TTA’s Week: Babylon Health’s 81% diagnostic rate challenged, Canary Care re-emerges, CVS-Aetna’s Thanksgiving, top changes at Watson Health, more

 

 

Babylon Health’s AI diagnostic efficacy challenged. CVS-Aetna’s merger out of the oven by Thanksgiving. And a win for TECS with Canary Care.

Is Babylon Health’s AI on par with a human diagnostician? Claim questioned in ‘The Lancet’. (What $100 million should be solving)
Comings and goings: CVS-Aetna finalizing, Anthem sued over merger, top changes at IBM Watson Health 
Canary Care re-emerges as Canary Care Global Ltd, confirms continued operations (A happier outcome)

Was Pepper’s Question Time a media stunt that overshadowed the larger discussion around robotic disruption? And we wind up the UK telehealth event year.

Upcoming UK telecare and telehealth events; SEHTA calls for Healthcare Business Awards nominees (Winding up the year)
A critical take on Pepper’s Parliament Question Time (UK) (Larger questions on robotics’ effect were missed)

A robot speaks to a Commons select committee and may be more lively than most of the MPs. The FCC backs telehealth with $100 million plus, a report on NIH’s massive ‘All of Us’ population health initiative, and MIT’s emotional support robots. 

Pepper pays a first-ever robot visit to Commons on the future of AI and robotics on education, older adult care (UK) (Is the US Congress next?)
Connected Health Conference highlights (so far): FCC’s $100 million telehealth pilot, NIH’s ‘All of Us’, MIT’s social robots integrating AI

DNA analysis goes food shopping to prevent Type 2 diabetes in the prone. Zimmer uses Apple Watch to monitor hip/knee replacement patients. A Code of Practice for IoT in UK. Plus NYeC’s Gala Awards, MedStartr’s latest challenge at AMIA, and our international company news roundup.

DNA-based personalized food choices to prevent Type 2 diabetes onset in test with Imperial College, London and Waitrose (UK) (Combining DNA testing with food shopping)
Apple Watch, Zimmer Biomet in clinical trial for monitoring hip and knee replacements (Potentially huge impact on outcomes)
News roundup: Partners HealthCare Pivot Labs, TytoCare’s CE Mark, ISfTeH’s 2019 conference calls for presentations, three Smart Ageing Prizes awarded (From Bilbao to Boston)
MedStartr Challenge at the AMIA Annual Symposium 5 November (Pick your companies!)
NYeC’s 2018 Gala & Awards on 27 November (US) (Mix with the top folk in NY healthcare)
UK sets forth a Code of Practice for secure IoT for connected devices and smart homes (Sound guidelines, but enforcement?)

Digital health funding finally soars to the moon–in the home. BlackBerry is alive and Sparking, Withings is back. E-triggers to detect misdiagnosis. And are you going to Connected Health in Boston?

$6.8 bn in digital health funding through Q3 blows the doors off 2017: Rock Health (And the vote’s for in-home health)
It’s Alive! BlackBerry still Sparking with an ‘ultra-secure hyperconnectivity’ healthcare platform (Plugging the gap in EoT)
Diagnostic ‘e-triggers’ in EHRs to detect misdiagnosis, identify high-risk patients over time (Mining that data with machine learning and AI)
Withings returns to international markets with Steel HR Sport and a new Go (From Finland to France, and back to design heritage)
A preview of this week’s Connected Health Conference in Boston (Three days of immersion at the Seaport)

Lessons from Theranos for Silicon Valley? Are the new Apple Watch health features a mismatch to their market? Whither GEHC’s future within the Death Star? Will healthcare AI hype melt from a dash of cold water? Accreditation increasing provider burden?

The Theranos Story, ch. 57: was it Silicon Valley and Startup Culture bad practices pushed to the max? (The ‘hit to hope’ has two meanings)
Accrediting telehealth and remote patient monitoring providers (US) (Another try that may work this time, but increasing the training burden)
The Apple Watch, ECG and fall detection–a trend too far? (A market disconnect between those who buy and who actually need)
CEO change at GE may mean delay or cancellation of GE Healthcare spinoff–for good or ill (Time to destroy the Death Star?)
A sobering, mercifully hype-free view of AI in healthcare (A needed cold water bath)

Vital signs monitoring that reads people through walls and could revolutionize RPM.

No more smartwatches or connected tablets? Reading human vital signs through walls via a reverse Wi-Fi box and machine learning (A future without PERS, tablets, watches….)

Breaking news about 3rings and Canary Care. Babylon Health has no problem with funding–and spending. Cigna-Express Scripts clears DOJ. Two warnings about code running amuck if we don’t chill. More on Best Buy’s Assured Living. And more!

3rings assistive tech will be ringing off next March (UK) (Breaking news on yet another sad health tech closure)
Canary Care goes into administration, is acquired by Lifecycle Software (UK) (Breaking, but perhaps some hope)
AI promises, promises! Babylon Health to spend $100m, hire 1,000 to develop leading AI platform (Attracting funding like a magnet)
Cigna’s $69 million acquisition of Express Scripts clears US Department of Justice hurdle (But 50 hurdles lie ahead)
Weekend reading: the deadly consequences of unpredictable code (don’t be in a bike in front of a self-driving car)
IoT=Cyberdisaster, if we don’t chill innovation and secure it. It’s hip to be scared! (An argument for rational regulation)
Best Buy update: ‘Assured Living’ assuredly up and running. And was this Editor’s in-store experience not typical? (Should have the Geeks to the house for the TV)


Have a job to fill? Seeking a position? Free listings available to match our Readers with the right opportunities. Email Editor Donna.


Read Telehealth and Telecare Aware: http://telecareaware.com/  @telecareaware

Follow our pages on LinkedIn and on Facebook

We thank our present and past advertisers and supporters: Tynetec, Eldercare, UK Telehealthcare, NYeC, PCHAlliance, ATA, The King’s Fund, HIMSS, Health 2.0 NYC, MedStartr, Parks Associates, and HealthIMPACT.

Reach international leaders in health tech by advertising your company or event/conference in TTA–contact Donna for more information on how we help and who we reach. See our advert information here. 


Telehealth & Telecare Aware: covering the news on latest developments in telecare, telehealth, telemedicine and health tech, worldwide–thoughtfully and from the view of fellow professionals

Thanks for asking for update emails. Please tell your colleagues about this news service and, if you have relevant information to share with the rest of the world, please let me know.

