Updates: ATA on telehealth policy priorities, UHG investor group demands denied care report, DOJ sues Walgreens on illegal Rx dispensing, VA nominee supports Oracle EHR deployment, RFK Jr. HHS nomination hits Senate

January 24, 2025 | by

ATA urges nine telehealth priorities for the Trump Administration’s consideration. Acknowledging that HHS expanded Medicare telehealth flexibilities at the start of the pandemic in 2020 in the previous Trump Administration, the American Telemedicine Association’s list is long and detailed.

#1 was to withdraw last week’s Drug Enforcement Administration’s (DEA) proposed rule, “Special Registration for Telemedicine and Limited State Telemedicine Registrations”. This would create a framework for the remote prescribing of controlled substances that in ATA’s view, would create “untenable restrictions and significant barriers to care”.

The remaining eight include flexibilities that were part of the 2020 rules.

  1. Permanently Allow for the Remote Prescribing of Controlled Substances
  2. Work with Congress to Make Permanent the Medicare Telehealth Flexibilities
  3. Ensure Affordable Telehealth Services for the Commercially Insured
  4. Ensure Affordable Telehealth Coverage for Part-Time, Contracted Workers Who Don’t Qualify for Health Care Coverage
  5. Ensure All Provider Home Addresses Remain Confidential
  6. Expand the Medicare Diabetes Prevention Program
  7. Reinstate Virtual Cardiopulmonary Rehabilitation Programs
  8. Release Updated Regulatory Guidance on Medicare Telehealth Flexibilities

Additional details are in the ATA Action letter to President Trump and Vice-President Vance and the ATA release.

An institutional investor interest group demands a report on delayed and denied care from UnitedHealth Group. This takes the form of a proposal for the 2025 proxy that the UHG board of directors prepare a report on these practices that create increased costs and ‘macroeconomic risks’.  The proxy is usually filed in April for a meeting that is typically in June. UHG will respond at that time it files the proxy.

The group proposing the report is the Interfaith Center on Corporate Responsibility (ICCR). ICCR represents 300 faith-based institutional investors, such as asset managers, pension funds, and foundations, with over $4 trillion in invested capital. This institutional shareholder action is in the aftermath of the Brian Thompson assassination, which revealed widespread consumer anger about UnitedHealthcare’s practices in high rates of claims denials, including their use of AI in the review process, and prior authorizations to restrict utilization. UHG ignores this at its peril. By the time proxies are released and the shareholder meeting occurs in June, the trial of the assassin may be underway, putting this issue back in top news.  ICCR release, Healthcare Dive

Walgreens’ Mound of Misery gained a few hundred cubic yards with a lawsuit filed 16 January by the Department of Justice (DOJ) over improper dispensing of opioids and and other unlawful medications over more than a decade. The civil lawsuit filed in the US District Court for the Northern District of Illinois alleges that Walgreens and subsidiaries dispensed millions of unlawful prescriptions, violating the Controlled Substances Act (CSA). Since Walgreens then sought reimbursement from Federal healthcare programs, they violated the False Claims Act (FCA). The time frame is from August 2012 to the present. Specific allegations include that Walgreens pressured pharmacists to fill prescriptions despite clear ‘red flags’, in excessive quantities, and lacking a legitimate medical purpose and that they ignored the pharmacists and their own internal data. One of the red flags were prescriptions for the ‘trinity’ of an opioid, a benzodiazepine and a muscle relaxant. There are also four different whistleblower actions against Walgreens under the qui tam (on behalf of the government) provisions of the FCA that have been consolidated. If successful, Walgreens could face civil penalties of up to $80,850 for each unlawful prescription filled in violation of the CSA, plus treble damages and applicable penalties for each prescription paid by Federal programs in violation of the FCA. Timing and Walgreens’ response are not yet available. This lawsuit could be a massive stumbling block to the rumored Walgreens/WBA sale.  DOJ release, Healthcare Finance 

The VA Secretary nominee recommits to resuming the 2026 rollout of the Oracle Cerner EHR. Former House Representative for Georgia Doug Collins told members of the Senate Veterans’ Affairs Committee at his nomination hearing Tuesday that he would look at the Oracle Cerner EHR deployment with ‘fresh eyes’ and that “there’s no reason in the world we cannot get this done.” On 20 December, the VA formally stated that they were starting planning now for deployment in four Michigan facilities — Ann Arbor, Battle Creek, Detroit, and Saginaw–for implementation by mid-2016. He was critical of what has transpired to date in the limited deployment as ‘not acceptable’ and pointing out that VA facilities needed modernization of their computer systems. But perhaps a little overoptimistically, he’d like to see a faster implementation in 2016, though it should be done properly and not rushed. NextGov/FCW, Healthcare IT News

And in the Warp Speed World that is now DC, Robert F. Kennedy Jr. is scheduled to testify next Wednesday (29 January) before the Senate Finance Committee on his nomination as Health and Human Services Secretary. At HHS, he would supervise the Food and Drug Administration (FDA), Centers for Disease Control and Prevention (CDC) and the National Institutes of Health (NIH). He has promised major reforms including food safety and chemical additives, as well as the relationships between FDA and pharmaceutical companies. Healthcare Dive  Meanwhile, during the transition, HHS froze external communications or work-related appearances by staff. This is fairly standard procedure until review procedures are set up, but apparently no one planned for this in advance. This has derailed two conferences (AFCEA HIT Summit and the HHS Industry Summit) that were scheduled for this month and February. Exceptions to this are ‘mission critical’ and emergency communications. NextGov/FCW

2024 another ‘down round’ for US digital health funding, with smaller deals and earlier stages: Rock Health

January 24, 2025 | by

US 2024 digital health funding explored some new lows, yet again. Plainly put, despite some perking up at the end of the year, 2024 was not a righting of 2023’s wobbly year when looking at the key metrics. It was more like a stabilization to 2019 levels with the pandemic period standing out in sharp relief as an aberration. Let’s see what this all means….

2024 by the numbers:

  • Year totals were $10.1 billion across 497 deals, versus 2023’s $10.8 billion across 503 deals
  • 63% of 2024’s funding rounds were labeled–up from 2023’s 57%
  • Average deal size shrank to $20.4 million from $21.5 million
  • 86% were seed, Series A, and Series B rounds
  • Series C and D fundings shrank in the wash to median sizes of $50 million and $55 million respectively—well below 2023’s $62 million and $58 million. Mega deals dwindled to 17 or 21% of overall sector funding from 2023’s 32% in 2023 and 38% in 2022.
  • M&A activity hit a 10-year low at 118 deals.

We’re back to 2019 in absolute dollars. Using the pre-pandemic year of 2019 as a benchmark, Rock Health factors in three years of inflation to calculate that 2024’s funding is back at 2019 levels. While 2024 outperformed in current dollars 2019’s $8.2 billion across 425 deals, knocking off $0.18 on each dollar (worth $0.82 in 2019 value) brings 2024’s total to $8.3 billion in 2019 dollar value–essentially flat.

Why is this happening? Rock Health is attributing this to:

  • More attractive Davids versus the Goliaths: earlier-stage startups are not encumbered by the inflated valuations of later-stage funded ventures. The later-stage Goliaths which are not in something resembling profitability are now faced with down or stalled rounds. They, or their key investors, may seek buyouts or ‘shotgun marriages’–or shut down. In Rock Health’s view, this may restart M&A activity. (From this Editor’s perch, it already has–check General Catalyst’s portfolio condensing.)
  • Fewer investors concentrating the available capital. Of the 391 VC funds, 30 raised 75% of all  US committed capital. Nine of those funds accounted for 50%.(Pitchbook) Editor’s note: it’s not clear if this accounts for private equity funders.
  • If you are tired of seeing Andreessen Horowitz (a16z) and General Catalyst (GC) in funding announcements, that is because they have between them about 20% of committed LP funding. Their dominance means unusual control over the direction of companies and their technologies. For instance, GC has HATco which as earlier reported, just entered a partnership with AWS to develop AI tools for its portfolio companies like Commure and Aidoc. This standardization means more control over ‘transforming healthcare’–and (as Rock Health doesn’t mention), over their investments in terms of costs, IP, and their business practices.

AI enablement was 2024’s hot button. It accounted for $3.7 billion, or 37% of the year’s sector funding, in 191 deals. There’s a discussion in the article about how foundational AI models for healthcare are gigantic large language models (LLMs) trained on vast data sets, which is why the seemingly low barrier to AI entry is in reality very high and can be dominated by a few Goliath players. The Davids need to work some niches and carefully consider their positioning.

