Friday short takes: Uber Health taps geriatrician CMO (updated), Sensyne Health completes £11M financing as part of formal sale, ATA + ECHAlliance ally, add GHCP Summit, Reimagine Care home-centered cancer care lands $25M

Uber Health’s first-ever chief medical officer is an unusual choice–a geriatrician. Michael Cantor, MD, JD is a board-certified geriatrician. According to his LinkedIn profile, he had previously been a CMO at insurtech Bright Health and CareCentrix. From the release, his expertise is in designing clinical programs for older adults and vulnerable populations for the most pressing gaps in care–and how technology can address them. Uber’s focus is in mobility–patient transportation and deliveries as part of social determinants of health (SDOH). They report 71% gross bookings growth for the business unit from Q4 2020 to Q4 2021. Release, Healthcare Dive

An update on Dr. Cantor: his CMO position at Uber Health is part-time, according to his LinkedIn profile. He will be continuing at Intuition Robotics as their CMO, having started with them in May 2021 (release). Intuition developed the ElliQ robot companion and is extending it to healthcare for older adults. Hat tip to Laurie Orlov for the info.

Some dismaying news from Oxford is that Sensyne Health, a clinical AI company for life sciences companies that analyzes data from US and UK health system EHRs, is having financial difficulties that have caused them to enter a Formal Sale Process (FSP). The £11.35 million will keep them solvent and not force a stop to their trading on the London Stock Exchange, and the FSP process will organize their outstanding debt until a purchaser can be found. Sensyne was founded by former UK science minister Lord Paul Drayson, and only last May inked two deals with the Colorado Center for Personalized Medicine (CCPM) and St. Luke’s University Health Network (PA/NJ) to expand its dataset. Sensyne release, Healthcare IT News

The American Telemedicine Association (ATA) announced that they will collaborate with Belfast-based ECHAlliance (European Connected Health Alliance) in the Global Health Connector Partnership (GHCP). The GHCP includes HLTH, The Digital Health Society, Health Parliament, the Commonwealth Centre for Digital Health, and Africa Health Business. The Global Health Connector Partnership Summit will convene at ATA2022, 1-3 May, in Boston. Release

Nashville-based Reimagine Care completed a $25 million capital raise led by Santé Ventures, Martin Ventures, and LRVHealth. Reimagine is a provider of home-centered cancer care for oncology practices and providers. The funding will be leveraged to further develop and commercialize the company’s first-of-its kind technology-enabled services in the Access Care Platform, launch their virtual care center, and expand the patient care team. Home-centered treatment reduces costs and increases patient convenience.  Release

Will ’22 digital health investment be historic? Or a question mark? The jury is out.

Some say historic, or will it be a historic question mark? It’s only January…Earlier this month, a Silicon Valley healthcare VC funding analysis [TTA 14 Jan] looked at 2021 funding — up over 150%–that was skewed to biopharma and health tech. It noted the SPAC slowdown, anemic post-IPO performance, and a decline in M&A value, while consolidation and buying for expansion will be the trend.

Healthcare Dive spoke to some industry mavens, and came up with a split picture. Some see turbulence ahead due to rising interest rates, a fluctuating market, and political instability leading to tighter purse strings, others see blue skies and lots of money flooding in from new investors in love with health, following the Amazons and Microsofts, fearing that they’ll miss out. Certainly, 2021 was more than warm. Both Silicon Valley Bank in the previous analysis and Rock Health came up with just under $30 billion in 2021 investment.

The feather in the wind: Rock Health’s numbers indicated skyrocketing exits–with SPACs nearly double that of IPOs. Funding hit record mega rounds of $100 million+ that spread to early rounds–10 Series B and one Series A. Mega money means mega pressure to perform in young companies. The SPAC highway increasingly narrowed to a two-lane road by end of year based on regulatory scrutiny and even some timing out (SPACs have to consummate a deal in two years). Exits for investors are to take back money or write off losses, if they get shaky about a company or category, even if they find a more attractive squirrel. Yet the fact is that $13 billion raised by VCs this month has to go somewhere–but will it be in health tech? Time will reveal all.  Also Healthcare Dive on the Rock Health year-end report.

News, deals, rumors roundup: Cerner’s DOD and VA go-lives, Akili’s ADHD therapy SPACs, Talkiatry’s $37M raise, Alto sings a $200M supper–and the Cigna-Centene rumors don’t stop

While Cerner’s acquisition by Oracle is winding its way through regulatory approvals, their EHR implementations are moving forward through both the Military Health System (Department of Defense) and the Department of Veterans Affairs (VA).

