News roundup: Amwell faces NYSE delisting; Walmart Health slows Health Centers, except Texas; Novosound’s ultrasound patent; Eko’s Low EF AI; Universal Brain; Elizabeth Holmes in ‘Dropout’ + update

April 5, 2024 | by | No Comments

Amwell on a six-month NYSE notice to get stock price above $1.  Telehealth provider Amwell received an NYSE notice on 2 April that their Class A stock, in having an average closing price of below $1.00 over a consecutive 30 trading-day period, violated NYSE’s continued listing minimum price criteria. It dipped below $1.00 on 12 March and stayed there. The stock will not be delisted at this time and is now in a six-month ‘cure period’. Amwell has already confirmed its intent to cure the deficiency, including proposing at its upcoming 2024 annual meeting a reverse stock split, subject to stockholder and board of directors approval. Amwell (AMWL) closing price today was $0.72 which represents a 65% decline over the prior year. Amwell is largely owned by institutional shareholders–289–holding 149.2 million shares (Fintel). Amwell IPO’d in the palmy days for telehealth in September 2020, raising $742 million at the time with shares debuting over $25 [TTA 18 Sept 2020]. Amwell’s 2023 was as hard pressed as rival Teladoc’s with a $679 million net loss in 2023, up 150% from 2022’s $272 million loss. The 2024 is not much sunnier, 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. Amwell has also released 10% of staff since 2023. Eh, have times changed? Amwell release, Healthcare Dive

Walmart Health pressing the brakes on its Health Centers, concentrating on Texas. Walmart, generally superb at reading the weather, has decided to slow down openings of its primary and urgent care centers, located only in Walmart Supercenters. The previous plan was to open 30 or more centers in 2024, reduced now to 22. 18 of these will be in Texas: eight in the Houston metro starting this month and 10 in the Dallas/Fort Worth region. The remaining four will be in the Kansas City metro. The Health Centers target patients with no or poor insurance coverage in underserved areas and offer a range of services including labs, X-rays, and dental care. The goal of 75 centers has moved forward to early 2025. Healthcare Dive, Drug Store News

A potpourri of news around smaller companies and innovations:

Scotland’s Novosound has patented a wearable, WiFi-enabled ultrasound digital platform, its 21st. The Slanj (phonetic for sláinte, meaning health in Scottish Gaelic) uses thin film printed gel-free, disposable high-resolution sensors to be integrated into other wearables such as smartwatches and other monitors. Novosound’s patent covers both the US and UK. In 2022, they inked a commercial partnership with diagnostics and digital health company PAVmed Inc. for intravascular imaging. Novosound was the first spinoff from the University of the West of Scotland. Mobihealthnews

Also in cardiac, the FDA cleared Eko Health’s Low EF detection AI. This enables a provider to quickly diagnose Low EF (ejection fraction) in a physical exam to assess possible heart failure. The Eko stethoscope and module connects to a tablet and provides a reading within 15 seconds. Trained on a proprietary dataset of over 100,000 ECGs and echocardiogram pairs from unique patients, clinically validated in a multi-site, prospective clinical study of 3,456 patients, it requires only a minimum of specialized training as part of the SENSORA Cardiac Early Detection Platform that can be used just about anywhere. The Eko Low EF was developed in conjunction with the Mayo Clinic. Eko release, MedCityNews

Universal Brain, which has developed a range of wearables that measure brain activity, named three new executives:  Greg Hajcak, PhD, as tChief Scientific Advisor, Vangelis Lympouridis, PhD as Chief Product Officer, and K.T. Venkateswara-Rao, PhD, as Head of Operations. For psychiatric clinical drug trials and psychiatric diagnosis, there is an EEG wearable paired with a digital ERP interface, Neurotique. They also developed a patient neurofeedback treatment system (EEG wearable + digital therapeutic) to augment standard treatment by providing real-time feedback for depressive symptoms.  Release

And for UK Readers weekend viewing pleasure in the UK, the Elizabeth Holmes biopic, ‘The Dropout’ is now available on BBC iPlayer. Hulu produced and originally aired the eight-episode series in March of 2022 (our review here). Hat tip to Editor Emeritus Steve. For US Readers, it is still available on Hulu. Or if you have a VPN, you can set it to a UK-based server and sign up for BBC iPlayer. The only recent (January) news about Ms. Holmes is that the Department of Health and Human Services (HHS) Office of Inspector General (OIG) banned her and Sunny Balwani from all Federal health programs for 90 years, which does strike one as overkill as beyond their reasonable lifetimes. Ars Technica

Based on a Reddit posting on a pop culture chat, celeb Jen Shah, also at FPC Bryan, and Holmes were snapped ‘hanging out’ in the yard. Shah was convicted of heading a telemarketing financial scam that preyed on the elderly. She is serving 78 months in Federal prison and has to pay $6.6 million in restitution–numbers that could fit easily in Holmes’ 135-month sentence and $452 million restitution. And Sunny Balwani, about whom there are no pictures, no Reddit, is apparently still serving his time at Terminal Island near San Pedro, California, not in Atlanta.

Teladoc CEO Jason Gorevic steps down immediately in shock announcement

April 5, 2024 | by | No Comments

Teladoc Health announced this morning the immediate departure of CEO Jason Gorevic. The release from Teladoc hit the wires at 6:30am Eastern Daylight Time. Chief financial officer Mala Murthy has taken the CEO position on an interim basis while the board of directors conducts an executive search for a permanent replacement. She will retain CFO responsibilities during the search.

From LinkedIn: Ms. Murthy has been with Teladoc since June of 2019, joining as CFO from seven years at American Express as CFO of their Global Commercial Services segment. Previously she was with Pepsico. 

The industry for some time anticipated Mr. Gorevic’s departure after 15 years due to Teladoc’s lackluster 2023 and a dismal forecast for 2024. Teladoc never really recovered from a disastrous 2020 $18.5 billion acquisition of Livongo engineered by Mr. Gorevic with Glen Tullman, followed by its 2022 $6.6 billion writedown. The share price never really recovered, reaching a high over $293 in February 2021 but eroding quickly after that. It currently languishes at below $15, losing 34% YTD and 95% since 2021. The crash in Teladoc’s value as the pandemic closures of practices resolved was replicated by other telehealth companies such as Amwell, MDLIVE, Included, and most others. But the picture didn’t seem to be clearing. Telemental health provider BetterHelp, which last year was touted as the company’s salvation, wasn’t, falling flat in 2023 revenue. Teladoc’s 2024 forecast was downbeat as well [TTA 22 Feb], but management in the announcement reinforced that they are standing pat on their Q1 and full year 2024 financial guidance.

The usual anodyne statements followed. “We thank Jason for his many achievements and contributions during the 15 years he led Teladoc Health. We wish him success in his future endeavors,” said David B. Snow, Jr., Chairman of the Teladoc Health Board of Directors. To CNBC, Mr. Gorevic said, “I am proud of the impact we’ve made on the healthcare system, and our many accomplishments in advancing innovation and transforming virtual health care from an unrealized promise into a valued reality for our 90 million members.” 

The impression left by Teladoc from press and related news articles, as well as by analysts, was this move was sudden. The precipitating action to remove Mr. Gorevic is yet to be revealed. The release was timed for the usual pro forma Friday, but the morning timing was designed for the markets to lift the stock in week-end trading. Teladoc’s financials have been hammered for the past two years, but no differently than its now extensive competition, with health systems and practices now incorporating telehealth and virtual health software. Another confirmation that this was a sudden move: a quick view of the Teladoc website at 12.30 ET was that Mr. Gorevic was still listed as the CEO; this changed with a second view at 1pm. To be continued…  FierceHealthcare, Axios, HealthcareDive

More New Reality: NeueHealth (Bright Health) CEO’s $1.9M bonus (updated), 2023 financials–and does Cano Health have a future?

