and patient communications. It reflects the deep falloff of value in the absurdly overcrowded field of EHR and practice management businesses since Meaningful Use wound up: Allscripts’ acquisition of Practice Fusion for $100 million in January 2018 [TTA 14 Aug 19] and reduced prospects for other HIT players such as Athenahealth, Watson Health and Waystar [TTA 25 Apr 19]. Total investment in CareCloud was north of $150 million in ten funding rounds (Crunchbase) which makes the price a knockdown for the investors like Norwest, Intel Capital, First Data and PNC. Seeking Alpha, MTBC release, commentary on HISTalk.

CES roundup: what happened to the excitement around ‘innovation’, robots, VR, and voice assistants?

What’s missing? Some sense of excitement. It may be your Editor’s back-to-work deluge after the holiday, but it’s hard not to have a sense of Déjà Vu All Over Again when reading the reporting from CES Las Vegas. So much of it seems lukewarm, a variant of what felt exciting, new, and transformative Back When. And so little of it seems to break through to a wider market. Let’s pick through and see what a Gimlet Eye might.

AARP’s Innovation Labs had yet another showcase of technologies from largely small companies from its own Hatchery and other accelerators with which it works. This year it highlighted VR developer partnerships with Rendever, which creates experiences for LTC residents, and VRHealth’s physical therapy at home. SanaHealth has a pulsed light/sound pain reduction device and the VoiceItt speech recognition device which translates the speech of the severely impaired into intelligible language.

Robots continue to seek a market, albeit tinier and we confess, occasionally more amusing.

  • Samsung’s Ballie robot, about the size of an orange, will roll through your home minding your pets, monitoring your safety, and interfacing with your smart devices and apps to make absolutely sure you get enough exercise and track your fitness. That is, if you don’t step on it, mistake it for a tennis ball, or your dog doesn’t mistake it for a chew toy.
  • The Charmin Rollbot will deliver a pre-loaded roll when you most need it, navigating through your home, although no capability of climbing stairs in its current concept.
  • The Misty II robot is yet again one of those tabletop robots which are developer toys. This one propels itself and has a camera, a microphone and 3D sensors, and could be repurposed for fall detection, companionship, or to bring you a hot towel.
  • The Lovot is a Japanese robot at its second CES which moves around, responds, is red and quite cuddly-looking (except for that weird thing on the top of its head). This ‘happiness robot’ will set you back over ¥299,000 ($2,700) when it finally hits the market.

Babies need both monitoring and changing, and combining the two may actually happen. P&G’s Pampers and Verily Life Sciences brought to CES the Lumi smart diaper with a connected HD video monitor plus an activity sensor in the diaper. It will detect baby’s sleep, feeding and diapering patterns. (But no changing by the Charmin Rollbot)

Voice assistants are getting more ubiquitous to find a way into the home. The war between Amazon Alexa (and siblings) and Google Assistant continues with new applications in cars (a/k/a computers on four wheels) to appliances and a host of third-party devices like garage door openers. A lot of this is ‘sneaky tech’ to get past the hard core of people who have already realized that both always-on Alexa and Assistant collect a lot of behavioral data which one does not necessarily want collected, and that many of these connected devices like Nest have been hijacked through compromised passwords.

More in Fierce Healthcare 7 Jan, 9 JanMobihealthnews

Babylon Health criticized by Manchester CCG, cardiac activists in UK, Canada

News you may have missed. Over the holidays, Babylon Health took some hard knocks on two fronts, right after the announcement of their expansion into North America. 

The Manchester Clinical Commissioning Group (CCG) rapped the developer of GP at Hand fairly hard on their expansion plans to this Northern city. “We are not convinced that Babylon GP at Hand’s model of care is sufficiently integrated with other local and national services to ensure safe and effective care for local people. Areas of concern include screening programmes and safeguarding. We therefore asked Hammersmith and Fulham CCG, the formal commissioner of BGPaH, to object to the Babylon proposal to begin operating in Manchester from early 2020.” There is a 1,001-person cap on registrations which may be lifted this month if Babylon can address and mitigate these patient concerns.