  • Within the MHS, Brooke Army Medical Center and Wilford Hall Ambulatory Surgical Center, both in the San Antonio (Texas) Market, went live with MHS GENESIS on 22 January. The change most visible to patients is the transition from TRICARE Online to the MHS GENESIS Patient Portal which enables 24/7 access for visit notes, secure messaging, test results, appointment scheduling, and online prescription renewal. MHS covers military retirees, active military, and family beneficiaries. According to the MHS’s website, the goal this year is to get to halfway–to implement MHS GENESIS in more than half of all military hospitals and clinics. It’s been taking place since 2017 and, in true military fashion, it’s planned in waves. Coming up are Naval Medical Center Camp Lejeune in South Carolina on 19 March and William Beaumont Army Medical Center in El Paso in summer.
  • VA is moving far more slowly, just getting to its second hospital. The Columbus VA go-live has been pushed back from 5 March to 30 April, citing training slowdowns due to a spike in staff COVID cases. Walla Walla, Washington is set for after Columbus, but the date is to be confirmed. The first, failed implementation at Spokane’s Mann-Grandstaff VA Medical Center in late 2020 was the subject of Federal hearings and a complete redo in VA’s plans and procedures in cutting over from VistA to Cerner Millenium. TTA 28 July and previous. Federal News Network

Akili Interactive, which has developed tech-driven, game-based cognitive therapies for ADHD and other psychiatric and neurological conditions, has gone public through a SPAC via a merger with Social Capital Suvretta Holdings Corp. I, The transaction is expected to close in mid-2022. Akili will be listed on the Nasdaq stock market under the new ticker symbol AKLI.

The SPAC is expected to provide up to $412 million in gross cash proceeds and value the company at over $1 billion. Investors in the $162 million PIPE are Suvretta Capital Management’s Averill strategy, Apeiron Investment Group, Temasek, co-founder PureTech Health, Polaris Partners, Evidity Health Capital, JAZZ Venture Partners, and Omidyar Technology Ventures. The funds raised will support the commercial debut of EndeavorRx, a FDA-cleared and CE-marked prescription digital therapeutic for pediatric ADHD. The technology is termed the Selective Stimulus Management Engine (SSME) and will be rolled out for ADHD, ASD, MS, and MDD treatment.

TTA noted Akili last year in a trial of AKL-T01 at several hospitals for treatment of long-COVID-related cognition problems. Unfortunately, the writing in their SPAC release made this Editor feel like she needed a few treatments.

Mentalhealthtech (psychtech?) continues to attract funding. Psychiatric care startup Talkiatry topped off its July $20 million raise with an additional $17 million from Left Lane Capital for a $37 million Series A financing round. CityMD founder Dr. Richard Park, Sikwoo Capital Partners, and Relevance Ventures also participated. Talkiatry uses an online assessment for a preliminary diagnosis and then matches you with a participating psychiatrist.  It is in-network with payers such as Cigna, Aetna, UnitedHealthcare (Oxford Health Plan), Oscar, and Humana. Funding will be used to expand beyond NYC. Mobihealthnews

Digital pharmacy is also hot. Alto, which promises same-day filling and courier delivery, raised a $200 million Series E led by Softbank Vision Fund. Their total to date is over $550 million. Alto serves selected areas mainly in California, Nevada, Texas, and NYC (Manhattan, Queens, Brooklyn). Competitors Capsule had another raise of $300 million in April for a total of $570 million and Medly raised a $100 million Series B in 2020. Mobihealthnews

In the wake turbulence of Centene’s dramatic management shakeup last month [TTA 18 Dec], rumors continue to surface that insurer Cigna is interested in acquiring all, or possibly part, of Centene. Bloomberg News in publishing its article earlier this week cited ‘people familiar with the matter’ said that talks took place last year, but that they are not ongoing. Seeking Alpha picked this up, adding market activity boosting Centene. Perhaps the disclosure and the ‘denials’ align with what this Editor has heard–that it’s very much ongoing but under wraps.

A Centene buy makes sense, but only with Cigna. While Cigna is almost double the market value of Centene, it does not have the sprawling business model the latter has, nor do their businesses overlap much. However, some divestiture would be needed to do a deal, given the constrained regulatory environment in the US on the Federal and state levels. Any insurer merger is seen as anti-competitive, unless it is an acquisition of a smaller, struggling plan. 

It certainly would vault Cigna into the top rank of insurers with non-Centene branded exchange, Medicare Advantage and Medicaid plans, a provider network, an established MSO, and other lines of business including Magellan behavioral health management. Cigna might also value Centene’s international holdings, such as private hospitals Circle Health in the UK and Ribera in Spain. A sale would also create a quick and profitable ROI for Politan Capital Management, the activist investor company that initiated the retirement of 25 year CEO Michael Neidorff last month, rather than managing and reorganizing the sprawl of Centene’s businesses to make it more profitable.

