An ‘insider’ point of view on the Connect America acquisition of Philips Lifeline

July 9, 2021 | by | 2 Comments

This Editor, through a search initiated due to reader Adrian Scaife’s comment on the article below, happened on a back article from a news source on the Connect America acquisition of Philips Lifeline. Who knew (as they say) that there was a newsletter solely devoted to the PERS business? The article was written from a real insider point of view with a complete background on Connect America, Lifeline, and also why Philips put Lifeline up for sale.

  • It’s likely that Philips bought high and sold low. In 2006, Philips purchased Lifeline for a reported $750 million, then HealthWatch for an additional $130 million. At the time of the announcement, PE Hub put the value of the company in the $200-400 million range. It’s understandable that with the rise of smartphones and mobile, wrist-worn band-type PERS, the value of what is largely a traditional PERS company would suffer, but the best case is a 60 percent loss over 14 years.
  • The industry believes that Philips mismanaged the company. Example: dealers did not have 4G/LTE cellular equipment to replace the 3G in the field. The phrases ‘a mess’ for the organization and ‘run the Lifeline name into the ground’ aren’t used lightly.
  • For the past few years, Lifeline has been in the shadow of Philips’ other clinically-oriented healthcare systems. As this Editor noted, Philips has divested or spun off multiple businesses in North America.
  • Philips ran the business without understanding its unique dynamics, including dealer networks and a B2B +B2C market of home health agencies and senior housing combined with direct-to-consumer sales. They focused on the latter and kept it on short rations for the past few years.
  • They were also slow to market with innovations and had a significant amount of negative publicity on the performance of AutoAlert for fall detection starting in 2011 (Editor Steve) and in 2014.

The Philips Lifeline saga was a longer and more costly version of Tunstall’s acquisition of AMAC. At the time of sale, Lifeline was #1 in PERS, and AMAC was #3. Even with Tunstall’s expertise and the addition of remote patient monitoring, the US market was Too Tough For Tunstall. They sold in 2019 to…drum roll…Connect America.

The article includes excerpts from an interview with CEO Janet Dillione, a review of the Connect America team, and well wishes from those insiders. PERS Insider (Subscription to the weekly newsletter is free and found here.)

Another irony: Just prior to the acquisition, Dennis Shapiro, the former head of Lifeline, passed away on 16 February, aged 87. Mr. Shapiro was responsible for the company creating the first modern PERS radio pendant, telephone-connected base unit, and call center monitored service in 1980.

 

News/deals roundup: Connect America finalizes Philips aging/caregiving buy; Amedisys-Contessa $250M hospital-at-home; UK’s Physitrack $20M IPO, Dutch motion tracker Xsens

July 7, 2021 | by | 2 Comments

Kicking off our week….

Connect America closed today (6 July) the purchase of Royal Philips’ Aging and Caregiving line of business. This includes the top basic personal emergency response system (PERS) device provider, Lifeline. Purchase price by Connect America’s owner, Rockbridge Growth Equity, was not disclosed. For Connect America, they now top 900,000 subscribers to PERS and monitoring services. At this point, the combined business will have 1,500 employees and 3,000 provider partners. Lifeline also includes services such as 24/7 response with their products: the HomeSafe traditional home PERS with and without AutoAlert fall detection and GoSafe2 mobile PERS with AutoAlert.

There is no indication from the company release or the brief Mobihealthnews article on whether the Lifeline brand name or others from Philips will be retained. Lifeline’s history dates back to 1974, with Philips adding the AutoAlert, HomeSafe, and GoSafe product after their purchase in 2006. Other undisclosed considerations are integration and rationalization of the current Connect America PERS and monitoring products with Lifeline. There is also a promotional partnership agreement with AARP that likely–but not necessarily–will transfer with the purchase. This Editor can tell you that a seat at AARP’s poker table requires a tall stack of chips.

Our earlier article on the acquisition profiles Connect America, Lifeline, and the decline of traditional/mobile PERS with the rise of accessible wristwatch and band forms that don’t scream ‘I’m at risk of falling and not being able to get up!’