April 5, 2024 | by | No Comments

After 2023, how did NeueHealth’s CEO earn a bonus of $1.90, much less $1.9 million? As our Readers know from our last episode of ‘Facing the Music of the New Reality’ [TTA 14 Feb, 24 Jan], Bright Health Group at the top of 2024 rebranded with the oh-so-chic name of its value-based care medical practice division, moving its HQ from poky, cold, failing Minneapolis to Doral, Florida. All its health plans, launched some years back in a blaze of flashes, either were sold (Medicare Advantage to Molina) or collapsed in a heap of losses. Aside from owing money to Texas ($85 million) on ACA plans, Neue owes mucho money to the Center for Medicare and Medicaid Services on Repayment Agreements, reportedly around $400 million, due on or before 14 March 2025. But in a masterful move, using the Molina money to keep the investors at bay, NeueHealth has managed to pay off JP Morgan for a credit line, dodge all the bill collectors–and award its CEO Mike Mikan a $1.9 million bonus, up from $1.69 million in 2022. Now, like some other of the C-suite, Mr. Mikan took most of his 2023 compensation of $9.9 million in stock-based pay, most of which is (glub glub) underwater. But one has to wonder about a board of directors, including major investor New Enterprise Associates, that would reward Mr. Mikan for steering Bright Health into a brick wall, even if it came out the other side as Neue. And Neue still needs funding to continue as a going concern this year (see page 12 (page 18 of PDF) of their March 10-K). AOL News, Ari Gottleib on LinkedIn, FierceHealthcare 4 April update  Cash bonuses of $875,000 were paid to CFO Jay Matushak and Executive Vice President of Consumer Care Tomas Orozco.

Another surprise in their 10-K is on pages 115-116 of the document (PDF pages 121-122) of a ‘material weakness’ in their financial reporting that has existed since 2022, not remediated in 2023, but is planned to be remediated in 2024. “Our disclosure controls and procedures were not effective due to a material weakness in our internal control over financial reporting”.

Their Q4 and 2023 financials reported in March were also underwater, with net losses of $62.8 million for the quarter and $627.7 million for the year, with an adjusted EBITDA loss of $8.5 million. But for 2024, they present a bright (ahem) picture for NeueHealth’s two divisions: NeueCare (owned clinics and partnerships with affiliated providers) and NeueSolutions, a management services entity that organizes independent providers and physician groups into performance-based ACA Marketplace, Medicare, and Medicaid-based ACO models, including the advanced performance ACO REACH program. Projected revenue is $1 billion and adjusted EBITDA between $15 million and $25 million. NeueHealth release, FierceHealthcare 

Perhaps investors New Enterprise Association ($1 billion in) and CalSTRS are letting their chips ride on what most could see as a losing number–what is the alternative? At the risk of repeating myself, they’ve managed to play multiple ends against the middle and tie masterful Gordian knots (pick your analogy) around CMS and their investors, hoping to stay alive until 2025 and better times. Or, as Ari Gottlieb speculates, NeueHealth may file a Chapter 11 before the CMS payments are due in March 2025. And then what?

This Editor also notes that former GE CEO Jeff Immelt is on Neue’s BOD and is a venture partner in NEA. The late ‘Neutron Jack’ Welch was once heard to regret naming Mr. Immelt as his successor, given that once-mighty GE is now split into three relatively small companies after maximum losses and management turmoil at legacy GE.

(5 March updates in red) 

After a disastrous 2023, does Cano Health even have a future? The telenovela is not fin, but little has been heard from Cano since it entered Chapter 11 bankruptcy on 4 February. A 26 February story in local Florida news, the Sun-Sentinel, has a few updates:

  • Cano’s goal is to exit Chapter 11 by the end of Q2 (June)
  • Class A shareholders, who accepted a 1 to 100 reverse share split in December 2023, will be left with no value–including the ‘Cano 3’ of Barry Sternlicht, Elliot Cooperstone, and Lewis Gold who owned 35% of the shares.
  • They have $150 million in operating cash until then
  • In the reorganization, they have two tracks: continue as an independent company or sell
  • The focus will be on core operations, including Florida Medicare Advantage
  • They plan to close 80 locations. Their filing contains 72 ‘dark leases’ mainly in Florida. Cano has 95 medical centers operating in Florida so it is not clear whether the closures take into account the dark leases.

Cano is now operating in Florida only, having offloaded or closed operations in Texas, Nevada, California, New Mexico, Illinois, and Puerto Rico. According to the filing, they currently employ 3,000 people, including 2,800 full-time staffers including executives, clinical, and administrative staffers, including 300 doctors, nurses, and physician assistants. In addition, Cano has affiliate relationships with approximately 630 provider practices. 

If you wonder what happened to Cano’s former CEO….founder and former CEO Marlow Hernandez, with two other Cano former executives, started a new company called Soran Health based in Hollywood/Miramar, Florida. It provides patient and medical management services including care delivery systems.  Dr. Hernandez and the other former Cano executives were sued in January by Cano for allegedly breaching their non-compete agreements and taking proprietary information. While they have a website and a LinkedIn page, they are remarkably content-less, but listed by CMS as a group practice.

ATA requests expediting of revised proposed rule on controlled substance telehealth prescribing; announces Nexus 2024 meeting 5-7 May

April 4, 2024 | by

ATA and 200 organizations request from DEA a revised proposed rule on controlled substance teleprescribing–stat. The American Telemedicine Association (ATA), in a 2 April letter (PDF link) with over 200 signatories, requests that the DEA quickly issue a revised proposed rule for industry comment.

Last October, the Drug Enforcement Administration (DEA) and Health and Human Services (HHS) extended for the second time pandemic flexibilities for prescribing controlled substances through 2024. The proposed rule issued in May had 38,000 comments, which overwhelmed DEA and HHS. The two agencies were unable to come up with a revised proposed rule by end of year and punted to 2024. The final rule is scheduled to be issued by this fall.

The 2 April letter advocates continuing many of the pandemic flexibilities due to care shortages and disruptions to patient care. If DEA were to create a special registration process for telehealth prescribers as many have proposed, transitioning and training would be needed to minimize disruptions in care to providers and patients in time for the new rule to take effect in 2025.

The controversy is around permitting and regulating the prescribing of controlled substances through telehealth. The pandemic rules suspended the Ryan-Haight Act restrictions that required in-person evaluations/visits prior to prescribing. Legally, that cannot continue. The extension of pandemic flexibilities permitted clinicians to prescribe Schedule II–V controlled medications via audio-video telemedicine encounters, including Schedule III–V narcotic controlled medications approved by the Food and Drug Administration (FDA) for maintenance and withdrawal management treatment of opioid use disorder. ATA release   HealthcareDive 4 April

ATA is also resuming an in-person spring conference, Nexus 2024, 5-7 May, at the Phoenix Convention Center in Arizona. It will have 300 speakers on 30+ topics. The meeting is being pitched to primarily care delivery and provider organizations. An overview of the conference is in the ATA release. More content information here (PDF link). Online registration (attendee and exhibitor) or email AmericanTelemedicine@​xpressreg.net

Davids (AliveCor, Masimo) v. Goliath (Apple): the patent infringement game *not* over; Masimo’s messy proxy fight with Politan (updated)

April 4, 2024 | by

Apple’s legal department certainly hasn’t been maxing their relaxing this year, what with DOJ and pesky upstarts taking them to court. The big one keeping them busy is the US Department of Justice (DOJ) giving Apple a dose of its own medicine in filing an antitrust lawsuit against Apple for monopolizing smartphone markets [TTA 22 Mar]. Apple also continues to fight antitrust and intellectual property (patent) infringement in Federal district courts, the US Patent and Trademark Office (USPTO)’s Patent Trial and Appeal Board (PTAB), and the International Trade Commission (ITC), brought by ECG reader AliveCor and Masimo‘s pulse oximetry reader and software. Masimo succeeded in disrupting Apple’s sales of the Watch Series 9 and Ultra 2 right at the Christmas holiday sales season [TTA 28 Dec 23], forcing Apple to disable the pulse ox feature [TTA 18 Jan] in future imports in one of Apple’s few losses.

