Theranos’ Balwani seeks to remain free during appeal, argues he owes nothing in restitution (updated for Holmes appeal)

February 22, 2023 | by

12.9 year Federal sentence set to begin 15 March. On Friday 17 February, Ramesh ‘Sunny’ Balwani, former Theranos president/COO, his defense attorneys, and the prosecution were in Judge Edward Davila’s Federal District courtroom to argue that Balwani should remain free during appeal, and–surprisingly–should owe nothing in restitution to investors.

Balwani is scheduled to report is scheduled to report to the minimum security Federal prison at Lompoc, California to begin his 155-month sentence on 15 March. During the hearing, Judge Davila did not issue a decision on Balwani’s freedom through appeal, nor about restitution. In play are the parallel sentences and appeals of Balwani’s boss and lover, Elizabeth Holmes, with her delay of surrender based on appeals being filed and restitution being decided in the same court.

Balwani’s defense is taking a different tack than Holmes’ defense regarding restitution. His attorney, Amy Walsh, presented that the company was still valuable at the time of Balwani’s dismissal in May 2016. Theranos still had $350 million in cash and intellectual property worth $100 million. Judge Davila seemed skeptical of that:  “Are you saying his conduct was completely divorced from Theranos’ demise?” The prosecution is seeking a far higher restitution–$900 million–than the $120 million Judge Davila estimated at the time of Balwani’s sentencing.

Elizabeth Holmes is also seeking to remain free while appealing her 11.25 year sentence in the Ninth Circuit Court of Appeals, with filings in December and January [TTA 24 Jan, 10 Jan] with Balwani’s filings on a similar timetable. Her defense team also filed for a new trial [TTA 15 Jan] based on purported errors by Judge Davila during her trial. Her restitution hearing on the $121 million Judge Davila has estimated during her sentencing is now scheduled for 17 March. As with Balwani, the prosecution is seeking a far higher restitution–$804 million.

Holmes’ surrender date is scheduled for 27 April to the Federal prison in Bryan, Texas–a change by the Federal Bureau of Prisons from Dublin, California, as rumored in November [TTA 30 Nov]. The women-only minimum security Bryan facility is considered in the Federal system to be ‘heaven’ compared to the Dublin satellite camp, though the latter is only about an hour from her home, partner Billy Evans, and her soon-to-be two children. The selection is important because Federal inmates serve in general 85% of their sentence.

Updated  Holmes’ second child has been born, according to a court filing on Thursday. Her defense continues to press for postponing her surrender during the appeals process. Defense and prosecution continue to wrangle on Holmes’ flight risk, based on the never-taken January 2022 Mexico trip and one-way ticket, now on the basis that she has never directly denied that she intended to flee nor explained her lack of a return ticket [TTA 24 Jan].  Mercury News

Balwani’s defense also maintains that government misconduct during the trial makes success for appeal likely, that he is not a flight risk based on his behavior since 2018, and has no history of violence. The clock is ticking down on both Balwani and Holmes. AP

Breaking: AliveCor wins presidential review on ITC Final Determination on Apple patent infringement

February 22, 2023 | by

Enforcement held for PTAB appeal decision. As anticipated after the International Trade Commission (ITC) decision, finding that Apple Watches infringed three AliveCor patents on ECG readings [TTA 3 Jan], the Final Determination issued 22 December 2022 has passed the 60-day mandatory presidential review and is now in effect.

The penalty in the bond assessed against Apple–$2 per watch–applies to Apple Watches with the ECG feature imported or sold during the presidential review period. It is the first Limited Exclusion Order (LEO) with a cease and desist order against Apple. However, the penalty cannot be enforced until AliveCor’s appeal of the US Patent and Trademark Office’s Patent Trial and Appeal Board’s (PTAB) ruling is decided. PTAB’s ruling in early December not only ruled that Apple did not infringe on AliveCor’s patents, but also threw out the AliveCor patents that were the basis for the infringement as unpatentable: No. 10,595,731 (“the ’731 patent”); No. 10,638,941 (“the ’941 patent”); and No. 9,572,499 (“the ’499 patent”) in their Apple Watches 4, 5, and 6.

The PTAB appeal is in progress. AliveCor also has a separate action against Apple through its Federal antitrust case in the Northern District of California. That will not go to trial until early 2024. AliveCor has about 170 patents, but the loss of any patents is important to a company’s IP and ultimately, funding. It’s also a clear signal to innovative companies that a David can win against a Goliath. AliveCor release

ATA 2023 Annual Conference 4-6 March–a special deal for our Readers

February 18, 2023 | by

The American Telemedicine Association (ATA) annual conference and expo is only two weeks away–4-6 March in San Antonio, Texas. ATA2023 is the only US event solely focused on telehealth and virtual care, with three full session days, an interactive exhibit floor, two receptions, a research track, and more. More information is available here.  This Editor will also note that average temperatures in San Antonio at this time of year will be warm without Texas stickiness–in the high 70s F°–so if you are looking to defrost, Go Texas! 

Registration link is here. But as a media partner of ATA (see above), our Readers are eligible for a discount of $250. On registration, enter this code: ATA23TAW250. If you attend, love to hear your feedback!

