Thursday legal news roundup: Oscar Health accused of IPO securities fraud; Venezuelan cardiologist moonlights as cybercriminal, faces slammer; Change Healthcare sues former employee now at Olive AI

May 19, 2022 | by

To use a cliché, what a difference a year makes. In March 2021, insurtech Oscar Health successfully raised $1,4 billion in its IPO with shares at $39. Heady times didn’t last long, with shares tumbling to $5.67 as of this writing. Now the shareholder lawsuits have begun, with the complaint stating that negative effects of COVID-19 on Oscar’s business were not disclosed, specifically the growing cost of the pandemic on testing and treatment costs they would cover, and “Oscar would be negatively impacted by an unfavorable prior year Risk Adjustment Data Validation (RADV) result relating to 2019 and 2020 [and] that Oscar was on track to be negatively impacted by significant SEP membership growth”. The lack of forward-looking disclosure at an IPO is a violation of the Securities Act. The initial lawsuit has been filed in the US District Court for the Southern District Court of New York by shareholder Lorin Carpenter. Multiple law firms have invited shareholders to join in the suit — example from PR Newswire. Also named in the suit are Oscar Health co-founders CEO Mario Schlosser and Vice Chairman Joshua Kushner, plus several investment banks.

Oscar started the year with a Q1 loss of $0.36 per share versus an estimate of a loss of $0.40, but this is less than half of last year’s loss of $0.98 per share. They are also exiting the Arkansas and Colorado markets in 2023. Healthcare Dive

Cardiologist, master cybercriminal, a new Dr. Mabuse? Accused of the creation, use, and sale of ransomware is one Venezuelan doctor and practicing cardiologist, Moises Luis Zagala Gonzalez, a dual citizen of Venezuela and France. The charges by the Department of Justice (DOJ) in the Eastern District of New York also detail his “extensive support of, and profit sharing arrangements with, the cybercriminals who used his ransomware programs.” SaaS can’t hold a candle to the RaaS–ransomware-as-a-service–operation he created to sell what he dubbed ‘Thanos,’ allegedly named after a fictional cartoon villain responsible for destroying half of all life in the universe. Turns out that Iranian state-sponsored hackers and fellow ransomware designers really liked it too. If convicted, he faces 10 years in Club Fed–five years for attempted computer intrusion, and five years for conspiracy to commit computer intrusions. Designing criminal software really does test the limits of moonlighting. DOJ release, TechCrunch

Change Healthcare sues former employee at competitor Olive AI. While their merger with UnitedHealthcare is tied up in the US District Court in DC [TTA 23 Mar], Change Healthcare is not letting any courtroom grass grow under their feet. They are suing a former employee, Michael Feeney, with violating the non-compete clauses of his employment contract. The suit was filed in Tennessee Chancery Court, its HQ state. Mr. Feeney has countersued in his state of residence, stating that the non-compete violates Massachusetts law. He was VP, strategy and operations at Change handling physician revenue cycle management. At Olive AI, he is currently SVP, provider market operations. Information is a bit scarce on this and the free article this Editor has found reads machine-translated. If you have access to the Nashville Post or Modern Healthcare it’s probably more decipherable.

As to the lawsuit affecting non-competes due to the tight labor market–don’t count on it. It’s a conflict between the state the company is in enforcing non-competes, versus a state which restricts (or negates) them that is the former employee’s state of residence and work. What wins out will be the interesting part and affect many of us in the US.

Cerner EHR implementation with both DOD and VA running into interoperability, other problems: Federal audit

May 18, 2022 | by

DOD, VA Cerner implementations stumbling on their raison d’être–interoperability. Those of us with pre-Covid memories recall that the Department of Defense and the Department of Veterans Affairs had separate and ancient EHRs that didn’t speak well with each other. Going back to the Federal FY 2008 National Defense Authorization Act (NDAA), both DOD and VA had to become interoperable. Thus Cerner became the one-stop-shopping solution for both, after attempting to modernize their warhorse systems (AHLTA and VistA, respectively). DOD went first in 2015 and rolled it out through the Military Health System (MHS). The VA awarded it in 2018 and started to roll it out in 2020. (No one said that the US government works quickly.) This would also include the US Coast Guard, which is under the Department of Homeland Security.

Earlier this month, a joint VA and DOD audit by their respective Inspectors General (IG) found that both departments, plus the FEHRM (Federal Electronic Health Record Modernization) Program Office established by DOD and VA to oversee the process, as well as the joint health information exchange (HIE) established in 2020 by the FEHR, did not ensure interoperability between their systems. Specifically, they did not:

  • Consistently migrate patient healthcare information from the legacy electronic health care systems into Cerner to create a single, complete patient EHR
  • Develop interfaces from all medical devices to Cerner Millennium so that patient healthcare information will automatically upload to the system from those devices
  • Ensure that users were granted access to Cerner Millennium for only the information needed to perform their duties

Most of the audit pointed responsibility at the FEHRM for not taking an active role in the program, instead acting as a facilitator. The IGs recommended a review by DOD and VA of FEHRM’s procedures, develop processes and procedures to ‘comply with its charter’ and the recommendations of the audit, as well as the NDAA.

VA’s problems with the first implementation at Mann-Grandstaff VA Medical Center in Spokane, Washington in late 2020 blew up embarrassingly last year before the Senate Veterans Affairs Committee [TTA 28 July 2021]. GAO further barked at them in a ‘watchdog’ report published in January. It followed VA’s own “mea culpa/go forth and sin no more” reorganization plan in December. Healthcare IT News, Healthcare Dive

Perspectives: Where next for technology-enabled care after 2025?