The DOJ lawsuit does not address Apple’s copycat activities against either AliveCor or Masimo. Both companies worked with Apple.  AliveCor integrated its early KardiaBand (2016) with early Apple Watches, only to have cardiac readings integrated into the Apple Watch two years later (2018). Masimo and Apple were in mid-stages of a 2021 partnership that Apple broke off, but Masimo then accused Apple of hiring its employees working on the project [TTA 27 Oct 23].

AliveCor hasn’t been quite so successful as Masimo in challenging Apple, but it has been fighting Apple as a David v Goliath on multiple fronts for years. In February, AliveCor lost a round in the US District Court for the Northern District of California on the heart rate algorithm changes Apple made in 2018 that made their SmartRhythm app provided to Apple non-functional. That decision reportedly is still under seal. However, AliveCor has multiple Federal patent infringement lawsuits going against Apple. The differing rulings of the PTAB against and an ITC ruling finding for AliveCor went to the Federal circuit court level. According to CEO Priya Abani in an excellent MedCityNews article, AliveCor expects to see action on this by summer. Abani also scored Apple’s annoying (understatement) habit of IP infringement and broken partnerships. “Apple’s vast resources allow them to squash small innovators,” she said. “They have more lobbyists and lawyers on their payroll than we have employees.”

AliveCor and Masimo aren’t the only ones battling Apple. In the MedCityNews article, NYU Langone cardiologist Joseph Wiesel has sued Apple on patent infringement on his atrial fibrillation app (2021), also involving the USPTO, an action that is wending its way through courts now. While this Editor has long been mystified by Apple’s continued combativeness against small innovative companies when certainly it would be cheaper (and more respectful) to pay a license or settlement, FTA in MedCityNews citing Dr. Wiesel’s attorney Andrew Bochner, “Apple is known among the legal community to have a certain modus operandi: they do “not entertain any sort of real settlement discussions” and instead battle “tooth and nail” in order to wear out their rivals with fewer resources.” The shocker here is that Apple, in this case, stated to Bochner that it filed “roughly 10%” of the USPTO’s total post-grant proceedings, which take place after a patent has been granted and generally challenge a patent’s validity. One wonders whether DOJ will even take note of this anticompetitive activity involving Apple Watches in its blunderbuss action on iPhones and the US smartphone market.

Masimo itself is being roiled by a shareholder proxy fight over who controls the company. Masimo is a publicly-traded (Nasdaq) electronics company that is primarily focused on health devices, including smartwatches, and data software monitoring for the clinical and consumer markets, notably pulse oximetry.

  • Last week, activist investor group Politan Capital Management accused CEO Joe Kiani and others of mismanagement, announcing the nomination of two more independent candidates from Politan for the board of directors. Politan already has two seats on the BOD and a win here would give Politan majority control.
  • The bone being picked is Masimo’s February 2022 $1 billion acquisition of consumer audio brand Sound United (Polk, Marantz, Denon, and others) which didn’t mesh well with their health tech business. This drove down the share price from that time, with Politan subsequently swooping in and picking up shares, successfully winning two BOD seats in 2023.
  • Masimo announced on 22 March that their consumer ‘hearables’ division would be spun off.
  • Politan’s response on 26 March was to object to the spinoff on governance grounds, nominate the additional directors, and heavily criticize CEO Kiani’s ‘control and influence’. Strata-gee 26 March

Yesterday’s follow-up is that Kiani and Masimo are rebutting all of Politan’s claims and more. Strata-gee 2 April, Masimo release 1 April, MedTechDive

This Editor notes that products in their personal monitoring line combine both audio and vital signs monitoring–the (out of stock) Stork, that appears with its baby sock to be directly competitive with Owlet’s Dream Sock.

This will all play out at the yet-to-be-announced 2024 Shareholders Meeting. This Editor notes that Politan picks its battles and is rarely defeated. Our Readers may recall that Politan swooped in on Centene Corporation in late 2021, and in short order ousted long-time directors, added new friendly ones, shook up management and forcibly retired 25+ year CEO Michael Neidorff (since deceased). Masimo’s victory over Apple may go down as either not mattering much–or that Apple will be fighting a much deeper-pocketed backer that knows how to win.

Update: It gets stranger. Masimo’s Consumer (audio) division’s brand president and general manager Joel Sietsema announced on Tuesday that he is no longer with the company. He came to Masimo through the Sound United acquisition being with them for a decade. He announced his departure on LinkedIn. It was apparently a mutual decision that preceded the current turmoil. Strata-gee 4 April

Perspectives: Working with a PR Agency–How to Make the Most of the Partnership

April 3, 2024 | 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 Jodi Amendola, CEO of Amendola, a full-service PR and marketing agency that focuses on healthcare, health tech, and life sciences. Your Editor personally knows Amendola as a leading US agency representing many leading companies ably and well in both earned and paid media. In this article, Jodi explains some best practices in working with your PR and/or marketing agency–why their specialized skills in dealing with the media are necessary–and getting the most out of your mutual commitment.

After leading a public relations agency for nearly two decades, I’ve learned a few things.

From the right way to shape a client’s message to the best reporters and media outlets to target for exposure to crafting the proper talking points for interviews, PR can deliver real results to help clients achieve their growth objectives.

However, some of the most useful knowledge and experience PR professionals can acquire pertains to building successful and mutually beneficial relationships with clients.

While there is undoubtedly a lot of optimism when a PR agency signs a new client, a successful partnership requires more than enthusiasm and high hopes. Without a clear focus and realistic objectives, the relationship may never produce the anticipated benefits for either party.

To that end, here are some important tips on what clients should do to maximize return on investment and reach the strategic goals of their public relations partnerships.

It’s all about alignment: At the beginning of the engagement, ensure that both client and agency are fully aligned on goals and key performance indicators (KPIs). Specifically, those KPIs need to help the client accomplish its goals, not the agency’s.

Think long- and short-term from the beginning: Agencies can produce better results when clients are invested in the process. Within the first few weeks, set both short- and long-term objectives to enable better tracking of the client’s KPIs. Solicit a wide range of input to make sure everyone is on the same page.

Communicate openly and transparently: By engaging in open and transparent communication, the client-agency relationship gains trust around shared values. Agencies should help create a collaborative environment that enables honest sharing of expectations and concerns, a step that is essential to generating a long-lasting working relationship.

Share what makes you special: To place a client in the appropriate light for media, customers, and other stakeholders, it is critical that the agency develops a deep understanding of what makes the client’s business unique. When clients demonstrate what sets them apart from others in a (most likely) crowded market space, agencies can tell better stories that are more likely to break through the noise.

Listen: Remember why you hired a PR team in the first place. The PR agency likely possesses skill sets and a level of expertise in media relations and content that your internal team may lack (since they specialize in other things). That’s okay and a testament to your good judgment! Let your PR team do what you are paying them to do and listen to their advice.

One touchpoint: Clients should identify a dedicated liaison to act as a single touchpoint and centralized hub for all agency contacts. Ideally, this person should have some PR and marketing savvy and should be as interested in moving the needle as the agency is. Often, media requests need to be turned around within only a few hours, so designating a single contact can expedite connections when every minute matters.

