News & deal roundup: Oak Street adds telespecialty RubiconMD, ATA plumps for wider telehealth access, yet claims fall to 4%, West Suffolk NHS adds Zivver mail/file security, Northwell’s $100M for AI–and miss industry shows yet?

October 29, 2021 | by

Primary care network Oak Street Health acquired virtual specialty telehealth provider RubiconMD for $130 million. Oak Street is a 19-state network of physicians in care centers who specialize in Medicare patients. RubiconMD has 230 specialists who provide doctor-to-doctor teleconsults (eConsults) in 120 specialties, with an emphasis on cardiology, nephrology, and pulmonology, which is a strong fit for Oak Street. RubiconMD also has separate offerings for specialty care panels and behavioral health. The $130 million includes up to $60 million in cash or cash/stock, subject to achievement of defined performance milestones. Management transitions were not disclosed. Release, FierceHealthcare

The American Telemedicine Association wants to preserve wider telehealth access into 2022–even if the public health emergency (PHE) for Covid has to be extended. Although the Medicare Physician Fee Schedule proposed by CMS for 2022 includes areas of wider telehealth access and reimbursement (temporary access under Schedule 3 added in 2021) into 2023 regardless of the PHE, Congressional action is required to permanently expand telehealth beyond the existing programs mostly for rural areas. If necessary, ATA is advocating that Health & Human Services (HHS) extend the PHE through 2022 so that telehealth access and reimbursement are preserved. ATA release, FierceHealthcare

While this Editor can understand ATA’s frustration and the sincerity of its aims, it distorts the emergency meaning of a PHE that is just about nonexistent except for mandates. And telehealth claims, even with current access, have sunk down to a tick above 4%, 60% of which are mental health codes (FAIR Health July national data). Too many providers, too little demand? 

The West Suffolk NHS Foundation Trust (WSFT) has selected Zivver UK to secure its mail and file transfer systems, as it migrates from NHS Mail to Microsoft 365. It includes encrypted email to patients as a core requirement meeting NHS digital standards, and ease of use for both sender and recipient in MS Outlook. 4,800 staff at WSFT, which covers 280,000 people who live in West Suffolk. Release. Hat tip to HISTalk for this and the next two stories.

Northwell Health backs AI health startups via joint venture with Aegis Ventures with $100 million stake. The JV between the two New York-based companies “will ideate, launch, and scale AI-driven companies to address healthcare’s most challenging quality, equity, and cost problems” with stakeholders across Northwell’s extremely large system. According to the release, “Northwell has a track record of success in AI research, including the development of a landmark algorithm that predicts patients’ overnight stability to reduce the need to wake them for vital sign checks.” Nice to know that a health system appreciates patient sleep. 

And finally–miss the grip and grin of a F2F industry trade show and presentations? Your Editor, who was once a habitué of meetings from Boston to Florida, does. Really! Virtual conferences, once fun, are now tedious. So enjoy this walk through of HLTH21 by Ben Rooks, the Investor Man, at the Boston Seaport (a great venue, though not precisely central), right down to the barbers, puppy rescue, disco ball, and juice shots. Courtesy of HISTalk

Theranos, The Trial of Elizabeth Holmes, ch. 5: how to easily fool rich people and their investment offices

October 28, 2021 | by

It seems like smart people with big money like to jump into wells with no bottom, too. Yesterday’s testimony by Lisa Peterson in the Elizabeth Holmes trial indicated that Ms. Holmes knew her ‘marks’ as well as any grifter at the horse track. She concentrated on Very Rich People, whose Very Large Private Investment Funds are handled by ‘family offices’. Those offices handled investments for families such as DeVos (one of the top 100 richest families in the US), Walton (Walmart), and Cox (media). Holmes targeted five or six of these family offices, with the come-on line that she was seeking them because, after all, institutional investors wanted to recoup their investment via going public too soon for the Miracle Blood Lab.

Perhaps it was the prospect (and prestige) of backing a revolutionary healthcare technology, or large denominations falling from the sky, or just leaving it to their advisors, but they believed the sizzle, didn’t check that the steak was soy–and lost up to nine-figure sums. For these family offices, and for Rupert Murdoch, the losses were embarrassing, not life-affecting.

The former Secretary of Education Betsy DeVos did not testify either, leaving it to Lisa Peterson, who oversees private equity investments for RDV Corp., the DeVos family office. Ms. Peterson, who wouldn’t have the job if she weren’t decently savvy, drew a picture for the prosecution of being consistently lied to by Ms. Holmes and Theranos executives before committing to a $99 million investment through its legal entity Dynasty Financial II, LLC on 31 October 2014:

  • Holmes and Balwani showed financial projections of $140 million in revenue in 2014 and $990 million in 2015. Peterson testified she did not know that both 2012 and 2013 had zero revenue–a real lapse on her part, in this Editor’s view
  • Theranos claimed validation by ten major pharmaceutical companies, including Pfizer (in last week’s testimony, revealing that their validation was forged)
  • The RDV Corp. group was told multiple times that Theranos would offer hundreds of tests via finger stick with the analyzer at 50% of the cost
  • The DeVos investors supposedly never knew that third-party analyzers were doing all the testing. Both the pharma company validation and testing were critical in the underwriting agreement, Peterson said.
  • Holmes told Peterson the analyzers were being used in military helicopters (false) and that the company did not buy third-party analyzers (false, again).
  • Prior to the investment, three members of the DeVos family and Peterson’s boss Jerry Tubergen met with Holmes at Theranos’ Palo Alto headquarters on 14 October. Cheri DeVos had her blood drawn and tested using the Theranos lab. The family subsequently doubled their investment.

