Masimo updates: former CEO Kiani claims 13.2% ownership, and a review of the new management’s style (updated)

April 30, 2025 | by | 2 Comments

Medical device company Masimo may not be able to rid itself entirely of its meddlesome former CEO, Joe Kiani. In fact, if a court awards him the shares exercised under his various employment agreements, he could be 1) a billionaire and 2) the second largest shareholder in the company after Fidelity Investments (FMR). He currently and undisputedly holds 7.5% of Masimo’s shares (Nasdaq: MASI), trading today at over $163.00 and ironically up substantially since his departure. The latest is that Mr. Kiani cleverly filed with the SEC a mandatory “beneficial ownership” report (Schedule G/A, designating an amended form) stating that he owned 13.2% of shares.

The difference? The options, restricted stock units (RSUs), and performance stock units (PSUs) that he attempted to exercise, but have not been granted by the current management, controlled by Politan Capital Management, owner of 8.8% of common shares. Mr. Kiani maintains  that he resigned from Masimo on 19 September 2024, the day of the Annual Shareholders Meeting, “for good reason” after losing his board seat and control of the company to Politan. The new, Politan-controlled board on that day placed him on indefinite leave, named an interim CEO (Michelle Brennan), then in October expanded the board by two directors and formally terminated him on 24 October ‘for cause’, invalidating the terms of his eye-watering (and questionable) $400 million severance agreement. That difference–5.7%–is a whopping 3,226,702 shares on top of his existing 4,085,799 shares. In the Schedule 13G/A comments section, the non-granted shares are delicately termed as “subject to a dispute between the Issuer and the Reporting Person” (Mr. Kiani).

This Editor’s source is the excellent and detailed analysis done by Ted Green of Strata-gee. His reporting on Masimo is from close attention to their audio business as they attempt to shed Sound United, comprising major brands such as Polk, Marantz, Denon, and Boston Acoustics. As of this writing, that has not happened though in 2025 financial reporting, it is classified as a “discontinued operation”. His opinion on the strategy behind the unusual filing on shares claimed to be owned, but not in the possession of Mr. Kiani, is that it is a legal tactic thrown into the ongoing dispute around Mr. Kiani’s employment and severance/change of control agreements. Quentin Koffey, Masimo’s vice-chairman plus CIO of Politan, has argued that the previous board controlled by Joe Kiani signed off on compensation packages so rich that they threatened the company’s stability, among other things. 

As previously noted in our 6 March and 30 January updates, both Mr. Kiani and Masimo ever since have been going mano-a-mano in the courts–the Southern District of New York (SDNY), Delaware Chancery Court, and in California with the Private Attorneys General Act (PAGA) notice submitted to the California Labor & Workforce Development Agency (LWDA) alleging multiple Labor Code violations concerning wages, multiple stock options, and severance owed to Mr. Kiani under his employment agreements. None of these have been resolved yet to this Editor’s knowledge. 

Masimo has been going about its business, holding their annual stockholders’ meeting today. They’ve had good news since September regarding share price, with its rise largely maintained in this roller coaster market, despite a 2024 that was in the red. Strata-gee has an excellent delving into their SEC Schedule 14A filing issued in advance of the stockholders’ meeting. Mr. Green notes that it is full of disclosures and rationales on board and management duties, longer-term compensation structures, and more, written to be investor-friendly in contrast to the over-stuffed filings of the prior regime:

Written in a highly professional, precise, and clear tone, the company is changing many long-held policies – policies related to business management, board oversight, management performance, compensation, and more. And this document delves deeply into these many changes, often explaining what was done in the past, how it will be changed in the future, and why it needs to be done.

Mr. Green’s prognostication is that he expects all directors to be elected (there are no holdovers from the prior regime) and proposals to pass. Masimo’s emphasis on growth and R&D will mean developments in the medical device area. The company is now led by a 100% medical device CEO. They have a core market in hospital monitoring with some extensions into wearables. What direction they go in digital health will play out over this year and next.  

Update 30 April: The main website (masimo.com) has been ‘down’ for two days–unusual–while the ‘shop’ pages are still up but not really working. And their W1 watch is no longer for sale as ‘coming soon’. What is afoot?

TTA’s Blooming Spring: Walgreens tidies opioids for $350M, health AI more show than go, Blue Shield CA’s Googly breach, Veradigm’s CEO to depart, BCI meets telehealth for stroke, fundings, more!

April 25, 2025 | by

25 April 2025

Back at the desk….hope your holiday was great!

Cherry blossoms are blooming (finally) and so is the news. The roundups include Walgreens’ continuing Aisle 9 cleanup of their Federal opioid prescribing allegations, a huge and mysterious breach of Google Analytics sending member info to Google Ads, and Veradigm’s interim CEO will be taking the summer off. Our big reads include two surveys: the first on the state of healthcare AI (more show than go) and the second on RPM utilization–and effectiveness. Two raises, a BCI/telehealth merge, and international initiatives.

Product & funding very short takes: South Australia 1st with Sunrise EMR; S. Korea pain research, new emergency services app; BCI + telehealth for stroke patients; VirtuSense monitoring launches at Emory; Series B raises for Nourish, Healthee

Short takes: Veradigm’s interim CEO departing, Blue Shield CA breached 4.8M members’ PHI to Google, advice on expanded M&A premarket notification rules (You can’t blame that CEO for ankling! And Blue Shield has 2nd largest breach–involving Google Analytics.)

News roundup: Walgreens’ $350M opioid settlement, only 30% of healthcare AI pilots reach production, Medicare RPM usage up 10-fold despite benefit limitations (Walgreens cleans up again, and two surveys on AI and RPM for weekend perusal)

Two weeks ago, we were still going through a chilly Spring. Our big pre-Easter/Passover read for the weekend was Halle Tecco’s quantifying of the Cracked SPAC phenomenon and what’s happened with OpenAI. Transcarent closes its Accolade buy and changes its tune to ‘one place’, Walgreens doing a bit better. In touting, Keir Starmer’s bet on NHS data research and Elon Musk on human trials for Neuralink Blindsight. Hinge Health may postpone its long-awaited IPO and FTC pauses its long-awaited toss of the book at PBMs. Plus a new Perspectives on rural healthcare and telehealth.

The weekend read: why SPACs came, went, and failed in digital health–the Halle Tecco analysis/memorial service; why OpenAI is going to be a bad, bad business (Grab the cuppa and lunch for a good read and podcast. Updated–Also Tecco’s blog post on why she quit being an angel investor.) 

Extra, extra!: ATA Action forms Virtual Foodcare Coalition, Ophelia and Spring Health partner on opioid treatment, ISfTeH renews NSA status with WHO (More action from ATA Action and a partnership to watch in telementalhealth)

Midweek roundup: Transcarent closes Accolade; Walgreens beats Street; New Mountain Capital’s Office Ally buy-in; Neuralink Blindsight human trial coming up; PM Keir Starmer touts NHS data research; FTC’s PBM litigation break (Transcarent’s pivot?)

Rock Health’s digital health Q1: more money, fewer deals, more additions and partnerships in ‘leapfrogging’ (Still in a minor key this year)

News roundup: Hinge Health may postpone IPO, Rite Aid may enter 2nd bankruptcy, Veterans Affairs committees want new EHR costs & timeline, fired Texas health plan head hired private eyes to spy on members, providers, lawmakers (The last one is shocking)

Perspectives: Bridging the Gap in Rural Healthcare Through Telehealth (From Yosi Health)

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Telehealth & Telecare Aware – covering news on latest developments in telecare, telehealth and eHealth, worldwide.

