Perspectives: Embracing the Power of EiPaaS in 2024 and Beyond

July 18, 2024 | by | No Comments

TTA has an open invitation to industry leaders to contribute to our Perspectives non-promotional opinion and thought leadership area. Today’s article is by Scott Sirdevan, co-founder and CEO at Vorro. In this article, Mr. Sirdevan explains the concept of EiPaaS and how it can integrate the digital programs and tools used by healthcare providers, securely, to enable customers to bring together data from any system to the point of decision. He holds a master’s degree in computer information systems from Kansas State University and was the lead inventor on Vorro’s three BridgeGate patents.

Vorro empowers businesses with seamless integration solutions to connect, transform, and automate their data processes, ensuring efficiency and innovation in the digital landscape.

Despite the increasing risk of using digital tools in healthcare due to faulty systems and cyberattacks, the booming health tech sector is becoming more vital for healthcare systems than ever before, delivering efficient, proactive, and more accurate solutions to providers.

Today, one of the most popular health tech solutions is Enterprise Integration Platform as a Service (EiPaaS), with its market expected to reach $10.26 billion by 2027. Essentially a data integration solution, EiPaaS streamlines healthcare provider processes by creating a centralized space in the cloud for all programs and tools to work in unison.

EiPaaS has become increasingly critical as healthcare systems seek increased collaboration between insurance companies, suppliers, and patients and deal with more software programs than ever. This integration connects all operations, making tasks automated, timelier, and safer.

Let’s examine three reasons modern healthcare providers should embrace EiPaaS:

1.    Seamless Data Integration

Delivering seamless data integration in healthcare is crucial for patient care. Fragmented care, often due to delayed communications between suppliers, providers, and insurance companies or human error, creates adverse effects on patients with chronic illnesses.

EiPaaS in healthcare operations ensures efficient communication and minimizes human errors, from typos to delayed manual processes. Providers can seamlessly share information with suppliers quickly, ensuring low-latency system responses.

Access to up-to-date patient data, such as allergies, prescriptions, and other patient information, helps physicians make informed decisions.

2.    Enhanced Scalability & Security

Cybercrime rates have skyrocketed since 2020, with 2023 witnessing the most attacks on record. Cybersecurity is paramount in healthcare, and EiPaaS solutions address these concerns by providing robust security measures. The “enterprise” in EiPaaS signifies a higher grade of fault tolerance, scalability, and cybersecurity, meeting standards like HIPAA and other government-mandated compliance requirements.

Often, healthcare providers hire vendors without vetting their cybersecurity stance, which puts their services and patients’ information at risk. In 2023, there were 725 large data breaches in the healthcare sector, exposing over 133 million records. Hacking incidents accounted for 79.72% of these breaches​ (The HIPAA Journal)​​ (HHS.gov)​​ (The HIPAA Journal)​. EiPaaS solutions feature up-to-date compliance, secure data sharing, and encryption, ensuring that digital services are safe and trusted.

Scalability is another significant advantage of EiPaaS. One of the biggest benefits is the ability to grow and shrink based on customer demand. This flexibility allows healthcare providers to handle large data loads efficiently. For instance, several of our customers have needed to load a large amount of data in a short time, and EiPaaS can scale up to support these large one-time bulk loads and conversions. This scalability ensures that healthcare providers can dynamically manage their data needs without compromising performance or security.

3.    Optional Fully Managed Services

A significant advantage of EiPaaS is its optional fully managed services. These services are beneficial for healthcare organizations in many ways. Healthcare organizations can focus on their core business, utilizing the EiPaaS provider to handle all Integration responsibilities and support. Managed services are more cost-effective and in sync with the specific systems healthcare organizations use daily.

As health tech solutions become more critical and scrutinized by regulators, data integration services like EiPaaS are taking center stage. EiPaaS’s robust cybersecurity practices, full audited chain of custody of data, and fault-tolerance scalability integration are what modern healthcare systems need today, leveraging technological advances to elevate service quality, resulting in excellent patient care.

For Perspectives editorial and other promotional opportunities, contact Editor Donna.

Short takes: fundings for Huma, Truvian, Headway, ThymeCare, Freshpaint; Headspace’s new CEO; UK M&A RLDatix-Carebeans; Elevance earnings news, another Steward shocker; Meta’s Reality Labs AR unit sinking–is Meta?

July 18, 2024 | by | No Comments

Rounding up the fundings first, as signs of life persist through AI disruptions, hacking, and layoffs:

Huma, the former Medopad, now up to a Series D and over $322 million in total funding. The $80 million funding represents a share issuance. Funders included AstraZeneca, Hat Technology Fund 4 by HAT SGR, HV Fund by Hitachi Ventures and Leaps by Bayer. London/New York-based Huma’s last major round was in May 2021 with a jumbo $130 million Series C, not unusual for that time. That round had a $70 million add-on option; looking at Crunchbase, there was a corporate round of £25 million and a debt financing of $30 million between the Series C and D. In 2020, Huma renamed, relogo’d, and pivoted then from something ill-defined around predictive diagnostics to a platform that supports ‘hospital at home’ plus pharma and research companies in large, decentralized clinical trials.

With the funding, Huma also announced the Huma Cloud Platform, designed to benefit their own projects and those of digital health developers with a library of pre-built modules and device-connectivity capabilities. The platform is FDA Class II, EU MDR Class IIb and Saudi FDA Class C cleared.  Huma release, Mobihealthnews

Truvian Health, developer of an automated digital benchtop blood-testing and diagnostics system, scored a $74 million raise in a venture round. The round was led by Great Point Ventures and Wittington Ventures, with participation from existing investors Medical Excellence Capital, Tao Capital, DNS Capital, 7wireVentures and TYH Capital. The company has raised over $208 million through this round and a 2021 (!) $105 million Series C. Truvian’s analyzer is not FDA cleared as of yet and the raise will be used to obtain that clearance. Truvian is also partnering with Shoppers Drug Mart, Canada’s largest pharmacy, as a commercial partner, having worked with Truvian last year on an onsite evaluation versus standard lab testing. Echoes of Theranos, except that it may work?  Release, Mobihealthnews

Behavioral health platforms are still getting financing, with Headway benefiting from a $100 million unlettered venture round. Spark Capital led the round with previous investors participating including Thrive Capital, Accel, Andreessen Horowitz and Global Founders Capital for a total funding of $325 million and a $2.3 billion valuation. Their last round was a $125 million Series C in October 2023 which was pretty impressive in the middle of a funding drought. Reports are a little scarce including no mention on their website, but Behavioral Health Business has what’s available via Bloomberg News. Headway’s niche is exclusively partnering with health plans to provide members with therapy and psychiatry.

One of Headway’s competitors, Headspace, named a new CEO, Tom Pickett, as their new CEO, effective 12 August. He joins from DoorDash, where he served as chief revenue officer, which is quite a leap. Prior to that, he was in digital media and the US Navy as F/A-18 pilot and “Top Gun” graduate. Pickett replaces Russell Glass, who resigned in March. Headspace has had a rocky time of it versus competition, with layoffs of 15% last July and a $105 million senior debt financing to get by [TTA 27 July 2023]. Release

Value-based cancer care platform Thyme Care announced a capital raise of $95 million. The Series B round of equity funding was led by Concord Health Partners with participation from all existing investors, including CVS Health Ventures, Town Hall Ventures, a16z Bio + Health, AlleyCorp, Echo Health Ventures, Frist Cressey Ventures, and Foresite Capital. Adding to this was a $40 million debt financing from Banc of California. The fresh funding brings their total to $178 million. According to MedCityNews, “Thyme Care manages over half a billion dollars in medical spend through its risk-based contracts and anticipates tripling that amount within the next year. The company has also doubled its oncology partnerships in the last six months and intends to expand nationwide by securing new contracts with health plans, employers and primary care groups that bear financial risk”. Release, Mobihealthnews 

Freshpaint took a slightly different tack with its announcement of a $30 million Series B round. Their CEO/co-founder’s blog for this healthcare-focused performance marketing/data infrastructure security company interestingly asks the question why they decided to obtain additional financing. Well, they want to cover the waterfront (Editor’s term) of healthcare beyond hospitals to payers, other providers, and retail health. The financing was led by Threshold with additional participation from SignalFire, Intel Capital, Zero Prime, and Y Combinator. Their Series A back in November 2022 was a modest $9.5 million, for a total since their start of $42 million. 