The binders were thick, the press articles at that stage were effusive, and both Safeway and Walgreens were going to roll it out in their stores. All the risk was on those companies for the execution, according to Petersen’s notes. 

So what we see is a classic ‘fake till you make it’ strategy, designed to play on two major retailers looking to buck up their pharmacy areas and select private investors with major funds. The articles in the WSJ and Fortune were fulsome to the point of parody. Holmes made an impact on supposedly cynical writers and Jim Cramer of CNBC’s ‘Mad Money’, who was highly influential on markets and investors at that time. It was to Cramer that Holmes made the famous statement, “This is what happens when you work to change things, and first they think you’re crazy, then they fight you, and then all of a sudden you change the world.” Whether she was scripted or really thought she was The Second Coming of Steve Jobs, it’s an audacious statement worthy of Napoleon or George S. Patton–which she had to walk back to Mr. Cramer and others in the press by early 2016 when the John Carreyrou/WSJ reporting made its own impact. The family offices questioned Holmes, of course, based on the email trail–and Theranos consistently downplayed the news to them as well as denying anything was wrong to the press.

What this Editor would like to know is once the signals went sideways, did any of these private offices’ investment managers get into Theranos to do some overdue due diligence and turn over some rocks, knowing that snakes might well fly out–or just let it ride?  CNBC, KTVU Fox 2 tweetstream 

What is somewhat risky may be the jury. The possibility of a mistrial has increased with halfway to go.  There have been three jurors removed, with their seats filled from the five alternates selected. Three more losses would lead to fewer than 12 jurors. Now the prosecution and defense could agree to go on–not a likely scenario. Judge Davila has increased the jury day by an hour daily to speed the trial up, but reports indicate the usual work and family problems. One juror was recently dismissed for playing a sudoku puzzle in the jury box due to “fidgetiness”. Choosing a jury was difficult in this tech area as few with the background and intelligence to understand financial fraud would be willing, for work and personal safety reasons, to appear on the jury. The defense is looking to unseal the juror questionnaires for their own strategic reasons. But CNN makes a mountain out of a speed bump, since Judge Davila is unlikely to pave any roads towards a mistrial.

Unfortunately, the Mercury News, Bloomberg, and WSJ, which would be primary sources, are paywalled.

TTA’s earlier coverage: Chapter 4 (see new comment from Malcolm Fisk), Chapter 3, Chapter 2, Chapter 1

To be continued….

Google joins the behavioral health wars, adds new senior executive from Headspace

October 28, 2021 | by

Google, having disbanded Google Health as a unit and scattered their products and teams internally, has decided that behavioral health is worth spending on across business lines. Megan Jones Bell, Psy.D., formerly chief strategy and science officer of Headspace, recently purchased by Ginger, rejoins Google this week as their first clinical director of consumer and mental health. 

She will be overseeing Google’s approach to mental health, supervising a team of clinicians, as well as coordinating primarily consumer-facing products such as the controversial verification of health information on Google-owned YouTube, across Google Search, Maps, Fitbit, and Cloud, medical products like the Care Studio EHR search app, depression screeners, and for employee health and safety. FierceHealthcare, Becker’s HealthIT

At least initially, Google does nothing in a small way. At HLTH21, Google’s chief health officer Karen DeSalvo, MD boasted that “Our get up every morning, raison d’être, is impact. It’s helping billions around the world be healthier.” Then followed broad and ambitious statements about social determinants of health (SDOH) and advancing health equity. Both have become a standard script for executive speeches at these conferences, virtual and in-person.

When scattered across multiple lines of business, it’s a little difficult to track ROI. And perhaps, that is the real Googly Goal. This Editor is of the opinion [TTA 24 Aug] that health is only a part-time pursuit for Big Tech, and that the real game is monetizing data–on people and what can be sold to healthcare organizations. When Big Tech tries to solve the problem of health by itself–which surely sounds what Dr. DeSalvo is about–it stumbles. Just ask David Feinberg, who decamped for Cerner after many frustrations at Google.  

Doro AB splitting in two, Doro Care changing name to Careium

October 27, 2021 | by

Sweden’s Doro AB announced today that it is dividing itself into two companies. Doro Phones will continue to be known as Doro. Doro Care will adopt a new name, Careium. This will involve a formal redistribution of shares to current shareholders. The plan is that Careium will be listed on Nasdaq First North Growth Market for Nordic small to mid-sized companies early in December 2021. The actual distribution will be disclosed at an Extraordinary General Meeting on 22 November.

According to Doro’s release on the corporate change, this started in 2020 with the separation of the phone and care business lines. Doro’s board of directors (BOD) believes that the now-former Doro Care “has now achieved the right conditions to act independently and develop outside Doro. A distribution and listing of Careium’s shares is considered to be able to contribute to Careium being able to continue to develop its business model and offering.” 

Careium’s logo is live–but not its website, which has but a discreet notice that it is under construction. There is a link to Doro Care in the UK only highlighting their three companies: Centra, Eldercare, and Welbeing–though what is not stated is the future of these three trade names. For their debut day, a standard marketing procedure (SMP) would be to go live with a home page containing the brand name change statement here. Another mystery: why the Careium website links only to the UK, and not to the websites of all the countries where Doro Care operates: Germany, France, the Netherlands, Norway, Sweden, and Spain.

And speaking of trade names….Careium will have difficulty using that name if their business development eventually includes the US, because there is a small home care company in Illinois called Careium Home Health which may, or may not, have protected that name. 