Donna Cusano, Editor In Chief
donna.cusano@telecareaware.com

– – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –

Comings and goings: CVS-Aetna finalizing, Anthem sued over merger, top changes at IBM Watson Health

What better way to introduce this new feature than with a picture of a Raymond Loewy-designed 1947 Studebaker Starlight Coupe, where wags of the time joked that you couldn’t tell whether it was coming or going?

Is it the turkey or the stuffing? In any case, it will be the place you’ll be going for the Pepto. The CVS-Aetna merger, CVS says, will close by Thanksgiving. This is despite various objections floated by California’s insurance commissioner, New York’s financial services superintendent, and the advocacy group Consumers Union. CEO Larry Merlo is confident that all three can be dealt with rapidly, with thumbs up from 23 of the 28 states needed and is close to getting the remaining five including resolving California and NY. The Q3 earnings call was buoyant, with CVS exceeding their projected overall revenue with $47.3 billion. up 2.4% or $1.1 billion from the same quarter in 2017. The divestiture of Aetna’s Medicare Part D prescription drug plans to WellCare, helpful in speeding the approvals, will not take effect until 2020. Healthcare Dive speculates, as we did, that a merged CVS-Aetna will be expanding MinuteClinics to create urgent care facilities where it makes sense–it is not a big lift. And they will get into this far sooner than Amazon. which will split its ‘second headquarters’ among the warehouses and apartment buildings of Long Island City and the office towers of Crystal City VA.

Whatever happened to the Delaware Chancery Court battle between Anthem and Cigna? Surprisingly, no news from Wilmington, but that didn’t stop Anthem shareholder Henry Bittmann from suing both companies this week in Marion (Indiana) Superior Court. The basis of the suit is Anthem’s willfully going ahead with the attempted merger despite having member plans under the Blue Cross Blue Shield Association meant the merger was doomed to fail, and they intended all along for “Anthem to swallow, and then sideline, Cigna to eliminate a competitor, in violation of the antitrust laws.” On top of this, both companies hated each other. A match made in hell. Cigna has moved on with its money and bought Express Scripts.

IBM Watson Health division head Deborah DiSanzo departs, to no one’s surprise. Healthcare IT News received a confirmation from IBM that Ms. DiSanzo will be joining IBM Cognitive Solutions’ strategy team, though no capacity or title was stated. She was hired from Philips to lead the division through some high profile years, starting her tenure along with the splashy new Cambridge HQ in 2015, but setbacks mounted later as their massive data crunching and compilation was outflanked by machine learning, other AI methodologies, and blockchain. According to an article in STAT+ (subscription needed), they didn’t get the glitches in their patient record language processing software fixed in ‘Project Josephine’, and that was it for her. High profile partner departures in the past year such as MD Anderson Cancer Centers, troubles and lack of growth at acquired companies, topped by the damning IEEE Spectrum and Der Spiegel articles, made it not if, but when. No announcement yet of a successor.

Cigna’s $69 million acquisition of Express Scripts clears US Department of Justice hurdle

As reported on 8 Sept, the DOJ announced on Monday that they have formally cleared the Cigna acquisition of pharmacy benefits manager Express Scripts. This puts together a major payer with a PBM manager, the latter area considered to be challenged for profitability as the PBM drug rebate model may be substantially less profitable in the future. Federal policy pressure is ramping up from Health & Human Services (HHS), with Secretary Alex Azar only last week promising disruptive change and more transparency in drug pricing.

CVS (PBM-Caremark) with Aetna is in the works and Anthem is creating its own PBM called IngenioRx. UnitedHealthcare has its own OptumRx for some years. 

Another point of pressure on the entire PBM category is the Amazon-Berkshire Hathaway-JP Morgan combine, sometime in the future when the hype and speculation on What Amazon Will Do turns into actual plans beyond their acquisition of tiny, specialized player PillPack for an exorbitant $1bn [TTA 4 July]. 

The DOJ investigation took six months, reviewed more than 2 million documents, and more than 100 industry people were interviewed.

Cigna and Express Scripts now must negotiate over 50 state departments of banking and insurance–over 50 because some states have two. Both companies already have shareholder approval, and the lack of overlap in their businesses limits the possibility of divestitures. Their advocacy website is here. But state DOBIs can be unpredictable, as Cigna found out with Anthem. (Their contentious breakup is still being contested in court–and Cigna could use the contractual breakup money to ease the Express Scripts debt estimated at $15 bn. Forbes.  Bloomberg, Healthcare Dive

CVS-Aetna, Cigna-Express Scripts reportedly on road to merger approval; Athenahealth in hostile takeover–or not (updated)

CVS’ pickup of Aetna, and Cigna‘s acquisition of Express Scripts are reported to be clearing the Department of Justice anti-trust review within the next few weeks, just in time for pumpkin season. The DOJ may have concerns on some assets related to Medicare drug coverage and may require a sell-off to resolve them. One potential buyer is WellCare Health Plans, which this week completed its acquisition of Meridian Health Plans and entered the S&P 500 on Monday. The Cigna-Express Scripts combine may not require any asset selloff. Seeking Alpha (report is from the Wall Street Journal).

The once blazingly hot Athenahealth is up for sale but can’t seem to get arrested by another healthcare company. Both Cerner and UnitedHealthcare passed on an acquisition. One of the larger shareholders, Elliot Management, initiated moves toward a hostile takeover in May, and in the process managed to oust founder and CEO Jonathan Bush on still-murky charges of past domestic abuse and workplace sexual harassment. Mr. Elliot is partnering with Bain Capital which owns Waystar, a revenue cycle management (RCM) company from the merged ZirMed and Navicure. Waystar could benefit from Athenahealth’s systems and IP. Mr. Bush would receive a relatively small sum in a sale –$4.8 million– with new executive chair and former GE CEO Jeffrey Immelt earning $150,000 a month in salary and $150,000 in restricted stock perhaps looking for a new job. Elliot’s reputation is that of a corporate raider–taking over businesses to strip assets and sell off the remains. New York Post, POLITICO Morning eHealth.