Short takes: Avaya’s Ch. 11; Aetna sells India telehealth; fundings for IncludeHealth, Senniors, Thatch, Previa, MDI; layoffs at Collective Health, Vicarious, Olive AI

February 17, 2023 | by

Avaya files second Chapter 11 reorganization in six years. The company, which provides virtual care and collaboration tools (and has contributed to our Perspectives series), is restructuring with a financing of $780 million. This was anticipated from August-September last year when they announced accounting problems with their cloud subscription revenue, resulting in substantial layoffs, $250 million in cost cuts, a CEO change, and a continuing crash in the stock value which was close to 99%. In December, they announced a likely delisting from the NYSE. Major creditors include Microsoft, Wistron Corp., and SHI International. Current customers will continue to be served. Upon completion of the restructuring process in a projected 60 to 90 days, Avaya will reduce its total debt by more than 75%, from nearly $3.4 billion to about $800 million. CRN 14 Feb, CRN 7 Sep 22, Yahoo Finance    Hat tip to HISTalk

Aetna’s subsidiary Indian Health Organisation (IHO) is selling its telehealth business to MediBuddy. Transaction cost was not disclosed. Bangalore-based MediBuddy is buying what is currently called vHealth by Aetna and will be rebranded over the next six months to MediBuddy vHealth, to be integrated with its other services. vHealth is a subscription-based primary healthcare service that offers telehealth consultations, an extensive outpatient network, pharmacy, diagnostics, dental services, delivery of medicines, blood tests, and other home healthcare products across 38 Indian cities. IHO employees will continue with MediBuddy. Last February, MediBuddy scored a $125 million Series C funding, led by Quadria Capital and Lightrock India.  Press release (Hospitals Management India), Mobihealthnews

A few early-state digital health fundings rounded up by Mobihealthnews:

  • Ohio-based digital musculoskeletal (MSK) health care and training company IncludeHealth raised $11 million in a funding round led by CincyTech with participation from Tamarind Hill and other investors. The fresh funds will be used to expand the MSK-OS remote care platform. Ray Shealy joined as COO and Grant Koster joins the board of directors. Also Finsmes 
  • Madrid, Spain-based Senniors raised $5.6 million in seed funding. Senniors provides home care services including therapy, mental healthcare, and nutrition counseling for older people and others who need support. The seed round was led by SixThirty with Sevenzonic, KIMPA, Zubi Capital and Invertidos.
  • Thatch, a health benefits startup, raised over $6 million in total funding across pre-seed and seed rounds from 16z and GV, with participation from Lux Capital, Quiet Capital, Not Boring Capital and BrightEdge. It includes a tech-enabled Health Savings Account, a Thatch debit card for all healthcare expenses, and on-demand access to experts who can resolve billing issues via text. Release
  • Previa Medical, based in Lyon, France, raised €2.1 million for its AI-based predictive medical device to alert providers to early signs of sepsis and raised $2.2 million in seed funding. It included participation from Kreaxi, M2care, Veymont Participations, Hopla Memory, CCI Capital Croissance, Holding Seraip, Bpifrance and BNP Paribas, with equity and debt financing from Banque Populaire AURA. SEPSI-SCORE analyzes patient risk factors for sepsis in real time through patient records drawn from hospital software to alert providers up to 48 hours before symptoms develop. Finsmes
  • And one more: $20 million in Series A funding to healthcare analytics company MDI Health. MDI uses AI in pharmacology to prevent negative outcomes in chronic polypharmacy patients and at-risk populations. Mobihealthnews

While layoffs in healthcare have slowed down somewhat, they do continue: 

  • San Mateo-based Collective Health, a benefits administration software provider for enterprises, laid off 54 of an estimated 500-1,000 employees. LinkedIn corporate posting
  • Vicarious Surgical, a robotic surgical developer which has received funding from Bill Gates and BD, is planning to reduce its workforce by 14% to conserve cash. Ironically, they are making a 510(k) submission for a robotic system to compete against giant Intuitive Surgical’s da Vinci. Med tech has tightened up substantially with giants like Baxter whacking 3,000 jobs (5%) in its global workforce and Abbott releasing temporary workers hired to produce COVID-19 test kits in Maine. Medtech Dive
  • Olive AI, which automates routine administrative healthcare processes such as revenue cycle management, laid off an additional 215 employees last week, about 35% of its remaining staff, due to account losses. In July, 450 employees or about 33% of staff were released. Axios

A Valentine’s Day tribute to Dame Esther Rantzen

February 17, 2023 | by

This is a lovely tribute to a Dame–Dame Esther Rantzen. Our UK Readers will know her from her TV journalism work, as presenter of That’s Life! on BBC TV for 21 years, and who was instrumental in the founding and popularization of both ChildLine and The Silver Line older adult helplines. She is also a supporter of Alertacall Ltd., noted when the company was awarded the Queen’s Award For Enterprise: Innovation [TTA 12 May 22]. 

James Batchelor, their founder and CEO, penned a lovely post on his personal blog to her:

A brief excerpt:

In her association with Alertacall, just as with Childline, The Silver Line, and the around 50 other charities she is involved with, Esther is genuinely invested in trying to change the world for the better.

Esther is the real deal.

Her celebrity may be what catches your attention but it is the fact she works so hard for causes she truly cares about which has made me, and so many others, admire her over the years. I will repeat it again, she is the real deal.

He also lauds her ability to galvanize action through her appearances and communications, listening and leading through example.

If she wants something to happen, Esther will also commit to it entirely. What’s more she will make sure you are committed to it with an equal tenacity, hold you to account and ensure you follow through on your promises. 

James notes many other ways Dame Esther has made the world a better place. Please comment below! A “love letter” to Dame Esther Rantzen

Is CVS’ Oak Street Health deal genius? Or a waste of time and $10B?

February 16, 2023 | by

A sample of the split opinion. In the buccaneering between CVS and Walgreens, plus Walmart and Amazon, to add primary care, CVS definitely buckled the swash with three deals: Signify Health (being questioned by DOJ and FTC) [TTA 21 Oct 22 latest], a $100 million investment in Carbon Health [TTA 11 Jan], and Oak Street Health [TTA 9 Feb]. These are in line with their strategy of acquiring companies to expand their capabilities in primary care, provider enablement, and home health. The wisdom of the first–primary care–is being questioned by a few in healthcare. 