What do you think of the new name? Does it sound like something out of the Roman Empire, or is it a good choice? (It’s better than Facebook’s new moniker of Meta-whatever)

Hat tip to Adrian Scaife, head of collaboration and marketing at Alcuris.

Serious swerving indeed: 23andMe buys Lemonaid Health for $400 million

October 27, 2021 | by

From genomic testing to telehealth and prescription delivery is quite a swerve. Or a pivot, as they say. 23andMe, the richly financed (via a February SPAC with Virgin Group) and valued ($4.8 billion market cap) DNA tester, originally marketed to trace ancestry and analyze for health information, announced the acquisition of Lemonaid Health. A telehealth company that markets their quick diagnosis of conditions such as mental health, erectile dysfunction, thyroid, and sinus infections with fast delivery of medications, it’s quite a changeup for 23andMe, at least on the surface.

But, as this Editor opined as far back as 2018 in advocating a Genomic Bill of Rights and revisited in 2020, consumer genetic testing for the above as a model was finito just before the pandemic started. (When was the last time you saw a formerly lederhosen-clad actor trumpeting their new kilt or imagining their connection to famous dead people?) There were plenty of questions about the ethics of consumer-driven genomic testing as practiced by 23andMe and Ancestry.com. Consumers found it difficult to opt-out of how their genomic data was being used commercially, and understanding if it was being protected, as it likely was not.

The real gold for 23andMe is, of course, selling all that data to pharmaceutical companies. So in that context, Lemonaid, as really a marketer of meds, is not the stretch that it seems on the surface. But, there’s more. For 23andMe, which has consistently covered its cake of business aims in a thick and sticky icing of customer-focused mission, from their blog and signed by CEO Anne Wojcicki: “We are acquiring Lemonaid Health so that we can bring true personalized healthcare to 23andMe customers. Personalized healthcare means healthcare that is based on the combination of your genes, your environment, and your lifestyle — with recommendations and plans that are specific to you.” Meanwhile, Lemonaid, widely advertised online and on TV with quick telehealth consults, brings in the cash.

The transaction was announced at $400 million in a cash and stock deal, with 25% of the total deal value in cash and the rest in shares. Paul Johnson, CEO and co-founder of Lemonaid Health, will become the General Manager of the 23andMe consumer business and will continue to run Lemonaid Health. Ian Van Every, Managing Director, UK and also a co-founder, will manage and grow UK operations. According to Crunchbase, total investment in Lemonaid was a relatively small $57.5 million in five rounds since 2015, up to a Series B. Release. Reuters

PERS/RPM catchup: VRI bought by ModivCare for $315M; Connect America buys AI-powered RPM 100Plus, opens new SC center

October 27, 2021 | by

ModivCare buys VRI. While your Editor was on holiday leave enjoying the beautiful beaches of late-late summer, the long-rumored sale of PERS and remote patient monitoring provider VRI [TTA 9 July] closed on 22 September. The buyer is a non-emergency medical transportation (NEMT), home care (Simplura), and meal delivery company once known as Circulation and now ModivCare. Purchase price is $315 million, subject to customary purchase price adjustments. VRI generated $56 million of revenue and $21 million of adjusted EBITDA for the twelve-month period ended June 30, 2021. The majority owner of VRI since 2014 was Pamlico Capital. VRI will remain HQ’d in Franklin, Ohio and Sullivan, Illinois. Jason Anderson remains as its CEO under ModivCare. Business Wire release, ModivCare news site. And PERS Insider has an insightful article with a link to the investor presentation

VRI gives ModivCare immediate revenue, as well as impressive capabilities in medical alert systems, established monitoring centers, connecting care in the home plus other residential settings, and cross-selling in ModivCare’s relationships with Medicare Advantage and Medicaid (state) plans. Your Editor became familiar with VRI as far back as 2006 in her QuietCare days, then when Andy Schoonover and Chris Hendricksen ran VRI (and your Editor wished they’d buy the company). Andy Schoonover is now the CEO of CrowdHealth, a community-based provider of health services.

ModivCare has managed 48.2 million trips through the industry’s largest network of contracted transportation companies. They recently signed another agreement with Uber Health to provide on-demand transportation in underserved communities. They claim to be the largest NEMT company in the US with a 40% market share and trades publicly on NASDAQ with a market capitalization of $2.3 billion. NEMT is one of the linchpins of social determinants of health (SDOH). 

And Connect America treated itself to a snack after the big meal of Lifeline. PERS Insider broke the news on their purchase of 100Plus, supposedly the first AI-powered RPM company. Terms, purchase price, and management changes were not disclosed. Their pitch is to providers with an essentially turnkey system: identify eligible patients, perform patient consent and training, ships devices directly to your patients ready to use, and a ‘virtual medical assistant’ to monitor patients. The AI part of this is Ava, an AI-enabled, text message-based chatbot. This strengthens Connect America’s small RPM division, ConnectVitals. Release  

Connect America also announced in August that they will be opening a new facility to consolidate the scattered Lifeline operations into a single purpose-built location. The new $1 million, 25,000 square-foot facility will bring 71 jobs to the area and will open by end of year. PERS Insider, Upstate Business Journal 

Short takes: Google’s Care Studio app debuts, Modern Age’s healthy (aging) $27M Series A, OnSky Health launches pad-based RPM

