TTA’s Realignment Autumn 7, Turkey Week Edition: Babylon’s decent Q3, more Oracle misery at VA, DOJ appeals UHG-Change, Walmart loses senior exec to JPM, health tech funding yellow flagged to 2025

 

Weekly Alert

As usual in the rollup to (US) Thanksgiving, it’s a light news week. Our two roundups include Babylon Health’s encouraging Q3 results, DOJ’s appealing to block the UHG-Change buy–already closed (!)–an senior exec move from Walmart Health to JPM, and digital health/health tech funding yellow flagged to 2025 by Very Important Investors.

Mid-week news briefs: House members’ ‘grave concerns’ on two deaths tied to Oracle Cerner VA rollout; care.ai’s $27M funding; Clear Arch’s new mobile RPM platform; digital health investment in rough times
News roundup: Babylon Health Q3 revenue up 3.9x; surprise–DOJ to appeal UHG-Change buy approval; Walmart loses senior health exec Pegus to JPM

Legal matters led this week, with Friday’s sentencing of Elizabeth Holmes to over 11 years in Federal prison and Cerebral’s ex-CEO fishing for evidence to use in legal actions. Amazon unveiled Clinic, a low-budget messaging platform for common condition diagnosis. Women’s health Maven rounded up $90M but Sema4 exited that testing field, losing 500. 

Breaking–The Theranos denouement: Elizabeth Holmes sentenced to 11.25 years with an investor loss of ~$121 million (Loss to be finalized at later date, sentence to start 27 Apr 2023)
Ousted Cerebral CEO may sue company, accuses management of scapegoating on Schedule 2 prescribing (Set up for legal action–or more settlement to go away)
The Theranos denouement: ‘Humble, hardworking’ Elizabeth Holmes sentencing Friday; prosecution and defense paint different pictures (updated)
News briefs: ResMed-Verily’s Primasun sleep solution; Maven Clinic’s $90M Series E; Mount Sinai genomics spinoff Sema4 lays off additional 500, exits women’s health
Yes, Virginia, there is an Amazon Clinic, after all; non-face-to-face consults for common conditions (Amazon’s Chevrolet–or Yugo–entry?)

VillageMD makes a quick, pricey deal for Summit Health. Many announcements on new products and partnerships. We stop in Singapore for funding while Oracle restructures its kitty. Amazon let a product ‘slip’. A rationale for a Transcarent-Teladoc tie-up. Telecare progress in Wales. Assessing where are we going, what are we doing in health tech funding after all this….realigning.

Short takes: Will there be an Amazon Clinic?, Transcarent and Teladoc, perfect together?, Get Well partners with Palomar Health, expands with Veterans Health Administration (Speculation can be fun)
Figuring out the future for health tech after 2022’s realignments: new SVB study (Solid weekend reading)
Oracle proceeds with $7B bond sale to restructure debt funding Cerner buy (Easier to manage, but bond rating still falls)
News roundup: cybersecurity benchmarking study, Tyto Care’s Home Smart Clinic, Long Island’s $2.6B life sciences hub, Singapore’s Speedoc raises $28M, NantHealth’s sinking feeling, Hims & Hers revenue up 95% 
TEC Cymru launches telecare programme strategy for Wales to complete digital transition by 2025 (Moving from analog to digital expands telecare)
VillageMD opens the Walgreens purse, set to buy Summit Health for $8.9B (This week’s Big Buy)

A mix of good and not-so-good news. Nearing year’s end, a flurry of fundings and promising partnerships. Walgreens’ VillageMD looking at a huge provider merger. JPM puts its venture money down on healthcare. UK GPs struggle with Data Saves Lives, as do health systems with lawsuits about Meta Pixel. And sadly, digital health layoffs continue at Kry/Livi and Brightline.

News roundup: WakeMed sued on Meta Pixel; Hint Health buys AeroDPC; Neurotrack’s $10M raise, 3 min. cognitive tool intro; layoffs dim Kry, Brightline (Good and bad news)
News roundup UK, AU, NZ: BMA England’s concerns on digital medical records; Australia and NZ’s health connectivity initiatives advance (Data Saves Lives agita)
J.P. Morgan forms life sciences/healthcare VC group; virtual care Ovatient formed by MUSC Health, MetroHealth; Oracle’s putting lots of KC office space on market (JPM sees opportunity, one new partnership, and office space to let!)
A spooky ‘good news’ roundup: AtlantiCare rolling out Orbita AI, Health Wildcatters Pitch Day, RapidSOS, HealthJoy fundings and more (Good News. Boo!)
VillageMD considering $5-$10B merger with Summit Health provider group: reports (A BIG provider consolidation, if it happens)

‘Fixing the holes’ this week. Global digital health funding is in a hole even deeper than the US. Telehealth a wobbly panacea, whether for discharged urban patients or care for the disabled. The pothole of layoffs hit Cerebral plus Israeli and German companies. Oracle’s Cerner acquisition requires more funding rearrangement, while VA deployment further delayed. Theranos tries the ‘mental’ defense as it digs out of that hole. But some light for Teladoc in narrowing its quarterly loss, and for smartwatches in accelerating adoption.

Is there a way out of the digital health funding black hole? Can it rebound to…2020? (So much depends on the next few months)
Telehealth-only follow up increased repeat ED visits by 2.8%, return admissions by 1.1%: JAMA Network study (Puts a hole in the savings points)
Smartwatches lead wearables, adoption now at 29%: Parks Associates study (Slow but sure development)
Pre-weekend short takes: Teladoc posts much smaller Q3 loss, 17% revenue boost; is telehealth threatening disability care quality; $2.8M for Australian wearables; more healthtech layoffs at Antidote, OrCam, Ada Health
Oracle talks to banks to increase loans funding Cerner buy; VA delays Cerner deployments to June 2023 (Oracle’s hornet’s nest?)
News updates: Theranos’ Holmes goes ‘mental’ in last ditch defense; troubled Cerebral telemental health fires another 400 (Theranos defense shows desperation, can Cerebral be saved?)

Perhaps it’s because the investment froth is off and it’s downscaling time, but the industry’s current and future status is a bit ‘Back to the Future’. A version that’s muted yet fractious, like the Conservative Party….

Meta Pixel is now considered a PHI breach that’s all Meta’s fault. Both Theranos trials move towards sentencing, despite defenses pulling ever-scrawnier rabbits out of hats. Back to antitrust action with CVS-Signify, while CVS apparently walks away from an expected deal with Cano Health. What’s moving forward? Smaller fundings, partnerships, and reorgs in a world resembling…2017 or 2018?

Meta Pixel ad tracker collects another 3 million data breaches at Advocate Aurora Health; Zuckerberg getting Senate scrutiny (Not going away despite denials and Zuckerbucks)
Breaking: CVS’ Signify Health buy under DOJ scrutiny in ‘second request’ (DOJ and FTC crave an antitrust win)
News roundup: CVS abandons (?) Cano Health buy; Signify adds home RPM; BioIntelliSense RPM acquires AlertWatch; GE Healthcare, AMC Health partner; Viome raises $67M, other fundings
Rosendorff stands pat on Theranos’ Elizabeth Holmes: “She needs to pay her debt to society” (He’s right–and now he needs a job and a relo)

There’s no escaping realignments in health tech. CVS sells an inherited business from Aetna. Babylon Health exits the practice business, financially maneuvers to avoid NYSE delisting. Layoffs continue to hit the formerly hot companies in health tech. Theranos’ Holmes and Balwani try to avoid the inevitable sentencing. And we have a Perspectives contribution from Avaya on NHS England’s ICS. 