May 17, 2022 | by | 1 Comment

TTA has an open invitation to industry leaders to contribute to our Perspectives non-promotional opinion area. Today, we have a contribution from Adrian Scaife, Global Product Manager at Tunstall Healthcare Group. Can telecare save the UK more than £14bn over the next 10 years, as FarrPoint projected–or is that an underestimate based on the past? Can we do better than this?

Interested contributors should contact Editor Donna. (We like pictures and graphs too)

FarrPoint recently published a report showing how extending telecare services to more people could save the UK more than £14bn over the next decade. While £14bn is no small sum, it is based on the evidence of hindsight and importantly through current models of reactive service provision.

In a LinkedIn post I boldly suggested that this should be an underestimate of the benefits that Technology-Enabled Care, associated with a wider transformation of care, could deliver over the next decade.

With increasing demand for care and support combined with finite resources for provision, the statutory care system is facing a perfect storm. The cracks have been appearing for some time but have become apparent to a much wider audience during the Covid pandemic. To be blunt, the current model of care provision is unsustainable in the medium term. (And many would argue today!)

By moving to more preventative, personalised, joined up and proactive service models, supported by communities as well as statutory services, the benefits are potentially much bigger across the whole care ecosystem. (The care ecosystem includes health care, social care, housing, the third sector and, the largest group of all, informal family carers.)

Source: Social Care Future  

This new vision is being discussed by many people and organisations across the care ecosystem and has been referenced, in whole or part, in a host of reports over the last couple of years. What is most encouraging is the consensus around the direction of travel.

The real challenge is the transformation of services from purely reactive, one size fits all, to a preventative and person-centred approach across housing, social care, health care, and the third sector, supported by families, friends, and communities, while still retaining a reactive safety net.

There are important questions around the how? Enabling and underpinning these new service models will be technology using data, information, and actionable insight. New technology has already created dramatic changes in many other sectors across the UK. There is a huge demand for a new set of tools that can, for example, flag everything is OK today or when an early intervention may be required. These tools will work on an individual personalised basis and all the way up to the population level. Joining up data and using insight provided by analytics will enable new high value timely personalised interventions and provide improved outcomes for all stakeholders. 

The good news is that there are a huge variety of companies already working on these challenges from start-ups to SME’s, larger companies, and even global players. The real challenge will be around people (e.g., new working practices) and processes (e.g., new models of commissioning), and of course, culture. Part of the new story will be about enabling working across all stakeholder groups and indeed recognising families as equal partners.

Finally, this is not a transformation that will take place overnight or even within a year but a journey that will take five or more years before it reaches any type of maturity. The green shoots already exist if you look for them, they may be a little tender and frost sensitive, but they are growing! It reminds me of the early telecare journey in the late 90s and early 00s when many could not see how it would scale to where we are today!

While £14bn from traditional reactive services would be welcome, the real opportunity for improved outcomes for all stakeholders across the care system is much greater and not just in an economic context. Personally, I am enormously excited to be playing a part in enabling those tender shoots to grow, thrive, and become the norm over the next few years.

Further reading:

News roundup: telehealth claims drop 9% in February; Amwell’s good news, bad news Q1; tech-enabled practice Crossover Health growing; NowRx and Hyundai test semi-self-driving delivery

May 17, 2022 | by

FAIR Health’s February monthly tracker is pointing downward again. After a brief post-holiday rise to 5.4% of claims in January, it dropped to 4.9% in February, a 9% drop. Mental health claims seized the lead again by a country mile at 64.2% of claims. COVID-19 fell off the list of top 5 claim areas, though only 3.4% in January compared to 58.9% for mental health. This month lists categories of specialists delivering telehealth, and social workers topped the list at over 31%, which fits the telemental health picture. 

Amwell’s shaky opening to 2022. It should not come as any surprise to our Readers that Amwell, the Avis to Teladoc’s Hertz, didn’t have a good Q1. Most of their key indicators around total revenue, providers, and visits grew smartly. Unfortunately, their losses did too. Comparisons are to Q1 2021 unless noted:

Revenue grew to $64.2 million [$57.6 million], up 11.5%
Gross margin: 42.8% [38.0%], up 12.6%
Total active providers grew 12% from Q4 to approximately 102,000 [91,000] Total visits also grew 20% from Q4 to 1.8 million [1.5 million]

But there’s no turning the corner on losses this quarter, despite Converge, their unified platform, shifting over telehealth visits as planned, and adding SilverCloud, Conversa, and specialty telehealth with musculoskeletal (MSK) and dermatology programs to the totals.

Net loss was ($70.3) million, compared to ($39.8) million, an increase of 77%
Adjusted EBITDA was ($47.1) million, compared to ($26.4) million, an increase of 78%

Amwell’s projected 2022 is the same–growth mixed with financial losses: revenue between $275 and $285 million, adjusted EBITDA between ($200) million and ($190) million.

Inquiring investors may very well ask when Teladoc and Amwell, now smaller by a factor of just over 9, will ever be profitable. Mr. Market had its say over the past year, from a high of $14.26 in early June 2021, to today’s close of $3.09, an enterprise valuation loss of $11.17 or 78%, just a little better than Teladoc’s 81% in the same period. It will likely be no time soon. But the shares may be an excellent opportunity at a low cost. Yahoo Finance, FierceHealthcare, Becker’s 

Crossover Health, a hybrid virtual/in-person primary care practice group, announced that they would be opening new centers in Seattle, Austin, and another one in New York this year. Their virtual care operates in all states, while their in-person footprint consists of 41 health centers in 11 states which are generally about 5,000 square feet. They have 33 on-site clinics for employers, which are a combination of exclusive to one company and shared, and in total cover 400,000 eligible employees and dependents including for 115,000 Amazon employees and dependents. In addition to corporate clinics, Crossover offers individual membership plans in a concierge, under one roof type model. FierceHealthcare