Telehealth saves $100+ per visit or lab tests, reduces unnecessary ER/ED + urgent care visits 19%: Cigna/MDLIVE study (updated for RPM offering))

Studies which quantify telehealth cost savings and visit reduction are always welcome. Cigna, through its telehealth company MDLIVE (purchased in April 2021), crunched the numbers and found some quantifiable savings and positive results:

  • Depending on whether the visit is for non-urgent primary care, visiting a specialist, or urgent care, telehealth savings are in the $100 range per visit: $93, $120, and $141 respectively. 
  • For urgent care, reducing unnecessary visits to both urgent care clinics and ER/ED settings is a major cost savings and a key measure of health plan performance. Virtual visits were found to reduce unnecessary emergency room or urgent care visits by 19%.
  • Lab visits were also reduced in cost. Patients who saw MDLIVE providers during urgent care visits were able to avoid unnecessary tests, saving an average of $118 for each episode of care.

Unfortunately, some of the results offered up by Cigna are countered by other sources–and surprisingly they didn’t cross-check:

  • Evernorth, their health services business, estimates that telehealth visits are currently 25% of all visits. That is far above the claims information that FAIR Health tracks, where telehealth is below 4%. Back in April 2020, it was 13%. Even Epic’s tracking indicated that the peak of 69% of visits in April 2020 tailed off one month later to 21% [TTA 8 Jan].
  • Citing 2020 only data around virtual wellness screenings and health conditions as a new normal is problematic. Cigna claims that more than 75% of Cigna customers who had an MDLIVE virtual wellness screening in 2020 not only lacked a primary care physician but also that two-thirds of these PCP-less patients learned they had a health condition via the virtual screening. Practices and people were locked down for most of 2020 and these numbers are likely skewed. 

But as quantifiable directional findings, the top three are welcome news. Cigna/MDLIVE release, Becker’s Payer Issues

Updated  MDLIVE announced today a remote patient monitoring program for members with chronic conditions Members can upload monitoring information such as blood glucose or blood pressure to their patient portal so that their MDLIVE doctor can review during the next telehealth visit. This feature will be available to health plans that utilize MDLIVE primary care services. Later this year, they will offer a device interface to the patient portal so that no manual entry will be needed. Mobihealthnews

Two healthcare data breaches of note: International Committee of the Red Cross and Jefferson Health

Healthcare data breaches have become so commonplace that this Editor now leaves it to others to report. They all share the same characteristics–international hackers inserting ransomware in compromised systems and demanding billions in bitcoin, disgruntled employees erasing or taking home files, burglaries, inside jobs of various stripes. A steady drumbeat despite many efforts to secure against outside attacks and continously monitor systems, still there are plenty of legacy devices floating around hospitals and clinics using outdated computer software and initial setup passwords.

But this one hits a new high of heartlessness. The International Committee of the Red Cross (ICRC), headquartered in Geneva, reported that on 18 January that servers hosting the personal information of more than 500,000 displaced people receiving aid services from the Red Cross and Red Crescent Movement program had been hacked. The servers were located in Switzerland and were directly targeted. The 515,000 records were of people in the ‘Restoring Family Links’ program which aids missing people and their families, unaccompanied or separated children, detainees, and other people as a result of armed conflict, natural disasters, or migration. The information consisted of names, locations, and contacts.  In addition, log in information of 2,000 workers was also breached. Pray tell, where’s the monetary value in this? Or is there something more nefarious? These systems and their information have been taken offline, hampering this international program. ICRC ‘What We Know’, Becker’s Health IT, Healthcare IT News

A more ‘garden variety’ breach of 9,000 patients’ protected health information (PHI) took place in November at Philadelphia’s Jefferson Health. This was an insurance portal breach that accessed patient billing information with the intent of rerouting the payments from the hospital to themselves. The hacker in the process gained access to patient billing information, names, dates of treatment, treatment codes and costs, but not the jackpot of SSI and other financial information. The article does not disclose whether payments were successfully redirected.  Becker’s Health IT

Update roundup: Change Healthcare sale to UnitedHealth Group/Optum may hinge on divesting, Oracle on Cerner exec departure packages up to $22 million

It looks likely that Change Healthcare will have to do some divesting in order to be bought by UnitedHealth Group. Bloomberg reported that ClaimsXten, part of Change’s Payment Integrity (PI) business, may be sold to facilitate the purchase. Sale price may be as high as $1 billion. Credit Suisse‘s analysis points out that ClaimsXten is only one part of the PI business, and more may have to be sold in PI or possibly in other lines of business. It also may not be enough to facilitate the sale though the move may be a hopeful one in the face of multiple challenges. UHG has already pushed the date forward to 5 April as we noted back in December, when it was barely noticed in the major shakeup at fellow payer Centene. Seeking Alpha