2024’s leading value propositions and clinical indications. Still top in value props is disease treatment; moving up dramatically, disease monitoring. Funding is increasingly concentrated among the six top value propositions, now at 85%, 10 points higher than previously. In clinical indications, mental health takes home the prize as the five-year champ at #1, with cardiovascular and oncology following. Weight management and obesity was the comer, moving in one year from #8 to #4. Expect to see this move up even more in 2025. Clinical indication funding was less concentrated but nearly doubled, with the top six taking 48% of sector funding versus 28% in 2023.

Rock Health 2024 Report. Also Healthcare Dive

Funding/M&A roundup: DarioHealth’s $25M, Innovaccer buys Humbi AI, Percipio Health launches with a $20M Series A, Iris Telehealth buys innovaTel

January 23, 2025 | by

DarioHealth pulls another multi-colored rabbit out of the hat. This time, it’s a $25.6 million private placement of 25,605 shares of convertible preferred stock at $1,000 per share “to extend Dario’s cash runway and bolster its financial position enabling the Company to continue executing its current strategic plan”.  The raise is from existing investors with the rest from ‘accredited healthcare investors’ and healthcare sector executives who can presumably hack their way through the terms and conditions of the placement.

Their objective by the end of 2025 is to have an operational positive cash flow run rate from “high-margin, scalable recurring revenues across our B2B and pharma channels.”  With the private placement, Dario has a $40.6 million cash position. Their last raise of $22.4 million, also a private placement, was timed with their complex $30 million (maybe) Twill telementalhealth acquisition in February 2024.  DarioHealth release, Mobihealthnews

That strategic plan has changed substantially since 2022, when Dario branched out from MSK therapies to clinically-based interventional care management solutions through apps and consults in cardiometabolic and behavioral health. In 2023, their revenue dropped to $20.4 million to the prior year’s $27.7 million with a slightly reduced net loss of $59.4 million from $62.2 million. This was attributed to changing from a B2B to a B2B2C model. By Q3 2024 the strategy at least on the revenue side seemed to be working, with YTD revenues at $19.4 million, a 16.1% increase over prior year, but an increased loss of  $46.1 million. Release.

Earlier this month, Dario jumped on the GLP-1 prescribing bandwagon with prescribing capabilities announced through a collaboration with MedOrbis. Release

Innovaccer makes third acquisition in a year, Humbi AI. The AI-enabled data analytics company for payer and provider intelligence will combine Humbi AI’s actuarial software, services, and analytics with their Healthcare Intelligence Cloud. Humbi’s data includes Medicare and Medicaid data covering over 200 million lives. Purchase price, funding, and management transitions for the small Tennessee-based company were not disclosed. San Francisco-based Innovaccer, which earlier this month raised $275 million in a rare Series F, purchased Cured and Pharmacy Quality Solutions (PQS) in 2024. Release, FierceHealthcare

Percipio Health launches with a $20 million Series A and a veteran crew. The Plano, Texas-based startup RPM company has developed an app-only platform that monitors health conditions without the use of peripheral devices. It works by collecting multiple health signals daily through vision-based AI biomarkers for vitals and medication monitoring and vocal AI biomarkers for brain health assessments, among others. This provides predictive clinical intelligence for clinicians to assess and provide proactive care for rising and high-risk patient populations. Co-founders Eric Rock and David Lucas co-founded Vivify Health, a RPM platform now owned by Optum and earlier  MEDHOST, an emergency department medical records and workflow solution now part of HealthTech Holdings. Percipio’s raise came from investors including UPMC Enterprises, WAVE Ventures, Labcorp, and First Trust Capital Partners, LLC.  Release

Iris Telehealth acquires innovaTel by Quartet. Iris specializes in providing behavioral health services to health systems and community health clinics. innovaTel adds telepsychiatry staffing through its national network of qualified psychiatrists, psychiatric nurse practitioners, and licensed clinical social workers. According to the release, Iris also becomes one of the largest telepsychiatry providers in the US. Psychiatric service coverage has been moving towards a crisis point for years, with the Federal Health Resources & Services Administration (HRSA) calculating that nearly 160 million Americans live in areas designated as having a mental health provider shortage.  Psychiatry is also the third oldest specialty, with doctors’ average age at 55 (Psychiatric Times).  Purchase price, funding, and management transitions were not disclosed. Release

Perspectives: Three Strategies to Bring Digital-First Care to Patients Through Telehealth

January 22, 2025 | by

TTA has an open invitation to industry leaders to contribute to our Perspectives non-promotional opinion and thought leadership area. Today’s contribution is from Jessica Wagner, Chief Operating Officer at RXNT, who leverages extensive customer insight, product expertise, and organizational experience to address challenges in the healthcare industry. With a background spanning roles in product management, sales, and marketing, she is dedicated to delivering software solutions that simplify operations for healthcare organizations, enabling them to focus on patient care. Wagner holds a Master’s in Technology Management from Georgetown University and a Bachelor’s in Philosophy from Palm Beach Atlantic.

This article highlights the findings of their recently published report, “Tracking the Impact of Technology on Patient Satisfaction Within the US Healthcare System”, available for download here.

Today’s patients expect flexible, convenient, digital-first healthcare experiences. Telehealth can address many of these needs by reducing travel time, eliminating long waits, and allowing remote consultations. However, if practices fail to communicate telehealth’s availability and benefits, patients may remain unaware or skeptical.

Our 2024 survey report uncovered that difficulty scheduling appointments (42%) and long wait times (38%) are two leading causes of patient dissatisfaction—barriers that telehealth can help overcome by offering quicker and more flexible access to care. On top of that, over half of patients surveyed believe introducing more technology would improve their healthcare experience, and 35% say they’d consider switching providers for better digital services.

When telehealth flexibilities are a core component of your business strategy, it shows patients you’re committed to facilitating the modern, seamless care experience they expect. Here are three steps your practice can take to make this happen:

1. Promote Telehealth Services on Your Website’s Landing Page

Your website is your digital front door. When patients land on your homepage—new or existing—they should see whether you offer telehealth and how they can access it. Showcase telehealth with a bold call-to-action button, short explanatory text, and clear benefits:

  • Explain “Why Telehealth?”
    Use bullet points or a concise paragraph to clarify common patient questions and the benefits of telehealth, such as reduced travel time, minimized exposure risks, and convenient, timely appointments from anywhere.
  • Highlight Ease of Scheduling
    2 in 5 patients say it’s hard to get in touch with healthcare professionals for appointments. Highlight that your telehealth booking process is designed to be quick and simple with no phone tag necessary.
  • Offer Patient Testimonials
    If available, share—in a HIPAA-compliant manner—a testimonial or quote from a patient that shows how telehealth saved time, money, or both.

2. Update Online Profiles and Manage Reviews; Include Your Telehealth Services

Patients increasingly rely on online reviews and listings to find providers they can trust. Ensure that Google My Business, Healthgrades, WebMD, Yelp, and more reflect your telemedicine appointment options so that potential patients know you’re ready to meet their digital preferences.

  • Emphasize Digital Convenience
    Fifty-five percent of patients prefer using a mobile application to manage appointments. On each profile, detail how you make remote care accessible, whether via a proprietary app or a web-based portal.
  • Mention Text and Email Reminders
    Nearly 9 in 10 consumers say they find text notifications valuable. If your practice utilizes text reminders for telehealth, call it out under the “Services” section or description.
  • Provide Easy Booking Links
    Link directly to your telehealth scheduling tool to simplify the process. The fewer clicks it takes, the more likely patients are to book a virtual consultation.

3. Offer Telehealth for Every Applicable Client Appointment

Sometimes, patients need an extra nudge to try telehealth. Encourage staff, particularly receptionists or schedulers, to mention remote appointments whenever it’s clinically appropriate.

  • Alleviate Communication Woes
    Poor communication with healthcare providers is the top complaint among unsatisfied patients. To combat this, telehealth platforms often include built-in messaging features that give patients a direct line of communication to manage care and help reduce missed connections.
  • Showcase Time Savings
    Highlight how telehealth can minimize time off work or away from family. The more you can personalize these perks, the greater the likelihood that patients will opt in. As an example, write something like, “Have your appointment from home in 15 minutes.”
  • Normalize Telehealth as a Standard Option
    Even in routine appointment reminders or automated messages, include “Switch to a telehealth appointment!” prompt. Present virtual care as routine to foster acceptance among those who might otherwise only consider in-person visits.

Meeting Patient Needs in a Modern World

Telehealth has become a vital part of modern healthcare strategy. Showcasing its benefits in as many places as possible will highlight its convenience and reinforce your commitment to meeting the changing needs of your patients.

Our survey data suggests that effectively communicating your telehealth offerings can provide a significant competitive edge. In today’s healthcare space, success means delivering it on patients’ terms: where, when, and how they need it.

Masimo names new CEO, new board chair and vice chair. And confirms a fresh direction.

