In non-COVID-19 news, Optum has confirmed to industry press that they have acquired post-acute management company naviHealth. Becker’s HealthIT cites sources that the purchase price is in the vicinity of $1 billion. Continuing their PAC-MAN path, this pharmacy benefit, population health, and care services wing of UnitedHealth Group in the past six months finalized the purchase of DaVita Medical Group from renal treatment giant DaVita for over $4.3 bn and is reportedly closing on a full acquisition of virtual behavioral health provider AbleTo [TTA 29 Apr] for a less stunning $470 million.
naviHealth provides post-acute care clinical decision-making tools that manage pre and post-acute care as part of value-based care programs such as the Bundled Payments for Care Improvement (BPCI) program with CMS. Their customer base includes health plans (4.5 million members within Medicare Advantage alone), over 140 hospitals, and post-acute care providers such as nursing homes, LTC facilities, rehabilitation, and home health. The company will retain current management and staff, and operate as a stand-alone company within OptumHealth. It’s a well-paid exit for Cardinal Health and Clayton, Dubilier & Rice. Also MedCityNews
Amwell raises $194 million in a second Series C. The former American Well did not need telehealth to receive a gratifying boost from its investors Allianz X and Takeda Pharmaceuticals. This follows on a February $60 million venture round from Chetrit Ventures (BostInno). Amwell has raised $711 million in nine funding rounds (Crunchbase). Their main business has been with payers, health systems, and employers. In April, they added a branded program, Amwell Private Practice, for practices under 100 providers for these mostly shuttered offices to reach their patients at home and to continue care. Release, Mobihealthnews.
This Editor recounted last night in the article below on The TeleDentists’ fresh agreements with Cigna and Anthem the observation of a former associate who has been in the thick of the remote patient monitoring wars for some years that telehealth/telemedicine has progressed 10 years in 2 months. Seema Verma, the head of the Centers for Medicare and Medicaid Services (CMS), stated to the Wall Street Journal (paywalled), “I think the genie’s out of the bottle on this one. I think it’s fair to say that the advent of telehealth has been just completely accelerated, that it’s taken this crisis to push us to a new frontier, but there’s absolutely no going back.” Even in a short period of time, CMS-reported telehealth visits as of 28 March trebled from 100,000 to 300,000. When the April numbers are in, it would not be surprising to see it grow well into seven figures.
The genie may be out of the bottle, but what will the genie do? Genies are, after all, unpredictable, and fly around. Out of the smoke, some educated guesses:
- Insecure, non-HIPAA compliant audio/video platforms will be the first which should be struck from CMS approval. Zoom has become a hackfest, with all sorts of alerts from mobile providers like Verizon on how to secure your phone. (An organization of which this Editor is a member had a panel this week completely disrupted by a hacker in five minutes.) Skype’s problems are well known. The winners here will be telehealth platforms that integrate well with EHRs, population health platforms (or may be part of population health platforms), and have robust security.
- Primary care practices and specialists, who’ve been surviving on non-F2F visits, will be adjusting their practices to patient demand, and integrating telehealth with physical visits in a way that their patients will prefer. This means a search for integration of EMRs/EHRs with secure platforms and reconfiguring areas such as care coordination. If planned correctly, this could create better management of patients with multiple chronic conditions.
- Actual physical visits will rebound, creating financial pressure on Medicare, hospitals, and private payers. How many people’s health has declined in two-three months is key. Small practices, who may see this first, will see another level of pressure, because they will be held to their Medicare quality metrics in value-based models even if adjusted. Hospitals will also rebound–if they are able. The dark side: private payers may run the numbers and scale back on benefits for the 2021 year especially if COVID is projected to make a return.
- Behavioral health may benefit, yet drive individual practices and a wave of retirements, or a consolidation into clinic or group settings. There’s a reason why Optum is buying out AbleTo; we may see a wave of competitor acquisitions in this area with the emphasis will be on cognitive health and short courses. Why retirements? Many psychiatric practices are still independent, concentrated geographically, and the average psychiatrist is over 50. Psychiatric EHRs are both costly and not particularly suited to practices. If faced with technological challenges, a lot of MDs and senior clinical psychologists may very well exit–threatening clinics which need MDs to legally operate.
- Rural health’s failure accelerated. USA Today’s analysis pinpointed at least 100 rural hospitals to close within the year. They already operated on thin margins, but with COVID expenses for additional equipment, the closing down of more profitable elective procedures and dependence on Medicaid, the over 1,100 unprofitable hospitals, over half of which are the only hospital in their county, have received a body blow. HHS allocated $10 billion to rural hospitals and clinics of the $100 billion aid package, but it may be too little and too late. Becker’s Hospital Review continues to track the bankruptcies and closures. Here there are no easy solutions from the digital health area.
- A culture of cleanliness should accelerate. If the genie pulls this out of the bottle, one major benefit will be that hospital-acquired infections will decline. Effective sanitization methods that reduce human application and scrubbing will be the ones to look at: disinfecting foggers and UV full room or area systems–or combinations of same. Cleanliness and lack of virii and bacteria may become a new metric. Look and bet on companies that can provide this, from rooms to computers/mobile tablets and phones.
Readers can help with these prognostications and especially how they will play out not only in the US, but also in the UK, Europe, and worldwide.
Optum, the part of UnitedHealthGroup that runs engagement, technology, and financial services for UHG, is in advanced negotiations to acquire AbleTo, a New York City-based behavioral health and virtual therapy provider, according to CNBC. Unusually, there is also a number attached: $470 million, about 10 times their forward revenue.
AbleTo is already well acquainted with Optum, as their Ventures arm provided financing in January 2019 in a corporate round. Over the past 12 years, the company has raised close to $47 million through a Series D. Interestingly, one of the early investors was Aetna, pre-CVS. Crunchbase
Optum of late has been on an acquisition tear, with first dialysis provider DaVita for $5 billion and then telehealth/remote patient monitoring company Vivify Health for an undisclosed but certainly far less amount. AbleTo is attractive not only in the context of telehealth (at last the belle of the ball!) but also for the underserved behavioral health market. Confirmation of its attractiveness? A fresh crop of competitors such as Quartet Health, Lyra, and ‘traditional’ telemedicine providers such as Doctor on Demand.
AbleTo was founded by Michael Laskoff, at one time quite the ‘face’ in the NYC digital health scene, who went on some years back to found another behavioral health company, Annum Health, focusing on alcohol addiction. AbleTo is one of the pioneers of virtual therapy, both telephonic and audio/video, using care teams of coaches and LCSWs to provide short-term cognitive therapy sessions. It is certainly an underserved market with over 50 percent of those researched citing cost and stigma to not obtain treatments, with about 2/3rds surprisingly under age 50, but not surprisingly about half with one or more chronic conditions. Most of its business is with payers and self-funded companies, although it still offers individual therapy plans. Mobihealthnews