Theranos’ Holmes sentencing now 18 November, defense wants to expand hearing scope; Balwani can’t join in
News roundup: CVS sells bswift; Babylon puts Meritage IPA up for sale, financially realigning to prevent delisting; Redesign Health sheds 20%, Noom 10%
Perspectives: How joined-up communications can enable connected patient care across healthcare Trusts

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Telehealth & Telecare Aware: covering the news on latest developments in telecare, telehealth, telemedicine, and health tech, worldwide–thoughtfully and from the view of fellow professionals

Thanks for asking for update emails. Please tell your colleagues about this news service and, if you have relevant information to share with the rest of the world, please let me know.

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donna.cusano@telecareaware.com

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Mid-week news briefs: House members’ ‘grave concerns’ on two deaths tied to Oracle Cerner VA rollout; care.ai’s $27M funding; Clear Arch’s new mobile RPM platform; digital health investment in rough times

A pre-Thanksgiving news roundup in this short week.

More miseries for Oracle Cerner’s VA rollout. This week, three House members sent a letter to the Department of Veterans Affairs (VA). After a 2 September visit to the Chalmers P. Wylie VA Ambulatory Care Center in Columbus, Ohio and interviewing the staff, they determined that the Cerner Millenium EHR as currently in use possibly led to the deaths of two veteran patients. The deaths were due to 1) hypoxia after an antibiotic ordered for mail delivery was never tracked nor received, leading to a decline in the patient’s condition; and 2) alcohol withdrawal symptoms after a patient’s missed appointment was lost in the EHR and not rescheduled, leading to his decline and death several months later. The three Representatives are asking Denis McDonough, the Department secretary, for answers on the processes and problems that led to this, and more. They are Mike Bost, R-Ill., Mike Carey, R-Ohio, and Troy Balderson, R-Ohio. Becker’s

care.ai, a system that uses sensor-based AI for care facilities, secured $27 million in venture funding from Crescent Cove Advisors. care.ai’s sensors and their Smart Care Facility Platform are currently used in 1,500 facilities in the US to automate, monitor, and streamline clinical and operational workflows in hospitals, skilled nursing facilities, and assisted living facilities. care.ai plans to use the funding from Crescent Cove Advisors to build on their ongoing operations and deliver ambient intelligence to healthcare. Release, Mobihealthnews

Clear Arch Health is introducing a new RPM mobile app, Clear Arch Mobile, as an alternative to its current tablet-based system. It connects via Bluetooth to devices and is based on the LifeStream Clinical Monitoring Dashboard by enhancing security (with two-factor authentication) and simplifying the collection and transmission of patient data for clinician assessment and intervention, as needed. LifeStream was acquired by Clear Arch earlier this year with their buy of Life Care Solutions. Clear Arch is a division of MobileHelp. Both were acquired by Advocate Aurora Enterprises in April. Release (PDF)

How to cope with the transition from easy funding to showing investors that they are squeezing every dime? That was the topic of a roundtable of investors at HLTH last week. One major problem was that the 2020-21 influx of capital boosted valuations to unrealistic and unsustainable levels, leading to unrealistic expectations for growth and moving into businesses that weren’t core. The advice was bracing from investor luminaries such as Glen Tullman of 7Wire Ventures/Transcarent, Emily Melton of Threshold Ventures, Andrew Adams of Oak HC/FT; and Krishna Yeshwant of Google Ventures.

  • Don’t focus on valuation. Focus on how much capital your enterprise needs to the next phase of inflection, minimize dilution, and set yourself up for the next up round.
  • Refocus and reprioritize, making the most of cash resources on hand
  • Have a plan to get to profitability, not just growth
  • Even more depressing news: the downturn is expected to continue through 2023 into 2024 — make cash last into 2025

Growth areas in healthcare they identified will be familiar: mental health, senior care and primary care –one is not, the Medicaid space. Mobihealthnews

News roundup: Babylon Health Q3 revenue up 3.9x; surprise–DOJ to appeal UHG-Change buy approval; Walmart loses senior health exec Pegus to JPM

Earlier this month, Babylon Health announced its Q3 financials. Both revenue and value-based care membership grew. Losses also grew but the margins narrowed considerably. Highlights of their release:

Comparing Q3 2022 to Q3 2021

  • Revenue increased by $288.9 million versus $74.5 million, an increase of $214.4 million or 3.9x. This was largely driven by a 285% increase in Medicare membership.
  • Losses were there but margins improved due to aggressive cost reductions. Q3 loss was $89.9 million, or a 31.1% loss for the Period Margin (percent of revenue). Last year’s loss was $66 million, or 88.6% Period Margin. This represented an improvement of 57 points. When looking at EBITDA, Adjusted EBITDA totaled $(54.3) million, an (18.8)% Adjusted EBITDA Margin. This compared to last year’s $(47.5) million Adjusted EBITDA, or (63.7)% Adjusted EBITDA Margin, an improvement of 45 points.
  • Value-based care membership grew 2.7x to approximately 271,000
  • They acquired Medicare Advantage members in New Mexico, and commercial members via a digital-first product for Centene’s Ambetter plans in six states
  • In the UK, their Bupa partnership was extended for three years. Bupa has 2.3 million health insurance customers.

For year 2022, Babylon is updating its revenue guidance from $1.0 billion or greater to $1.05 billion to $1.1 billion.

Babylon is selling Meritage Medical Network, an independent physician association (IPA) based in Northern and Central California with 1,800 providers in six counties serving 90,000 patients, advised by  a major investment bank. They will also comply with SEC reporting requirements for a domestic issuer versus previously as a foreign private issue. Babylon will report its Q4 and 2022 yearend results under U.S. GAAP. They are also proceeding with a 25-to-1 reverse stock split to boost share price and prevent a NYSE delisting [TTA 13 Oct]. Mobihealthnews

The Department of Justice (DOJ) wiped egg off its face Friday, appealing the District Court of the District of Columbia approval in late September of UnitedHealth Group’s acquisition of Change Healthcare. The two companies closed on the buy in early October. DOJ was joined in the appeal by New York and Minnesota. The surprising appeal, after six weeks and the closing, is unusual but not unprecedented. At the time, the DOJ statement was written so that industry observers expected an appeal.

While the merger is closed, an appealed decision, if favorable to the DOJ, would force a separation of the businesses. Of course, UHG believes that “the appeal is without merit.” Stay tuned to see if this goes anywhere. Becker’s, Healthcare Dive

Walmart loses another healthcare exec. Cheryl Pegus, MD, will be departing Walmart as EVP of health and wellness and joining Morgan Health as a managing director. At Morgan, she will be focusing on population-based health initiatives and bringing clinical expertise to mental health, diabetes, and other chronic diseases. She is also joining Atria, a physician-owned organization of heart specialists.