Timely, effective PR can help companies access new employees, customers, markets, partners, and investors that they otherwise would not have attracted the attention of. Trust me, I’ve seen it happen time and time again. Follow the above steps when working with your PR firm, and it could happen to you, too!

Mid-week news roundup: US offers $10M for BlackCat/ALPHV info; most Change systems still down; Risant closes Geisinger buy; SureScripts exploring sale; DarioHealth 2023 revenue -23%; Amazon Pharmacy same-day delivery NYC and LA

April 3, 2024 | by

US State Department pays well for Big Breach information. Interestingly, this US agency through the Diplomatic Security Service has a special program, Rewards for Justice (RFJ), for cyberattacks that are deemed “malicious cyber activities against U.S. critical infrastructure in violation of the Computer Fraud and Abuse Act (CFAA)”. The activities of the now-disappeared (ha ha!) BlackCat/ALPHV  ransomware-as-a-service (RaaS) group, identified on 29 February as the culprits in the massive Change Healthcare/Optum system takedown, are now listed as qualifying for a reward, presumably as disruptive to US healthcare and not just UnitedHealth Group. Contact Rewards for Justice via the Tor-based tips-reporting channel at: he5dybnt7sr6cm32xt77pazmtm65flqy6irivtflruqfc5ep7eiodiad.onion (Tor browser required). That is, if you dare! Rewards for Justice release, Becker’s

Six weeks later, most Change services are still X-d on the Optum Solution Status page. A quick rundown of the hundred or so programs that Change provides to enterprises has a long line of Xs with some triangles containing ! (partial outage) or yellow boxes (degraded performance). The green checkmarks are clustered in high-priority areas such as pharmacy solutions and clinical decision support. Otherwise, they are scattered across categories. The summary on the top of page (dropdown) lists workarounds for specific programs such as batch processing and transitioning over to Optum systems unaffected by the attack. This Editor bets that most of these Change legacy systems will come back only partially if at all–many will be abandoned and replaced by Optum systems. Hat tip to HIStalk 29 March

Risant Health, the non-profit community hospital system founded by but separate from Kaiser Permanente, has closed its acquisition of Pennsylvania-based Geisinger Health as of 2 April.  Jaewon Ryu, MD, JD, currently Geisinger’s president and CEO, will move to CEO of Risant Health, with Terry Gilliland, MD, replacing him at Geisinger. The Risant plan announced last April is that Kaiser will fund $5 billion to Risant, which will acquire now four or five health systems over the next four to five years. The health systems will retain their names and operational areas. The purpose of Risant is to bring community systems it acquires greater access to capital, technology, and resources for facility improvements, innovation, and investment in patient care. Keeping an eye on 109-year-old Geisinger. Risant release

Mega e-prescription system Surescripts is exploring a sale. Silicon Valley investment bank TripleTree is handling the search for buyers. Currently, Surescripts is owned 50% by CVS Caremark and Cigna-owned Express Scripts, with two trade groups, the National Association of Community Pharmacies and the National Association of Chain Drug Stores, owning the other 50%. It isn’t disclosed in the Business Insider ‘reveal’ what group(s) is interested in selling all or part of its ownership. Since Surescripts holds 95% of the e-prescribing market, any buyer or investor would need be mega flush to buy into it. 

DarioHealth didn’t have a great 2023. Net revenue was down 23% versus 2022: $20.4 million to the prior year’s $27.7 million. The chronic condition management company managed to narrow its 2023 net loss of $59.4 million from $62.2 million in 2022. A lot of the problems seemed to center on their Q4, with net revenue that declined to $3.6 million from $6.8 million in Q4 2022 and a net loss that increased to $14.3 million from $12.6 million in Q4 2022.  Dario’s gross profits for 2023 were down 38% to $6 million, a decrease of 38% versus 2022’s $9.7 million. The changing financial picture was attributed to a new private label platform with Aetna launching in 2024, changing from a B2C to a B2B2C model, and February’s “transformational acquisition” of Twill (Happify) in telemental health. As this Editor noted then, it was a feat of funding legerdemain that rivaled a Frank Lorenzo deregulation-era airline acquisition. Their information around 2023 earnings isn’t much different. Dario provides a combined app and in-person approach to musculoskeletal (MSK) therapy, diabetes (including GLP-1 drugs), hypertension, weight management, and behavioral health. Mobihealthnews, Dario release

And speaking of pharmacy, Amazon Pharmacy expanded same-day medication-delivery offerings to NYC residents and the greater Los Angeles area. This adds to same-day prescription delivery available in Phoenix, Austin, Seattle, Indianapolis, Miami, and Texas, including free drone delivery in College Station. How it works: Amazon has small facilities and pharmacists near the areas, ready to fill and deliver medications in minutes using genAI and machine learning tools. Delivery in NYC/Manhattan will be by bike and in LA, electric vans or other commercial vehicles. (Editor’s note: bike delivery in the outer boroughs is like LA–impractical.) Amazon Prime members have additional benefits. Competition here are online companies like Mark Cuban Cost Plus and GoodRx’s prescription service. But perhaps it’s a good time to sell Surescripts? Mobihealthnews

Facing Future 2: Walgreens writes down $5.8B for VillageMD in Q2, lowers 2024 earnings on ‘challenging’ retail outlook

March 28, 2024 | by

Walgreens unsparing in FY 2024 Q2 results, affected by VillageMD closures, weak retail, and inflation. In a financial report released Thursday, remarkably devoid of happy talk, Walgreens Boots Alliance (WBA) presented a ‘picture adjustment’ that wrote down VillageMD’s losses even while locations are being closed. WBA also factored in for full year 2024 the ‘challenging retail environment in the US’ as well as the blurry picture of the US Healthcare division that includes VillageMD, Summit Health/CityMD, Shields Health Solutions (pharmacy), and CareCentrix (home care). 

For WBA in total, the first six months of their fiscal year, through 29 February 2024, reflected a tidy increase in sales: 8.1% from the year-ago period (7.2% in constant currency) to $73.8 billion. Operating loss was $13.2 billion, versus prior year/same period loss of $6 billion.

  • Most of the operating loss was attributable to VillageMD’s exits from Florida, Indiana, Chicago, Boston, Rhode Island, and Las Vegas. The total number of locations will be 140, not the earlier reports of 50 that grew to 85. Both were confirmed by a company spokesperson to Forbes.
  • Financially, the impact is a $12.4 billion non-cash impairment charge related to VillageMD goodwill, resulting in a $5.8 billion charge attributable to WBA, net of tax and non-controlling interest.
  • The six-month net loss: $6.0 billion versus $3.0 billion in prior year/same period, again taking into account non-cash impairment charges.
  • This totals to a loss per share of $6.93 compared to loss per share of $3.50 in prior year/same period.

As noted earlier, this Editor’s math is that Walgreens in the US sank close to $10 billion in VillageMD including their minority then majority interest, plus subsidizing their purchase of Summit Health. This write-off is well over half. The fact that the write-off of closing markets, locations, and goodwill is not being delayed past the fiscal mid-year is aggressive. Contrast this to Teladoc, which waited a full year to write down Livongo.

US Healthcare as a whole for Q2 rose 33.2% in sales, narrowed operating loss to $34 million versus last year’s $159 million, and came up positive in EBITDA with $17 million, a $127 million increase versus the same quarter prior year. For the full year, WBA is projecting a breakeven of plus/minus $50 million.

Retail sales continued to weaken, with a 4.5% decrease for the quarter ending 29 February. Comparable retail sales decreased 4.3% versus same quarter in prior year. Pharmacy sales were higher, driven partially by higher drug costs, with a 8.7% rise.

Rounding out the picture, for the full year, WBA’s earnings per share guidance lowered to $3.20 to $3.35.  WBA earnings release, FierceHealthcare,CNBC    CEO Tim Wentworth will have an interesting next six months to turn this ship around.