Product & funding very short takes: South Australia 1st with Sunrise EMR; S. Korea pain research, new emergency services app; BCI + telehealth for stroke patients; VirtuSense monitoring launches at Emory; Series B raises for Nourish, Healthee

April 25, 2025 | by

Starting with international health tech developments…

South Australia Health has rolled out Altera Digital Health’s Sunrise Electronic Medical Record (EMR) and Patient Administration System (PAS). The EMR and PAS is being implemented across over 100 hospitals and health services, in both metropolitan and rural areas, in South Australia. South Australia is fourth-largest state in Australia, covering 983,482 square kilometres, which makes it five times larger than Texas and 10 times larger than the UK–but has only 1.7 people per square kilometer, which makes healthcare service challenging. Altera Release

In South Korea, researchers at Asan Medical Center have developed a pain assessment model which can be used during surgery, a time when the patient cannot provide feedback. The metrics include tracking a patient’s heart rate, blood pressure, and blood volume change during surgery, then using a machine learning algorithm combining them that confirms pain during and after surgery. The study tracked  242 AMC surgery patients. Mobihealthnews Also in South Korea, their Ministry of Health and Welfare’s emergency services 129 app has added new features to access health counseling via the web chat feature.  A 24/7 chatbot feature now answers inquiries about health and welfare-related policies. The Ministry has been developing health tech features to compensate for staff shortages, including a regional emergency system for patient classification and transfer, a multi-institutional real-time critical patient transfer management system, and an AI-based clinical decision support system for predicting cardiac arrest, cardiovascular diseases, and sepsis in emergency departments. Mobihealthnews

Back in the US, an intriguing combination of brain-computer interface (BCI) and telehealth for stroke. Neurolutions, a BCI company, is merging with telehealth provider Kandu Health. and have raised $30 million from Ally Bridge Group and AMED Ventures. Now known as Kandu, Inc., the combined company will provide an end-to-end solution for stroke survivors. Kandu’s app and care navigators provide support in the hospital-to-home transition for stroke patients and families. Neurolutions’ IpsiHand device is designed to improve arm and hand movement, reporting improvement in 70% of clinical trial patients. Kandu will now be able to offer telehealth rehabilitation, therapy monitoring, education, caregiver support, advocacy and navigation. Release, MedTech Dive

VirtuSense monitoring launched at Emory Healthcare for virtual nursing. The VirtuSense VSTOne monitoring and telemetry platform is being integrated into Emory’s virtual nursing initiative in Peoria-area (Illinois) hospitals, Midtown as the first and later Emory Hillandale Hospital for a total of eight inpatient units and 1,000 beds this year. VSTOne uses LIDAR (Light Detection and Ranging) technology in patient rooms to detect falls, continuous monitoring of patient data to anticipate deterioration or emergencies, and care staff to call directly into patient rooms to expedite admission, discharge, and general documentation. At Emory, it integrates with Epic MyChart Bedside TV. Release

In company fundings:

  • In the burgeoning ‘food as medicine’ segment, Nourish raised $70 million in a Series B funding round. Nourish works with national commercial, Medicare, and Medicaid plans to better manage and guide those with chronic conditions through nutrition. Users work virtually with registered dietitians along with a support app with AI meal tracking, wearable and lab integrations, recipes, and more. The funding was led by JP Morgan Private Capital’s Growth Equity Partners, with participation from Thrive Capital, Index Ventures, Y Combinator, Maverick Ventures, BoxGroup, Atomico, G Squared, and Pinegrove. The fresh funding will be used for product development, expand Nourish’s Registered Dietitian (RD) network, and strategic partnerships. Nourish is also a founding member of ATA Action’s new initiative, the Virtual Foodcare Coalition [TTA 10 Apr]. Release, Mobihealthnews
  • Healthee raised $50 million in an oversubscribed Series B round from Key1 Capital, with participation from Fin Capital, Glilot Capital Partners, and Group11. Healthee’s health benefits platform uses AI to help employees navigate healthcare and benefits and simplify a complex enterprise benefits system. Interestingly, Healthee management claims that they did not seek the funding but were sought after. They will use it for scaling their product suite, go-to-market operations, and deliver intuitive, AI-powered tools for benefits. Release, Mobihealthnews

Short takes: Veradigm’s interim CEO departing, Blue Shield CA breached 4.8M members’ PHI to Google, advice on expanded M&A premarket notification rules

April 25, 2025 | by

Veradigm’s interim CEO departing, CFO continuing. Tom Langan, who has been in place as Veradigm’s CEO for the last 11 months, will be departing after a little more than 13 months, according to Veradigm’s SEC Form 8-K securities filing dated 22 April. The former president and chief commercial officer (CCO), who replaced an earlier interim CEO, Dr. Dr. Shih-Yin (“Yin”) Ho, on 7 June 2024, has signed a separation agreement effective 31 July. According to the filing, the Veradigm board will be resuming a search for a permanent CEO. Mr. Langan declined the opportunity to participate as a candidate.

Lee Westerfield, who has been interim CFO since 7 December 2023 through three six-month agreements, has signed an extension until 31 December. 

Both Mr. Langan and Mr. Westerfield have been through considerable tumult at Veradigm: first (for Mr. Langan), the inability to file audited financial reports for 2022-24; the failed effort to sell, merge, or find a strategic partner [TTA 31 Jan]; finally, a major investor, Kent Lake, stepping in and controlling the board with the chairman stepping down as well as two other directors [TTA 22 Feb]. While the 2022 financial report was released last month along with 2025 guidance, the catchup won’t be done until sometime in 2026 [TTA 19 Mar].

One could not blame either of them, but especially CEO Langan, for tiring of the entire situation. He has been there in various positions since 2018 when it was Allscripts. His tenure will certainly be worth his while. Based on the filing, after termination he will receive $1.4 million over 12 months, which is a year of salary plus his target bonus; a lump sum cash payment for $406,000 for his pro-rated annual bonus, based on target performance; a year of health and dental coverage at active employee rates; and reimbursement of $10,000 in attorney’s fees incurred in negotiation of the separation agreement. His unvested portions of the stock options, restricted stock units or other equity awards will vest through those dated 31 July 2027. CFO Westerfield, on board as an interim for a considerably shorter time but in a mission-critical position, has a less golden package–a simple pay continuance through the end of the year plus five months if he is terminated not for cause or departs for good reason. Healthcare Dive

Blue Shield of California breached personal health information (PHI) via Google, in the second largest breach of 2025 to date. The unusual breach was not from the usual bad actor, but from Blue Shield’s use, unbelievably, of Google Analytics. According to their submission to the Department of Health and Human Services’ Office for Civil Rights’ (HHS-OCR) breach portal, their Google Analytics on how customers used their websites was configured in such a way that sent selected member PHI data over to Google Ads. Google Ads could then send these users and members targeted advertising. This went on for three years, ending only in January 2024. 

The data included:

  • Insurance plan name, type and group number
  • Patient names, city, ZIP code, gender and family size
  • Blue Shield of California identifiers for members’ online accounts, medical claim service date and service provider and patient financial responsibility.

It may have also included data around “Find a Doctor” search criteria and results, such as location, plan name and type, provider name and type. Other sensitive information, such as SSI#, credit cards, and driver license numbers, were not included. Because of its duration, it could potentially affect up to 4.8 million BSC members. BSC’s notice

The questions are–who programmed it this way? Was it Google? And if Google, who is responsible there? Is it configured that way at other health plans? And if not Google, who did it at BSC?

The analyses in both FierceHealthcare and Healthcare Dive point accusing fingers at Google, which has also been kicked very hard by the Department of Justice in their antitrust win on Google’s online advertising products or “ad tech stack” that dominates the industry–and may force the divestiture of Google Chrome as the result of another decision on web search. The Verge

M&A-ing? Premarket Notifications now in place makes it tougher. Our series of articles in 2023-24 explained the steeper requirements to our Readers for transactions that fall under the nearly 50-year-old Hart-Scott-Rodino (HSR) Act requirements. The threshold of value for 2025 is set at $126.4 million. Our 15 October 2024 overview summarizes the changes and links to other documentation on the many changes, particularly around the buyer’s investors and a five-year lookback at the under-the-HSR-wire serial acquisitions (rollups) made by both companies. The information required now is much more extensive and demanding. FTC will also have an online portal for comments on every acquisition. HIMSS has a six-minute plus interview with Michael Ramey, a managing principal of Strategic & Transaction Solutions at PYA (better known to many of us as Pershing), that touches on the highlights.

