Short takes: Humana’s big MA loss (updated); Medicare telemental care bill back in Senate; HHS releases cybersecurity performance goals; Texas Healthcare Challenge hackathon 23-24 February

Humana apparently surprised Wall Street with their Q4 losses, driven by escalating Medicare Advantage (MA) costs.  While revenues ($26.5 billion) for MA’s second largest plan provider were up from prior year’s $24 billion, MA expenses drove an adjusted Q4 loss of $361 million under the insurance segment. From Humana’s earnings statement: “The sector is navigating significant regulatory changes while also absorbing unprecedented increases in medical cost trends. We believe the elevated MA medical costs are an industry dynamic, not specific to Humana, and that they may persist for an extended period or, in some cases, permanently reset the baseline.” On the earnings call, their CFO cited increased inpatient costs, especially for short stays, and more spending in outpatient surgeries and supplemental benefits–trends that Humana expects to continue into 2024 and even into 2025. Home health under CenterWell were tidily profitable and growing. Perhaps MA’s sector problems were the reasons why Cigna, selling off their MA plans, backed out of their acquisition/merger? Q4 press release, management remarks, Becker’s, Healthcare Dive

Updated Humana announced the appointment of a President of Enterprise Growth, David Dintenfass, to spearhead customer growth and retention. His background is not healthcare but Fidelity Emerging Growth Markets, with previous stints at Procter & Gamble and Bank of America. This assumes that the cost problem can be grown out of. Expect more departures and arrivals to roil Humana, as their current CEO moves to a planned retirement transition later this year and has already laid off staff in January Healthcare Dive

A bipartisan Senate bill proposes to continue coverage of virtual-only telemental health for Medicare beneficiaries. The ‘Telemental Health Care Access Act of 2023″ is sponsored by four Senators: Bill Cassidy, R-La., Tina Smith, D-Minn., John Thune, R-S.D., and Ben Cardin, D-Md. and is designed to make permanent the pandemic waiver of in-person requirements that expires at the end of 2024. The senators cited rural health and overall access to mental healthcare. Mental health remains the leading claim line for telehealth. Healthcare Dive, draft bill

The Department of Health and Human Services (HHS) published voluntary cybersecurity performance goals for healthcare and public health organizations. These fit within the HHS 405(d) Program and Health Sector Coordinating Council Cybersecurity Working Group’s Healthcare Industry Cybersecurity Practices as well as the NIST Cybersecurity Framework and the Cybersecurity and Infrastructure Security Agency’s National Cybersecurity Strategy. (Whew!) The two voluminous sets of goals, Essential and Enhanced, directly address common attack vectors against U.S. domestic hospitals as identified in the 2023 Hospital Cyber Resiliency Landscape Analysis. As noted earlier this week, there were 116 million patient records exposed in 2023 data breaches, doubling that in 2022.

HHS means well, but this is another ‘blood out of a rock’ situation. Health IT departments all over the US, from providers to payers, have had or are facing layoffs in the ongoing clash of business versus technology, which won’t cease because HHS would like it to. HealthcareDive, HealthcareITNews

The Texas Healthcare Challenge Hackathon is back! After three years dark, this year’s edition will be held this year 23-24 February in Dallas. Sponsored by the Health Wildcatters, a Dallas-based accelerator in the DFW area, it is open to just about anyone who can apply–you don’t have to code or hack. Friday kicks off with “problem pitching,” where participants form teams around identified issues, with Saturday starting with morning motivation and intensive team hacking, moving to participants developing viable solutions, assessing market potential, creating functional business models, and addressing risks with mentor support from industry experts. The day culminates in team presentations, with judges awarding cash and in-kind prizes to winning solutions. Learn more and apply here (application form is under the numbers, click on “Hackathon Sign-Up”). Sponsorship is the second button.

Midweek updates: Walgreens may sell Shields Health after 2 years; Ventric Health’s home cardiac RPM; Singapore military medical corps upgrades PACES 3 EMR

Walgreens reportedly looking to sell Shields Health Solutions, working with advisers on a valuation to raise cash. That valuation may bring $4 billion in a sale. Shields provides specialty pharmacy services and is part of its US Healthcare division. Criticism of the possible sale breaking in Bloomberg 23 January was hardly muted. TD Cowen analysts cited in Healthcare Dive called it “a strange move” to sell what could be Walgreens’ highest margin business with a knock-on effect of slowing a return to profitability. They even proposed that a sale of Boots in the UK might make more sense. A Bloomberg analyst called it “a pointed reversal of the prior CEO’s strategy to diversify” but also stated that “the strategic rationale for owning it remains strong”. It is perhaps the most salable of US Healthcare’s assets, with excellent growth of 27% in its last quarter. WBA bought a minority stake in Shields  in 2019, spent $970 million to take majority control in 2021, and bought out the last 30% for $1.37 billion in 2022.

The impression left by these articles and in FierceHealthcare was that WBA is a “troubled drug-store chain in turnaround mode” (Bloomberg). That isn’t a good look.

Heart failure is a major disease, with 6.5 million in the US diagnosed and joined by 550,000 every year. Ventric Health has a newly FDA-cleared non-invasive cardiac diagnostic system for remote patient monitoring (RPM) that can be used in the home as well as clinical settings. A trained clinician can use Ventric’s Vivio system to perform an evaluation in the home or a clinic that could only previously be done in the hospital. An EKG patch and arm cuff are placed on the patient, connected to a tablet with the Vivio app and its advanced algorithms via Bluetooth, and in under five minutes–two minutes for the data collection and about a minute for the analysis, can evaluate patient heart failure. The portability of the system eliminates a lot of care barriers to cardiovascular health by being more accessible to clinicians and patients in non-hospital settings, reduces time wasted on initial diagnosis, improves support of diagnosed patients, and promotes better outcomes. Healthcare IT News

