Mid-week roundup: telehealth success in opioid use disorder treatment, Epic sees fewer followup visits from telehealth vs in-office, telehealth usage slightly lower, HCA data theft may affect 11 million

July 12, 2023 | by

Success reported in opioid use disorder (OUD) treatment using telehealth in conjunction with medication-assisted treatment (MAT). A recent study presented at the annual ASAM Conference indicates that in a study published by a telehealth MAT provider, Ophelia, that telehealth+MAT can achieve retention rates significantly higher than traditional in-person care. Published in The American Journal of Drug and Alcohol Abuse, their findings were that 56.4% of Ophelia’s OUD patients remained in treatment for six months, with 48.3% remaining for one year. Their MAT is based on the Massachusetts Collaborative Care Model adapted to telemedicine and providing a framework for licensed MAT providers. Ophelia is licensed to provide care in 36 states plus has national and regional insurance contracts covering 85 million lives, including bundled rates across Medicaid, Medicare and commercial populations. A second study presented at ASAM indicated that home-based buprenorphine inductions guided by telehealth are both feasible and well tolerated, with 90% of patients returning for one or more follow-up sessions and more than 80% met HEDIS engagement criteria. While OUD is statistically down among adults according to the National Survey on Drug Use and Health, overdose fatalities have increased due to the deliberate contamination of opioids with fentanyl.  HealthcareITNews

Telehealth users aren’t doing in-person follow up for most specialties–is this good or bad? Epic Research’s original study noted that most telehealth appointments didn’t require an in-person follow-up appointment in the next 90 days. Their new study compares in-office visits to telehealth and finds pretty much the same. Follow-up rates for telehealth and office visits in primary care were within two percentage points of each other. The largest difference was in mental health care, the majority of telehealth currently, with 10% of telehealth visits and 40% of in-person visits having in-person follow-up within 90 days. Epic Research, Healthcare Dive

Telehealth utilization is down slightly but remains above 5%. FAIR Health’s monthly national survey of claims from private insurance and Medicare Advantage has telehealth declining from 5.6% to 5.3% (-5.36%). Mental health is again in the far lead with 68.4% of all diagnoses. A new breakout is asynchronous telehealth (store and forward) where acute respiratory diseases and infections lead with 21.6% of diagnoses with 12.6% related to hypertension in second place. Another new breakout is audio-only telehealth comparing urban and rural usage, both near or over 5%. FAIR also breaks out data by four regions. Becker’s

Some post-July 4th fireworks came with the announcement of a data breach at HCA Healthcare, one of the largest provider networks in the US. The hacking took place through an external storage location exclusively used to automate the formatting of email messages. The information up for sale by the unidentified hacker on a ‘deep web forum’ had some personally identifiable information (PII) including patient name, address information, emails, telephone numbers, date of birth, and gender. Some of the data posted included medical appointment dates and locations. The unidentified hacker (unusual) notified HCA on 4 July with a list of unidentified demands to be responded to by 10 July. It was flagged on Twitter by Brett Callow, an analyst at New Zealand-based Emsisoft. What wasn’t included was typical personal health information (PHI)–sensitive clinical information, payment information, or other PII such as driver’s license and Social Security numbers that can be cross-referenced with other hacked data. The sheer scope of the breach–reportedly 11 million records for patients across 24 states and 171 healthcare facilities, perhaps one of the largest breaches ever–while limited in harm to patients, is still going to create a big headache for HCA. CNBC, Becker’s, HealthcareITNews, DataBreaches.net, 

Rock Health’s first half funding roundup adjusts the bath temperature to tepid, the bubbles to flat

July 11, 2023 | by

The ‘new normal’ continues, as the bubbles vanish and the poor duck’s feathers are getting soggy and cold. Rock Health’s roundup of digital health funding (US only) continues the chilly flat-to-downward trend to funding. What money and fewer funders are out there which persist in their dedication to healthcare are betting cautiously, minimizing their risk on the table in lower unlabeled funding rounds and pre-vetted concepts. 

  • First half 2023 (H1) funding closed at $6.1 billion across 244 deals. Average deal size was $24.8 million, the lowest since 2019.
  • Breaking down by quarter, Q2 2023 funding hit a new low– $2.5 billion in funding across 113 deals, lower than Q4 2022’s ‘hole’ of $2.7 billion. By comparison, Q1 2023 funding totaled $3.5 billion over 131 deals, adjusted from the earlier report of 132 deals [TTA 5 Apr]. The collapse of three banks, most notably Silicon Valley Bank in March, clearly affected Q2.
  • Given the trend, Rock Health projects that 2023 funding will fall well below 2022, between 2019’s $8.1 billion and 2020’s $14.3 billion

Delving into the numbers:

  • Those ‘generalists’ who jumped into the digital health pool in 2021-22 jumped out. H1’s 555 investors had a 71% repeat rate, meaning that those who knew the water saw some opportunity or put on their wet suits. The overall total dropped from 775 in H1 2022 and 832 in H1 2021.
  • Unlabeled raises were suddenly the way to go. 101 of 244 deals–41%–had no series or round attached. This unprecedented move avoids the spectre of down rounds for companies needing to raise funds–down rounds affect valuation. Interestingly, 67% of these companies’ prior raises were in 2021 and 2022. 37 of them were Series B or lower. 
  • Mega deals inhabit a different territory. H1 had 12 mega deals, 37% of total funding dollars, and was at the 2021 norm of $185 million. Half were at Series D and growth/PE. They clustered in value-based care, non-clinical workflow, and that former mouse in the pumpkin coach, in-home and senior care. This level of funding also gravitated to the pre-vetted: incubated by VCs included Paradigm (clinical trials) and Monogram Health (kidney care).  Recently funded Author Health, long in stealth, will operate in a narrow slice of mental health funded by Medicare plans.
  • Zero IPOs, but acquisitions and shutdowns/selloffs continue. Acquisitions continued on a track of about a dozen per month, down from 2022’s average of 15. On the gloomier side, quite a few companies simply ran out of runway after raising a little or a lot of funding. These hit the lights at the end resulting in hull loss: Pear Therapeutics, SimpleHealth, The Pill Club, Hurdle, and Quil Health. If they were lucky, they had intellectual property worth something to someone–Pear to four buyers including a former founder, 98point6’s AI platform business to Transcarent–or subscriber bases worth acquiring, such as Pill Club to Nurx, SimpleHealth to TwentyEight Health. This does not count Amazon shuttering Halo and leaving subscribers in the lurch. (Nor Amazon’s dodgy approach to privacy getting Federal and private scrutiny, which this Editor explores here and here.)