News roundup: Walgreens’ $350M opioid settlement, only 30% of healthcare AI pilots reach production, Medicare RPM usage up 10-fold despite benefit limitations

April 24, 2025 | by

Walgreens continues to clean up on Aisle 9 before it goes private. Walgreens settled the Federal allegations around illegally filling invalid prescriptions for opioids and seeking payment from Federal programs for $300 million. There’s an additional $50 million tagged onto it if the company is sold, merged, or transferred prior to fiscal year 2032. Since Walgreens has ‘done the deal’ with Sycamore Partners, the settlement amount will be the full $350 million. According to the Department of Justice’s press release, the settlement was based on Walgreens’ ability to pay. There was no statement on when the $350 million will be due.

This settles the complaint filed on 16 January (amended 18 April) in the US District Court for the Northern District of Illinois by the Department of Justice (DOJ), the Drug Enforcement Administration (DEA), and the Department of Health and Human Services Office of Inspector General (HHS-OIG). In the suit, Walgreens faced civil penalties of up to $80,850 for each unlawful prescription filled in violation of the Controlled Substances Act (CSA), plus treble damages and applicable penalties for each prescription paid by Federal programs in violation of the False Claims Act (FCA) for over 10 years–approximately August 2012 through March 1, 2023 The red flags included prescriptions for the ‘trinity’ of an opioid, a benzodiazepine and a muscle relaxant. If Walgreens had been found guilty, the penalty could have been billions. 

Given the numbers that in January presented a large impediment to a sale, settling rather than fighting makes sense. The projected Sycamore Partners closing is only two quarters away (Q4, TTA 11 Mar). The 35-day ‘go shop’ period has closed with no other offers. The DOJ has moved to dismiss its complaint in Illinois, while Walgreens will also move to dismiss a related declaratory judgment action filed in the District Court for the Eastern District of Texas. In addition to Illinois, the District of Maryland, the Eastern District of New York, the Middle District of Florida, and the Eastern District of Virginia participated in the complaint.

In addition to the settlement, Walgreens’ pharmacy operations are now under Federal scrutiny, based on multiple agreements with DEA and HHS-OIG attached to the settlement, addressing what they and the DOJ saw as compliance violations in dispensing controlled substances. From the release:

  • Walgreens and DEA entered into a memorandum of agreement that requires the company to implement and maintain certain compliance measures for the next seven years. 
  • Walgreens must maintain policies and procedures requiring pharmacists to confirm the validity of controlled substance prescriptions prior to dispensing controlled substances, provide annual training to pharmacy employees regarding their legal obligations relating to controlled substances, verify that pharmacy staffing is sufficient to enable pharmacy employees to comply with those legal obligations, and maintain a system for blocking prescriptions from prescribers whom Walgreens becomes aware are writing illegitimate controlled substance prescriptions.
  • Walgreens has also entered into a five-year Corporate Integrity Agreement with HHS-OIG, which further requires Walgreens to establish and maintain an extensive compliance and training program

Crain’s Chicago Business, Healthcare Finance, Settlement Agreement

Healthcare AI continues to be more show than go. A report by Bessemer Venture Partners surveying payers, pharma, and providers states that 95% of respondents said GenAI will be transformative, with 85% of provider and 83% of payer leaders expecting it to reshape clinical decision-making within three to five years. Yet only 30% of AI pilots — what the report calls “internally and externally developed GenAI proof of concept (POC) projects” make it to production. 

Generative AI applications are being developed by the organizations’ IT teams, building their own tools by partnering with horizontal AI labs (i.e., Anthropic), Big Tech companies, or going to current and new vendors. The impediments they face are cybersecurity, data readiness, integration costs, and limited in-house expertise. Procurement is shifting toward co-development; 64% of execs are open to co-developing with early-stage partners. A contradiction is that only 32% of executives believe GenAI solutions from startups are superior to those from large tech incumbents. yet 48% prefer working with startups over established players.

Yet with these “aspirations and expectations” in the 80-90th percentile, only half of the surveyed organizations surveyed have a clear AI strategy with 57% having an AI governance committee, with payers in the lead. Those in it are putting real money behind it and seeing some meaningful ROI (54%), however. 

Among the three surveyed segments, Bessemer identified 59 jobs-to-be-done. Yet 45% of these jobs are still in the ideation or POC phase, with far fewer actually in production. These jobs clustered as follows: 22 for payers (claims, network, member, pricing), 19 for pharma (preclinical, clinical, marketing, sales), and 18 for providers (care delivery, revenue cycle management). The survey was performed by Bessemer with Amazon Web Services and Bain & Company, across 400 leaders in the three segments. 

Remote patient monitoring (RPM) Medicare usage growing steadily, despite limitations on clinical effectiveness. This new report from the Peterson Center on Healthcare tracks how RPM usage has grown among Medicare (traditional, Medicare Advantage) and Medicaid beneficiaries since 2019, when CMS enabled Medicare codes for reimbursement. For Medicare, despite only 1% of beneficiaries using RPM, it grew exponentially–10-fold for traditional Medicare between 2019-2023 and 14-fold for MA between 2019 and 2022.

  • Top chronic conditions are hypertension (57%) with diabetes far behind at 13%. Also growing but much smaller is remote therapeutic monitoring (RTM), dominated by musculoskeletal (MSK) disorders.
  • Traditional Medicare spent $194.5 million on RPM and $10.4 million on RTM in 2023.
  • Clinical effectiveness tends to be short-term. In hypertension, RPM is most valuable within the first six months, when blood pressure medications are actively monitored. For diabetes, the prime target is likely patients with the highest starting HbA1c levels and those
    who are at critical transition points in their care plan, such as starting insulin. For RTM, the most effective gains occur in 2-4 months.
  • Yet utilization is increasing. The duration of continuous RPM in traditional Medicare in 2023 was 5.2 months, with 22% over nine months. For hypertension, the average is 6.6 months. For MSK RTM, the average was below effectiveness-only 1.7 months.

The Peterson Center’s policy conclusions advocate a reset:

  • Coverage and reimbursement need to be better aligned to actual clinical value
  • Adoption of high-impact remote monitoring services and minimizing or eliminating the use of poorly performing digital applications
  • Improved data collection for remote monitoring services for evidence-based coverage and reimbursement decisions

Evolving Remote Monitoring

TTA Where *Is* Spring? 3: SPACs–why they cracked, Hinge Health and FTC-PBM delays, Transcarent’s tune change, UK’s pivot on NHS research data, why OpenAI is losing its way, more!

April 11, 2025 | by

 

11 April 2025

It’s still a chilly Spring in your Editor’s whereabouts, but we have, fresh out of the hothouse, a bumper crop of news and opinion. The big read for the weekend is Halle Tecco’s quantifying of the Cracked SPAC phenomenon and what’s happened with OpenAI. Transcarent closes its Accolade buy and changes its tune to ‘one place’, Walgreens doing a bit better. In touting, Keir Starmer’s bet on NHS data research and Elon Musk on human trials for Neuralink Blindsight. Hinge Health may postpone its long-awaited IPO and FTC pauses its long-awaited toss of the book at PBMs. Plus a new Perspectives on rural healthcare and telehealth.

The weekend read: why SPACs came, went, and failed in digital health–the Halle Tecco analysis/memorial service; why OpenAI is going to be a bad, bad business (Grab the cuppa and lunch for a good read and podcast) 

Extra, extra!: ATA Action forms Virtual Foodcare Coalition, Ophelia and Spring Health partner on opioid treatment, ISfTeH renews NSA status with WHO (More action from ATA Action and a partnership to watch in telementalhealth)

Midweek roundup: Transcarent closes Accolade; Walgreens beats Street; New Mountain Capital’s Office Ally buy-in; Neuralink Blindsight human trial coming up; PM Keir Starmer touts NHS data research; FTC’s PBM litigation break (Transcarent’s pivot?)