The Singapore Armed Forces (SAF) Medical Corps upgraded its EMR for the first time in a decade. The SAF’s Patient Care Enhancement System 3 (PACES 3) runs both the Sunrise EMR system and the newly implemented Altera Opal by Altera Digital Health. This is Sunrise’s first upgrade in Asia-Pacific. Soldiers can now access information on their medical history, manage and book their medical appointments. Also upgraded: document management, clinical and financial applications, including enhanced workflows, improved system performance, enabled compliance with regulatory obligations, and improved overall usability. It also connects securely to Singapore’s National Electronic Health Record system and other local health IT infrastructures via internet. The EMR is the responsibility of the Ministry of Defence (MINDEF) of Singapore. Healthcare IT News

Peering through the cloudy crystal ball into 2024 healthcare investment and company health

crystal-ballWill 2024 be the mirror image of 2023? This time last year, signs pointed to slow, steady growth after the bubble bath of 2020-early 2022 was followed by failures of tech-leveraged banks (SVB and Signature in March 2023) leading to a mid-year bust [TTA 11 Aug 23]. Some big deals kicked off the year (CVS’ Carbon Health investment, Oak Street mega-buy TTA 16 Feb 23). Then as the year went on, they were followed by sheer turmoil–huge losses and business divestitures (Cano Health, Bright Health, insurtechs like Clover and Oscar), bankruptcies and shutdowns (Babylon, Pear, Quil, OliveAI, Smile Direct, Cureatr, Rite Aid), IP lawsuits (Apple-Masimo, Apple-AliveCor, FruitStreet-Sharecare), C-levels walking the plank (Walgreens, Noom), and big layoffs nearly every week. Cigna and Humana called off merging again, perhaps because Cigna didn’t like what it saw. M&A fell to its lowest level in years and IPOs fell to zero.

To cap the year, the Federal Trade Commission (FTC) and the Department of Justice (DOJ) issued new Merger Guidelines that made the M&A mountain even steeper, and will follow up this year with Pre-Merger Notification guidelines that will make that part even more costly. Both signal hard times for M&A. Add to that the overt hostility the chair of the FTC has to any kind of M&A and the weaponization of the tools government has at hand…..Even early-stage, independent companies which allegedly these agencies are trying to foster don’t catch a break. A change in the tax law hitting hardest in 2023 forces annual expenses in research and experimentation (R&E) to be amortized over five years versus one year which severely affects their financials. (Section 174 explained here)

The crystal ball promises to be more like a Magic 8 Ball this year. Other than a flurry of smaller-scale investments, a rumor of a $5 billion EHR company sale (Netsmart), and predictable layoffs in health systems, the start of the year in healthcare has been fairly (ominously?) quiet.

HealthcareFinance talked to two partners in law firm Akerman’s healthcare practice group to get their take, weaving in some findings from a PWC report: 

  • Buyer interest in acquiring practices and surgery centers
  • Partnerships on rise, for example Amazon’s One Medical with health systems 
  • Smaller hospitals in mid-America will merge as there is “safety in numbers’
  • More investment in life sciences and drug development, especially diabetes/weight loss drugs in the GLP-1 category
  • Anything around AI attracts interest

The two big factors: interest rates (the Federal Reserve has signaled no further increases, and maybe cuts in 2024) and (of course) a presidential election as well as all of the House, much of the Senate, and state gubernatorial offices.

Bubbling under this are reports of two big pending IPOs:

  • Home health, pharmacy, and eldercare services provider BrightSpring Health filed with the SEC on 3 January for a near-billion dollar IPO (publicly released on 17th). This is estimated to raise $960 million, valuing the company at about $3 billion. Common stock will debut between $15 and $18 on Nasdaq under the symbol BTSG. They are also selling 8 million tangible equity units at $50. Proceeds will go from the offerings to repay outstanding debt under various credit facilities and pay penalties associated with terminating its monitoring agreement with Kohlberg Kravis Roberts & Co. L.P. (KKR, the current owner) and Walgreens Boots Alliance. BrightSpring serves 400,000 daily patients and dispensed 34 million prescriptions in 2022. IPO timing is still to be announced. This is the second time the company has filed, abandoning its first attempt in late 2021 as the market softened in 2022. KKR is signalling an exit…will it happen this time? Release, FierceHealthcare
  • Waystar’s IPO is still pending after being announced late last year [TTA 26 Oct 23]. The RCM and payments software company delayed it to 2024 due to an uncertain market at year’s end. Reportedly the roadshows were postponed to December but there has been no confirmation that they took place. Will it happen?

Fasten your seatbelts…it may be a bumpy ride.

News roundup: Bright Health now NeueHealth; breached patient records double, RCM as vector for hacking; Amazon’s CCM marketplace; JPM reflects the new reality; fundings for Vita Health, Turquoise, CardioSignal

Bright Health Group switches off, takes on NeueHealth name. Now that Bright Health has sold its remaining operating health plans to Molina Healthcare [TTA 3 Jan] with others closed down or insolvent like Texas [TTA 12 Dec 23], they have smartly pivoted to the name of their remaining value-based primary care operation, NeueHealth. (Inexpensive, too) Accordingly, on 29 January, their NYSE listing will convert from BHG to NEUE. The stock value closed today at $13.25, well down from its 52-week high of $79.04. NeueHealth’s operations are divided into NeueCare, which is comprised of their owned clinics and partnerships with affiliated providers, and NeueSolutions, which is a management services entity that organizes independent providers and physician groups into performance-based ACA Marketplace, Medicare, and Medicaid-based ACOs models, including the advanced performance ACO REACH program which covered 60,000 beneficiaries in 2023. Unsurprisingly, the company HQ is moving from chilly Minneapolis to much warmer Doral, Florida, nearer to three of their major clinic networks and 150,000 of its claimed 275-295,000 ‘health consumers’ forecast for 2023. 2023 revenue forecasts for NeueCare are $250-275 million and NeueSolutions $890 million. They have also stated that the corporate move will not affect jobs remaining in Minneapolis, which may be few.