The basic argument is that primary care is money-losing, ‘unless you have significant ancillary revenue and downstream referral income’ according to Randy Davis, vice president and CIO of CGH Medical Center, based in Sterling, Illinois. Oak Street’s Medicare Advantage business is also money-losing because of its dependence on increasing severity scores (risk adjustment) and is generally an ‘uphill battle’. This Editor will add that as previously noted–and lauded in CVS’ release–Oak Street is notable for serving underserved patient populations–50 percent of Oak Street Health’s patients have a housing, food, or isolation risk factor. That equates to greater expenses that may or may not be reimbursable. Oak Street certainly has proven the money-losing part, forecasting a loss of $200 million for 2023 and not projecting a profit until 2025. Mr. Davis was blunt, calling it a deal that made no sense and “CVS better have a plan they implement in 18 months or they’ll get slaughtered.”

Another rap on the deal is that it is not big enough. Given the size of Oak Street at about 169 offices and the national figure is quoted as 600,000 ambulatory sites, it’s tiny. However, what isn’t considered is Aetna’s existing relationships with primary care physicians through ACOs formed as joint arrangements, and if Signify Health goes through, the Signify/Caravan ACOs. In fact, this may be a factor in the DOJ/FTC consideration of antitrust.

Others see opportunity in integrating primary care into CVS’ retail locations (Carbon Health) and serving historically underserved communities–much the same tack that Walgreens is taking with VillageMD (acquiring Summit Health) and Walmart with Walmart Health clinics. Becker’s Hospital Review

And as to Amazon, this Editor’s prediction is that Amazon will strike its Jolly Roger and sail away from the One Medical buy.

Mid-week news roundup: Parsa admits Babylon SPAC was ‘big mistake’, FTC’s strategy on GoodRx action, Oracle signs Accenture for VA training, Constellation delays ’22 reports, Emirates Health launches Care.ai and Digital Twin

February 15, 2023 | by

Regrets? Babylon has a few. A short but surprising interview in Mobihealthnews by Ali Parsa will give Readers an idea of the bubbly mindset of 2020-21 and the crises that followed for some companies. Babylon had 400% growth, then felt it had to go public via a SPAC in October 2021. It cost them a lot, including losing US shareholders, yet being listed on the NYSE. Parsa admitted “But in hindsight, that was a very big mistake. There’s no question.” While their revenue has continued to climb, on target to hit over $1 billion this year as of January, the cracked SPAC (opening at $272, today at $11.50) has forced Babylon to reorganize, selling non-core businesses like the Meritage IPA, reorganizing as a foreign private issuer to a domestic, and planning a reverse share split. These were announced last fall to avoid an NYSE delisting when the shares fell below $1 [TTA 13 Oct 22].  It also is leading them to shed Medicaid business and target commercial payers, such as Centene’s Ambetter. There’s a hint at the end of the article of some tech changes to promote continuous vital signs monitoring. You have to give Mr. Parsa credit for not papering over his errors.

FTC’s moves against GoodRx a preview of coming courtroom attractions–and collections? The start of February marked the first time that the Federal Trade Commission used the never-used-before Health Breach Notification Rule (HBNR), enacted in 2009, to elicit a penalty. With GoodRx choosing to settle for $1.5 million rather than fight [TTA 3 Feb], the FTC has now demonstrated a willingness to use Federal action against other online health companies sharing user data with third parties and monetization of that data. An attorney quoted in the Healthcare Dive article analyzing the ramifications: “This is the FTC trying to signal all these apps and other startup companies that are collecting a lot of sensitive data that we have a mechanism for enforcing data privacy rules against you.” Seven charges against GoodRx were around deceptive representations and unfair practices, with the HNBR the eighth layer of cake icing. According to another attorney quoted, the FTC is expanding the definition of breach into data that is shared or distributed “without the consent or authorization of the person whose data it is.” It seems like HBNR are yet more initials to be dreaded by digital health businesses that aren’t covered entities and stay well outside HIPAA privacy laws. 

Oracle Cerner getting help in digging through the Mound of Misery around their VA EHR implementation. FedScoop reported today (14 Feb) on Oracle’s signing of Accenture to improve clinician training on the Cerner Millenium system. Oracle EVP Ken Glueck confirmed that “We signed a contract with Accenture probably a month ago. So they are part and parcel of the training procedure for the continued rollouts when they resume in June of 2023.” They also confirmed that it was within the current ‘budget envelope’. Not surprisingly, Accenture is part of the Leidos Partnership for Defense Health that is implementing the Department of Defense’s considerably further along and relatively less troubled version of the Cerner EHR, MHS Genesis.

EHR watchers last year also noted the $700 million sale of EHR pioneer Allscripts (now Veradigm) five hospital and large physician practice EHRs to Constellation Software, integrated into their N. Harris Group [TTA 6 May 22] and now called Altera. Constellation has delayed reporting its Q4 and FY2022 results, usually released about this time, to a date to be determined, because of the Altera acquisition. Release Constellation, a Canadian company, trades on the Toronto Stock Exchange at an eye-watering share price of C $2,405 and a capitalization of C$49 billion.

Swinging over to the UAE, Emirates Health Services at Arab Health 2023 launched both the Care.ai and Digital Twin services for its facilities across the region. Care.ai is an Orlando-based company. For EHS, this will create an AI-enabled automation system that will update and analyze patient data and and assist doctors in diagnosing patients using computer vision. Digital Twin is an energy management system developed in partnership with Schneider Electric and Microsoft using Azure. At Al Qassimi Hospital, it cut consumption by up to 30% and reduced breakdowns and maintenance work by up to 20% .EHS release  Hat tip to HISTalk 

Digital technology falling (even) short(er) in NHS nursing: QNI report (UK)

February 9, 2023 | by | 2 Comments

When health tech ‘magic’–isn’t. Roy Lilley and his several times per week newsletter (NHSManagers.net, subscribe here) are really must reads for our UK readers dealing with the foibles of the NHS and NHS Digital. Billions have been poured into digitization of records and equipping district (community) nurses with laptops and access to apps that connect them to patient information. All of which is apparently, a flop for the money spent. 