Rock Health’s digital health Q1: more money, fewer deals, more additions and partnerships in ‘leapfrogging’ (Still in a minor key this year)

News roundup: Hinge Health may postpone IPO, Rite Aid may enter 2nd bankruptcy, Veterans Affairs committees want new EHR costs & timeline, fired Texas health plan head hired private eyes to spy on members, providers, lawmakers (The last one is shocking)

Perspectives: Bridging the Gap in Rural Healthcare Through Telehealth (From Yosi Health)

Last week: A relatively light news week in a so-far chilly, stormy Spring. Our top article is not one, but two dives into the Unicorn Known as Hippocratic AI. 23andMe’s sale isn’t attracting a lot of buyers (deliberate?) but presents even more problems for the users who took their surveys. Dr. Oz confirmed for CMS as HHS goes on a GLP-1 diet and then some. VA adds to their Oracle 2026 rollout, ATA Action enlarges, and DOJ seeks execution for Brian Thompson’s assassin.

News roundup: 9 additional VA centers named for Oracle 2026 EHR rollout; ATA Action acquiring, expanding with DTA; Dr. Oz to lead CMS while HHS cuts; DOJ seeks death penalty for Mangione  (VA creeps forward, ATA Action enlarges, HHS chops, justice awaits)
Are Hippocratic AI and AI “nurses” the wave of the future–or just another tide of hype? Two articles question. (A needed discussion on this particular unicorn and whether its AI capabilities are all they’re pitched to be)
23andMe’s slim list of prospective buyers–who must uphold privacy policies, according to the FTC. But what about that survey information? *Updated* (More problems with 23andMe’s sale–and if you took their surveys, they have more data on you)

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Advertise on Telehealth and Telecare Aware
Support not only a publication but also a well-informed international community.

Contact Editor Donna for more information.

Help Spread the News

Please tell your colleagues about this free 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

Telehealth & Telecare Aware – covering news on latest developments in telecare, telehealth and eHealth, worldwide.

The weekend read: why SPACs came, went, and failed in digital health–the Halle Tecco analysis/memorial service; why OpenAI is going to be a bad, bad business

April 10, 2025 | by

Let us now hold the formal memorial service for the SPAC–the special purpose acquisition company, at least for digital health. Halle Tecco, whom many of us know as the founder and past CEO of Rock Health, plus angel investor, plus adjunct professor in digital health at Columbia, now has an opinion blog on Substack. As our Readers know, this Editor, who is none of the above, has been shoveling dirt on SPACs here on TTA since they became an Easy Way To Avoid the cumbersome, oh-so-tiresome preparation for a public IPO during the Digital Health Boom of 2020-22 (RIP). She has been covering their Trouble Every Day and demise ever since. Having not kept quantitative track of Cracked SPACs, only the news as they floated, declined, and failed, this Editor enjoyed Ms. Tecco’s quantitative analysis of the overall picture. She puts it into a readable business context. 

Shockingly, SPACs across all IPOs are still going on. In 2023 and 2024, total SPACs as a percent of IPOs neared 40%. Their high was reached in 2022 at 73%. The attractiveness of SPACs was obvious: an investor sets up a publicly traded company and goes through the hassle of an IPO. It raises money on public markets and from investors to acquire another company. Then it hunts for a company to acquire. The target is landed, is acquired, symbols change, and the deal is done, all in three to six months. The acquired company doesn’t have to go through the investor pitches, the due diligence, the incessant filing…less fuss and muss, but missing the rigor of a traditional IPO. For the SPACs, especially those focusing on digital health, 2020-22 became FOMO Fever–the fear of missing out.

For digital health companies, the boom became a race to the bottom. 

  • 30.4% went bankrupt, some spectacularly, others with a whimper as they’ve failed, one after the other: 23andMe, Cano Health, Babylon Health, Nuvo, Pear, others
  • 26.1% were acquired well below their SPAC entry price: Sharecare, SOC Telemed, Akili and others. The only exception: Augmedix, with a $40 million SPAC valuation, was bought for $139 million by Commure. (Commure is backed by General Catalyst and Andreessen Horowitz; Commure/Athelas itself is an interesting and complex story.)
  • 39.1% are still in business but trading below their SPAC entry price. A number flirted with the Devil of Demise and are recovering: Clover Health, Owlet (baby monitors), Butterfly (ultrasound POC), Talkspace. DocGo became a Covid play and then got into political trouble and is nearing $2/share from their late 2022 high of just below $11. And others.
  • There is exactly one success story: hims & hers (4.3%)

Enjoy this read on her blog. If you prefer a podcast, here’s Ms. Tecco on her ‘Heart of Healthcare’ with Mohamad Makhzoumi (link is to Spotify), co-CEO of New Enterprise Associates (NEA), a VC in healthcare and technology (33 minutes), discussing healthcare’s evolution, so to speak, from “the trailer park of venture investing” and the hilarious ‘healthcare hokey-pokey’. And here’s a Gimlety View of SPACs from 26 June 2024.

Another Big and Disastrous Fail in the making may be OpenAI, the creator of ChatGPT. It is converting from a non-profit to a for-profit company, losing its founder group, fundraising like crazy, and generally has ditched its Mission. “OpenAI is an AI research and deployment company. Our mission is to ensure that artificial general intelligence benefits all of humanity.”  OpenAI has raised the largest venture-backed fundraise of all time, $6.6 billion, and is now valued at $157 billion. Why overvalued? A tell is that SoftBank has invested $500 million into this megillah–this Editor recalls that SoftBank invested in Theranos and WeWork. Another tell–the NY Times and The Information estimated that Open AI lost $5 billion in 2024, it loses money on every copy of ChatGPT, and its revenue projections are near-absurd at $11.6 billion in 2025 and $100 billion by 2029. It totally ignores that every major player has an AI program, from Microsoft to Google. If you’re a fan of ChatGPT or need your eyes cleared around this type of AI, grab your cuppa and a bottle of your favorite pain reliever for Ed Zitron’s article, OpenAI Is A Bad Business. (Ed is an English tech writer, podcaster, and PR specialist)

Extra, extra!: ATA Action forms Virtual Foodcare Coalition, Ophelia and Spring Health partner on opioid treatment, ISfTeH renews NSA status with WHO

April 10, 2025 | by

Extra non-merger/financing news.

A new virtual food initiative from ATA Action. In another sign that the ATA Action portfolio is enlarging, they announced the formation of a new advocacy group, the Virtual Foodcare Coalition. The new group, composed of organizations ranging from food providers to telehealth and a law firm, is promoting healthy food as an integral part of healthcare. Their five policy priorities center on Federal laws, telehealth, and cross-state practices:

  1. The Medical Nutrition Therapy (MNT) Act
  2. Funding for Medically Tailored Food and Food Benefits Management that Foster Optimal ROI and Sustained Impact
  3. Rationalize Supplemental Nutrition Assistance Program (SNAP), Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), and School Meals; Align with Clean Food Initiatives
  4. Expand Reimbursement and Incentive Models for Telenutrition, Remote Monitoring Devices, Remote Therapeutic Monitoring and Foodscripts
  5. Facilitate Cross-State Nutritional Healthcare Delivery

The founding coalition members are: Albertsons Companies, Inc., Circle Medical, Foodsmart, hims & hers, Lifepoint Health, Nixon Law Group, Nourish, and Teladoc Health. With RFK, Jr. as head of Health and Human Services, there’s no better time. Release

Ophelia and Spring Health partner for opioid treatment. In another alliance to expand telehealth treatment versus standing alone, Ophelia, an opioid use disorder (OUD) treatment provider, will be joining with Spring Health in providing medication-assisted treatment (MAT) OUD for Spring Health’s employer and health plan clients. Spring Health’s telementalhealth clients include Adobe, Bumble, General Mills, Moda Health, Wellstar, and Guardian with a total access to 20 million lives. In return, Ophelia’s clients will now be able to access Spring Health’s behavioral health services, including therapy and psychiatric support, in an expansion of Spring Health’s portfolio. Release

Internationally, it’s another three-year agreement between ISfTeH and WHO.  ISfTeH, the International Society for Telemedicine & eHealth, is formally a Non-State Actor (NSA) in official relations with the World Health Organization (WHO). That status has been renewed for another three-year period. In that regard, ISfTeH works on and provides input to Research on Quality of Care, the Global Telehealth Community of Practice (GTCoP), Digital Health Atlas, Global Digital Health Monitor, Guidelines on Cross-Border Telemedicine, the WHO Acute Care Action Network (ACAN), and more. ISfTeH members also have an opportunity to participate in some of the WHO’s annual constitutional meetings–contact here for more information. LinkedIn post. ISfTeH/WHO’s collaboration document. Hat tip to Frederic Lievens of ISfTeH.