Home healthcare provider Amedisys announced their $250 million acquisition of Contessa Health, extending into hospital-at-home and skilled nursing-at-home. As our Readers who looked at Ziegler’s analysis [TTA 25 June], this is a hot and tech-driven care area. Amedisys is claiming that they are the first home health, hospice, and personal care service provider to expand into Contessa’s business, which is hospital-at-home and skilled nursing facility (SNF) at-home including palliative care services launched recently with Mount Sinai Health System (NY). Contessa will operate as a separate division of Amedisys, which plans to invest in both the future growth of Contessa and their proprietary informatics platform CareConvergence with the aim of creating a “premier home-based health system”. The acquisition is expected to close on 11 August. Contessa has both hospital partnerships, which are the bulk of Amedisys’s client business, and joint venture/payer partnerships. Amedisys release, Hospice News

The UK’s Physitrack quietly went public with a raise of over $20 million. The IPO was listed on 18 June on the Nasdaq First North Premier Growth Market (Nasdaq Nordic, Sweden and Finland) earlier this month with an original offering of SEK 40 ($4.69) per share with 4.4 million shares in the offering. The market value is estimated at SEK 624 million ($72.5 million). Unfortunately, you cannot look beyond this investor page if you are in the US, Australia, Canada, Hong Kong, Japan, New Zealand, Singapore, Switzerland, South Africa, or South Korea as citizens of these countries cannot invest in their shares. Physitrack is a digital physical therapy plus patient engagement company headquartered in London with offices in Santa Monica, Houston, and Utrecht. It was in the first group of the NHS’ Digital London accelerator program and now is distributed in 100 countries serving 1 million patients. Mobihealthnews, Baker McKensie (legal advisor announcement)

And keeping it physical, Xsens, a Dutch 3D motion capture and attachable sensor company for therapy and ergonomics study, is extending into Automatic Reporting as part of its online MotionCloud platform. A full report, graphs, and a digital recording of an avatar completing the movements can be available to physiotherapists, health specialists, and ergonomic consultants in under two minutes. In addition, they announced a new Awinda Starter system which has their proprietary motion-tracking technology at a more affordable price. Xsens press release, Mobihealthnews

Lightning news roundup: AI for health systems Olive scores $400M, VA’s sticking with Cerner EHR, Black+Decker gets into the PERS game

July 2, 2021 | by

As here in the US we are winding up for our Independence Day holiday (apologies to King George III)….

Olive, a healthcare automation company for healthcare organizations, scored a venture round of $400 million from Vista Equity Partners. To date, it’s raised $856 million through a Series G plus this round and is now valued at $4 billion according to the company release. Olive’s value proposition is automating via AI routine processes and workflows, such as benefit verification discovery, prior authorizations, and billing/payments for health systems. About 900 US hospitals have adopted Olive’s systems. Mobihealthnews.

Breaking: The US Department of Veterans Affairs will be staying with Cerner Millenium for their EHR modernization from VistA. This follows a 12-week review of the implementation following failures within the $16 billion program itemized by the Government Accountability Office (GAO) in February [TTA 19 Feb]. Secretary Denis McDonough is scheduling two further review weeks to determine additional changes to the program. The intent is to build a cloud-based system fully interoperable with the Department of Defense’s Military Health System (MHS) also built with Cerner. FedScoop, Healthcare IT News

And in the What Are They Drinking in Marketing? I want some of that, stat! department…

Black + Decker is now becoming a PERS provider with the introduction of Black+Decker Health and the goVia line of mobile and home-based PERS with optional fall extension and call center monitoring through Medical Guardian . The devices are a fairly predictable line of cellular-connected (Verizon, AT+T) with a ‘classic’ home landline unit. The units are being sold through Amazon. B+D release

From a marketing perspective, the Black+Decker name, identified for decades with home and power tools, on a PERS line is also a classic–a classic mistaken line extension like Cadbury mashed potatoes or Colgate frozen entrees. Buy a PERS, get a drill? Relevance and fit to a older, female-skewing group?  It surely looks like their parent Stanley, which is a leading company in institutional alarm and location services. offloaded this legacy business to them. (Judging from the website, someone’s in a rush as some pages still have ‘greek’ copy under headings.) Hat tip to a Reader who wishes to remain anonymous.