As to the bills coming due for CMS liabilities and debt owed to New Enterprise Associates now that JP Morgan has been paid…not a word. We continue to hand it to Bright, now NeueHealth, for the Best Gordian Knots in Healthcare. Release, Healthcare Dive

Patient records exposed in data breaches doubled in 2023 versus 2022. According to an analysis by cybersecurity firm Fortified Health Security of HHS’ Office of Civil Rights (OCR), which tracks data breaches, in 2023 there were 116 million patient records exposed, topping the over 100 million of 2015, with over 655 breaches, a decrease from 2022’s peak of 721. Of that 116 million, over 112 million were from three health plan breaches: Anthem, Premera Blue Cross, and Excellus, Ten-year total? A stunning 489 million. What also increased over those 10 years by 143% were breaches stemming from business associates–vendors providing services to the covered entity. The just-published Horizon Report (free, available for download here) also reveals that the average recovery cost for a breach is $9.48 million. And health plans and systems are cutting IT staff?  Healthcare Dive

One way that hackers are finding their way into healthcare organizations is via ‘social engineering’, but not always of employees. They’re targeting business associates at revenue cycle management (RCM) companies serving health systems and hospitals. The American Hospital Association is warning members that hackers are cannily evolving their tactics to defeat security procedures such as multi-factor authentication and they have to anticipate hacker tactics. From Becker’s, hackers “steal the identities of revenue cycle employees or other finance staffers, calling IT help desks and correctly answering security questions. They then request to reset their passwords and enroll new devices, getting full access to the employees’ accounts and diverting payments to fraudulent bank accounts.” These are based in the US and then diverted overseas. The AHA recommends at minimum a call back to the employee on these new device enrollments, a call to the person’s supervisor, or as in the case of one health system, a physical appearance at the help desk. AHA article

Amazon enters the chronic care management field through a tried-and-true (for them) vector–e-commerce. Search for a health device like a glucose monitor, a blood pressure cuff, or pulse oximetry, and receive a ‘direction’ to a management service that they may be eligible for at no or low cost through their employer or private health insurance. The kickoff partner with Amazon is chronic care management company Omada Health in the diabetes prevention, diabetes, and hypertension categories. Omada claims 20 million eligible members across 1,900 enterprises. This mode may get better traction with Amazon shoppers than directly providing them with health services such as Amazon Pharmacy, One Medical (primary care), and Amazon Clinic (asynchronous telemedicine). Omada didn’t disclose the revenue model. Omada release, Healthcare Dive

Wrapping up the JP Morgan healthcare conference, the New Reality permeated it, even if some didn’t want to admit it. As this Editor projected back in December, the board is being cleared of the also-rans and never-should-have-beens. You see a general cleansing of the cant and hype infecting a sector, which is initially unnerving. We are cycling through this stage fairly rapidly to emerge…where, we don’t quite know yet. Unlike some other publications, MedCityNews can never be mistaken for an industry cheerleader (even if you have to read between the lines). Their extensive coverage confirmed this emerging view of 2024.

  • Katie Adams didn’t make it to SF for her article on nine JPM takeaways, but she sussed out that life sciences isn’t ready for AI, GLP-1 drugs won’t solve obesity, transactional telehealth for urgent and behavioral care is over, founders are trying to figure out fundraising timelines, and retail clinics are suddenly Not All That. And more.
  • Arundhati Parmar profiled a companyone of all too many–that cycled from high to low–Butterfly Health. They started in 2011 to develop the first point-of-care handheld ultrasonic probe using a semiconductor chip that connected to a smartphone, became a unicorn by 2018, went public via a SPAC in 2021 at over $19, cracked hard, and now trades around $1. Their new CEO used the JPM platform to explain that their 2023 revenue slide wasn’t so bad because they were working their way through the longer-than-they-ever-imagined adoption curve by cutting $200 million in costs out of the company and building up their cash reserve. They may survive, or not, given that competition has names like GE Healthcare, Philips, and Siemens. But their ideas around selling the technology of the semiconductor chip to healthcare companies outside of ultrasound and opening their POCUS to developers (like Apple) are clever. It sounds like a company that could fit into a PE portfolio, if only some wallets and checkbooks opened.

And another marker of the New Reality: Scripps Health in San Francisco, hit hard by a cyberattack in 2021, announced at JPM that they hired Todd Walbridge, recently retired from the FBI as their supervising agent in their San Diego cybersecurity hub, as senior director for corporate and system safety and security. He had worked with Scripps on their cyberattack during his diverse career with the FBI. Mr. Walbridge is not only in charge of cyber, but also of physical security as workplace violence and assaults on staff have soared. FierceHealthcare

And we’ll wind up with some fundings, modest ‘green shoots’ in winter:

  • Vita Health, based in Connecticut, secured $22.5 million from seven investors for their suicide prevention and therapeutic telehealth platform. An 2022 seed raise totaled $8.38 million. Release, Mobihealthnews
  • Turquoise Health, based in San Diego, gained a $30 million Series B investment from four investors for expansion of its healthcare pricing platform used by 160 healthcare organizations. 2021-22 seed and Series A raises totaled $25 million. Price transparency is a 2024 hot button issue from government to enterprises to payers. Release, FierceHealthcare  
  • CardioSignal raised another $10 million in a Series A from three investors, bringing total funding to $23 million. Based in Finland and Palo Alto, CardioSignal uses a smartphone’s accelerometer and gyroscope sensors to analyze precordial micro-vibrations caused by cardiac motion. The initial analysis is completed in one minute and after a transfer to their cloud site for additional analysis, is returned in about one minute. Release, Mobihealthnews

Published: NHS guidance on integrating TEC providers into urgent community response (UCR) (UK)

Filling a ‘donut hole’ gap between technology-enabled care (TEC) and emergency response by using urgent community response (UCR) organizations. A just-published NHS guidance document developed in partnership with the TSA (Technology Services Association) is designed to provide guidelines for how TEC providers can utilize local UCR organizations in situations that typically now are answered by emergency ambulance services. According to the report, ambulance services receive around 2,600 daily calls from over 200 TEC providers, approximately 3% of all calls. What if UCRs can effectively supplement this, providing timely response to these call, treating people safely at home, and reducing demand on emergency ambulance services?