Midweek roundup: Transcarent closes Accolade; Walgreens beats Street; New Mountain Capital’s Office Ally buy-in; Neuralink Blindsight human trial coming up; PM Keir Starmer touts NHS data research; FTC’s PBM litigation break

April 10, 2025 | by

Transcarent closes Accolade buy, changes its game. Transcarent’s $621 million acquisition of Accolade was wrapped up in record time (two months from announcement). This takes the Nasdaq-listed Accolade private and rewards its former shareholders with $7.03 in cash. For a stock that peaked in late December 2020 into January 2021 above $59.00, and within the past year was above $9.00, this was salvage not profit except for speculators. The combined company in corporate care management now has 20 million members and more than 1,700 employer and health plan clients.

Notably, and very much in keeping with Glen Tullman’s M.O., the lead in their release is a new and rather generic marketing statement: “one place for health and care”. Much space is devoted to combinations: Transcarent’s generative AI WayFinding with Accolade’s True Health Actions member database to deliver clinical guidance to members. Transcarent also is promoting its generative AI as reducing the administrative burden for clinicians. The combined company is merging executive teams and much of its software. But the reality is combining two companies with clearly opposing care management products: Transcarent with a cost-saving, software-based, risk pricing model for self-insured employers, Accolade with a traditional human-based per member per month service model incorporating corporate care navigators and benefits consultants. Neither Accolade CEO Rajeev Singh, nor other members of top management whose shares fully vested (Stephen Barnes, Robert Cavanaugh, and Richard Eskew), are not listed in the new management lineup, though earlier information indicated that retention bonuses were offered. CNBC, Mobihealthnews  Also TTA 19 Feb reviewing MedCityNews’ Arundhati Parmar’s take on the combo and updated background TTA 21 Feb.

Walgreens beats Street analyst expectations on revenue, narrows losses. Winding up its public financial reports before the Sycamore Partners acquisition is finalized, Walgreens reported on Tuesday their fiscal Q2. Revenue was up 4% versus prior year to $38.6 billion. Losses were reduced to $2.9 billion versus prior year’s $5.9 billion loss. Per share losses were $3.30 versus $6.85. The year-ago loss included a $12.4 billion non-cash impairment charge related to VillageMD goodwill, which resulted in a $5.8 billion charge attributable to WBA, net of tax and non-controlling interest, and a $455 million non-cash impairment charge related to certain long-lived assets in the U.S. Retail Pharmacy segment. Operating cash flow in the current quarter was negatively impacted by $969 million of legal payments primarily related to PWN/Everly Health [$595 million, TTA 26 Feb] and multiple opioid-related settlements. WBA also withdrew 2025 financial guidance with the sale pending by end of year.  Release, Healthcare Dive

VC New Mountain Capital makes investment in Office Ally. The NMC “strategic growth investment” in the practice management/payment clearinghouse/EHR company is alongside Francisco Partners, which will also reinvest alongside management. The investment amount is not disclosed. Vancouver, Washington-based Office Ally enables the exchange of more than 950 million transactions and works with 80,000 healthcare organizations. For the $55 billion in assets NMC, this was evidently a better investment than their quickly terminated bid for 23andMe. Release

Neuralink’s next move–overcoming blindness. The Elon Musk-backed brain-computer interface (BCI) company announced at a Wisconsin town hall streamed on YouTube that its Blindsight implant will be tested in humans by the end of 2025. “Neuralink has had in monkeys a working device we call Blindsight,” Musk said. “It has been working well, and the monkeys are healthy for a few years now.” (The video clip is at 6:15 in this independently produced Neura Pod video, credit to Ryan Tanaka who follows Neuralink). The Blindsight implant works to restore vision in individuals who have lost sight and even their eyes or optic nerves by stimulating the visual cortex. The implant received FDA Breakthrough Device designation last September. Ironically, reviewers of Elon Musk’s Neuralink project and other brain-computer interface companies were among the 20 fired at FDA’s Office of Neurological and Physical Medicine Devices [TTA 21 Feb]. Mobihealthnews

Short takes:

NHS being ‘turbocharged’ by PM as medical research center. Prime Minister Keir Starmer took the lead on this, not the NHS, in announcing the creation of a new health data research service based on NHS data. The intent is to make all NHS data accessible through a secure single access point for national-scale data sets. The UK government and the Wellcome Trust will invest up to £600 million. This is part of the government’s Plan for Change to set up a modern industrial strategy, unlocking the potential of the Oxford‑Cambridge growth corridor, and “pro-growth measures to build a strong, resilient economy with more well-paid jobs”.  Gov.uk release

A longish break for the major pharmacy benefit management (PBM) companies. The Federal Trade Commission (FTC) announced that it was staying its insulin pricing litigation against the three major PBMs: Caremark (CVS), Express Scripts (Cigna), and Optum Rx (UnitedHealth Group). The long-running action initiated last year by the now-departed FTC chair Lina Khan ran into FTC problems with the change of administrations. First, there are not enough commissioners at present to try the case, with the firing last month of two Democrat commissioners. Republican Melissa Holyoak recused herself. The new FTC chair, Andrew Ferguson, initially recused himself since he, while Virginia solicitor general, had advised the state’s attorney general on filing an amicus brief in a class action case against PBMs. He unrecused himself on 3 April (X statement) so that the case can continue when the FTC has enough commissioners. The PBMs countersued in November. The stay is 105 days followed by evidentiary hearings 225 days later, meaning that next February is the earliest the case can resume. It’s a break for their parent healthcare companies’ share prices, which have been weighed down by the FTC action. FierceHealthcare, Healthcare Dive

Rock Health’s digital health Q1: more money, fewer deals, more additions and partnerships in ‘leapfrogging’

April 8, 2025 | by

There’s a small uptick and some optimism in the air for US digital health deals after all. After a 2024 that realistically was a ‘down round’ or Back To 2019, 2025 is picking its way through the New Reality of Global 52-Card Pickup, powered by a new US government and still-defining AI technology. Let’s unpack what Q1 was like in Rock Health’s view:

  • Funding was $3.8 billion across 122 deals, with an average deal size of $24.4 million. Compared to Q1 2024, total investment was up ($2.7 billion) as was the average size ($20.6 million) but number of deals were down (133).
  • Q1 funding also exceeded Q4 2024 funding in a pattern typical of the past few years.
  • 83% of deals were seed, Series A, and Series B rounds, not much different than 2024’s 86%. There were a few exceptions listed by Rock Health. By far the largest was Hippocratic AI’s $141M Series B but also Achira’s $33M seed, and Open Evidence’s $75M Series A. MSK player Vori Health sported a $53 million Series B in March
  • There were only 5 Series D or larger deals but three were jumbo sized: Innovaccer ($275M), Abridge ($250M), and Qventus ($105M), which pulled the average up to $105 million, nearly double that of FY 2024.

Rock Health is mum on unlabeled or funding not disclosed deals, such as the ones TTA noted through the quarter: Summer Health -Caraway, Neuroflow-Quartet Health, Iris Telehealth-InnovaTel, Dispatch Health-Medically Home, and Wysa-April Health.  It also doesn’t provide its usual analysis of healthcare value propositions and clinical indicators.

An interesting analysis in the shorter-than-usual announcement breaks down an approach they’ve dubbed ‘leapfrogging’, defined as ways companies can acquire knowledge or shift to respond to market dynamics:

  1. Tapestry Weaving. It’s a quaint way of saying that capabilities can be bought through M&A. (Business can be bought that way too–Transcarent closed its $621 million buy of enterprise care navigator Accolade today.) 
  2. Modular Tech Stacks. This type of tech design allows companies to switch out or add in tech as the market changes or better tech emerges.
  3. Channel Partnerships. Companies, by adding partners, add capability at low cost and reach, though the logistics of partnering, the integration cost and quality of service aren’t easy lifts.
  4. Engaging Disruptors. Companies invested in certain standard processes can expand by allying with their disruptors, versus viewing them as competitors. 