It should be said that Birmingham had similar concerns to Manchester, but a similar cap was lifted last month. Babylon’s stated strategy is to work with the CCGs on their concerns to successfully roll out the service to offer in-person appointments and 24-hour digital appointments by early 2020. Digital Health

There’s also been charges of gender bias in diagnosis of cardiac symptoms by Babylon’s chatbot. When presented with

identical cardiac symptoms, the chatbot reportedly will tell a man to seek immediate care, but a woman is advised that it may be a panic attack or even depression. Here’s the Twitter discussion between @DrMurphy11 and past TTA contributor Carolyn Thomas, the “Heart Sister”, on this bias. When asked, Dr. Keith Grimes, Babylon’s Clinical Innovation Director, replied: 

Ms. Thomas is a long-time Canadian writer and activist on women living with cardiac conditions, how they are often misdiagnosed (The Grinch’s Guide to Women’s Heart Attacks), and how women’s symptoms of cardiac disease differ.  Her blog is personal, interesting, and informative. (Do read her 22 December post on the Christmas truce of December 1914)

The CES circus opens its largest tent yet in health tech, AI, 5G, and more

CES kicked off today in Las Vegas (7 Jan), taking over the town in multiple locations, and will be making news through Friday 10 January. Like the circus, there are three health tech ‘rings’ at CES this year: Accessibility, Digital Health (Digital Health Summit), and Fitness and Wearables.

  • Digital Health Summit over the two days of its conference has shifted focus from the gadgets and wearables of their past conferences to prevention, health data, voice tech, machine learning, AI, bioelectronics (low current devices for treatment), behavioral health, and passive monitoring. There’s also a soupçon of star power with Katie Couric and Dr. Mehmet Oz, and some Grizzled Pioneer speakers and moderators such as Laurie Orlov, Chris Otto, Sean Slovenski, and Jane Sarasohn-Kahn. The Digital Health Summit is itself a Grizzled Pioneer as it goes back at CES to 2013–and my, how the players have changed. (Whatever happened to Sonny Vu?)
  • The Wearables Tech Summit is about the form and function of wearables, plus VR, AR (augmented reality), and of course Peleton.
  • Accessibility is sadly a mismatch (mish-mash?) of home networks, 5G, IoT, and a pitch competition.

What’s big? 5G, AI anything, and autonomous vehicles. What’s faded in the stretch? Robots.

Back to health tech…here’s some highlights:

  • Philips has several new or tweaked products at CES this year
    • A smart version of the Sonicare toothbrush that collects and shares real-time toothbrushing data. The BrushSmart program works with Delta Dental of California to analyze the data for insights into oral care. Users get benefits such as exclusive dental care offers, the Philips Sonicare ExpertClean toothbrush and free brush heads when they brush regularly.
    • The Avent mother and childcare app adds a new feature called Baby+ to track baby’s growth and receive ongoing advice specific to each stage of their baby’s development.
    • The SmartSleep system adds the SmartSleep Deep Sleep Headband 2 to actively improve deep sleep with features such as Fall Asleep Sounds, SmartAlarm, and the SleepMapper app. Release
  • OMRON is adding to its heart monitoring services with HeartGuide, the first wearable blood pressure monitor, and Complete, the first wearable that combines a blood pressure monitor and EKG. The company is also launching this summer a heart health coaching and incentive app, OMRON Connect 2.0, that states it changes behavior, combining its two existing apps HeartAdvisor and OMRON Connect. Release
  • Withings’ newest is the ScanWatch which will be able to take an ECG and monitor for sleep apnea. The ECG has three leads on the watch on the side of the watch’s bezel and an SpO2 sensor to monitor apneic episodes and oxygen saturation. FDA and CE approval are pending, and when released later this year will cost $249 to $299 depending on size.  ZDNet
  • ZDNet and TechRepublic have a running special feature on CES’ big trends for business. The annoyance factor you’ll have to endure is the running CBS commercials for various programs.
  • Mobihealthnews rounds up interesting devices and software such as the Nanit baby sleeping bag that monitors an infant’s breathing, Reliefband’s low current anti-nausea band, Samsung’s Ballie rolling robot plus collaborations with Kaiser Permanente (cardiac rehab) and IrisVision (low vision/macular degeneration assistance), and more.
  • John Lynn, another Grizzled Pioneer, in Healthcare IT Today typically diverts from the mainstream coverage in spotlighting smaller companies in atypical areas. Examples are France’s Adok smart projector with the potential to be used collaboratively in practice offices, new connected apps for Neofect’s smart gloves for arm/hand rehab, two air filters to monitor both inside and outside air quality (as a social determinant of health!), Xenoma’s wired pajamas for fall detection, the Mateo bath mat which can measure weight and body mass, and a smart diaper from Smardii.

More to come in the next days!