January 22, 2025 | by

After a dramatic 2024, Masimo settles in a new CEO and board. Joining from BD (Becton Dickinson) is Catherine (Katie) Szyman for the top spot and a board seat. With new board positions are interim CEO (since October and the resignation/ousting of Joe Kiani) and independent director Michelle Brennan as chairman of Masimo’s board and as vice chairman, lead independent director from Politan Capital Management, Quentin Koffey. The changes are effective on 12 February.

Ms. Szyman’s background in medical device and related is impressive, especially in joining a $1.5 billion company from a $6 billion one. She was briefly worldwide president of Advanced Patient Monitoring at BD after nine years at Edwards Lifesciences where she was corporate vice president and general manager, Critical Care, their unit for device and predictive analytics software. She is credited with Edwards obtaining the first AI clearance from the FDA for patient monitoring.  Edwards was acquired by BD last September. Prior to Edwards, she was at Medtronic for 24 years, rising from finance to president of their diabetes care unit. She has also held and still is on multiple board positions and is a Harvard MBA. According to the release and Ms. Brennan’s statement, Ms. Szyman will be “prioritizing our pipeline to focus on large opportunities, while developing a clear strategy for bringing our next generation patient monitoring platform to market”, which promises more professional monitoring products.

The double-down on the professional health side is backed by the makeup of the now nine-person board. Ms. Brennan is retired from a global leadership position at J&J. Tim Scannell and Bill Jellison both retired from Stryker as president and CFO respectively. Wendy Lane has extensive financial and investment background. Darlene Solomon was a chief technology officer and VP of Agilent Technologies in life science and chemical research. Strata-gee 21 October 2024. Holdovers from the Kiani era are former Disney CEO Bob Chapek and Craig Reynolds, a former COO of Philips Respironics.

With Ms. Szyman at the helm, one can easily predict that Masimo’s professional vital signs monitoring medical devices won’t stay concentrated in pulse oximetry and more on ‘large opportunities’, perhaps incorporating predictive analytics and AI. More will be changing at Masimo. Under the vague language of ‘alternatives’ and ‘strategic review’, Sound United will be sold, sooner rather than later as it will not be reported in their 2025 financials [TTA 17 Jan]. The release also confirms that the consumer healthcare business that encompasses smartwatches, fingertip pulse oximeter, a wearable thermometer, baby and infant monitors, and ‘hearables’ (the latter two with no product on the website), is on the block. Unless the consumer side can be developed, it’s too competitive. Politan is signaling wants to grow this investment big time.  A hat tip and bow to Ted of Strata-gee today for breaking this.

Straws in the wind? 23andMe considering Lemonaid telehealth sale, announces Discover23 research offering with Lifebit

January 22, 2025 | by

The long jump to Who Knows %&()#$!@ Where continues. 23andMe’s Incredible Shrinking Act continues with reports that their Lemonaid telehealth/teleprescribing unit is reportedly being shopped. The reports originated with sources talking to Business Insider with pickup in other industry publications like PYMNTS. How far the fishing line has been thrown is unclear. 23andMe has not returned calls from either BI or PYMNTS.

23andMe hasn’t much else to throw out the hatch. In lightening their expense load after their disastrous, poorly handled 2023 consumer data breach and subsequent class action lawsuits, the company last year shuttered its therapeutics discovery unit [TTA 14 August 2024]. By the fall, it scrubbed out 200+ employees or 40% of its remaining workforce, and fully closed its therapeutics development unit though it was still running two clinical trials that would have to be wound down. It was touted as saving $35 million annually but when executed cost $12 million in one-time severance and termination-related costs [TTA 14 Nov 2024]. Somehow it survived a mass resignation of the board [TTA 17 Sept]. 23andMe still merchandises its ancestry, health analysis, and the Total Health annual package on a scale from $99 to $999 annually.

Lemonaid entered the hot GLP-1 prescribing and support business in 2024, adding to its quick-diagnosis/quick-prescribing suite of psychiatric, birth control, erectile dysfunction, diabetes, and cholesterol meds. 23andMe bought it during their 2021 steak-and-trimmings days for $400 million in cash and stock, when 23andMe rolled in cash after their IPO at $300/share and was worth $3.5 billion. At the time, CEO Anne Wojcicki touted the integration of Lemonaid with their genetics as “healthcare that is based on the combination of your genes, your environment, and your lifestyle”. Lemonaid lifted them to a $4.8 billion valuation. Today, 23andMe’s stock, after a reverse stock split, closed today at $3.58 for a market cap of $86 million. Ancestry and health genomics proved to be a ‘one and done’ unsustainable consumer business, with the capture of consumer genetic information proving to be controversial. While featuring its 23andMe ownership, Lemonaid continues in its established business model without a breath of genetics.

The value of Lemonaid as a standalone is unknown. But given the competitive teleprescribing sector it’s in with GLP-1 weight loss drugs peaking, it’s likely at or near maximum value to be cashed in.

Anne Wojcicki for the past year has made no secret of her desire to personally buy the company and take it private. From her recent statements about “transforming healthcare” in five years [TTA 4 Dec 2024] and the company’s latest moves, Lemonaid may be, in her eyes, an off-strategy ‘lemon’. Their 8 January announcement of Discover23 was strictly about merchandising their research database cohort and genomic studies for biomedical research and governments (!) through a Trusted Research Environment (TRE) developed by Lifebit, an outside technology company based in London.

The picture to this Editor is of a company deliberately shrinking, moving away from the consumer market as much as possible, and selling its apparently huge genomic database for research purposes as its real and main business. A clever and timely cashout of Lemonaid will satisfy shareholders–and make the company, now worth less, easier for Wojcicki, who holds the controlling shares, to buy. And from there, who knows?

2024 earnings roundup, after a dramatic year: UnitedHealth Group and Masimo

January 17, 2025 | by

UnitedHealth Group’s annus horribilus closed out with a decent, but not up to earlier projections, financial report.

Having opened in February with the massive (and massively expensive) ransomware/hack of Change Healthcare, UHG didn’t have a lot of bright spots. Elevated utilization rates increased expenses; changes in Medicare Advantage reimbursements and the STAR ratings metholodogy changes reduced bonus payments.

Then, in the early, dim morning of their 4 December investor day in NYC, UnitedHealthcare’s CEO Brian Thompson was murdered while entering the New York Hilton Hotel. The manhunt and the controversy set off by the perpetrator’s so-called ‘manifesto’ exploded into a hurricane of severe public criticism on how plans process claims and treat members, a traditional and social media/online storm that only diminished around Christmas and the rise of other news. In literal fear for their lives, health plan executives took the lowest profiles they could manage. 

UHG’s earnings, while positive overall, reflected this uncertainty with lower Q4 revenue causing them to miss Street estimates. Share price fell over 6% today (Thursday). 

  • UHG’s Q4 revenues were $100.8 billion versus $94.4 billion in the prior year, up 6.8%. Profit of $5.5 billion was flat versus prior year. UHG’s 2024 revenues were $400.3 billion, 7.7% higher than 2023’s $371.6 billion. 
  • Health plan unit UnitedHealthcare’s 2024 revenues were $292 billion, up 6%, with operating earnings of $15.2 billion. US commercial members grew by 2.1 million.
  • Their 2024 medical cost ratio — the percentage of premiums spent on medical care — rose to 85.5%, far higher than 2023’s 83.2%, exceeding analysts’ projections of 84.96% and far above the targeted 80%.
  • Optum’s revenue, affected by the Change Healthcare hack and ransomware payments, still rose to $253 billion, up $26.3 billion or 12% versus prior year. The Optum Insight unit, which includes Change, had revenues of $18.8 billion, declining 1% because of the $867 million loss due to business disruption.

UHG release, FierceHealthcare, CNBC 

UHG also announced:

  • The Optum Rx unit will now pass through 100% of rebates negotiated with drugmakers to their clients–insurers, states and unions. This is up from 98% since 2% have preferred other rebate models. FierceHealthcare
  • UHG and Amedisys filed last week in the US District Court of Maryland to have the November Department of Justice suit dismissed. They cited that the DOJ did not adequately prove that the $3.3 billion acquisition would be anti-competitive. For one, the DOJ did not adequately define or provide detail on the geographic markets that would become be non-competitive. FierceHealthcare  They extended their deal deadline to the end of 2025 last month.
  • Change Healthcare stated yesterday that it has ‘substantially’ completed notifying affected consumers of their breach. Interestingly, if you use a search engine to try to find the breach notice, you’ll have a great deal of trouble–because the source code contains a hidden “noindex” code on the notice. ‘Noindex’ code tells search engines to ignore the web page–and has been there, apparently, since 20 November 2024. UHG has also not publicly disclosed a more exact number of those affected beyond the long-ago estimate of 100 million. TechCrunch   The state of Nebraska has sued UHG, Optum, and Change over the breach [TTA 19 Dec 2024] 

Masimo, ending a dramatic year of its own, now firmly in the control of Politan Capital Management despite flying lawsuits with former CEO Joe Kiani and an SEC investigation announced last month, issued its preliminary 2024 closing financials and their 2025 guidance. What’s hot–their consumer and professional medical devices, including smartwatches, that measure vital signs including pulse oximetry. What’s not–their audio business under Sound United, which is on the block.