Tunstall under fire in Swedish court on appeal of Adda procurement exclusion

July 2, 2021 | by

Tunstall appeals Swedish procurement exclusion. Tunstall has gone to a Swedish administrative court to fight the exclusion by Adda Inköpscentral from the Swedish framework agreements for the municipal procurement of telehealth and security alarms,  In April, Adda, the strategic supply consultant and agreement manager, announced that Tunstall would be excluded from two 2018-2019 framework procurement agreements as well as the new four-year framework agreement on performance issues, including a major problem with alarm responses last October [TTA 22 May]. 

What is being debated in court in the action between Tunstall and Adda is the following, according to SVT Nyheter (disclosure: translated from Swedish to English via Google Translate):

  • Certain municipalities received compensation from Tunstall, which the company has refused to disclose nor what the agreements look like, other than they were based on a template. Municipalities also refused to send Adda copies of the agreements, citing confidentiality. In Sweden, municipalities can negotiate agreements on their own with suppliers, but if they choose to work under the framework agreement, the municipalities create their own detailed contracts using the framework as a basis. Adda apparently received copies of agreements that included ‘silence’ (presumably non-disclosure or confidentiality) clauses. According to Adda, this violates both the framework agreement and ‘publicity legislation’.
  • According to SVT quoting Adda’s filing, “Tunstall “consistently deliberately withheld information from Adda, probably in order to avoid exclusion in the Procurement” and now “deliberately tries to mislead not only Adda, but also the administrative court.” This also refers to data files that contained information about when alarms stopped working in over 100 municipalities in October 2020 due to, apparently, a bad software update. The translation in the article subhead refers to “lying and misleading the court”.
  • Municipalities had delays in implementation going back to 2018. Ystad demanded a fine of half a million for its delays, where it turne out that response times had been calculated in different ways, After Tunstall promised improvement, Ystad dropped the demand. Götene signed an agreement on security alarms for nursing homes in spring 2020 but only a limited number were operative by December well into this year. This municipality remains unhappy according to SVT, contradicting Tunstall’s official statement to the publication, which closes the SVT main article.

There is no indication in the article when a decision will be made by the administrative court.

There is a second SVT article on the disagreement on the handling of an alarm call in Lidingö. The Tunstall call center did not call for an ambulance, the city was delayed for two hours, and the person died. Neither Tunstall nor Adda were interviewed for the 24 June SVT articles. Hat tip to two of our Readers who wish to remain anonymous. One also referred, with a certain gimlety turn, to two 2018 interviews with CEO Gordon Sutherland on the subject of building trust both as an organization and with their customers. PwC (January 2018) and The Trusted Executive (June 2018).

Four ‘moonshot’ health tech startups aiding cognition and brain health (podcast)

July 1, 2021 | by

This 30 minute podcast interviews four tech entrepreneurs in the StartUp Health Health Transformers accelerator/funding ‘moonshot’ program. Their focus is on technologies designed to improve brain health and address issues around cognitive impairment and disease.

  • Amir Bozorgzadeh, CEO & Co-founder of Virtuleap, a Lisbon-based company that uses VR and gamification in the Enhance VR brain training app for a daily cognitive workout of short, intense, and fun games
  • Kate Rosenbluth, PhD, Chief Science Officer & Founder at Cala Health, Cala Trio is a wrist-worn stimulator that reduces hand tremor for people with essential tremor (ET). Up until this therapeutic device, the only option for ET was a stimulator inserted in a key portion of the brain. 
  • Maor Cohen, CEO & Co-founder of n*gram health, uses immersive digital experiences and augmented reality delivered via smartphone and tablet for assessment, evaluation, and improvement in older adults with cognitive impairment.
  • Mark Cavicchia, RC21X co-founder. RC21X has developed two brain and human performance assessment tools, Roberto and RC21X. These provide brain performance trend data that can be used in healthcare, for monitoring treatment and recovery plan effectiveness, as well as industrial safety.

All these businesses are well along in proven technology and funding, a trend we’ve been finding with accelerators that once specialized in startups barely out of seed and still proving their models. Cala Health, for example, we noted in 2016 with its $18 million raise, but has been around since 2013. RC21X, once Home Base, also has been around since 2013.

The podcast is hosted by India Edwards and Logan Plaster. Mr. Plaster, StartUpHealth’s media director, and this Editor worked together on an article about the late Viterion Digital Health in his previous venture with Telemedicine Magazine.