The guidance provides five “Gold Standard” indicators on whether TEC providers are ready for using UCR as an option versus referring to the local ambulance service, and clear standards for operating the TEC-UCR pathway:

1. There are direct referral routes in place from locally operating [TSA] Quality Standards Framework (QSF*)-certified TEC responder services into the UCR service, which don’t rely on clinician-to-clinician referral. (*TSA’s QSF is a United Kingdom Accreditation Service (UKAS) accredited scheme for TEC providers which aligns with the standards of a regulated service.)

2. Only activity which is inappropriate for UCR response is directed to 999, with responsibility being maintained by the TEC provider until this transfer of care occurs.

3. The UCR service has open lines of communication into its locally operating QSF-certified TEC responder services, which limit the amount of rejected referrals due to capacity limitations.

4. Training on appropriate referral reasons is available to local QSF-certified TEC responder services, with the UCR service having an ‘accept all’ approach to referrals from providers who’ve completed this training.

5. Induction and refresher training for TEC to UCR pathway is co-designed and co-delivered frequently, with at least quarterly plan-do-study-act (PDSA) approaches to understand the reason for and mitigate against future rejected referrals.

For those unfamiliar with the organization of TECs in the UK, TECs can be commissioned by local governmental authorities (e.g. borough or county councils) but some are private. Some TECs are local/regional, while other providers are national.

An idea of how TEC providers can work with both UCRs and ambulance services is in Dudley in the West Midlands near Birmingham. A gauge of the volume of calls to the local ambulance service was in a six-month audit (October 2020 – April 2021) of the North West Ambulance Service. It showed that of the 3,000 calls from telecare services to the service, 32% (959) required conveyance to ED, but 45% (1,347) were seen and treated and 23% (694) ‘hear and treat’ disposition (referred elsewhere), or closed by the emergency operations centre. Once implemented, the collaboration between Dudley Telecare and local UCR teams saw the number of ambulance callouts for injured fallers reduced by 85% within a month, with response within 45 minutes. In Warrington, between Liverpool and Manchester, the 24/7 UCR service reduced pressure on ambulance services while responding in less than 60 minutes. Outcomes are positive with 80% of people remaining at home following a visit.

The guidance includes information on requirements and best practices on how to map the pathway, developing a project team, implementation, measurement, and continual reviews. TSA Voice release; NHS Guidance: web page, PDFHat tip to TSA’s post on LinkedIn

Got a data breach? Blame the victims like 23andMe did!

23andMe wished its breached customers Happy New Year by putting the blame…on them!

The hacking that started with 14,000 records and grew to exposing the records and personally identifiable information (PII) of 6.9 million users, about half their customer database, has spawned over 30 class action lawsuits in the US, plus lawsuits in Ontario and British Columbia, Canada. 23andMe, in their responses to law firms and on their blog, told lawyers and users–not unexpectedly–that the data breaches were due to 23andMe users recycling log in credentials, such as passwords, that were used on other–breached–websites, and failed to update them on 23andMe after these incidents.

However, as this Editor noted when this first broke in December, this credential stuffing doesn’t account for the targeting nor the hacking of users who claimed they had unique credentials, including the US National Security Agency (NSA) cybersecurity director Rob Joyce who creates a unique email for each of his accounts (!). It also doesn’t account for how 14,000 brute-force hacked records grew exponentially to 6.9 million records. One reason may be data sharing with a partner, MyHeritage, in adding functionality to Family Tree, or sharing their information by opting into 23andMe’s DNA Relatives feature. 

It also does not account for how 23andMe squarely blamed users–that they were negligent in whatever passwords they used, that two-factor authentication was available since 2019 (but optional), that the information taken didn’t include highly sensitive information such as Social Security number, driver’s license number, or financial information. Therefore any lawsuits were futile, per a letter from 23andMe’s Greenberg Traurig to one of the class action firms, Tycko & Zavareei LLP. Afterwards, 23andMe reset all passwords and instituted mandatory multi-factor authentication, closing the barn door after the horse, cow, and goat got out and made it to the next county.

Playing into this is the weakness of US law around what constitutes ‘reasonable security procedures’ for securing personal information–and that is from the wording of the California Privacy Rights Act (CPRA), which may be the US’ toughest privacy law. On one hand, users have responsibility for a decent, unique password every time–but on the other hand, 23andMe bears responsibility for securing its shared data and not letting a breach get wildly out of hand like this one did. And what if next time it’s the actual DNA information?

The insult to injury: In December, 23andMe changed their terms of service to essentially indemnify themselves. Users had to agree, in the terms of service, exactly 30 days to opt out of the right to participate in a class action lawsuit and instead submit to private arbitration in the event of a dispute.

Not owning up to some fault is not the way to build customer confidence. Especially with a company in a faltering sector now trading around $0.70 per share. TechCrunch, ArsTechnica

News roundup #2: sells remaining customers to 98point6; Netsmart EHR up for $5B possible sale; Caregility intros two new telehealth systems

More from JP Morgan’s Healthcare Conference (JPM), CES, and after:’s remaining assets sold to 98point6. Now stay with your Editor as we sort through this. was sold, we thought, to Cigna’s Evernorth MDLIVE telehealth unit last October, announcing at HLTH that MDLIVE would add’s asynchronous telehealth technology to their platform. Evidently, had other assets not included in that sale, namely the right to service 17 asynchronous telehealth provider customers such as Baptist Health and UAB Medicine. Those customers have been purchased by 98point6, a company that last year transitioned out of direct care into being a licensor of real-time and asynchronous telehealth, plus other software for clinical decision support and EMR integration.