The last news roundup for 2019: ACA mandate unconstitutional, more $ for health research, PartnersHealthcare rebrands, Hackensack Meridian pays ransom, breaches>heart attack deaths, telepsychiatry merger, more

Well, it’s happy trails for 2019, until we meet again in 2020, paraphrasing a well-known Roy Rogers tune (Roy was a movie and TV cowboy singer in the US; his eponymous roast beef sandwich chain was an advertising client for one of this Editor’s first jobs). So we’ll round up the news as we and I trust most of our Readers will be off for most of the next two weeks to be observing the holidays with family, friends, de-stressing, defrosting, or attempting to catch up on work while it’s quiet before January Madness hits. It’s hard to believe that This Year of Grace is almost over.

Breaking News: In a somewhat split decision, the Fifth Circuit Court of Appeals ruled Wednesday evening that the (Un) Affordable Care Act’s (ACA)’s individual insurance mandate, compelling everyone to signup Or Else, is unconstitutional. Congress zeroed out the mandate charge in 2018’s tax law. A decision regarding severability of the mandate from the ACA law has been remanded to the District Court. FierceHealthcare, Healthcare Dive

Also here in the US, we have both an impeachment of a President (a House action which will fail utterly in the Senate, and regarded by ordinary folks as a political annoyance) and a Federal budget running out on Friday that hardly anyone notices because it’s been extended since October by two continuing resolutions (CRs). The new budget that has to be signed by President Trump on Friday is, according to this POLITICO report today, chock full of health research dollars for NIH, the All Of Us genomics initiative directed by Eric Dishman, the Patient-Centered Outcomes Research Institute, or PCORI. and more. There’s some coal dust in the stocking for the national patient identifier initiative. Separately, CMS’ Blue Button 2.0 is offline due to a bug.

PartnersHealthCare rebranding, investing $100 million. Now called Mass General Brigham to better align with its parents (Massachusetts General Hospital and Brigham and Women’s Hospital, the Boston Globe reported that MGB will be spending $100 million for the first 18 months of a digital health initiative to improve the patient experience and the efficiency of care. Much will be around patient convenience, for example the ability to book appointments online, communicate with care providers via video and text, and providing online access to their medical records through OpenNotes. Efficiency initiatives will be focused on analytics and AI to manage patient flow and track revenue. The strategic plan and rebranding is promoted as a five-year project. Partners has been a pioneer in the field, with other large health systems following such as Novant Health (NC) and Mount Sinai (NY) with innovative partnerships and investments. FierceHealthcare

Hackermania in Hackensack continues. TTA reported last week that local New Jersey media identified Hackensack Meridian Health had been the victim of a ransomware attack starting on 5 December. The health system confirmed on Friday that it was a ransomware attack and they paid an undisclosed sum covered by insurance. The attack forced them back to paper records in all 17 of their hospitals, so with the insurance–and against law enforcement advice–they decided to pay up. Asbury Park Press, Healthcare IT News,Health IT Securitywhich also mentions the November attack on Oahu (Hawaii) Cancer Center. International hacker and ransomware attacks on vulnerable healthcare organizations are the subject of these year-end roundups: CISOMag, Becker’s Hospital Review.

Cyberbreaches increase fatal heart attacks? A Vanderbilt University study has also traced an uptick in patient mortality after heart attack to delayed care due to breaches. A survey of 3,000 Medicare-certified hospitals, about 10 percent of which had experienced a data breach, led to 36 additional deaths per 10,000 heart attacks. Krebs On Security blog

Short takes: the Sutter Health-Aetna partnership is adding home visits via Heal and telemedicine via 98point6 in Sutter’s Northern California area….Medtronic snapped up eating behavioral health startup Klue to reinforce a hybrid closed loop system to simplify diabetes management….Telepsychiatry is still niche, but InSight Telepsychiatry and Regroup Telehealth, two of the larger companies in the field, agreed to combine to be the single largest with a few hundred centers. Both American Well and Teladoc are encroaching on this area. 

We wish our Readers a Festive Holiday Season, whether you celebrate the week of Hanukkah, Christmas, Kwanzaa, or

another holiday. Rest, reflect, and our best wishes for a happy, healthy New Year. We will be off except for perhaps an occasional article until after 2 January.

 

Babylon Health to enter US market with two large strategic partners: report

An apparently exclusive report in Mobihealthnews confirms the recent speculation that Babylon Health is entering the US market starting next month with its smartphone-based chat and triage service. Kurt Blasena, Babylon’s senior managing director of commercial strategy and revenue growth, said at the October Digital Health Innovation Summit in Boston that there are two current partners and a projected additional one to three more in 2020. The hints were that they were two “very large” strategic partners and one implementation will be for the state Medicaid market. The partners were not named, which leads this Editor to guess that the Medicaid implementation hasn’t been cleared with its state yet.