  • 2024 healthcare revenue was up smartly by 9% to $1.395 billion. 
  • 2025 healthcare revenue is projected to increase 8-11% in the range of $1.5 billion to $1.53 billion. Non-GAAP operating profit is projected for 2025 at $398 million to $406 million.
  • Non-healthcare revenue (a/k/a Sound United) was $699 million. That declined 10% decline on a reported basis. 
  • Non-GAAP EPS for 2024 was $4.10. 

For 2025, Masimo is ending reporting for the Sound United business nor providing 2025 guidance since they are selling it. The only guidance they are giving is on the healthcare business. If one does the math–selling off Sound United will take out $700 million from their revenue. One more thing…updated results will be postponed until their investor call, delayed until Tuesday, 25 February. Mass Device, Masimo release

Short takes: UK’s Cera raises $150M, $105M for Qventus, Solera Health’s $40M; General Catalyst’s AWS deal, Virta Health hits $100M in revenue, powered by GLP-1 maintenance; VirtuAlly’s JC telehealth accreditation

January 16, 2025 | by

A ‘this-n-that’ roundup, with a flurry of fundings and more.

Larger fundings are really swinging it this month, making it feel a little bit like old times:

Cera raises $150 million for UK/NHS expansion, platform AI development, and upscaling. The $150 million funding is split between equity and debt, via lead investors BDT & MSD Partners and Schroders Capitals, plus Earlymarket, Guinness Ventures, DigitalHealth, and Robin Klein, a private UK investors. Cera has raised a total of $407 million, with their last raise of $302 million in 2022. 

Cera supports a spectrum of in-home health through its proprietary AI-assisted carer platform. Their nurses and other staff carers use the app on phones (primarily) to direct care and monitor patients. AI and ML assists enable caregivers to view and react to changes in condition. Families can also view reporting on the app. The company claims results of daily savings of £1 million for the UK healthcare system, hospitalization reductions of up to 70%, a 20% reduction in patient falls, and hospital discharges that are up to five times faster. It supports an estimated 60,000 daily in-person healthcare visits across UK homes, partners with over 150 local governments, and two-thirds of NHS Integrated Care Systems. They also claim to be EBITDA positive (as of 2022) and free-cash-flow positive from last year. TechFundingNews, TechCrunch

Qventus raises $105 million in a Series D. The investment in the care operations and automation platform for over 115 health systems was led by KKR’s Next Generation Technology III Fund with Bessemer Venture Partners plus new strategic investors Northwestern Medicine, HonorHealth, and Allina Health. Qventus claims to be ‘AI-first’ for automating routine care and record tasks, increasing team productivity up to 50%. The new funding will be used to accelerate the development and commercialization of solutions powered by its AI Operational Assistants into new care settings beyond its Surgical Growth and Inpatient Capacity solutions. Total funding to date is $203 million over 10 rounds. Release, MedCityNews

A $40 million round for Solera Health gets them to a Series E. The insider round was co-led by payer group Health Care Service Corporation (HCSC). It also includes investors Adams Street, Cobalt Ventures, and Horizon Mutual Holdings, Inc. Funding to date totals $112 million. Solera’s HALO platform provides access to hundreds of digital health applications for payers and employers, including apps for virtual specialty care in areas such as hypertension, high cholesterol, diabetes prevention, and weight management, to drive down the cost of care. Also announced was the confirmation of interim CEO John Santelli to the position. He joined Solera after nearly 30 years with UnitedHealth Group, departing as CIO. Release, MedCityNews

When giants meet…new AI models follow, with General Catalyst allying with Amazon Web Services (AWS) to develop AI tools for its portfolio companies. The focus will be on cloud services and generative AI using Amazon Bedrock, the ML application for building generative AI on AWS. This will be used for improving predictive analytics around patient treatment outcomes and insights into factors such as disease progression. Also mentioned are tools based on Anthropic and Mistral AI, along with securely trained health care-specific models. 

First up are the expanding Commure and Aidoc. Their specialized technology solutions like Copilot Suite and aiOS will be integrated with AWS’s AI and data capabilities. General Catalyst, besides investing in many healthcare and digital health companies, will be using this for their separate HATco, The Health Assurance Transformation Corporation. HATco was founded in October 2023 to develop an interoperability model for technology solutions, targeting health systems and payers. Mobihealthnews, Yahoo Finance/Global Data, FierceHealthcare

In the hot nexus of diabetes management and weight loss, Virta Health passed the $100 million in revenue threshold and growth of 60%. It’s remarkable given that Virta specializes in reversing Type 2 diabetes and obesity via nutrition modification and lifestyle changes. They’ve tweaked their approach into what happens after GLP-1 patients go off the drug, though they now manage GLP-1 prescribing for health plans, employers, and pharmacy benefit managers (PBMs). Their off-ramp is modeled after their Sustainable Weight Loss solution, Responsible Prescribing is designed as an alternative to GLP-1 drugs or as an off-ramp for patients moving off them to maintain their weight loss. Release

Virtual nursing provider VirtuAlly has received accreditation from The Joint Commission (JC). This relatively rare status for telehealth is based on continuous compliance with performance standards and commitment to providing safe and quality patient care. VirtuAlly provides 24/7 turnkey virtual nurse-patient monitoring, temporary virtual support, and consulting services. They also have added a new term to our lexicon, “tele-sitting”. Release 

M&A consolidation + integration continues with Health Catalyst-Upfront Healthcare, New Mountain-Access Healthcare and Machinify, SuperDial-Major Boost

January 15, 2025 | by

The early line on 2025 M&A centers around dinner to snack-size deals that consolidate competitors (or potential competitors) and integrate capabilities–one of our Quirky Predictions:

Health Catalyst agrees to buy Upfront Healthcare. The deal between the two will add Upfront’s personalized patient activation and engagement platform to Health Catalyst’s healthcare management services centered on data and analytics, care management, and performance related services for healthcare organizations. No transaction cost was listed in the release, but the Form 8-K of 10 January details an initial payment of $86 million, composed of $41 million in cash and 5.7 million shares of Health Catalyst stock, plus an earnout of $33.4 million. By comparison, last August’s Lumeon Ltd. buy was for $40 million plus a $25 million potential earnout [TTA 15 Aug 2024]. The UK company’s Care Orchestration service is now integrated into the Health Catalyst suite of services which appears to be the plan for Upfront Healthcare’s services and staff. Closing is stated in the 8-K as occurring during Q1 2025 ending 31 March. Health Catalyst release

Private equity New Mountain Capital invests in Access Healthcare–and reportedly seeks to buy. Based in India with offices in Dallas, Access is a revenue cycle management company for about 150 hospitals and non-acute care practices.  Services include medical billing, coding, and accounts receivable management services. It processes about 400,000 transactions annually according to the Access release today. New Mountain’s investment is (again) for an undisclosed amount. Bloomberg reports that according to the usual insiders, New Mountain is negotiating an acquisition of Access for its portfolio in a transaction that could value Access at about $2 billion. This could close in a few weeks.

On Friday 10 January, New Mountain announced that it will acquire Machinify Inc., a provider of AI-powered software for healthcare payments, for an undisclosed amount. It will join a combined payments company serving over 60 health plans formed by New Mountain from earlier acquisitions The Rawlings Group, Apixio’s payment integrity business, and VARIS. The new company will take the Machinify name and have about $500 million in revenue. Closing is anticipated by end of Q1. Becker’s

Our snack-sized deal: SuperDial’s acquisition of MajorBoost. These two AI-intensive phone call automation providers occupy different parts of the healthcare phone call continuum. SuperDial automates provider to payer and RCM outbound healthcare phone calls for insurance verification, provider attestation for health plans, prior authorizations, credentialing, and more. MajorBoost also automates  provider calls to payers through waiting on hold and navigating their Interactive Voice Response (IVR) phone trees. Acquisition cost nor management transitions are not disclosed, but MajorBoost is listed on Crunchbase as pre-seed with only $350,000 in funding. SuperDial is listed as having $4.2 million in funding over three seed rounds. Release

Walgreens’ kicks off FY 2025 with a wider net loss of $265M; shares rise 25% as closures, sales, and cost-cutting continue

January 14, 2025 | by

Walgreens kicked off their FY 2025 on a sad trombone note–yet Mr. Market liked the music. In one of those contradictions that only make sense to Wall Street, Walgreens’s Q1 2025 earnings report, ending 30 Nov 2024 that reported last Friday, was dismal by any reading–but seemed hopeful to market makers who lifted the shares by over 25% as of midday 14 January. 