On the M&A front, we have the UK’s RLDatix acquiring Carebeans. Transaction cost and staff transitions were not disclosed. The two systems will be integrated with single sign in. RLDatix is a healthcare operations platform that captures data across risk, safety, compliance, provider lifecycle and workforce management. Carebeans also provides care management services software primarily in the domicilary, care planning, supported care, and social care management sectors. Release

Elevance (the former Anthem) had a decent quarter. Their Q2 notched $2.3 billion in profit but the company turned around and lowered their full year guidance due to weakness in the health insurance business that reduced total revenue slightly to $43.2 billion. While beating Mr. Market, the ongoing weaknesses in the payer market have analysts seeing yellow and red flags. Elevance’s Medicaid enrollment declined 5%: 2.2 million to 45.8 million. As UHG stated in their earnings results, they are swimming against a general trend toward elevated utilization rates and higher acuity populations, particularly in Medicaid, which was offset by increased premiums. For Medicare Advantage, they believe their plans will benefit from CMS’ rerun of the Star ratings and balance out reimbursement cuts. Healthcare Dive, FierceHealthcare

As if the Steward Healthcare story couldn’t get any more seamy (not steamy–that was earlier this month), 14 executives paid themselves $1 million + salaries and bonuses in the year prior to the company’s Chapter 11. MedCityNews did the math on the bankruptcy filing addendum (Statement of Financial Affairs Amendment). The CEO earned a $3.7 million salary, the president of Steward Health Care a $1.73 million salary plus a $500,000 bonus, and the EVP for human resources a $842,000 salary with a $300,000 bonus. Extremely high C-level/EVP salaries in healthcare are not unusual even for smaller organizations, but Steward was in trouble plenty for some years, and being sued right and left by vendors for long-delayed payments and bouncing checks. You wonder what the debtors-in-possession will make of all of this

Last but certainly not least are reports of layoffs and major restructuring at Meta (Facebook)’s Reality Labs, which is their unit for augmented reality (AR)/virtual reality (VR) headset and software development unit. It’s now separated into two units, Wearables (headsets, glasses such as smart Ray-Bans) and Metaverse (platform and Quest headsets). Reports that are primarily paywalled have said that multiple leaders have been laid off from the company, with The Information (paywalled) stating the late June layoff affected a dozen VPs and directors. Teams also have to cut spending 20% by 2026, with the bulk of the cuts this year. Meta, despite billions in investment and Metaverse hype by Mark Zuckerberg including a corporate name change, has largely failed against Apple’s Vision Pro and others. ABPLive, EM360Tech

Whither Meta? An Editor’s Opinion: This Editor believes that Meta requires a real housecleaning which may be beyond the abilities or interests of its controlling shareholder. The Reality Labs reorganization resembles rearranging deck chairs on a listing ship as AR/VR users in healthcare invariably use Apple and other headsets. While claiming 175 million users of an X-like platform called Threads, does anyone actually use it? Facebook is suffering from an aging user base and Gen X defection. Ads are down in overall share though still around 10%. Effectiveness in the past few years is also dropping due to fatigue factor. As a Facebook admin for a non-profit organization, their tools feel a decade old–clunky and hard to use. Facebook Marketplace is a modest success as an e-commerce adjunct to Facebook, but resembles CraigsList. Zuckerberg seems to care more for his charities and political influence, so perhaps it’s time for him to leave management to others–and retire.  

News roundup: UHG’s cyberattack hit now $2.3B, Senate bill on cyberattacks intro’d, VA’s AI tech sprint awards, AliveCor’s new CPT codes

July 18, 2024 | by | No Comments

UHG reported earnings, profit reduced by $1 billion due to Change Healthcare cyberattack costs. On Tuesday 16 July UnitedHealth Group reported Q2 (ending 30 June) earnings of $98.9 billion, up $6 billion or 7% versus Q2 last year. Profit though didn’t move the same way, instead taking a hit at $7.9 billion, down from last year’s $8.1 billion. Despite strong performances in the UnitedHealthcare and Optum units, the drag from the Change Healthcare cyberattack is now estimated at an additional $1 billion from last quarter’s guesstimate, now at $2.3 billion. Also affecting the profit bottom line is inflating healthcare costs that are reflected in rising medical loss ratios (MLRs). Change is also obliged to do the patient notification which will start by the end of this month [TTA 21 June], having already started notifications of hospitals, providers, insurers, and other customers. Release, Healthcare Dive

But hey, now the Senate has a bill to coordinate agencies with the purpose of reducing those darn cyberattacks. The Healthcare Cybersecurity Act, sponsored by Senators Jacky Rosen (D-Nev.), Todd Young (R-Ind.), and Angus King (I-Me.), would direct the Cybersecurity and Infrastructure Security Agency (CISA) and the Department of Health and Human Services (HHS) to collaborate on improving cybersecurity. One important change would be creating an HHS liaison within CISA to coordinate incident response specifically for healthcare entities. An earlier version introduced by Sen. Rosen in 2022, S. 3904 (117th Congress), never made it into committee.  Sen. Jacky Rosen release, Healthcare Finance   But aren’t there other agencies involved in cyberattacks and ransomware like the FBI and the Department of Justice? And international agencies like the NCA and Europol since so many come from the darker parts of Europe and Asia? (The devil’s in the details…)

The Department of Veterans Affairs (VA) is taking a modest dip into the AI ocean. The award late last week of pilots for an AI-assisted healthcare dictation tool went to Abridge AI and Nuance Communications. The non-competitive, fixed-price contracts are as a result of the two companies winning the first track of the VA’s AI Tech Sprint which launched last October. The tools are designed to generate transcriptions from ambient recordings of patient encounters within specialty care, mental health care, and primary care settings, as well as integrating into the Oracle Cerner EHR. The notice does not specify start or end date. There is also a second sprint around developing an AI system to process documents generated in patient-provider encounters and other complex medical documents for continuity of care and sharing information with VA providers. FedScoop

AliveCor received CPT codes applicable to the company’s Kardia 12L ECG System. The Category III Current Procedural Terminology (CPT) codes are assigned by the American Medical Association (AMA).  The 12-lead system a few weeks ago gained FDA clearance for the combination of the Kardia 12L ECG System (left), a single cable with five electrodes that acquires 8 high-quality diagnostic bandwidth leads, with their KAI 12L AI-assisted diagnostic technology for clinician use only. The three new codes will be effective 1 January 2025 and will be published in the 2025 CPT Code book. Release

Masimo v. Politan goes into extra innings with two-month shareholder meeting delay, mucho maneuvering

July 17, 2024 | by | No Comments

In the history of proxy battles and hostile takeovers, Masimo v. Politan may be one for the business and law school case histories. The latest moves by health tech monitoring (and sound) company Masimo are to sue–both metaphorically for extra time and literally in a Federal court.

  • Masimo postponed on Tuesday 16 July their shareholder meeting, originally scheduled for next week–Thursday 25 July–to Thursday 19 September. The revised proxy statement will be filed with the Securities and Exchange Commission (SEC). This not only allows shareholders additional time to review materials but also, as requested by Politan Capital Management, a later ‘record date’  (deadline for share ownership) of 12 August. 
  • The downside of the postponement is that any shareholders who have already voted their proxies must vote again. Downside #2:  in this Editor’s view, conceding this allows Politan to accumulate additional shares beyond their current 9%.
  • Another reason for the delay: in a California Federal court, Masimo has filed for an injunction that seeks to force Politan Capital to correct “material misstatements and omissions” in its proxy materials.
  • Masimo also alleges in the complaint that Quentin Koffey, Politan’s chief investment officer and the company’s representative on Masimo’s board of directors, has assisted Politan’s counsel in litigation against Masimo.

The fight on the Masimo board of directors for two open seats pits the Masimo slate of CEO Joe Kiani and outside candidate Christopher Chavez, against Politan’s Darlene Solomon and William Jellison. Politan already holds two seats and with a win of two additional seats will control the company. Two outside proxy advisors, ISS and Glass Lewis have recommended that Masimo shareholders support both Politan nominees. Glass Lewis in particular accuses Masimo and Kiani in a form of proxy manipulation called ’empty voting’ by a 9.9% shareholder named RTW, a $5.9 billion fund described by Joe Kiani on the RTW website as a decades-long ‘trusted partner.’

Countering this are multiple conditional resignations from managers to leadership that would be effective if Politan controls the company, which would constitute a pyrrhic victory.