In another tech area, med delivery company NowRx is partnering with Hyundai for a limited test of their self-driving cars in the LA area. Hyundai will be using slightly modified Hyundai Ioniq 5 electric vehicles with some autonomous capability, but using a driver. The purpose of the test is to simulate and gather data on autonomous vehicle delivery, such as delivery statistics, dispatch and customer interactions, and feedback. NowRx offers free same-day prescription delivery in the San Francisco Bay area, Orange County, and Los Angeles areas. FierceHealthcare

Alertacall receives Queen’s Award For Enterprise: Innovation

May 12, 2022 | by

One of the items that whizzed by this Editor while she was in Pepper the Robot mode was the highly prestigious Queen’s Award For Enterprise: Innovation, awarded to one of the pioneering companies in UK telecare, Alertacall Ltd.  Their CEO and founder, James Batchelor, is an old friend of TTA from early days with Editor Emeritus Steve. (Editor Donna hadn’t even thought of marketing health tech at that time.)

Alertacall provides tablet touchscreen connectivity to the housing, care markets, and personal markets, from OKEachDay checkins to smart home systems controlled by the touchscreen.

Alertacall was founded in 2004 by James, the original inventor of the “I am okay” button. Like many of us in those days, he had a personal inspiration for being engaged with creating a better way to support older adults in their home–Eveline, his own staunchly independent grandmother. She was, in James’ words “a shop keeper for much of her life, and a B+B operator up until her early eighties. After the death of 2 husbands – the first of whom was detained as a Prisoner of War in WW2, she learned to drive in her late 50s, travelled the world on her own and was an inspiration to many with her grit and determination to live on her own, and under her own terms for as long as possible.”

Also, James’ gracious note from LinkedIn, posting on the Queen’s Award:

We won this Queen’s Award because of the great technology we have created for sheltered and supported housing to help independent older people, women fleeing domestic violence and people who are disabled – to feel safe, connected and informed.

This award really is testimony to that innovation, but more so to the incredible team I have the joy of working with each day. This is an award for them and their phenomenal care of our customers.

In July I’ll be attending a winners reception at Buckingham Palace with HRH The Prince Of Wales – on behalf of those team members. My grandma, Eveline, who was the inspiration for Alertacall would have been pretty excited by that I think.

A lot of you run your own businesses, and some of you might have started those from scratch. So you’ll understand that external, independent validation is rare, and a great feeling when it comes.

Many of you have also been a positive part of our journey – and if so thank you, sincerely.

Dame Esther Rantzen DBE, the well-known British journalist and TV presenter of That’s Life! on the BBC for 21 years, who was instrumental in the founding and popularization of both ChildLine and The Silver Line helplines, is a supporter of Alertacall. Her statement is attached here.

Our warmest congratulations to James and the Alertacall team!

Alertacall announcement.

CMS telehealth pandemic waivers boosted usage among disadvantaged, urban patients

May 11, 2022 | by

Broadening telehealth usage areas when in-person visits are restricted boosts–telehealth usage. Beyond the tautology, the surprising finding here is that it benefited two groups that telehealth hasn’t done well with prior to the pandemic: those living in the most disadvantaged neighborhoods and in metropolitan areas. It also increased usage among women and those of Asian and Hispanic heritage.

The Johns Hopkins study, published in Health Affairs (abstract only, restricted access), reviewed 30 million Medicare fee-for-service claims to quantify outpatient telemedicine use before and after the Medicare telemedicine coverage waiver that took effect on 6 March 2020. Prior to the waiver, Medicare beneficiaries were covered very narrowly for telehealth, in designated rural areas and specific designated facilities, using synchronous audio/video only–a total of 0.42% with one outpatient visit. After the waiver, this grew to 9.97% of patients with at least one outpatient telemedicine visit. Medicare had previously reported that Medicare beneficiary telehealth usage had grown to over 40% during the pandemic.

According to the study abstract, “After adjustment [for demographic variables], our data suggest that the coverage waiver increased access to telemedicine for all Medicare populations, including people residing in the most disadvantaged neighborhoods, although the odds of use were persistently lower with increasing age.” Other studies had found disparities based on demographics such as race, income, and residential location, with higher status pointing to greater telehealth usage, but this study indicates that the loosening of restrictions did not contribute further to these disparities. Thus the logic points to more availability (access) powering increased usage, or at least the odds of use, in this disadvantaged/minority population. 

It is certainly an argument for retaining most of the telehealth waivers–which will require Federal legislation for Medicare after the 90-day Public Health Emergency renewal expires in mid-July, if not renewed. Healthcare Finance, FierceHealthcare

DOJ investigates telemental Cerebral on over-prescribing of controlled medications

May 10, 2022 | by

DOJ dropped an anvil on Cerebral’s head Friday night. Last week’s reports on the Drug Enforcement Agency (DEA) investigation of telemental health provider Cerebral were confirmed on Friday with the official notification that the US Attorney’s Office for the Eastern District of New York had subpoenaed the company as part of their investigation into possible violations of the Controlled Substances Act. According to the Wall Street Journal, the subpoena was issued to Cerebral Medical Group, the corporation it uses to contract with clinicians and provide healthcare services. The company is fully cooperating with the investigation by the Department of Justice, which includes turning over records pertaining to their prescribing of controlled substances such as Adderall and Xanax. This has been reported by FierceHealthcare which is citing (paywalled) Insider.

Last week, Cerebral announced that it would stop prescribing controlled substance prescriptions for new ADHD patients as of 9 May. However, they would continue prescribing controlled substances for other mental health conditions, according to a memo from their chief medical officer to their clinician network.