During two years at Walmart, Dr. Pegus helmed development of a low-cost private brand analog insulin, expanded Walmart’s retail health center network across major markets, and the company’s pandemic response. Morgan Health was set up in 2021 to improve the quality, affordability, and equity of employer-sponsored healthcare. It has opened advanced primary care centers in Ohio. JPM a few weeks ago opened a Life Sciences Private Capital group [TTA 2 Nov]. Becker’s, Healthcare Dive

Walmart, despite their size, has had a certain wobbliness in their strategy. Aggressively starting out of the gate in 2018 with high-profile exec Sean Slovenski leading and plans to open up 1,000 clinics, he departed in 2020 and that put the brakes on the clinic strategy for awhile. In 2021, they bought privately held telehealth provider MeMD. Earlier this year, they announced the opening of more health ‘superstores’ in Florida, having established 20 in Arkansas, Illinois, and Georgia starting in 2019. Meanwhile, Walgreens is going big with VillageMD and its acquisition of Summit Health, and CVS Health is snapping up Signify Health to expand into value-based care and home health.

TTA’s Realignment Autumn 6: Theranos’ Holmes gets 11 years on fraud, Cerebral ex-CEO’s legal fishing, Amazon Clinic and Primasun debut, Maven rounds up $90M, Sema4 ditches women’s health + 500

 

 

Weekly Update

Legal matters led this week, with Friday’s sentencing of Elizabeth Holmes to over 11 years in Federal prison and Cerebral’s ex-CEO fishing for evidence to use in legal actions. Amazon unveiled Clinic, a low-budget messaging platform for common condition diagnosis. Women’s health Maven rounded up $90M but Sema4 exited that testing field, losing 500. 

Breaking–The Theranos denouement: Elizabeth Holmes sentenced to 11.25 years with an investor loss of ~$121 million (Loss to be finalized at later date, sentence to start 27 Apr 2023)
Ousted Cerebral CEO may sue company, accuses management of scapegoating on Schedule 2 prescribing (Set up for legal action–or more settlement to go away)
The Theranos denouement: ‘Humble, hardworking’ Elizabeth Holmes sentencing Friday; prosecution and defense paint different pictures (updated)
News briefs: ResMed-Verily’s Primasun sleep solution; Maven Clinic’s $90M Series E; Mount Sinai genomics spinoff Sema4 lays off additional 500, exits women’s health
Yes, Virginia, there is an Amazon Clinic, after all; non-face-to-face consults for common conditions (Amazon’s Chevrolet–or Yugo–entry?)

VillageMD makes a quick, pricey deal for Summit Health. Many announcements on new products and partnerships. We stop in Singapore for funding while Oracle restructures its kitty. Amazon let a product ‘slip’. A rationale for a Transcarent-Teladoc tie-up. Telecare progress in Wales. Assessing where are we going, what are we doing in health tech funding after all this….realigning.

Short takes: Will there be an Amazon Clinic?, Transcarent and Teladoc, perfect together?, Get Well partners with Palomar Health, expands with Veterans Health Administration (Speculation can be fun)
Figuring out the future for health tech after 2022’s realignments: new SVB study (Solid weekend reading)
Oracle proceeds with $7B bond sale to restructure debt funding Cerner buy (Easier to manage, but bond rating still falls)
News roundup: cybersecurity benchmarking study, Tyto Care’s Home Smart Clinic, Long Island’s $2.6B life sciences hub, Singapore’s Speedoc raises $28M, NantHealth’s sinking feeling, Hims & Hers revenue up 95% 
TEC Cymru launches telecare programme strategy for Wales to complete digital transition by 2025 (Moving from analog to digital expands telecare)
VillageMD opens the Walgreens purse, set to buy Summit Health for $8.9B (This week’s Big Buy)

A mix of good and not-so-good news. Nearing year’s end, a flurry of fundings and promising partnerships. Walgreens’ VillageMD looking at a huge provider merger. JPM puts its venture money down on healthcare. UK GPs struggle with Data Saves Lives, as do health systems with lawsuits about Meta Pixel. And sadly, digital health layoffs continue at Kry/Livi and Brightline.

News roundup: WakeMed sued on Meta Pixel; Hint Health buys AeroDPC; Neurotrack’s $10M raise, 3 min. cognitive tool intro; layoffs dim Kry, Brightline (Good and bad news)
News roundup UK, AU, NZ: BMA England’s concerns on digital medical records; Australia and NZ’s health connectivity initiatives advance (Data Saves Lives agita)
J.P. Morgan forms life sciences/healthcare VC group; virtual care Ovatient formed by MUSC Health, MetroHealth; Oracle’s putting lots of KC office space on market (JPM sees opportunity, one new partnership, and office space to let!)
A spooky ‘good news’ roundup: AtlantiCare rolling out Orbita AI, Health Wildcatters Pitch Day, RapidSOS, HealthJoy fundings and more (Good News. Boo!)
VillageMD considering $5-$10B merger with Summit Health provider group: reports (A BIG provider consolidation, if it happens)

‘Fixing the holes’ this week. Global digital health funding is in a hole even deeper than the US. Telehealth a wobbly panacea, whether for discharged urban patients or care for the disabled. The pothole of layoffs hit Cerebral plus Israeli and German companies. Oracle’s Cerner acquisition requires more funding rearrangement, while VA deployment further delayed. Theranos tries the ‘mental’ defense as it digs out of that hole. But some light for Teladoc in narrowing its quarterly loss, and for smartwatches in accelerating adoption.

Is there a way out of the digital health funding black hole? Can it rebound to…2020? (So much depends on the next few months)
Telehealth-only follow up increased repeat ED visits by 2.8%, return admissions by 1.1%: JAMA Network study (Puts a hole in the savings points)
Smartwatches lead wearables, adoption now at 29%: Parks Associates study (Slow but sure development)
Pre-weekend short takes: Teladoc posts much smaller Q3 loss, 17% revenue boost; is telehealth threatening disability care quality; $2.8M for Australian wearables; more healthtech layoffs at Antidote, OrCam, Ada Health
Oracle talks to banks to increase loans funding Cerner buy; VA delays Cerner deployments to June 2023 (Oracle’s hornet’s nest?)
News updates: Theranos’ Holmes goes ‘mental’ in last ditch defense; troubled Cerebral telemental health fires another 400 (Theranos defense shows desperation, can Cerebral be saved?)

Perhaps it’s because the investment froth is off and it’s downscaling time, but the industry’s current and future status is a bit ‘Back to the Future’. A version that’s muted yet fractious, like the Conservative Party….

Meta Pixel is now considered a PHI breach that’s all Meta’s fault. Both Theranos trials move towards sentencing, despite defenses pulling ever-scrawnier rabbits out of hats. Back to antitrust action with CVS-Signify, while CVS apparently walks away from an expected deal with Cano Health. What’s moving forward? Smaller fundings, partnerships, and reorgs in a world resembling…2017 or 2018?

Meta Pixel ad tracker collects another 3 million data breaches at Advocate Aurora Health; Zuckerberg getting Senate scrutiny (Not going away despite denials and Zuckerbucks)
Breaking: CVS’ Signify Health buy under DOJ scrutiny in ‘second request’ (DOJ and FTC crave an antitrust win)
News roundup: CVS abandons (?) Cano Health buy; Signify adds home RPM; BioIntelliSense RPM acquires AlertWatch; GE Healthcare, AMC Health partner; Viome raises $67M, other fundings
Rosendorff stands pat on Theranos’ Elizabeth Holmes: “She needs to pay her debt to society” (He’s right–and now he needs a job and a relo)

There’s no escaping realignments in health tech. CVS sells an inherited business from Aetna. Babylon Health exits the practice business, financially maneuvers to avoid NYSE delisting. Layoffs continue to hit the formerly hot companies in health tech. Theranos’ Holmes and Balwani try to avoid the inevitable sentencing. And we have a Perspectives contribution from Avaya on NHS England’s ICS. 