The bone of contention started in 2022 with the tussle over Masimo’s $1 billion purchase of Sound United’s consumer audio business, which made their share price crater. Masimo announced last week [TTA 10 July] plans to sell a substantial portion of that consumer audio and healthcare business to a to-date unnamed investor. MedTech Dive, Strata-gee.com, Masimo release

A few days earlier, Strata-gee summarized Masimo’s preliminary financials for Q2 2024 as strong for the Healthcare division with revenues of $344 million, up 22% at $63 million or 22% versus $281 million in Q2 2023. But the Sound United unit sank these good results with a 13% decline in revenues to $152 million–a decline that has been fairly consistent. Masimo needs to find another investor or sell off Sound United.

Stay tuned!

Walgreens’ Mound of Misery piles higher with shareholder class action lawsuit, skeptical industry opinion

July 17, 2024 | by | No Comments

Walgreens Boots Alliance (WBA) faces shareholder, analyst discontent. The securities class action lawsuit filed by investor Rizwan Bhailain on 12 July in the US District Court for the Northern District of Illinois alleges that WBA misled investors with “overwhelmingly positive statements” about its pharmacy division while “concealing material (sic) adverse facts” such as the pharmacy division being “not truly equipped to handle ongoing challenges in its industry” and that “Walgreens would require significant restructuring to create a sustainable model.” The proposed class is for those who purchased shares between 12 October 2023, right before CEO Tim Wentworth started, to 26 June 2024. Wentworth, CFO Manmohan Mahajan, and chief pharmacy officer Rick Gates are also named in the lawsuit. The law firms involved are Lubin Austermuehle P.C., the Law Office of Terrence Buehler, both in Illinois, and Levy & Korsinsky, LLP in NYC. Crain’s Chicago Business, Scribd (lawsuit full text)

Industry stock analysts aren’t crazy about what is happening either. As the stock remains in the doldrums below $12, Walgreens’ billion-dollar ‘cut and sell’ strategy under Tim Wentworth has not led to optimism. Full year guidance was lowered only weeks ago after Q3 results were in. [TTA 2 July] The assumption based from the Q3 call that one-quarter of Walgreens’ 8,700 US store locations are candidates for closure by 2027 hasn’t bolstered confidence from one influential firm, Raymond James, where an analyst remarked in a recent report: “We are unaware of any retailer successfully adopting a ‘shrink to survive’ strategy.”

MedCityNews’s dismal headline, “Walgreens’ Finances Are in Dire Straits — But All Hope Is Not Lost”, interestingly had no counter from Walgreens per author Katie Adams’s requests. She tried to find some optimistic voices but the best she could manage was a sanguine view from Stephanie Davis, senior equity research analyst at Barclays. She approved of shrinking VillageMD as the largest drag on Walgreens’ financials, but acknowledged that the ‘headwinds’ in retail pharmacy justified an underweight or sell rating.

UpScript Health’s CEO Peter Ax was quoted at length pointing out other factors affecting both the ‘front’ of the store and pharmacy. In the front, there’s theft, lack of staff, supply chain shortages, and consumer wallet shortages. Over in the pharmacy section, shrinking margins, lack of pharmacists, and the squeeze between the current cost of capital and Walgreens’ financials will likely hamper reconfiguring stores and adopting efficient technologies. Another factor is that the patient blending between the pharmacies and primary care has proved to be extremely difficult. Walgreens, in trying to create a pharmacy/VillageMD closed system, now sees it as low margin/high cost, and wants to offload the cost onto additional investors. (Not much different than CVS with Oak Street Health, except that CVS got to the JV point faster. TTA 29 May) 

Even when locations are closed, some leases may be difficult to terminate or ‘repurpose’–and in these closures, Walgreens will be dealing with the anger of communities believing they will be shortchanged in access to pharmacy and healthcare, which knock on to the political and bad publicity that’s not needed.

The ride continues to be rough for Wentworth and Company. What Mr. Market is saying is that some very good news needs to be forthcoming, quickly. If Walgreens is ‘too big to fail’, as the Trilliant analyst quoted in the article put it, well, that hasn’t proved true for other companies in similar situations.

Mid-week news roundup: HarmonyCares $200M round, Risant to buy Cone Health, Courier Health’s $16.5M Series A; Coalition for Health AI loses HHS/FDA members; Weekend Read–reining in AI’s Wild West?

July 11, 2024 | by | No Comments

In further Signs Of Life in healthcare funding and acquisitions:

In-home primary care provider HarmonyCares obtained $200 million in an unlettered round. Lead investors are General Catalyst, McKesson Ventures, and interestingly, an unnamed large national payer. Other investors are K2 HealthVentures with existing investors Rubicon Founders, Valtruis, HLM Capital, and Oak HC/FT. HarmonyCares provides in-home primary care to 70,000 patients in 15 states via 175-plus providers. Care teams include nurse care managers, social workers, and pharmacists, reinforced by 24-7 on-call support. The integrated model serves higher-needs patients through value-based care partnerships with Medicare Advantage plans and Medicare ACO programs via Centene, Aetna, and others. The fresh funding will be used for market expansion and scale up new technology for clinical outcomes and patient satisfaction. The company was founded as US Medical Management in 2013, became majority owned by Centene Corporation, which then sold it off as part of their 2021 divestitures. Release, FierceHealthcare, MedCityNews

Risant Health, the nonprofit/community-based hospital system initiative of Kaiser, intends to acquire Cone Health of Greensboro, North Carolina. Cone has five hospitals and an insurance plan. Purchase price was not disclosed, but Cone’s 2023 operating revenue was $2.8 billion. Closing the deal is dependent on the usual approvals. Cone plans to continue to operate independently. It is the second of five planned acquisitions with a $5 billion war chest that kicked off with Pennsylvania-based Geisinger that closed in April, The systems are being chosen for value-based care and population health models–as well as financial health and geographic expansion. Geisinger added $4.6 billion in a one-time gain to Kaiser’s bottom line last quarter.  MedCityNews, Healthcare Dive

Geisinger also experienced a massive data breach initiated by a former Nuance Communications employee that potentially exposed 1.2 million records. While it took place in late 2023, it was reported only last week. TTA 2 July

Courier Health added a $16.5 million Series A from Norwest Venture Partners and existing investor Work-Bench to its existing $4 million in seed funding. NYC-based Courier is a customer relationship management (CRM) platform to manage specialty medications across the patient journey, coordinating information for biopharma companies from patients and providers for field access, patient services, and marketing teams. Release, Endpoints

The Coalition for Health AI (CHAI) is losing two members out of HHS: Micky Tripathi and Troy Tazbaz. They were named in March to the CHAI board of directors as non-voting Federal liaisons. Both withdrew from the BOD due to potential Federal regulatory conflicts surfaced by Congress with this primarily private and for-profit organization. Dr. Tripathi is head of the Office of the National Coordinator for Health Information Technology (ONC-HIT) and Acting Chief Artificial Intelligence Officer at the US Department of Health and Human Services (HHS). Mr. Tazbaz is Director of the Digital Health Center of Excellence (DHCoE) at FDA. An FDA spokesperson told Healthcare Dive that Mr. Tazbaz is stepping down after the agency decided it no longer needed to participate in CHAI as a non-voting member. Hmmmm…..