Cerner has disclosed additional details in an SEC Schedule 14D-9 on lead executive and associate compensation as part of the sale to Oracle, and it’s eye-blinking. Non-employee directors and executive officers will receive payments for their shares and cashed out compensatory awards in the Table of Equity Related Payments.  HISTalk calculated total ‘golden parachute’ packages and severances for the following:

  • President and CEO David Feinberg $22 million (company tenure – less than four months)–$17 million alone termed a ‘golden parachute’
  • EVP/CFO Marc Erceg $11 million (company tenure – less than one year)
  • EVP/CTO Jerome Labat – $11 million (company tenure – 19 months)
  • Former Chairman and CEO Brent Shafer — $21 million

Only two executives listed, CEO David Feinberg and CTO Jerome Labat, have waived ‘change of control’ separation payments as they will be continuing with Oracle [TTA 21 Jan].

If you’re an ordinary associate, from the wording, your vested shares will be cashed out (typical in change of control) and unvested shares will be rolled over to Oracle equivalents and not cashed out. Change of control benefits go only so far down the line. There is no language covering the status of unvested shares if you are one of the unlucky ones terminated due to the merger.

HISTalk also distilled a timeline from the background and board recommendation of how Cerner became open to purchase. There were risks from competition, retention of key technical employees, the risks in government contracting, and making their business goals.

American Telemedicine Association sets up ATA Action for policy advocacy

The American Telemedicine Association (ATA), which has been known for its advocacy of telemedicine and telehealth since 1993 (!), is doubling down with setting up a separate “affiliated trade organization”, ATA Action, for policy advocacy. This is centered on making permanent pandemic-expanded telehealth access for Americans, state and federal telehealth coverage, and appropriate payment policies. ATA Action will be led by Kyle Zebley, ATA vice president, public policy, as executive director. There is a long list of ‘founding members’ and ‘Advocacy Council Members’ listed in the ATA release.

Key policy advocacy is centering on nine major points, including: 

  • Removing the in-person telemental health requirement
  • Increased broadband access
  • Coverage through federal programs such as Federally Qualified Health Centers (FQHCs) and Rural Health Clinics (RHCs), the Indian Health Service, TRICARE, and the Veterans Health Administration
  • Telehealth across state lines while maintaining state authority to regulate the clinical practice
  • Remove regulatory roadblocks to decentralized clinical trials
  • Align Medicare coverage of remote patient monitoring with how it is practiced

ATA is also confirming that their 2022 annual meeting will be in-person at the Boston Convention & Exhibition Center 1-3 May. Information and registration are here.

Sold! IBM Watson Health to Francisco Partners

Another non-surprise, since we knew early in January [TTA 7 Jan] that Watson Health was on the exit side of the IBM ledger. Francisco Partners, a private equity company, is picking up the healthcare and data analytics assets of Watson Health. These include, according to the joint release, “extensive and diverse data sets and products, including Health Insights, MarketScan, Clinical Development, Social Program Management, Micromedex, and imaging software offerings.”

The company will be standalone and the current executive team will continue to serve their clients in the life sciences, provider, imaging, payer and employer, and government health and human services sectors.

Francisco Partners has $30 billion in assets under management and over time has invested in over 400 companies. Their current healthcare companies include GoodRx, ZocDoc, and  TrellisRx. 

Financial terms were not disclosed, but IBM was seeking bids in the $1 billion range. It’s also known that IBM spent well in excess of $4 billion to build the company, was earning about $1 billion in revenue sans profit, so it can be charitably called a fire sale to get it off the IBM books. In any case, barring regulatory glitches, the sale is expected to close in second quarter 2022. Also HealthcareITNews, Becker’s HealthIT, HISTalk

News, acquisitions, funding roundup: Cerner CEO, CTO’s ‘stay-with-conditions’ deal, Quest buying Pack Health coaching platform, Wheel’s $150M Series C, mental health’s bubbly Lyra Health’s $235M and Big Health’s $75M

Cerner CEO, CTO sticking around after Oracle acquisition, but there’s a catch. Cerner’s recently started CEO (August), Dr. David Weinberg, and their chief technology officer, Jerome Labat, both received ‘stay deals’ to remain with Oracle for 12 months from the closing date. The language in the SEC filing discloses the conditions. It’s a typical waiver of the right to leave for ‘good reason’ or ‘constructive termination’ if Oracle adversely changes their authority, duties, position, or responsibilities, which would trigger their ‘change in control’ severance. In return for the waiver, even if assigned to the data center in the Yukon, they will receive their severance benefits ($4.5 million and $2.3 million in cash respectively plus stock vesting) a year and one day later, even if they remain with Cerner. One wonders how far down the top management this goes. Becker’s Hospital Review, HISTalk