Babylon is experienced at international rollouts but not the US market. According to Mr. Blasena, they been busy localizing the service for the US by adapting the chatbot’s natural language processing system and hiring US-based staff. Part of the US difference is negotiating through how local healthcare is delivered, plus the thicket (this Editor is being kind) of Federal, state, and local regulations.

Right now their US operations are in a Prospect Heights, Brooklyn NYC apartment and in a WeWork in Austin, Texas. Mr. Blasena, according to his LinkedIn profile, is resident in San Diego.

Babylon Health has abundant cash on hand from a $550 million August Series C led by the Saudi Arabia Investment fund along with previous investors Kinnevik AB and Vostok plus new investor Munich Re. The stated intent was to expand into the US and other international markets in addition to presently being in Rwanda and Canada. Release  Stay tuned….

Calling all pitchers! Join us at Baker Botts on 5th February for a great evening

Baker Botts (UK) LLP, in association with the Digital Health & Care Alliance and Ascendant Corporate Finance, invites you to join them for the DHACA/HTF fourth annual pitch event on Wednesday 5 February 2020 at their London office close to Bank tube station. The evening will feature a number of healthtech/medtech sector companies presenting their business for five minutes each, followed by two minutes of Q&A from the audience and panel of funders. Prizes will be awarded by Baker Botts Partner, Neil Foster, to the most fundable company and best presentation (as voted on by the panel and audience). Attendance is free.

Stuart McKnight, Managing Director of Ascendant Corporate Finance, will be the keynote speaker and will discuss key venture investment trends in the digital health and medtech sectors including highlighting the biggest deals and the most active investors.

We are particularly keen to have the best companies pitching so if your company would like an opportunity to pitch at this event, please download a copy of the pitch form by clicking here and return it as soon as possible it to Abigail Brookes at abigail.brookes@bakerbotts.com and definitely by Friday 10 January 2020. This event is also a great opportunity to meet and network with like-minded people, organisations and investors.

In order to qualify to pitch, you should be a private company within the healthtech or medtech sector, seeking funding within the next year. Successful applicants will be informed no later than w/c 13 January 2020.

Finally just to add that the Digital Health and Care Alliance is also running our next DHACA Day at Baker Botts on 18th March – you can book here, now. The agenda is in active development so keep checking.

Appello acquires Medvivo Careline telecare in second major move this year (UK)

Appello announced another major acquisition to close out the year. Effective 5 December, they have acquired the home monitoring business of Medvivo, Medvivo Careline Ltd. Careline provides telecare alarm monitoring, ‘comfort calls’, and out-of-hours call monitoring services to at-home and at-risk customers. The company was formerly known as Magna Careline. Terms were not disclosed.

The Medvivo Careline acquisition increases Appello’s monitoring customers by about 20 percent to approximately 250,000. Appello’s earlier acquisition this year was of RedAssure Independent Living from Worthing Homes [TTA 17 Oct]. Appello is the UK’s largest telecare monitoring service.

Medvivo, in its statement, took some pains to position the sale as enabling the company to focus on their now core business of integrated urgent care services across Bath and NE Somerset, Swindon and Wiltshire. It demonstrates that the UK health tech area continues to consolidate, notably in the monitoring area.

The Careline website has already been cut over to Appello here. Appello release.

Outcome Health founders Shah, Agarwal plead not guilty in Federal court

As expected, the co-founders of in-office health information/advertising firm Outcome Health today (Monday) pleaded not guilty in the Northern District of Illinois Federal Court in Chicago. Of a total of 26 counts in the Federal indictment, Rishi Shah, the company’s former CEO, has been charged with six counts of mail fraud, 12 counts of wire fraud and two counts each of bank fraud and money laundering. Shradha Agarwal, the former president, has a somewhat lighter charge count of six counts of mail fraud, nine counts of wire fraud and two counts of bank fraud. Both were released on bond: $20 million for Mr. Shah, $10 million for Ms. Agarwal. Crain’s Chicago Business, may require free registration.

The charges relate to deception layered around company performance as detailed in our 3 December article–overstatement of advertising placement and delivery, manipulating third-party data on patient engagement on Outcome’s tablets, and fraudulently stating results to auditors. This was used to leverage nearly half a billion of a total $1 bn raise by major firms such as Goldman Sachs, Alphabet, and the Pritzker fund.