To this Editor, 2023 will be a ‘grind it out and survive’ year for most health tech and digital health companies. Survivors will carefully tend their spend, their customers (who will be doing their own cutbacks), and watch their banks. The signature phrase this year was written in 1950, another uncertain time, by Joseph L. Mankiewicz and uttered with flair by Bette Davis in a classic film about the theatre, ‘All About Eve‘: “Fasten your seatbelts; it’s going to be a bumpy night.”   Rock Health Insights

Short takes: FDA seeks feedback on home care tech; Japan care homes piloting AI; Author Health’s $115M bet on senior mental health; Alertacall’s Batchelor on ‘right fit’ finance support; Headspace in the wrong (layoff) space again

July 7, 2023 | by

Short takes for a short (US) week

FDA seeks public comment on home care tech–an opportunity for developers and home care. The US Food and Drug Administration’s (FDA’s) Center for Devices and Radiological Health (CDRH) has a request for public comment on technologies that could improve home care, both in the traditional sense and in hospital-to-home transitional care. Their two key questions of nine are: “How can the FDA support the development of medical technologies, including digital health technologies and diagnostics, for use in non-clinical care settings, such as at home?” and “What factors should be considered to effectively institute patient care that includes home-based care?” The FDA’s language around this is anodyne as couched in ‘health equity’ but it’s seriously around increasing access to all, supporting innovation, reducing barriers to care, and empowering people to make better decisions around their health. All public comments must be submitted to FDA’s docket (FDA-2023-N-1956), available at Regulations.gov. Important–the public comment period will end on 30 August 2023. Healthcare Dive

In Japan, a nursing home operator/insurer is adopting analytics to track residents and reduce caregiver workload. The operator/insurer is Sompo Holdings (LinkedIn) and the analytics company is Palantir. The jointly designed software platform, egaku, integrates artificial intelligence and analytics with proprietary data on sleep, diet, medical treatment, and exercise. Sompo Care uses minimally intrusive devices such as sensor-equipped beds to evaluate sleep conditions via tracking of body movements, respiration, and heart rate. They are claiming a 15% reduction of caregiver workload in a typical 60-person capacity care facility, saving as much as $60,000 annually. Unfortunately, the FT article is paywalled but a partial citation is available on ACM TechNews   On the Palantir website, there is a fragmentary article on how Sompo used the Palantir Foundry platform to streamline gathering information for care plans by linking local resident data t0 additional care data to create ‘a single source of truth’. Sompo press release

Speaking of seniors, Boston-based Author Health launched at the end of June with a unique mission–reaching out to older adults with serious mental illness and substance use disorders–and with a tidy startup kitty. The company provides specialized physicians, nurses, therapists, and community health workers to deliver a mix of virtual and in-person care. Their first partnership is with Humana Medicare Advantage (MA) plans in Fort Lauderdale and Miami, Florida metros in conjunction with CenterWell Senior Primary Care. Author Health helps to treat conditions such as depression and anxiety, schizophrenia and psychosis, bipolar disorder, Alzheimer’s Disease and other dementias, and substance use disorders. Author is led by CEO Dr. Katherine Hobbs, a psychiatrist and former health insurance executive. The $115 million in initial financing was led by General Atlantic and included participation from Flare Capital Partners. Author Health release, FierceHealthcare, MedCityNews

TTA has previously profiled James Batchelor, CEO and founder of Alertacall. He is an old friend of TTA from early days with Editor Steve and Alertacall is one of the pioneering companies in UK telecare. Most recently (May 2022) Alertacall achieved the Queen’s Award For Enterprise: Innovation. This short interview with him in New Business UK discusses the importance of finding the right fit in long-term funding. If your buyers are in a sector with lengthy, complex sales cycles, it’s vital to find a backer that understands the selling space, which for Alertacall is ‘property management’. Even more important now!

Apparently in the wrong space is Headspace Health. The Los Angeles-based telemental health company is laying off 181 additional employees, or 15% of its current workforce. This follows on their December layoff of 5% or 50 employees. In the palmy days of mid-2021, Headspace acquired Ginger for a $3 billion valuation at that time [TTA 27 Aug 2021] to enter the enterprise market and acquired Sayana and Shine in 2022. It’s been a struggle ever since though they did not go the SPAC route, stayed private, and now claim 70 million members (actually downloads of their app), both individual and enterprise. Headspace expanded to the UK in January. Too much lookalike/soundalike competition and now a very hard road to that cliché, ‘a path to profitability’. LA Times, Mobihealthnews

Why the ‘insurtechs’ didn’t revolutionize health insurance–and the damage they may have done

July 7, 2023 | by

crystal-ballIce water on hopes that many placed in ‘insurtechs’. This is the umbrella term that healthcare dubbed the upstart tech-enabled, health tech-friendly US payers which were supposed to deliver health insurance plans more efficiently (buy online!), more conveniently using apps and telehealth, with strong networks and at a lower delivery cost to consumers, from those who needed individual plans to Medicare Advantage. Around 2019-2020, these insurers gained billions in funding before going public through IPO or SPAC: Bright Health’s $500 million Series E in 2020 was only a chunk of their total $2.4 billion; Oscar Health raised $1.6 billion, Clover Health $1.3 billion. All three have struggled to stay clear of the insolvency precipice, with Friday Health Plans going over [TTA 23 June]. Bright Health Group will be exiting the insurance business after this year with the stock sale of their plans to Molina Healthcare–provided they survive to Q1 2024 [TTA 6 July]. Oscar and Clover have exited states and cut back offerings. In April, in a real retrenching, Oscar hired on Mark Bertolini, late of Aetna, pushing back a founder to an operational role. 

This Editor, in a marketing assessment for a client two years ago, believed as many did that Insurtechs Were The Future. At the very least, their practices would be adopted by the legacy insurers: easy online enrollment, lower premiums, predictive analytics, machine learning, digital documentation, online health education via apps, outsourcing areas such as customer service 24/7 and even marketing. Even those like Cigna through their Ventures arm bet some millions on insurtechs redefining payer-member relationships and payer structure, gaining better margins at profitable lines of business like Medicare Advantage (MA) and special needs plans (SNPs). After all, these plans did have people with decades of experience at insurers in their management, didn’t they, and they’d know what NOT to do. (And that’s the problem with gazing into crystal balls…eyestrain.)

Marissa Plescia’s article in MedCityNews is an excellent review on why the insurtechs’ centre did not hold. Key points made from her dive among the experts:

  • They underpriced and took heavy losses to grow their member base
  • They didn’t understand that some ‘inefficiencies’ in the health insurance market exist for reasons–perhaps not good ones, like state mandates through their departments of banking and insurance, but they exist and cannot be ignored. [Ed.–health education for MA has to be provided or at least available in written form in most if not all states]. Compliance can’t be skirted or ignored. Were they paying attention to the compliance of their plans?
  • They didn’t pay provider claims efficiently or at all [the SSM lawsuit of Bright]–a nifty way to lose networks and be sued by states, very damaging if the network wasn’t all that competitive to begin with.
  • Contracted rates with providers weren’t competitive. Were they managing risk adjusting coding well? 
  • Did they leverage sales channels beyond online such as brokers and their provider network? What about customer service?
  • The plans were not sticky enough to create some loyalty to an infamously non-loyal product

The insurtechs perhaps expected the technology to do too much–and for legacy payers to not catch up to them if they weren’t already moving there. Another problem–they (largely) were.