98point6 pivoted last March by selling their physician group, self-insured employer business, and an irrevocable software license to Transcarent, in a deal worth potentially $100 million. What they bought from can only be interpreted as those 17 customers were not obliged to go with MDLIVE in that earlier transaction. Those 17 customers now will license 98point6’s asynchronous telehealth. 98point6’s purchase price is 45% in cash and 55% in equity. 98point6 is also taking on six former staff in commercial and sales. Another small puzzle is that the website remains unchanged with last entries in July 2023 and no mention of MDLIVE. The company’s most recent LinkedIn posts also end in July 2023, yet a sample of the executive staff indicates that they remain employed at Axios, 98point6 release

Netsmart Technologies exploring $5 billion sale. The company is reportedly exploring a sale of its EHR and related software business via Goldman Sachs and William Blair in the coming weeks which could fetch up to $5 billion. The EHR has an estimated 754,000 users at community health centers, behavioral health centers, hospice care, and non-profits. This year’s EBITDA is estimated to be about $250 million. 

The current owners, GI Partners and TA Associates, bought it between 2016 and 2018, but its roots go back to 1992 (with an acquired company back to 1968). It went public in 1996, moved private in 2006, then went through various private equity owners including Allscripts, moving from NYC to Great River, Long Island and presently to Overland Park, Kansas. If the sale, likely to another group of PE investors, is successful, it would demonstrate signs of life in the dead healthcare M&A market.  Reuters   Axios’ sources estimate closer to a $4 billion sale

Another during CES announcement came from Caregility, which announced two new point of care telehealth edge devices. The APS200 Duo is the company’s first dual-camera, all-in-one system with onboard edge computing and a dedicated graphics engine. The new APS100 Pro is a second generation model of their all-in-one system with a wide-angle camera for remote patient observation. This can be upgraded with the APS FlexCam, an external high-definition 40x power zoom video camera for virtual nursing programs and remote patient examinations. The devices connect to the Caregility Cloud virtual care platform with multiple audio and video streams for clinical and care applications supporting workflows in acute and ambulatory settings. Release. Caregility also contributed a Perspectives on virtual nursing and telehealth in November.

Breaking: appeals court continues ITC ban on Apple Watches with working pulse oximetry (updated)

Breaking  US appeals court lifts temporary injunction, bans sale of new pulse oximetry-functioning Watch 9 and Ultra 2. Yesterday, the US Appeals Court for the Federal Circuit dropped the first shoe and that landed against Apple’s head. The court ruled against continuing the short-term stay against the sale and importation of new Watch 9 and Ultra 2 watches equipped with functioning pulse oximetry (blood oxygen, SpO2). That ban is now in effect. The ban is a result of the International Trade Commission’s (ITC) Limited Exclusion Order that found that Apple violated Masimo’s patents on pulse oximetry (SpO2) sensors and software that became effective on 31 December.

Apple’s workaround was to disable the pulse oximetry software for new watches they sell in Apple Stores and ship to third parties.  The hardware is still inside, but readings are disabled by the watchOS. These new versions have a /A after the model number. This workaround allows the US Customs and Border Protection (CBP)’s Exclusion Order Enforcement (EOE) branch to permit new Watch 9 and Ultra 2 watches to be imported and sold. TTA 17 Jan

Reports have confirmed that existing models that were already sold or distributed before the ban through retailers will continue to have working SpO2 software. The court decision does not require pushing a software update that disables the blood oxygen reading. These pre-ban Watches sold by third parties and on the used market do not have the /A after the model number. Other Apple Watch models that never had the pulse oximetry feature were unaffected by the ban.

Of note, the appeals court cleverly separated the Apple Watch importation from the appeal of the ITC ruling. That ‘other shoe’ is a decision on whether Apple can appeal the ITC ruling, initiating the long appeals process. That decision is pending but due shortly. See TTA 28 Dec 2023 for the timeline.

Another possible outcome is that Apple settles with Masimo at some point, an action that seems obvious, but not in Apple’s suites. CNBC, 9to5Mac has the best explanation of the model changes with commenters reflecting the split jury on whether SpO2 readings are all that critical for Watchaholics. This story is developing and will be updated.

Update 19 Jan   This Editor enjoyed reading Strate-gee’s writeup on the latest developments in Masimo v. Apple. He digs into the roots of the dispute which go quite far back, to 2022 and Apple’s poaching of Masimo employees working directly on their pulse oximetry including their chief medical officer and chief scientist. The first employee went to Apple and then started his own company. He was found to have appropriated Masimo’s trade secrets and technology. Another finding: in the Masimo letter to the appeals court (included in the article) stating that the redesign of the Apple Watch “eliminates any irreparable harm”, part of the EOE proceeding is confidential and thus the EOE decision document is not public. His speculation is that this may be a key to whether the already in circulation Watch 9 and Ultra 2 models will in future have their blood oxygen reading disabled via an Apple software update.


News roundup: Owlet’s Dream Sock, BabySat go to market; General Catalyst’s HATco agrees to buy Summa; Cigna’s contrasting provider strategy; new ElliQ robot assistant debuts at CES

JP Morgan’s Healthcare Conference (JPM) and CES are as expected big generators of news around digital health–here’s a selection from then and more:

Owlet launches Dream Sock and BabySat at CES. Both were FDA-cleared in November and June 2023 respectively. The Dream Sock baby monitor received first-of-kind de novo clearance for pulse oximetry and sends real-time Health Notifications for low pulse rate, high pulse rate, and low oxygen to parents’ smartphones. Target market is infants 1-18 months and 6 to 30 pounds with direct sale on the Owlet website at $299.

The BabySat is the prescription-only version (left) targeted to infants 1-18 months and 6-30 pounds, but with acute or chronic medical conditions. It also has the unique capability not only to track vital signs but also for the provider to customize alarms for oxygen saturation and pulse rate. Owlet’s BabySat information page explains in plain English the type of medical conditions where the BabySat would be of assistance and the steps to obtain a prescription that is fulfilled through their partner AdaptHealth. A virtual Rx and insurance reimbursement are in the works. A small drawback is that it is only usable with an iPhone. Happily, their stock is also on the rebound at the highest point in six months. Having followed them since the ‘telehealth for the bassinet set’ days of 2012-2013, their continued independence, their rebound from some dark days, as well as their focus on baby health, this Editor continues to wish them bonne chance. Owlet release (via Yahoo Finance).