UPDATED 19 Sept Reports from yesterday indicate that Mr. Elliot has ‘balked’ at the $160 per share price that Athenahealth is asking, and may be angling for a lower price, according to the NY Post report. Reportedly no one else–Cerner and UnitedHealthcare–is interested, though Athenahealth has extended the bid deadline to 27 September. There may be problems uncovered by the due diligence. It’s also a recognized hardball lowball strategy to get the share price way down. The industry is betting on the latter because the former is difficult to contemplate for customers and healthcare as a whole. Also HealthcareITNews.

News roundup: Walmart and Microsoft AI, are derm apps endangering public with 88% skin cancer diagnosis?

[grow_thumb image=”http://telecareaware.com/wp-content/uploads/2017/12/Lasso.jpg” thumb_width=”150″ /]Walmart and Microsoft partner to change the retail experience via AI. The five-year agreement will switch over applications to the cloud and will affect shipping and supply chain. It’s projected in Healthcare Dive that the impact will be in healthcare as well. Microsoft announced last month that it is forming a unit to advance AI and cloud-based healthcare tools. The landscape is under extreme pressure in retail and healthcare delivery, and Walmart needs to ready for future moves which will certainly happen. Walmart is rumored to be interested in acquiring Humana and is currently working with Emory Healthcare in Atlanta. Then there is CVS-Aetna, Cigna-Express Scripts, Google, and (looming above all) Amazon. (Though you can tuck all the years of Amazon’s profits into one year of Walmart’s.)

The ITV News headline grabs attention — but are dermatology apps really endangering the public when teledermatology can help diagnose 88 percent of people with skin cancer and 97 percent of those with benign lesions? A University of Birmingham-led research team did a metastudy of the literature and found three failings: “a lack of rigorous published trials to show they work and are safe, a lack of input during the app development from specialists to identify which lesions are suspicious and flaws in how the technology analyses photos” particularly for scaly or non-pigmented melanomas. But did access to these apps encourage early diagnosis which can lead to up to 100 percent five-year survival? Of course review is required as recommended by the study, but this last factor was not really examined at the British Association of Dermatologists’ annual meeting in Edinburgh. University of Birmingham release with study abstract

Care Innovations sells off Validation Institute. But is there more to the story? And a side of Walmart Health action.

The Health Value Institute, part of Woburn, Massachusetts-based conference organizer World Congress, announced late last week the acquisition of the Validation Institute from Care Innovations. Terms were not disclosed. The Health Value Institute and the Validation Institute recently partnered to validate the outcomes for the Health Value Award finalists and awards this past April at the 15th Annual World Health Care Congress. According to both parties, the acquisition will help to expand the membership of validated companies, and the present offerings for HR, broker, and benefit executives. Release.

The Validation Institute was launched with fanfare back in June 2014, when GE still had a chunk of the company and during the 2 1/2 year repositioning (revival? resuscitation?) led by Sean Slovenski from the doldrums of the prior Louis Burns regime. Mr. Slovenski departed in early 2016 to be president of population health at Healthways/Sharecare, which lasted a little over a year. However, this week Mr. Slovenski made headlines as the new SVP Health & Wellness of Walmart, reporting directly to the head of their US business.  The hiring of a senior executive with a few years at Humana and a short time at Sharecare, another Walmart partner, coupled with several years in healthcare tech and provider-side is certainly indicative of Walmart’s serious focus on healthcare provision. It’s a fascinating race with Amazon and CVS-Aetna–with the mystery of what Walgreens Boots Alliance will do. Also Healthcare Dive.

But back to Care Innovations. Signs of a new direction–and a loss. The case can be made that the Validation Institute, the Jefferson College of Population Health, and validating individuals and companies was no longer core to their business which is centered around their RPM platform Health Harmony (with QuietCare still hanging in there!) However, this Editor notes the prominent addition of  ‘platform-as-a-service’ advisory services for those who are developing health apps, which appears to be a spinoff of their engineering/IT services. Vivify Health, a competitor, already does this. There is a vote of confidence; in June, Roche signed on with a strategic investment (undisclosed) as well as integration of the mySugr integrated diabetes management/app solution (release).

Looking around their recently refreshed website, there is an absence–that of the two or three pages previously dedicated to the Veterans Health Administration (VA) and the press release of the VA award. This tends to lend credence to the rumors that there was a second company that did not pass the Trade Adjustment Act (TAA) requirements that knocked out Iron Bow/Vivify Health from the VA, or for another undisclosed reason CI bowed out of a potentially $258 million five-year contract. If so, that leaves for the VA Medtronic and 1Vision/AMC Health. It’s certainly a limited menu for the supposedly growing numbers of veterans requiring telehealth and a limited choice for their care coordinators–and not quite as presented to the public or the 2015 competitors in the solicitation. Who benefits? Who loses? (Disclosure: This Editor worked for one of the finalists and a VA supplier from 2003, Viterion.)  Hat tip to one of our ‘Industry Insiders’, but the opinions expressed here are her own.

Department of Justice won’t challenge CVS-Aetna merger: report

DOJ, stay away from our doors! The $69 bn CVS Health and Aetna mega-merger looks like it will go sailing down that river, if Mr. Market is right. Shares in both companies enjoyed a nice bump on today’s report that the DOJ won’t challenge this merger. The local Hartford Courant is relieved that Aetna plans to stay in their longtime HQ city (since 1853), conveniently omitting their long-standing plan to set up a big shop in NYC. CNBC

What a difference from a year ago when two mega-mega-mergers, Aetna-Humana and Anthem-Cigna, were shot d0wn–nay, riddled with bullets–in the Senate and in two courts [TTA 9 Feb 17]. Cigna is still living with the hangover of their bad breakup with Anthem, with a fight over a nearly $1.9 bn breakup fee [TTA 17 May 17] continuing in the Delaware Chancery Court in 2019.  Cigna nixed any other insurers in a horizontal merger and sought out Express Scripts, a pharmacy benefits manager (PBM) which was reeling a bit after its largest client (coincidentally) Anthem departed. Anthem sued its PBM, Express Scripts, for $15 billion, alleging the PBM overcharged it by $3 billion annually The merger will cost them over $550 million in transaction cost and that is just the beginning. That $1.9 bn would sure come in handy. Modern Healthcare 

Rock Health’s ‘Another record-breaking first half’ in digital health funding is actually–flat. (With a Soapbox Extra!)