The Queen’s Nursing Institute (QNI) has published a study, Nursing in the Digital Age 2023, via its data gathering and analytics area, the International Community Nursing Observatory (ICNO). It obviously should be microscope-read by NHS Digital, but also by US developers (and in other countries) with clinical users. (Oracle Cerner, Epic, and 00’s of EHRs and workflow apps–take notice).

Mr. Lilley outlines the level of failure here–from his article: 

  • 5 yrs ago; 32.7% reported problems with lack of compatibility between different computer systems… in 2022 the figure had risen to 43.1%.
  • 5 yrs ago; around 85% of respondents reported issues with mobile connectivity… in 2022 this figure was around 87%.
  • 5 yrs ago; 29.5% reported problems with device battery life… in 2022 the figure was almost 53%.

The overall take of the QNI study is that nurses are highly digitally literate and embrace technology at scale, but in practice, the apps and the hardware have become impediments as the workload increases. For non-UK readers, district nurses travel a lot, often working from home–akin to home care or rural nurses in the US. Points from their executive summary:

  • Hardware–battery life, weight of laptop, old laptops, ergonomics not only from weight but also when working in cars. Safety and confidentiality issues lead many nurses to take the work home, leading to delays.
  • Software–connectivity, authentication, multiple platforms, little integration, repetition of data entry, and poor connectivity and software design leading to interrupted workflows.
  • Some scheduling tools cause workload issues, such as over-allocation of work, unmanageable workloads and loss of personal autonomy.
  • Systems design–impersonal, designed to act as a barrier to interacting with patients.
  • Duplicative workload–repetition with dual entry on paper and into platforms because of poor connectivity and software design
  • The use of electronic health records (EHR) and similar platforms was mixed in terms of productivity gains and work capture. 

Another issue: “Moving technology-enabled care (remote monitoring) to the community appears to have shifted work from the hospital to the community”, meaning an increased workload on nurses where specialists or non-nursing staff could do this. 

Mr. Lilley summarizes as a service what both the hardware and software should be accomplishing:

Just ten simple things:

  1. Who is the patient,
  2. where have they come from.
  3. See their record, have they been sick before and…
  4. What we did we do?
  5. Anything in their history that’s a red flag?
  6. What do we do to fix them up this time and…
  7. Record how we did it.
  8. Figure out what worked,
  9. What did it cost and…
  10. Do we want to do it again.

Both Mr. Lilley’s newsletter and the study (PDF) are must reads wherever you live. Especially if you are a software designer.

No wonder nurses are single-day rolling striking!

(He also has an interesting take on ChatGPT, AI for copywriting and reporting, which we will take on next week….) Hat tip to Editor Emeritus Steve.

Ad tracker action heats up: Congress questions DTC telehealth companies on sensitive patient health data sent to advertisers

February 9, 2023 | by

It looks like telemental and addiction counseling telehealth sites are routinely sending patient information to media ad platforms–Google, Facebook (Meta), TikTok, Microsoft, Snapchat, Bing, Pinterest, and Twitter–to serve ads back to patients. Four Senators sent letters this week to three telehealth companies treating patients: Monument (alcohol addiction), Workit Health (opioid and alcohol), and Cerebral (ADHD and other mental health). The letters questioned the use of ad trackers (pixels) such as Meta Pixel that collect information from telehealth sites and then use the information to send users targeted ads based on that information. Except that this is not about curtains or shoes, but medical treatment. 

Kicking this off was The Markup/STAT study in December, examining 50 telehealth websites.

  • 49 of 50 websites shared user/patient tracking data to advertising platforms. This captured data as routine as URLs and IPs, and as extensive as name, email, phone, questionnaire answers, when users created accounts, and cart behavior, such as a prescription medication or treatment plan.
  • 35 were found by the study to have trackers sending individually identifying information to at least one media platform that included names, email addresses, and phone numbers
  • 25 had at least one tracker that indicated when users added prescription drugs and other items to their cart or when they checked out with a subscription for a treatment plan
  • 13 had at least one tracker that collected patients’ answers to medical questions

Ad trackers then send that information to platforms, which then serve targeted ads back to the telehealth companies’ users and patients. For the telehealth companies, the data is monetized. Because ads are served, there is a revenue stream back to the telehealth companies. 

From the senators’ letter: “This data is extremely personal, and it can be used to target advertisements for services that may be unnecessary or potentially harmful physically, psychologically, or emotionally.” Markup/STAT

Users may well assume that because the telehealth companies eventually connect them to a provider covered by HIPAA, or sends them a prescription from a provider, such as migraine treatment, that their data is protected along the entire journey. That assumption has now been demonstrated to be incorrect. This included major, heavily advertised DTC providers such as Lemonaid, Keeps, Hims & Hers, Talkspace, and Roman (Ro). Many of them are now examining their pixel policies.

The December article linked above has all 50 companies and what information they found was sent to ad platforms. The only website that did not was Amazon Clinic–brand new and of course not wanting to share their information outside of Amazon.

This follows on the FTC’s still to be approved by a Federal court, but apparently successful $1.5 million action against med discounter GoodRx using the never-used-before Health Breach Notification Rule, enacted in 2009 [TTA 3 Feb]. 

Why this is significant: first, the FTC action using an old rule, followed by the senators targeting three prominent (and in Cerebral’s case, beleaguered) telehealth companies, and the red meat documentation provided by The Markup/STAT study provide grounds for endless follow-up by not only Congress, but also private and public (DOJ) litigation. Stay tuned.

Chronic traumatic encephalopathy (CTE) found in over 90% of deceased NFL player brains: BU study

February 9, 2023 | by

A topic TTA extensively covered from 2012 up to end of 2017 was long term brain damage created by repeated concussive, and likely sub-concussive, head impacts, culminating in chronic traumatic encephalopathy (CTE) which can only be diagnosed after death. Your Editor was privileged to attend presentations by researchers from Boston University (BU) and Ludwig-Maximilians-Universität München (LMU) in 2013 at NYC’s German Center for Research and Innovation and by BU’s Robert Stern, MD, at NYC’s MedTech in 2014 (indexed here).