Disruption–but not the Clayton Christensen definition. Their disruption so far has been financial and legal (insolvency, cracked SPACs, lawsuits, share prices below $1.00, and delistings pending), loss of coverage for members; unpaid providers. With this track record, investors will avoid this category beyond the legacies. States won’t approve new plans from new companies. (This Editor believes that there are some overlooked positives such as inclusion in marketing of specialized and underserved groups, as well as some forced streamlining of processes.) There will be survivors–Alignment Health, kind of a below-the-radar operation and an afterthought in funding at $375 million, is in a few states and is mentioned. It’s also hard to bet against Bertolini leading Oscar–except that this is maybe Act V for him and he’s had his share of bunts and misses (bunt–ActiveHealth Management, misses–Healthagen, CarePass, iTriage) before his contentious departure from CVS. But in this particular widening gyre, while more revelations will be at hand, innovative newcomers in health plans won’t be seen for a long time, if ever. If the saga of airline deregulation (1980-1995) is a model, payer disruption just took a fraction of that time.

Bright Health to exit insurance business, selling California plans to Molina for up to $600 million–contingent on surviving to 2024

July 6, 2023 | by

Over the slow July 4th holiday weeks, Bright Health perhaps staved off the inevitable. Maybe. Molina Healthcare agreed to pick up all of Bright Health’s California Medicare Advantage plans, Brand New Day and Central Health Plan. The deal: purchase 100% of the issued and outstanding capital stock of the two plans. Molina’s valuation is $510 million plus a $90 million tax benefit. It is contingent on the usual government approvals, of course–and Bright Health surviving into Q1 2024 for the closing.

For Bright, of the $600 million, approximately $500 million will eventually go to JP Morgan to pay off their outstanding and overdue credit facility with the remaining proceeds to be used towards liabilities from its discontinued ACA (Affordable Care Act-individual plan) insurance business. Bright also announced a waiver extension and amendment to its credit facility.

There is no mention of a bridge loan from Molina or any other lender. As Ari Gottlieb of A2 Strategy pointed out in the Fierce Healthcare article, Bright Health must absorb any and all losses from the California plans, their operations, and survive into Q1 2024 for the deal to execute. Given their current situation, that is still a mountain for Bright to climb. According to Bright’s release, they do not intend to comment or disclose further developments until the transaction is closed.

As of today, the Bright plans cover 125,000 members in 23 California counties. They include Medicare Advantage prescription drug plans (PDP), dual eligible special needs plans (D-SNP), and chronic conditions special needs plans (C-SNP). There is a 60% overlap with Molina’s Medicaid footprint in California.

Molina using ‘on hand’ funds, and the deal depends on Bright Health staying solvent into 2024. In Molina’s release, they stated that “Molina intends to fund the purchase with available funds including cash on hand. The transaction is subject to federal and state regulatory approvals, the solvency and continued operation as a going concern of Bright Health Group throughout the pre-closing period, and other closing conditions. It is expected to close in the first quarter of 2024.” Molina is atypical–it is the largest ‘pure’ health plan group serving over 5 million members. Unlike UHG, CVS Health, and Cigna, it long ago shed healthcare-related service businesses to concentrate on plans and plans only. The deal adds about $1 to their $5.50 share price.

What’s left at Bright Health Group is NeueHealth, also called their Consumer Care Delivery business. That will now be part of a provider agreement with Molina to serve Medicaid and ACA Marketplace populations in Florida and Texas starting in 2024. Bright Health stopped nearly all plans at the end of 2022 and will cease coverage of members in their Texas ACA plans at the end of July.   Healthcare Finance, Becker’s   More on Bright Health’s health status here

Ireland’s Clare Island as multimodal rural telehealth and telemonitoring testbed

June 30, 2023 | by

A ‘feel-good’ story figuratively and literally. Clare Island is an island off the west Irish coast in the Atlantic. It is located at the entrance to Clew Bay, part of County Mayo, with a lighthouse and abbey ruins that are tourist attractions. Its connection to the mainland is a 20-minute ferry service to Louisburgh on the mainland, generally adequate for its 138 people scattered in its 5 x 3-mile terrain. Galway, the largest city in the area, is nearly two hours south, and Westport is four hours. This makes it difficult when islanders need healthcare beyond their single small medical clinic with two resident nurses and weekly visiting GP.

The islanders are now part of a Digital Health Project designed by the University of Galway that can best be described as multimodal. The university’s Health Innovation via Engineering (HIVE) laboratory has been working on rural health projects at least since 2019 since the HIVE lab delivered via drone insulin from Galway to Inis Mór in the Aran Islands. On Clare Island, the HIVE lab has worked with islanders to connect them to better healthcare access on and off island, and also with each other.

  • Enabling video consultations with remote physiological monitoring, including blood pressure, weight, and blood glucose. This connects to clinics on the mainland, freeing up local clinic time. Irish company MyPatientSpace provides the platform.
  • The RPM for islanders is augmented by an artificial intelligence algorithm that allocates clinic slots if data readings for blood pressure or glucose readings indicate the need for an in-person clinic visit.
  • A recent demonstration showed how a drone could deliver an epipen to the local clinic, while MADRA the robot (Medical Autonomous Droid Remote Assistance–above left) scaled mountainous terrain to deliver first aid.

A private 5G wireless system was installed to facilitate video and RPM, as well as to connect a number of isolated islanders and their families on the mainland with always-on video, primarily to counter loneliness. Withings has also equipped islanders with Pulse HR watches. These enable self-monitoring both via the watch and through a supplied tablet. Over 80 islanders, aged from 18 to 90, have already signed up to the project, which began in September 2022.

The project is funded through a public-private partnership led by technology company Cisco and Cúram (Merative) software, the Science Foundation of Ireland Research Centre for Medical Devices at the University of Galway, in partnership with Ireland’s Health Service Executive (HSE).  The €1 million remote health project is intended to be a template for other rural areas in Ireland. The head of the project is Professor Derek O’Keefe, a physicianeer (physician and engineer) with resident Dr. Ian McCabe as project manager. His grandmother moved to Clare Island in 1939 as an operator connecting the island to the mainland via radioed Morse Code. Irish Times, RTÉ, University of Galway news archive (2022), EuroPMC paper 

Photo credit: Kevin Johnson/Clare Island Home Health Project. ‘Madra’ the robot (center). Jack Pinder (Public Patient Involvement), Dr Jennifer Doran (Project Physician), Dr. Ian McCabe (Project Manager), Prof. Derek O Keeffe (Project Lead), and Hemendra Worlikar (Project Engineer) 

FTC, DOJ float enhanced information requirements for HSR premerger notification filing process–what will be M&A effects?

June 29, 2023 | by

FTC, DOJ are now coming after M&A–and you thought they were tough before? New information disclosure requirements proposed by the US Federal Trade Commission (FTC) and the Department of Justice (DOJ) Antitrust Division for mergers and acquisitions that fall under the Hart-Scott-Rodino Act (HSR) may put a damper on an already stagnant business area. On Tuesday 27 June, FTC, notably taking the lead with the concurrence of DOJ, released multiple proposed changes to the premerger notification filing process, the most extensive since they were first published in 1978 after HSR was passed in 1976. HSR premerger notification is required for transactions that exceed the threshold currently set at $111.4 million.

These changes will be formally submitted for the standard 60-day public review and comment later this week in the Federal Register. Changes are typically made after that time before final rules are published, a process that may take months.