Big Investor General Catalyst announced their first acquisition move for the Health Assurance Transformation Corporation (HATCo) not at JPM but today (17 Jan). Summa Health is a $1.8 billion (in revenue) non-profit integrated healthcare system headquartered in Akron, Ohio that encompasses hospitals, community medical centers, a health plan, an accountable care organization, a multi-specialty physician organization, medical education, research and the Summa Health Foundation. HATCo’s objective is to transform healthcare towards a goal of “health assurance”, defined as “a more affordable, accessible and proactive system of care” where presumably their extensive experience in investing in healthcare gives them expertise. [TTA 10 Oct 2023] The letter of intent initially sets up a partnership with immediate investment in Summa while due diligence takes place, then when completed moves to a definitive agreement with details of the acquisition and a transaction price in the next few months. Summa would move from a non-profit to a for-profit in becoming a subsidiary of HATCo. According to their information, current management will remain in place.

Summa’s incentive is to stem losses, reportedly at $37 million through Q3 2023, more than double the prior year. HATCo in November stated its desire to buy a health system in Summa’s $1 to $3 billion range. As usual, the buy is subject to regulatory approvals and a final closing date.  HATCo release, Summa Health statement on “our future”, FierceHealthcare

To the contrary, Cigna prefers to partner, not own, healthcare providers. As a payer closer by many degrees to hospitals and practices than General Catalyst, structured much like UnitedHealth Group with Evernorth its counterpart to Optum, they have avoided the aggressive ownership of physician practices. UHG employs about 10%–90,000–physicians through ownership of practices as of December 2023. MedPageToday  At JPM, Cigna CEO Eric Palmer emphasized ‘strategic relationships’ like a minority share of VillageMD (majority owned by Walgreens) in their acquisition of Summit Health, and creating an ‘ecosystem’ that connects to the best partners. Their investments will be wrap-around services in home health, behavioral and virtual care now that a merger with Humana is once again off the table. Becker’s Payer They’ll have some cash to do so; Cigna’s sale of their Medicare Advantage business will likely be to Health Care Service Corporation (HCSC) and fetch $3 to $4 billion. Becker’s Payer

Intuition Robotics debuts ElliQ 3 at CES. An interactive desktop companion robot designed to improve social connection and alleviate loneliness of older adults and those with assistive needs, the new version updates the robot hardware and software capabilities including generative AI capabilities powered by Large Language Model (LLM). The new design from Yves Behar’s design studio, Fuseproject, is also 1.3 pounds lighter and has a 36% smaller footprint which makes it easier to both place and handle, along with a fully integrated screen. Technical improvements include an octa-core SoC and a built-in AI processing unit (APU); 33% more RAM, twice the amount of computing power and memory, and an inclusion of a dual-core AI processing unit (APU), all of which are needed to power generative AI for greater ‘conversant’ capabilities. The LLM technology integrated into the Relationship Orchestration Engine makes real-time decisions regarding actions, scripted conversation, and generative AI conversations. For instance, the person speaking with ElliQ may talk about activities and beliefs, which are stored and classified. In another conversation, ElliQ may use that information to suggest participation in activities and social interactions, while ensuring that the context and flow of conversation is ‘guardrailed’ and appropriate. The AI can also assist the person in activities such as painting or writing poems together.

Current partners include the New York State Office for the Aging, Inclusa (a Humana company), and the Area Agency on Aging of Broward County, as well as newer partners like The Olympic Area Agency on Aging, Ypsilanti Meals on Wheels, and others. Release

Israel-based Intuition Robotics most recently raised $25 million in August 2023 in an unlettered round with $20 million in venture capital plus $5 million in venture debt. TTA 19 Sept 2023

Apple removes pulse oximetry from Watches to dodge ban; AliveCor advances patent review v. Apple (two big updates!)

Apple redesigns US versions of the Watch 9 and Ultra 2 to delete pulse oximetry, gains approval from US Customs and Border Protection (CBP). The CBP enforces the International Trade Commission (ITC) ban on the original Watch 9 and Ultra 2 models that found that Apple violated Masimo’s patents on pulse oximetry (SpO2) sensors and software. The ban went into effect on 31 December but models were pulled from sale by 24 December.

While Apple’s emergency appeal of the ITC Limited Exclusion Order filed on 26 December grinds on in the US Court of Appeals for the Federal Circuit, right now the ITC ban is on a short-term stay that will be decided in the next few days. The appeals court will decide shortly whether Apple’s appeal will go forward and whether the Watch pulse oximetry version ban will be stayed until the completion of the appeal, typically another 18 months [TTA 28 Dec 2023].

Apple’s new versions of the Watch 9 and Ultra 2 without pulse oximetry skirts the ban and may be the longer term solution if the appeals court decides to uphold the ITC ban on the original models. According to HIStalk reporting Bloomberg News‘ coverage, the new versions have already been shipped to Apple Stores but not released for sale. Apple also has not disclosed whether previously sold Apple models will continue to have their pulse oximetry operative, or disabled via an update.

Masimo’s position is that Apple selling Watches without the disputed pulse oximetry is not a problem. They sent a letter to the appeals court confirming that “redesigned Watch products definitively do not contain pulse oximetry functionality” and thus are outside the scope of the import ban. In fact, “Apple’s claim that its redesigned watch does not contain pulse oximetry is a positive step toward accountability” around intellectual property rights. According to MedTechDive, Masimo’s CEO Joe Kiani is open to a settlement.

The appeals court decision on granting Apple a full appeal and stay of the ban of the watches with pulse oximetry is pending but may be decided in the next few days. It’s nice to have money to be able to redesign two flagship smartwatches, which Apple certainly does! 9to5Mac, Digital Trends

Updated 18 Jan  Federal appeals court continues import ban on Apple Watches with working pulse oximetry, Apple appeal on ITC LEO still pending

Apple’s other nemesis, ECG monitoring system AliveCor, is back with the US Patent Trial and Appeal Board (PTAB) about Apple’s patent infringements. AliveCor shared with this Editor that the PTAB is instituting an inter partes review (IPR) of two AliveCor petitions on Apple patents asserted against AliveCor: claims 11–20 of US Patent No. 10,866,619 (the ‘619 patent’) and claims 1–22 of US Patent No. 10,076,257 B2 (“the ’257 patent’). AliveCor continues to be engaged in an antitrust court action with Apple on its ECG technologies in Apple Watches in the US District Court of Northern California.