Weekend Read: despite CHAI and other well-meaning agencies, including Federal, AI still resembles The Wild West. The author of this MedCityNews influencer piece points out that a faulty algorithm can make the difference between life and death. While he credits AI scribes for lightening provider load, AI is no quick fix or a bucket of cherries. FTA:

  • Bold claims abound but aren’t backed up by clinical research or regulatory oversight
  • Healthcare has become saturated with AI solutions that blur the line between what’s regulated and what isn’t. Clinicians have been left in the dark and are pushing back–the nurses’ protest against Kaiser is but one example.
  • AI development should be viewed through a regulatory-grade lens. The ability to demonstrate that a solution is positively impacting the care of a patient and not creating patient safety issues is crucial.
  • Clinical AI needs to go through the FDA approval process and developers need to understand that process.
  • The solution is not there to replace the clinician

Of course, this is all happening as healthcare is targeted by ransomware bad actors–and while health systems are laying off experienced IT staff, who have to be part of this evaluation. The above-mentioned Kaiser laid off well over a hundred in the past few months. Becker’s

Two debuts of note: Samsung’s Galaxy Ring, Watch upgrades; Alivecor’s InstantQT+KardiaMobile 6L Europe launch

July 10, 2024 | by | No Comments

Samsung’s big reveal at Unpacked in Paris today was the new Galaxy Ring device and health enhancements to the Galaxy Watch. Lots of health tracking features powered by Galaxy AI are packed into both that work best (of course) in the Samsung Health ecosystem, such as ring and watch together with Galaxy phones. General availability is 24 July. A topline review:

Galaxy Ring

–Accelerometer, optical heart rate sensor (including green, red, and infrared LEDs), and skin temperature sensor
–Sleep monitoring: movement during sleep, sleep latency, heart and respiratory rate. Quality of sleep analysis.
–Menstrual cycle via skin temperature tracking.
–Heart rate when unusually high or low, plus real time heart rate checking
–Exercise and the kind of workout or activity a person is doing
–Pricing at $399.99, available today at Samsung, Amazon, and Best Buy today, all other retailers 24 July. Size of ring is around 2.3 to 3 grams, depending on ring size (Samsung provides sizers). It’s also charged in a special dock and a single charge can last up to seven days.

Galaxy Watch 7 ($299) and Galaxy Watch Ultra (for athletes, $649)

–BioActive sensors for preventative care, capabilities to obtain more accurate health measurements, advanced athletic tracking capabilities and an emergency siren.
–Modifications to the photodiodes for more accurate data capture
–Blood oxygen levels, sleep quality, stress levels, heart rate

Data from both the Ring and Watch tie into Samsung Health apps that monitor blood pressure (CE Marked for EU), FDA-cleared ECG, and de novo clearance for detecting signs of sleep apnea. There is also a biomarker index, Advanced Glycation End Products (AGEs) Index, that indicates metabolic health and biological age markers.

More details: CNBC, The Verge, Mobihealthnews, Samsung release

Alivecor launches InstantQT in Europe. Used with Alivecor’s KardiaMobile 6L device and the KardiaStation app, InstantQT remotely records a point-of-care ECG and evaluates patients for potential cardiac abnormalities – all in less than one minute.  QT represents the time it takes for the heart muscle to contract and then recover (the electrical activity between the Q and T waves). Many medications can prolong that time leading to arrhythmias and potentially sudden heart failure. For monitoring those on antipsychotic medications and some cancer treatments, the quick evaluation by the patient using the KardiaMobile 6L device with the KardiaStation professional app can be performed on iOS devices. The InstantQT measurements are made using the EK12 ECG algorithm from GE HealthCare. Release

 

News roundup: Masimo has offer to JV consumer business for $950M or more, Get Well sold to SAI, One Medical scored on poor handling of urgent calls from Iora patients

July 10, 2024 | by | No Comments

Slow early July? Not quite.

Masimo’s maneuvering continues with a potential $950 million offer to buy into its consumer audio and health business. The unnamed offeree listed in Masimo’s latest Form 8-K is a potential joint venture (JV) investor negotiating with Masimo since 7 May. Masimo would sell off the majority stake of its consumer audio and consumer health businesses to the partner, that would make 1) a cash payment to Masimo and 2) contribute cash. The 2 July update confirms that the potential partner is offering in the range of $850 million to $950 million on a cash and debt free basis. It’s by no means a done deal as Masimo is pressing for more cash and for retaining certain intellectual property rights. For instance, Masimo’s IP would be for use solely within the consumer field, not healthcare. The Apple litigation on IP infringement on their pulse oximetry (SpO2) sensors and software would remain with Masimo.

The consumer audio business would include the international audio brands acquired in the $1 billion buy of Sound United in 2022: Bowers & Wilkins, Denon, Polk Audio, Marantz, Definitive Technology, Classé, and Boston Acoustics. Their consumer healthcare includes smartwatches and the Stork baby monitor.  MedTechDive

This is an interesting Act 3 Curtain Raiser to Masimo’s ongoing proxy fight with ‘activist investor’ Politan Capital Management, which is attempting to take two more seats on the board of directors and wrest control from the current board controlled by CEO/founder Joe Kiani. Hundreds of Masimo staff have threatened to resign if Politan takes over. The shareholder meeting is on 25 July. TTA 2 July

Get Well, a patient engagement platform, has been acquired by SAIGroup for an undisclosed amount. Get Well serves health plans and systems with patient engagement at point of care, digital care plans, and AI-enabled care navigation. SAI will integrate their existing advanced predictive + generative Eureka AI platform into Get Well’s offerings. SAIGroup has two other AI-related companies in its portfolio: ConcertAI and generative AI RhythmX AI. Michael O’Neil will continue as Get Well Founder and CEO. Release    Hat tip to HIStalk 7/10/24

A story highly critical of Amazon’s One Medical broke over the holiday weekend with a PBS News story about patients put at risk by sloppy call handling. The patients were former Iora Health members, acquired with One Medical, who are older 65+ adults in Medicare Advantage and Medicare Shared Savings Programs (MSSP) ACOs including the advanced ACO REACH model. In March, calls to Iora Health offices were shifted to what Amazon termed ‘mission control’ in Tempe, Arizona. The call center reps did not have access to their records and were not medically trained. The patients were calling with acute symptoms–one of 17 ‘red flag’ symptoms such as symptoms of a blood clot, sudden rib pain, stomach pain and blood in their stool. At the call center, they were not triaged to immediate assistance and instead were given appointments later that day or later in the week. Amazon is claiming that as far as they know, no patients were harmed. Becker’s

As TTA backgrounded on 6 March, the former Iora offices were rebranded, if not closed, as One Medical Senior and they would shift to existing One Medical offices. FTA: Existing patients, many with multiple chronic conditions, reported cutbacks in callbacks, appointment length, physician load, and services provided such as transportation. One clinic had 20 staff cut back to five with patients pushed out to virtual visits–hardly appropriate for a high needs, older, less technologically savvy patient population in value-based care, quality-measured models.

How will these high care needs patients in tightly monitored, intensive programs such as MA and ACO REACH, mesh with the cheap efficient approach that Amazon takes with everything–including One Medical?

VA sued in Federal court on Oracle Cerner EHR accessibility issues

July 8, 2024 | by | No Comments

What you may have missed over the holiday–another one to add to the VA’s Mound of Misery with the Oracle Cerner rollout. The Department of Veterans Affairs (VA) is being sued on the choice of Oracle Cerner as the successor to VistA and its inability to accommodate Federal accessibility requirements. The new EHR apparently does not accommodate assistive technology, such as screen readers that enable the visually impaired to read and direct input on computer screens and thus perform their work. The lawsuit was filed on 21 June in the US Federal District Court for the District of Columbia by Laurette Santos, a clinical social worker at VA’s White City, Oregon, facility.

Ms. Santos is a 10+ year veteran of the VA. In her job as Visual Impairment Services Team (VIST) Coordinator since 2019, she relies on the Job Access With Speech (JAWS) screen reader application. Like the veterans she counsels, she is also legally blind and has been since 1988.  She requires access to the EHR in order to obtain veterans’ histories, determine their needs, and input notes. JAWS converts the screens into spoken words (or Braille output through a connected device) and allows blind users to access and interact with applications using the computer keyboard. In planning for the Oracle Cerner transition in June of 2022, she reported in 2019 that the JAWS screen reader did not work with the new EHR and didn’t even allow her to sign in. At work, she continues to use VistA in a read-write-only format but cannot use Oracle Cerner and must delegate tasks to sighted employees. Bottom line, she cannot independently perform her work whereas previously she was able.

The lawsuit charges that the VA did not ensure that the Oracle Cerner EHR complied with the Section 508 accessibility standards per the contract and that it worked before its implementation. Section 508 has been part of every Federal contract since 1998, when the Rehabilitation Act of 1973 was amended to make electronic and information technology accessible to people with disabilities. Between November 2020 and November 2021, the VA’s Section 508 Office conducted several audits and found the Cerner EHR was inaccessible. The lawsuit alleges that this constitutes ongoing violations of both Section 508 and Section 501 of the Rehabilitation Act; Section 501 prohibits discrimination against individuals with disabilities. Veterans also cannot use features tied into Oracle Cerner as they are non-compliant.