What’s not mentioned in the report are the high profile failures this quarter: 23andMe’s bankruptcy, Walgreens’ sale to Sycamore Partners, and Veradigm’s failure to sell itself.  Given the past few months, we’ll be doing a lot of ’embracing uncertainty’ this year!  Also FierceHealthcare

News roundup: Hinge Health may postpone IPO, Rite Aid may enter 2nd bankruptcy, Veterans Affairs committees want new EHR costs & timeline, fired Texas health plan head hired private eyes to spy on members, providers, lawmakers

April 8, 2025 | by

Isn’t April a bit early for roller coaster rides?

Hinge Health may postpone its IPO. This is absolutely to no one’s surprise. Virtual MSK provider Hinge Health had filed a SEC S-1 preliminary prospectus back in mid-March [TTA 14 Mar] with few specifics, and had not committed to any dates. With Mr. Market taking multiple rides on an old-school wooden roller coaster, Hinge is dangling a postponement. Business Insider spoke with the usual Insider who said rather minimally that the company intended to start speaking with investors towards the end of April and go public in May, but now may postpone. They might still go public on this schedule if Mr. Market sees Hinge as a good alternative buy. Supposedly, they have the cash on hand and don’t need the IPO to finance the business. By this stage, there’s a gaggle of investors hungry for a partial or full exit financed by Other People’s Money on their $826 million invested to date: 8% shareholders Coatue, Tiger Global Management, Whale Rock Capital Management, Bessemer Venture Partners, Insight Partners (19%), and Atomico (15%). Founders Daniel Perez (CEO) and Gabriel Mecklenburg (director), who own 18.9% and 8.2%, may also be eager to cash in. Hinge is keeping mum as they must. This Editor’s bet is that their IPO will be no later than June. Yahoo! Finance

Rite Aid may go through the Pain of Bankruptcy yet again. Sadly, the distant third in the pharmacy/retail healthcare market is rumored to be considering another bankruptcy as not seeing a sustainable way forward as a private company. Alternatively, they are exploring selling parts of its business, though it’s hard to imagine who would buy. In the October 2023 bankruptcy, the company went from 2,000 locations and 47,000 employees to 1,300 locations, exiting entire states to concentrate where they could have some market impact. They sold Elixir, their pharmacy benefits manager, and settled with major creditors. In March 2018, they had downsized by selling 1,932 store locations for $4.38 billion to Walgreens. Like Walgreens and CVS, they are also dealing with legal liabilities from opioid-related lawsuits. Reportedly, they are being advised by Big Law firm Paul Weiss to advise on options, such as what can still be sold and what kind of bankruptcy. Wall Street Journal, Chain Drug Review, Daily Mail

The VA and Oracle have some ‘splainin’ to do to Congress. As VA has put stakes in the ground with migrating 13 VA Medical Centers from VistA to Oracle, a few Members of Congress on Veterans Affairs committees in the House and Senate have been awaiting More Information on the Electronic Health Record Modernization (EHRM) program. What they want to know are the fundamentals: costs and updated schedules. VA has not yet provided a cost update that is mandated by laws and Office of Management and Budget (OMB) directives governing major acquisition programs. The Congress members from both parties requesting the information are: Sen. Jerry Moran (R-Kansas), Richard Blumenthal (D-Conn.), Rep. Mike Bost (R-Ill.), Rep. Mark Takano (D-Calif.), Sen. John Boozman (R-Ark.), Sen. Jon Ossoff (D-Ga.), Rep. John Carter (R-Texas) and Rep. Debbie Wasserman Schultz (D-Fla.). Senator Moran press release

Private Eyes Are Watching You. They See Your Every Move. Mark Sanders, CEO of Superior Health Plans in Texas, a Centene health plan, admitted before the Texas House Delivery of Government Efficiency Committee that he had hired private investigators to get “background information” on lawmakers and plan members, specifically about claims, in a 26 March hearing on Medicaid procurement. The Dallas Morning News had previously uncovered examples of members who were being investigated from 2017 on, when Mr. Sanders became CEO. He testified that “investigators had done “routine” background checks into several state representatives, senators, health care providers, patients and their families and a journalist.” The state officials included Texas Land Commissioner Dawn Buckingham, then a state senator, and Southlake Republican state Rep. Giovanni Capriglione, according to documents obtained by The Dallas Morning News.  One claim denied was, according to the paper, Linda Badawo of Mesquite, Texas, and her 3-year-old son D’ashon Morris. “D’ashon, who was denied private duty nursing despite emphatic protests from Linda, his doctors and nurses, pulled his trach out and was found not breathing, as his caregivers warned he would.” Mr. Sanders called these ‘routine background checks’ and ‘general research’  no longer being done. Rep. Capriglione is now chair of the committee holding the hearings, which surely meets the Sicilian Standard of revenge as a dish best eaten cold.

Superior used a Missouri-based security company, Griffin Personnel Group, to perform these and other investigations. One investigation the committee uncovered said that Griffin attempted to obtain the divorce records of Sen. Charles Schwertner, R-Georgetown, just a few months after his wife filed in early 2019. Sen. Schwertner and Rep. Capriglione were members of budget committees at the time. Centene is HQ’d in St. Louis, Missouri.

Texas Attorney General Ken Paxton almost immediately announced an investigation into Centene’s practices. Centene fired Mr. Sanders within hours, stating “The conduct highlighted yesterday during the course of the Texas House Committee hearing is not reflective of our values nor is it a practice Centene’s current leadership condones. To this end, Mark Sanders is no longer with our organization.” Perceptive Readers will note the subtle ‘dig’ at the previous CEO; in 2017, Centene’s CEO for then over 20 years was Michael Neidorff, who is no longer here on this planet to defend himself. Centene is now controlled by activist investor Politan Capital.) At stake are hundreds of millions in state Medicaid contracts.

(Disclosure: this Editor worked for an ACO management services organization owned by WellCare, not Superior, acquired by Centene, and technically worked for Centene for less than one year ending in 2020.)

Perspectives: Bridging the Gap in Rural Healthcare Through Telehealth

April 7, 2025 | by

TTA has an open invitation to industry leaders to contribute to our Perspectives non-promotional opinion and thought leadership area. Today’s topic is the closure of rural hospitals and whether telehealth can bridge this access gap. The author, Hari Prasad, is co-founder and CEO of  Yosi Health, a full-service technology ecosystem that connects patients with their providers through the entire care journey before, during and after the visit, creating delightful patient experiences and modernizing the entire healthcare patient experience. 

Rural hospitals across the United States are at risk of closing especially if Medicare and Medicaid cuts are enacted. According to a March 2025 report by the Center for Healthcare Quality and Payment Reform, over the past two decades, nearly 200 rural hospitals have already closed. It’s an economic reality that could leave hundreds of thousands of Americans without local medical care.

Rural communities, which already face challenges related to limited healthcare resources, transportation, as well as staffing and economic constraints, are likely to experience even greater disparities in access to essential services. As these hospitals and clinics face potential shutdowns, telehealth is emerging as a critical tool to maintain healthcare connectivity and improve patient outcomes in these underserved areas.

The threat of rural hospital closures has far-reaching implications. For many residents, these facilities provide not only emergency care but also routine health services, chronic disease management, and preventive screenings. With the loss of a nearby hospital, patients are often forced to travel long distances for care—a situation that can delay treatment and exacerbate health conditions. Additionally, the closure of rural hospitals often leads to increased pressure on remaining facilities, further straining resources and limiting access.

Telehealth, which allows patients to connect with healthcare providers through digital platforms, offers a promising solution to these challenges. By enabling virtual consultations, remote monitoring, and digital care coordination, telehealth can mitigate some of the negative effects of hospital closures. It provides patients with timely access to medical advice and treatment without the need for long, costly journeys to distant facilities.

In my experience at Yosi Health, we are witnessing a notable trend: rural healthcare providers are increasingly turning to telehealth as a means of bridging the access gap. Digital tools and virtual care platforms have evolved to support not only routine consultations but also more complex care management needs. For example, remote patient monitoring is now being used to track chronic conditions such as diabetes and hypertension, ensuring that patients receive ongoing care – without the constant need for in-person visits.