In time for the Big Game known as the Super Bowl is the timely release by the Boston University CTE Center of their latest findings, and it will give anyone who plays contact sports caution. 

Out of 376 former National Football League (NFL) players studied, 345 were confirmed to have died with CTE–91.7%. The norm is around 0.6%, and the lone person with it was a former college football player (2018 study by BU of 164 brains of men and women donated to the Framingham Heart Study). CTE is characterized by misfolded tau protein that is unique and unlike changes observed from aging, Alzheimer’s disease, or any other brain disease.

Ironically, former players of teams in this Sunday’s Super Bowl LVII between the Philadelphia Eagles and Kansas City Chiefs were included in this study–former Eagles quarterback Rick Arrington, who played three seasons for the Eagles from 1970-73, and former Chiefs defensive tackle Ed Lothamer, who played for them in the very first Super Bowl and was a member of their winning team in Super Bowl IV.

The CTE Center cautions that the 91% quoted in the study should not be interpreted as a current/past player number, as the brain bank samples are subject to selection bias. The families donate the brains because their loved ones had the personality changes and debility in their final years, often in middle age and younger, that characterize CTE. 

In the past five years, CTE has been increasingly recognized as a risk in contact sports and in repeated concussion. According to the release, “In October 2022, the National Institutes of Neurological Disorders and Stroke (NINDS), a branch of the National Institutes of Health (NIH), updated their position on what causes CTE: “CTE is a delayed neurodegenerative disorder that was initially identified in postmortem brains and, research-to-date suggests, is caused in part by repeated traumatic brain injuries.” Research is ongoing on whether sub-concussive head trauma, easy to overlook, may be a contributing or causative factor.

There are also five active CTE Center clinical studies designed to learn how to diagnose and treat CTE. Project S.A.V.E. (Study of Axonal and Vascular Effects) is actively recruiting 50+ adults who  played 5+ years of a contact sport, including American football, ice hockey, soccer, lacrosse, boxing, full contact martial arts, rugby and wrestling. BU CTE Center release.  The Daily Mail has a surprisingly  comprehensive article on the BU research, relatively young former players who killed themselves and others who turned out to have CTE, and (in this Editor’s opinion) the NFL’s limited efforts in providing for research funding, changing play/practice, and for league awareness. 

CVS opens the checkbook, does the Oak Street Health deal for a generous $10.6B

February 9, 2023 | by

Staying on strategy, CVS buys provider group Oak Street Health. First rumored in mid-January, CVS Health and Oak Street finalized their deal today. The $10.6 billion purchase price of the NYSE traded company rewards shareholders with a $39 per share purchase price. 45% of the shareholders are composed of Newlight Partners LP and General Atlantic LLC plus certain members of the Oak Street Health Board of Directors. They have agreed to vote the shares they own in favor of the transaction (with a whew! at exiting). It is expected to close this year subject to the usual Department of Justice antitrust, Federal Trade Commission (FTC), and state-level review.

The $39 per share price was a tick lower than the January speculation that the price would be over $40 per share. $39 is not bad; at close of last week OSH was trading at $26.80, a far cry from its 2021 share prices in the $50-60 range. Today’s price closed at just above $35.  It has 169 offices and 600 providers across 21 states, making it a manageable size for CVS. OSH is headquartered in Chicago. Their CEO Mike Pykosz will continue to lead OSH, which will become part of CVS’ new Health Care Delivery organization and will be payer agnostic.  Oak Street is notable for serving underserved patient populations–50 percent of Oak Street Health’s patients have a housing, food or isolation risk factor.  

CVS Health’s long term plan, announced at recent earnings calls, is to add services in three categories: primary care, provider enablement, and home health. They are not hurting for profit or financing, closing out 2022 with $4.2 billion profit which certainly is a shining star in the depressed healthcare sky. CVS projects more than $500 million in synergy potential at the 2026 goal which is over 300 centers by 2026. But there will be losses first: 2023 loss about $200 million and not turning the profit corner till 2025 at earliest. An attractive point for CVS is  Canopy, their proprietary technology that determines the appropriate type and level of care for each OSH patient–and care integrates nicely into CVS Health’s community, home and digital offerings, as they say.

Will DOJ allow it without divestment? This administration has already taken a fairly hard tack on antitrust, trying (and failing, though appealing) to block UHG-Change Healthcare. Already the CVS-OSH tie-up has been opposed by an antitrust think tank, the American Economic Liberties Project. Oak Street adds primary care practices to those already under Aetna, many of which are in Federal ACO programs. Signify Health also has Medicare ACO practice groups, including the Caravan ACOs bought late last year. The Signify buy is already under a rolling DOJ and FTC review that has been moving slowly since last October. Signify’s other strength is diversification into home health, CVS’ third target area.

CVS’ investment in Carbon Health ($100 million Series D investment into primary and urgent care clinics in Western states) may be considered as Carbon will be piloting clinics in CVS retail locations. Release, Mobihealthnews, Healthcare Dive, Becker’s (including a breakdown of CVS’ 2022 financials), FierceHealthcare

Amazon gets all tangled up on their $3.9B One Medical buy as FTC widens antitrust scrutiny

February 7, 2023 | by

Amazon’s ride towards being the #1 threat to healthcare hits an oncoming train. A report in stock analysis newsletter Seeking Alpha, picked up from other sources (the subscription Dealreporter), states that the Federal Trade Commission (FTC) hired outside economists to scrutinize Amazon’s $3.9 billion purchase of provider network One Medical (1 Life Healthcare). In a little-noticed action in early December, FTC also sent out subpoenas to current and former One Medical current and former customers as part of its investigation.