Theranos’ Holmes sentencing now 18 November, defense wants to expand hearing scope; Balwani can’t join in
News roundup: CVS sells bswift; Babylon puts Meritage IPA up for sale, financially realigning to prevent delisting; Redesign Health sheds 20%, Noom 10%
Perspectives: How joined-up communications can enable connected patient care across healthcare Trusts

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Read Telehealth and Telecare Aware: https://telecareaware.com/  @telecareaware

Follow our pages on LinkedIn and on Facebook

We thank our present and past advertisers and supporters: Legrand/Tynetec, Eldercare, UK Telehealthcare, NYeC, PCHAlliance, ATA, The King’s Fund, DHACA, HIMSS, Health 2.0 NYC, MedStartr, Parks Associates, and HealthIMPACT.

Reach international leaders in health tech by advertising your company or event/conference in TTA–contact Donna for more information on how we help and who we reach. 


Telehealth & Telecare Aware: covering the news on latest developments in telecare, telehealth, telemedicine, and health tech, worldwide–thoughtfully and from the view of fellow professionals

Thanks for asking for update emails. Please tell your colleagues about this news service and, if you have relevant information to share with the rest of the world, please let me know.

Donna Cusano, Editor In Chief
donna.cusano@telecareaware.com

– – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –

Breaking–The Theranos denouement: Elizabeth Holmes sentenced to 11.25 years with an investor loss of ~$121 million

Elizabeth Holmes received her sentence today by Judge Edward Davila of the US District Court of Northern California, in an over four-hour court proceeding.

The sentencing was based on Federal guidelines for four counts of a Class C (non-violent) felony, as well as the recommendations of probation officers. Your Editor watched this in real time from the NBC Bay Area feed and reporter Scott Budman’s Twitter feed from the courtroom (cameras are excluded). This started at 10am PT with last arguments made by prosecution and defense and victim statements. The actual reading of the sentence in his summation by Judge Davila took a little more than 20 minutes, delivered in a silent courtroom, concluding after 2pm PT.

The decision:

  • Prison sentence: 11.25 years (11 years, three months), to be followed by three years of supervised release. Holmes will be required to self-surrender on 27 April 2023. This is likely after her delivery date. This was less than the 15 years requested by the prosecution (in turn less than the 20 years maximum), more than the nine years recommended to the judge by the probation officers (what is called a downward deviation), but entirely based on the sentencing manual. Judge Davila obviously did not believe that he could justify that downward deviation.
  • The investor loss. Judge Davila estimated the total loss by 10 investors at $384 million, not $804 million. A ‘reasonable total loss’ is only $121 million. This winnowing down is a big win for Holmes. While she will never be able to pay it, below $500 million it takes down her possible sentencing, according to NBC’s legal commentator, former prosecutor Dean Johnson. The total and final amount will be settled at a later date at a restitution hearing.

Scott Budman’s tweets included the jousting between both prosecution and defense on multiple points.

There were victim impact statements directed to Holmes, which include the father of whistleblower Tyler Shultz, Alex Shultz, whose grandfather was investor, board member, and enabler George Shultz. “There’s a lot of talk about Sunny and Elizabeth. From my family’s perspective, Elizabeth is their Sunny Balwani. She took advantage of my family.” Theranos lawyers burst into their home (average for the bare-knucks tactics of one David Boies) with no chance for Tyler to defend himself. It also pitted the senior generation (now departed) versus son and grandson, ripping apart the family.

A cancer patient testified; the judge gently said he read her letter.

Holmes presented her own statement as the last word. “I am devastated by my failings. I have felt deep pain for what people went through, because I failed them. To investors, patients, I am sorry.”

Judge Davila’s formal sentencing of Holmes was well under 30 minutes. A judge’s summation must primarily justify the sentencing. It is where he speaks at length. It must detail his logic, discretion, reasoning, and thought process based on the information presented at trial and by precedent. The quotes are from Scott Budman’s play-by-play tweets:

“This case is troubling on so many levels. What went wrong? This is sad because Ms. Holmes is brilliant.”
“Failure is normal. But failure by fraud is not OK.”
“We know by the texts with Mr. Balwani that there was conspiracy.”
“What is the pathology of fraud? Is it the inability to accept responsibility? Perhaps that [is] the cautionary tale to come from this case.”

This Editor will reflect on this, with more information, next week. Will there be a genuine Silicon Valley impact in the middle of a downturn or has this all been factored in? There is the implosion of bitcoin/crypto FTX in the headlines–2022’s equivalent of the early 1930s’ fall of Swedish Match/Ivar Krueger and Ivan Boesky’s stock fraud of the Big ’80s.

Certainly there will be appeals by the defense and by the Feds. A defense appeal, for instance, may lengthen the time before she will serve her sentence.

Sunny Balwani’s attorneys will not be having a Palm Springs Weekend, either, now knowing the thought process of Judge Davila. 

With deep appreciation to the NBC Bay Area team coverage, the analysis by Dean Johnson, and warmly to Scott Budman.

Ousted Cerebral CEO may sue company, accuses management of scapegoating on Schedule 2 prescribing

Troubled telemental health provider Cerebral may face a lawsuit from former CEO Kyle Robertson. Ousted in May when the company’s prescriptions for ADHD patients started to be excluded from pharmacies such as Truepill, CVS, and Walmart for Schedule 2 (potential for abuse and misuse) medications such as Adderall, Ritalin, and Vyvanse [TTA 6 May], Robertson has written a letter to Cerebral demanding access to documents. The types of documents requested, according to (paywalled) Insider, include “possible breaches of fiduciary duty, mismanagement and other violations of law.” Usually, these are a setup to determine whether others on the company board and leadership were the real culprits in business mismanagement, and a prelude to a legal filing.

CBS News obtained a copy of the Robertson letter, in which “Robertson says he was pressured by the company’s investors to “sell more stimulants” and believes his ouster was an effort to “scapegoat” him as these investigations arose.  He was urged by one board member  that “the easier you make it for people to get stimulants, the better for the business and its customers.” and also claimed that an investor told Robertson’s partner the company’s “ADHD business is crushing and it’s a cash cow … Kyle’s got to push this thing further.” Other documents obtained by CBS allegedly detail clinical safety issues, staff “practicing with expired (or) suspended license(s),” and duplicate accounts which could set the stage for overprescribing. Other documents allege lack of training, pushing prescriptions to 95% of patients, and disregarding state regulations putting licenses at risk. [TTA 29 June] The current management, led by David Mou, has denied this all.

Multiple investigations are proceeding. From May on, Cerebral came under investigation by the Federal Trade Commission (FTC) on deceptive advertising and marketing practices, the Drug Enforcement Agency (DEA) as part of increased scrutiny of telehealth providers and pharmacies possibly overprescribing telehealth-generated prescriptions, and most significantly, the Department of Justice (DOJ) subpoenas on allegations of overprescribing. A prior wrongful dismissal lawsuit by Matthew Truebe, Cerebral’s former VP of product and engineering, alleged that the company put growth before patient safety, including prescribing ADHD drugs to 100% of diagnosed patients as a retention strategy. The concatenation of evidence from multiple sources makes a lawsuit by Robertson, who also cites other factors, probable–unless this is being used as a tablespoon to sweeten his severance.