From FTC’s release, the proposed changes fall under these areas.

  • Provision of details about transaction rationale and details surrounding investment vehicles or corporate relationships.
  • Provision of information related to products or services in both horizontal products and services, and non-horizontal business relationships such as supply agreements.
  • Provision of projected revenue streams, transactional analyses and internal documents describing market conditions, and structure of entities involved such as private equity investments.
  • Provision of details regarding previous acquisitions.
  • Disclosure of information that screens for labor market issues by classifying employees based on current Standard Occupational Classification system categories.
  • These proposed changes also address Congressional concerns that subsidies from foreign entities of concern [North Korea, China, Russia, and Iran–Ed.] can distort the competitive process or otherwise change the business strategies of a subsidized firm in ways that undermine competition following an acquisition.

The National Law Review goes into far more detail on exactly what additional information will be required. This includes disclosure of what foreign jurisdictions are reviewing the deal. The rationale for the changes is that transactions have become far more complex since the original requirements were set and that the additional information will “more effectively and efficiently screen transactions for potential competition issues within the initial waiting period, which is typically 30 days.” According to FierceHealthcare, the FTC said it expects the proposed changes will take merging entities 144 hours per filing, up from the current 37-hour average. It’s clear that the mountain of information already needed to file a pre-merger notification and the time needed to gather such information will be much higher, perhaps to months and reveal far more than perhaps some companies want to disclose.

For those surprised that FTC is taking the lead on this, this once-sleepy agency woke up late last year in a heckuva bad humor and is now (more…)

Embedding ECG sensors to a supermarket cart (trolley) handle as ‘first-line’ screening for atrial fibrillation

June 28, 2023 | by

Not coming soon to a supermarket near you, but an interesting test at Sainsbury’s in Liverpool. The 2022 study by a team from Liverpool John Moores University (LJMU) was designed to move atrial fibrillation (AF) screening closer to everyday routines. At least one weekly routine is to go to the supermarket.

In the ‘SHOPS-AF’ study first/proof-of-concept phase designed in 2022, the LJMU team installed a single-lead ECG designed by them, the MyDiagnostick, into the cart (US)/trolley (UK) handles at four local Sainsbury’s with pharmacies. This idea is similar to the pulse monitor handle that you find in most sport treadmills. The study over the past two months recruited 2,155 adult shoppers who used the carts and placed hands on the equipped handles over the 60-second monitoring time required to get an accurate ECG. About 220 were ‘red-lighted’–an irregular heartbeat was picked up by the sensor in the handle that alerted the in-store pharmacist, who then took a manual pulse measurement and a static control sensor reading. Of the 220, it confirmed AF in 59 individuals–26%. 20 already knew they had AF, meaning that 39 did not know. The average age of the 59 participants with atrial fibrillation was 74 years and 43% were women. To the positives, the pharmacist offered a cardiologist consultation referral.

The results suggested to the LJMU team that results in phase 1 were not very accurate, and the second phase required a more accurate diagnostic tool. Accessibility and acceptability were favorable. Ian Jones, one of the researchers and a professor at LJMU said, “Nearly two-thirds of the shoppers we approached were happy to use a trolley, and the vast majority of those who declined were in a rush rather than wary of being monitored.” The second phase of the study would also give a designated spot to place the hands continously and halve the time of the ECG to 30 seconds based on ESC (European Society of Cardiology) guidelines.

The results above were presented at the ACNAP (Association of Cardiovascular Nursing & Allied Professions) Congress 2023 in Edinburgh on 23 June (session listing). European Society of Cardiology (ESC) release, Interesting Engineering, Manchester Evening News,    Study proposals: abstract and full text in PubMed.

Mid-week roundup: Optum buying Amedisys home care for $3.3B; Clover Health settles 7 shareholder lawsuits around SPAC non-disclosures; Walgreens cuts 2023 outlook, stock plummets 11%

June 28, 2023 | by

UnitedHealth Group expands home health again, aces out Option Care Health in all-cash deal. Amedisys had previously accepted Option Care’s all-stock deal in May valued at $97.38 per share. Optum’s offer is at $101 per share in cash, a dollar higher than its previous offer, creating a valuation for the company at $3.7 billion. Amedisys will add to UHG’s $5.4 billion acquisition of the LHC Group in February, including the hospital-at-home market from its acquisition of Contessa Health for $250 million in 2021. 

Option Care is a public (Nasdaq: OPCH) post-acute and home infusion care company for which Amedisys in-home care delivery would have been an exceptional fit. It was last heard from in August making a run at Signify Health for home health and ACO providers. At that time, the not-well-known company was discovered to have some impressive backing from Goldman Sachs. Walgreens Boots Alliance also backed the company but cut its stake in March and sold the rest for $330 million earlier this month. Option Care will receive a termination fee of $106 million. Healthcare Dive, FierceHealthcare

Insurtech Clover Health settles seven lawsuits around its 2021 SPAC. Clover, with Medicare Advantage plans in eight states, went public in January 2021 at the very peak of ‘blank check’-dom. Almost immediately, after an explosive report by Hindenburg Research that revealed that the Department of Justice (DOJ) had been investigating the company on investor relationships and business practices starting in fall 2020 [TTA 9 Feb 2021], there were multiple lawsuits filed by shareholders (derivative litigation) over not revealing this material fact. Shares took the expected dive from their intro of $15.90 to today’s $0.85. The seven derivative lawsuits were in Delaware, New York, and Tennessee courts and are being settled without payment. According to Clover’s release, “the defendants in the derivative lawsuits will receive customary releases and the Company will implement a suite of corporate governance enhancements. The settlement does not involve any monetary payment, other than payment of an award of fees and expenses to plaintiffs’ counsel, which has not yet been set. The defendants have denied all wrongdoing and have entered into this settlement to avoid the burden, expense, and distraction of ongoing litigation.” In April, Clover settled a securities class action in which the class will receive $22 million, $19.5 million paid by the company’s insurance. Mobihealthnews

Walgreens Boots Alliance missed Wall Street expectations and lowered its outlook for the year. In their Q3, net earnings fell 59% to $118 million, mostly due to lower operating income. Their topline was healthy–$35.4 billion, up 9% year over year–driven by the US health provider segment (VillageMD, Summit Health, and CityMD plus at-home care provider CareCentrix and specialty pharmacy Shields Health Solutions) which was up 22%. However, both retail consumer sales and CityMD underperformed due to the absence of COVID and a mild respiratory illness winter. Together with VillageMD’s clinic expansions, this led to an adjusted operating loss of $172 million for US Healthcare. WBA cut its earnings guidance for the year to $4.00 to $4.05 per share from its previous outlook of $4.45 to $4.65. Walgreens has been selling off businesses or investments that are peripheral to providing healthcare services, such as its investment in Option Care (above). FierceHealthcare, Healthcare Dive

Amazon Clinic delays 50-state telehealth rollout due to Federal data privacy, HIPAA concerns on user registration, PHI–is it a warning?