Quest Diagnostics is buying Pack Health, a chronic conditions care management, coaching, and patient engagement platform. Term details other than an all-cash equity deal were not disclosed. Pack coaches across 30 chronic conditions to address patient mental health, lifestyle behaviors, access to care, and social determinants of health (SDOH) factors. They market to payers for care management and life science companies for medication adherence. Pack will be added to Quest Extended Care, which includes Quest HealthConnect, a provider of in-person home-based risk assessment and monitoring services to supplement clinical care. The sale is expected to close in Q1. Release

Wheel, an Austin, Texas-based clinical platform that combines turnkey virtual primary care, behavioral health, urgent care, and diagnostic telehealth, announced a $150 million Series C, bringing total funding since 2018 to $215.6 million. The round was co-led by Lightspeed Venture Partners and Tiger Global. New investors Coatue and Salesforce Ventures participated in the round along with existing investors. Funds will be used to scale their platform. In 2021, they claimed 1.3 million patient visits in 2021 and is expected to triple visit volume by the end of 2022. Release

And corporate-focused mental health tech stays frothy with Lyra Health completing a $235 million Series F, bringing their funding to over $900 million with a valuation now pegged at $5.85 billion. Lyra is planning international expansion with all that loot. The round was led by Dragoneer, plus (again) Salesforce Ventures and existing investor Coatue Management. Lyra claims that it presently serves 10 million global employees. FierceHealthcare, release

Not-quite-as Big Health, which also claims millions of corporate and health system users including the NHS (offered for free in Scotland and select postal codes), raised $75 million in a Series C, led by Softbank Vision Fund 2 with ArrowMark Partners and existing investors Octopus Ventures, Gilde Healthcare, Kaiser Permanente Ventures (KPV), and Morningside Ventures. Big Health started in the UK, and our Readers there may be more familiar with their apps–Sleepio (first mentioned here in 2013! for insomnia) and Daylight (for anxiety). Big Health departed the UK for San Francisco and its greener money pastures back in 2015, noted here. Release

How Big Data failed public health during COVID

Once upon a time, say about 2012, Big Data and Massive Crunching was going to show us The Way. Better health, diagnosis, prevention, behavior, and a whole lotta other things. Doctors, nurses, engineers, and marketers feared that their jobs would be taken over by the handsome specimen to the left.

So at the start of the COVID pandemic, the hope was that Big Data was going to map the outbreaks and contact trace so that people could go into self-lockdown after a ride on a bus or subway, inform distancing measures, and identify hot spots for public health organizations, no matter how remote. Academic researchers and nonprofit partners mobilized into the non-profit Covid-19 Mobility Data Network that started by analyzing smartphone location data shared by tech companies. The intent was that public health officials could analyze it for insights based on hard data rather than 6′ guesstimates. It would then be expanded with additional data from Big Tech and grow, grow, grow.

Where it ran a cropper was the ad tech companies’ incompatibilities in data gathering, reluctance to share proprietary granular information, and privacy–an international battleground. Facebook turned out to be clueless in mapping mobility as a proxy or input to calculate contact rates, since it released only percent changes in movement or staying at home. The professors also didn’t figure on proprietary non-compatible systems and peculiarities stemming from business needs. Facebook, for instance, released data that mapped only eight-hour chunks in UTC which didn’t, of course, take into account normal bedtimes. Google would state that trends in staying home were up, versus Facebook data that indicated downward trends. Contact tracing, as Readers know, turned out to be a gigantic flop.

While the Covid-19 Mobility Data Network has evolved into a broader project called Crisis Ready, with the goal of creating data-sharing agreements that activate during a public health crisis, closing the gaps in data for epidemiological research remains elusive in areas such as urban versus rural and with specific demographics. STAT, PLOS Digital Health

Connecting JPM and CES dots: Babylon Health tripling revenue in ’22 to $1 billion–how? And Bosch tiptoes back into healthcare.

Dig for dots with your Editor….Babylon Health used their JPM forum last week to announce that with some US agreements signed, they expect by the end of this month to top $80 million per month, closing in on $1 billion this year, based on signing US value-based care agreements. The US agreements add an estimated 88,000 organic new members, bringing global managed lives to over 440,000. The $1 billion in revenue is nearly triple their 2021 preliminary closing revenue of $321 million. Interestingly, the US agreements were not specified in the release.