Prior to that, Cerebral was one of the leaders in the still-hot digital mental health category. In December 2021, their $300 million Series C raise led by Softbank boosted their valuation past $4.8 billion, employed 4,500, and had 210,000 patients. In October, they released 400 staff but other reports indicate far more. Also FierceHealthcare

The Theranos denouement: ‘Humble, hardworking’ Elizabeth Holmes sentencing Friday; prosecution and defense paint different pictures (updated)

Elizabeth Holmes finally faces the music and perhaps the mercy of Judge Edward Davila on Friday, 10 am PT. Convicted on four felony counts of 11 and defrauding investors of over $144 million, the prosecution has called for Holmes to go to Federal prison for 15 years of the maximum 20, plus three years of supervised release. Restitution of $804 million would go to investors plus a fine of $250,000 for each charge. In US Attorney Stephanie Hinds’ 46-page pre-sentencing memo to Judge Davila, the prosecution states that she was blinded by ambition. “She repeatedly chose lies, hype and the prospect of billions of dollars over patient safety and fair dealing with investors. Elizabeth Holmes’ crimes were not failing, they were lying—lying in the most serious context, where everyone needed her to tell the truth.” They called her crimes “extraordinarily serious, among the most substantial white collar offenses Silicon Valley or any other district has seen.” and that her actions damaged the trust and integrity that is needed for Silicon Valley investors to trust companies to fund ideas before profits are seen. The cut: “She stands before the Court remorseless. She accepts no responsibility. Quite the opposite, she insists she is the victim.”

In all fairness, her defense has relentlessly painted Holmes as exactly that, from young, naive, battered, psychologically and sexually abused Trilby to Sunny Balwani’s Svengali. Their argument in their 82-page sentencing memo argues for mitigation to the point of no sentence at all, or a minimal sentence of no more than 18 months in home confinement plus her continuing service work. Supporting her character as a ‘humble, hardworking, and compassionate woman who deeply wants to give what she can to the world” and not motivated by greed or personal gain were character testimony letters from Billy Evans, her partner, as one would expect, but also from some unexpected places: the Senator from this Editor’s home state of New Jersey, Cory Booker, who knew her starting in 2012, and a former EPA head, William Reilly, who worked with Holmes’s father back in the George H.W. Bush administration. Their memo cited 130 letters.

Also revealed by the defense: Holmes is not only the mother of a year-old son but also pregnant. Evans’ letter contains another heartbreaking fact. Her beloved ‘wolf’ of a husky dog, Balto, was tragically killed by a mountain lion while she and Evans were living in seclusion in a rural area. While they lived in San Francisco, according to him, they were harassed by reporters, ordinary people, and threatening letters, so they hit the road for at least 6 months living in a camper.

Holmes’ ability to pay $804 million to the likes of Safeway and Walgreens seems to be a bit of a reach, as Holmes never cashed out of Theranos stock–at its peak valued at  $4.5 billion–is unemployed with no prospects, and is widely assumed to be, as they say, flat broke as are her parents. As to her sentence, what is widely expected is a multi-year sentence. If that happens, the defense will request that she remains free on bail (a motion for stay) while the filing to the Federal Appeals Court is made, a process that can take a year or more from filing to a decision. 

Judge Davila’s record has been to take in all the circumstances and to be measured in sentencing. After several years, he is intimately familiar with Theranos to the likely point of dreaming about it at night. Factors he may consider in sentencing, start of her term, where it will be served, restitution and fines: lack of flight risk, Holmes’ young child, and her current condition both physical and financial. Savvy court watchers have noted that if Federal law enforcement is in the courtroom, Holmes may initially be taken to prison and held, then freed on bail pending appeal. The jury convicted her on only four out of 11 counts (and threw out the 12th), but it remains that the prosecution proved and the jury decided that she was fully capable of engineering fraud, not once but several times, leaving Balwani’s Mesmerizing Influences aside.

Balwani’s own sentencing on 12 charges, with the same maximum of 20 years in Federal prison, is scheduled for 7 December, Pearl Harbor Day, at 10 am PT.

The Mercury News articles, while thorough, are paywalled: 11 November (defense memo), 11 November (Billy Evans letter), 14 November (prosecution filing). FierceBiotech, MedCityNews

The US Attorney, Northern District of California summary: U.S. v. Elizabeth Holmes, et al.  District Court documents here.

NBC Bay Area will cover the sentencing live here at 10 am PT, 1 pm ET, 6 pm GMT.

News briefs: ResMed-Verily’s Primasun sleep solution; Maven Clinic’s $90M Series E; Mount Sinai genomics spinoff Sema4 lays off additional 500, exits women’s health

The large conference HLTH is underway in Las Vegas and like pre-Covid, conferences are a platform for announcements. Verily, which is Alphabet’s (Google’s) life sciences and health skunk works, and ResMed, a large company in respiratory medical devices for sleep apnea and sleep disruption treatment, have formed a joint venture, Primasun. Their target market is employers and providers to identify patients at risk for sleep disorders, particularly obstructive sleep apnea. About 75% of those in the US experience some form of sleep disruption at least a few times a week, leading to behavioral and physical problems. Mobihealthnews has the basic information on the launch but also some side information on Verily. Back in September, alongside a $1 billion raise to fund precision health, controversial founding CEO Andy Conrad announced he was stepping down effective in January 2023, replaced by current president Stephen Gillett. Dr. Conrad survived a brace of bad press back in 2016 [TTA 6 Apr 2016] and multiple ups and downs in the past six years.

Maven Clinic, a virtual care company targeting women and families, bucked the trends and locked up a $90 million Series E financing. Led by General Catalyst, there are nine other investors including La Famiglia, CVS Health Ventures, and Intermountain Ventures, bringing total funding to just under $300 million (Crunchbase) and unicorn valuation last year. Maven focuses on women’s health journey from fertility through menopause. The company claims to host 15 million members through primarily companies and health plans, and has contracts with half of the Fortune 15. Recently, they launched a menopause and ongoing care program with 1.2 million lives covered across 150 employer clients.  Release, Mobihealthnews  Notably, General Catalyst has been a bullish funder of both US and UK health systems such as Banner Health, Cincinnati Children’s Hospital Medical Center, Hackensack Meridian Health, HCA, and Intermountain Health, along with Guy’s and St Thomas’ NHS Foundation Trust in the UK. Mobihealthnews

Unfortunately, Mount Sinai spinoff Sema4 continues to cut back and restructure. Their latest round of layoffs affects 500, or 32.5% of its workforce. Sema4 will be exiting its reproductive and women’s health testing business and shuttering operations located in Stamford, Connecticut by end of Q1 2023. Going forward, they will concentrate operations in Maryland. In August, they discharged 250 staff, about 13% at that time, including its founder from both the president and director slots. With this latest restructuring, their workforce has been reduced to 1,100. Their release states that they will concentrate on their high growth, high margin pediatric and rare disease business using whole exome/genome diagnostic testing, achieve annual revenue growth in excess of 20%, and reach profitability by 2025. MarketWatch, Becker’s, Mobihealthnews

Yes, Virginia, there is an Amazon Clinic, after all; stripped down, non-face-to-face consults for common conditions

On the move while Care is shutting down and OneMedical is not yet onboard as awaiting Federal approvals, Amazon Clinic’s premature leak generated press for the service’s formal debut on Tuesday. The leak was remarkably accurate [TTA 11 Nov] in describing it for the New York Minute it was up. According to their introductory blog, Amazon Clinic will operate in 32 US states (not specified, but a quick check indicates it’s not available in Alaska and New Hampshire). It provides message-based virtual care for more than 20 common health conditions, such as allergies, acne, eczema, UTIs, and hair loss. (The website lists conditions covered and prescription renewals for previously diagnosed conditions such as asthma, hypothyroidism, high cholesterol, and migraine.)