June 27, 2023 | by

Amazon delaying Amazon Clinic national rollout from today (27 June) to 19 July. Amazon Clinic, which debuted last November as an asynchronous, message-based telehealth consult or prescription renewal referral platform [TTA 16 Nov 2022], has run once again into Federal scrutiny. This time, it’s two Senators from New England–the well-known Elizabeth Warren (D-MA) and the little-known Peter Welch (D-VT)–who are poking Amazon with the stick of whether sensitive health and personal data are flowing into Amazon’s other databases.

Their letter to CEO Andy Jassy was fair warning that, as this Editor predicted last February (see the list of open issues) after the One Medical buy closed to high-fives all around, the government is nowhere near finished with scrutinizing Amazon and how personal data, including health data, flows between their units and is monetized. 

In a two-page letter dated 16 June based on reporting in the Washington Post (100% owned by Amazon’s 12.6% shareholder and controller, Jeff Bezos–the irony runs deep here), the two senators believe that they have caught Amazon but good–and with some of the goods. 

  • Users of the Amazon Clinic service are asked, in the registration form, to authorize the “use and disclosure of protected health information.” They are told that agreement to this gives Amazon access to the “complete patient file” and that this information “may be re-disclosed,” after which it will “no longer be protected by HIPAA”. By agreeing to this, users waive any HIPAA personal health information protections.
  • If the user declines to agree, they are redirected and unable to complete Amazon Clinic registration and denied care. HIPAA regulations specifically prohibit conditioning care on agreement to disclose patient information. (This is known by anyone who has taken required training or certification on HIPAA when working for health plans or other regulated healthcare providers including RPM and telehealth vendors.)

The letter raises the sensible, usual questions on why personal data is being collected and what Amazon is doing with it. For instance, it requests responses on how patient data is used by Amazon, what data is shared with third-party entities, and what data is used in any analytics or algorithms. It cites as a non-compliance example the $1.5 million that GoodRx paid in an FTC penalty on their past Meta Pixel usage for ad tracking. (Interestingly avoiding the $7.5 million Teladoc paid for similar ad tracker misuse by BetterHelp.)

The $30/visit service has been available in 33 states since last year and currently through asynchronous messaging, provides care for minor conditions such as UTIs, herpes, and skin infections. The expansion will cover all 50 states and add synchronous video telehealth.

One would think that with billions on the line with One Medical, Amazon would be more cautious about poking the Antitrust Bear. They have already been put on notice by the Federal Trade Commission, the Department of Justice (DOJ), Congress, and multiple states. For Amazon Clinic, requiring individuals to waive their right to protect their PHI in registering for the service is downright brazen. How this got past their legal and compliance departments boggles the mind. Why Amazon is not ‘hiving off’ PHI collected through this small service is another question. Doing so would show to FTC and DOJ that Amazon can play by the rules. Instead, it confirms the widely held belief of those in healthcare that Amazon culturally cannot deal with the restrictions that come with the territory. Are they deliberately ‘playing chicken’ with the Feds? Pollo loco? This up-to-the-line behavior tends not to end well, as the telemental health providers that over-prescribed controlled substances found out.  POLITICO, The Hill, mHealth Intelligence

Babylon Health to go private with AlbaCore in planned ‘Take Private Proposal’, combine with MindMaze

June 26, 2023 | by

Babylon Health moving forward with AlbaCore Capital LLP ‘Take Private Proposal’ with AlbaCore affiliate MindMaze Group SA. On Friday, Babylon Health as Babylon Holdings Limited filed their Form 8-K with the Securities and Exchange Commission confirming their acceptance of AlbaCore Capital’s ‘Take Private Proposal’. No surprises here as announced in May along with AlbaCore’s interim funding proposal of $34.5 million plus the June timing of Babylon (inevitably) selecting the AlbaCore proposal. [TTA 11 May, 11 May followup]. Babylon did not disclose that there were other proposals under consideration between 10 May and last Friday. 

The 23 June Form 8-K (filed on a summer Friday when corporate news goes to hide till the following week) is brief in content despite its eight pages, half of which is devoted to the press release. It delivers the following:

  • The core operating subsidiaries of Babylon will be transferred to MindMaze. MindMaze is a private Lausanne, Switzerland-headquartered healthcare company in neuroscience and digital neurotherapeutics in areas such as stroke, traumatic brain injury, Alzheimer’s disease, and Parkinson’s disease. This apparently covers the ‘Go-Forward Business” mentioned in May. 
  • “The Proposed Transaction provides for a new capital structure and a reduction of pro forma company debt, and is expected to include immediate material funding for current business operations as well as a commitment to fund the combined business of MindMaze and the Company.” This presumably will resolve Babylon’s debt to AlbaCore of $300 million from the SPAC.
  • BBLN shares will cease trading upon closing. Class A ordinary shareholders or other equity instrument holders will receive no payment, as disclosed in May. (Shares are trading at $0.65 today, amazingly, but whatever shares are out there are being bought and sold, for instance in restricted stock units being vested and sold for whatever value could be obtained.)

There is no further mention in either the 8-K or the press release of the appointment of UK administrators (similar to a US Chapter 11). Per the May 8-K, these would be appointed by the High Court in London to supervise the transfer of assets from Babylon Holdings Limited to Babylon Group Holdings Limited and then their sale to the ‘NewCo’ formed after the reorganization by AlbaCore Capital as the Go-Forward Business. It may be that the transfer to MindMaze avoids that. Babylon is headquartered in Jersey (Channel Islands) along with Austin, Texas.

The transaction is expected to close in July, subject to regulatory approvals in the US and UK, with Babylon continuing in its business plan and in the press release’s terms, “accelerating its core mission” at least for the short term. In going private, Babylon will no longer have to disclose its ongoing problem of growing losses after this quarter. In Q1, they had a net loss of $63.2 million, a (20.3)% net loss margin, which was 117% greater than last year’s loss of $29.1 million or (10.9%) margin. Noticeably in the release, Babylon CEO and founder Ali Parsa is not quoted.

How it’s positioned: Both companies will operate independently until such time as they can become a “leading value-based care platform with cutting edge technological, clinical and operational ability to both provide holistic primary care and effectively diagnose, manage and treat major episodic and chronic diseases.” Over the longer term, the combination will “align the strengths of their organizations to deliver a truly novel care paradigm and deliver exceptional outcomes for all stakeholders.” No transition of headquarters, leadership, and staff was announced in the release.

The reality–one or the other will change: This Editor considers this a ‘marriage of convenience’ for their chief investor, AlbaCore, to financially reconcile two of their healthcare businesses. Neither are alike or complementary.

  • We know how Babylon is performing (or not) as a public company for now. We do not with MindMaze, hidden behind the veil of private financing and ownership.
  • Their core businesses are very different–primary care patient access and population health for Babylon, more rarefied and clinical neurotherapeutics for MindMaze.
  • Babylon Health is in a crowded primary care and enterprise telehealth sector of healthcare. Morphing to connect populations ‘from reactive sick care to proactive care’ has a few elephants in it named Teladoc and Amwell, along with multiple niche and private label players.
  • MindMaze’s public profile is that they have built a long-term clinical footprint–examples such as Izar, a FDA-cleared hand motor therapeutic, a partnership with the Vibra health system in two states, and Mount Sinai in NYC–along with two racing sponsorships in 2022–Andretti Autosport for US Indycar and internationally with Alfa Romeo F1 Team ORLEN, for promoting their MindMaze Labs R&D. According to Crunchbase, the company has raised $340 million over 10 rounds since 2012 including rounds by film star Leonardo DiCaprio, Concord Health Partners in NJ, and London-based Hambro Perks along with AlbaCore. 