Both the Wall Street Journal and Bloomberg (paywalled) are reporting that this appears to be part of a larger FTC action in developing a wide-ranging antitrust lawsuit against Amazon on multiple anticompetitive business practices. In a recent example, FTC held up Amazon’s acquisition of iRobot (Roomba) during the summer, and in September, requested information from 1 Life and Amazon above and beyond the usual required Hart-Scott-Rodino Act (HSR) reports reviewed by the FTC and DOJ [TTA 15 Sept 2022]. This examination has been going on for some years, across two administrations, but may come to fruition as early as this spring. The main investigation is around Amazon favoring its own products, how it treats outside sellers on its platform, and copycatting the products of outside sellers. It may also cover Amazon Prime bundling practices. Prime also plays into its healthcare strategy. FierceHealthcare

Another factor: the highly profitable growth of Amazon Web Services (AWS) has taken a nosedive along with the cloud market, killing Amazon’s growth and value, according to Seeking Alpha’s analysis (may be paywalled). Amazon is also closing or pausing already built-out food stores–Fresh supermarkets and Go convenience shops–ending a long-term commitment to developing them.

When all of these factors are combined with Amazon’s 18,000 layoffs and huge 2022 net loss of $2.7 billion, it’s hard to believe that Amazon now has enough blue sky fisc to make the huge investment and long-term commitment that a largely new and cash-intensive business, delivering healthcare through real live providers in offices, will require. Amazon’s current health business is either transactional virtual retail (Pharmacy and the new non-face-to-face Amazon Clinic for virtual medical referrals) or hardware+subscription (Halo)–areas that Amazon knows well. But managing an entirely new and complex area that provides expensive and regulated provider services?

This Editor will go out on a wintry limb and predict that Amazon, facing FTC and state anticompetitive actions plus plenty of shareholder profit pressure , will cancel the deal with One Medical–leaving One Medical on another limb.

Week-end roundup: more House actions on telehealth benefits, VA EHR; Oracle exec moves to FDA digital health; Angle Health raises $58M; layoffs at Akili, Innovaccer, Athenahealth, Mindstrong

February 4, 2023 | by

Has the House in this 118th Congress acquired a propensity for taking fast action? It seems that under the new Speaker, the House on both sides, though divided, is energized and responding to changes that would benefit worker health–and perhaps find a way out of the VA Tower of Trouble that would ultimately benefit veteran care.

The first is a short (four page) bipartisan bill still in draft, the Telehealth Benefit Expansion for Workers Act, that would amend current law in the Public Health Service Act, the Employee Retirement Income and Security Act of 1974, and the Internal Revenue Code of 1986 to allow employers to provide telehealth to employees as excepted benefits. This allows employers to finance an additional benefit not covered under their primary health plan. Examples of excepted benefits are vision and dental plans. Sponsors of the bill are Rep. Suzan DelBene (D-WA) as lead and co-sponsors  Tim Walberg (D-MI), Angie Craig (D-MN), Ron Estes (R-KS), Mikie Sherrill (D-NJ), and Rick Allen (R-GA). This builds upon the Medicare and other plan reimbursement expansions contained in the omnibus budget plan passed in the 117th Congress that extended telehealth in high-deductible health plans with health savings accounts (HSAs). At this point, the bill is not numbered, submitted, or on Congress.gov. HealthcareITNews

Not addressed in this bill or any other is whether the extensions will cover hospital-at-home remote patient monitoring (RPM) that was permitted under waivers during the Public Health Emergency (PHE). With its scheduled 11 May end, the Connected Health Initiative (CHI) believes that CMS will not allow remote monitoring to continue in hospital-at-home programs, under current reimbursement and devices. CHI had sent Congress at the end of January a list of their priorities and they’ve received a hearing, but no action has been taken yet. Healthcare Finance

The second is a House bill that would support solving the issues around the VA implementation of the Oracle Cerner EHR without returning to VistA. This is being proposed by Democrats on the House Veterans’ Affairs Committee. According to FedScoop, which broke the story, this is being worked on as an alternative to Rep. Matt Rosendale’s H.R. 608 which would pull the plug on Oracle Cerner and revert back to VistA [TTA 1 Feb]. Exactly how this bill would solve Oracle Health’s issues with Cerner Millenium and support VA in continuing that EHR implementation after June is not specified. FedScoop’s source told them that “the proposal may have a wider scope than prior attempts at legislative oversight and could involve a complete rethink of how other IT projects are conducted within the agency. This proposal is focused at a higher level than just one program.” The lack of specificity in this broad brush is not precisely reassuring, but a bipartisan ‘game on’ by both parties on Veterans Affairs, perhaps a ‘good cop/bad cop’ treatment, could be an effective ‘nowhere to hide’ approach with Oracle. Becker’s

Oracle’s loss, FDA’s gain. Troy Tazbaz, formerly Oracle’s senior VP heading up their cloud transformation efforts, joined FDA as Director of their Center of Digital Health Excellence. In that capacity, he will be in charge of technology evaluation, policy development and strategic partnerships for safe healthcare use of digital technologies that advance public health. Certainly he is tanned, rested, and ready: Mr. Tazbaz  left Oracle last September and used part of that time to achieve a dream of bicycling from Chesapeake Bay in Maryland to San Francisco Bay over 58 days. FierceHealthcare

Employer insurer Angle Health raised a $58 million Series A. Lead was Portage Ventures, along with PruVen Capital, Wing Venture Capital, SixThirty Ventures, Mighty Capital, and several others. Angle’s angle is to act as a fully digital, full-stack insurance carrier that delivers comprehensive healthcare benefits tailored to startups and technology companies on one platform. Their baseline telehealth offering covers primary care, urgent care and behavioral health, outsourced to Included Health. They bundle this with administrative services and care navigation, and use the First Health and Cigna PPO networks according to their website. Angle recently expanded from Utah into Arizona, Georgia, Indiana, Ohio, Missouri, and South Carolina. Release, FierceHealthcare