Furthermore, telehealth solutions are proving effective in reducing hospital strain. By diverting non-emergency cases from overcrowded emergency departments, these platforms help ensure that hospital resources are preserved for patients in critical need. Virtual visits can also lead to more efficient use of healthcare resources, allowing providers to manage larger patient loads with improved workflow efficiencies.

There are, however, challenges that must be addressed for telehealth to reach its full potential in rural areas. One of the key issues is the digital divide. While broadband expansion initiatives and improved rural telecommunications infrastructure are making strides, many rural communities still lack reliable internet access—a crucial component for successful telehealth implementation. Policymakers at the state and federal levels, including considerations in the Federal 2026 budget, are beginning to recognize the importance of investing in these areas. Such investments are essential to ensure that telehealth can serve as a viable alternative to in-person care in rural settings.

Another challenge is ensuring that telehealth services are fully integrated with existing healthcare systems. Interoperability between telehealth platforms and electronic medical records (EMRs) is vital to maintain a seamless flow of patient information, which in turn supports continuity of care. As more healthcare providers adopt digital solutions, the need for standardization and robust data exchange protocols becomes increasingly important.

Ultimately, while telehealth is not a complete substitute for all in-person care, it is a powerful tool that can help maintain continuity in the face of rural hospital closures. By improving access to care, reducing travel burdens, and alleviating pressure on overstretched facilities, telehealth can play a central role in preserving the health of rural populations.

The ongoing evolution of telehealth technology offers a hopeful outlook for rural healthcare. As innovations continue to improve service delivery and integration, it is imperative for stakeholders—providers, policymakers, and technology developers alike—to collaborate in expanding these solutions. In doing so, we can help ensure that rural communities are not left behind, but instead have access to the high-quality, timely care they deserve.

For Perspectives editorial and additional opportunities such as supporting TTA through advertising, contact Editor Donna.

News roundup: 9 additional VA centers named for Oracle 2026 EHR rollout; ATA Action acquiring, expanding with DTA; Dr. Oz to lead CMS while HHS cuts; DOJ seeks death penalty for Mangione

April 4, 2025 | by

VA moving forward with the 2026 Oracle Cerner rollout of (lucky?) 13 centers. In March, the Department of Veterans Affairs (VA) announced that the EHR Modernization (EHRM) for 2026 would be expanded to a total of 13 sites, adding nine to the four in Michigan announced in December. True to form, ‘later this year’ was less than one month later, yesterday. The additional nine are in Ohio (4), Indiana (3), Kentucky (1), and Alaska (1): 

Cincinnati VAMC-Fort Thomas (Fort Thomas, KY)
Chillicothe VAMC (Chillicothe, OH)
Cincinnati VAMC (Cincinnati, OH)
Dayton VAMC (Dayton, OH)
Louis Stokes Cleveland VAMC (Cleveland, OH)
Fort Wayne VAMC (Fort Wayne, IN)
Marion VAMC (Marion, IN)
Richard L. Roudebush VAMC (Indianapolis, IN)
Alaska VA Healthcare System (Anchorage, AK)

The four locations in Michigan are VA Battle Creek Medical Center, VA Detroit Healthcare System, VA Ann Arbor Healthcare System, and VA Saginaw Healthcare System. This is almost two years after all installations replacing the venerable VistA were halted in April 2023, with the priority to fix the five troubled current deployments and the 2024 MHS joint installation at Lovell FHCC. This series is termed ‘market based’ with the locations relatively close to each other for greater efficiency, versus the earlier far-flung centers. In addition, “VA will adopt a standard baseline of products, workflows and integrations aligned with subject-matter-expert recommendations.” VA release, HealthcareDive

ATA Action acquires Digital Therapeutics Alliance (DTA), launches Advancing Digital Health Coalition. The advocacy arm of the American Telemedicine Association (ATA) will be combining with the DTA, a 501(c)(6) non-profit trade association with a mission of advancing digital therapeutics globally. The new organization will continue to take policy roles in advancing telehealth, ATA Action’s focus, but expanding into policies governing digital health tools in diagnostics, remote patient monitoring, and AI, leveraging DTA’s established relationships at the FDA and international regulatory agencies. Kyle Zebley will remain executive director of ATA Action. Andy Molnar, CEO of DTA, will transition to head of digital health at ATA Action. ATA Action is also launching the Advancing Digital Health Coalition, a membership non-profit which will extend the work of the DTA into advocacy for innovative digital health technologies transforming patient care, including digital therapeutics, prescription drug use related software (PDURS), and remote monitoring devices. Timeframe was not disclosed. ATA-DTA release, Advancing Digital Health Coalition release, FierceHealthcare, Healthcare IT News

Over at the Feds, Dr. Mehmet Oz was confirmed today (Thursday) by the US Senate to head the Centers for Medicare and Medicaid Services (CMS). The vote was 53 to 43.  Former TV personality and PA Senate candidate Dr. Oz, a cardiac surgeon, graduated from the University of Pennsylvania, earning both an MD and an MBA from Wharton. He became a professor at the Columbia University – Vagelos College until 2022. The now-whitehaired Dr. Oz will be CMS Administrator over a downsizing organization, which will be 300 staff lighter and with a Congress that needs to find billions in savings. Within Health and Human Services (HHS), Secretary Robert F. Kennedy Jr. has presided over 10,000 in packaged out layoffs, with another 10,000 laid off this week for an ultimate 25% downsizing across all agencies to 62,000. Reports indicate confusion, which is sadly typical of mass layoffs for organizations of size. HealthcareDive, MedTech Dive 27 Mar, MedTechDive 3 April, HealthcareITNews

The US Department of Justice (DOJ) will seek the death penalty against Luigi Mangione. The Federal murder charges brought in December have been increased by Attorney General Pam Bondi. She has directed Acting US Attorney for the Southern District of New York, Matthew Podolsky, to seek the death penalty for this murder as an act of political violence, premeditated and threatening the public. Currently, the Federal government has a moratorium on executions which she has committed to reviving. The accused murderer of Brian Thompson, CEO of UnitedHealthcare, is currently incarcerated at Brooklyn’s Metropolitan Detention Center, facing first-degree murder as an act of terrorism charges brought by New York State. He and his attorney are requesting that Mangione have access to a laptop for reviewing case documents, an unprecedented privilege. Mangione also faces charges in Pennsylvania on gun and false identification charges from his flight from NYC. The DOJ will be waiting some time for Mangione, as the New York charges have precedence. New York has not yet set a trial date, which is certain to be a circus given his fan girls.  DOJ release, FierceHealthcare, NY Post

Are Hippocratic AI and AI “nurses” the wave of the future–or just another tide of hype? Two articles question.

April 3, 2025 | by

Gimlet EyeTwo Gimlety views of a hot AI player, Hippocratic AI. 2025’s first $1.6 billion valuation unicorn after its January $141 million Series B venture round is on a hiring streak. Their ‘safety focused generative AI for healthcare’ built on large language models (LLMs) has developed multi-age, ethnicity, and language AI-powered virtual “nurses” to interact with patients on post-discharge follow ups for medical and hospital visits, chronic care management, and medication reminders. The purpose of the agentic AI nurses is to close the gap of healthcare staff shortages.

On their website, the recorded demos of the ‘nurses’ roleplaying with real nurses sounded to this Editor responsive, warm, convincing, and uncannily human–the opposite of AI agents this Editor has dealt with, which are robotic, clearly on narrow scripts, and easily thrown off by off-script or critical questions, resulting in long silences and cutoffs. But none of the ‘patients’ threw curveballs, talked about multiple conditions, or deviated much in the Q and A. In other words, the bots got to shine.