What it is: a stripped-down, questionnaire-driven provider referral platform, enabling a non-face-to-face telehealth consult or prescription renewal. It’s not clear from available information whether the messaging is synchronous, asynchronous (delayed), or a combination of both. This certainly sounds less ambitious than the home-based delivery/enterprise membership model of Amazon Care. How Clinic works:

  • Select your condition
  • Pick your preferred provider from a list of licensed and qualified telehealth providers. Costs and if available in your state are disclosed in the selection process.
  • Complete intake questionnaire
  • Connect with clinician through a secure message-based portal
  • After the message-based consultation, the clinician sends a personalized treatment plan via the portal, including any necessary prescriptions to the customer’s preferred pharmacy including Amazon Pharmacy. Here, costs may be covered by insurance.

As Care was, payment is upfront as Amazon doesn’t accept insurance. The cost of consultations will vary by provider and condition but tend to be in the $40 – 50 range. This includes ongoing follow-up messages with the clinician for up to two weeks after the initial consultation. Some conditions, such as rosacea, require a prior diagnosis.

In addition, the services provided are available only to those aged 18-64, which strikes this Editor as discriminatory for those 65 and over who can well pay cash and might prefer a ‘visit lite’.

No mention of whether those laid off at Amazon Care or through the rest of Amazon (10,000 announced) can apply for jobs with this new service; it sounds largely referral, highly automated, manageable, and not requiring heavy oversight. The last can be a problem all its own. TechCrunch, Mobihealthnews, CNBC

TTA’s Realignment Autumn 5: VillageMD-Summit Health deal, Oracle restructures debt, future of health tech funding, new partners/products from Tyto, Get Well, TEC Cymru, Amazon Clinic, more!

 

 

Weekly Update

VillageMD makes a quick deal for Summit Health. Many announcements on new products and partnerships. We stop in Singapore for funding while Oracle restructures its kitty. Amazon let a product ‘slip’. A rationale for a Transcarent-Teladoc tie-up. Telecare progress in Wales. Assessing where are we going, what are we doing in health tech funding after all this….realigning.

Short takes: Will there be an Amazon Clinic?, Transcarent and Teladoc, perfect together?, Get Well partners with Palomar Health, expands with Veterans Health Administration (Speculation can be fun)
Figuring out the future for health tech after 2022’s realignments: new SVB study (Solid weekend reading)
Oracle proceeds with $7B bond sale to restructure debt funding Cerner buy (Easier to manage, but bond rating still falls)
News roundup: cybersecurity benchmarking study, Tyto Care’s Home Smart Clinic, Long Island’s $2.6B life sciences hub, Singapore’s Speedoc raises $28M, NantHealth’s sinking feeling, Hims & Hers revenue up 95% 
TEC Cymru launches telecare programme strategy for Wales to complete digital transition by 2025 (Moving from analog to digital expands telecare)
VillageMD opens the Walgreens purse, set to buy Summit Health for $8.9B (This week’s Big Buy)

A mix of good and not-so-good news. Nearing year’s end, a flurry of fundings and promising partnerships. Walgreens’ VillageMD looking at a huge provider merger. JPM puts its venture money down on healthcare. UK GPs struggle with Data Saves Lives, as do health systems with lawsuits about Meta Pixel. And sadly, digital health layoffs continue at Kry/Livi and Brightline.

News roundup: WakeMed sued on Meta Pixel; Hint Health buys AeroDPC; Neurotrack’s $10M raise, 3 min. cognitive tool intro; layoffs dim Kry, Brightline (Good and bad news)
News roundup UK, AU, NZ: BMA England’s concerns on digital medical records; Australia and NZ’s health connectivity initiatives advance (Data Saves Lives agita)
J.P. Morgan forms life sciences/healthcare VC group; virtual care Ovatient formed by MUSC Health, MetroHealth; Oracle’s putting lots of KC office space on market (JPM sees opportunity, one new partnership, and office space to let!)
A spooky ‘good news’ roundup: AtlantiCare rolling out Orbita AI, Health Wildcatters Pitch Day, RapidSOS, HealthJoy fundings and more (Good News. Boo!)
VillageMD considering $5-$10B merger with Summit Health provider group: reports (A BIG provider consolidation, if it happens)

‘Fixing the holes’ this week. Global digital health funding is in a hole even deeper than the US. Telehealth a wobbly panacea, whether for discharged urban patients or care for the disabled. The pothole of layoffs hit Cerebral plus Israeli and German companies. Oracle’s Cerner acquisition requires more funding rearrangement, while VA deployment further delayed. Theranos tries the ‘mental’ defense as it digs out of that hole. But some light for Teladoc in narrowing its quarterly loss, and for smartwatches in accelerating adoption.

Is there a way out of the digital health funding black hole? Can it rebound to…2020? (So much depends on the next few months)
Telehealth-only follow up increased repeat ED visits by 2.8%, return admissions by 1.1%: JAMA Network study (Puts a hole in the savings points)
Smartwatches lead wearables, adoption now at 29%: Parks Associates study (Slow but sure development)
Pre-weekend short takes: Teladoc posts much smaller Q3 loss, 17% revenue boost; is telehealth threatening disability care quality; $2.8M for Australian wearables; more healthtech layoffs at Antidote, OrCam, Ada Health
Oracle talks to banks to increase loans funding Cerner buy; VA delays Cerner deployments to June 2023 (Oracle’s hornet’s nest?)
News updates: Theranos’ Holmes goes ‘mental’ in last ditch defense; troubled Cerebral telemental health fires another 400 (Theranos defense shows desperation, can Cerebral be saved?)

Perhaps it’s because the investment froth is off and it’s downscaling time, but the industry’s current and future status is a bit ‘Back to the Future’. A version that’s muted yet fractious, like the Conservative Party….

Meta Pixel is now considered a PHI breach that’s all Meta’s fault. Both Theranos trials move towards sentencing, despite defenses pulling ever-scrawnier rabbits out of hats. Back to antitrust action with CVS-Signify, while CVS apparently walks away from an expected deal with Cano Health. What’s moving forward? Smaller fundings, partnerships, and reorgs in a world resembling…2017 or 2018?

Meta Pixel ad tracker collects another 3 million data breaches at Advocate Aurora Health; Zuckerberg getting Senate scrutiny (Not going away despite denials and Zuckerbucks)
Breaking: CVS’ Signify Health buy under DOJ scrutiny in ‘second request’ (DOJ and FTC crave an antitrust win)
News roundup: CVS abandons (?) Cano Health buy; Signify adds home RPM; BioIntelliSense RPM acquires AlertWatch; GE Healthcare, AMC Health partner; Viome raises $67M, other fundings
Rosendorff stands pat on Theranos’ Elizabeth Holmes: “She needs to pay her debt to society” (He’s right–and now he needs a job and a relo)

There’s no escaping realignments in health tech. CVS sells an inherited business from Aetna. Babylon Health exits the practice business, financially maneuvers to avoid NYSE delisting. Layoffs continue to hit the formerly hot companies in health tech. Theranos’ Holmes and Balwani try to avoid the inevitable sentencing. And we have a Perspectives contribution from Avaya on NHS England’s ICS. 