Does this tie in with the Higi acquisition [TTA 7 Jan], or are there others? Looking back on the Higi buy, we see one of the investors coming over from Higi is Glen Tullman, CEO of Transcarent and Managing Partner of VC 7wireVentures. His comments about Babylon in that release glow:

“Babylon’s innovative value and risk sharing models fit well with market leaders and innovators, including Transcarent, because they believe that, with the appropriate use of technology, data science, and good old-fashioned clinical care, you can impact the member satisfaction and quality of care, while, at the same time, reducing costs. This is the formula everyone has been searching for and the combination of Higi and Babylon bring us all one step closer.”

Higi is not large enough (though they claim ‘millions’) to boost Babylon’s revenues into the stratosphere, but some of Transcarent’s business very well might.

  • Transcarent earlier acquired BridgeHealth, a surgical and value-based benefits provider claiming 1 million members.
  • In October, Transcarent inked an agreement with Walmart to provide services for self-insured employers linking them to Walmart’s, including drug prescriptions.
  • Transcarent is on a funding roll of its own, with its own announcement at JPM in landing a $200 million Series C.

We’ll see if this Editor’s dots connect correctly….

Remember Bosch and health tech? Bosch was one of the ur-companies in remote patient monitoring with Health Hero/Health Buddy plus other telehealth/telecare businesses. Once upon an early 2010s time, they were a major supplier to VA Home Telehealth along with Viterion, Cardiocom, and Medtronic. After multiple setbacks, rounded up by TTA here, they exited European telehealth/telecare in January 2015 and shuttered Health Buddy six months later. So it’s déjà vu all over again to see Bosch technology used in a three-way project with Highmark Health in Pennsylvania and their Pediatric Institute of Allegheny Health Network (AHN) in Pittsburgh. AHN will be using Bosch’s SoundSee sensor-based tech to capture patient breathing audio that is then analyzed via Bosch’s proprietary AI and machine learning to detect pediatric pulmonary conditions. Clinical studies at AHN will be starting this quarter. Bosch’s Intelligent IoT group responsible for SoundSee is located at Bosch Research in Pittsburgh. Bosch has patented SoundSee for multiple applications in industrial and healthcare monitoring. Release, FierceHealthcare

Buried in the release is Bosch’s other step back into health tech. Vivatmo me, a breath-gas analyzer device that allows patients to accurately determine levels of inflammation, documenting them via an app–a very interesting concept–has been commercially available from March 2020 in Germany and Austria. It may be introduced in the US.

The Theranos Trials, ch. 1: Holmes sentencing to be 26 September, three mistrial charges dropped, appeal dates set

Yesterday, Elizabeth Holmes’ next few months were outlined for her.

Her sentencing for the four charges on which she was convicted [TTA 4 Jan] will be 26 September by the trial judge, Judge Edward Davila. The delay in sentencing due to the ‘ongoing proceeding’ of the Sunny Balwani trial (scheduled to start 15 March) was revealed in a joint filing by the prosecution and Holmes’ defense. The filing confirmed that the prosecution would file a motion today (Friday) to dismiss the three deadlocked charges and that she will remain out of custody on a $500,000 bond secured by personal property, increased by request of the prosecution.

Judge Davila also set a deadline of 4 March for filing post-trial motions he will hear, such as an appeal by Holmes’ defense, with the hearing set for 16 June.  Fox News, Yahoo!News

Meanwhile, the Silicon Valley Home Town Newspaper, the Mercury News, waxed on how difficult life will be for Holmes’ baby after her incarceration, even in a minimum-security Federal prison (colloquially known as Club Fed). It is highly unlikely that she will face the extreme hardships of women facing hard time, imprisoned thousands of miles away from their families, or losing their children to foster care because there are no family caregivers. The Federal Bureau of Prisons tries to place low-risk prisoners like her within 500 miles of home. There is visitation time. Also cushioning this is Holmes’ own family and an affluent partner, Billy Evans, who has stayed by her side. Reportedly, they live with their son at a home rented on an estate in an affluent San Jose suburb, Woodside. But after the appeals (and money) are exhausted, the long sentence will likely be served, and then will come the tough part for the child growing up without a mother. 

Short takes: rounding up revenue and acquisition action during JPM

The  JP Morgan conference (JPM), which wrapped on Thursday, is traditionally a major venue for healthcare announcements, from revenue to staff to investments. Having never attended but harboring a secret desire to observe (as a poor churchmouse on the wall–no fly am I) the 1% doing their thing, this Editor cannot imagine how boring it must be in virtual format. 

Here are a few highlights: the important, kind of interesting, and not too tedious.