Short takes: PocketHealth, Brightside fundings; VA OIG reports hit Oracle Cerner; Change cyberattack/legal updates; UHG-Amedisys reviewed in Oregon; Optum to buy Steward Health practices

March 28, 2024 | by

It’s a relatively quiet week before the Easter holiday, with a few fundings, more drama at the VA around Oracle Cerner, updating Change Healthcare’s comeback, and the continuing scrutiny around UnitedHealth’s acquisitions:

PocketHealth garners a US$33 million Series B. The Toronto-based company markets an AI-assisted platform to health systems and providers that allows patients to access their medical imaging and reports as well as for providers to easily share imaging information. The funding was an all-equity round by Round13 Capital with participation from Deloitte Ventures, Samsung Next, and existing investors Questa Capital and Radical Ventures to bring total funding since 2020 to $55.5 million. The fresh funding will be used to grow further within the US and Canada and develop new platform functions. Patients have access to three platforms:  Report Reader to explain medical terms in the patient’s report, Follow-Up Navigator for follow-up imaging recommendations, and MyCare Navigator to equip patients with relevant, personalized questions to ask their doctor. The platform is available in 775 hospitals and imaging centers across North America and is used by more than 1.5 million patients.  PocketHealth release, Mobihealthnews

Brightside Health moves to a Series C of $33 million. This round for the telemental health company was led by S32, along with Kennedy Lewis, Time BioVentures, and Anne Wojcicki (Redwood Pacific) with existing investors ACME, Mousse Partners, and Triventures. Total funding since 2018 is $114 million. Brightside provides telemental health through payers in 50 states such as CareOregon, Blue Cross and Blue Shield of Texas, and Centene. The new funding will be used to expand into the usual new markets and offerings. Trip Hofer, who was former CEO of Optum Behavioral Health Solutions and now with .406 Ventures, will join the Brightside board of directors. Their most recent moves are expansion into Medicare and Medicaid programs for psychiatry, therapy, and their Crisis Care program for individuals with elevated suicide risk. Release

The Department of Veterans Affairs Office of Inspector General (OIG) released three reports last Thursday (20-21 March) that were sharply critical of the new Oracle Cerner EHR. While Oracle Cerner Millenium operates in only five VA locations, not including the joint MHS/Genesis Lovell FHCC, each one has been problematic from training to implementation–and are on hold. The OIG reports available here on the Electronic Health Records Modernization (EHRM) are scathing on the EHR’s scheduling and pharmacy features leading to patient safety and staff usability issues.

  • At VA Central Ohio Healthcare System (facility) in Columbus and elsewhere, this led to inaccurate medication and allergy information transmission from new EHR sites to legacy EHR sites that staff and pharmacists had to work around to provide adequate safety checks.
  • Also at VA Central Ohio, the Cerner EHR system error in 2022 led to a patient’s missed appointment since it was not routed to a queue to prompt rescheduling efforts. Subsequently, a nurse practitioner never evaluated the medication refill request, nor did a psychologist evaluate mental status and critical clinical information. The veteran patient died by accidental overdose approximately seven weeks after that missed appointment.
  • Regarding future implementations, the OIG was specific on what had to be fixed on both: “These concerns include the need for additional staffing and overtime to meet or exceed pre-deployment appointment levels, displaced appointment queue functionality, challenges related to providers and schedulers sharing information, inaccurate patient information, difficulties changing appointment type, and the inability to automatically mail appointment reminder letters. At facilities currently relying on the EHR, these issues have resulted in inconsistent workarounds and additional work, increasing the risk for scheduling errors.” 

Healthcare IT News, Healthcare Dive, EHR Intelligence, TTA 22 Feb

Change Healthcare’s systems are gradually returning. Since our last update on 14 March, UnitedHealth Group confirmed that 99% of pharmacy network services were up and running–and that they have fronted $2 billion to providers. Separately, they launched workaround software for medical claims preparation.

  • On 15 March, the electronic payments platform was restored.
  • On 20 March, UHG restored Amazon Web Services. It was backed up from Assurance, a claims and remittance management program, and claims clearinghouse Relay Exchange.
  • Relay Exchange went back online by 24 March to begin processing $14 billion in medical claims.

But on the legal and Federal fronts, UHG will be keeping its legal department busy. Starting the week of 11 March, the first class action lawsuit was filed by a women’s health practice in Albany, MS–Advanced Obstetrics & Gynecology PC. Another class action suit was filed on 18 March by Gibbs Law Group on behalf of providers to be named. Patients who have had compromised PII and PHI will be next from the 4 or 6 terabytes of payer information held by ‘notchy’ and other affiliates from the BlackCat/ALPHV masterminded attack as this is confirmed. Expect these to multiply like weeds in May. HIPAA Journal  And the American Hospital Association, Senators and House Representatives are jumping all over Health and Human Services (HHS) to ensure that payments are made to Medicare, Medicaid, and Medicare Advantage plans–as well as calls for investigating UnitedHealth. Becker’s, FierceHealthcare

As expected, UHG’s acquisition of Amedisys home health is running into more opposition at the state level. In this case, it’s the Oregon Health Authority (OHA) that will be conducting a full review. The Department of Justice (DOJ) has been investigating the acquisition on antitrust grounds almost since it was announced in June 2023. Shareholders approved the $3.3 billion buy the following September, but it has not closed. UHG’s plan is to merge it into Optum’s home health providers Contessa Health and LHG Group, creating a home health juggernaut. As noted earlier this month when DOJ announced a further antitrust probe of UHG around the UnitedHealth plan relationships with Optum services, “DOJ has a long memory, a Paul Bunyan-sized ax to grind, and doesn’t like losing. One wonders if now UHG has buyer’s remorse after fighting for two years to buy Change.” (And winning versus DOJ!) Fierce Healthcare

Yet UHG goes on buying providers, DOJ scrutiny or not. Optum is bidding for Steward Health Care’s Stewardship Health practices over nine states. For-profit Steward, headquartered in Dallas, needs to raise funds as it is in debt overall and facing major problems in Massachusetts, with several hospitals at risk of closure. In any case, the company wants to exit the state. A purchase price was not announced. The transaction is under review by Massachusetts’ Health Policy Commission (HPC) over the next 30 days. The Stewardship transaction would add to OptumCare’s total of 90,000 physicians–10% of US physicians, a number that is raising red flags on the state and Federal levels. FierceHealthcare, WBUR

Can digital health RPM achieve meaningful change with type 2 diabetics? New metastudy expresses doubt.

March 27, 2024 | by

A metastudy from the Peterson Health Technology Institute (PHTI) has reservations about the efficacy of digital diabetes management tools. Over $50 billion has been invested in the sector between development, investments, mergers, and acquisitions. Generally, the claim around digital management tools for diabetes to aid self-management and prevent poor outcomes, particularly for those at high risk, has been that they can 1) deliver meaningful and lasting clinical benefits in reduction of HbA1c (glycemic control) and 2) reduce long-term costs of poor control, benefiting patients. In the US, diabetes affects 11% of the population and is an expensive chronic condition. It also disproportionately affects people of color and those with lower income, especially as they age.

The systematic literature review of 1,100-plus studies was augmented by interviews with physicians, patients, digital health experts, along with companies. They included 120 clinical references from DarioHealth, Omada, and Virta. The PHTI grouped digital tools into three types of solutions for Type 2 diabetes in adults. All used standard glucometers, not continuous glucose monitors/CGM as well as apps to provide real time feedback to a virtual or actual coach or care team:

  1. Remote patient monitoring (glucometer plus feedback): Glooko
  2. Behavior/Lifestyle modification (glycemic feedback plus coaching features): DarioHealth, Omada Health, Perry Health, Teladoc (Livongo), Verily (Onduo), and Vida
  3. Nutritional ketosis (dietary guidance that restricts carbohydrates and monitors the patient’s glycemic and ketone levels): Virta Health

The findings did not meet their expectations in demonstrating “clear, substantial, and durable progress toward glycemic control in people with type 2 diabetes, resulting in a lower prevalence of uncontrolled type 2 diabetes across the population.”