In the lawsuit, Ms. Santos is represented by The National Federation of the Blind and Brown Goldstein & Levy partners Eve Hill and Chelsea Crawford. The VA does not comment on pending litigation. HIT Consultant, Federal News Network

Done Global Federal probe expands to five more people; company suspended from Google, TikTok ad platforms

July 3, 2024 | by | No Comments

The first telemedicine prescribing Federal prosecution adds charges against five additional employees. The charges are similar to those for Ruthia He, the founder/CEO, and David Brody, listed as the clinical president of Done Global (Done)–providing easy online teleprescription access to Adderall and other Schedule II stimulants, skirting the normal restrictions provided in the Controlled Substances Act (CSA) and other regulations [TTA 19 June].

These new charges center on an alleged scheme to defraud federal health care benefit programs including Medicare and Medicaid and are part of the Department of Justice’s 2024 National Health Care Fraud Enforcement Action.

Those charged are Riley Levy, 30, Done’s executive leader, operations and strategy; prescribers Christopher Lucchese, DO, 58; and nurse practitioners Yina Cruz, 37, Katrina Pratcher, 70, and Erin Kim, 54. Levy, Lucchese, Cruz, and Pratcher were charged in the Northern District of California (US Attorney’s office release). Erin Kim was charged in the Middle District of Florida (Case Summary). 

Prescribers were paid based on initial consultations–if they took place–then auto-refills without follow up. Prescribers are also charged with writing prescriptions where Adderall, for instance, was not medically necessary and issued to people who did not have ADHD. Follow up meetings were not compensated and frowned upon.

  • Nurse-practitioner Erin Kim from Florida prescribed over 1.5 million pills since 2021 and earned over $800,000. Done’s system with auto refills even prescribed to patients who had died. As of the end of May, her patient roster was still over 1,100.
  • Nurse-practitioner Yina Cruz from New Jersey made about $20,000 a month prescribing primarily stimulants to 2,300 patients, according to a 2022 interview with The Wall Street Journal. She renewed prescriptions based on forms patients filled out online, sometimes as fast as two renewals a minute. 

Done didn’t respond to a request for comment from the WSJ. A spokesman for the founder, Ruthia He, said she hasn’t entered a plea. The senior doctor, David Brody, has pleaded not guilty. Done maintains a statement on its website of disagreement with the charges and continuance of normal operations.

Done Global knocked off of TikTok and Google ad services–but not Meta. In 2022, Done lost certification by LegitScript, a clearance service for telehealth companies. Advertising continued on Google, Meta, and TikTok into June. Last week, Google and TikTok told the WSJ that Done was suspended. Advertising continues on Meta (Facebook) as long as the ads promote a service, not prescription drugs. The numbers in a suffering online ad market aren’t small, either. Done spent $7 million on Meta ads since November 2022, $20 million on Google, and about $3 million on TikTok ads. based on documents reviewed by the WSJ. Wall Street Journal, The San Francisco Standard

Short takes: Fabric buys Walmart’s MeMD telehealth arm, Geisinger data breach via vendor exposed ~1.2M records, UK’s Careium develops resilient rSIM, $50M funding for K Health, India’s Alyve’s $6M Series A, Upside Health closes

July 2, 2024 | by

Walmart Health’s virtual care telehealth services, originally known as MeMD, sold to care enablement/workflow integrator Fabric. The transaction is effective immediately though no purchase price, management transition, or change in website were disclosed. The sale is no surprise as Walmart Health in shutting their clinics starting at end of May depicted the shutdown as total, lambasting low reimbursement and the cost of business as factoring into an unsustainable model. Fabric, based in NYC, uses conversational AI to triage patients, evaluate with decision support, and optimize resource allocation and patient flow.

Fabric claims that MeMD has 30,000 corporate, institutional, and health plan partners and 5 million members, Walmart bought it for an undisclosed amount in May 2021 during the telehealth boom. It expanded to include not only urgent care, but men’s and women’s health issue support, mental health and psychiatric support. Fabric’s funding since their founding in 2021 as Florence Labs is $80 million, the most recent a February Series A round of $60 million with General Catalyst, Thrive Capital, GV (Google Ventures), and four others. They bought a telehealth Ur-company, Zipnosis, from then-Bright Health in May 2023 [TTA 24 May 2023] and GYANT, an AI-assisted enablement company, in January. Release, Mobihealthnews

Geisinger, the lead health system within Kaiser Permanente’s Risant Health, experienced a data breach that potentially exposed 1.2 million records. The former employee of Nuance Communications, an IT provider in clinical documentation, accessed records two days after his termination. Geisinger discovered the breach on 29 November 2023, Because of the ongoing investigation, patients were not notified until 24 June.

Breached information varies by patient, but it included names combined with one or more of the following: date of birth, address, admit and discharge or transfer code, medical record number, race, gender, phone number and facility name abbreviation. No claims or insurance information, credit card or bank account numbers, other financial information, or Social Security numbers were accessed.

The former Nuance employee has been arrested and is facing federal charges. Nuance had no comment. Release, Healthcare Dive

In an important development for the UK’s rapidly implementing digital switchover, now extended to January 2027, Careium has developed an ‘intelligent’ SIM card for devices. It partnered with CSL to develop a “resilient’ rSIM that actively monitors connectivity and will switch either profile for maximum uptime on all UK networks. rSIM is available for all Careium 4G products in the Eliza smartcare hub and is compatible with current devices. Careium is marketed and covers about 400,000 seniors in the UK, Sweden, Norway, the Netherlands, Germany, and France.  Release

Two fundings of note–and one shutdown:

K Health, a NYC-based digital primary care startup, received $50 million in venture round funding from lead investor Claure Group. Additional investors were Pablo Legorreta, founder and CEO of Royalty Pharma, Mangrove Capital Partners, Valor Equity Partners and Atreides Management LP. Total funding to date is over $380 million through a Series E plus two venture rounds. Valuation is estimated at $900 million. K Health supports users through an app with AI-assisted diagnostics as well as partnerships with leading health systems in 48 states including Cedars-Sinai and health plans Elevance and UnitedHealthCare. Conditions supported are primary care, weight management, urgent care, and mental health. Release, FierceHealthcare

Alyve Health, a Mumbai, India-based digital health provider, raised a Series A of $5,5 million. It was led by Axilor Ventures with participants 1Crowd Fund, InHealth Ventures, and Trifecta Capital. Alyve provides services to corporate markets to simplify the health plan experience for members across multiple healthcare experiences such as doctor consultations, diagnostics, medicine purchases, dental procedures, gym memberships, and proactive well-being. According to the release, the raise will be used to improve its data, security, and AI capabilities, as well as expand operations, hire more talent, and enhance services. Mobihealthnews

Pain management technology company Upside Health closed. Founder Rachel Trobman posted the closure on her personal feed on LinkedIn. Their Branch Health app helped chronic pain sufferers better manage their pain and connected them to clinical and educational resources. Their website and LinkedIn pages are shuttered. According to her post, they had a base of 30,000 patients. Their funding listed on Crunchbase was $635,000.

Follow up roundup: Amwell to reverse stock split to avoid delisting (updated), Amazon Clinic folded into One Medical, Amedisys divesting to close UHG deal, latest on Steward Health’s antics and $7M spying, Masimo’s shareholder fight (latest)

July 2, 2024 | by

Amwell will reverse stock split to fix their pending delisting on the NYSE. The board of directors approved on 28 June a 1 for 20 reverse split. This will remedy their non-compliance with NYSE regulations requiring an average closing price of above $1.00 over a consecutive 30 trading-day period [TTA 5 Apr]. Shareholders approved the move at their meeting on 18 June. The NYSE notice was given on 2 April and the reverse split will happen at the market open on 11 July, well within the six-month window. Amwell Class A shares closed yesterday at $0.27 so that condensing 20 shares will bring the share price around $5.40. Amwell’s 2024 is forecast with revenue in the range of $259 to $269 million and adjusted EBITDA in the (less) red between ($160) million to ($155) million, with no breakeven in sight until 2026. Their Q1 posted a $73.4 million net loss. Amwell has also released 10% of staff since the palmier days of 2023. Amwell, like Teladoc, continues to struggle in a stand-alone urgent care model that is now obsolete. Release, Healthcare Dive

Update 11 July: Amwell shares opened today at $6.52, and as of midday were trading at $7.51. So short term, the reverse split is working to plump up the shares.