Taking bets on which company and management survives.

Mobihealthnews and FierceHealthcare recap the releases and recent news for both companies.

Week-end roundup: Walmart Health adds 3 FL centers; wearables nudge close to 50%; Dandelion cardiac AI performance pilot; Aledade’s $260M Series F; $10M for DUOS’ older adult assistance platform; Friday Health Plans to close

June 23, 2023 | by

Walmart Health continues Florida expansion with three new centers opening this week–two in Orlando and one in Kissimmee. This adds to their present five in the central Florida area: Orlando, Kissimmee, Ocoee, Sanford, and Winter Garden. By fall, plans are to have 23 in Florida, tracking to the Q1 2024 plan for 75 total, including 28 new locations in the Dallas (10), Houston (8), Phoenix (6), and Kansas City MO (4) metros [TTA 3 Mar]. Becker’s

New study by AnalyticsIQ indicates nearly half the US population may be adopting wearables and using digital health. Usage doubled in the midst of the pandemic (2020-21) with 46% reporting using at least one type of consumer health technology over the past six months. 35% of the 8,000 respondents used smartwatches, with Fitbit (42%) edging out Apple Watch (38%) followed by Samsung Galaxy Watch and Garmin Vivoactive. By other wearable device type:

  • Blood pressure devices: 59% of survey respondents
  • Sleep monitors: 21%
  • ECG monitors are still a niche: 11%
  • Biosensors such as glucose monitors, hormone monitors, fall detectors, and respiratory monitors are still niche at 8%, but the business grew to $25 billion in 2021
  • Smart clothing: a surprising 6%.

Unsurprisingly, wearable health tech usage skewed heavily towards Generation X-ers and men. Among ethnic groups, black and Latino groups had the highest usage.  Healthcare Dive

Dandelion Health testing cardiac dataset for AI reliability and bias. Starting with their data on ECG waveform algorithms, this startup will be validating the performance and bias of artificial intelligence across key racial, ethnic and geographic subgroups. NYC-based Dandelion is a public-service focused precision analytics company that works with three healthcare systems–Sharp HealthCare (San Diego, California), Sanford Health (Sioux Falls, South Dakota) and Texas Health Resources (Arlington, Texas) to aggregate and de-identify clinical data for roughly 10 million US patients. The validation pilot will start on 15 July and last for an initial period of three months. It may be expanded to include additional clinical data modalities such as clinical notes and radiology imaging. According to their founder and CEO Elliott Green, the “pilot program answers the question, does your algorithm do what it’s supposed to do? And does it do it fairly, for everyone?”  Release, Healthcare IT News

Who said big, late raises are a thing of the past? Not if your company is Aledade, which has solidly succeeded in management services for independent primary care practices transitioning to value-based care models. They just gained a shiny new Series F of $260 million on top of last June’s $123 million Series E for a new valuation of $3.5 billion. The Series F round was led by Lightspeed Venture Partners along with Venrock, Avidity Partners, OMERS Growth Equity, and Fidelity Management. Aledade has grown to manage 1,500 practices and has acquired in recent months Curia (data analytics for advance care planning) and Iris Healthcare (care planning technology). The additional funds will be used to opportunistically add capabilities into its platforms. FierceHealthcare, Bloomberg (paywalled)

Somewhat more in the recent range is DUOS’ $10 million venture capital raise for a total of $33 million. Leading the round were Primetime Partners, SJF Ventures, and CEOc’s Aging Innovation Fund managed by Castellan Group. What’s unusual is that the platform addresses older adults’ needs as a personal assistant in areas such as care, support in social determinants of health (SDOH), housing, and transportation against Medicare Advantage plan benefits, local community resources, and government programs. The benefit for the older person is to close gaps in care and increase utilization of Medicare Annual Wellness Visits (AWVs). Originally targeted to older adults, the company is broadening its markets to health plans, providers and employers. Release, Mobihealthnews, Home Health Care News

Insolvent ‘insurtech’ Friday Health Plans loses last two health plans to state receivership, will close. Colorado and North Carolina were the last two states the company operated in. Both states’ insurance departments put Friday into receivership this week after the insurer notified them that they could not raise additional cash to continue operations. This affects 35,000 and 39,000 individual health policyholders respectively. Texas, Georgia, Oklahoma, and Nevada were previously placed in receivership. State insurance regulators have assured providers that they can expect to be paid for their services per their contracts. Members generally need to find new insurance companies quickly, however. 323 Friday employees in Alamosa, Colorado, their headquarters, will be laid off between 23 June (this Friday) and 6 July, without the previously promised 60 day notice nor any notice of severance or benefit continuation. Friday is the largest employer in this Denver/Colorado Springs suburb. In its brief lifespan, Friday raised over $300 million and lost over $700 million. FierceHealthcare 22 June, 21 June.  Alamosa Valley Courier  Additional commentary by industry analyst Ari Gottlieb on LinkedIn

Ransomware roundup: TimisoaraHackerTeam (THT) attacks cancer centers; KillNet’s ‘Sudanese’ member; 101K ChatGPT accounts infostolen; LockBit attacker arrested on Federal charges

June 22, 2023 | by

TimisoaraHackerTeam (THT) attacked an unnamed US cancer center with malware in June, demanding a ransom of 10 bitcoins ($300,176). The Central European, possibly Romanian-based group (named after a Romanian town), was uncovered in 2018 and was last tracked to an April 2021 attack on a French hospital. The malware vectors in using legitimate software from Microsoft Bitlocker and Jetico’s BestCrypt. Reports state that it targeted Fortinet’s FortiOS SSL-VPN to exploit CVE-2022-42475, a heap-based buffer overflow vulnerability that allows remote attackers to execute code or commands using specially crafted requests. THT may be linked to other malefactors such as DeepBlueMagic and China-based APT41 based on software used and style in notes. DeepBlueMagic disabled an Israeli medical center, Hillel Yaffe, in October 2021. 