AliveCor’s statement to this Editor: 

AliveCor applauds the U.S. Patent Trial and Appeal Board (PTAB) decisions to institute Inter Partes Review (IPR) of two patents Apple meritlessly asserted against AliveCor.  These institution decisions closely follow last week’s decision by the Court in the Northern District of California to stay the underlying district court case while the PTAB analyzes the validity of Apple’s patents.  Institution decisions directed to Apple’s remaining asserted patents are expected in the coming months.

Separately, our antitrust case against Apple is proceeding in the U.S. District Court,  Northern District of California, where the judge will decide several pending motions before setting a trial date for later this year. Our cases are among many recent developments revealing the extent of Apple’s bullying.

Unlike Masimo, Apple licensed AliveCor’s ECG technology in early Apple Watches, then took action when Apple introduced its own ECG in the Apple Watch 4 in 2020.

Updated 18 Jan  The US District Court of Northern California on 17 January upheld the continued stay of Apple’s patent infringement countersuit pending the outcome of the PTAB’s Inter Partes Review (IPR) of the 257 and 619 patents. In addition, the order reveals that the PTAB has a pending decision on whether to institute IPRs on US Patent Nos. 10,270,898 and 10,568,533. Both AliveCor and Apple are required to inform the District Court of any new IPRs ordered, as well as on the current IPRs at minimum every six months to update the Court on their status and any appeals. Court order PDF

Wrapping up many changes at Walgreens, VillageMD, CVS Health, Oracle Health

Walgreens’ multitudinous c-c-c-changes from the suites to the streets. Financially, Walgreens’ US Healthcare segment in Q1 2024 (Oct-Dec 2023) grew sales to $1.9 billion versus prior year’s $989 million. This included VillageMD’s revenue from Summit Health and some growth at CareCentrix (home care) and Shields Health Solutions (specialty pharmacy). But losses continued, with an operating loss of $456 million and adjusted operating loss of $96 million, reduced from the prior year’s $152 million loss. This is also after their November layoff of several senior staff and 5% of corporate workers following a May layoff [TTA 10 Nov 2023]

  • On the earnings call, new CEO Tim Wentworth confirmed that VillageMD has closed 27 under-performing clinic locations. This is a little less halfway through the 60-location previously announced closure. This is a key part of the $1 billion in 2024 cuts announced at the end of last quarter by then-acting CEO Ginger Graham [TTA 18 Oct 2023]. Healthcare Dive
  • VillageMD’s weakness has been filling physician ‘patient panels’. A patient panel is one doctor’s patient count treated over typically 12 to 18 months. This can be as high in primary care as 2,500 patients, though no numbers were cited for VillageMD. According to Wentworth, VillageMD is now “on a diet”; fewer locations, more patient concentration at available clinics, patient panels and profitability goes up. Or so the math goes. Forbes
  • Walgreens also has trouble in the IT department. Key indicators: Neal Sample is their third CIO in a year, layoffs in staff among employees and contractors, departures of key managers, and the need for new technology including AI to support operations. Graham has cited the new pharmacy inventory system to more accurately forecast demand using AI as an example of the direction she sees IT taking. (Let’s hope it will quiet the rebellious pharmacists.) The former CIO, who departed in September, stocked up on AI and engineering talent at the expense of other needed roles. The Wall Street Journal’s deep dive from December.

Year’s end brought a stop to some of the musical chairs in the CVS Health C-suite. CFO and appointed president of Health Services Shawn Guertin turned his leave of absence due to family health reasons into a formal departure at the end of May. Interims Tom Cowhey moves from SVP corporate finance to CFO and Mike Pykosz, the CEO of Oak Street Health, becomes president of Health Care Delivery. Release, FierceHealthcare

Oracle Health also has the music up and the chairs out.

  • General Manager Travis Dalton is departing on 1 March to join MultiPlan as president and CEO. He succeeds Dale White, who moves to executive chairman replacing the retiring chairman Mark Tabak after 23 years with the company. MultiPlan is a payer cost management company that serves about 700 payers in payment and revenue integrity, network-based and analytics-based services. Dalton is the fifth of 10 senior executives from Cerner to depart after the late 2021 sale to Oracle.MultiPlan releaseHIStalk 1/5
  • Oracle Health’s chairman, Dr. David Feinberg, has also been making some transitional moves of his own, joining Aegis Ventures as a senior advisor while remaining at Oracle. His role is to help Aegis work with a consortium of health systems on developing and launching digital health products. Interestingly, there has been no disclosure of the percentage of time he will spend at Oracle versus Aegis. Dr. Feinberg also is a Humana board member. He joined Cerner from Google Health and within a few months, Cerner was sold.  Modern Healthcare

A timely webinar Fri 12 Jan: Protecting a lifeline – preparing for the digital voice switchover (UK)

Free Zoom webinar: Protecting a lifeline, preparing for the digital voice switchover
Friday 12 January, 13:00 (1 pm) GMT
Information and registration

The digital switchover, the 2G and 3G phaseout…these issues are roiling UK telecare services. Will providers be ready for VoIP with enhanced services by the end of 2025? Will their customers be left without crucial services? The Digital Poverty Alliance is sponsoring a webinar with guests Kamran Mallick, CEO at Disability Rights UK, and Dennis Reed, Director of Silver Voices, as they share their concerns for their customers and some experiences of the switchover. This webinar will also consider the practical steps providers should be taking to protect their customer’s needs, and ensure no one is left without crucial services as part of the switch. 