The Breathless Tone was the clue. “It’s déjà vu for digital health, with yet another record breaking half for venture funding.” It was déjà vu, but not of the good sort. This Editor hates to assume, so she checked the year-to-year numbers–and first half 2018 versus 2017 broke no records:

  • 2018:  $3.4 bn invested in 193 digital health deals 
  • 2017: $3.5 bn invested in 188 digital health companies [TTA 11 July 17]

But ‘flat’ doesn’t make for good headlines. Digging into it, there are trends we should be aware of — and Rock Health does a great job of parsing–but a certain wobbliness carried over from 2017 even though the $5.8 bn year finished 32 percent up over 2016, analyzed here [TTA 5 Apr 18]. Their projection for 2018 full year is $6.9 bn and 386 deals.

Let’s take a look at their trends:

  • “The future of healthcare startups is inextricably linked to the strategies of large, enterprise-scale healthcare players—as customers, partners, investors, and even potential acquirers.” It’s no mistake that the big news this week was Amazon acquiring tiny, chronic-conditions specializing prescription supplier PillPack after a bidding war with Walmart for an astounding $1bn, making its 32 year-0ld founder very rich indeed and gaining Amazon pharmacy licenses in 49 states. (Prediction: Walmart will be pleased it lost the war as it will find its own solutions and alliances.) 
    • Enterprise healthcare players are cautious, even by Rock Health’s admission, but the big money is going into deals that vertically integrate and complement, at least for a time–for example, Roche’s purchase of Flatiron Health. And when it doesn’t work, it tends to end in a whimper–this May’s quiet sale by Aetna of Medicity to Health Catalyst for an undisclosed sum. Back in 2011, Aetna bought it for $500 million. (Notably not included in the Rock Health analysis, even though they track Health Catalyst and the HIE/analytics sector.)
  • The market is dependent on big deals getting bigger. If you are well-developed, in the right sector, and mature (as early-stage companies go), you have a better shot at that $100 million B, D, E or Growth funding round. B rounds actually grew a bit, with seed and A rounds dipping below 50 percent for the first time since 2012. 
  • The Theranos Effect is real. Unvalidated, hyped up claims don’t get $900 million anymore. In fact, there’s real concern that there’s a reluctance to fund innovation versus integration. The wise part of this is that large fundings went to companies validating through clinical trial results, FDA clearance (or closing in on it), and CDC blessing.
  • The dabbling investor is rapidly disappearing. 62 percent of investors in first half had made prior investments in digital health including staying with companies in following rounds.
  • Digital health companies, like others, are staying private longer and avoiding public markets. Exits remain on par with 2017 at 60. Speculation is that Health Catalyst and Grand Rounds are the next IPOs, but there hasn’t been one since iRhythm in October 2016. The Digital Health public company index is showing a lot less pink these days as well, which may be an encouraging sign.
  • Behavioral health is finally getting its due. “Behavioral health startups received more funding this half than in any prior six-month period, with a cumulative $273M for 15 unique companies (nearly double the $137M closed in H1 2016, the previous record half for funding of behavioral health companies). Of these 15 companies, more than half have a virtual or on-demand component.”

Keep in mind that Rock Health tracks deals over $2 million in value from venture capital, excluding government and grant funding. They omit non-US deals, even if heavily US funded. 

Their projection for 2018 full year is $6.9 bn and 386 deals. Will their projection pan out? Only the full year will tell!

A Soapbox Extra!

Rock Health, like most Left Coast companies, believes that Vinod Khosla is a semi-deity. This Editor happens to not be convinced, based on predictions that won’t pan out, like machines replacing 80 percent of doctors; making statements such as VCs have less sexual harassment than other areas, and even banning surfers off his beach. He was at a Rock Health forum recently and made this eye-rolling (at least to this Editor) statement:

Is there one area in the last 30 years where the initial innovation was driven by an institution of any sort? I couldn’t think of a single area where innovation—large innovation—came from a big institution. Retailing wasn’t disrupted by Walmart, it was by Amazon. Media wasn’t changed by CBS or NBC, it was by YouTube and Twitter. Cars weren’t transformed by Volkswagen and GM—and people said you can’t do cars in startups—but then came Tesla.

Other than making a point that Clayton Christensen made a decade or more ago, the real nugget to be gained here is that formerly innovative companies that get big don’t grow innovation (though 3M tends to be an exception, and Motorola didn’t do too badly with the cell phone). They can buy it–and always have. 

Go back a few more decades and all of these companies were disrupters–and bought out (or bankrupted) other disrupters. CBS and NBC transformed entertainment through popularizing radio and then TV. VW created the small car market in the US and saved the German auto industry. GM innovated both horizontally (acquiring car companies, starting other brands) and integrated vertically (buying DELCO which created the first truly workable self-starting ignition system in 1912).

YouTube? Bought by innovator Google. Twitter? Waiting, wanting to be bought. Innovation? Khosla is off the beam again. Without Walmart, there would be no Amazon–and Amazon’s total lifetime profit fits nicely into one year of Walmart’s. Tesla is not innovative–it is a hyped up version of electric car technology in a styled package that occasionally blows up and remains on the borderline of financial disaster. (Model 3, where art thou?)

I’d argue that Geisinger, Mayo Clinic, and Intermountain Healthcare have been pretty innovative over the last 30 years. Mr. Khosla, read Mr. Christensen again!

News roundup: First Stop, GlobalMed, American Well, Avizia, Medicity, Health Catalyst, Allscripts, Welbeing, BenevolentAI

[grow_thumb image=”http://telecareaware.com/wp-content/uploads/2017/12/Lasso.jpg” thumb_width=”125″ /]Announcements and acquisitions have been multiplying–here’s what’s most interesting.

In companies we’ve recently written about:

Our recent Contributor Bruce Judson, now with corporate telemedicine provider First Stop Health, wrote us enroute to the Government Finance Officials Association conference in St. Louis that FSH achieved triple-digit top-line revenue growth and also achieved an average utilization rate of 52 percent. The formal announcement was made earlier this week at the HLTH conference in Las Vegas (release), where another one of our Contributors, Sarianne Gruber, is attending for Answers Media Company.