US retail pharmacy sales and operating losses were the main drags on WBA’s results.

First, the highlights from the earnings release:

  • Operating loss was $245 million, versus $39 million in Q1 2024. The increased loss was due to lower US retail sales and lapping prior year sale-leaseback gains. Another driver was the US Retail Pharmacy Footprint Optimization Program, unexplained in the release.
  • Net loss was $265 million, versus $67 million in Q1 2024, driven by operating losses.
  • It was a dismal quarter for US Pharmacy, which includes the retail stores, despite gains in pharmacy sales of 10.4% due to drug inflation. Retail sales (the front end of the store) decreased 6.2%.
  • A bright spot was US Healthcare, which includes VillageMD, CareCentrix, and Shields, had a smaller operating loss of $325 million, versus same quarter in FY 2024’s $436 million. VillageMD sales increased 9%, CareCentrix increased 16% and Shields increased 30%.
  • Another bright spot was Boots UK’s performance. Their ‘comparable’ pharmacy sales increased 10.9% versus prior year, retail sales  8.1 percent% and grew across all categories. Boots.com sales–22% of total retail sales–were up 30% boosted by Black Friday.

So why did Mr. Market kvell over this and immediately boost the same shares that fell 63% in 2024? Mostly from the earnings call with CEO Tim Wentworth and other C-levels:

  • Results beat the Street estimates (LSEG survey):
    • Earnings per share: 51 cents adjusted vs. 37 cents expected
    • Revenue: $39.46 billion vs. $37.36 billion expected
  • Guidance for FY 2025 estimates adjusted earnings per share at $1.40 to $1.80 per share with revenue in the $150 billion range.
  • CEO Tim Wentworth confirmed that retail locations will continue to close and will accelerate. 70 were closed in Q1 2025.
    • Their goal is to close 1,200 locations from 2024 through 2026, with 450 to 500 underperforming locations to shutter in 2025. Walgreens currently has around 8,500 retail locations.
  • The sale of VillageMD is underway but no potential acquirers were mentioned on the call.  Separately for Summit Health and CityMD, Walgreens is considering “best options” such as sale or restructuring. These units were snapped up by VillageMD in January 2023.
  • They are working to turn around retail sales which are declining due to consumers restricting spending due to inflation and the value in using online retailers.
    • One measure is around labor scheduling being redesigned to improve the in-store experience. Walgreens is launching a new scheduling model in about 200 locations based on store demand patterns.
  • In pharmacy, they plan to roll out digital and virtual check-in for patients plus micro-fulfillment centers for prescription processing.

Interestingly, Walgreens in the US is not promoting online sales–unlike Boots UK which has done well with it.

There was no comment on the reported consideration of sale to a private equity (PE) firm such as Sycamore Partners [TTA 10 Dec 2024, 8 January], which would remove it from the NYSE.

Street analysts are boosting the stock now, but state that they need to see a few more quarters of stable performance to feel more confident about WBA’s future. Whether that will happen and that the US retail/pharmacy picture improves is to be determined. HIStalk, CNBC, FierceHealthcare, Healthcare Dive

AI-powered senior companions hit the tabletops at CES: ElliQ’s Caregiver Solution, ONSCREEN Joy

January 14, 2025 | by

“Companion” tabletop devices shared the spotlight at CES this year, targeting the older adult market and their caregivers–and integrating AI features in their debuts.

Intuition Robotics introduced the latest iteration of its tabletop companion robot, ElliQ, at last week’s CES. The ElliQ Caregiver Solution integrates caregiver-facing features and care assistance into the robot’s app. Previous versions of ElliQ have been oriented towards interactive companionship and “conversing” with the older adult to alleviate loneliness, provide cognitive stimulation, provide support and cues around health and reminders, and improve social connectivity.

The Caregiver Solution expands the app to allow family and caregivers to automate monitoring of the older adult’s health and activity while providing daily companionship. Through the app, caregivers can also set personalized care goals that are then promoted by ElliQ to the older adult during daily activities. Caregivers then receive updates powered by AI features, especially around significant changes in health or behavior. The goal is to reduce caregiver stress by providing unobtrusive monitoring.

The original ElliQ was upgraded and also debuted at CES last year. The ElliQ 3 was redesigned by Yves Behar’s design studio, Fuseproject, to be lighter, smaller, and integrate a screen. The software was updated to integrate generative AI capabilities using Large Language Models (LLM). ElliQ’s own study of July 2024 study found that users reported more engagement and activity with the tabletop ElliQ than with a tablet. Much of this is undoubtedly due to the form factor–a small, cute but not humanoid device that uses AI to model interactions with the older adult. ElliQ has previously been adopted by the New York State Office for the Aging, Inclusa (a Humana company), and the Area Agency on Aging of Broward County, as well as newer partners like The Olympic Area Agency on Aging, Ypsilanti Meals on Wheels, and others.

Intuition Robotics of Tel Aviv has raised $83 million over seven rounds. Crunchbase. Their last raise was $25 million in August 2023 in an unlettered round with $20 million in venture capital plus $5 million in venture debt. The Robot Report, VentureBeat

Also at CES was a new entrant to the tables, ONSCREEN, debuting the Joy tablet-based AI companion. Targeted to older adults living at home or in senior communities, the Joy programming can run on iPads or Android-based tablets families already own. It has companionship features such as conversations, trivia, jokes, and creative activities, wellness reminders, video calling and Zoom connectivity, messaging, YouTube content shared by family members, and a photo gallery. It rebranded its existing app for family members and caregivers as ONSCREEN Family. Now available for download in the Apple App Store and Google Play Store, it is also affordable at a modest $9.99 per month. The company previously developed Moment, a TV-based senior care device. Release

News roundup #2: why Walgreens is considering selling to a PE, December fundings, 2024’s surprises, M&A ’25 predictions, Transcarent buying Accolade for $621M

January 8, 2025 | by

Why would Walgreens sell out to a private equity investor, reportedly Sycamore Partners? This news leaked early in December to the Wall Street Journal that this PE would either buy Walgreens Boots Alliance (WBA) in whole, in parts, or with partners [TTA 10 Dec 2024]. This MedCityNews article gathers the speculation from multiple financial executives, and the answer is a resounding Maybe.

  • Primary care was a losing bet–and their retail pharmacies are challenged by new models like Amazon Pharmacy and Cost Plus.
  • It will take about $9.2 to $10 billion, which is a lot for Sycamore to pony up. But it’s a bargain from what PE giant KKR offered in 2019– $70 billion.
  • Sycamore may have competition for buying WBA.
  • The 12,000 store network is now seen not as an asset, but a liability, not only for pharmacy but also for retail goods.
  • Sycamore may be more interested in the retail and e-commerce sides of Walgreens versus healthcare. For instance, WBA company Boots in the UK has leveraged its beauty business to nearly the prominence of health in their stores.
  • A private company may have more power to swiftly make the changes that Walgreens needs, versus a company having to report quarterly to shareholders. 

There was the usual rush to announce fundings by December’s end, a refreshing change from 2023’s end. MedCityNews helpfully rounded up five of the last-minute closings:

  • Already noted: Oura’s $200 million plus funding for a Series D from Dexcom ($75 million) and Fidelity Management. Our earlier reporting noted total financing at $223 million and the valuation at $5 billion.
  • Cleerly’s $106 million Series C led by Insight Partners. Cleerly developed AI-assisted detailed phenotyping of coronary artery disease.
  • Remodel Health gained $100 million in a funding led by Oak HC/FT and Hercules Capital. Remodel works with employers and employees to build and access Individual Coverage Health Reimbursement Arrangement (ICHRA) plans.
  • Cala Health raised $50 million from Vertex Growth Fund and Nexus NeuroTech Ventures. Cala is a bioelectronic medicine company which developed FDA-cleared, noninvasive devices for hand tremors.
  • Soda Health’s $50 million Series B, led by General Catalyst, is in the hot sector of ‘food as medicine’. Soda provides a ‘smart benefits’ card to use at approved retailers for food, health products, and pharmacy benefits.