Amazon says goodbye to Amazon Clinic by folding it into One Medical. This should come as no surprise to Readers who noted the  May departure of Clinic’s general manager Nworah Ayogu, MD to VC Thrive Capital with no replacement or search. Amazon’s announcement on 27 June was typically upbeat in renaming the service as One Medical’s Pay-per-visit telehealth. The improvements they claim are:

  • Pay-per-visit telehealth for 30+ common but minor conditions, like pink eye, the flu, or a sinus infection
  • A One Medical monthly or annual membership plan that includes on-demand virtual care and same or next-day appointments at 150+ One Medical primary care offices
  • More affordable–messaging/asynchronous visits are now $29, formerly $35, and video visits at $49, formerly $75. 

The catch–existing Clinic members have to log into One Medical to access their records and the service. Amazon is also propping up One Medical through Prime membership, offering a better deal at $99/year and non-Prime individuals for $199 per year. Amazon does not disclose users, growth, or revenue for either Clinic or One Medical. Healthcare Dive

The long-delayed UnitedHealth-Amedisys home health deal moves closer to closing. Amedisys and UHG’s home health operation under Optum will be divesting some of their locations to VitalCaring Group to avoid Department of Justice anti-trust concerns. The divestiture is contingent on the acquisition closing, now projected in second half of this year. The number of locations was not disclosed though earlier speculation had estimated it at 100. UHG’s offer to acquire Amedisys was made in June 2023 for $3.3 billion in an all-cash deal. It would be additive to its earlier $5.4 billion buy of LHC Group, now part of Optum. With the divestiture, analysts do not see any impediments to a closing, though it had faced opposition in Oregon in March and DOJ opposition since it was announced. This Editor remains sanguine about a successful closing. After UHG won versus DOJ in the Change Healthcare acquisition, “DOJ has a long memory, a Paul Bunyan-sized ax to grind, and doesn’t like losing.” Expect a few more impediments tossed in their direction over the next months. FierceHealthcare , Zack’s Research

The latest episodes in the continuing soap opera of Steward Health involve both Optum and James Bond moves on their critics. Optum had offered back in March to buy their practice groups under Stewardship Health, which stalled with first the Massachusetts Health Policy Commission (HPC), then their bankruptcy. That offer is now off, leaving Steward in the lurch. It was critical to $75 million of Steward’s debtor-in-possession (DIP) financing as recently as 13 June [TTA 14 June]. The deal would have been problematic anyway for Optum as they are under DOJ scrutiny not only for Amedisys but also because Optum controls or has arrangements with 10% of US physicians, 90,000 to date. Healthcare Dive They also settled recently with DOJ for $20 million on Optum Rx’s filling orders from a mail-order pharmacy in Carlsbad, California between 2013 and 2015 for Schedule II drugs: opioids, benzodiazepines, and muscle relaxants. Healthcare Dive

Adding to Steward’s piles of misery are the latest revelations that Steward financed a $7 million spy operation on their critics. This loony aspect to the Steward endgame involved contracting with UK investigators on surveilling a critical former executive, a British financial analyst, and a Maltese politician to find compromising actions between 2018 and 2023. The investigations were allegedly authorized and prioritized by Steward’s top executives while Steward struggled to pay bills for its hospitals and practices. Payments to the investigators were routed through Steward’s Malta operation against their critics in Malta and elsewhere. Steward at the time was embroiled in a dispute around their management of hospitals in Malta, which was eventually investigated and terminated by a Maltese court last year.

One example: the UK firm Audere “collected embarrassing personal information and photographs of a former Steward employee after Steward feared he would leak financial information to its auditor.” Another was the investigation and harassment of a British financial analyst, Fraser Perring, critical of Steward’s actions in its dealings with Medical Properties Trust (MPT). He was followed, his home CCTV was disabled, his home was broken into, family members and his partner were followed. Perring was also being smeared on Twitter through an account set up by Audere. There is much more on this in OCCRP’s report, published (paywalled) in the Boston Globe and Times of Malta. OCCRP’s full report and findings are here. FierceHealthcare

Electronics, audio, and medical device company Masimo continues to fight a hostile activist investor, Politan Capital Management. In December 2023, Masimo notched a significant win via the International Trade Commission versus Apple’s Series 6 and later Watches that forced Apple to disable its pulse oximetry (SpO2) sensors and software that violated Masimo’s smartwatch patents [TTA 28 Dec 2023]. Politan descended on Masimo in April accusing CEO and chairman Joe Kiani and others of mismanagement, including the 2022 acquisition of Sound United’s audio brands. It won two seats on the Masimo board of directors at the last shareholders’ meeting and is demanding two more seats at this year’s meeting on 25 July which would give it effective control.

The latest in the proxy fight is that the chief operating officer, Bilal Muhsin, will depart after 24 years at Masimo if Joe Kiani is forced out. The brief conditional resignation was sent to Masimo’s lead independent director, Craig Reynolds. Mentioned in the resignation was that he would refuse to work with Quentin Koffey, a Masimo director and chief investment officer of Politan Capital. More letters like this may be coming as reportedly Masimo management has urged employees to sign similar letters. Strata-gee, MedTech Dive  

Politan was the investment group that upended Centene Corporation and ousted most of Centene’s board plus 25-year CEO Michael Neidorff in 2022 shortly before his death on 7 April 2022 [TTA 18 Dec 2021]

Update: 300 engineers in Masimo’s healthcare division expressed specific support for Joe Kiani against Politan and Quentin Koffey in an open letter. “We wish to convey our deepest concern if Quentin Koffey and Politan Capital take control and Joe Kiani is removed. We are committed to Masimo because of the vision and innovation he pushes and drives us to deliver. The prospect of losing our founder and CEO threatens to derail the progress we have made and jeopardize the future of Masimo.” They also expressed that they may leave. “We, the undersigned from Masimo Healthcare Engineering, wanted you to be aware that we may not continue with the company if Joe Kiani is replaced by Quentin Koffey and Politan Capital.” This follows on other letters written by international regional managers and presidents in June also stating their support and warning that they may leave if Kiani leaves. The annual shareholder meeting is scheduled for 25 July.   MedTech Dive

However, Masimo is also embattled on other fronts: earlier in June, DOJ and FDA announced their investigation of problems with their Rad-G and Rad-97 SpO2 devices leading to a recall and the SEC is investigating potential accounting irregularities and internal control deficiencies. MedTechDive

Walgreens gives up on VillageMD, will sell to reduce stake below majority, closing underperforming stores, revising profit outlook– and in abandoning Boots sale, managing director James quits

July 2, 2024 | by

Q3 results are in for Walgreens Boots Alliance (WBA) and it was largely a bummer, especially if you work for VillageMD. Their financials have taken a hit from crashing US consumer retail spending and the softening pharmacy business. Adjusted earnings per share (EPS) were $0.63, down 36.6% on a constant currency basis compared to Q3 last year. The full year guidance was lowered from Q2’s outlook of $3.20 to $3.35 EPS to $2.80 to $2.95, again citing US trends. Q3 sales were up 2.6% to $36.4 billion, up 2.5% versus last year. Release

Industry estimates are that fully one-quarter of Walgreens’ 8,700 US stores are being reviewed for performance and closure, based on industry estimates and Tim Wentworth’s remarks on the investor call last week. Healthcare Dive, FierceHealthcare

Mr. Market didn’t like the WBA news at all, dropping the share price from the call last week to today, closing at $11.58, its lowest level in years. Nine years ago, it traded just over $95 per share. Its consistently steady price and healthy dividend save the last couple of years gave it a broker nickname of a ‘widows and orphans’ stock.

The bad news for VillageMD is that it’s for sale. Walgreens plans to lower its ownership below a majority holding and not to grow that line of business, instead focusing on retail pharmacy. Lowering its ownership stake means it has to find a buyer or buyers for at least 14 points of its 63% share. And it’s been a money pit. It not only upped its share from about 30% to 63% in 2021 for $5.3 billion but subsidized the acquisition of Summit Health/CityMD by VillageMD in November 2022 for $8.9 billion ($3.5 billion from WBA). The rough calculation of $10 billion [TTA 28 Mar] spent under CEO Roz Brewer’s watch does make it a bit easier for CEO Tim Wentworth to slash away. 140 locations were closed by March with a total now estimated at 160.  