Theranos’ Holmes sentencing now 18 November, defense wants to expand hearing scope; Balwani can’t join in
News roundup: CVS sells bswift; Babylon puts Meritage IPA up for sale, financially realigning to prevent delisting; Redesign Health sheds 20%, Noom 10%
Perspectives: How joined-up communications can enable connected patient care across healthcare Trusts

Digital health funding jumps off cliff, but UHG and Change a done deal and Theranos’ Holmes gets a new hearing.

Q3 digital health funding craters nearly 50% to $2.2B: Rock Health (2021 was, as it turns out, not the future)
Catchup News Roundup: UHG-Change buy final; Theranos’ Holmes sentencing delayed, ‘limited hearing’ agreed to (A hearing right out of Perry Mason)

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Telehealth & Telecare Aware: covering the news on latest developments in telecare, telehealth, telemedicine, and health tech, worldwide–thoughtfully and from the view of fellow professionals

Thanks for asking for update emails. Please tell your colleagues about this news service and, if you have relevant information to share with the rest of the world, please let me know.

Donna Cusano, Editor In Chief
donna.cusano@telecareaware.com

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Short takes: Will there be an Amazon Clinic?, Transcarent and Teladoc, perfect together?, Get Well partners with Palomar Health, expands with Veterans Health Administration

Did Amazon prematurely leak an initiative? Or was it an error? The Verge reports that a video was uploaded to Amazon’s YouTube page on Tuesday–then taken down–describing a new service that would offer assessment, diagnosis, and treatment of common conditions such as allergies. The Amazon Clinic video depicts a user taking an online questionnaire about their symptoms, After paying a fee, a clinician reviews it, diagnoses, and prescribes as needed, sending to the patient’s pharmacy. The disclaimer: “Telehealth services are offered by third-party healthcare provider groups.” The video directs to amazon.com/clinic which is not live. Another Amazon Mystery. Amazon Care is shuttering and the company is jumping through Federal hoops to get approval to close their buy on OneMedical. Hat tip to HISTalk today.

HISTalk also pointed to a Forbes article on health navigator companies such as Castlight and Firefly Health, with a bit of a ‘sting’ at the end. Transcarent, a health navigator that takes on risk integrating its services into employee benefits, is the latest enterprise founded by Glen Tullman, a serial entrepreneur who founded Livongo, investor group 7Wire Ventures, and built up Allscripts as CEO. The writer speculates that Tullman should buy Teladoc to give Transcarent a distribution system–a built-in network of physicians and health system relationships. Yes, this is the same Teladoc that Tullman sold Livongo to for a tidy $18.5 billion, then earlier this year wrote off $6.6 billion as an impairment. This one drips with irony. With its stock down nearly 90% from its January 2021 high, it’s never been cheaper!

Get Well, an RPM, patient care management, and workflow automation company, announced new and expanding partnerships. The new one is with Palomar Health, a health system in Escondido, California. This will implement Get Well services in four phases in five areas to improve patient experience: digital care management (GetWellLoop), inpatient experience (Get Well Navigator and a workflow automation for hospital staff), emergency department experience, care gap closure, and health equity through additional features. Becker’s  The second is an expansion with the Veterans Health Administration (VHA) into 70 Veterans Affairs Medical Centers (VAMC) and a fifth Veterans Integrated Service Network (VISN) with nine facilities. They also now have a FedRAMP “In Process” designation for cloud services which is enabling expansion of GetWellLoop care plans with a VAMC. Release (Business Wire)

Figuring out the future for health tech after 2022’s realignments: new SVB study

As Readers who subscribe to our Saturday Alerts (repeated on Wednesday) have seen, this Editor has dubbed this season Realignment Autumn. From the fever pitch of funding, hiring, inflated valuations, SPAC funny money, and unrealistic expectations that started in 2020 and peaked in 2021, we in the industry are now fretting that we can’t get back to 2019 or 2020. Part of the new reality is that telehealth and health tech are far beyond that point in tech integration, ease of use, and takeup by enterprises, but has entered an uncertain business period more than a bit overextended and overexpecting. Unprofitable lines and side businesses, however promising, are being dropped or sold. Talented people who helped to start them are gone. The trend toward consolidation, which started last year, is accelerating.

For a more financial and data-oriented view, Silicon Valley Bank’s latest, “The Future of Healthtech 2022”, does not disappoint. This is a far deeper dive than served up by Rock Health, StartUp Health, and (unless you are a subscriber) CB Insights. This is a US and EU (including UK) view of how investment patterns have shifted, and a look at where investment may be going next year.

So far in 2022 they have seen:

  • Lower valuations and plummeting share value of public companies
  • A shift from ‘growth at all costs’ to a clear value proposition and creation: improving health outcomes, access or affordability.
  • Investments are more modest and at earlier stages–no more blockbuster Series Ds and Es (40% decline in mega-rounds of $100 million+)
  • No IPOs so far
  • Only 18 unicorns formed this year
  • M&A still rising at the right price
  • Companies have to deliver measurable value to continue driving innovation

Through 30 September, SVB tracked investment at $23 billion. Where it’s going:

  1. Provider operations: $7.0 billion–defined as technology that improves efficiency and accuracy of provider-provider, provider-patient interactions
  2. Clinical trial enablement: $6.8 billion
  3. Alternative Care (includes telehealth and mental health): $5.6 billion
  4. Wellness and education: $1.3 billion
  5. Healthcare navigation: $1.3 billion
  6. Medication management: $833 million
  7. Insurance: $117 million

Sections drill down on these sectors and subsectors such as mental health and women’s health, including an analysis of female-founded health tech companies, investors by sector, and a historical view of unicorns. Grab a cuppa and take your time with this one!

Oracle proceeds with $7B bond sale to restructure debt funding Cerner buy

As expected at end of October, Oracle is refinancing debt incurred to acquire Cerner. Bloomberg reported the bond sale is in as many as four parts. “The longest portion of the offering, a 30-year note, yields 2.55 percentage points above Treasuries after earlier discussions of about 3.1 percentage points, said the person, who asked not to be identified as the details are private.” The bridge loan (revised) of $11 billion was further reduced by $1.3 billion. Citigroup Inc., Bank of America Corp., Goldman Sachs Group Inc., HSBC Holdings Plc, and JPMorgan Chase & Co. are managing the bond sale.

Oracle has one of the highest debt loads in tech, exceeding $90 billion. Fitch Ratings has downloaded their bond rating from BBB+ to BBB overall, the next to lowest investment grade rating. The new notes were rated BBB by Fitch and S&P Global Ratings. An investment company queried by Bloomberg noted that as recently as 2020, Oracle’s debt was rated high A. Also Becker’s.

News roundup: cybersecurity benchmarking study, Tyto Care’s Home Smart Clinic, Long Island’s $2.6B life sciences hub, Singapore’s Speedoc raises $28M, NantHealth’s sinking feeling, Hims & Hers revenue up 95%

Censinet, the American Hospital Association (AHA), and KLAS Research announced at industry confab CHIME22 Fall Forum a benchmarking study on health system cybersecurity. The study, currently enrolling hospital and health system participants, according to the release will enable a comparison of cybersecurity investments, resources, performance, and maturity to peer organizations across key operational cyber metrics. It will also cover NIST Cybersecurity Framework (NIST CSF) and Health Industry Cybersecurity Practices (HICP). Censinet provides healthcare risk management solutions, consolidating enterprise risk management and operations capabilities. Hat tip to HISTalk 9 Nov.