GlobalMed, a prior contributor to Perspectives, is offering a lower cost telemedicine alternative to practices with a flat fee starting at $799 per month for three years. Startup costs remain at about $5,000. The starting kit includes a cart, a total exam camera, stethoscope and vitals linked to the organization’s network, and a nurse license. Additional compatible equipment is available at extra cost. We know that a number of comparable telemedicine cart-based kits run upwards of $8,000. It is one of the first public acknowledgments this Editor has seen (but has known for years) that high cost is a major impediment for implementing both telehealth and telemedicine in practices. Health Data Management.

In other news:

Telemedicine and telehealth consolidation continues with American Well’s acquisition of hospital-based telemed/workflow systems provider Avizia. Avizia has a product line of telemedicine carts and workflow software for 40 different specialties, including telestroke and telebehavioral health. The acquisition price was not disclosed. Prior investors in this 2013 Cisco spinoff include Northwell Health, NY-Presbyterian, HealthQuest, and other providers in seven rounds totaling over $23 million. Healthcare IT News

A further sign of consolidation, this time in the crowded health information business, is the Medicity acquisition by Health Catalyst. Health Catalyst is primarily a data analytics and warehousing company while Medicity focuses more on data interoperability and patient engagement for practices, health systems, and HIEs. Medicity was purchased by Aetna in 2011 with much fanfare for $500 million as one of its ‘Emerging Businesses’, rebranded as Healthagen in 2013 [TTA 28 Feb 14] which never quite took off. Out of that unit, what remains are Active Health Solutions and Aetna Accountable Care Solutions, a payer-driven value-based care management company. The amount of the sale was not disclosed but is expected to close in 90 days. Health Catalyst’s CEO Brent Dover served as president of Medicity up to 2013, and both companies are located in Salt Lake City. What is interesting about this sale is that CVS, which is buying Aetna, has no comparable in-house technology. It’s a probable shedding of peripheral or money-losing businesses prior to sale.  HISTalk, MedCityNews

Allscripts continues on its acquisition binge with patient communication and engagement platform HealthGrid. HealthGrid is a mobile app platform that delivers care and education materials traditionally distributed from practices to patients via paper. In January, Allscripts bought practice EHR Practice Fusion for $100 million (a loss to investors) and earlier McKesson’s HIT business for $185 million. It’s a noticeable shift to value-added care tools for this formerly EHR-centric company. Mobihealthnews. 

In UK news:

Welbeing has won Norwich City Council’s Norwich Community Alarm Service (NCAS). It provides a 24-hour, year-round monitoring and response service for over 6,500 adults who are vulnerable or at risk in this part of East Anglia. The press release is on UK Telehealthcare‘s news page. 

BenevolentAI, a UK company using artificial intelligence for drug development, raised $115 million in new funding, mostly from undisclosed investors in the United States, according to Mobihealthnews, for a total funding of over $200 million. The company uses AI to reduce drug discovery time and risk. It does not do its own drug discovery but sells the intellectual property discovered by their AI algorithms, claiming to cut drug development timelines by four years and improve efficiencies by 60 percent compared to pharma industry averages.

CVS-Aetna: DOJ requests additional information at deadline (updated for CVS earnings)

[grow_thumb image=”http://telecareaware.com/wp-content/uploads/2017/12/canary-in-the-coal-mine.jpgw595.jpeg” thumb_width=”150″ /]The Canary Tweets. The sources [TTA 8 Dec] were correct that the Department of Justice (DOJ) would take the lead on reviewing the CVS-Aetna merger. Yesterday (1 Feb) they did, requesting additional information. This extends the waiting period for an additional 30 days or more.  The CVS Form 8-K (SEC), which reports the request for information, is here courtesy of Seeking Alpha.

The US law governing this is the Hart-Scott-Rodino Act Antitrust Improvements Act of 1976 (HSR). A pre-merger notification and report was filed with DOJ and the Federal Trade Commission (FTC) on 2 January. There’s a 30-day period for an additional information request and that was taken by the DOJ yesterday. The length of the compliance process may extend for 30 days but may be less if the request is satisfied or more if requested by the parties involved. 

CVS and Aetna still hope to complete the merger by the second half of 2018. The respective shareholder meetings are already scheduled for 20 March. Our previous coverage here.

Editor’s thoughts: CVS-Aetna, despite its size, is a relatively straightforward merger, but because of its nature and size, expect some political haymaking and delays to come. This will be a preview of the action around the Amazon-Berkshire Hathaway-JPMorgan Chase cooperative partnership, in whatever they decide to create, if they create: “there’s many a slip twixt cup and lip.”

Updated for 4th Quarter Financials: CVS is reasonably healthy and nimble. Their earnings report is positive in earnings, operating profit, and reinvestment versus prior year. Under US securities law, it’s silent on Aetna. Form 8-K and press release via Seeking Alpha.

Scary Monsters, Take 2: Amazon, Berkshire Hathaway, JPMorgan Chase’s addressing employee healthcare

Shudders through the US financial markets resulted from Tuesday’s Big Reveal of an Amazon-Berkshire Hathaway-JPMorgan Chase combine. Ostensibly they will be “partnering on ways to address healthcare for their U.S. employees, with the aim of improving employee satisfaction and reducing costs” and setting up an independent company “free from profit-making incentives and constraints. The initial focus of the new company will be on technology solutions that will provide U.S. employees and their families with simplified, high-quality and transparent healthcare at a reasonable cost.” This and the Warren Buffett quote about ballooning healthcare costs being a “hungry tapeworm” on the American economy have gained the most notice. Mr. Bezos’ and Mr. Dimon’s statements are anodyne. The company will initially and unsurprisingly be spearheaded by one representative from each company. The combined companies have 1.1 million employees. Release. CNBC.

There is a great deal in those lead quotes which is both cheering and worrisome. To quote a long time industry insider in the health tech/med device area, “What this tells me is finally, enough pain has been felt to actually try to do something. We need more of this.” This Editor notes the emphasis on ‘technology solutions’ which at first glance is good news for those of us engaged in 1) healthcare tech and 2) innovative care models.

But what exactly is meant by ‘technology’? And will they become an insurer?

What most of the glowing initial comments overlooked was the Absolute Torture of Regulation around American healthcare. If this combine chooses to operate as an insurer or as a PBM, for starters there are 50 states to get through. Each state has a department of insurance–in California’s case, two. Recall the Aetna-Humana and Cigna-Anthem mergers had to go through the gauntlet of approval by each state and didn’t succeed. PBM regulation varies by state, but in about half the US states there are licensing regulations either through departments of insurance or health. On the Federal level, there’s HHS, various Congressional committees, Commerce, and possibly DOJ.