The cancer center and Heimdal Security were able to reclaim the hacked records through the use of decryption software as they were only partially encrypted, avoiding the ransomware payment. HHS’ Office of Critical Infrastructure Protection has issued its notification with details on the attack here (PDF). SC Magazine, Healthcare Dive

KillNet, the Russia-based agglomeration of anti-Western hacktivist groups, has a possible new member in the interestingly named Anonymous Sudan. Their modus operandi is to use distributed denial of service (DDoS) attacks in response to the anti-Islamic views or actions of Western, to date 24 Australian, organizations, but the DDoS claims are smokescreens that not only tie up cyberdefense resources and generally spread panic and disinformation, but also gain publicity for the group. Cyber researchers CyberCX noted that their DDoS attacks have been intense, but unusual in that Sudan (the country) apparently has not instigated the attacks nor have the attacks been monetized. SC Magazine

Surprise, surprise–infostealers using malware to get into ChatGPT accounts. Once into the accounts, the malware infects browsers to collect saved credentials, bank card details, crypto wallet information, cookies, browsing history, and other information. Most of the affected devices are in Asia-Pacific. The malware is for sale on the dark web, with most of the 101,134 accounts tallied by Group-IB were breached by Raccoon/RecordBreaker (78,348), while the remainder were hit by Vidar (12,984) and RedLine (6,773). ChatGPT is being downloaded individually and often introduced into enterprise systems from personal devices without the usual IT security and vetting. LLM models for now are unsecured and for hackers, it’s ‘happy time’.  SC Magazine

But sometimes the bad actors get caught and dragged back to New Jersey. The FBI finally caught up to Russian national Ruslan Magomedovich Astamirov, who is accused of being part of the ransomware gang dubbed LockNet. The two counts filed in the Federal District of New Jersey center on conspiracy to commit fraud and related activity in connection with computers, plus the ever-popular conspiracy to commit wire fraud for the usual extortion of money and property between 2020 and 2023. The attacks were on businesses based in West Palm Beach, France, Tokyo, and Virginia, and received about $90 million in ransom payments. Astamirov sent emails and owned IP addresses, including Amazon and Microsoft accounts used in the fraud. NJ was chosen as the location for the Court since there was one LockBit victim in Essex County. SC Magazine, Criminal Complaint filed against Astamirov (PDF)

Wednesday roundup: Owlet BabySat monitor clears FDA; Rosarium Health seed $1.7M led by Rock Health; Optum Startup Studio shuts; CareRev lays off 100, changes CEOs; pet telehealth Fuzzy shuts, leaves workers and vendors in lurch

June 21, 2023 | by

Owlet’s BabySat medical pulse-oximetry device receives FDA clearance. The wire-free sock design connects to a mobile app and tracks pulse rate and oxygen saturation level. The app alerts parents and caregivers when those readings fall outside ranges set by a physician. Launch is projected for later in 2023. Unlike other Owlet socks and systems, it will be by physician prescription only for babies that the doctor determines should have additional monitoring at home. There is a button for interested consumers (and presumably clinicians) to be notified of release information. Owlet release, Owlet product page, Mobihealthnews.  The original Smart Sock continues to be offered as a consumer product outside of the US and Canada. Owlet’s Dream Sock tracks non-clinical quality sleep quality indicators, including heart rate, average oxygen, wakings, and baby movements. In December 2022, FDA accepted Owlet’s de novo application for an enhancement to Dream Sock that provides heart rate and oxygen notifications in addition to sleep monitoring tools [TTA 18 Mar]. Perhaps these mean a turnaround is in the offing in this now much smaller company. They received a $30 million private placement lifeline in February, but the stock on the NYSE, while rising, is still well below $1. [TTA 16 May].

Rosarium Health receives a pre-seed round of $1.7 million from Rock Health and two other investors. It’s surprising because Rosarium is in the business of medically necessary home modifications to enable safe aging at home. Not your typical digital healthy, sexy, techy, buzzy Rock Health investment. But one that bears a few important checkmarks: since 2019, the Centers for Medicare & Medicaid Services (CMS) has covered home modifications in two different programs: Medicare Advantage (MA) through supplemental benefits, and Medicaid, through Medicaid Waivers (Section 1115 Waivers) or Medicaid Managed Care programs. In the current environment, that assurance of payment makes it most attractive indeed. Rock Health was joined by Primetime Partners with participation from Flare Capital. Rock Health release

Just when you think it’s getting better….

  • Optum Startup Studio fades to black–report. Startup Studio was Optum’s startup incubator and graduated over 100 early-stage companies that received mentorship and a chance to pilot their offerings through Optum’s companies and systems plus receive $25,000 to $50,000 in non-dilutive grant funding. The report in Axios attributed the program’s end to a reorganization within Optum that left mentors like Liz Selvig, who joined it in 2022, out in the cold. The timing could not have been worse for just-shuttered fertility planning startup Bunnii. Optum’s abandonment quickly killed interest from a potential lead investor who looked at Optum’s program and piloting as a vote of confidence. This Editor notes that the website and application pages are still live.  If this report is incorrect, we invite Optum to contact us.
  • CareRev, a short-term nursing/CNA staffing app platform, reportedly is laying off 100 employees or one-third of its staff. The same reports claim $100 million raised to date, but Crunchbase lists ~$50 million through a Series A in April 2021. Earlier this month, CareRev’s co-founder and CEO, Will Patterson, BSN, RN, resigned after The Information inquired on allegations that he used drugs and encouraged employees to try LSD and cannabis. CareRev subsequently named Brandon Atkinson, formerly COO of cardiac digital health Cleerly Health. Release. Becker’s
  • Fuzzy, a veterinary care digital health/e-commerce startup based in San Francisco, folded last week without paying employees or vendors. It raised about $80 million through a Series C from 2016. Backers included Icon Ventures, Greycroft, Crosscut, and Matrix Partners, private vet practices in the US, UK and Germany plus individual investors. Its $15/month subscription-based model included 24/7 live chat and telehealth, ship-to-home prescriptions, educational content, vet-curated pet items, and programs for nutrition, training, and obedience. The bad part: reports from employees on Twitter and Glassdoor indicated that the company stopped paying health insurance and salaries two weeks ago but were not formally notified of the company shutting until Saturday 16 June, and that vendors as well as contractors were misled on payment for weeks. The website is dark and CEO Zubin Bhettay’s LinkedIn profile plus Twitter handle are gone. Coverager

Mid-week update: Cano Health CEO finally booted, interim named; further information on Oracle Cerner layoffs

June 21, 2023 | by

Cano Health CEO Marlow Hernandez stepping down, but remains on Cano’s board of directors. It looks like Florida-based value-based primary care provider Cano Health is finally starting to clean up its act. The fallout from the long-delayed shareholder meeting taking place last Thursday (15 June) was that the Cano 3 (resigned directors Barry Sternlicht, Elliot Cooperstone, and Lewis Gold), finally got their way with ousting Hernandez. Mark Kent, who was named chief strategy officer in April, will be taking over as interim CEO while the board performs an external search. No time frame was specified.

Hernandez’s departure was not a surprise since Cano had a miserable Q1, with a $60.6 million net loss versus 2022’s barely-there $100,000. Their adjusted EBITDA was only $5 million, compared to $29.2 million in Q1 2022 [TTA 12 May]. Their new chairman of the board, Sol Trujillo, also has a background in turnarounds.

The Cano 3 own about 35% of the shares and one, Barry Sternlicht, invested at least $50 million in the cracked SPAC’s PIPE. They started to push for change back in April. Today (20 June), they issued a statement approving of Mark Kent’s interim appointment though they were not able to prevent the reelection of directors Alan Muney and Kim Rivera as they urged shareholders to do in a 15 June public statement. 