Cerebral’s Saturday statement in response to the subpoena maintains (from FierceHealthcare):

“To be clear, at this time, no regulatory or law enforcement authority has accused Cerebral of violating any law”

and

“Cerebral has dedicated significant time, energy, and resources to ensuring that its policies and procedures regarding the prescription of controlled substances and other medications both are medically appropriate and comply with all applicable state and federal law,” the statement also said. “As a responsible company, Cerebral is continuously improving its systems and practices. The foundation of this company is built on evidence-based, ethical, and compliant practices so that our patients can receive the highest quality of care and achieve the best clinical outcomes.”

The company has done well with the increased demand for mental health services provided via telehealth including remote evaluating and prescribing. In December, their $300 million Series C raise boosted their valuation past $4.8 billion.

Darkening this rosy picture is, as TTA noted last week, that a former VP of product and engineering, Matthew Truebe, has sued Cerebral for wrongful dismissal. According to him, the company put growth before patient safety, including overprescribing medications for ADHD. Other reports indicate that the DEA interviewed other former Cerebral nurse practitioners who felt pressured to prescribe ADHD medication after a short video call. The Verge

Cerebral has also gained notoriety for dodgy advertising claims pertaining to ADHD and other conditions. In January, advertising on TikTok and Instagram was pulled for claims that obesity is “five times more prevalent” among adults with ADHD, and stated that getting treatment for the mental health disorder could help patients “stop overeating.” These followed inquiries by Forbes and NBC News. Also pulled was their Facebook advertising around prescribing Type 2 diabetes medications, GLP-1 agonists, as a “wonder drug” for weight loss. 

Will this put a damper on the burgeoning area of telemental health and remote prescribing? Stay tuned. Also Becker’s. 

Weekend news and deals roundup: Allscripts closes sale of hospital EHRs, closing out CEO; DEA scrutiny of Cerebral’s ADHD telehealth prescribing; more telehealth fraud; Noom lays off; fundings; and why healthcare AI is only ML

May 6, 2022 | by

That was fast. Allscripts closed its $700 million March sale of its hospital and large physician practice EHRs to Constellation Software Inc. through N. Harris Group. The Allscripts EHRs in the transaction are Sunrise, Paragon, Allscripts TouchWorks, Allscripts Opal, and dbMotion. They reported their Q1 results today. According to HISTalk earlier this week, CEO Paul Black will be stepping down, with President Rick Poulton stepping in immediately. Update–this was confirmed on their investor call Thursday and the transition is effective immediately. No reasons given, but there were no effusive farewells.  Healthcare Dive

A damper on telemental health? Online mental health provider Cerebral, which provides talk therapy, audio/video telehealth, and prescriptions for anxiety, depression, insomnia, ADHD, and other conditions, is finding itself under scrutiny. This week, its main mail fulfillment pharmacy partner, Truepill, stopped filling prescriptions for Adderall, Ritalin, Vyvanse, and other controlled Schedule 2 pharmaceuticals. Cerebral is redirecting current patients with these prescriptions to local pharmacies and as of 9 May, will not prescribe them to new ADHD patients.

Based on reports, the Drug Enforcement Agency (DEA) is looking at Cerebral in particular as part of a wider scrutiny of telehealth providers and pharmacies filling telehealth-generated prescriptions due to allegations of overprescribing. It also didn’t help that a former VP of product and engineering plus whistleblower claims in a wrongful dismissal lawsuit that Cerebral execs wanted to prescribe ADHD drugs to 100% of diagnosed patients as a retention strategy. Bloomberg Law. Unfortunately, Insider is paywalled but you may be able to see a report in the Wall Street Journal. Becker’s Hospital Review, FierceHealthcare

Also troubling telehealth is recurrent fraud, waste, and abuse cases involving Medicare and Medicaid. Back in 2020 the National Healthcare Fraud Takedown took down over 80 defendants in telemedicine fraud [TTA 2 Oct 20, 30 Jan 21]. The Eastern District of NY based in Brooklyn has indicted another physician, an orthopedic surgeon, in a $10 million fraud involving durable medical equipment (DME). In exchange for kickbacks from several telemedicine companies, he allegedly prescribed without examination and with only a cursory telephone conversation DME such as orthotic braces. DOJ release

Some fundings and a sale of note–and a big layoff at a well-known digital health leader:

  • Blue Spark Technologies, an RPM company with a patented Class II real-time, disposable, continuous monitoring body temperature patch good for 72 hours, TempTraq, raised a $40 million intellectual property-based debt solution (??) to fund growth led by GT Investment Partners (“Ghost Tree Partners”) with support from Aon plc (NYSE: AON)  Release
  • Specialty EHR Netsmart acquired TheraOffice, a practice management platform for physical therapy and rehabilitation practices which will be added to its existing CareFabric platform. Neither terms nor management transitions were disclosed in the release.
  • ‘White label’ telehealth/virtual health provider Bluestream Health is implementing its systems in Mankato Clinic, with 13 facilities across southern Minnesota. It’s a rarity–physician-owned and led–and in business since 1916. This also fits into a new telehealth trend–providers working with ‘white label’ telehealth companies and not with the Big 5. Release
  • Ubiquitously advertised (in US) weight-loss app Noom is laying off a substantial number of employees–180 coaches plus 315 more employees. Reportedly they are pivoting away from on-demand text chat to scheduled sessions that don’t require so many people. While profitable in 2020 ($400 million) and with Series F funding of over $500 million in 2021, it’s come under criticism that while its pitch heavily features easy behavioral change achieved through cognitive behavioral therapy (CBT), their real core of weight loss is severe calorie restriction. Engadget
  • Element5, an administrative software provider for post-acute facilities, raised a $30 million Series B from Insight Partners. They claim that their software is AI and RPA (robotic process automation) based. Release, Mobihealthnews

And speaking of the AI pitch in healthcare, a VC named Aike Ho explains why she doesn’t invest in healthcare AI companies because there’s no such thing in healthcare–it’s just machine learning. On that, Ms. Ho and your Editor agree. She also makes the point that the market they address is ancillary and not core services, plus they have difficulty clinching the sale because they don’t relate well to achieving or can’t prove at this stage improved clinical outcomes. Ms. Ho’s looooong series of Tweets is succinctly summarized over at HISTalk (scroll down halfway).