2024 had its share of surprises in this two-part Mobihealthnews roundup. No surprise for our Readers in that GLP-1 drugs for weight loss went to radioactive-level hot (but this Editor predicts a collapse in 2025). The failure of retail clinics such as Walmart Health and VillageMD surprised many in the industry–as well as Optum shuttering its telehealth business. Developing: menopause and autoimmune health (and their relationship)–and food as medicine. On the insurance side, the troubles of the Medicare Advantage health plan model multiplied, not moderated. And AI? On top of everything, but you maybe shouldn’t develop your own LLM. Part One, Part Two

Predictions for 2025 mergers and acquisitions center on consolidations. There’s little foo-foo or froth in this Mobihealthnews article– instead, lots of New Reality. Many pandemic-born startups will die quiet deaths in sales, shotgun marriages, and shutdowns. Much caution in any M&A. The emphasis is on interoperability, which is widely defined as acquirer-acquiree and a clearly presented integrated value proposition to customers. Their industry leader panel cannot agree whether M&A will accelerate as a result of changes at FTC (Lina Khan’s departure and a new chair) or slow down. And at least one leader believes that Medicare Advantage will stabilize and recover.

But one buyer plays it high and wide in ’25–the deep-pocketed Transcarent, agreeing to buy Accolade for $621 million in 2025’s First Big Deal. Accolade is also in enterprise care navigation, as well as providing virtual primary care, specialist consultations, and patient advocates. It went public on Nasdaq in 2020. Transcarent’s offer is $7.03 per share in cash, an approximately 110% premium over the company’s closing stock price yesterday 7 January. The funding is coming from General Catalyst (!) and Glen Tullman’s 62 Ventures. Accolade will go private at the closing, expected to be Q2 following shareholder and regulatory approvals, and be integrated into Transcarent. The combined Transcarent will have 1,400 employer and payer clients. Release, Healthcare Dive

News roundup #1: UHG-Amedisys extended, NeueHealth going private in NEA’s ‘deal deal’, Commure buying Memora Health, VA resuming Oracle rollouts–now mid-’26

January 8, 2025 | by

The end of year is a favorite time to slip in news that deserves wider notice. Sometimes it’s by design so as not to be noticed…and sometimes it’s timing. Or both. Here’s a potpourri of analyses of late December moves of note.

UnitedHealth Group and Amedisys home health agreed to extend their deal window to 31 December 2025. Amedisys filed regulatory paper on 26 December (file here) that moved the acquisition termination date to end of this year, or alternatively to 10 business days after a final court ruling blocking the merger. The latter is a distinct possibility since the Department of Justice back on 12 November filed a lawsuit to prevent the acquisition [TTA 14 Nov 24] on anti-trust grounds, joined by the attorneys general of four states. Amedisys, a major competitor to UHG/Optum, would be merged into Optum’s existing home health operations.

This long-running acquisition started back in June 2023 as an all-cash deal for $3.3 billion and went into DOJ review by August. The target closing at that time was end of 2024 as both companies knew that divestitures would be necessary. The penalty for non-completion was also upped to $325 million if needed divestitures to the VitalCaring Group proposed last July aren’t completed by 1 May. Even with a new Attorney General coming in after Senate confirmation, the wheels are already in motion for this antitrust action that throws a completion into doubt. Becker’s, Healthcare Dive

Gimlet EyeNeueHealth to be taken private by New Enterprise Associates (NEA) and other investors. The latest episode of the long-running NeueHealth (formerly BrightHealth) show dropped on 23 December. Existing investor NEA and 12 other investors with preferred shares in the company will take it private at an enterprise value of approximately $1.3 billion and roll over their shares for equity in the private company. Other holders of common stock will be cashed out, receiving $7.33 per share, a premium of 70% over the $4.31 closing on 23 December. The final price may change as common shares went up sharply the next day and remain up–today (8 January) opened at $7.49. Closing timing of this ‘deal deal’ is dependent on shareholder and regulatory approvals. Management will remain and roll over their shares into the company. Hercules Capital’s loan facility remains in place.  

Buried in the release is this caveat: “The merger agreement includes a 30-day “go-shop” period that will expire at 12:01 AM New York City time on January 23, 2025, which permits the Special Committee and its financial advisors to solicit and consider alternative acquisition proposals.” These proposals will be kept under wraps. But in this Editor’s view, outside offers are highly unlikely given the company’s death-defying history, continuing losses, and Ticking Time Bombs (see below). Their Q3 results had projected full-year 2024 adjusted EBITDA between $15 million and $25 million–but they lost $40 million in Q3 with the 2024 loss to date over $102 million.

As Ari Gottlieb dryly noted in his LinkedIn post, the company is $1.4 billion in debt. $7.33 per share is quite a comedown from the June 2021 IPO at $18 and an $11 billion valuation. The payout to the 36% of shares held by the other public shareholders is a paltry $21 million. Bottom line–NEA and the preferred investors are buying the company for $21 million–such a deal!

This Editor has previously and Gimletly noted NeueHealth’s high-wire act. It has truly Dodged Disaster with aplomb, skillfully creating its Own New Reality. But its Ticking Time Bombs remain: $300 million in CMS Repayment Agreements due on or before 14 March 2025 and $89 million owed to Texas from last year to cover risk liabilities for its shuttered ACA plans [TTA 14 Feb]. To be continued…   Release, Star-Tribune, FierceHealthcare

Commure bought digital health navigation platform Memora Health. Neither acquisition cost nor management transitions were disclosed on 20 December. Commure has one of the more interesting stories out there as the current company emerged from a General Catalyst-engineered estimated $6 billion merger between Commure and Athelas, with Athelas taking the upper hand in the reorganization [TTA 23 Oct 2024]. It should then be no surprise that Memora has significant investment from General Catalyst, which led its last round of funding in April 2023, making this another investor-arranged deal.

Commure’s primary products are the Strongline duress systems for worker distress and patient elopement and the Patient Keeper EHR, with Athelas in revenue cycle management and sensor-based remote patient monitoring. The combined company now features AI-aided workflows, RCM, duress systems, and a software development platform accessible to outside vendors. What Memora is primarily known for is automating practice follow-up texts before and after procedures. The Memora acquisition is positioned as reinforcing CommureOS’ clinical documentation, RCM, and real-time location services (RTLS). In October, Commure closed their acquisition of Augmedix, an AI-assisted physician scribe used by 20 health systems, for $139 million ($2.39/share), giving it a huge leg up into those providers. Augmedix IPO’d via a SPAC in 2021 at $4/share. About 400,000 physicians are claimed to be users of the Commure suite of products.  Release, Mobihealthnews, Endpoints, FierceHealthcare (Augmedix)

And what end of year would it be without a hopeful note from the VA about the Oracle Cerner rollout–now continuing in mid-2026? The Department of Veterans Affairs (VA) on 20 December officially targeted mid-2026 for four Oracle Cerner implementations, 18 months from now. It’s carefully hedged that they are beginning ‘early-stage planning’ for deployment in four Michigan facilities — Ann Arbor, Battle Creek, Detroit, and Saginaw. Meanwhile, improvements will continue at the five sites that use Oracle Cerner plus the sixth joint implementation with the MHS (Lovell). Interestingly, the current VA secretary, Denis McDonough, announced at an 11 December press conference that new implementations would start before the end of 2025 [TTA 19 Dec 2024]. This Editor assumes that the staff sharpened their pencils and recalculated right before Christmas. What’s also hopeful for Oracle and the VA are continuing  improvements in veteran outpatient trust and clinician satisfaction scores, as well as effectively eliminating outages for 200 days as of the release date. VA release, Healthcare Dive 

A year’s end newsletter to our Readers: a few wishes for Under the Tree, a few Quirky Predictions for 2025

December 19, 2024 | by

It’s hard for your Editor to believe, but this is actually the 15th year since Steve Hards was most kind and invited me to contribute a few articles to what was then simply Telecare Aware.

A lot has happened since then, professionally and personally. I’m grateful for the opportunity that TTA has given me to Cover the Healthcare Waterfront, relying on multiple sources from super-local to Mainstream News to the Usual Sources. 

Most of all, this forum (and it is one!) stays true to the course that now Editor Emeritus Steve set some years ago:

Telecare Aware’s editors concentrate on what we perceive to be significant events and technological and other developments in telecare and telehealth. We make no apology for being independent and opinionated or for trying to be interesting rather than comprehensive.

In that, though I’ve occasionally gone far afield (and down some rabbit holes) into exclusively US issues such as how healthcare gets paid, its politics, and the financial landscape (from bubble to devastation to recovery), I believe they hold true in the UK and in other countries. 

So one wish I have from Santa for 2025 is for More Comments. I’m very interested in knowing what you think about topics that are covered and your take on them. Using hits as a guide, it is hard to predict. Sometimes it is breaking news, a major data breach, or Walgreens’ continuing soap opera. Perhaps you want more audio commentary or article audio files, which I’ve experimented with via Soundcloud. So…What do you think?

A second wish: for other writers to join me here as lead/topic providers or better, contributors, for news outside the US. Specifically, I believe Readers want to know what is going on in the UK and Europe, but ‘standard sources’ are either not focused on health tech, paywalled, or overly specific ‘inside baseball’. Steve and I have long recommended Roy Lilley’s newsletter and UK Telehealthcare.

