$6.8 bn in digital health funding through Q3 blows the doors off 2017: Rock Health

And the money rolls in. All Rock Health had to do was wait a quarter to get breathless [TTA 4 July], because digital health funding through Q3 is now exceeding the full year 2017 by $1.1 bn. The average deal size has accelerated substantially–$23.6 million versus last year’s $16.4 million. The deals are bigger but fewer–290 so far versus 357 last year–and the length of time between funding rounds has consistently grown shorter. 

Another proportional shift is the growth of Series B and C startups, at long last, and a more than doubling of D+ deals.

A big shift in this quarter were that the stars lined up, perhaps for the first time, with at-home and on demand health. American Well of course at $291 M loaded these dice, but also benefiting from the throw were the similar Doctor on Demand, Honor (home care), and NowRx med delivery service. Faster meds at lower cost have become a major area of action (Amazon with PillPack, TelePharm, others). Digital therapeutics that help to monitor health at home followed from Pear Therapeutics, Click Therapeutics, Akili Interactive, Virta Health, Propeller Health, and Hinge Health. 

And where the money comes from? Independent venture funds still account for 63 percent, and corporate VCs for 15 percent.  Some of those CVCs are major names such as GSK, Abbott, and Cigna. Big tech is also moving into healthcare, with Amazon’s $1bn acquisition of PillPack, the Apple Watch 4, Google’s Nest.

Rock Health’s trend prediction is continued consolidation in digital health, with companies continuing to acquire each other. “With available capital and a desire to build out product lines, talent, and client bases, it’s not surprising to see a great deal of M&A activity within digital health.” One example given is Welltok, which plays in the consumer health ‘activation’ area, and their acquisitions from corporate health management programs to Wellpass, which has created such as Text4Baby, Text2Quit and Care4Life and whose largest customer is state Medicaid plans.

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.

Rock Health’s report. Healthcare Dive.  Mobilhealthnews‘ own top 17 M&As, which include Best Buy-GreatCall and Logisticare-Circulation in the burgeoning area of non-emergency medical transport (NEMT).

Is Uber fit to deliver healthcare transport? Healthcare organizations may want to check.

Healthcare-related organizations have codes of conduct pertaining to suppliers. Does Uber meet compliance standards? As we reported a few days ago in our article on the burgeoning area of non-emergency medical transport (NEMT) [TTA 9 Mar], Uber Health’s debut with a reputed 100 healthcare organizations has led this Editor to a further examination of Uber, the organization. Uber has had a hard time staying out of the headlines–and the courts–in the past two years, in matters which might give healthcare partners pause.

  • On 21 Nov, Uber reported that the personal data of 57 million users, including 600,000 US drivers, were breached and stolen in October 2016–a full year prior. Not only was the breach announcement delayed by over a year, but also in that year it was made to go away by Uber’s paying off the hacker. Reuters on 6 December: “A 20-year-old Florida man was responsible for the large data breach at Uber Technologies Inc [UBER.UL] last year and was paid by Uber to destroy the data through a so-called “bug bounty” program normally used to identify small code vulnerabilities, three people familiar with the events have told Reuters.” The payment was an extraordinary $100,000. “The sources said then-CEO Travis Kalanick was aware of the breach and bug bounty payment in November of last year.” The Reuters article goes further into the mechanism of the hack. It eventually led to the resignation of their chief security officer, former Facebook/eBay/PayPal security head Joe Sullivan, who ‘investigated’ it using encrypted, disappearing messaging apps. Atlantic.
  • CEO and co-founder Travis Kalanick was forced to resign last June after losing the confidence of the company’s investors, in contrails of financial mismanagement, sexual harassment, driver harassment, and ‘bro culture’. This included legal action over Uber’s 2016 acquisition of self-driving truck startup Otto, started by former Googlers who may or may not have lifted proprietary tech from Google before ankling. These are lavishly outlined in Bloomberg and in an over-the-top article in Engadget (with the usual slams at libertarianism). Mr. Kalanick remains on the board and is now a private investor.
  • The plain fact is that Uber is still burning through funds (2017: $1bn) after raising $21.1bn and its valuation has suffered. The new CEO Dara Khosrowshahi, who earlier righted travel site Expedia, has a tough pull with investors such as SoftBank and Saudi Arabia’s Public Investment Fund. Also Mashable.

Healthcare and NEMT, as noted in our earlier article, are a strong source of potential steady revenue through reimbursement in Medicare Advantage and state Medicaid programs, which is why both Uber and Lyft are targeting it. The benefits for all sides–patients, practices, these companies, sub-contractors, and drivers–can be substantial and positive in this social determinant of health (SDOH).  