October 22, 2021 | by

Care Studio, Google’s EHR search tool and patient record organizer, will be available to clinicians as a mobile app. The desktop version is in the process of acceptance testing with Ascension Health and Beth Israel Deaconess Medical Center (BIDMC). The company is looking to pilot the tool in Q4 or Q1 2022. Care Studio is capable of cross-checking information from multiple EHRs, accessing a patient summary, patient location, a “one-liner” provided from a previous note and a link back to the source, vitals and labs. The Google spokesman’s comments emphasize privacy, which is understandable given Care Studio’s earlier incarnation as Project Nightingale at Ascension in 2019. That made headlines since Google accessed 10 million identified patient records without patient or physician consent or knowledge, including patient name, lab results, diagnoses, hospital records, patient names, and dates of birth [TTA 9 April]. Mobihealthnews

Modern Age, which promotes better aging through boosting wellness, raised $27 million from Oak HC/FT, GV, and Juxtapose. The company’s attractive proposition is to use technology to ‘connect the dots’ around health as you age, and to bring together all the tools to ‘feel younger and live longer’. This starts with a personal assessment across variables to determine how old one feels, plus the areas of health and wellness that are most important, concentrating on skin, hair, bones, and hormones. The fresh funding will be used to build out their clinic in New York’s Flatiron district to open in early 2022, and build out their company from the present 17 to about 50. The founder Melissa Eamer is a former vice president at Amazon and COO at Glossier so has a handle in both the tech and appearance worlds. Aging and longevity are attracting investment, according to TechCrunch, with companies like Longevica, Gero AI, and Rosita Longevity gaining funding. Mobihealthnews

San Jose-based startup OnSky Health enters the remote patient monitoring fray with SkyPad, which claims to be the first virtual care solution that provides continuous contact-free vital sign sensing with an optional emergency alert and calling service. The SkyPad is a sensor pad placed under the patient’s or resident’s pillow, then uses machine learning software using sensor data generated through the pad.  The pad and system monitors multiple vital signs: heart rate, respiration rate, sleep-habit / sleep-quality tracking, breathing quality, snoring, and body temperature variation. It also checks for patient safety monitoring and assistance alerts. System monitoring is done through a tablet. The alert system is optional. The parent, OnSky Inc., is an alarm system company based in Ho Chi Minh City, Vietnam (Crunchbase). Release, Mobihealthnews

Amazon Care confirms five more cities, beefs up DC lobbying–but what’s the real game?

October 22, 2021 | by

Amazon Care will be expanding in 2021, confirming five new locations–and maybe more. Kristen Helton, the director of Amazon Care, confirmed at HLTH21 that 2021 rollouts of the virtual + mobile care service would include Dallas, Chicago, Philadelphia, Boston, and Los Angeles, ‘to name a few’. Ms. Helton confirmed that Washington DC and Baltimore region are live. The website does not state active cities, only permitting a zip code search and confirmation. Pharmacy delivery is also available in select, but not stated, areas. Healthcare Dive

Amazon Care originated with Amazon employees as a telehealth service, with in-person available to employees in the Seattle area. By March, they opened the full service (Video and Mobile Care Medical) to other Washington state companies. At that time, they announced that Video Care will be available nationally to companies and all Amazon employees by the summer–and claimed that in-person services would be rolled out to multiple cities by the summer. That did not happen. 

In June, at a Wall Street Journal Tech Health event, while being coy about the rollout, Amazon Care VP Babak Parviz said that the service would look like:

  • Clinician chat/video connected within 60 seconds
  • If an in-person visit is required, a mobile clinician arrives within 60 minutes, who can perform some diagnostic tests, such as for strep throat, provide vaccinations and draw blood for lab work. For other diagnoses, that clinician is equipped with a kit with devices to monitor vital signs which are live-streamed to remote clinicians.
  • Medication delivery within 120 minutes

Basically, what is not being said is that Amazon has been slow walking Amazon Care, probably wisely. With telehealth visits, mobile care, and pharmacy, there are multiple and complex elements to mesh seamlessly, which is after all Amazon’s Promise. What’s not so seamless is paying for it. While for Amazon it is with immediate payment for service, it is not for the patient–obtaining reimbursement, if available, is left up to the patient–at least for now, as reports indicate they are negotiating with Aetna. Amazon Care is also its own closed network.

There’s also the blunt fact that Amazon is moving into territory well staked out by major players that integrate employers, insurance, primary care, and pharmacy: Teladoc, Amwell, Included Health (Grand Rounds + Doctor On Demand), MD Live. They are now joined by UnitedHealth Care’s announcement a few days ago of NavigateNOW, a new virtual-first commercial plan rolling out next month to employers in nine markets and 25 markets by end of 2022. It offers 24/7 primary care, urgent care, and behavioral health care services through Optum as well as UnitedHealthcare’s national provider network. Many services and medications will have $0 copayments. Healthcare Dive, FierceHealthcare

However, if the cost of Washington lobbying is any indicator, Amazon is blasting off in healthcare. According to a report in OpenSecrets.org, “Amazon, which is creating its own health care service, is the biggest corporate lobbying spender so far in 2021. The company has spent nearly $10.2 million on lobbying in the first six months of the year, and spent $18.7 million in 2020.” The (unfortunately paywalled) report in STAT confirms the hire of Claire Winiarek from PCMA to be their new director of health policy.

This Editor’s opinion remains as in June–that Amazon’s business plans for Care and Pharmacy, and generally in healthcare, are really about accumulating data, not user revenue, and are certainly not altruistic no matter what they say. Amazon will accumulate and own national healthcare data on Amazon Care and Pharmacy users far more valuable than whatever is spent on providing care and services. Amazon will not only use it internally for cross-selling, but can monetize the data to pharmaceutical companies, payers, developers, and other commercial third parties in and ex-US. That’s a very different game than traditional insurers and the telehealth giants.