ATA conference roundup: a new board chair, a digital app review pilot, and company announcements

May 5, 2022 | by

The American Telemedicine Association (ATA) 2022 conference and expo is a wrap, after starting on Sunday through to Tuesday. While your Editor could not attend due to other commitments that precluded a trip to Boston, one industry insider who visited the expo–his first in-person event in two years–reported that after a slow start on Sunday, the floor busied up on Monday. Business was being done, finally and not virtually. What were the busy booths and what was ‘hot’? Companies in the areas of telemental health and remote patient monitoring (RPM). (Did you attend? What was your impression? Leave comments below.)

ATA had two major announcements of its own during the conference:

  • Kristi Henderson, DNP, NP-C, FAAN, FAEN, has been named as Chair of the ATA Board for a two-year term. Henderson is the CEO of Optum Everycare, where she leads a team building digital and virtual health solutions to improve quality outcomes and experiences for patients and providers. She has served on the board since December 2020. As Chair, she is succeeding Joseph Kvedar, MD and Professor at Harvard Medical School among other positions. Dr. Kvedar will become Immediate Past Chair and Senior Advisor to the ATA. Announcement
  • ATA, the American College of Physicians (ACP), and ORCHA, the Organization for the Review of Care and Health Applications,  announced a framework for the assessment of professional and consumer digital health technologies, including mobile apps and web-based tools. ACP and ORCHA, which has experience assessing compiling libraries of apps, will be piloting a test of the framework against a database of digital health tools. The goal of the pilot is to “determine how the library can be useful to physicians in recommending high-value digital health tools to their patients, and what other barriers to wider adoption of digital health tools may exist.” Announcement

Quite a few company announcements were made during ATA–a selection:

  • Johns Hopkins Bloomberg School of Public Health highlighted the publication of a major scientific study (full text) documenting telehealth outcomes in JAMA Network Open. This Johns Hopkins-based research was partially supported by the ATA. The study followed a national cohort of 40.7 million commercially insured persons from July to December 2021 and included 21 chronic and non-chronic conditions. Fourteen-day follow-ups for persons with an initial telehealth visit were compared to persons receiving in-person care. On average, patients participating in an initial telehealth consult for a new health condition did not require more unplanned hospitalizations or follow-up ED visits within 14 days of their initial consult compared with patients making an initial in-person visit. The exception was respiratory conditions. Release
  • BioIntelliSense, which last year scored $45 million in funding for its on-body sensors, announced two major collaborations for remote patient monitoring (RPM) with UC Davis Health and Houston Methodist.
  • CDW Healthcare and Caregility announced a strategic partnership to expand their virtual care capabilities, including Caregility’s new Inpatient Virtual Engagement solution (IVE), also launched during ATA. 
  • Connect America, which snapped up Lifeline last year, launched Connect America Home, a single health and safety platform connecting (PERS) and remote patient monitoring (RPM) with supporting services, including AI-enabled virtual health assistance and Social Determinants of Health (SDoH) support, along with analytics. Release.
  • AliveCor announced the launch of KardiaComplete, a comprehensive heart health enterprise solution designed to drive improved health outcomes and reduce the cost of cardiac care. The service will be available through self-insured employers, health insurance plans, and health systems to those diagnosed with hypertension and arrhythmias, like atrial fibrillation.
  • Withings launched Withings RPM, the company’s most advanced remote patient monitoring solution designed to enhance the patient experience. It is a single platform that enables clinicians to order and send Withings RPM devices, manage data from multiple patients with automated alerts and reminders, communicate via SMS, phone, and in-app video calls, billing, sleep tracking, and more. 

TTA was a media partner of ATA 2022.

Some thoughts on Teladoc and the Week That Was in telehealth

May 4, 2022 | by

Yes, your Editor has, for the past few weeks, felt like Pepper the Robot, moving at two speeds–crazed and off. (‘Off ‘ to the left. Now cart me off.) Home renovations, with strangers tramping through your abode, noise, dust, and the corresponding moving of furniture, packing and unpacking, pre- and post-cleaning, then trying to put things right and get your life back will do that. Add to that an unexpected gushy kitchen sink that took three ‘fixes’ to get actually fixed. Then there were technical problems with our email sender that Editor and Administrator Emeritus Steve had to work through. One becomes more appreciative of order, routine, and Peace and Quiet.

Speaking of Peace and Quiet, there is little to be found in telehealth. Instead, there is a lot of Feeling Off. The Big News of late last week, of course, was Teladoc’s troubles. In the words of Seeking Alpha, they had one horrific quarter. The horror show started with writing off the Livongo acquisition– a noncash goodwill impairment charge of $6.6 billion, for a massive loss of $41.11 per share for a total of $41.58 per share. To compare, last year’s Q1 loss was $1.31 per share. While revenues were up almost to projection (25%), it was still a $3 million miss and in context, it was the cherry on a very nasty sundae. After rosy projections last year, Teladoc lowered their 2022 revenue guidance from $2.6 billion to $2.45 billion.  

Moving forward from the questionable Livongo acquisition at the absolute peak of the market, CEO Jason Gorevic admitted some hard truths to investors that deepened the hole: much more competition, particularly in telemental health; the rising cost of paid search advertising and the keywords driving towards direct-to-consumer telehealth driving up the cost of acquisition; and difficulty closing B2B deals. This creates, in the terms of analyst SVB Leerink’s Stephanie Davis quoted in FierceHealthIT, “a direct-to-consumer air pocket that business-to-business sales (and their inherently longer cycles) are too slow to fill” at least, in her view, until the end of the year.