Large companies generally self-insure for healthcare. They use insurers as ASO–administrative services only–in order to lower costs. Which leads to…why didn’t these companies work directly with their insurers to redo health benefits? Why the cudgel and not the scalpel?

Lest we forget, the Affordable Care Act (ACA, a/k/a Obamacare) mandated what insurance must cover–and it ballooned costs for companies because additional coverages were heaped upon the usual premium increases. Ask any individual buyer of health insurance what their costs were in 2012 versus 2017, and that’s not due to any tapeworm. Forbes

Conspicuously not mentioned were doctors, nurses, and other healthcare providers. How will this overworked, abused, and stressed-out group, on whose shoulders all this will wind up being heaped, fare? And what about hospitals and their future? Health systems? The questions will multiply.

Disruption is now the thing this year. Of course, shares of healthcare companies took a beating today, many of which do business with these three companies: CNBC names Cigna, Express Scripts, CVS, Aetna (themselves partnering for innovation), and UnitedHealthGroup. Amazon uses Premera Blue Cross (a non-profit). 

Because of Amazon’s recent moves in pharmacy [TTA 23 Jan], there is much focus on Amazon, but the companies with direct financial and insurance experience are…JPMChase and Berkshire Hathaway.

An Editor’s predictions:

  • Nothing will be fast or simple about this, given the size and task. 
  • The intentions are good but not altruistic. Inevitably, it will focus on what will work for these companies but not necessarily for others or for individuals.
  • An insurer–or insurers–will either join or be purchased by this combine in order to make this happen.

Hat tips to Toni Bunting and our anonymous insider.

CVS-Aetna: It’s not integrated healthcare, it’s experiential retail!

[grow_thumb image=”http://telecareaware.com/wp-content/uploads/2017/12/canary-in-the-coal-mine.jpgw595.jpeg” thumb_width=”150″ /]This very interesting take on financial analysis site Seeking Alpha draws another insight from the CVS-Aetna merger–it’s actually part of the rising commercial real estate trend of experiential retail. Here’s the logic. CVS MinuteClinics increase traffic to CVS stores. If they are part of a shopping center, that means those patients might grab a meal, coffee, or shop. Reportedly CVS and Aetna will add nurses and nutritionists, which will further increase attraction, stickiness, and traffic. 

CVS and Walgreens‘ clinics have started, in the new model, to become significant, even anchor, tenants of shopping centers, filling up the empty storefronts left by traditional retail. Doctors’ offices, urgent cares like CityMD, and hospital-run outpatient clinics are filling retail spaces and anchoring new developments. Another part of the experience–fitness clubs, which are also converting vacant office spaces–a line extension increasingly popular with health systems. CVS also bought out department store Target’s drugstores and in-store clinics, which is another model (fill a prescription, buy socks or a TV). Another line extension is partnerships with urgent cares or outpatient clinics, not much of a stretch since CVS already has affiliations with health systems in many areas.

Add telemedicine (Aetna’s partnership with Teladoc) to the above: both MinuteClinics and in-home become 24/7 operations. Not mentioned here is that Aetna can add in-person or kiosk services in CVS stores to file claims, answer questions, or sell coverage.

As this model becomes clearer, big supermarket operators like Ahold (Stop & Shop, Giant), Wegmans, Publix, Shop Rite and others, which have pharmacies in most locations, may ally with or merge with insurers or health systems–or partner with CVS-Aetna. There is also the 9,000 lb. elephant called Walmart, which is 2/3 of the way to an experiential model including nutrition, diet, and fitness (ask any WalMartian). Further insights on how this merger is forcing retailers to adapt are in Drug Store News.

CVS-Aetna could very well be a major mover in experiential retail, which may save all those strip malls. But this article points out, as this Editor has already, that the full shape of what could be experiential healthcare will take years to work and shake out, assuming the merger is approved. Our prior coverage is here.

Rounding up the roundups in health tech and digital health for 2017; looking forward to 2018’s Nitty-Gritty

[grow_thumb image=”http://telecareaware.com/wp-content/uploads/2017/12/Lasso.jpg” thumb_width=”100″ /]Our Editors will be lassoing our thoughts for what happened in 2017 and looking forward to 2018 in several articles. So let’s get started! Happy Trails!

2017’s digital health M&A is well-covered by Jonah Comstock’s Mobihealthnews overview. In this aggregation, the M&A trends to be seen are 1) merging of services that are rather alike (e.g. two diabetes app/education or telehealth/telemedicine providers) to buy market share, 2) services that complement each other by being similar but with strengths in different markets or broaden capabilities (Teladoc and Best Doctors, GlobalMed and TreatMD), 3) fill a gap in a portfolio (Philips‘ various acquisitions), or 4) payers trying yet again to cement themselves into digital health, which has had a checkered record indeed. This consolidation is to be expected in a fluid and relatively early stage environment.

In this roundup, we miss the telecom moves of prior years, most of which have misfired. WebMD, once an acquirer, once on the ropes, is being acquired into a fully corporate info provider structure with its pending acquisition by KKR’s Internet Brands, an information SaaS/web hoster in multiple verticals. This points to the commodification of healthcare information. 

[grow_thumb image=”http://telecareaware.com/wp-content/uploads/2017/12/canary-in-the-coal-mine.jpgw595.jpeg” thumb_width=”150″ /]Love that canary! We have a paradigm breaker in the pending CVS-Aetna merger into the very structure of how healthcare can be made more convenient, delivered, billed, and paid for–if it is approved and not challenged, which is a very real possibility. Over the next two years, if this works, look for supermarkets to get into the healthcare business. Payers, drug stores, and retailers have few places to go. The worldwide wild card: Walgreens Boots. Start with our article here and move to our previous articles linked at the end.

