TTA’s Mid-Winter Update: CVS board boots Bertolini , VA’s exec suite revolves again, a clean look at Digital Health 2019 investing, Outcome Health exec settles, NHS snoozes, more!

 

 

February is here, can Spring be far away? It might be an early one for Mark Bertolini, booted from the board of the company he worked so hard to put together. Ashik Desai of Outcome Health may be looking at a Club Fed ‘vacation’. And James Byrne of the VA got an early furlough from Washington for that Florida holiday. So we can take a Mid-Winter’s nap courtesy of NHS, dream of digital health investments for 2020, and won’t buy into a company paying a $1 million monthly rent.

But do wake up in time for DHACA Day on 18 March! A good reason to be in London….

Considering 2019’s digital health investment picture: leveling off may be a Good Thing (Less froth, more quality)
Outcome Health’s Desai reaches settlement with DOJ, SEC (Another cautionary tale of Young Entrepreneurs Gone Wrong–somewhat like Theranos)
Comings and goings, wins and losses: VA’s revolving door spins again, NHS sleep pods for staff, Aetna’s Bertolini booted, Stanford Med takes over Theranos office

Practice Fusion costs Allscripts another $145 million–and leads a closer look at the boundaries between ethics and revenue. AR contact lenses on the way? Outcome Health’s small fish plead guilty. And in the UK, CQC’s recommendations and DHACA Day in March.

Mojo Vision’s really smart vision correcting/AR contact lenses (A bit of a moonshot)
A Practice Fusion coda: an insider’s perspective on the pressure to ethically breach an ‘objective’ service for revenue (How far is too far?)
Allscripts’ $145 million settlement with DOJ on Practice Fusion’s ‘kickbacks’ on opioid prescribing, other charges (Why PF was so cheap)
Outcome Health analysts plead guilty, cooperate with Federal prosecutors (Trap the small fish…)
Digital triage in health service – CQC’s initial recommendations (Moving towards regulatory clarification)
Calling all digital health entrepreneurs: DHACA Day on 18th March is for you! (NHSX, AI, and more)

Acquisitions and funding raises lead off with Teladoc and InTouch Health, DrChrono, and CareBridge. Where are the hottest startups?–not on either coast. But Proteus continues on the Road to No-teous. Femtech’s hot but unvalidated. And events from Dallas to Dubrovnik!

News roundup: Proteus dissolves with Otsuka, EHRs add 16 min. per patient, DrChrono mobile EHR raises $20M, CareBridge LTSS launches, ‘flyover healthtech’ soars
Femtech’s huge potential global healthcare market–but needs to connect with payers and employers (That Old Validation Again)
Consolidation crunch time in telehealth: Teladoc acquires InTouch Health for $600 million (Enterprise telehealth is the charm)
European Patient Experience and Innovation Congress (EPIC 2020) invites world health tech to Croatia (And beautiful Dubrovnik)
Texas Healthcare Challenge WISH-es on women in February hackathon (Dallas TX) (Health Wildcatters’ latest)

To kick off the New Year, we take a Gimlety view of CES and the state of health tech innovation, Babylon Health’s diagnostics, Germany’s health ID system, and the cratering value of many HIT companies.

News roundup for the New Year: NHS £40m diet on login times, Germany’s ‘cheesy’ health ID security, Livongo and Higi partner, MTBC picks up CareCloud (For a knockdown price)
CES roundup: what happened to the excitement around ‘innovation’, robots, VR, and voice assistants? (A Gimlet Eye view of CES)
Babylon Health criticized by Manchester CCG, cardiac activists in UK, Canada (Scaling and AI problems lead to more)
The CES circus opens its largest tent yet in health tech, AI, 5G, and more (Step right up…)

Our windup for 2019: the ACA mandate was found to be unconstitutional, Babylon Health’s entering the US market in January, Appello acquires Medvivo Careline. Will Outcome Health’s execs dodge Club Fed? And calendar DHACA/HTF’s pitch event on 5 February.

The last news roundup for 2019: ACA mandate unconstitutional, more $ for health research, PartnersHealthcare rebrands, Hackensack Meridian pays ransom, breaches>heart attack deaths, telepsychiatry merger, more (Bidding farewell to ’19, and a happy, healthy New Year to our Readers)
Babylon Health to enter US market with two large strategic partners: report (What $550 million will do)
Calling all pitchers! Join us at Baker Botts on 5th February for a great evening (DHACA/HTF London pitch event)
Appello acquires Medvivo Careline telecare in second major move this year (UK)
Outcome Health founders Shah, Agarwal plead not guilty in Federal court
(Dodging the Club Fed Outcome will take years)

Barely two weeks to Christmas, but a blue one for Proteus Digital Health employees and six former Outcome Health execs. HHS leadership mixes it up in public, malware bites Hackensack, but it’s lovely in Leeds–and if you have a new job.