Last month, it released its Polaris 3.0 product which organizes 22 LLMs having 4.2 trillion parameters, using proprietary data, documentation, regulatory documents and other training materials then tested by clinicians. It claims a clinical accuracy rate of 99.38% compared to 98.75% for their previous Polaris 2.0 version and upgrades in audio processing, agent emotional quotient, and improved clinical documentation. At the end of the month, Hippocratic AI announced seven new hires at C and VP levels, coming from major companies like Amwell, Blue Shield of California, non-profits such as Population Services International, and smaller healthcare companies such as Sidekick Health and Notable. Quite a move for a company only formed in February 2023, 22 months ago.  Release, Mobihealthnews

Hippocratic AI is on a roll, but as with any sudden rise and particularly with LLM AI, the technology and claims are being examined closely. Two articles on Substack take a critical view–this Editor strongly suggests getting a cuppa and taking time to read them carefully.

The shorter of the two (and open to all) is Thomas W. Dinsmore’s “No Bots, Please” . He looks at Hippocratic AI’s tech from the perspective of someone highly experienced in machine learning tools and platforms from back when we called them algorithms. He presents a lot of cautions and yellow flags.

  • Testing apparently not done on real patients
  • Their claims of Polaris’ accuracy are not benchmarked externally. “Independent benchmarks are impossible with a proprietary model like Polaris.”
  • LLMs are ubiquitous, costs are coming down, and investing in a company with proprietary LLMs may not be the smartest move.
  • Hippocratic AI has many healthcare ‘partners’ (this Editor counted 15), many glowing endorsements from healthcare leaders, an impressive timeline. The rub? They are likely not paying anything, which is unusual for a Series B anything much less a unicorn. (I can personally confirm this last point.) Everyone will say nice things about you if you are free.
  • He points out two types of value creation in healthcare. The first is doing a routine or even highly skilled process faster and better. The second is creating an entirely new capability.
  • The touted healthcare shortage number is way overstated. The 15 million healthcare worker shortage cited by WHO and Hippocratic is global. The need in developing nations is primarily midwives, which can’t be done virtually. In the US, the number reported by the Bureau of Health Workforce (BHW) is closer to 2 million, with about 1 million nurses and the rest in LPNs, adult psychiatrists, family physicians, internists, and other clinicians.
  • The Hippocratic pitch is that their bots can replace nurses. The irony is that what the bots do best–patient education–isn’t being done by nurses, based on a McKinsey study on nursing workloads. The nurses’ biggest time suck is updating documentation, followed by hunting and gathering (everything from locating patients to finding equipment), and medication administration. None of which can be done by Hippocratic AI. 
  • Bots have very limited use with mentally ill patients — and negative for those in crisis.

Conclusion: The model is shaky. The effort in creating bots is wasted. What would be a lot more useful in healthcare would be a system that prioritizes, flags, and notifies staff of a patient deteriorating who needs a real human being to call.

Want more? The Really Long Read is Sergei Polevikov’s Hypocritical AI: $45/Hour Human Nurses Babysitting $9/Hour “AI Nurses” in AI Health Uncut. This may be only partially viewable by those who are not subscribers (and it’s worth the small amount). It is a very deep and critical dive into Hippocratic AI, if what it is selling is real (red flag–their releases contain a lot of numbers which aren’t verifiable), and VC hype. The main sections of the article:

  1. What exactly Hippocratic AI is selling, including poor workflow and EHR integration 
  2. What’s really under the hood of its “AI agents.”
  3. The reality behind “AI nurses”—and the human nurses tasked with babysitting them.
  4. Whether Hippocratic AI fine-tuned its models using confidential insurance or health data obtained from Health IQ.
  5. The toxic corporate culture, code of silence, and reliance on H-1B/O-1 visa “slavery.”

Plenty of references and comparisons. If you aren’t skeptical after the Dinsmore article, you will be after this. A must read.

23andMe’s slim list of prospective buyers–who must uphold privacy policies, according to the FTC. But what about that survey information? *Updated*

April 3, 2025 | by

Barely a week later, but only a few buyers are lining up for 23andMe’s parts. The future of the bits and pieces of 23andMe and their 15 million customers apparently are in the Magic 8 Ball’s response class: “reply hazy, try again” and “cannot predict now”. Not entirely surprising is the lack of vigorous and financially competitive interest in them. Fortune counted the interested parties at only three, plus unsurprisingly, their controlling shareholder Anne Wojcicki.

Here’s their rundown:

Nucleus Genomics. This isn’t a surprise as their founder, Kian Sadeghi, had posted an article about their pass at 23andMe on Substack last September. [TTA 12 March, Editor’s comments] Sadeghi has often likened Nucleus to Netflix versus 23andMe’s Blockbuster, where the second generation survives while the first generation dies off. Nucleus’ consumer offering are $400 tests that it claims can identify health risks for more than 900 conditions. Like 23andMe, Nucleus got in trouble with an early offering, a genetic test for IQ. Supposedly, Mr. Sadeghi is not all that interested in the genetic database, but in Lemonaid, the telehealth remedy site that 23andMe bought for $400 million ($100 million cash, $300 million in now worthless stock). The objective is to integrate telehealth and remedies with Nucleus’ tests, broadening the ‘one and done’ nature of most genetic testing–the original reason why 23andMe bought it. Nucleus has some cash on hand and resources to call in, having closed a $14 million Series A in January and backed by Reddit founder Alexis Ohanian and Peter Thiel’s Founders Fund.

The Sei Foundation. A blockchain developer and advocate for decentralized science (DeSci), it’s proposed a unique use case for the 23andMe database. Their X posting states that they can plug 23andMe genomics information into their blockchain, return data ownership to users through encrypted, confidential transfers, and then allow users to choose how their data is monetized and share in the revenue. They maintain that this would be compliant with existing healthcare and data privacy laws. Gerald Gallagher, general counsel for the foundation, said that “The legal issues involved are not specific to whether or not the data is stored on chain, and the current policy requires notice and new approvals from customers in the event of a sale of assets or change in control.”

Pinnacle Reliability. CEO/founder Ryan Sitton of this complex systems data analytics company for industrial reliability expressed interest in 23andMe before the Chapter 11 via this LinkedIn posting that offered $100 million four weeks ago. The social post did not lead to a real and properly financed offer to the board. According to Fortune, he has renewed his interest.

Anne Wojcicki stated her intent to buy the company when the Chapter 11 was announced and she stepped down from the CEO position. Neither she nor her spokesperson has had any further comment. 

23andMe and buyers better keep the data privacy promises. Federal Trade Commission (FTC) chairman Andrew Ferguson has already notified representatives of the US Trustee Program, a Justice Department division that oversees administration of bankruptcy proceedings, that 23andMe currently, as well as any future owners, must retain the data privacy policies put into place by 23andMe, such as they are. “The FTC believes that, consistent with Section 363(b)(1) of the Bankruptcy Code, these types of promises to consumers must be kept. This means that any bankruptcy-related sale or transfer involving 23andMe users’ personal information and biological samples will be subject to the representations the Company has made to users about both privacy and data security, and which users relied upon in providing their sensitive data to the Company,” he wrote. “Moreover, as promised by 23andMe, any purchaser should expressly agree to be bound by and adhere to the terms of 23andMe’s privacy policies and applicable law, including as to any changes it subsequently makes to those policies.” This seems to be a straight-up reading of current law, even if the current administration’s policy is to bring FTC and other agencies under closer control by the executive branch, a tangent which occupies the last two paragraphs of the Ars Technica article.

Guess what other information 23andMe has on its 15 million users? Survey data! 85% of 15 million users consented to have their individual data used for research. As part of that research, 23andMe requested that users complete an optional survey which added to their profiles. These extensive questions were not available for prior review, but the FAQs made it clear that once you consented to answering them, every time you visited the research page, you’d get questions to answer until they were all answered. In other words, endless continuing research. The rationale presented to users was to “help drive scientific and medical discoveries”. So, when you request to delete your data, will the survey data associated with the user profile be withdrawn as well? The lengthy article in The Conversation seems to conclude, no.

If it remains identifiable, this trove of data could be matched up with other data for law enforcement or to discriminate against someone at high risk for developing a genetic disorder. That type of discrimination is banned for employment and health insurance, but not life insurance or long-term care. Or it could be used to compile a more personal profile for marketing purposes. This needs to be cleared up. Despite this, every person with a 23andMe account should request that their personal data and anything else associated with it be deleted, immediately, before this information finds its way to a new buyer.