It couldn’t be more timely. As VoIP systems have been implemented, failure incidents of telecare and PERS alarms have escalated to the point where last month Michelle Donelan, the UK Technology Secretary, demanded that telecoms stop forcing the non-voluntary conversion of copper lines to VoIP on the elderly and disabled. Both BT and Virgin Media on Monday 18 December announced that they paused their rollouts. Even The Telegraph has campaigned for a re-think of the “big switch”. Telegraph (via Yahoo Finance Canada)

More about Silver Voices’ campaign to delay the switchover of traditional copper wire landlines to internet-based telephone systems (VoIP or Digital Voice). VoIP is far more versatile but not as reliable as copper (although when copper fails…). Everyone with internet knows the loss of voice and device connectivity when it goes out and how battery backup systems are short-lived at best, if there at all. Cellular/mobile can be used as backup, but many areas of the UK are without reliable cell coverage–which can also fail in storms.

Hat tip to Adrian Scaife via LinkedIn   Also see resources and events available through TTA’s partner, UKTelehealthcare–also linked on sidebar

News roundup: Cano Health gets 2nd NYSE delisting warning; Veradigm acquires Koha Health RCM, faces class-action lawsuit; Bright Health-Molina sale closes; Devoted Health’s $175M Series E (updated)

Cano Health gets another billet-doux from the NYSE. Spoiling the confetti and champagne, tech-based primary care provider Cano Health was notified on 29 December that it faced delisting from the NYSE, this time not for the share price (which is above $1 at $5.23) but for its total market capitalization. The NYSE has a pesky rule (Section 802.01B) that a company’s total market capitalization must be above $50 million over a 30 trading-day period and its stockholders’ equity must be above $50 million. The timeline: Cano has 10 business days from the 29th to respond to the NYSE to state intent to cure the deficiencies, and 45 days from that time to submit a business plan to regain compliance within 18 months. If accepted, shares will continue to trade. In its release, Cano announced accelerating its ‘transformation plan’ to further cut costs, divesting operations and terminating underperforming affiliate operations to save approximately $290 million by the end of 2024, which includes the $65 million of previously planned cost reductions. They will also need to pay $30 million in pre-tax charges to resolve exiting leases and staff termination charges. Earlier in December, Cano appointed two independent directors, Patricia Ferrari and Carol Flaton, both with strengths in restructuring companies and their financials. It also established a three-person finance committee, to assist in trimming down the company and exploring a sale. Release

Veradigm buys Koha Health, which specializes in orthopedic/musculoskeletal (MSK) revenue cycle management (RCM). Acquisition cost and management transitions were not disclosed. The purchase of Koha adds to Veradigm’s RCM portfolio in ambulatory health. Koha, based in Merrimack, New Hampshire, was still owned and run by younger members of the founding family.  Veradigm is still working out over a year of trouble with its Nasdaq listing and has changed out its CEO and CFO recently [TTA 14 Dec]. Release. Also HIStalk 1/3/24   

Updated  Veradigm faces a shareholder class-action lawsuit on its share price. As is typical in these cases, there is a lead plaintiff (John M, Erwin) represented by a law firm (in this case Robbins Geller Rudman & Dowd LLP of San Diego) which is filed on behalf of a class, in this case individuals who bought shares between 26 February 2021 and 13 June 2023 and suffered losses. It charges Veradigm as well as certain of its current and former top executive officers with violations of the Securities Exchange Act of 1934.  This centers around Veradigm’s ongoing problems in stating its financials from Q3 2021 and overstating its earnings from there through 2023, negatively affecting the share price. The lawsuit was filed 22 November 2023 in the US District Court for the Northern District of Illinois. Robbins Geller is now seeking other plaintiffs to join in the suit. Release, Justia Dockets & Filings, Mobihealthnews

Wrapping up another continuing story, Bright Health closed the sale of its California plans to Molina Healthcare on New Year’s Day. With the proceeds, reduced to $425 million [TTA 20 Dec 23], Bright as predicted cleared what was owed on its credit facility with JP Morgan, reduced on Friday by $30 million to approximately $298 million. The remaining funds will go to their cash position ($90 million in unregulated cash plus approximately $155 million in excess cash surplus after reserving for expenses) and $110 million from escrow, and now on its sole continuing value-based primary care business, NeueHealth. Cash reserves do not include CMS Repayment Agreements which come due on or before 14 March 2025, sufficiently far in the future (?). No mention of repayments to their lender New Enterprise Associates (NEA) or the Texas Department of Insurance clawing back money owed out of its insolvent Texas plan. You have to hand it to Bright Health. They’ve managed to play multiple ends against the middle and tie masterful Gordian knots (pick your analogy) to stay alive until, they hope, 2025.  [TTA 5 Dec].  Release 29 Dec. Release 2 Jan   FierceHealthcare

Updated  And one more bright spot: $175 million raised by Devoted Health. Devoted is a combination of Medicare Advantage (MA) plans with in-house telehealth and in-home care delivered by Devoted Medical. The Series E was funded by a lead syndicate composed of The Space Between (TSB), Highbury Holdings, GIC, Stardust Equity, Maverick Ventures, and Fearless Ventures with an arms-length list of other participants. Devoted was started by two brothers, former athenahealth and government IT leaders Ed and Todd Park, CEO and executive chairman respectively. Devoted release, Becker’s. Fierce Healthcare, Mobihealthnews

What a difference a little over two years makes. At the time of their hefty $1.15 billion Series D, raised in the heady days of October 2021, they were considered one of the smaller, more specialized ‘insurtechs’ along with Alignment Health. Now they are walking tall in a field of damaged or expired payers: Bright Health, Oscar, and Clover among the survivors, and Friday Health Plans deceased. Devoted now states that its MA plans serve 140,000 members in 299 counties across 13 states, as of December 2023. Most impressively, 94% of their members in Star-eligible plans are in 4 to 5 Star plans. Their HMO plans in Florida and Ohio were all 5 Star plans. 

Some thoughts on the insurtechs, why the hype didn’t quite pan out, and the damage they may have done [TTA 7 July 2023].