Despite the ouster, the Cano 3 still have plenty of disagreements with how the company is run, nailing these to the door in their 20 June statement responding to what they called an “Offensive Friday Afternoon “News Dump” Regarding its Leadership Transition”:

  • Per his employment agreement, Hernandez is required to step down as a board director now that he is no longer CEO. “Dr. Hernandez’s employment agreement plainly states that ‘the Executive shall be deemed to have resigned from all officer and board member positions that the Executive holds with the Company or any of its respective subsidiaries and affiliates upon the termination of the Executive’s employment for any reason.” They also cite a “history of insider dealings and fiduciary delinquency.”
  • They demand that directors Angel Morales, Dr. Alan Muney, Kim Rivera, and Solomon Trujillo resign immediately as “Dr. Hernandez’s enablers for far too long”. The board permitted the reelection of directors Muney and Rivera despite 82% of shareholders withholding their votes, citing Cano’s post-meeting statement. 
  • Shareholders now must entrust the selection of a new CEO to a board that is not reflective of the majority of shareholders who have lost over 90% of their share value, and not collaborating with the Cano 3 on reforming the board and a new direction of the company. “In fact, it rejected our Group’s two highly qualified director candidates and a proposal to collaborate on a credible refresh of the Board. We are left to question whether Dr. Hernandez and his boardroom allies are continuing to box us out because they are hiding something nefarious. If not, we urge the Board to immediately align with us on a path forward that includes the addition of our candidates – Guy Sansone and Joe Berardo, Jr. – and other essential changes to leadership and strategy.” Both Sansone and Berardo are very senior executives with long, successful records in leading healthcare services and startups.

(Cano Health shares closed at $1.42 today, a decent bump from their valley last week.) To be continued….  Healthcare Dive

Last Friday, TTA was one of the first to cover the Oracle Cerner layoffs (along with HIStalk) affecting the Cerner Federal teams. This week’s coverage elsewhere confirmed that the layoffs were a minimum of 500 to possibly 1,200, plus rescinded job offers and reduced open positions as this Editor saw from employees posting on the Reddit group. They–in particular, The Register (below), confirmed where this Editor would not go in cause-and-effect–that the layoffs were largely due to VA holding further implementations after multiple failures in the five VA systems where it was implemented between 2020 and 2022. The layoffs were also due to the Department of Defense (DoD) Military Health System (MHS) implementation as largely completed, although not glitch-free. It’s a clear cleanout of what Oracle perceives as a problem. 

Oracle did not respond to these publications’ requests for comments.

The new contract’s focus is to fix these five and implement a sixth (James Lovell in Chicago) which is joint with MHS by 2024. This has to be accomplished before implementation starts in the 160 remaining centers plus satellite medical clinics (CBOCs). VA has much leverage in the five one-year terms and the monetary penalty structure [TTA 18 May]. The pressure to perform for an awakened VA–and Congress–is going to be intense on those remaining, and whomever is shifted over from Oracle. This Editor also noted speculation that Oracle Cerner may start to wash its hands of the just-renewed VA EHR implementation by outsourcing most of it.  The Register, Becker’s, Healthcare Dive   TTA’s coverage of the Cerner/VA implementation here.

Rounding up the week-end: Oracle Cerner layoffs hit 500+ in VA, DoD groups (updated); AWS cash cow stumbles; Transcarent-ViewFi team on virtual MSK; Veradigm delays annual, quarterly reports again; Olive AI sells BI to BurstIQ

June 16, 2023 | by

Oracle, which already laid off 3,000 since its Cerner acquisition and dumped its real estate, is proceeding with more layoffs in Cerner groups serving the Federal government, specifically DoD and VA. According to the Reddit group r/cernercorporation on this thread, the layoffs hit broadly within the Federal teams: VA and DoD professional services, Federal care delivery, Federal change management, support service owners, and consulting. The number is at least 500 but may be more. The severance package is four weeks plus an additional week for every year of service plus unused vacation with the layoff date 30 June. Offers made to start for new hires have been rescinded. This has fueled speculation that Oracle Cerner may start to wash its hands of the just-renewed VA EHR implementation by outsourcing most of it. There is precedent for this: Cerner partnered with Leidos for the DoD implementation from the start and Oracle Cerner brought in Accenture for training in February. Of course, the all-heart Mr. Market liked the layoff news coupled with Oracle’s Q4 ending 31 May results of net income of $3.32 billion, a rise of 7% versus last year. CNBC  Oracle is now at a $342 billion valuation, a new high. HIStalk 16 June    

Updated 16 June: details remain sketchy but confirmation that layoffs are in the ‘hundreds’ Reuters, Becker’s, KC Business Journal (paywalled); the last posits from CEO Katz’s statement that this is only the first of many to come.   Further details on the Reddit group is that consultants were onsite at clients working on projects and go-lives when they received their layoffs, that 80% of departments were affected, and that the layoff may go over 1,000. 

Amazon Web Services’ business continues to slow, with the AWS cash cow’s growth slowing to half versus last year’s, with further decline expected this quarter. This Editor noted that market analysts at Seeking Alpha called it back in February when we looked at Amazon’s ability to spend cash so freely in healthcare, for example on OneMedical. Google and Microsoft have been tough competitors and while their growth is off too, they are starting with smaller pie slices. Companies are using more than one cloud provider in a ‘belt and suspenders’ approach; Gartner predicts that by 2026, more than 90% of businesses will use multiple providers, from 76% in 2020. AWS’ plans continue to build outside of the US, with a $12 billion investment in cloud infrastructure in India by 2030 as well as five data centers in Oregon due to a controversial $1 billion tax break. Google and Microsoft have also led in generative AI, while AWS has not. AP

Enterprise health navigator Transcarent has made another bid in the virtual health area. It’s a partnership with ViewFi, which helps MSK providers to diagnose and treat MSK injuries in real time. ViewFi providers are affiliated with the NYC-based Hospital for Special Surgery. The idea for ViewFi came from retired tennis champion Andy Roddick who, with his orthopedist Josh Dines, MD turned their bad experiences during the pandemic using FaceTime for virtual consults into a new platform. ViewFi’s platform now takes patients through an intro screener that records physical and mental health, through diagnosis and a recovery care plan with personalized diagnostic tests and exercises with real-time support from their health guides. For Transcarent-contracted companies, a ViewFi initial appointment can be set in as little as two days as opposed to the usual average of 17 days. Transcarent bought the virtual care platform developed by 98point6 in March. FierceHealthcare

We noted back in March and last month that Veradigm (the former Allscripts) had serious problems with their Q4 and FY 2022 reporting due to a software flaw (!) that affected its revenue reporting going back to 2021. Nasdaq has extended for the second time–from 14 June to 18 September–their 2022 annual 10-K filing and their 10-Q for the quarter ending 31 March 2023. Not filing the reports will mean delisting. Seeking Alpha

Olive AI’s reorganization continues [TTA 23 Feb], with data solutions company BurstIQ buying its business intelligence platform.  LifeGraph Intelligence uses AI tools such as natural language processing and machine learning to extract insights from clinical notes and EMR fields. The platform presents cost and clinical data in a meaningful way through cohort comparisons. According to an example on their website, it contributed to $90 million in savings for one health system. Acquisition cost and management transitions were not disclosed. BurstIQ release  Hat tip to HIStalk 16 June