Teladoc’s difficulties, as this Editor has noted, started after a peak in early 2021 as the pandemic started its protracted wind-down and telehealth volumes plunged to well below 5% of claims as practices reopened. The stock value is down over 90% from last February, not helped by a volatile market triggered by war and inflation. Similar difficulties are plaguing Amwell (down 92% since February 2021), Talkspace (down to a paltry 16 cents and in court for misleading investors), SOC Telemed (taken private at a 70% drop in value, TTA 8 Feb), and other health tech companies. For our Readers, this is no surprise: the telehealth bender is ovah.

One industry leader in a post-ATA conversation with this Editor cited a less obvious factor–that hospitals and other health providers are now putting together their own telehealth/triage packages tied into population health and case management software, with and without ‘white label’ providers such as Bluestream Health and Zipnosis (acquired by insurtech/payvider Bright Health a year ago). Teladoc is a late entry to this provider/payer market with Primary360, where they also compete with Babylon Health [TTA 7 Oct 22]. And health retailers have joined the primary care telehealth game. Walmart last week announced a virtual health diabetes care program for employers through their recently acquired MeMD.

Big Telehealth’s troubles may depress investment in related earlier stage companies–or help those in niches such as telemental and population health, or remote patient monitoring (RPM) systems that have telehealth features (e.g. TytoCare), as VC investment seeks a brighter home. Right now, this Editor’s Magic 8 Ball is saying ‘outlook, cloudy”. 

Tunstall Healthcare announces new group CEO, Emil Peters

April 11, 2022 | by

The Guard Changeth. Emil Peters will be joining Tunstall Healthcare as group CEO, effective 16 May. Mr. Peters is departing Cerner Corporation, having come up through the ranks over 25 years through international directorates and markets, leaving only briefly for a seven-month sojourn at TriZetto in 2012. For the past five years, he has been president of Cerner Global, managing all territories outside of the US from London, and previously general manager of Cerner Europe and Latin America. With the acquisition of Cerner by Oracle pending the usual approvals and then the usual restructuring, this is likely to be a fortuitous move on both sides.

Mr. Peters will succeed Gordon Sutherland, who held the position from September 2016 and oversaw many changes, but most significantly the change of ownership and company restructuring finalized in April 2020 from Charterhouse Capital Partners to a lender group led by Barings and M&G [TTA 10 April 2020 and 30 October 2020].

Peter Nicklin, chairman of the Tunstall board, who himself joined the company in March 2021, commented: “As we move forward past our 65th year anniversary and continue to expand our digital technology capabilities, I am thrilled to have Peters leading the charge. His leadership experience is perfectly placed to empower the Tunstall team to deliver products and services that, ultimately, save and prolong lives.”

This is the third high-profile change at Tunstall in the past year. In August, Gary Steen came from TalkTalk as Group Chief Technology Officer (CTO) Yorkshire Times.

LaingBuissonNews, HealthInvestorUK, Tunstall release   And a hat tip to a UK Reader who wishes to remain anonymous.

Weekend roundup: telehealth claims ticked up again in January, Walmart opens Florida health ‘superstores’, Blue Shield California partners with Walgreens’ Health Corners

April 8, 2022 | by

Telehealth now above 5% of January claims. Perhaps Omicron, winter weather, or the post-holiday blues, but telehealth visits after a long drop have risen to 5.4% of January medical claim lines. It’s also the third month in a row of increase: November was 4.4%, up from October’s 4.1%; December was 4.9%.

As a percent of the total, claims increased in November and December for acute respiratory and Covid-19, but leveled off in January. The numbers remained in single digits compared to the leading diagnosis code group, mental health conditions, which rose in January:

MonthMental healthAcute respiratoryCovid-19
January 202258.93.43.4
December 202155.06.04.8
November 202162.24.51.4

February and March claims will be the proof, but telehealth is leveling off to a steady 4-5% range of claims with seasonal rises, barring any mass infectious diseases. The FAIR Health monthly map also enables drill-down by region. Healthcare Dive

Walmart Health ‘superstores’ open in Florida, finally. The concept, which had gradually spread to 20 locations in Arkansas, Georgia, and Illinois starting in 2019, now has two locations in the Jacksonville area. Three additional locations will be opening by June in the Orlando and Tampa area. Openings were delayed from 2021 so that Walmart could debut their Epic EHR and patient portal in those locations. Plans for expansion in Florida, filled with areas with aging populations, have been hinted at but coyly not confirmed by Dr. David Carmouche, senior vice president of Omnichannel Care Offerings.

After a few false starts and retrenching, Walmart is leveraging its strong physical point in delivering health–retail supercenters–against competitors such as CVS, Walgreens, and Amazon. The centers provide primary and urgent care, labs, X-rays and diagnostics, dental, optical, hearing and behavioral health and counseling for a checkup priced around $90, with most under contract with payers. Walmart has not announced expansion beyond Florida or in current states, but prior statements have indicated their desire to open Walmart Healths across the country. Walmart release, Healthcare Dive, Miami Herald

And Walgreens is not far behind the curve with 12 Health Corners in California. Walgreens’ joint model with Blue Shield of California in the San Francisco Bay and Los Angeles areas is designed to boost community health, especially in areas with low health coverage or ‘health deserts’. Health advisers can provide simple in-store care along with guidance on preventive screenings, chronic care management and medications. Select health screenings, such as blood pressure checks and HbA1c tests will be available. 

Both in-person and virtual services through the Health Corner app are available at no additional cost to members enrolled in Blue Shield’s commercial PPO (Preferred Provider Organization) and HMO (Health Maintenance Organization) plans, who live within 20 miles of a Walgreens Health Corner location. It is part of both Walgreens’ enlarging of patient care offerings, including telehealth at a local level, and Blue Shield’s health transformation goals.