TytoCare’s latest is the rollout of the Home Smart Clinic, a platform that combines TytoCare’s FDA-cleared handheld for remote physical exams; Tyto Insights, their AI-powered diagnostic support that aids diagnosis in remote physical exams; Tyto Engagement Labs, a suite of user engagement services including behavioral science-backed blueprints, consulting services, and marketing tailored to each specific program and cohort; and support for multiple provider models and different patient populations. The new platform is targeted to health plans and providers. Release (Yahoo)

Long Island NY’s proposed Midway Crossing project, creating a life sciences hub in quaintly named Ronkonkoma, would cost about $2.55 billion, but create an estimated 4,300 science, technology, engineering, and healthcare positions. They’d also be lucrative, with salaries mostly well over $100,000 a year. The proposal was authored (sic) by Michael Dowling, president of Northwell Health, and James Hayward, PhD, president and CEO of Applied DNA Sciences, and appeared in Newsday (paywalled). Its 179 acres would include a STEM educational center, research labs, biotech manufacturing facilities, health care offices, a hotel and convention center plus connect to the LIRR and Long Island-MacArthur airport. While approved by local authorities, it now needs funding. Becker’s

Traveling to the far Pacific…Speedoc, a home health company based in Singapore, raised $28 million. Speedoc offers app-based video consults and home visits, non-emergency ambulance transport, and remote monitoring for several chronic conditions. It is available in nine cities in Singapore and Malaysia. According to Mobihealthnews, it is also one of the technology partners for the two-year pilot of the Mobile Inpatient Care@Home initiative by the Ministry of Health’s Office for Healthcare Transformation. The pre-Series B funding round was led by its new investors Bertelsmann Investments, Shinhan Venture investment, and Mars Growth. Vertex Ventures Southeast Asia & India, which led its $5 million Series A funding round in 2020, also participated. 

Our Readers with very long memories will remember that transformative health darling, NantHealth. This Patrick Soon-Shiong NantWorks company, originally in genetic sequencing for cancer research, was caught en flagrante in a ‘pay to play’ scheme with the University of Utah funding NantHealth and providing data that would prove useful to other Soon-Shiong companies [TTA 18 April 2017]. It’s long since pivoted to payer/provider data solutions (NaviNet). What’s not improved is their bottom line. It lost $13.7 million, or $0.12 cents per share, increasing loss by 26% from 3Q 2021. Shares on NasdaqGS are trading at $0.31. Yahoo!Finance/SimplyWallSt. Another tip of the cap to HISTalk 9 Nov.

And who said all of telehealth is suffering? Online direct-to-consumer marketer Hims & Hers posted a third consecutive $100 million+ quarter in revenue. Their Q3 revenue was up 95% versus Q3 last year, reaching $144.8 million. They also gained 70,000 new online subscribers for a total of 991,000, up 80% year over year. Q4 guidance is up to $159 million to $162 million, with a full-year revenue forecast of $519 million to $522 million. And yes–they’re profitable. Their embarrassing TV spots notwithstanding, they seem to have found The Magic Formula. FierceHealthcare

TEC Cymru launches telecare programme strategy for Wales to complete digital transition by 2025

TEC Cymru, Wales’ national platform to use, scale up, and spread technology-enabled healthcare across health and care, has launched its new Telecare Programme Strategy to guide digital migration changes over the next 18 months for the December 2025 digital telecom deadline. 

The strategy document, published today (9 Nov) outlines action to support Welsh ARCs (Alarm Receiving Centres) with digital migration over the next 18 months, working with NHS and social care entities. The goals are:

  • Ensure telecare services in Wales are fully ‘digitally enabled’ comfortably ahead of the 2025 deadline
  • Shift the narrative from reactive to proactive care through common data standards and interoperable protocols allowing for greater
    opportunities for widespread TEC adoption
  • Enable a culture of high performance and measurable outcomes on the importance of telecare in Wales to its citizens through producing consistent business intelligence data

Once this is accomplished, the next move will be to move forward with Next Generation Telecare and a workforce restructured to handle reactive and proactive alerts, supported by health and social care teams.

For migration, the test bed was The Vale of Glamorgan Council. They completed their upgrade to a SaaS-based digital ARC in six months, from January to July this year. Their summary report is here. TEC Cymru also provides a toolkit for pre-migration planning. More information on their website. Release (PDF).

VillageMD opens the Walgreens purse, set to buy Summit Health for $8.9B

Moving from rumor to deal in a New York Minute. Primary care provider VillageMD has moved to a definitive agreement to acquire specialty/urgent care provider Summit Medical in an $8.9 billion deal including debt. This was heavily rumored last week [TTA 1 Nov]

This will create a provider behemoth of 680 provider locations, 750 primary care providers, and 1,200 specialty care providers in 26 markets. The fun facts:

  • VillageMD has 342 total primary care clinics in 22 southern and northeastern markets covering 15 states, with 152 co-located with Walgreens; these will eventually increase to 200.
  • Summit Health has 370 locations in New York, New Jersey, Connecticut, Pennsylvania, and central Oregon. VillageMD and Summit do not overlap (except in NJ) on markets.  
  • VillageMD consists of primarily owned and affiliated primary care practices; Summit Health specialty practices (neurology, chiropractic, cardiology, orthopedics, dermatology) plus 150 CityMD urgent care locations.
  • VillageMD has successfully mastered value-based care models in Medicare and entered advanced Medicare ACO models early and vigorously (Editor’s information). Summit Health presently is primarily is fee-for-service with some participation in value-based programs.

The participation in this one is interesting: 

  • Walgreens Boots Alliance (WBA) will invest $3.5 billion through an even mix of debt and equity 
  • Cigna’s health services organization Evernorth will become a minority owner; the exact percentage is not disclosed at this point
  • It’s not disclosed at this time whether Summit Health’s current majority owner, Walburg Pincus, will retain an interest in the combined companies. 

WBA remains the largest and consolidating shareholder of VillageMD, but with this acquisition, reduces its ownership share from approximately 62-63% to 53%. WBA’s other US non-retail healthcare interests include specialty pharmacy company Shields Health Solutions and at-home care provider CareCentrix.

Based on their release, the acquisition is expected to close in January 2023, subject to the usual Hart-Scott-Rodino Act (HSR) premerger notification and report with the DOJ and the Federal Trade Commission (FTC) that initiates a 30-day waiting period.

Bet on VillageMD and Summit closing deeper into Q1–but closing. This Editor’s over/under is that this is overly optimistic given the current DOJ and FTC’s scrutiny and apparent dislike of healthcare acquisitions, even though the provider groups don’t overlap except in a minor way in NJ. But perhaps Amazon, with a healthcare footprint primarily in pharmacy and shuttering Amazon Care, thought OneMedical would move smartly. CVS thought the same with Signify Health, yet both are on information Second Requests that extend the waiting period. DOJ is after all smarting hard with a Federal District Court nixing their challenge of UHG’s Optum with Change Healthcare, but it’s hard to throw typical antitrust at this one.

Go big or go home, indeed.     Healthcare Dive, Becker’s