Last week, we covered the pleas of Ashik Desai, former EVP of business operations/chief growth officer (guilty) and Brad Purdy, former COO/CFO (not guilty). Mr. Desai, interrupted from his graduate studies at Wharton, is cooperating with the prosecutors; Mr. Purdy is blaming Mr. Desai.

A podcasted discussion on Crain’s Daily Gist has expressed the opinion that some in tech and healthcare, especially in Chicago, believe the list of charges and heavy penalties are ‘unusual’ and ‘extreme’ for a startup, considering that the revelations started four years ago, the accused stepped down two years ago. and restitution has been made to the defrauded companies. Moreover, the business and the model was not far fetched or pie-in-sky–it was a reasonable model, according to report John Pletz. The company continues in business, albeit scaled down. Mr. Pletz believes that the outcome of Outcome Health will be far more due diligence on investors’ part (accentuated by the WeWork/Softbank crash in the same car) on startups. “Failure is expected–fraud is not.” The resolution of the charges will also be far in the future, perhaps years, due to this being an extraordinarily complicated case. There will be further hearings in January, but do expect it to drag on. A mini-surprise in his commentary was stating that the analysts may turn their plea to guilty. 

News roundup: Proteus may be no-teous, DOJ leads on Google-Fitbit, HHS’ mud fight, Leeds leading in health tech, malware miseries, comings and goings

Proteus stumbles hard, cuts back. The original ‘tattle-tale pill’ company, Proteus Digital Health, plans to lay off 292 people in the San Francisco Bay Area and to permanently close its three Redwood City and Hayward locations, starting 18 January, according to notices sent to California state and local offices, including the state employment development department. It is unclear where Proteus will be located after the closures.

This followed after Proteus failed to launch a twelfth funding round of $100 million. According to reports, they furloughed most of their employees for two weeks in November and are reorganizing. This is after a substantial number of investors have put in about $487M in funding through a Series H (Crunchbase), including a game-changing investment by Novartis dating back to 2010.  Proteus achieved unicorn status about three years ago, but its high-priced pill tracking technology with a pill sensor tracked by a skin-worn monitor reporting into a smartphone has a built-in limited market to expensive medication. Otsuka Pharmaceutical in 2017 partnered with Proteus for an FDA-cleared digital medicine system called Abilify MyCite that basically put an off-patent behavioral drug back into a more expensive tracking methodology. But Proteus remains a great idea on tracking compliance in search of a real market, and may not have much of a future. San Jose Mercury News, CNBC

But ingestible detectable pills are still being tested. On Monday, as Proteus’ bad news broke, eTectRx announced its FDA clearance of the ID-Cap System and its testing at Brigham and Women’s Hospital and Fenway Health, focusing on HIV medication when used for treatment and prevention. Release, HISTalk

Department of Justice taking the lead on scrutinizing Google’s Fitbit acquisition. The Federal Trade Commission also sought jurisdiction over the transaction. According to the New York Post, “both agencies are concerned that a Google-owned Fitbit would give the search giant an even bigger window into people’s private data, including sensitive health information, sources said. Under the Hart-Scott-Rodino Act, all large mergers must file proposals with both the DOJ and the FTC, but only one antitrust agency reviews the merger.”

Coal from stockings being thrown about at HHS. According to POLITICO and the New York Times, the disagreements between Seema Verma, the head of the Centers for Medicare and Medicaid Services (CMS), and the Cabinet-level Secretary of Health and Human Services (HHS), Alex Azar, have boiled over, enough to have to be settled by the President’s acting chief of staff, Mick Mulvaney. According to the Times, both President Trump and VP Mike Pence have told them to find a way to work together. Both are administration appointees, but President Trump has not been reluctant to cut a mis-performing or overly contrary appointee loose. The latest salvo from those obviously not on Ms. Verma’s side was the revelation that she requested compensation for jewelry stolen on a business trip, contrary to government policy of course. She was compensated for other items which is standard. (Isn’t that what homeowners’ insurance is for? And what sensible person actually travels with valuable jewelry?) Under Ms. Verma, CMS has been quite progressive in developing new business models in Medicare fee-for-service, moving providers to two-sided risk, and innovating in both Medicare and Medicaid. It will either be settled, or one or both will be gone. Pass the popcorn.