  • They did not deliver clinically meaningful benefits compared to ‘usual care’. Only three out of 10 comparative HbA1C studies achieved a meaningful difference of 0.5 percentage points (Minimal Clinically Important Difference or MCID) in patients. Their range was 0.23 to 0.60 percentage points compared to usual care.  The nutritional ketosis program had greater benefits as long as patients maintained the rigorous requirements of the therapeutic regimen.
  • The average price impact of the solution exceeds the savings achieved from the clinical benefits. The PHTI analysis looked at commercial insurance, Medicare, and Medicaid over three years. Provider reimbursement and pricing exceed cost savings from avoided care.

So where is the worth? The PHTI study recommended that:

  • Payers use these solutions for the highest risk and diverse/underserved populations
  • Regularly analyzing outcomes and tie contracts to clinical performance
  • Focus on patients with higher starting HbA1c newly starting insulin
  • Payers could also recommend nutritional ketosis as the Virta program had greater benefits.
  • Solutions could also evolve to include GLP-1 drugs, CGMs, and nutritional ketosis.

PHTI study (free download of full report, four sections, and appendices). PHTI press release.

PHTI is also offering a free webinar on Thursday 28 March at 2pm US Eastern Time on assessing digital diabetes management tools–registration here.

2023 US data breaches topped 171M records, up 187% versus 2022: Protenus Breach Barometer

March 22, 2024 | by

2023’s US healthcare data breaches hit an all time high, both in reported breaches and number of records affected. Protenus, which publishes an annual Breach Barometer, uses multiple data sources including Health and Human Services’ public breach tool. The numbers are shocking for both:

  • HHS 2023 reported 725 reports and about 135 million records
  • Protenus‘ numbers are significantly higher: 1,161 reports and 171,139,241 breached records. In 2022, the totals were respectively 1,138 reports affecting a total of 59,664,152 breached records. Breached records were up 187% in 2023.

The variance in reporting is due to factors including not knowing the true scope of the breach in reporting to HHS, state reports being incomplete, and business associate reports covering all or only some of their clients.

Also included in their report is a discussion on how HHS through the Office of Civil Rights (OCR) response to breaches contained in HHS’s 2022 annual report released last month. In investigating, they seem to prefer voluntary resolutions and corrective actions. Only three  resolution agreements with monetary penalties and corrective action plans were imposed.

The Protenus Breach Barometer report is available for free download here. DataBreaches.net collaborated with Protenus in the report.

Why is the US DOJ filing an antitrust lawsuit against Apple–on monopolizing the smartphone market?

March 22, 2024 | by

The Department of Justice’s antitrust filing against Apple on the iPhone is a many-splendored thing–and will take many years to work through the courts. It was filed Thursday 21 March in the US District Court for the District of New Jersey, alleging monopolization or attempted monopolization of smartphone markets in violation of Section 2 of the Sherman Act. New Jersey’s US District Courts are in beautiful Newark, Camden, and Trenton. The DOJ was joined by 16 states in the lawsuit including NJ. Apple has promised to fight it tooth and nail, correctly realizing this goes to the core of its business. “This lawsuit threatens who we are and the principles that set Apple products apart in fiercely competitive markets” and “We believe this lawsuit is wrong on the facts and the law, and we will vigorously defend against it.”

On the face of this, the DOJ antitrust lawsuit seems almost ludicrous. While iPhones have a 60% market share in the US (Backlinko), there’s plenty of Android phones from Samsung and others (sadly, no longer LG) at competitive prices from every carrier. This Editor never looked twice at an iPhone for personal use and wasn’t impressed by a short-lived company phone, a totally locked-down iPhone 6. (On the other hand, my second computer at work where I really self-learned computing was an easy-to-use Mac 2si, a long time ago.) There are about 140 million iPhone owners in the US. Obviously, Apple makes a product and ecosystem, including the Apple Watch, that people, especially US upper-income users, prefer. There are features that Androids have and iPhones have, and sometimes the twains don’t meet, but for most of us it doesn’t matter.

But does Apple act in an anticompetitive, monopolistic way?

The DOJ says yes. The complaint states that Apple uses its control over the iPhone to engage in a broad, sustained, and illegal course of conduct, using its monopoly power to extract as much revenue as possible. The specifics include some centering on the Apple Watch:

  • Apple has exclusive software features–apps–that Android manufacturers don’t have or don’t work as well, for instance Apple Pay, iMessage, Find My Phone, FaceTime, and AirTags.
  • Apple Pay blocks other financial institutions from instituting their own cross-platform payment systems.
  • Apple’s control over app developers in their ‘walled garden’, locking them in especially in the cloud gaming area, but generally imposing contractual restrictions on and withholding critical access from developers in the name of security and privacy. Reportedly there are 30% commissions on app sales. Blocking ‘super apps’ restricts not only developers but also users from switching to Android since they will lose use of the app.
  • Apple’s messaging systems are only partly interoperable with Android and have unique features not available on Android
  • App Store commissions and rules are prohibitive for many developers
  • Locking in consumers with features not available on Android
  • Lack of interoperability of the Apple Watch with Android phones, and other manufacturers’ watches with iPhones 

What is interesting is that in the Apple Watch charges, there’s nothing about how Apple has essentially stolen features from other developers such as AliveCor and Masimo as found in other Federal courts. That IP theft is outside of antitrust and being litigated in other courts.

Much of the heated commentary has to do with the Apple Brand Promise and how they deliver apps. Apple is an integrator and people like the ‘walled garden’. The phone ‘just works’. Quoting Alex Tabarrok in Marginal Revolution, Apple is a gatekeeper that promises its users greater security, privacy, usability, and reliability. Users trade off control for a seamless experience and it delivers. It’s desirable. However, many of us don’t need or want to give over all that much control and desire flexibility in a more open platform. Not all of us need or want ‘seamless’ features like Apple Pay and live very well without that or games. 

What will keep DOJ and Apple entertaining each other in court for the next few years are court decisions over the years that have favored Apple:

  • Monopoly has been defined in repeated decisions as market share in the 70-80% range, not 60%
  • The concept of ‘procompetitive’ means that if you can choose between open access and the Apple ‘walled garden’, Apple has a legitimate competitive feature.
  • Companies don’t have a ‘duty to deal’ with other companies
  • Apple as a monopoly has already been dismissed in other cases

The push towards the DOJ action has apparently been stimulated by the EU Digital Markets Act, which Apple will comply with, as well as Apple competitors in the US who have tried and failed to restrict Apple in integrating its services. Will DOJ succeed in forcing Apple to be more like Android? The debate will rage on. DOJ release, 88 page filing, The Verge, 9to5 Mac, Medium.com, AP, Epoch Times

Mid-week roundup: UK startup Anima gains $12M, Hippocratic AI $53M, Assort Health $3.5M; Abridge partners with NVIDIA; VillageMD sells 11 Rhode Island clinics; $60 for that medical record on the dark web

March 21, 2024 | by

It may be a little chilly out, but it feels like Springtime For Early Round Funding and Big Partnerships.