Unfortunately, layoffs continue in and out of healthcare as funding and usage go south:

  • Akili Interactive in January cut 30% of staff, or 46 people. Akili has developed cognitive therapies for ADHD and other mental illness, including EndeavorRx, a prescription treatment delivered through a video game. Non-ADHD therapies have been put on hold. They announced going public via a SPAC in January 2022 via a merger with Social Capital Suvretta Holdings Corp. I which closed last August at over $14, and are currently trading at $1.92. Mobihealthnews
  • Innovaccer, a health data analytics company, later in January laid off 15%, or 245 people, in the US and India, to concentrate on their ‘core portfolio’. This is their second layoff round;  90 people or 8% went in September. This was quite a turnaround to their sunny-side up 2021, where they raised Series D and E rounds totaling $255 million backed by Tiger Global, Whale Rock, Mubadala Group, and Microsoft M12, achieving a unicorn valuation over $3 billion.  Mobihealthnews, Inc42.com
  • Athenahealth yesterday released 178, or 3% of its staff, two months after going private. They pointed to overhiring, a sluggish recovery in doctor visits, and inflation. They plan to release or move to less expensive office space in their current cities of Watertown, MA and Austin, TX. Boston Globe
  • In yet another sign that virtual mental health’s boom is deflating sharply, Silicon Valley-based Mindstrong is essentially shutting down. Almost all of its C-suite including the CEO and CFO are gone plus an additional 128 jobs including therapists. It is closing its headquarters and is ceasing patient services as of 10 March, yet is still recruiting on its website. Employees are departing between 24 March and 15 April, when presumably the last one out the door will turn out the lights.  Mindstrong raised over $160 million since 2014 including a $100 million Series C in 2020. Behavioral Health Business

News roundup: GoodRx pays $1.5M to FTC on Meta Pixel use, ATA concerns on Covid PHE end, defending Livongo sale to Teladoc, Philips lays off 18K, Amazon health layoffs–and big ’22 loss, Ireland HSE digital head quits, Matt Hancock assaulted on Tube

February 3, 2023 | by

Rounding up the week–and it’s not over. 

Prescription discounter GoodRx settled with the FTC for $1.5 million for the unauthorized sharing of user health data with Facebook, Google, Criteo, and other advertising sites. GoodRx used the Meta Pixel and other Javascript trackers in software development kits (SDK) for sharing user data with third-party advertisers. They would then be capable of serving personalized health and medication-specific ads to GoodRx users. This differs from the earlier Meta Pixel incidents which involved hospitals using the tracker on their website appointment schedulers and patient portals which exposed personal health information (PHI) under HIPAA regulations. GoodRx is not a covered entity, thus does not fall under HIPAA violations of PHI.

For the first time, the Federal Trade Commission (FTC) used the Health Breach Notification Rule, created in 2009, in charging GoodRx in a Federal court with misuse of consumer health information. The action was taken in US District Court for the Northern District of California, which has yet to approve the FTC order and the settlement.

GoodRx responded to the charges in their release that they stopped using pixel trackers in 2019 to protect user privacy. The trackers transmitted no PHI but primarily IP addresses and web page URL information. GoodRx maintains that this is a “novel application” of the Health Breach rule. But they settled with the FTC to avoid ‘the time and expense of protracted litigation’ on privacy issues they’ve already updated. HISTalk, The Markup, FierceHealthcare  TTA’s Meta Pixel articles

The good news for most of us is that the Public Health Emergency for Covid-19 will be ending 11 May. Not such good news, according to ATA and ATA Action, for mental health patients. While the omnibus budget passed at the end of the 117th Congress last year extended many telehealth provisions for two years [TTA 4 Jan], it did not extend the remote prescribing of controlled substances as part of the Ryan Haight Act. They are urging the Drug Enforcement Administration to release its rules for special registration for telemedicine as a first step. Release

With Teladoc’s $6.6 billion writeoff of the costs of acquiring Livongo in Q1 2022 [TTA 4 May 22], did Teladoc pick up an $18 Billion Bunch of Lemons in Livongo? Or did Teladoc mess up the expensive buy? You have to hand it to MedCityNews’ Arundhati Parmar for asking that burning question of Zane Burke, who was Livongo’s CEO at the time and the engineer of the sale, now CEO of Quantum Health. Not surprisingly, he said that “When we left the business, it was a freaking good business”, had just turned a big funding, was EBITDA positive, and wasn’t seeking a buyer. The massive difference was in the cultures, a ‘chasm’ that wasn’t bridged. One indicator: none of the top 16 Livongo executives stayed with Teladoc–and they were not required to as a condition of the sale. Teladoc considered it a ‘roll up’. 

This Editor was skeptical about it from the start–see TTA analyses 6 August and 11 August, as it happened in 2020. And while many smart observers were enthusiastic, others were not–the synergies (forgive me) they saw and the bottom line boosts were not there as predicted. In retrospect, which is always 20/20, it’s now proven to be a terrible buy. Teladoc has rebooted Livongo as of last month. More than the writeoff cost for Teladoc, it cost the industry, and affected lives.  It’s an important read in today’s situation.