Leeds picks up another health tech company. Mindwave Ventures is opening an office there, as well as appointing Dr Victoria Betton and Dr Janak Gunatilleke to the roles of chief innovation officer and chief operating officer. Mindwave develops technologies around digital products and services in healthcare and health research. Leeds reportedly is home to over 250 health tech companies and holds an annual Leeds Digital Festival in the spring [TTA 11 April].

Ransomware attack hits Hackensack Meridian. Systems were down for about a week. While this large New Jersey health system hasn’t admitted it, sources told the Asbury Park Press that it was ransomware. And if it’s not ransomware, its Emotet and Trickbot. Read ZDNet and be very apprehensive for 2020, indeed, as apparently healthcare is just one big target.

Comings and Goings: There may be some end of year bombshells, but after last week’s big news about John Halamka, it’s been fairly quiet. Paul Walker, whom this Editor knew at New York eHealth Collaborative, has joined CommonWell Health Alliance as executive director. Mr. Walker was most recently Philips Interoperability Solutions’ vice president of strategy and business development. CommonWell’s goal is improving healthcare interoperability and its services are used by more than 15,000 care provider sites nationwide. Blog release, Healthcare Innovation ….Dr. Jacqueline Shreibati, the chief medical officer for AliveCor, is joining Google Health in the health research area. Mum’s the word when it comes to Fitbit (see above). CNBC ….Peter Knight has pleaded guilty to falsifying educational credentials to gain his position as chief information and digital office at Oxford University Hospitals NHS Foundation Trust. He held that position from August 2016 until September 2018. BBC News

“There were practices going on there that were wrong”: Outcome Health’s Desai pleads guilty, cooperates with DOJ.

Perhaps the smartest move, under really, truly bad circumstances. Ashik Desai, the former executive vice president of business operations/chief growth officer of point-of-care health information/advertising company Outcome Health, ‘copped a plea’ this past Monday to felony wire fraud charges. According to the Chicago Tribune, Assistant US Attorney Matthew Madden told Judge Thomas M. Durkin of the Northern District of Illinois Federal Court in Chicago that Mr. Desai is cooperating with the investigation. “When I was at Outcome Health, there were practices going on there that were wrong,” Mr. Desai said, understatedly, during his court appearance Monday. “I participated in those practices that ended up defrauding Outcome’s customers.”

According to the article and other sources (WTTW), Mr. Desai is only 26; he started at Outcome as an intern when it was still Context Media and departed in 2017. With continued cooperation, the prosecution is recommending only 10 years in prison, half of what a conviction might bring at the statutory maximum of 20 years. He was released on bond and surrendered his passport.

The multiple and most serious charges in the indictment are for the two founders, Rishi Shah and Shradha Agarwal, both of Chicago, and Brad Purdy, their former COO and CFO, all in their early 30s. These are criminal charges of fraud relating to their capital raises of about $1 bn during 2011 into 2017, deceiving their investors, lenders, and their own auditors for profit and misrepresenting to advertisers their delivery performance.

On Monday 9 December, Mr. Purdy pleaded not guilty to six counts each of mail fraud and wire fraud, two counts of bank fraud and one count of making false statements to a financial institution. His counsel, not unexpectedly but amusingly for those of us who are experienced in the corporate pecking order and what exactly a CFO is responsible for, stated: “Ashik Desai and several of his underlings committed a massive fraud. The evidence will show Brad Purdy was not part of that fraud,” he said. “Evidence is going to show Ashik Desai repeatedly lied to Brad and others to conceal his fraud from people like Brad.” Mr. Purdy also was released on bond and surrendered his passport.

Two of those underlings, Kathryn Choi and Oliver Han, pleaded not guilty on Thursday 5 December to their respective charges of wire fraud. They face five years maximum if convicted. In this Editor’s opinion, they were indicted to bring forth additional information to buttress the major charges on Mr. Desai and the three top executives. As ‘small fry’ with at most a little profit sharing, they are sideshows–easy to pressure. They may truly spill the beans if they and their counsel sense that things are going badly–if they have any more beans to spill. 

Mr. Shah and Ms. Agarwal are scheduled to appear in court next Monday, 16 December. They have previously stated that they will plead not guilty (FiercePharma). Flight risk is undoubtedly a concern for the prosecution regarding Ms. Agarwal. According to this Refinery29  interview from 2017, Ms. Agarwal is an Indian citizen and, while a long-time legal resident, not a naturalized American. Mr. Shah was born in the US. This cautionary Tale of the Unicorn, told in the Chicago Way, warns us all to be careful of what we see, are asked to do, sign on to–and sign off on.