News roundup: Proteus may be no-teous, DOJ leads on Google-Fitbit, HHS’ mud fight, Leeds leading in health tech, malware miseries, comings and goings (Proteus runs out of road for 300, DOJ looking at Fitbit acquisition, HHS execs no lika each other, malware 2020, and it’s Leeds leading)
“There were practices going on there that were wrong”: Outcome Health’s Desai pleads guilty, cooperates with DOJ. (One pleads guilty, three not guilty, with the major players pleading on Monday)


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Considering 2019’s digital health investment picture: leveling off may be a Good Thing

2019 proved to be a leveling-off year for digital health investment. The bath may prove to be more cleansing than bubbly.

We noted that the always-fizzy Rock Health engaged in some revisionist history on its forecasts when the final numbers came in–$7.4bn in total investment and 359 deals, a 10 percent drop versus 2018. When we looked back at our 2019 mid-year article on Rock Health’s forecast [TTA 25 July], they projected that the year would end at $8.4 bn and 360 deals versus 2018’s $8.2 bn and 376 deals. That is a full $1bn under forecast and $0.8 below 2018. Ouch!

In their account, the 10 percent dip versus 2018 is due to average deal size–decreasing to $19.8M in 2019–and a drop in late-stage deals. Their analysts attribute this to wobbliness around some high-profile IPOs, citing Uber, Lyft, and Slack, as well as the near-collapse of WeWork right before its IPO towards the end of 2019.

New investors and repeat investors increased to 627 from 585 in 2018, with no real change in composition.

The headliners of 2019 were:

  • Amazon’s acquisition of Health Navigator adding symptom-checking tools to its health offerings
  • Google’s buy of Fitbit
  • Optum’s purchase of Vivify Health, which gives it a full remote patient monitoring (RPM) suite (right when CMS is setting reimbursement codes for RPM in Medicare)
  • Best Buy’s addition of Critical Signal Technologies for RPM
  • Phreesia, Livongo’s and Health Catalyst’s IPOs. For Livongo and Health Catalyst, current share prices are off from their IPOs and shortly after: past $25 for LVGO and $31 for HCAT. Phreesia closed today at a healthy $33, substantially up from PHR’s debut at $15. (Change Healthcare, on the other hand, is up a little from its IPO at $16, which isn’t bad considering their circumstances on their financing.)

Rock Health only counts US deals in excess of $2 million, which excludes the global picture, but includes some questionable (in this Editor’s estimation) ‘digital health’ players like Peloton, explained in the 25 July article.

Rock Health’s analysts close (and justify their revisions) through discussions with VCs expecting further headwinds in the market–then turn around and positively note the Federal backing of further developments in building the foundation for connected health as tailwinds. No bubbly forecasts for 2020–we’ll have to wait.

Is this necessarily bad? This Editor likes an occasional dose of reason and is not displeased at Rock Health’s absence of kvelling.

Confirming the picture is Mercom Capital’s analysis which also recorded a 6 percent dip 2019/2018: $8.9bn with 615 deals, dropping from the $9.5bn and 698 deals in 2018. Their ‘catchment’ is more global than Rock Health, and encompasses consumer-centric and patient-centric technologies and sub-technologies. Total corporate funding reached $10.1bn.

The GreatCall Lively Mobile Plus Federal District Court lawsuit–and TTA

Eight emails and two comments later, your Editor wonders why the full court press on TTA. Our Readers may have noted that at the end of our last article on Best Buy [TTA 25 June] and their expansion into digital health, there was a brief reference to a recall of their subsidiary GreatCall’s Lively Mobile Plus and a related lawsuit:

This is not without pitfalls. Earlier this month, Best Buy was sued for a defect found in its GreatCall Lively MobilePlus mobile PERS that in action failed to detect falls as described, after GreatCall discontinued the device in mid-May in what a letter from their CEO David Inns described as an “important safety recall,” offering buyers a Jitterbug flip phone or a full refund. 

The link above was to a fairly comprehensive 3 June article in Mobihealthnews on a Federal District Court-Central District of California class action lawsuit filed by firm Bisnar Chase on 22 May on behalf of plaintiff Scott Barnes of San Luis Obispo, California (document via Mobihealthnews).

  • Mr. Barnes purchased the device on 21 April.
  • In early May, Mr. Barnes fell twice but the device did not detect the fall and automatically alert emergency services. Mr. Barnes is a disabled veteran and relied on the device to detect falls. The lawsuit states that he suffered unspecified damages as a result.
  • In a letter from David Inns as we noted above, GreatCall notified purchasers/subscribers dated 15 May (letter) that it was recalling all devices. It acknowledged fault in a quality issue. It also asked customers to stop using the device immediately and return it for a full refund plus additional considerations.