Anima, a London-based startup fresh out of Y Combinator, now has a $12 million Series A raise. It was led by Molten Ventures, with participation from existing investors Hummingbird Ventures, Amino Collective and Y Combinator. Its platform combines online consultation with productivity tools for integrated care enablement in one dashboard for primary care. Their founders position it as a single source for patient truth across care settings, avoiding missed diagnoses. As of today, Anima is deployed in over 200 NHS clinics in England caring for a combined 2 million patients and a monthly request volume of over 400,000 requests. They also claim to halve the time the time practices spend on coding, processing, and filing documents and resolve 85% of patient inquiries within a day. Shun Pang, co-founder and CEO of Anima, who trained as a doctor at Cambridge University, told TechCrunch. “The entire clinic collaborates in a real-time multiplayer dashboard, like Figma, and can ping cases to each other, and chat with a Slack-like UX.” he said. He also added that Anima’s processing system can “autonomously ingest any document, like handwritten, diagrams, imaging, and output a summary, with structured fields.” Anima has not entered the US market yet. Anima blog/release, Tech.EU

Hippocratic AI raised a jumbo $53 million Series A for what they term the first safety-focused Large Language Model (LLM) for healthcare. AI of course is the hottest funding area in healthcare. With two previous rounds raised in mid-2023, their total funding is $118 million (Crunchbase), creating a valuation estimated at $500 million. Investors were co-led by Premji Invest and General Catalyst with participation from SV Angel and Memorial Hermann Health System as well as existing investors Andreessen Horowitz (a16z) Bio + Health, Cincinnati Children’s, WellSpan Health, and Universal Health Services (UHS). Their product is a novel staffing marketplace where health systems, payors, and others can “hire” auto-pilot generative AI-powered agents to conduct low-risk, non-diagnostic, patient-facing services to help solve the massive healthcare staffing crisis. This is now being released for phase three safety testing with 5,000 licensed nurses, 500 licensed physicians, and the company’s health system partners. Release

San Francisco-based startup Assort Health now has a seed round of $3.5 million to advance its generative AI approach to healthcare call centers. Its goal is to eliminate front desk stress and call center/service holds. Their system in development uses AI and NLP (natural language processing) to understand a caller’s intent, then to integrates with the medical providers’ EHR, including Epic, to resolve patient inquiries without human intervention. Funding was led by Quiet Capital (!) joined by Four Acres, Tau Ventures, and a number of angel investors from tech companies. Release

Another generative AI company with a substantial Series C under its belt, Abridge, is partnering with super-hot NVIDIA.  The partnership also comes with undisclosed funding from NVIDIA’s VC arm, NVentures, to add to last month’s $150 million raise. Abridge is developing conversational AI technology using LLM and speech recognition to ease the burden of taking notes during the doctor’s appointment, with fluency in 14 languages across 55 medical specialties. Abridge’s technology is designed to capture clinician-patient conversations and structure the scribing. NVIDIA’s partnership will give Abridge access to NVIDIA’s computing resources, foundation models, and expertise in efficiently deploying AI systems at scale. Release

Another episode in the continuing Walgreens Restructuring Saga has VillageMD selling 11 practices to Arches Medical Partners. The practices are located in the Providence metro area of Rhode Island and consist of three urgent cares and eight offices with a total of 50 physicians and 75,000 patients. It is unusual because it is the first time that VillageMD sold their practices instead of closing the offices, which they are doing with 85 to 90 offices. Transaction cost was not disclosed but closed on 2 March. Arches is based in Cambridge, Massachusetts. They acquired these practices but also deploy software from its wholly-owned technology subsidiary, New Era Medical Operations (NEMO), to enable IPAs to negotiate and manage global risk contracts. Arches release, Becker’s, Crain’s Chicago Business

Wondering why ransomwareistes, their affiliates, and hackers in general are attracted to healthcare? It’s the value of a medical record. Going rates on the ‘dark web’ are now topping $60, according to CNBC’s source, a cybersecurity researcher Jeremiah Fowler. By comparison, Social Security number are a bargain $15 and a credit card number but $3. It’s also easier to hack than ever due to affiliate relationships termed ransomware-as-a-service or RaaS. The ransomware is supplied, the affiliate hackers do the work, and they share in the rewards–most of the time (see ‘notchy’ being scammed by BlackCat/ALPHV on the Change Healthcare cyberattack TTA 5 Mar). But this doubles or triples the potential for company extortion, with multiple ‘actors’ attacking a company, extorting a ransom, and then keeping healthcare data and selling it through their channels.

The article concludes that healthcare execs need to get very, very serious about protecting their data. Yet this year has marked healthcare downsizing IT departments in order to save money. This is as security software has proliferated–but has to be purchased and managed. Another distressing fact: this Editor only last week attended a major NYC conference on cybersecurity. Healthcare was mentioned only in passing as a market. Worse, till this Editor questioned a speaker from the floor, was the massive Change Healthcare attack even mentioned–and unfortunately she knew more about it than the speaker!

Walgreens’ latest cuts affect 646 at Florida, Connecticut distribution centers

March 20, 2024 | by

Walgreens closes two distribution centers to ‘streamline capacities to best support our stores’. Two large centers serving Walgreens retail stores, in Orlando, Florida and Dayville (Killingly), Connecticut, are closing permanently in May, with workers discharged on or before 17 May. Affected are 324 workers in Orlando and 322 workers in Dayville who according to Walgreens will receive severance, additional separation pay, on-site career fairs, and/or outplacement services. While workers in Orlando have a better employment situation locally with unemployment at 3%, Dayville, in northeastern Connecticut’s rural Windham County near the Rhode Island border, is up to 5%. WARN notices were filed in both states about 14 March. Crain’s Chicago Business, Becker’s 

Press accounts do not mention corresponding closures of Florida or New England Walgreens stores. The puzzle is that Florida, particularly central Florida, is a growing market with a permanent population as well as seasonal/tourism. Yet all 52 Village Medical co-located offices have closed in that state [TTA 22 Feb]. Reasons why range from too small co-locations unable to support full practices to lack of doctors and medical saturation.

Walgreens, after several quarters of losses, is cutting to the bone expenses, with layoffs, consolidations, and closures everywhere from their Illinois headquarters to VillageMD. Despite the $1 billion in cuts for 2024 announced last October, Mr. Market is not responding–Walgreens’ stock price continues its downward trend and has lost 15% sharply since January. The new CEO Tim Wentworth has already positioned Walgreens’ recovery as ‘not a 12-month turnaround story’. Walgreens, over the past three years, drilled a lot of holes. Some worked out well, such as Shields, but the $10 billion investment in VillageMD may be a dry hole.  In the strategic review he announced earlier this month, Boots may be on the block, not Shields, but there will be more and deeper cuts to come–if WBA’s closely held ownership agrees. Based on the distribution center closures, expect more closures of retail locations served by those centers to be announced. 

Weekend roundup: NHS Dumfries (Scotland) cyberattacked; delisted Veradigm’s strong financials; One Medical NY patients’ coverage clash; Suki voice AI integrates with Amwell; Legrand and Possum extended; Zephyr AI’s $111M Series A

March 15, 2024 | by

NHS Scotland’s Dumfries and Galloway region reported on Friday 15 March a “focused and ongoing” cyberattack affecting their 148,500 patients. Information is light at this point, but the region has reported system incursions that may involve the acquisition of patient data. “We have reason to believe that this could include patient-identifiable and staff-identifiable data.” Police Scotland, the Scottish Government, the National Cyber Security Centre, and the NHS have all been notified along with law enforcement. This story is developing. NHS D&G cyberattack page, BBC News, The Record, Cybercrime Magazine Top News 15 Mar

Delisting from Nasdaq hasn’t hurt Veradigm’s results in the slightest. As TTA and others noted in late February, Veradigm management telegraphed their strong financial state while announcing the acquisition of ScienceIO, an AI data company. These are all unaudited revenue numbers:

  • For 2023, revenue between $608 million and $622 million, net income from continuing operations is estimated between $49 million and $58 million.
  • For 2024, their estimate is for revenue growth ranging from $620 million to $635 million, with adjusted EBITDA of between $104 million and $113 million, with net cash of $140 million subsequent to the ScienceIO acquisition.