US telehealth and telemedicine’s march towards reimbursement and parity payment continues. See our article on the CCHP roundup and policy paper (for the most stalwart of wonks only). Another major change in the US is payment for more services under Medicare, issued in early November by the Centers for Medicare and Medicaid Services (CMS) in its Final Rule for the 2018 Medicare Physician Fee Schedule. This also increases payment to nearly $60 per month for remote patient monitoring, which will help struggling RPM providers. Not quite a stride, but less of a stumble for the Grizzled Survivors. MedCityNews

In the UK, our friends at The King’s Fund have rounded up their most popular content of 2017 here. Newer models of telehealth and telemedicine such as Babylon Health and PushDoctor continue to struggle to find a place in the national structure. (Babylon’s challenge to the CQC was dropped before Christmas at their cost of £11,000 in High Court costs.) Judging from our Tender Alerts, compared to the US, telecare integration into housing is far ahead for those most in need especially in support at home. Yet there are glaring disparities due to funding–witness the national scandal of NHS Kernow withdrawing telehealth from local residents earlier this year [TTA coverage here]. This Editor is pleased to report that as of 5 December, NHS Kernow’s Governing Body has approved plans to retain and reconfigure Telehealth services, working in partnership with the provider Cornwall Partnership NHS Foundation Trust (CFT). Their notice is here.

More UK roundups are available on Digital Health News: 2017 review, most read stories, and cybersecurity predictions for 2018. David Doherty’s compiled a group of the major international health tech events for 2018 over at 3G Doctor. Which reminds this Editor to tell him to list #MedMo18 November 29-30 in NYC and that he might want to consider updating the name to 5G Doctor to mark the transition over to 5G wireless service advancing in 2018.

Data breaches continue to be a worry. The Protenus/DataBreaches.net roundup for November continues the breach a day trend. The largest breach they detected was of over 16,000 patient records at the Hackensack Sleep and Pulmonary Center in New Jersey. The monthly total was almost 84,000 records, a low compared to the prior few months, but there may be some reporting shifting into December. Protenus blog, MedCityNews

And perhaps there’s a future for wearables, in the watch form. The Apple Watch’s disconnecting from the phone (and the slowness of older models) has led to companies like AliveCor’s KardiaBand EKG (ECG) providing add-ons to the watch. Apple is trying to develop its own non-invasive blood glucose monitor, with Alphabet’s (Google) Verily Study Watch in test having sensors that can collect data on heart rate, gait and skin temperature. More here from CNBC on Big Tech and healthcare, Apple’s wearables.

Telehealth saves lives, as an Australian nurse at an isolated Coral Bay clinic found out. He hooked himself up to the ECG machine and dialed into the Emergency Telehealth Service (ETS). With assistance from volunteers, he was able to medicate himself with clotbusters until the Royal Flying Doctor Service transferred him to a Perth hospital. Now if he had a KardiaBand….WAToday.com.au  Hat tip to Mike Clark

This Editor’s parting words for 2017 will be right down to the Real Nitty-Gritty, so read on!: (more…)

A basket of reflections, considerations on CVS-Aetna: Epic, Cerner, the model, and hospitals’ role

[grow_thumb image=”http://telecareaware.com/wp-content/uploads/2017/12/canary-in-the-coal-mine.jpgw595.jpeg” thumb_width=”150″ /]With the holidays and the end of the year coming in a little over two short weeks, there’s plenty of room for thoughts, reasoned speculation, and some unusual takes on the CVS-Aetna merger. This Editor remains in her belief that among us, there’s a bit of exhaustion and an attitude of ‘wait and see’ around the topic among us. The canaries have a case of the vapors….

Let’s sort through some of the more interesting POVs expressed of late by our fellow pressies, which Readers can consider in between cups of good cheer and bites of All That Food. Bear in mind that this merger has a long road to go on a hard road, with potholes marked DOJ and (in this Editor’s opinion) HHS, before it’s a done deal in 2018.

  • A big win for Epic. Currently the EHR for CVS’ MinuteClinics and most recently the care management programs of CVS Specialty, Epic is bullish on the opportunities in what their VP of population health termed the ‘gray space’ in the patient experience outside of the traditional sites of care. In October, CVS added Epic’s Healthy Planet population health analytics platform to learn more about drug dispensing patterns and medication adherence–this Editor believes in preparation for merger talks. The open question this Editor has after all the glow in this article is how Aetna’s varied systems (e.g. ActiveHealth, Medicity, and others) would integrate into Epic, and the price of poker, because with Epic it’s never free. Ask any hospital. Healthcare IT News.
    • Certainly, their main competitor Cerner is feeling the heat after a slowdown in its VA plans, the single largest EHR implementation ever. Congress has held up initial funding making the contract effective (Washington Technology). It is geometrically more complicated than their simultaneous DoD implementation, with $10 billion estimated over 10 years (FCW). Other wrenches in the works: a fresh CliniComp lawsuit against Cerner based on infringement against their 2003 patent on remote hosting, and their appeal of the no-bid award to Cerner [TTA 23 Aug] against VA. Kansas City Business Journal, Healthcare IT News
  • Is it going to increase cost? It might. And what about info sharing with providers? A Harvard Medical School professor opined to Marketplace that instead of self-treatment at home for a cold, the patient might actually traipse to a MinuteClinic for care, thus driving up healthcare costs. This resembles the RAND logic around telemedicine consult expense we deflated in a series of articles back in the spring. Information sharing with regular providers is a bigger issue which urgent cares, telemedicine, and clinics already are dealing with. The paradox is that integration with a payer, with a retailer’s ability to track ancillary purchases such as OTC meds and DME purchases, might actually help that issue. But will it? Will a combined CVS-Aetna share information or hoard it, further disempowering patients? This Stat article calls on Mark Bertolini to promote shared information, engagement, and accountability to balance the scales.
  • Do we really need hospitals? If they don’t change, we might need a lot less of them except for highly specialized treatment. And this is likely a good thing. The HBR points out that CVS-Aetna is hardly the only threat to the traditional hospital–there’s Johns Hopkins’ Hospital at Home program for older adults, UnitedHealthcare’s growing network of providers under OptumCare, including the recent deal for DaVita dialysis centers, and free-standing, low-cost “neighborhood” hospitals, almost like pop-up stores. The article doesn’t mention ‘consult stations’ like Europe’s H4D, which is proving that the kiosk idea isn’t dead. 

The reality is that we won’t know what this merger entails until it actually happens, if it happens–and its final shape will take years to mold. Related: CVS-Aetna: the canary says that DOJ likely to review mergerAnalysis of the CVS-Aetna merger: a new era, a canary in a mine–or both?CVS’ bid for Aetna–will it happen, and kick off a trend? (what will Amazon and other retailers, including supermarkets, do?)