More on this is from a Morning Call (Allentown PA) article (picked up from the San Diego Union-Tribune) provided by Mr. Barnes to this Editor. It makes the cogent point that the device as a PERS did not require FDA 510(k) clearance. Fall detection does not fall under Class I or II medical device regulation as it does not monitor vital signs.

Mr. Barnes has written five separate emails to this Editor within less than ten minutes, with another three after our reply. Obviously, this matter is important to him. Moreover, our email is public and we welcome direct contact (including confidential contact) from our Readers with pertinent information. We also welcome comments on articles and don’t mind it being lively.

However, there were two comments at the end of our earlier article on Best Buy’s acquisition of Critical Signal Technologies that are, in the opinion of this Editor, marginal. One from ‘Scott’ implied that there was a relationship between this publication and Best Buy: “What is your companies relationship with the Recalled Great Call/Best Buy Mobile Lively Plus defective device that is now under a Federal Legal Action and Lawsuits.” (My answer was, of course, is that we report on these two companies, and other than that, have no relationship.) The other from ‘Kennie’ was phrased as ‘Be Warned’ and made certain assertions about the device and the company which have yet to be proved in court. This was published with some trepidation.

We ask commenters to be respectful of other Readers, of the facts, and understand that we report–and comment–as we see it.

Best Buy enlarges health tech footprint with Tyto Care expansion, connected fitness products (updated)

Best Buy is dramatically increasing its wellness profile with two announcements around digital health. The first is today’s announcement of a further rollout of retailing Tyto Care’s TytoHome device and platform in select Best Buy stores in California, Ohio, North Dakota, and South Dakota. This adds to the previously announced Minnesota locations [TTA 17 Apr] for a total of 30, as well as nationwide via BestBuy.com. In Minnesota, North and South Dakota, Tyto Care connects to Sanford Health doctors 24/7. In California and Ohio, as well as for online sales, Tyto Care partners with LiveHealth Online, part of American Well, except for users in Louisiana and Mississippi who will be covered by Ochsner Health System. Each visit is a maximum of $59, which may be less depending on the patient’s insurance plan or the type of visit. Tyto Care is also offering the plan through LiveHealth Online to select employers. Release.

Tyto Home is a handheld examination device with attachments that can examine the heart, lungs, skin, ears, throat, and abdomen, plus body temperature. The captured information can be sent or examined live by a primary care provider.

Best Buy is also betting that people also will flock to their stores to sample connected fitness, most with virtual classes and coaching. Last week they highlighted five: Flywheel Sports, an indoor cycle with online classes; Hydrow, a rowing machine with virtual classes on real-life bodies of water; NordicTrack, with a line of treadmills, bikes, rowers and strength training machines with virtual classes; NormaTec, a digital compression recovery system; and Hyperice, which produces a range of recovery tools like massagers. The digital fitness market is massive–estimated by Piper Jaffray at around $5 billion today, over double from 2016’s $2.1 billion. Mobihealthnews, CNN Business

This adds to a Best Buy digital health profile that includes the Big Buy of GreatCall last year and Critical Signal Technologies monitoring last month to add senior remote monitoring devices to their portfolio. This is not without pitfalls. Earlier this month, Best Buy was sued for a defect found in its GreatCall Lively MobilePlus mobile PERS that in action failed to detect falls as described, after GreatCall discontinued the device in mid-May in what a letter from their CEO David Inns described as an “important safety recall,” offering buyers a Jitterbug flip phone or a full refund. But Best Buy is hedging its bets on tech with higher price-point connected fitness exercise machines and wearables which will attract higher end buyers into stores and online.

Best Buy buys Critical Signal Technologies, increasing telehealth footprint

Late last month, Best Buy with little fanfare bought Critical Signal Technologies (CST) of Novi, Michigan. CST is a device-agnostic telehealth monitoring and social work services platform through its Care Center, covering services such as PERS monitoring, medication management, and remote patient monitoring. Terms were not disclosed for this private company founded in 2006, but CST cares for 100,000 patients and has partnerships with 1,500 payers, including many Medicare Advantage plans. 

For those seeking the sunnier uplands of digital health, it’s surprising but gratifying to see Best Buy place another sizable bet in the home health area. The recent acquisition of GreatCall for $800 million is larger, but GreatCall is a turnkey, profitable company. The partnership with Tyto Care [TTA 17 April] to retail their system is relatively low risk, limited in scope, and follows their Midwest intro pattern (followed over 12 years ago with, believe it or not, QuietCare when owned by Living Independently).

Best Buy has gained kudos for moving into specialty areas in healthcare when its fellow retailers have been falling by the wayside. It covers both their bricks-and-mortar–where older adults still like to shop–and online, delivering a large slice of health tech directly to consumers. One asset, the tech-oriented Geek Squad, is a ready made unit for installing and walking older adults through using home tech. MedCityNews, MarketWatch