Healthcare organizations, especially payers, have strict codes of compliance not only for employees and business practices but also for their suppliers’ practices. Payers in Medicare Advantage and Medicaid are Federal and state contractors. While Uber under its new CEO has shown contriteness in acknowledging an organization in need of righting its moral compass (CNBC), there remains the track record and the aftermath. Both deserve a closer look and review.

Lyft and Uber’s big tech twists on a Social Determinant of Health–medical-related transportation

Social determinants of health (SDOH), that widely-discussed concept often dismissed as the turf of social workers and small do-good companies such as Healthify, are receiving a substantial boost from two profit-oriented, on-demand transportation companies: Uber and Lyft. Several years ago, smaller companies such as Circulation and Veyo [TTA 21 Feb, 26 Apr 17] entered the non-emergency medical transportation (NEMT) field with their on-demand services. These proved to be valuable links in the continuum of care–valuable in helping patients make their appointments, at generally a lower cost than Access-a-Ride or taxis, while collecting a wealth of data on usage.

Uber and Lyft’s recent announcements take the NEMT concept further with integration into discharge planning, chronic care management in practices, and EHRs while keeping it simple for patients and caregivers.

  • The launch of Uber Health, targeted to healthcare organizations (and just in time for HIMSS). The ride booking for both patients and caregivers uses a HIPAA-compliant dashboard for the health manager to book the ride, and text messaging to the patient for confirmations and pickup. Over 100 healthcare organizations are piloting the service. MedCityNews
  • Lyft Business inked a deal with Allscripts to integrate booking transportation into appointment setting. The Allscripts EHR is in 45,000 physician practices and 2,500 hospitals (which doesn’t include newly-acquired Practice Fusion’s 30,000 small ambulatory sites). Besides its own driver base, Lyft also has used its Concierge API to facilitate partnerships with NEMT brokers working with providers such as Circulation, National MedTrans (the NEMT provider for Anthem’s CareMore Health Plan HMO), and American Medical Response for drivers and more specialized vehicles. Hitch Health works with Lyft and independently integrates into Epic and Athenahealth. MedCityNews, POLITICO Morning eHealth (scroll down).

But does providing transport for appointments save money? The logic behind it is that missed appointments can exacerbate existing conditions; a direct example is dialysis, where missing an appointment could result in a hospital admission. Another area is patient avoidance of making appointments. The CareMore Health Plan study reduced waiting times and ride cost, increasing patient satisfaction–great for HEDIS and ACO quality scores, but the longer-term cost saving is still to be determined.

Another attraction for Lyft and Uber: steady revenue. In Medicare Advantage, 70 percent of members are covered and all state Medicaid programs reimburse their members for qualifying transportation.

Sustainable transportation models for patient access to care at lower cost

Guest Editor Sarianne Gruber (@subtleimpact) and MovedbyMetrics) returns to the transportation aspect of social determinants of health earlier explored in her article on Veyo [TTA 21 Feb]. New on-demand services provide affordable ‘a to b’ transportation not only which is clean, safe and tailored to the patient’s needs, but also accountable to the health system or provider. A surprise here is that Circulation’s service is not smartphone dependent. 

Circulation, Inc. launched its Non-Emergency Medical Transportation (NEMT) system with just a few hospitals back in September 2016. This game changer company provides on-demand rides with a healthcare transportation platform and an Uber app.  To date, they have expanded significantly with over 30 new clients and ride access in over 25 states. Last week, I had the pleasure to speak with Robin Heffernan, PhD., the co-founder and CEO of Circulation, to learn how they have been able to achieve a successful cost-effective and reliable transportation system for patients and providers. A gently edited version of our conversation follows below.

How has Circulation reduced the cost of a ride with an NEMT system? How will cost savings trickle down?

Heffernan: Our health facility clients are saving costs on the ride component only.  When someone transitions from mostly using taxis to being able to use Uber rides, the cost of that ride is 40 to 50 percent less. We have not yet calculated the bigger total cost savings for our clients. When patients actually make their ride appointment, the savings begin because they are not missing a primary care appointment. Without a scheduled ride, they may decide to take an ambulance the next day to the ER for a basic cough.  I think this is a huge advance for this industry. From day one you are going to achieve significant savings on a pure ride cost basis, get increased patient satisfaction and see your patients actually getting to appointments on time. Health facilities can track for the first time a whole downstream value proposition, and actually tie transportation to appointments to costs like ED utilization. Our solution tracks this component with our clients.

How does Circulation’s transportation model impact value-based care? (more…)