Veradigm’s repositioning post-ScienceIO will be around healthcare intelligence with scaled and proprietary LLM products supporting physicians & providers, payers, and life science research enterprises. Release

Now about those 2022 and 2023 financial reports that went sideways due to their financial software. Lee Westerfield, their interim chief financial officer, stated at the Barclays 26th Annual Global Healthcare Conference that the audit process is not only “prolonged” but also not fully in the company’s hands but with auditors. While they won’t say it out loud, it seems that Veradigm hasn’t let the Nasdaq delisting cramp their style, nor making money, at all.  Crain’s Chicago Business

New York-area One Medical patients caught in the UnitedHealthcare-Mount Sinai clash. Mount Sinai, one of the leading hospital systems of the New York metro, is in a dispute with UnitedHealth on their upcoming insurance contract.  Mount Sinai requested higher payments for hospital stays and physician visits, not unexpected given the duration of most of these contracts span several years and inflation has bitten hard over the past two years, but UHG rejected this. The lack of a contract as of Thursday 14 March means that as of 22 March, patients of Amazon-owned One Medical practices in the New York area with UnitedHealthcare and Oxford insurances (Oxford is an insurance brand of UHG) will not be in-network if receiving services through Mount Sinai’s hospital network. One Medical is part of Mount Sinai’s clinically integrated network (CIN) but apparently this has no impact. This Editor is betting that Amazon did not figure on provider/payer disputes of this type–it may be the first of many affecting One Medical with hospital networks. Becker’s

Some good news from Amwell around their new partner, Suki AI. The Suki voice-enabled AI powered digital assistant will be integrated into Amwell’s platform Converge. The voice assistant will not require a separate app as fully integrated into Converge and into Amwell providers’ existing workflows. Suki Assistant leverages natural language processing to help clinicians complete notes 72% faster on average, according to Suki, and also supports coding and dictation. A date was not specified for implementation. Suki has partnered with with multiple EHR systems, including most recently Meditech. The Amwell platform is used by providers at more than 55 health plans covering 90 million lives, plus 2,000 hospitals and health systems. Suki release, Healthcare IT News

In more partner news in the UK, Legrand and Possum have extended their now 14-year reseller agreement. Possum continues as the exclusive reseller for the NOVO range of Legrand telecare products in the UK and Ireland. Read more about it on TSA Voice and UKTelehealthcare. While you’re there, our UK Readers can also seek our supporter UKTH’s continued training events and resources on the 2025 Digital Switchover. Legrand is a long-time advertising supporter of TTA.

Zephyr AI raises $111 million in Series A financing. Revolution Growth, Eli Lilly & Company, Jeff Skoll, and EPIQ Capital Group financed a bountiful Series A scarcely seen since 2022. As you’d expect, Zephyr has this year’s flavor, having integrated AI into precision medicine for oncology and cardiometabolic disease. Zephyr’s earlier seed round of $18.5 million was raised in March 2022 (Crunchbase). From the release: “The new funds will enable Zephyr AI to further enhance its analytical speed and fortify its extensive collection of training and validation data sets. Moreover, the funds will support the expansion of the company’s scientific and commercial teams to expedite the delivery of its rapidly growing pipeline of insights to the market.”

News roundup: Cerner goes live at VA, DOD Lovell Center; WebMD expands education with Healthwise buy; Dexcom has FDA OK for OTC glucose sensor; Centene may have buyer for abandoned Charlotte HQ

March 12, 2024 | by

In news other than Walgreens and Optum/Change Healthcare–with more to come out of HIMSS in Orlando this week…

The DOD/VA Cerner EHR went live on Saturday 9 March in the Capt. James A. Lovell Federal Health Care Center (Lovell FHCC), right on scheduled time. This EHR which will serve both active duty service members in the Military Health System (MHS) and veterans through the VA is being watched closely. While MHS Genesis has been rolled out in most military health facilities in the US and overseas, the VA’s has stalled at five. As of now, Lovell is the only VA implementation planned for this year and its functionality and interoperability with MHS is under a microscope. Training has been intensive and VA reports having made many changes from the earlier implementations. The MHS Genesis team from DOD have also been a key part of the training.

VA has shown improvement with no full outages in 300+ days and with the nagging smaller incidents greatly reduced. But the VA’s deputy inspector general reported significant and dangerous faults in the Oracle Cerner Millenium medication record system only last month to the House Subcommittee on VA Technology Modernization [TTA 22 Feb]. While the fixes are in effect in the five VA locations with Millenium, Genesis at Lovell will not have them yet.

Lovell FHCC is located in north Chicago, has a combined DOD/VA staff of 3,200, and serves 75,000 patients per year: 25,000 veterans, over 10,000 TRICARE enrollees, and 30,000 Navy recruits from Great Lakes with a 300-bed main facility and clinics in the Chicago area. Federal News Network

WebMD buys health education developer Healthwise. The company’s patient education assets including content and technology that integrate into care management platforms for both health systems and payers will become part of WebMD Ignite, which was formed last April to unite Krames, also in health education, Mercury Health data analytics, Wellness Network videos, Vitals provider scheduling, in addition to Medscape and WebMD. According to the release, the combination of Krames and Healthwise will reach 650 healthcare organizations, comprising more than 50% of hospitals in the U.S. and 85% of the top 20 payers, which is a dominant market share with limited other competition such as Wellframe, owned by HealthEdge. Transaction cost, surviving name, and management/staff transitions were not disclosed.

Healthwise is unusual in that it was formed as a non-profit in Boise, Idaho in 1975. In the 2024 Best in KLAS Report, Healthwise was ranked first in health education for value-based care. While the education assets are being sold to WebMD, the non-profit will go on, according to Healthwise. Healthcare IT News (Editor’s disclaimer: Donna was a consultant for Krames on marketing projects during 2021-22, prior to Ignite.)

WebMD is also integrating into Ignite personalized medication instructions from First Databank (FDB)’s Meducation through WebMD Ignite’s Krames On FHIR platform. It will then go into prescribers’ EHRs and patient portals. FDB release

Dexcom receives FDA clearance for Stelo, the first over-the-counter (OTC) continuous glucose monitor cleared in the US. Like the prescription version, the biosensor attaches to the arm to monitor blood glucose without skin penetration and connects to a Dexcom phone app. The sensor is the same as the prescription Dexcom G7, with a battery life of about 15 days. Stelo was cleared for use by adults 18+ who have Type 2 diabetes but not on insulin therapy–over 25 million people in the US. Release is scheduled for online-only release this summer as a cash-pay purchase (cost not disclosed), with insurance reimbursement TBD over the next few years. Mobihealthnews, Healthcare Dive

Centene may be close to selling its ‘dream’ Charlotte, North Carolina headquarters building. The now near-complete 800,000-square-foot building in Charlotte’s University City would have been Centene’s East Coast HQ. It was planned by the previous CEO in 2020 to be the center of a campus with over 6,000 employees, 3,200 to be hired locally. The plan was abandoned in August 2022 due to a shrinking office-based workforce primarily in St. Louis with some in plan locations throughout the country. Cushman & Wakefield is marketing the building with word being that a single company is interested in purchase. New Class A space is reportedly relatively rare in Charlotte, though the vacancy rate in the immediate area is at 25%. There is also undeveloped land on the site that has attracted interest from a locally active multifamily developer, although that would require a rezoning. Centene purchased the land in 2020 for $19 million, not including a separate 51-acre parcel purchased later in 2020. In addition to reducing its real estate pattern, Centene has also been reducing its staff with two 2,000-person layoffs in 2023, one in the summer and the second in December.  Charlotte Business Journal, Becker’s