The Veradigm earnings call following the 2022 financial release had to be…interesting, perhaps in what wasn’t said. HIStalk’s reporter took away several key points succinctly; a full reading at their site is recommended (scroll down). In brief:
- “The financial impact of the internal control failures was $239 million in asset reduction and $46 million in fees.”
- The company will not be current on its financial reporting until 2026
- The core provider and life sciences businesses went wobbly
- ScienceIO, bought in February 2024, generated no revenue. The AI/LLM acquisition was touted as being incorporated into other business lines, trimmed with jargon.
The accumulation of things that just aren’t tucked, tied, and moving forward gives the impression of uncertainty. And uncertainty is a bad place to be in a billion-dollar business. Veradigm consists of a complex mix of businesses. Yet the CEO, Tom Langan, is still ‘interim’ after 10 months which affects the leadership. Months ago, the company was for sale, yet all the interested bidders who could have well afforded Veradigm took a pass. Now they are facing a ‘standalone future’. Right after that announcement, an activist investor intervened and is now calling the shots on board members [TTA 19 Mar, 22 Feb]. Stay tuned….
VA cutting contracts, including six EHRM sub-vendors–a wrench in the EHRM works? According to this Federal News Network report, the total number of canceled contracts, originally announced as 875 contracts, was later reduced to 585. Included in the cuts were at least six small contractors tied into the EHR Modernization (EHRM) with Cerner. While VA is ‘walking back’ the termination of some of these EHRM contractors working on essential pieces such as interoperability and HIPAA compliance, these small, generally veteran-owned companies with specialized workers have already laid off staff. What’s really telling is the statement from FNN’s source, which this Editor doubts you’d hear outside of government or a huge global company: “For every FTE in government, there’s maybe two, three, even four support resources that are assisting. The government is just there for decision-making. The groundwork, and all the other work, is being done by this contract support team. Right now, they’re just trying to do damage control.” In addition, 24 on the EHRM team either were laid off or took the buyout. Having once worked for a contracting RPM company for the Veterans Health Administration which had its contract terminated after over 10 years, this Editor can testify to 1) the devastating effect and 2) the specialized skills of people making up these support teams. Hmmmm….
Hospital-at-home DispatchHealth and Medically Home to merge, effective mid-year. Terms of the transaction, headquarters location, and employee transitions were not disclosed. According to Healthcare Dive, Jennifer Webster, CEO for DispatchHealth, will lead the combined organization under the DispatchHealth name. Both offer same-day in home medical care, recovery services, and hospital-level care at home. DispatchHealth, headquartered in Denver, raised $403.2 million through a March 2021 Series D. Medically Home in Boston raised $197 million through a January 2022 Series D. They don’t have investors in common, unusually for mergers of late. Medically Home focuses on health systems and physician groups for serious and complex care decentralized management, while DispatchHealth base is with insurance companies, value-based entities, as well as health systems. Coverage for the combined entity is stated as nearly 40 health systems, as well as most major health plans and value-based care entities, with 2,200 employees, over half in frontline care. Release.
Over in Telemental Health Land, Wysa and April Health are merging. Wysa primarily features an AI LLM chatbot for cognitive behavioral therapy, targeted to individuals and employers, while April Health partners with primary care providers for behavioral care management with live managers. The Wysa chatbot in 2022 received FDA Breakthrough Device Designation for use by patients 18 years old and older with a diagnosis of chronic musculoskeletal pain, depression and anxiety. April Health has already integrated the Wysa chatbot with its services for LifePoint Healthcare and The Newton Clinic (affiliated with MercyOne). Terms of the transaction, headquarters location, and management transitions are not disclosed. Wysa has raised about $35 million in funding, with the last round in 2023, while April Health has seed funding only. Release, Behavioral Health Business, Mobihealthnews
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