So…if you know of reporting on UK or EU issues, please direct me there. Better yet, contribute an article! Or two! We are small and cannot pay, but if the facts are there and the writing is sound, you’ll be published and can republish elsewhere. (This is exclusive of Perspectives, which are non-promotional thought pieces contributed by companies’ marketing areas. And we thank them!)

A third wish: speaking of marketing, I am a marketing and communications consultant by trade. Yet I am very shy about putting my shingle out there and asking Readers for leads to companies that might need marketing help, short-term or long term. My LinkedIn profile has most of my CV and key information on what I’ve done and where I’ve worked, but for a full overview about my capabilities across branding, program, planning, and products, email me here. 

Now for the Quirky Predictions–I’ll keep it short and open to debate:

2025 will continue international rebuilding of companies in healthcare and health tech. But the tear-downs will continue to clear the table. Overall, there’s optimism in the air with a new administration. It doesn’t feel like a rerun of 2023 where everyone thought it was going to be Romping Unicorns post-pandemic and the Big Guns were snapping up Big Buys like Signify Health and Oak Street Health for Big Bucks. We know now how that worked out for Walgreens, CVS, Walmart, and even Amazon (which I predict will be rethinking–and retrenching). We are starting from a low level and hopefully leveling up from there.

That doesn’t mean that there won’t be more Shotgun Mergers by VCs that avoid the new merger guidelines and a few Chapter 7s and 11s (UK=administration) along the way. There will be more layoffs. Funding rounds for both healthcare and digital health will be moderate. Down rounds that reduce valuation will still be with us. Investors will push for more control–witness what is happening at Walgreens and CVS, and what happened at Centene.  There will be more big changes at Walgreens, CVS, Elevance, Centene, Cigna, and many others considered mainstays of healthcare–and don’t rule out Amazon and Walmart. But by the end of year, barring a Bird Flu Pandemic, space aliens landing from the Plague of Drones in US and international skies, or an Unraveling of Sanity, overall we will be doing a lot better.

Robert F. Kennedy Jr. will be turning up the heat on Health. He will be confirmed as head of Health and Human Services and will, within a year, refocus it along its name. Health rather than Sick Care. A lot of substances ranging from vaccines to PFAS to various dyes and additives in food will be questioned at FDA, restricted, and brought to the national consciousness. As a personality, he is extremely intelligent and dynamic–knows how to absorb the most complex information and move on it. He knows that Make America Healthy Again is his Main Chance and also to be true to his legendary father’s legacy. It will make a lot of drug and chemical companies rather…nervous. (I am less sanguine about Dr. Mehmet Oz as head of CMS and his ability to clean up that puzzle palace, but hopeful.)

Speaking of heat, I wouldn’t want to be a C-level at any of the major health plans that are in multiple lines of integrated business.  The assassination of Brian Thompson and earlier the massive Change Healthcare hack ripped the cast and bandages off the entire system. The sheer hostility to payers was startling enough for UHG CEO Andrew Witty to write a massively defensive op-ed in the NY Times–and the hostility has hardly dimmed with the jailing of Luigi Mangione who has turned into a folk hero to some. (Yeesh! I cannot think of anything less moral.) The incoming administration and Congress are restive and major changes will be coming from there. Already there is a bipartisan Congressional bill (the PBM Bill) requiring the divestiture of pharmacy benefit management (PBM) companies from insurers within three years. While it will not be passed by the 118th Congress, it will be reintroduced by the 119th after 3 January if you look at who is backing it. This is the kind of movement to simplify how healthcare is delivered and paid for that crosses ideologies and finds a wide spectrum of support from Bernie Sanders to RFK, Jr. and presumably the re-elected President. 

Once the PBM string is pulled, what then comes into focus is insurer ownership and control of providers. UHG/Optum owns or is affiliated (meaning ACO or partial ownership) with 10% of US practices. DOJ is already after UHG for the Change Healthcare acquisition on security grounds. The more aggressive posture around anti-trust will not change in this administration and only slightly moderate with a new FTC chair. (Lina Khan’s term has expired though she may try to hang on, but her bête noire Amazon is still in trouble with their One Medical Bad Bet.)  The few payer organizations that only offer health plans, like Molina, Oscar, and Clover, will start to look very smart indeed. Perhaps smaller and less controlling is actually…better. And more profitable.

Running in parallel: the lack of trust in Big Pharma and the cost of drugs from them. They’re next.

We will need to get much more realistic about AI, what it is capable of, and its social effects. It is spreading into everything like kudzu (try entering into most browsers) but what we will be finding out is that a lot of what is ‘AI’ sold to companies as labor-saving is half-baked. It doesn’t work well. Some of it falls into the ‘uncanny valley’ of unease as too humanoid. If a company or service relies on it for decision making, it may not make those decisions better than humans. Reportedly UnitedHealthcare uses AI for a claims decision model, something that is cited as flawed. Bad decisions incite human anger, and lack of human contact is like being in a perpetual voice jail.

There is also growing evidence that in writing and researching, over-dependence on AI prompts and drafts destroys the ability to remember and creatively connect both on the fly and under consideration, in the ability to move an argument logically to a conclusion utilizing persuasive writing and speech skills. This especially affects the young. I’m hearing reports on this from the hiring front, where young grads cannot write without AI assistance and are stunted in their verbal skills. AI in writing gets to be a crutch (I use a tool for grammar–and about 10% of the time it’s off.). And have we forgotten that AI is dependent on content….GIGO from the early computing days still applies. We don’t want to be the Eloi, do we? (Look up your H.G. Wells)

And one last prediction. The mass market weight loss fad hyping GLP-1 drugs (Wegovy, Ozempic, Mounjaro, Zepbound) will implode. These drugs are now readily available, less expensive (but certainly not cheap), and cheerily advertised on social media, radio, and TV by drug manufacturers and telehealth prescribers. These are promoted for weight loss alone, not for weight loss to better manage Type II diabetes or true obesity. What will pop the bubble? Side effects of slow digestion like stomach paralysis. Diarrhea, nausea, intestinal distress, even pancreatitis and suicidal ideation. Little known is that 80-90% of clinical trial participants experienced at least one adverse event. If you survive these, a weight gain rebound often happens once off the injections.

The telehealth prescribers like Ro and Hims make it so easy–and do they go through blood and other testing, and histories, to ensure that the patient is a suitable candidate?  Metabolic modifications ain’t beanbag.

A side business popping up: nutritional  supplements and ‘special drinks’ to prevent malnutrition (because of the low food intake) and muscle loss. (Another sign that GLP-1 is hitting a peak.)

Perhaps waiting in the wings are the class action lawyers, ready to jump on any massive side effects or, God forbid, deaths.

No ‘craze’–and this is one–is unalloyed bliss. If you have a diversified telehealth company like Teladoc and you get into this business, it may not make a difference (?)–but sole providers like Calibrate (among many) will feel the pain. And destruction. (Does anyone remember the much-touted Alli/Orlistat that reduced the fat absorbed by the digestive tract and those side effects?)

May you and your loved ones have a Merry Christmas, Happy Hanukkah, and a Happy New Year…however you and yours celebrate! We will be on a two-week break and return, along with many of you, on 6 January.

News roundup: Precision’s $102M raise, more on BCI; Withings clears BPM Pro 2; Nebraska 1st state to sue Change/UHG, related insider trading update; VA Oracle go-lives may resume; ATA intros CODE; ClearDATA HITRUST certified

December 19, 2024 | by

One more funding. A competitor of Elon Musk’s Neuralink, Precision Neuroscience. closed their Series C at $102 million. This round was led by General Equity Holdings, with participation from firms including B Capital; Duquesne Family Office, the investment firm of Stanley F. Druckenmiller; and Steadview Capital, bringing their total funding to $155 million. The total brings them according to their release as one of the best-funded brain-computer interface (BCI) company after Neuralink, whose funding is unknown. The funding will be used to advance its clinical research and expedite development of its cutting-edge brain implant. 

Precision is the developer of the Layer 7 Cortical Interface to treat motor paralysis. At the time of their last funding in January 2023, this Editor noted that their difference was to treat neurological illnesses and events such as stroke, traumatic brain injury, and dementia. Their focus remains largely there: severe spinal cord injury, stroke, ALS. So far, the investigational device has been tested its device in 27 patients through research partnerships and was designated by FDA as a Breakthrough Device.

More on BCI in this must-read article by Timmy Broderick for STAT. The upcoming issues around BCI now center around the engagement of CMS (Centers for Medicare and Medicaid Studies) for coding, coverage, and payment for devices after the investigational stage; privacy issues about neural data; and continued support after implantation. This last one is acute as these companies are young. There has already been the example of Second Sight’s bankruptcy, leaving subjects stranded with useless retinal devices in their eyes. BCI to this Editor will develop through 2025–and be a major focus of investment by 2026-2027.