Their release promises an additional eight locations by mid-year. Healthcare Finance, FierceHealthcare

Thursday roundup: UHG/Optum, Change extend merger deadline to 31 Dec, buys Kelsey-Seybold; $2B Tivity Health sale; General Dynamics enters derm AI diagnostics; MobileHelp PERS sold to Advocate Aurora

April 7, 2022 | by

UnitedHealth Group’s Optum unit and Change Healthcare, to no one’s surprise, have cast the die and extended their merger deadline to 31 December. Originally, the acquisition was to be completed at end of 2021 and later pushed to 5 April.

In a joint release, they touted their shared vision for a “simpler, more intelligent and adaptive health system for patients, payers and providers”. Backing this up is a break fee of $650 million from Optum to Change Healthcare in the event the court scuppers the deal.

On 25 February, the US Department of Justice filed a lawsuit in US District Court in Washington, DC to stop the acquisition on anti-competitive grounds [TTA 25 Feb]. UHG/Optum and Change, despite divestitures, could not evade DOJ’s reasoning that Optum was buying its only major competitor in areas such as hospital claims data, claims processing, claims editing, and EDI clearinghouse, which facilitates the transfer of electronic transactions between payers and physicians, health care professionals, or facilities. Less than a month later, Optum and Change responded, contesting the charges in that same District Court, and contending that it would be ‘economic suicide’ for Optum to be anti-competitive, since Optum’s business model is dependent on payers other than UnitedHealth. Fighting rather than switching off the deal, it’ll be heard on 1 August [TTA 23 March]. FierceHealthPayer, 

As noted last week, Optum is writing big checks for LHC Group home care/management services and Refresh Mental Health. This week’s jumbo buy is the Kelsey-Seybold Clinic of Houston. This is a multi-faceted operation with multiple multi-specialty care centers, a cancer center, a women’s health center, two ambulatory surgery center locations, and a 30-location specialized sleep center. It also has a highly regarded ACO and KelseyCare Advantage, a 5 Star Medicare Advantage plan, in addition to partnering with insurers on commercial value-based health plans. If it closes, Optum will be more than likely well over its goal of owning or controlling over 5% of US providers. Terms were not disclosed, but TPG’s private equity arm made a minority investment in Kelsey-Seybold two years ago. At the time, the valuation was rumored to be $1.3 billion.

Tivity Health is being acquired by funds managed by Stone Point Capital for $2 billion. The $32.50 per share is a 20% premium to the 90-day price average, which reflects its 40% financial share growth in the past year. Having sold its original name of Healthways and a sizable chunk of its original business to the digital health conglomerate Sharecare, it rebranded in 2017 as Tivity and concentrated on fitness businesses: senior-targeted SilverSneakers, gym chain Prime Fitness, and alternative/complementary medicine WholeHealth Living. Closing is anticipated to be Q3. CEO Richard Ashworth will remain with the company, and headquarters stay in Franklin, TN. Release, Becker’s

A palate cleanser: a division of defense/aerospace giant General Dynamics, General Dynamics Information Technology (GDIT) has developed an AI diagnostic for remote dermatologic use for the active service/veteran market. It classifies images of skin lesions, determines if they are indicative of skin disease, and will recommend follow-up care. According to the GDIT release, “the GDIT skin lesion classifier tool won third place in the VA National AI Tech Sprint 2020-2021, a competition organized by the Department of Veterans Affairs (VA) National Artificial Intelligence Institute (NAII) to match private sector talent with veterans, VA clinicians and other experts to brainstorm AI-based solutions that can improve veteran health and well-being.” Also Healthcare IT News

MobileHelp, one of the earliest mobile PERS, and sister company Clear Arch Health, a remote patient monitoring provider, have been purchased by Advocate Aurora Enterprises. Terms were not disclosed, but management will remain in place in Boca Raton. MobileHelp was private, so estimates of valuation are difficult, but their private equity backing included ABRY Partners and Topmark Partners (Crunchbase). Their PERS market claimed 300,000 households. Clear Arch had a separate clinical base with provider care management of chronic condition patients connected to EHRs. For AAE, a division of Advocate Aurora Health systems in Illinois and Wisconsin, MobileHelp’s acquisition will complement their recently acquired home health provider Senior Helpers and Xhealth clinical digital solution ordering. The traditional PERS and call center business continues to be of interest, but blending into other businesses. Release, Healthcare IT News

Digital health funding’s Q1 hangover from 2021’s bender–and Q2 is a question mark, even for Rock Health

April 6, 2022 | by

Chug the Pedialyte and pickle juice, down those milk thistle caps for the liver. It’s a morning after quarter that we knew was coming. After 2021’s mighty year for health tech investment, doubling 2020’s, capped by a $29.1 billion total across 729 deals [TTA 29 Jan], the slump we knew would arrive, did. Rock Health’s tracking of 2022’s Q1 proved to be a less than stellar $6.0 billion across 183 deals. It mildly lagged 2021’s Q1 but was still 75% more than 2020’s depressed Q1 at the start of the pandemic.

Even in January, the 2022 projections were iffy. Silicon Valley Bank projected, based on anemic post-IPO performance, that there would be ‘massive consolidation’ and even acquiring companies to hire talent [TTA 14 Jan]. Rock Health and Silicon Valley Bank noted the waning of SPACs as an easy way to IPO for a variety of reasons, including SEC scrutiny. A combination of both was SOC Telemed. which IPO’d via a SPAC at $10, and was taken private seven months later at $3 per share–after trading at $0.64. SOC was not an outlier–larger telehealth brothers Amwell and Teladoc had taken major share price kicks in the head at 50% and more by February [TTA 8 Feb].

The rest of the story is mixed as the economy continues to open up with the pandemic over, but the stock market is wobbly, inflation soars as does a Russia-Ukraine war. 