Theranos, The Trial of Elizabeth Holmes, ch. 4: we deceive those who want to believe

October 21, 2021 | by | 1 Comment

The Theranos Cave apparently has no bottom. Reportedly at the halfway mark, Tuesday’s trial focused on the testimony of former Theranos product manager Daniel Edlin. Recommended by his college friend Christian Holmes in 2011, he soon stepped into frontline work, assembling presentations sent to investors such as Rupert Murdoch, conducting VIP tours with demonstrations of the Edison labs, coordinating with the press, and with Elizabeth Holmes, plumping for Department of Defense and pharmaceutical company business. 

According to Mr. Edlin’s testimony, Theranos executives and staff staged demos and blood tests for investors and VIPs. Sometimes the blood tests worked fine, sometimes they didn’t (as in Rupert Murdoch’s case). Investors and reporters often were more interested in seeing Edison and MiniLab machines “work” without seeing any test results. All routine for an early-stage technology company. What was not routine was that other test results others were “corrected” (for Walgreens executives), reference ranges changed, or tests removed on the direction of Dr. Daniel Young, a Theranos VP.  The MiniLab never was used for patient blood testing as it had trouble performing general chemistry or ELISA tests adequately.

Rupert Murdoch’s (listed as a witness) investor presentation binder was entered into evidence. According to CNBC, one section of the binder read: “Theranos offers tests with the highest level of accuracy.” Another section said the blood-testing technology “generates significantly higher integrity data than currently possible.” Mr. Edlin testified that Ms. Holmes vetted every investor deck and binder, including the ones shown to DOD. The website, overseen by Ms. Holmes, made statements such as “At Theranos we can perform all lab tests on a sample 1/1000 the size of a typical blood test.” However, even Theranos’ general counsel advised against using these superiority claims:

  • “Please remove reference to “all” tests and replace with statements such as “multiple” or “several.” It is highly unlikely that the laboratory can perform every conceivable test, both from a logistical standpoint and because the CLIA certification designates specific specialties of test the lab performs.
  • For a similar reason, replace “full range” with “broad range.”
  • Replace “highest quality” with “high quality”
  • What substantiation do you have for “have results to you and your doctor faster than previously possible?”
  • Remove “unrivaled accuracy.”

To be fair, some of this language did change over time. The defense, for instance, had a try at shifting blame to one of Theranos’ marketing agencies.

But overstatements were a way of ‘fake it till you make it’ life at Theranos. The infamous Fortune article (later retracted by the author), the glowing 8 September 2013 Wall Street Journal article by Joseph Rago made at the time of the Walgreens pilot were felt to be overstatements by Theranos insiders, but never corrected. Walgreens and Safeway executives previously testified that they were told that Theranos devices were in use in Army medical evacuation units. But the truth was, according to Mr. Edlin who managed the DOD relationship, that AFRICOM (US Army African Command) deployed the Edison device in Cameroon, Uganda, and South Sudan to run as an experiment to test the viability of the machine. It was never deployed in the Middle East (CENTCOM). The Edison 4.0 was deemed too heavy and put off until lighter-weight units were developed. Nonetheless, Theranos received a 12-month service contract. 

The prosecution strategy here is to show that Ms. Holmes was hands-on when it came to marketing and investor communications, approved the overstated claims, and was not “controlled” by Sunny Balwani as the defense maintains. If anything, he deferred to her. 

CNN Business, KTVU Fox 2 running commentary, Daily Mail, California News Times  Unfortunately, the Mercury News, Bloomberg, and WSJ are paywalled.

TTA’s earlier coverage: Chapter 3, Chapter 2, Chapter 1

To be continued….

News roundup: Grand Rounds rebrands as Included Health, HealthEdge buys Wellframe, TytoCare rings Google Chime

October 20, 2021 | by

Grand Rounds Health rebranding to Included Health. Virtual care and navigation telehealth company Grand Rounds, which merged with Doctor On Demand back in May, is adopting the new and inclusive name, Included Health. Aside from the full rebranding as a company that is “turning the existing model on its head” for those who “feel marginalized by today’s healthcare, and it’s all about subtraction, taking things away from us,” as Owen Tripp, CEO stated in the announcement at HLTH21, it’s also a convenient name. Around the time the merger was being finalized, this Editor noted that Grand Rounds had acquired a small care concierge/health navigation targeting the LGBTQ+ community called…Included Health [TTA 28 May]. Release, FierceHealthcare

HealthEdge acquires Wellframe. HealthEdge, which specializes in payer administrative and clinical systems connectivity and automation software, announced their intent to acquire digital health and care management company Wellframe. Terms were not disclosed. Wellframe currently serves more than 33 million members. HealthEdge stated that they would be integrating their GuidingCare and HealthRules Payor with Wellframe’s systems, along with Wellframe co-founder and CEO Jake Sattelmair, his leadership team, and approximately 150 employees. While there’s some overlap, the two companies greatly complement each other in integrating payer systems to work more efficiently end-to-end in member and care management.  Release

TytoCare Chimes In. Telehealth diagnostic TytoCare upgraded its two-way video capabilities using the Amazon Chime platform. Its new video features include enhanced video quality, multi-party calls, and the ability for clinicians to conduct remote visits on any tablet, including iPads. TytoCare enables users to perform remote physical exams of the heart, skin, ears, throat, abdomen, and lungs, plus measure blood oxygen levels, heart rate, and body temperature. Release

Short takes: Walgreens now majority share of VillageMD, CareCentrix; Lark Health lifts $100M, UnitedHealth Group’s profitable Q3 and Change delay

October 14, 2021 | by

Walgreens has ‘gone big’ with its VillageMD primary care practice investment, putting on the table $5.2 billion. It’s now t the majority owner with 63% of the company, up from 30% last year. Their projected number of co-located full-service Village Medical practices is projected to grow to 600 by 2025, up from a current 52. VillageMD is still planning an IPO in 2022, making for a potential great ROI for Walgreens. Walgreens Boots Alliance also invested $330 million in CareCentrix, a post-acute and home care provider, for 55% of the company. CareCentrix was a recent investor in Vesta Healthcare [TTA 9 April]. Wrapping it all up is their new Walgreens Health, for tech-enabled consumer-directed primary care, post-acute care, and home care.