Philips will be laying off 6,000 globally over the next two years, in addition to 4,000 booted this past October. Reasons why are the 2021 recall of Respironics ventilators, BiPAP machines, and CPAP machines because of the potential health risks of deteriorating polyester-based polyurethane (PE-PUR) foam, supply-chain challenges, lower sales in China, and the fallout from the Russia-Ukraine war. Their new focus will be on R&D and fewer ‘more impactful’ projects. Dataquest India, Mobihealthnews

Amazon’s layoffs of 18,000–and huge 2022 loss–also affected their developing healthcare areas. The shutdown of Amazon Care affected 159 jobs. But surprisingly, growth areas that had just rolled out new programs also lost staff. Amazon Pharmacy, which just rolled out RxPass, a $5 per month medication prescription service, laid off some of its program managers, risk compliance managers, and billing managers. Employees working on Halo health and fitness trackers were also laid off.  Becker’s Hospital Review  Yet many health executives see Amazon as the #1 threat to health systems’ core business. In a survey by Health Tech Nerds (sic), these execs predicted that Amazon might buy Color, Walgreens, and Smile Digital Health–in addition to a health plan! At this point, their One Medical buy is under scrutiny by both the DOJ and FTC [TTA 15 Sept 22] and on 2 February they reported a $2.7 billion net loss for 2022, the first since 2014 (The Verge) so those predictions on aggressive healthcare moves might be very blue side up.  Becker’s Hospital Review

In Ireland, Prof. Martin Curley, who headed digital innovation for the Health Services Executive (HSE), resigned in an unusual fashion. On LinkedIn announcing his resignation effective immediately, he said he has “called off this particular ascent on Everest”. In the post, he expressed frustration with supply chain and funding blockages, but later interviewed by the Irish Times cited poor IT infrastructure creating patient adverse outcomes, even death–and that senior administrators blocked new technology solutions. He is now a visiting professor at the University of Bath and a professor of innovation at Maynooth University. Irish Times 16 Jan, 25 Jan

And former Health Secretary Matt Hancock cannot catch a break. First, he was suspended from the Conservative Party in November, having decided that traveling to Australia for several weeks to appear in a reality show was more important–while he was Conservative Whip and Commons was still sitting. Now as an independent representing West Suffolk, in December he announced he will not stand for re-election next year. The insult upon injury was being assaulted last month by a 61-year-old man on the London Underground, following Mr. Hancock through Westminster station and onto a train, and earlier by the same man on Parliament Street. The Lancashire man was arrested. Lately quite in the BBC News.

Killnet racks up 22 more healthcare cybervictims and data thefts; whitepaper on best defense practices

February 3, 2023 | by

Ransomware attacks keep rolling through healthcare organizations. The latest tally just for Killnet, the rogue group of pro-Russian hacktivists, is up to 22 hospitals from Los Angeles to Egg Harbor, NJ. Becker’s HealthIT on Tuesday reported on 17 listed by BetterCyber on 31 January with another six yesterday. (BetterCyber’s Twitter feed subtracted Dartmouth Health Cheshire Medical Center from the victim list yesterday, thus 22.) Most affected are regional and community hospitals.

According to SC Media’s report on an HHS Cybersecurity Coordination Center (HC3) Alert, health and personal data were ‘exfiltrated’ onto the Killnet list. Quite oddly, and this Editor is sure it’s just a coincidence, the HC3 analyst note linked is offline; on a search to cross-check the link, the HHS pages show up in index form. Also Becker’s HealthIT 1 Feb 

The attacks were DDoS (distributed denial of service), described by HC3 as “thousands of connection requests and packets to be sent to the target server or website per minute, slowing down or even stopping vulnerable systems.” This ties up IT and slows down services such as websites or information portals. The danger in DDoS attacks, as noted in previous coverage [TTA 22 Dec 22] is that DDoS can be cover for other cybercrimes or information gathering in preparation for same. 

How can a healthcare organization ‘keep calm’ and lessen the impact of cyberattack, as it’s ‘not if, but when?’ A whitepaper by Cynerio,  focuses on microsegmentation, a network security technique that logically divides the data center into distinct security segments down to the individual workload/workflow level, and then defines security controls. (In marketing, market profiling down to buyer personas is similar.) The paper looks at how organizations should focus on four areas: visibility, risk mitigation, real-time defense, and regulatory compliance, then work through multiple considerations. Happily, the whitepaper (no registration required) is mostly understandable to those outside of IT. It also provides three case studies and checklists. Cynerio is a NYC-based healthcare-focused cybersecurity management company that helps hospitals to manage risk and secure their IoT, IoMT, and unmanaged IT and mobile devices.

Pull the plug on Oracle Cerner in the VA! Two House Representatives urge return to VistA, send bill to Veterans’ Affairs committee

February 1, 2023 | by

Hold your hand up if this comes as a complete surprise. A Congressman who was the top Republican on a subcommittee overseeing technology at the Department of Veterans Affairs (VA) has evidently had quite enough of the Oracle Cerner problems in implementing Cerner Millenium. Rep. Matt Rosendale of Montana has introduced H.R.608, titled “To terminate the Electronic Health Record Modernization Program of the Department of Veterans Affairs”. It would pull the plug on Oracle within 180 days, dissolve the VA Electronic Health Record Modernization Integration Office, and restore VistA/CPRS. In other words, back to the drawing board.

It was co-sponsored by Rep. Mike Bost of Illinois who is the chairman of the House Committee on Veterans’ Affairs, where the bill was referred on 27 January. Rep. Rosendale is now the chair of the House Veterans Affairs Subcommittee on Technology Modernization. 

This follows on last week’s two-day slowdown of both the VA and MHS Genesis systems, last summer’s Congressional hearings with the roasting that Oracle Health’s head Mike Sicilia and VA heads received over the OIG report on the ‘unknown queue’ that created 149 adverse events, and October’s delay in further Oracle Cerner rollouts in the VA from January 2023 to June.

While the likelihood that the bill would pass both House and Senate, and be signed into law, is low, H.R. 608 is one very heavy and clever cudgel for getting Oracle–and the VA staff involved with the conversion–to Pay Attention! Fix The Problems! There’s also leverage far beyond the VA EHR. Oracle has multiple Federal contracts which could be jeopardized or defunded. Stay tuned to further developments in VA’s Tower of Trouble and Oracle’s Mound of (Acquired) Misery.  Hat tip to HISTalk for the heads up, actually obtaining a screenshot of part of the bill which has not yet been posted on Congress.gov.  FCW.