But where to find a buyer/investor? It won’t be Cigna. Last May, Cigna wrote off $1.8 billion of its 2022 $2.2 billion investment which gave it a ‘in the teens’ share [TTA 2 May]. WBA wrote it down as well; last quarter, a $12.4 billion non-cash impairment charge related to VillageMD goodwill netted a $5.8 billion writedown. It’s no moneymaker though its revenue this quarter grew 7%. An industry analyst estimated VillageMD’s 2023 losses at $800 million last April. Primary care is no longer a hot investment. Even mighty CVS is looking for a private equity investor in Oak Street Health, which implies that CVS doesn’t want to put more than the bare minimum into expanding OSH’s clinics [TTA 29 May].

This Editor’s own interesting take on an option. VillageMD’s new COO/president is a Centene ‘retiree’, Jim Miller. Previously, he had the same positions for two years at Magellan Health. He was there when it was acquired by Centene in 2022 and stayed on till retiring in April. Magellan’s holdings have largely been sold off since activist investor Politan stepped in [TTA 10 Apr]. Could it be that Miller may find investors to buy or spin it off and go private?

Shields Health not for sale and neither is Boots, which didn’t make the latter’s managing director happy. On the investor call, Wentworth also confirmed that specialty pharma operation Shields Health Solutions, bandied about as a sale candidate, will be retained. It grew 24% in Q3 versus year prior. Boots pharmacies in the UK will remain off the WBA selling block in another about-face. Right after last week’s investor call, Boots’ managing director Sebastian James announced his departure, effective in November (!) reportedly for a European eye surgery business. James had been with Boots as MD since 2018 and oversaw 13 consecutive quarters of market share growth including this one, with a 6% rise in UK comparable retail sales. It’s hard not to speculate that either James had lined up a buyer or he tired of the push me-pull you from management. Another factor that doesn’t inspire confidence. Morningstar UK

Wentworth continues to have a rough ride with some speculation as to why WBA continues to dig itself into a hole and when it will turn around.

Short takes/wrapup: fundings for Talkiatry, Heyday Health, CipherHealth; Brightside Health now 50 states for Medicare Part B; Neurabody’s sensor based posture therapy; below the radar global layoffs at Medtronic

June 27, 2024 | by

The funding spigot seems to be on, even up to a Series C.

Talkiatry closed a $130 million Series C for a total funding of $245 million. The round was led by Andreessen Horowitz (a16z) with participation from Perceptive Advisors. Debt financing was provided by Banc of California. Talkiatry’s offering in virtual behavioral or telemental health is psychiatrically-based with a national network of 300 psychiatrists performing to date over 1 million patient visits. Their differentiation is stronger outcomes and reduced utilization of higher levels of care. Their footprint is in health plans: Aetna, Blue Cross Blue Shield, United Healthcare, Cigna, and Humana, covering more than 70% of commercial lives in the US–but plans to expand to provider networks. Release, FierceHealthcare

Heyday Health‘s raise of $12.5 million was from Gradient Ventures (Google’s early stage fund), Lionbird, a large national payor, Great Oaks Capital, and Kate Ryder, CEO of Maven Clinic. Heyday’s technology provides 24/7 in-person’s home, telehealth, and phone visits for Medicare and Medicare Advantage beneficiaries in Ohio and Kentucky. Each person is connected to a personalized care team comprised of a physician, a nurse practitioner, and a Health Ally that works with them to design and manage care plans. The funding will be used for geographic expansion into the Cincinnati/Dayton area in Southwest Ohio and the Louisville area in Kentucky. Release, FierceHealthcare

CipherHealth received an undisclosed capital investment from Atalaya Capital Management for growth and expansion. Cipher provides communication solutions for patient engagement such as secure texting, appointment setting, rounding, and patient feedback. Release 

Brightside Health, another telemental health provider that had its own $33 million Series C in April, announced that it has expanded its reach to Medicare Part B recipients in all 50 states and the District of Columbia, making it the first and only telepsychiatry provider to do so. With this, they now have a total reach of 130 million covered lives. Older adults are an underserved market for mental health support, with 15% utilizing ERs for care, one in four recipients living with a mental illness, and those 65+ having the highest rate of suicidal ideation. Release

We don’t often hear of digital health coming out of Luxembourg, but startup Neurabody located there is combining sensor-based data with AI to address the causes of and therapy for lower back pain. The current Posture AI device is a smart posture estimation sensor and an optional posture correction ergonomic shirt that provides personalized feedback and advice on improving posture and reducing pain via a smartphone or tablet app. If the user begins to slouch, the sensor detects it and buzzes to remind the user to sit up straight. Future products in the next two years are a smart posture seat and smart lumbar support devices. Co-founder William Choi is a serial entrepreneur, an investor and founding member of BackJoy Orthotics, an Inc 500 Fastest Growing Company. Right now the app is available on Google Play and the Apple App Store. The shirts are listed at $149 but the sensor and chest strap are not listed for sale and the shirt purchase pages are not functional. The pages need some work (e.g. typos, ‘coming soon’ pages). Release

But layoffs are still with use, even for the powerful ‘giants’.

Med device giant Medtronic has been quietly proceeding with a global layoff. The only publications that have been on this are Mass Device, which initially was unable to receive confirmation but pursued, and the local Minneapolis Star-Tribune. The layoffs started in April and May, with posts from former employees on LinkedIn and on TheLayoff, which are coded in Medtronic-speak. The company confirmed earlier this month to the Strib that it was laying off staff but would not give details, from the number of employees affected to impacted business divisions or geographic locations.

At the end of 2023, Medtronic offered employees an early retirement program, usually a first sign of major layoffs. Then, at the start of 2024, Medtronic announced the closure of five manufacturing plants and six distribution centers as part of an effort to improve the company’s supply chain, but again refused to disclose where or when. Medtronic relocated to Dublin years ago but maintains an operational HQ near Minneapolis. 11,000 employees of 90,000 total work there, making Medtronic the world’s largest medical device company and still a major employer in Minnesota. None of the layoffs are showing up on state WARN sites either because they are below the thresholds or Medtronic is simply not filing, though states do not except foreign companies.

Did they really think that they could keep this on the QT and Strictly Hush-Hush in the age of social media and layoff trackers (apologies to James Ellroy)?

News roundup: AliveCor launches FDA-cleared Kardia 12L ECG, eVisit buys UPMC’s inpatient teleconsult, UPMC and MedStar invest; NeueHealth gains $150M loan–with caveats–and NYSE non-compliance notice

June 26, 2024 | by

AliveCor shrinks 12-lead ECG to a single cable with AI-assisted detection for 35 cardiac determinations. The just-cleared by FDA system for clinicians combines the Kardia 12L ECG System (left), a single cable with five electrodes that acquires 8 high-quality diagnostic bandwidth leads, with the KAI 12L AI-assisted diagnostic technology. KAI uses a deep neural network-machine learning AI model to interpret ECG data acquired and validated on more than 1.75 million ECGs from leading US medical centers. It can make 35 cardiac determinations–14 arrhythmias and 21 morphologies–that include acute myocardial infarction (MI) and the most common types of cardiac ischemia. The Kardia 12L is battery-powered, weighs about 1/3 of a pound, and fits into a typical lab coat pocket.

12-lead ECG is considered the standard of ECG readings. A pocket system of this type puts this in reach of clinics, rural health, urgent care offices, and employer clinics. It requires minimal self-guided training and doesn’t require patients to fully disrobe. Release, Mass Device

Telehealth provider eVisit acquiring UPMC’s inpatient teleconsult technology–along with investments from UPMC and MedStar Health. This ‘hat trick’ adds hospital inpatient telehealth capability to eVisit’s health system-focused telehealth triage, provider-to-provider consults, and scheduled telehealth visits. The teleconsults serve inpatient care across five services: stroke, neurology, critical care, psychology, and toxicology. Both UPMC and current client MedStar Health (from the 2023 Bluestream Health acquisition, TTA 27 Apr 2023) are also investing in eVisit, adding an undisclosed amount to eVisit’s 2021 $45 million Series B. (Another way of saying ‘unlettered raise’?) Release, FierceHealthcare

And would this month be complete without items from the Dean of Dodging Disaster, Creating its Own New Reality, the one and only NeueHealth? The first is that Hercules Capital is giving them a second term loan facility (Loan and Security Agreement) of up to $150 million over three years that is, to be polite, hedged with qualifications. 