Weight loss and chronic conditions app Lark Health flew into a $100 million Series D, led by Deerfield Management Company, with PFM Health Sciences and returning investors Franklin Templeton, King River Capital, Castlepeak, IPD, Olive Tree Capital, and Marvell Technology co-founder Weili Dai. Their total funding since 2011 is over $195 million (Crunchbase). Lark claims an AI-based platform for individual coaching in weight loss along with related conditions such as diabetes, pre-diabetes, diabetes prevention, cardiovascular, and behavioral health. The platform logs and provides immediate feedback on food and tracks data from sources like Apple Health. The new funds will be used for R&D and to expand its virtual care integrations to more payers. Current payer partnerships include Anthem, Highmark BCBS, and Medical Mutual. Release, MedCityNews, FierceHealthcare

UnitedHealth Group, parent of UnitedHealthcare and Optum, reported $4.1 billion in profit for Q3, notching $72.3 billion in revenue for the quarter, a tidy gain over year prior’s $65.1 billion. The mega-acquisition of Change Healthcare to fold into OptumInsight is further delayed, being worked towards a closing of early 2022, having hit more than a few strong regulatory headwinds and the rocks of DOJ [TTA 14 Aug].  Becker’s Payer Issues, FierceHealthcare 

What’s next for telehealth? Is it time for a correction?

October 14, 2021 | by

crystal-ballThe boom may be over, between shrinking visit volume and a pileup of providers. Is a correction in the cards? The flood of funding that started in 2020 and has not abated was kicked off by the pandemic and a massive shift to telehealth visits in March/April 2020 from a barely-above-plant-life number in January/February.

Post-pandemic, the shift corrected.

  • The peak of 69% of visits tracked by Epic in April had tailed off to 21% as early as May 2020 [TTA 2 Sept 20].
  • National commercial claims data via FAIR Health was lower. They tracked its peak also in April 2020 at 13%, falling continuously monthly: May to 8.69%, 6.85% in June, 6% in August, and 5.61% in October [TTA 9 Jan].
  • By mid-year 2021, the claims numbers continued to lose altitude: June 4.5%, July 4.2% (FAIR Health monthly report).

Despite the numbers, telehealth companies raised $4.2 billion of a total $15 billion in digital health funding in the first half of 2021, according to Mercom Capital Group, a global communications and research firm. So…what’s the problem with les bon temps rouler?

CB Insights notes the increased specialization of new entrants and, as this Editor has noted previously, the blending and crossing of business lines.

  • Companies like Heal, Dispatch Health, and Amazon Care will send a clinician to your house for a checkup–no running to your urgent care.
  • Kidney disease? Monogram Health. Musculoskeletal pain? Hinge Health. Child with an earache or fever? Tyto Care. Check symptoms first? Babylon Health.
  • Telemental health has gone from cocktail party repellent to the belle of the ball, concentrating on cognitive remote therapies. For the past year, it moved to more than half of all telehealth claims, with currently over 60% of procedure codes–and it’s consolidating. AbleTo was bought by Optum, Ginger bought by Headspace, SilverCloud by Amwell.

So for the Major League–Teladoc, Amwell, Doctor on Demand, Grand Rounds, and MDLive–what does this mean? If this interview with Teladoc’s CIO is an example, they plan to segue to a ‘hybrid’ model of virtual quick response plus integrating providers into a continuing care model with patients, creating a relationship with history and familiarity. A model that’s very much dependent on IT, analytics, and connecting with willing providers. But in this free-floating sea of verbiage, it didn’t come into misty focus till the very end, when he mentions Primary360 [TTA 7 Oct] and a virtual primary care team. (And let’s not forget Babylon360 along similar lines.) He finally sketches a view of all the connections to conditions coming together on a very far horizon. 

One can say it’s a cloudy crystal ball, indeed. FierceHealthcare, HealthcareITNews (Teladoc CIO interview)

News and deal roundup: Babylon’s $200M raise, Best Buy buys Current Health, Virgin Pulse-Welltok, Devoted Health’s $1bn raise, Withings watch gains FDA ECG clearance

October 13, 2021 | by

Babylon Health adds $200 million to the accounts–in advance of its SPAC. Babylon’s raise of $200 million (€173M) in a ‘sustainability-linked investment’ came from the strategic capital investment firm, Albacore Capital Group. With the SPAC and PIPE, Babylon will now have access to over $800 million in capital [TTA 7 Oct]. Whew! Mobilhealthnews, Babylon release 

A score for Edinburgh. Current Health, a biosensor-based monitoring and home care management/remote patient monitoring system based in Edinburgh and Boston, sold itself to US retailer Best Buy. The company recently raised $43 million in an April Series B, which makes its quick sale somewhat unusual. Terms were not disclosed other than it was a cash deal and that Current’s CEO Christopher McCann will be remaining with the company. Best Buy extends its reach into digital home health, following on their 2019 buys of GreatCall, Critical Signal Technologies for RPM, and partnership with Tyto Care.