  • Average deal size was $32.8 million, again below 2021
  • January was a cheerier month than the following two, with companies raising $3.0 billion. Some of this was carryover from 2021 deals that didn’t quite make it past the post. February slumped to $1.4 billion while March ticked up to $1.6 billion, not a good trend going into Q2.
  • Rock Health’s Digital Health Index (RHDHI), a composite of publicly traded digital health securities, fell 38%, far below the S&P 500’s 5% dip over that same time period.
  • SPACs tumbled along with the market, continuing their fall since 2021. Deals were canceled, taken private (SOC Telemed), and companies sued for misleading investors (Talkspace).
  • Late stage deals continued to roll: mega Series D+ deals in Q1 2022 included TigerConnect ($300M), Lyra ($235M), Alto Pharmacy ($200M), Omada Health ($192M), and Ro ($150M). D and above deal size fell by $16 million. But average deal size fell off at every Series, less so for B and C.
  • Lead clinical investment areas were mental health continuing far in the lead, followed by oncology, cardiovascular, and diabetes. Oncology rose from the fifth spot in 2021 to #2 in Q1, displacing cardio. In value proposition, the top three were on-demand healthcare, R&D, and clinical workflow–this up from the 11th spot.

A weak start for 2022, but only compared to 2021. Q2 and maybe even Q3 will be the test in this mid-term election year. Rock Health Q1 report

Wisconsin’s $5M for child psychiatry, community telehealth; FQHC patients prefer audio-only telehealth–Rand

April 5, 2022 | by

The state of Wisconsin is granting $5 million to telehealth vendors, equally split between child telemental health and community telehealth delivery. Governor Tony Evers announced the grant series which was funded by the American Rescue Plan, the third COVID stimulus round of 2021 as part of the State and Local Fiscal Recovery Fund to bolster rural telehealth plus mental health. With COVID fading, the funds are being redeployed by states for related health initiatives.

Applications are due 6 May for:

  • Up to five one-year grants of approximately $500,000 will be provided to Wisconsin hospitals and health systems to expand and improve child psychiatry telehealth services
  • Between 25 and 50 providers to partner with community organizations to establish neighborhood telehealth access points at food pantries, homeless shelters, libraries, long-term care facilities, community centers, and schools. These are targeted to reach people with limited access to technology and reliable internet service. These are also one-year grants of up to $100,000 each.

While big telehealth funding for mental health grabs the headlines, at the local level, it is these state initiatives that often keep both providers and smaller telehealth companies going. State of Wisconsin release, mHealth Intelligence

RAND Corporation’s study of telehealth in Federally Qualified Health Centers (FQHCs) found that audio-only telehealth was used more frequently during the pandemic, and continued to be used by patients for behavioral health even when primary care shifted back to in-person visits. The study group was the California Health Care Foundation (CHCF)’s 45-center Connected Care Accelerator (CCA) program started in July 2020. These centers serve rural, low-income, and underserved populations, common in places like Wisconsin (this Editor worked with a successful FQHC ACO there) and in California.

Audio and video telehealth was problematic for both the patient population and the clinics. Those with limited English proficiency participated in a significantly lower percentage of video visits. Behavioral health centers also had difficulties. Centers that coordinated efforts to replace audio-only with video visits had specific promising practices.

According to the RAND study, “key facilitators of telehealth implementation were leadership support, patient willingness to use the technology, platforms that were easy to use and access, a sense of urgency within clinics, changes in reimbursement policy, and training opportunities for staff.” Another recommendation was to retain centers to serve as distant telehealth sites (and to be reimbursed). Also mHealth Intelligence

Weekend wrapup & reading: Amazon Health on talent hunt, Practice Fusion fined $200K for violating $145M prosecution agreement, and must-read studies and articles on older adults tech

April 2, 2022 | by

Resumes and networking up! A writer at Becker’s Hospital Review tired of their usual diet of healthcare departures, ‘alarming’ rises of COVID rates by state, and cyber-attacks on hospitals to publish six top-level jobs opening up in Amazon’s healthcare areas. The lead is Head of worldwide health technology solutions to lead strategy in that area at the C-level. Two are in UX and software development at Alexa Health, a senior solutions architect, health artificial intelligence , a principal of behavioral health for digital health benefit programs, and a health information exchange specialist. So if your spring brings a yen for change….

Physician EHR Practice Fusion, now Veradigm owned by Allscripts, got another $200,000 spanking from the Feds. Back in January 2020, right before Pandemic Hell really broke loose on the world, the Department of Justice successfully resolved both criminal and civil charges against the EHR company. Practice Fusion was charged with “soliciting and receiving kickbacks in return for embedding electronic prompts in its electronic medical record (“EMR”) to influence the prescribing of opioid medications” as part of the platform’s clinical decision support (CDS) alerts. The kickback was $1 million from an unnamed ‘opioid company client’, The deferred prosecution agreement (DPA) was accompanied by 1) a $145 million fine and 2) maintenance of an Oversight Organization based on three specific requirements. DOJ in the District of Vermont found that Practice Fusion did not comply with the terms of the latter, charges that Practice Fusion denied. They settled with the DPA extended by 11 weeks with a fine of $200,000. Release, US Attorneys Office, District of Vermont 29 March, US DOJ release 27 January 2020

Weekend Reading. Laurie Orlov of Aging and Health Technology Watch has been hard at work, recently updating her Market Overview Technology for Aging and releasing The Future of Smart Homes and Older Adults. No time with spring cleaning to tackle long-form? Try three tart short takes on PERS smartwatches (not getting the ‘why’), did ‘voice first’ technologies meet their 2018 promises (not quite), and what she sees as the Seven Top Trends for tech to reach older adults–with the first being hospital to home (Optum and Humana have voted ‘yes’).