  • Teladoc projects full-year 2021 revenue to hit $2.03 billion, nearly doubling its 2020 revenue. 2022’s projection is about $2.6 billion. It’s revenue without profitability, however. Teladoc lost $84.3 million Q3 2021, which more than doubled its PY $36 million loss. As we noted in our earlier article, Teladoc, like every other telehealth company, saw its shares plummet in 2021 as patients returned to offices and telehealth claims plunged to 4%, mostly for behavioral health. FierceHealthcare
  • Transcarent, Glen Tullman of Livongo’s ‘encore’ company, has landed a $200 million Series C and is now valued at $1.62 billion. Transcarent’s market is self-insured employers and provides a care management model focusing on personalized health and care support for employees. Kinnevik and Human Capital led investors and were joined by Ally Bridge Group, General Catalyst, 7wireVentures, and health systems Northwell Health, Intermountain Healthcare, and Rush University Medical Center. Release
  • Boston-based Medically Home, which supplies hospital-to-home support and integrates technology services, nabbed a $110 million venture round from investors Baxter International Inc., Global Medical Response, Cardinal Health, Mayo Clinic, and Kaiser Permanente. To date, they have worked with 7,000 patients. Release 
  • DexCare, a platform-as-a-service (PaaS) that ‘orchestrates’ digital demand and health system capacity, closed a $50 million Series B funding led by Transformation Capital, with participation from Kaiser Permanente, Providence Ventures, Mass General Brigham, Define Ventures, Frist Cressey Ventures, and SpringRock Ventures. Release
  • Mental health/meditation app provider Headspace Health acquired startup Sayana to build out AI capabilities in mental health and wellness. Its self-care app leverages chat-based sessions with an AI persona. Terms were not disclosed, but Sayana CEO/founder Sergey Fayfer will join Headspace in a product leader role. Headspace acquired rival Ginger back in August [TTA 27 Aug]. FierceHealthcare, release

Headspace is also facing a shareholder lawsuit on securities fraud after going public in a $1.4 billion SPAC deal. According to FierceHealthcare, the charges filed 7 January center on non-disclosure in their financials of critical growth headwinds, including increased advertising and customer acquisition costs and worsening growth and gross margin trends. They also overvalued its accounts receivable from certain health plan clients. Coupled with management turmoil–their president/COO resigned after a ‘conduct’ problem at an offsite event–their share price has plummeted over 80%. Their projection of full-year 2021 revenue was cut to $112 million from $125 million. Headspace, of course, has said the suit is meritless.

  • Aledade, well known to this Editor as an organizer of accountable care organizations (ACOs) and a management services organization (MSO) for physician groups in value-based care, bought Iris Healthcare. Iris provides advance care and palliative care planning for health plans and providers for seriously ill and high-risk patients via its network of 1,000 independent primary care practices and health centers. It will be folded into their new Aledade Care Solutions unit. FierceHealthcare, release

US/EU 2021 healthcare VC funding soared 65%, but health tech performance slumped 28%–and 2022 surprises

This isn’t the usual Rock Health report of puppies and unicorns. Silicon Valley Bank is a source new to this Editor, but even in topline, the report is pretty bracing. Their coverage is broad and detailed–biopharma, health tech, dx (diagnostic)/tools, and device–on US and European venture capital (VC) funding from 2019 to 2021. There are some warning flags for the health tech sector through their report (summary page; report available for free download here).

What you’d expect: total health care soared in 2021 to over $86 billion–a 65% increase over 2020 (not 30%!). This was led by biopharma at $36.3 billion, then health tech at $28.2 billion. Dx/tools and devices had far more modest funding gains. 

For health tech: 

  • Funding was up 157% versus 2020–42 new ‘unicorns’, four times 2020
  • Provider operations companies comprised a record 35% of total seed/series A funding, up from 20% in 2020. The other hot areas were clinical trial enablement and alternative care. Surprisingly, healthcare navigation was next to last, perhaps indicating that these companies are further along in maturity.
  • Investors were numerous, but high frequency investors were Tiger Global, Andreesen Horowitz, General Catalyst, Casdin, and Gaingels.
  • SPACs slowed in 2021, trying to find the right match before their two-year window to complete a merger and reflecting greater SEC scrutiny of blank checks. Of those who ‘de-SPAC’ed in 2021, Talkspace and Owlet led in market losses, 80% and 73% respectively.
  • Post-IPO performance dropped 28%, led by insurtechs Oscar, Bright Health, and Alignment Health
  • There were 122 M&A deals. The $63 million median value was down 25% from 2020. marking a shift to vertical integrations in care continuums or horizontal to capture consumer bases.