Current had achieved FDA Class II clearance in early 2019 [TTA 7 Feb 2019], had piloted with Mount Sinai Brooklyn and in the UK, Dartford and Gravesham NHS Trust for a post-discharge monitoring program, and recently had created a “Community” initiative to build diverse longitudinal datasets for decentralized clinical trials [TTA 18 Feb]. Current Health announcement, Best Buy release, Mobihealthnews, Healthcare Dive

The wellness app-employee/health plan engagement program area continues to consolidate with Virgin Pulse’s acquisition of Welltok. In recent years, Welltok has concentrated more on data analytics and predictive capabilities in its member experience and patient acquisition/retention platforms for health plans and systems, after a start in employee wellness programs. Virgin Pulse, which exited the Richard Branson universe (despite the logo) when sold to Morgan Equity Partners in 2018, is now backed by Marlin Equity Partners. Terms and leadership were not disclosed. Virgin Pulse release, HISTalk

‘Insurtech’ Devoted Health raised a hefty $1.15 billion Series D led by Uprising and Softbank Vision Fund 2, along with a long list of returning and new investors. Icing on the cake is that they are closing in on an additional $80 million in funding to accommodate an investor. Devoted is led by former athenahealth and government IT leaders Ed and Todd Park. It’s one of the smaller in footprint tech-based Medicare Advantage providers but combines their plans with health coverage via Devoted Medical, a telehealth and in-home care provider, and partner providers. FierceHealthcare

The ECG monitoring space is now a little more crowded. Withings finally received FDA clearance for their ScanWatch’s ECG and SpO2 monitoring, nearly two years after its introduction in January 2020. It received clearance in Europe a year ago. The cleared features are atrial fibrillation detection alerts, which advises users to take a 30-second ECG readings, and SpO2 blood oxygen monitoring for detection of respiratory issues. Withings joins the Apple Watch, Fitbit, Samsung, and the grandaddy of them all, AliveCor’s KardiaMobile, for ECG monitoring–but packs this monitoring into a good-looking watch. Mobihealthnews

Theranos, The Trial of Elizabeth Holmes, ch. 3: Safeway, Walgreens execs testify to deception, frustration with Holmes, failed pilots and labs (updated)

October 13, 2021 | by

It’s Tuesday, and it’s another court day in Silicon Valley’s Big Trial, this time with the former C-level executives of Safeway and Walgreens who did the partner deals with Theranos–and rued the days Elizabeth Holmes walked in their doors. Updated for additional Tuesday testimony reports.

Former Safeway (supermarket) CEO Steve Burd returned to the stand for more prosecution questions and a turn with the defense. Mr. Burd had formed Safeway Health to introduce Theranos in 2010, after Ms. Holmes personally negotiated a deal with Safeway without attorneys. Ms. Holmes definitely wove a spell on Mr. Burd. “There are very few people I had met in the business that I would actually say are charismatic. She was charismatic, she was very smart, and she was doing one of the hardest things you can do in a business, and that’s to create an enterprise from scratch.” Always decisive, ‘she owned the room’.

From that point, and after an unusually high 100 hours of due diligence (updated, ArsTechnica 13 Oct), it was full speed ahead. But the potholes turned up fast after Ms. Holmes had convinced Safeway to invest in the company, claiming that they could run 95% of tests on one cartridge and that they could handle the volume from hundreds of store testing sites. During a pitch to the Safeway board, board member Michael Shannon offered his blood draw for a PSA test, the screening test for prostate cancer. The Theranos Edison machine “made a bunch of noise,” but never delivered a result, even after Ms. Holmes said something about getting it later (updated, ArsTechnica 13 Oct).

By the time the pilot started with regular blood draws, from the testimony, “there were results that didn’t make any sense. Samples were lost and samples were not properly cooled. He also said tests took days to come back when other companies could deliver in 24 hours. In an email to Holmes, Burd wrote: “I am genuinely concerned that Safeway’s lab reputation gets worse by the day.” By 2012, Safeway had built out 98% of 960 planned stores to hold Theranos testing sites, but had long since blown past the $30 million estimate. Multiple launch dates were missed over two years. By November 12, Mr. Burd had reached the end of his tether. “I can only recall having been discouraged once in the last 62 years. That said, I am getting close to my second event. ” and “This does not feel like a partnership, I’ve never been more frustrated.”

Theranos never rolled out to the public with Safeway. Mr. Burd retired from Safeway after a long career in May 2013.

Apparently the defense cross conducted by Kevin Downey is concentrating on The Big Chance that Safeway took with Theranos, after all a ‘startup’ that never built out their technology for consumer use, and all the regulatory hurdles the company faced. Mr. Burd confirmed it but he and the board reviewed the agreement and included requirements such as a CLIA waiver to operate the lab devices, negotiating preferred network status with commercial health plans, and a network of partners. Most of all, Safeway negotiated the right to terminate the agreement if the pilot failed and Theranos did not obtain FDA clearance. On the redirect, the government maintains that Theranos started in 2003 and purported to be making money (!!).

Up next for the prosecution was Wade Miquelon, former CFO of Walgreens. Walgreens was the only Theranos partner to put Theranos centers in their store. He testified to the presentation he received in 2010 which was similar to those received by investors. It included claims that Theranos’ technology could “run comprehensive blood tests” from a finger stick in real time and that it had partnerships with major pharmaceutical companies and military organizations–some of which were semi-true, the rest fictional. Apparently, some of the validation reports from pharmaceutical companies were false–while they had logos, there was one from Schering-Plough where its name was misspelled and never noticed by anyone at Walgreens. The prosecution had already established to the jury in opening arguments on 8 September that the Pfizer report endorsing the technology had also been faked. It had been written by Theranos, with a Pfizer logo added. 