Withings gains FDA clearance, intros BPM Pro 2. A professional-level product for hypertension and chronic heart failure (CHF) targeted to care teams to connect with their patients, the FDA clearance covers blood pressure and pulse rate measurement in adults with arm circumferences of 9 to 17 inches (22 cm to 42 cm) or 16 to 20 inches (40 to 52 cm). What is really interesting about the connected (Wi-Fi, cellular, BT) device is that care teams can program the device through the Patient Insights feature for the patient to interact with the device in real time. Through a small screen, it asks questions that help to track the patient’s condition, reinforce medication adherence, and assess their satisfaction. It also has a Retake Measure feature to retake a reading if results exceed predetermined thresholds and increases accuracy. Withings plans to upgrade the device to take a 1-lead ECG to detect atrial fibrillation; this is a separate clearance and expected to become available in 2025. The device is not yet CE Marked. Withings was named a CES 2025 Innovation Awards Honoree in the Digital Health category. (Photo, Withings website) Release, Mobihealthnews, MedCityNews

UHG’s Mound of Misery multiplies with Nebraska’s Change Healthcare lawsuit, plus separate but related insider trading. 

  • Nebraska became the first state to sue UnitedHealth Group, Optum, and Change Healthcare over those affected by the late February ALPHV/BlackCat hack of Change’s systems. In Nebraska alone, it affected 575,000 individuals. (It is actually hard to find someone who was not affected by the hacking of the leading exchange for major claims clearing and payments.) Nebraska’s attorney general Mike Hilgers is suing because of the company’s carelessness in handling data and, even worse, in its slow notification of those affected. Our Readers will recall that Change/UHG initially tried to push off notification on healthcare providers. When HHS threw the ball back to Change [TTA 5 June], notices didn’t go out until August-September. The charges in state law center on consumer law: financial data protection and consumer protection statutes, deceptive trade practices, and Federal standards on privacy (HIPAA, and HIT protection. The lawsuit was filed by the AG in the District Court of Lancaster County, Nebraska. Nebraska Examiner
  • The Change acquisition and later problems were possibly the catalyst for stock sales by senior/C-level UHG executives, including UnitedHealthcare CEO Brian Thompson. The $300 million Hollywood (Florida) Firefighters Pension Fund initiated a class action lawsuit alleging that the sales were made while the Department of Justice (DOJ) was considering an anti-trust action against UHG that would revisit the so-called ‘firewall’ between it and Change.  The complaint specifically mentions that UHG executives were aware of it as early as October 2023. The Wall Street Journal revealed the investigation on 27 February 2024–the same time as the Change breach was revealed, cracking the stock almost immediately. Executives including Thompson ($15 million), UHG CEO Andrew Witty, and board chairman Stephen Hemsley ($102 million) were named. The class action covers the period for stock purchased between 14 March 2022 and 27 February 2024. UHG has until 1 March 2025 to answer the complaint. Healthcare Finance News  (This is likely to affect the settlement of the Thompson estate–Ed.)

VA confirms that additional Oracle EHR implementations may go live in 2025, after 18 months of dead stop. The Oracle Cerner EHR is reportedly ‘running better’ at the current six sites where it is operating: five VA only (including 20 community clinics and about 100 support sites), and the sixth at Lovell jointly with the Military Health System (MHS). The restart of EHR Modernization (EHRM) was confirmed earlier during budget hearings by Kurt DelBene, assistant secretary for information and technology and chief information officer. Crash and lag downtimes are reduced by half and incident tickets by 60% since the last updates in August.  Timing remains indefinite for 2025 (FY ends 30 September 2025) but current VA Secretary Denis McDonough confirmed that primarily VA staff will continue to work on it under the Trump Administration. “The overwhelming majority of VA professionals who work on EHRM will be working on EHRM on January 21st, just as they were on January 19th,” McDonough said at an 11 December press conference. Federal News Network

Short takes:

  • The American Telemedicine Association (ATA) launched its new ATA Center of Digital Excellence (CODE) last week. CODE is constructed as an alliance with leading health systems for the development and implementation of digital health best practices that prioritize patient-centered care, equitable access, and improved clinical and operational outcomes. Tools span enhancement of workflows and patient engagement to improve healthcare accessibility. ATA release
  • ClearDATA’s CyberHealth platform and cloud managed services have earned Certified status by HITRUST for information security. ClearDATA provides healthcare specific managed cloud security, compliance and operations solutions. HITRUST, the Health Information Trust Alliance, is a non-profit that sets standards for data organizations through the HITRUST CSF framework. Release

Rounding up last of 2024’s M&A/fundings: Redesign Health’s $175M, HEALWELL AI buys Orion Health, startup Tuva Health’s $5M

December 19, 2024 | by

The largest of the year-end fundings (so far) goes to Redesign Health. Best described as a designer and funder of startup health companies which are then spun off, Redesign gained a $175 million investment for a new fund from Declaration Partners, Euclidean Capital, and True North Advisors. Unlike your typical seed funder or incubator, Redesign takes an activist role in forming startups before spinning them off. Its model includes in-house experts to advise on formation, connecting the startup to existing relationships with healthcare organizations and demand generation systems, and access to networks of investors and talent experts. Redesign has used this model with more than 60 companies. These companies have had over 15 million patients and generated >$1 billion of revenue. The fresh funding will be used to start up new companies in eight areas, including ‘preparing for an aging population’. Release, MedCityNews 

Once spun off, the organizations are on their own. Some have been acquired: Jabra Enhance in hearing aids (GN Hearing) and Vault Workforce Screening (Sterling). One notably got into trouble–Calibrate, which was sold for $20 million in an October 2023 ‘reorganization’ to private equity firm Madryn Asset Management along with other investors [TTA 26 Oct 2023]. A pioneer in DTC telehealth programs for GLP-1 weight loss drugs, Calibrate was caught in the squeeze between scarcity of those drugs (Ozempic, Wegovy) and the entry of Teladoc, unable to fulfill its programs nor, at that time, to get insurance reimbursement. It is now benefiting from being in a very hot sector of weight loss drugs. Prior to the sale, Calibrate raised about $160 million in funding [TTA 15 Feb]. Interestingly, Calibrate is still listed in the Redesign portfolio including career openings.

Redesign itself had some rocky times earlier this year with their layoff of 77 from their New York-based staff of 200 to 250 (estimated). The cuts were from the areas that support new venture creation. The new funding is the first sign that Redesign is getting back into the business of forming new companies versus maintaining the portfolio.

New Zealand’s Orion Health to be acquired by Canada’s HEALWELL AI. The final price is NZ$200 million/CA$165 million (US$115 million) for 100% of Orion’s private shares. CA$86 million will be paid in cash and the balance will be paid in HEALWELL stock plus CA$20.5 million in a 3-year performance-based arrangement. Closing is anticipated to be April 2025, after Orion divests itself of non-strategic assets and the usual approvals by shareholders, regulators, and the Toronto Stock Exchange.

Orion Health’s products–Orchestral, Amadeus, and Virtuoso–are data exchange, patient record, and analytics platforms to benefit clinicians and patients. Their largest customers are in Canada, Australia, and New Zealand, plus the NHS in the UK, giving HEALWELL AI an international footprint. HEALWELL AI is based in Toronto and is an artificial intelligence company focused on preventative care through the early identification and detection of disease. Their release announcing the transaction is interesting because of the complexity of the funding (dare we say leveraged?). HEALWELL has $47.6 million in funding over six rounds (Crunchbase). It trades in the vicinity of CA$ 2.00 which gives it a valuation of CA$354 million. Mobihealthnews

Orion Health was last mentioned here with their win two years ago of Saudi Arabia’s health information exchange. The founder, Ian McCrae for the past 30 years, stepped down in August 2022 for health reasons. Replacing him was Brad Porter, his son-in-law. 

On the other end of the spectrum, Tuva Health emerges from stealth with $5 million. The round was led by Virtue, with participation from Box Group and Y Combinator, and notable health tech angel investors. New York-based Tuva has an open-source data model for healthcare analytics and data management to be used by healthcare providers, payers, life sciences companies, and research institutions as an open standard for healthcare data transformation. Their software gives users the ability to transform claims and EHR datasets into analytics-ready data tables via an open-source data model with built-in normalization, data quality testing, and enrichment. 1,500 experts are currently working in collaboration on the model. Their initial partnerships are with Oscar Health and CareAbout Health.  The principals and founders, Aaron Neiderhiser and Coco Zuloaga, are former senior executives from Health Catalyst and Strive Health. Release, FierceHealthcare