2022 The Year of M&A and Acquire-to-Hire? The end of the report sounds a cautionary note to health tech ‘bulls’. Expect “massive” consolidation. Healthy investment will continue, but the opportunities will be for companies seeking expand product offerings, expand to other markets, or acquire to hire talent (!)–the latter something quite new.

Also FierceHealthcare

Connected care keeps expanding: Stryker acquiring Vocera Communications for $3B, Baxter’s close of Hillrom sale for $12.5B

Medical device companies that have grown into or acquired tech and analytics are now buying into communications systems to connect it all. Massive medical/surgical/orthopedic device company Stryker is acquiring clinical communications/coordination workflow systems Vocera Communications for a snappy $2.97 billion. The deal is for $79.25 per share and is expected to close in this quarter. Vocera is expected to expand Stryker’s Advanced Digital Healthcare and connect devices and digital communications both for clinical caregivers and with families. Vocera is considered to be an innovator in communications systems that connect clinical and operational systems, and is presently in 2,300 medical facilities internationally. No management transitions were disclosed. Release.

Hillrom, another device company mainly in cardiac and hospital monitoring which last year had broadened its remote patient monitoring and connected care portfolio, was in turn acquired by medtech giant Baxter International last month. Hillrom had acquired Bardy Diagnostics and EarlySense about a year ago [TTA 4 Feb 21], and in 2019 Voalte Communications, directly competitive with Vocera. In 2015, Hillrom bought Welch Allyn which boosted it into digital health from primarily hospital furniture. The purchase price closed at $10.5 billion and including Hillrom’s outstanding debt obligations, the acquisition in total was $12.5 billion. From Baxter’s release, the “legacy” Hillrom and Welch Allyn brands will be introduced into international markets and integrated into Baxter’s technologies. The lack of mention of Hillrom, the ‘legacy’ references, and no mention of Hillrom management transitions in the release, is a sure sign that the brand will be sunsetted very quickly, along with its management team. Medtech Dive. Also a snappy tip o’ the cap to HISTalk.

What’s next for telehealth in the (almost) aftermath–and rating the US states on policies

crystal-ballWhat’s in that cloudy crystal ball?  Last year, especially the first half, saw telehealth acquisitions, stock prices and valuations hit the roof. The roof proved to be high but sturdy, as they bounced right back down, not unexpectedly. 

But gee whiz, Fast Company’s article seems to be shocked, shocked at all this, calling it a bubble. This Editor sincerely doubts that any investor that tracked telehealth over the last 10 years would have NOT expected this ride on the rollercoaster after the urgent care and practice offices reopened starting in mid-2020 and worked slowly through 2021. The rebound, as with health insurance payers, took a few months to work through into 2021. Telehealth usage in 2021 receded steadily to single digits, and at last report to just above 4% of claims as of October 2021 (FAIR Health US claims data).  What remains is the continued dominance of mental health–62% for mental health codes. It’s turned out that Babylon Health‘s SPAC was the last of the major action for 2021, getting in under the wire in October. 

It’s obvious that investors will be more realistic in assessing telehealth companies, looking at the areas that sustained telehealth usage, such as behavioral health. Another surprising niche is LGBTQ telehealth–Grand Rounds’ buy of Included Health in May, which then led to the entire company, including Doctor on Demand, adopting the name [TTA 20 Oct].

The other move that telehealth companies are making is to take more of the patient than a few virtual visits. They’ve moved into offering primary care teams to patients in employer plans (Babylon360 and Teladoc’s Primary360). Amazon Care moved into in-home health and clinics with Crossover Health. Amwell acquired SilverCloud for expanding behavioral health capabilities internationally, and stuck a toe into care management with their Converge platform and acquiring startup Conversa‘s health coaching app. The flip side is retail health migrating into in-person and virtual primary care–CVS Health and Walgreens, via VillageMD.

What also held telehealth back for over a decade of less than 1% was reimbursement by Medicare, Medicaid, and private insurers. The pandemic broke through that barrier. While it has narrowed considerably, CMS will still reimburse audio-only telehealth for behavioral health services, addiction treatment, and in-home health visits. State policies on telehealth practices can positively influence telehealth growth for patients and physicians. Free-market organizations Reason Foundation, Cicero Institute, and the Pioneer Institute have reported on all 50 on several policy metrics: 

  • In-person requirements
  • Modality neutral (asynchronous or synchronous, technology including audio, video, store and forward, and remote patient monitoring.)
  • No state barriers
  • All providers can use telehealth
  • Independent practice (including nurse-practitioners)
  • No coverage or payment mandates
  • Cross-state compacts

Rating the States on Telehealth Best Practices