Mr. Miquelon testified that he was never told that third-party labs were being used.“My understanding is, the blood would be tested on the [Theranos] Edison device,” adding later, “My understanding was that the base level testing would be able to do 96 percent of the testing done at labs.” He stated that third-party testing would be to check calibrations and accuracy. Relying on such testing would be beside the point of cost and time savings. 

Mr. Miquelon’s testimony will continue on Wednesday.

KTVU2’s coverage is nearly all tweets so it’s assembling a picture from many fragments. Ars Technica on Mr. Burd.  Updated: Additional information on Mr. Miquelon: Fortune, Washington Post

Walgreens sued Theranos in 2016 for $160 million invested [TTA 9 Nov 2016]. The company was one of the few able to claw back substantial funds, a paltry $25 million, in August 2017. Safeway settled in June 2017 for an undisclosed amount. They had built out 800 centers and cost the company $360 million before the agreement was axed (updated for cost, ArsTechnica 13 Oct).

If you have access to the WSJ, their coverage details a trail of forged documents, massive fundraising–and losses, and partner deception. The NY Times ran an interesting ‘color’ article on the atmosphere in the San Jose courtroom. The trial is settling into a groove. Two court artists (complete with art) have interesting impressions of Ms. Holmes and the participants. The spectators appear to be primarily retirees with the time to line up for the 34 seats in the courtroom and 50 in an overflow room, though the testimony goes over the head of many. Ms. Holmes’ family and partner accompany her daily. And two jurors have departed, one a Buddhist who became uncomfortable with the idea of punishing Ms. Holmes. Judge Davila has already extended trial hours one hour to get through the stack of witnesses a little faster.

Our previous coverage: Chapter 1, Chapter 2

To be continued….

Telehealth’s primary care wars heat up: Teladoc’s Primary360, Babylon 360

October 7, 2021 | by

The new fronts in the Telehealth Wars continue to expand, with this week Teladoc announcing that their virtual primary care offering, Primary360, is now available for health plans, employers, and other payers. Babylon Health, in its push into the US market and their upcoming SPAC, also announced that their similar program, Babylon 360, is also being offered to health plans.

Both these services connect the patient users with an assigned doctor and primary care team for ongoing care. They emphasize building a relationship with a doctor and team, not just a random selection previously typical of telehealth. Both Teladoc and Babylon are fully virtual in exams and checkups, sending equipment where needed, ordering lab tests and prescriptions, and accepting your prior health records, plus have 24/7 coverage for urgent situations. Babylon’s service also offers a symptom checker and connection to social determinants of health (SDOH) community services.

It’s obvious that the payer-provider walls are coming down in all directions–telehealth is one more. Babylon, as we noted earlier, acquired two California-based practice groups. Payers like lower-cost, more convenient visits, and after a fractious start, have for some time. Many of the insurtechs either have close relationships with providers or have bought practices (Bright Health’s NeueHealth)–copying the Optums which have affiliations with or ownership of practices all over the US. It’s also another pressure on primary care practices around reimbursement. Often the answer is to either sell out or enter into value-based care arrangements.

For the patient/member, there’s the benefit of convenient care, and a relationship with a team, albeit not with an in-person option right now–if these services are consistent in their promise and steady in their physician/clinician groups. Mobihealthnews (Teladoc)

Babylon Health’s SPAC closing later this month at $4.2 billion value, buys California medical practices

October 7, 2021 | by

Ali Parsa, CEO of Babylon Health, confirmed to FierceHealthcare yesterday that Babylon Health will be going public later this month via a SPAC. This is proceeding as closed in June with blank-check Alkuri Global Acquisition Corp., led by former Groupon CEO Rich Williams [TTA 1 June].

The pro-forma equity valuation is estimated as $4.2 billion, with Alkuri providing $575 million in gross proceeds to Babylon, including $230 million in a private placement from investors such as AMF Pensionsförsäkring and Palantir Technologies. The new Babylon Holdings Limited will be listed on the New York Stock Exchange under the ticker symbol BBLN.

After developing its GP in Hand triage service with the NHS starting in 2017, now claiming 102, 000 users, it has weathered controversies from clinical commissioning group (CCG) reservations to gender bias in its chatbot (‘Heart Sister’ Carolyn Thomas) to a litany from @DrMurphy11 to the BBC Two’s Newsnight treatment [TTA 9 Jan 20, 27 Feb 20]. However, Mr. Parsa believes that their value proposition (technically, a written document) is sound and that they are now poised for growth.

Newly developed products include Babylon 360, a digital-first value-based care service that includes the option for telehealth visits, and Babylon Cloud Services, a suite of digital self-care tools for patients and doctors, including an AI-enabled symptom checker. Expansion has been as far flung as Rwanda and the US, although in the crowded US telehealth market, Babylon has found it difficult to make a strong  impression versus Teladoc and Amwell, though they cover three million lives and has licensed providers in all 50 states.  They recently bought two California-based medical practices, Meritage Medical Network and First Choice Medical Group, opening an office in Palo Alto. Babylon also optioned to buy Higi health kiosks after a $30 million investment [TTA 30 May 20], which may close after the SPAC. Still, Mr. Parsa is staking the future on the US, where over 40% of global healthcare money is spent. 

Babylon has been growing 400% year to year for a few years with $79 million in 2020 unaudited revenue, a 394% year-over-year increase, and a projected $321 million in 2021, $710 million by 2022, and $1.4 billion by 2023. Hampering this sunny picture are Babylon’s continued losses: $76 million first half of 2021, less than their PY net loss of $91 million.