  • Tranche #1 is available on closing: $30 million
  • Tranche #2, $25 million, will be available only for a limited time– 10 November through 31 December 2024. It is also dependent on Molina making its final payment to NeueHealth for the Medicare Advantage plans they bought–a payment dependent in turn on those plans achieving plan performance ratings ( the “2025 Stars Condition”).
  • Tranche #3 of $45 million will be available from 5 February 2025 to 15 September 2025. But it is contingent after paying off what is owed in connection with the ACO REACH Model for performance years 2023 and earlier, payment in full of the CMS Settlement (as defined in the Loan and Security Agreement) and the Company having at least $22.5 million of unrestricted cash and cash equivalents.
  • Tranche #4: up to $50.0 million and available until 21 June 2027
  • The loan matures on 1 June 2028

Release 24 June, SEC Form 8-K, FierceHealthcare

The second is that the loan could not have come at a more needed time, as NeueHealth received a non-compliance notice from the NYSE on 16 June. It fell below an average market capitalization of $50 million for 30 consecutive trading days, with their last reported stockholders’ equity also below $50 million. It has 45 days to submit a business plan to remedy it within 18 months. NeueHealth’s preferred stock had a value of $920.4 million as of 31 March 2024 but is excluded from the NYSE calculations of common stockholder equity. NeueHealth closed today at $5.23.

This is in addition to a $30 million loan from current 60% majority shareholder NEA [TTA 16 Apr].

Along with tying Gordian knots masterfully and playing multiple ends against the middle, one wonders what management does all day at their new offices in Doral, Florida? Avoiding Chapter 11? Golfing? Surfing?

A Gimlet Eye view on IPOs and Cracked SPACs: Altaris buys Sharecare for $518M, takes it private; a look at Waystar and Tempus AI post-IPO

June 26, 2024 | by

Gimlet EyeSharecare finally gets itself bought and taken private, less than three years after its SPAC. One-time health tech darling Sharecare, now a patient navigation and employee benefits platform and once valued at $3.9 billion, will be acquired by healthcare-focused private equity company Altaris LLC for $1.43 in cash per share, or about $518 million. The shares on the buy date, 20 June, were trading at $0.77 so the offer is about an 86% premium, though shares are now trading at around $1,38. (Notably, Sharecare was below the $1.00 threshold for Nasdaq since February.) The transaction is expected to close in Q2 subject to formal shareholder approval and regulatory agencies. In terms of management, the executive team is expected to continue at least for now, with founder Jeff Arnold voting his shares in favor of the transaction and continuing as a shareholder. Release, FierceHealthcare, Mobihealthnews

Founded in 2010 by WebMD founder Jeff Arnold and celebrity doc/former political candidate Dr. Mehmet Oz, Sharecare had IPO’d a decade later via a SPAC, Falcon Capital Acquisition Corporation. It announced in February 2021’s Pandemic Palmy Days then hit markets on 2 July. At that time as essentially a personal care management app, it debuted at above $9.00 and received $571 million in gross proceeds with a reported valuation of $3.9 billion. A month later, it acquired CareLinx, an on-demand home care provider, from Europ Assistance in a $65 million cash/shares deal. By late 2021, Sharecare entered the Cracked SPAC Track as shares cratered. Dr. Oz is no longer on the board of directors or the advisory board. As share values fell precipitously, in November 2023 Mr. Arnold turned over the CEO reins to Brent Layton, a 20+ year Centene veteran and its retired president, picking him from the BOD and moving to chairman.

Shortly thereafter, Fruit Street sued Sharecare, a former partner, for $25 million charging that their diabetes prevention program (DPP) was supplanted by Sharecare’s own, breaching their contract and appropriating intellectual property. [TTA 14 Dec 2023] This suit is apparently still wending its way through the infamous Fulton County, Georgia courts. Sharecare also faced an escalating number of shareholder class action lawsuits alleging false and misleading statements on their financial condition (KRON 4).

What can we learn from IPOs as they are reviving? The first, of course, is that SPACs have gone the way of the dodo and passenger pigeon. The second is that there are quality IPOs, and then there are the ones to watch out for even if you are not an investor.

Remember first and foremost that VC and PE investors want to exit, profitably. And quickly. Exit=Sell to Someone Else. “Someone else” can be an IPO or another investor. An IPO means offloading the risk to the investing public. Please do keep in mind that what follows 1) is not investment advice, only observations and 2) your Editor is only a marketer, but one who has seen investments go up, down, and sideways since her days at the Frank Lorenzo School of Airline (Mis)Management, a/k/a New York Air (right, below) including a year observing up front and personally the dismal fate of Eastern Airlines. (Somewhere she has her old Texas Air share certificates…)

The investment scene in health tech and AI strongly resembles the Wild West days of airlines post-deregulation 30 years ago. Investor money in, now fleeing for the exits, whether the bankruptcy court or passing the hot potato to others with money.

Waystar IPO’d earlier this month at $21.50 per share. Checking in today, it’s trading at $21.55, essentially in a narrow and flat trading range in a down market. The IPO gave Waystar a fully diluted valuation of $3.69 billion. It’s early days, but three factors in favor of WAY staying the course at least short term are:

  1. They waited to IPO for the better part of a year and pulled it back when their initial valuation of $8 billion made Mr. Market ROTFL.
  2. Their investors have held on tight: EQT AB, Canada Pension Plan Investment Board (CPPIB), and Bain Capital will beneficially own approximately 29.2%, 22.3%, and 16.8%, which is over 68% of the company.
  3. They occupy a boring part of healthcare and aren’t new kids on the block. Payments and revenue cycle management (RCM) aren’t sexy or trendy. Waystar is the combination of ZirMed (1999) and Navicure (2001) which merged and renamed in 2018. 

The downsides: Competition. Lots of it. The usual unprofitability. Waystar lost money the past two years. Last quarter, those losses accelerated (Google Finance). Will that show up later this year in share price?

Tempus AI also IPO’d mid-month at an eyewatering $37/share, at the top of its offering range, and a valuation in excess of $6 billion. It’s AI! It’s backed by Google! And it rose 15% on its first day of trading, 14 June! Precision Medicine! Intelligent Diagnostics!

But where are shares today on 26 June? It closed yesterday at $24.96. That’s a downer of 32% from the IPO price–38% if you take it against the first-day close above $40. I’m sure the first-day investors, unless they have cast-iron stomachs, have already reached for the antacids.

So what’s going on here? Tempus AI’s business combines AI for data analytics and a vast database to guide doctors in therapy and treatment, identify clinical trials, guide treatments, and close gaps in care. The analysis is done on blood samples, buccal swabs, and liquid tests. It’s a familiar pitch that multiple companies are using around AI and their ‘vast databases’ from the time of IBM Watson’s lofty ambitions.

  • Their CEO has already traversed the hype circuit. “We’re on a really good trajectory,” Tempus AI CEO Eric Lefkofsky, the founder of Groupon, said on CNBC’s “Squawk Box” Friday morning before shares started trading. “As revenues have been growing quickly, we’re not investing all that gross profit dollar growth back into the business. We’re generating improved leverage every quarter.” (Exactly what does that mean? Probably that money is sent down to the profit line.) Setting expectations–within the next year, the company is expected to be cash flow and EBITDA positive within the next year. It’s twice been on CNBC’s Disruptor 50 list of private companies which historically has been a mixed bag.
  • In their favor is that they already have as of today 510(k) clearance from FDA for its Tempus ECG-AF device to identify patients who may be at increased risk of atrial fibrillation/flutter (AF). It’s the first FDA clearance for an AF indication in the category known as “cardiovascular machine learning-based notification software”. But it needs to be integrated into resting 12-lead ECG recordings collected at a healthcare facility and analyzed against other patient data. What is that timeline and market?
  • Tempus has already survived and evolved from one major pivot. Looking back, they started in the genomic testing business in 2015, primarily concentrating on oncology. In 2020, it branched out to then-trendy Covid-19.  CNBC 17 June 2020  Genomics is now subsumed on the site by terms such as pharmacogenomics (PGx) coupled with patient-reported outcome (PRO) software.

Investors up to the IPO were listed as Google, Baillie Gifford, Franklin Templeton, NEA, Softbank, and T. Rowe Price. Who’s sticking around? The underwriters are Morgan Stanley, JP Morgan, Bank of America Securities, and Allen & Company. Reuters  Customers include AstraZeneca and GSK (GSK.L). One of its competitors, Guardant Health, which has patents in DNA blood testing for cancer, is suing on infringement on five patents. Reuters

All in all, Tempus AI started off way high–and there is only one way to go from there. They have a great story and a potentially good business, but it bears watching, not investing, at this point.