CVS-Aetna: the canary says that DOJ likely to review merger–plus further analysis and developments

[grow_thumb image=”http://telecareaware.com/wp-content/uploads/2017/12/canary-in-the-coal-mine.jpgw595.jpeg” thumb_width=”150″ /]The canary is still tweeting. News reports indicate that the US Department of Justice (DOJ) will be in the lead reviewing the CVS acquisition of Aetna. This should be no surprise to our Readers. This Editor’s first analysis noted regulatory necessity and earlier this week, more explicitly predicted either the Federal Trade Commission (FTC) or the DOJ would be reviewing.

The New York Post’s Beltway sources (for ex-US readers, it’s the mass market News Corp. paper/site) are talking up DOJ:

President Trump’s Department of Justice appears to be the agency that will review CVS Health’s $69 billion merger with Aetna, sources tell The Post. While the decision is not yet final, the move would not be good news for the merging parties, sources said. “I think they would prefer it to be at the Federal Trade Commission,” one Washington, DC, source said.

The article explains that it’s a tossup as to bailiwicks–FTC reviews retail and drugstore mergers, DOJ insurance mergers. A sound but (by CVS) unwelcome reason for DOJ to review the merger is their familiarity with Aetna after DOJ opposing its failed merger with Humana in Federal court less than a year in the past. Their expertise would be wasted and politically, a cup that FTC would wish to pass inasmuch they are also short on commissioners.

As the Third Century Greek philosopher Sextus Empiricus stated, ‘The mills of the gods grind slowly, but they grind small’ (or ‘exceeding fine’ in more modern citations), which means that justice, at least in the Federal definition, will be served eventually.

  • The Trump Administration has let DOJ question the AT&T/Time Warner merger on antitrust reasons up, down, and sideways, to the point where it is nearly derailed. Much the same can be expected here.
  • The businesses create a new type of healthcare system. Expect HHS to have a say.
  • Congress is already demanding hearings, which given the short time to Christmas break will likely be January. 
  • What may help Aetna’s cause is that the merger with Humana was a friendly one; the decision, at least in the press, was accepted with grace. 

But as wags have said for at least two centuries, you can always tell the pioneers by the arrows in their back. When you’re redesigning the Conestoga Wagons, it has to be expected–which is why the experts gathering here in NYC over the past week have had not much to say about it to date.

Certainly it has been a downer for investment pickers, though both companies had significant profitability challenges facing them in the future. We refer here to several articles in Seeking Alpha where it’s predicted that the acquisition will boost CVS’ growth, but saddle it with huge debt: $45B in new debt, $21B in new equity, plus using $4B in available cash. Are they overpaying? Will it reduce internal cost and boost profitability? Will it do what they say they’ll do, which is to bend the cost curve down by start-to-finish engagement with customers? What pieces are missing? And time is a critical factor–how long this will take to realize is not projected. If you like stock and value charts and graphs, here’s the place. Seeking Alpha (by author): Ciura, Arnold, Ward

Other retailers will have their say. We’ve noted earlier that the vast supermarkets like Publix, Wegmans, Shop Rite or Ahold (Stop & Shop, Giant) are likely looking at opportunities with logical alliances or buy-ins to insurers like Oscar, Clover, Bright Health, or the smaller Blues. Target is already allied with CVS for their in-store drugstores. And then there is retail/online giant Walmart. The Wal-Martians need plenty of healthcare and Humana, based on local Louisville-area reports, is in play after not merging with Aetna.

Looming over all this is Amazon. A little-noticed report in Becker’s from July indicated that their 1492 unit has set about extracting data from legacy EHRs and to build a telehealth platform on Amazon hardware such as Echo. Already noted has been their buying of pharmacy licenses in various states. None of which can make any of the usual healthcare suspects happy.

Analysis of the CVS-Aetna merger: a new era, a canary in a mine–or both?

[grow_thumb image=”http://telecareaware.com/wp-content/uploads/2017/12/canary-in-the-coal-mine.jpgw595.jpeg” thumb_width=”150″ /]This Editor has been at two healthcare conferences in the last four business days (with tomorrow being a third). They should be abuzz about how the CVS-Aetna merger may transform healthcare delivery. To her surprise, there’s been a surprising lack of talk. There is a certain element of ‘old news’, as the initial reports date back five weeks but the sheer size of it ($240bn combined future value, $69bn purchase, an estimated $750 million in near-term synergies), being the largest health insurance deal in history, and the anticipated effects on the health delivery model normally would be a breaking news topic. To this Editor, it is a sign that no one truly knows what to make of it, and perhaps it’s too big–or threatening–to grasp for provider and payer executives especially.

For an overview of what we saw at the time as reasons why and possible competitor reaction, Readers should look back to our original article [TTA 28 Oct]. It’s being presented by both companies as a vertical merger of two complementary organizations, which already were moving towards this model, integrating their different services into “America’s front door to quality health care” (CVS CEO Larry Merlo)–a lower cost setting that saves premium dollars and brings integrated care to consumers’ doorsteps.

CVS brings to the table huge point of care assets: 9,700 pharmacy locations, 1,100 MinuteClinics, Omnicare’s senior pharmacy solutions, Coram’s infusion services, and the more than 4,000 CVS Health nursing professionals providing in-clinic and home-based care. Aetna has about 23.1 million medical members, 14.5 million dental members, and 15.2 million pharmacy benefit management (PBM) services members. Aetna also has a wealth of advanced data analytics capabilities through two subsidiaries, ActiveHealth Management and  Medicity’s health information exchange technology.

Seeking Alpha has an intriguing POV on this entry into a ‘new era’: that both CVS and Aetna consider this to be a long-term reshaping of their business model under the threat posed by Amazon, and are willing to do this despite little short-term financial benefit for either company. The problem as the writer sees it: execution. This is re-engineering care on a national scale, and its benefits are based upon combining intangibles, a murky area indeed especially in healthcare. Time is also a factor, as Amazon is getting pharmacy licenses in multiple states, and is rather an expert at combining intangibles.

Does it signal that the approach to a ‘new era’ in healthcare is accelerating? If this is a preview, 2018 will be extremely interesting. Our ‘canary in the coal mine’ may tweet–or fall over on its perch, asphyxiated.

Some additional points to consider: (more…)