Oracle’s Q4/FY 23 earnings push Cerner to background, stock price soars on AI deals; 81% of VA clinicals really can’t stand Cerner

Oracle keeps blue side up but disappoints Mr. Market, Cerner results now fall into the background as stock price soars despite misses. Oracle kept it upbeat in reporting its Q4 and FY2023 results this past Tuesday 11 June, and it paid off.

  • Its Q4 revenue of $14.3 billion was up 3%, with Q4 GAAP earnings per share was $1.11 while non-GAAP (adjusted) earnings per share was $1.63.
  • FY23 revenue totaled $53.0 billion, up 6%, with GAAP earnings per share at $3.71, while non-GAAP earnings per share was $5.56. 

Overall results were disappointing for Wall Street analysts. The blue side is that the stock has surged big time with a YTD high yesterday, closing above $140. The secret sauce? New AI-related contracts and demand for Oracle Cloud Infrastructure. On the call and in the release Oracle CEO Safra Catz announced new cloud sales to Google and Microsoft for OpenAI and ChatGPT. OpenAI will run deep learning and AI workloads on Oracle Cloud. Oracle also sold 30 contracts worth $12 billion in Q4.

The surprise on the call for this Editor? The Cerner business will no longer be identified and broken out, which is major league unusual for a specific, large product line. From HIStalk News 6/12/24: CEO Safra Catz said, “I will no longer be breaking out the Cerner business in my results. And even though it will begin to grow modestly throughout the year in both revenue and operating margins, it’s not necessary to break it out anymore because it is now operating in a growth mode.” A way of concealing ongoing bad news? Major hat tip to HIStalk on the earnings call summary, Investors Business Daily, Oracle earnings release

Not that many at the VA, MHS, or elsewhere actually like Cerner. An internal and unpublished survey for the Department of Veterans’ Affairs (VA) by KLAS, obtained by Bloomberg News, reported results for Oracle Cerner, and they were close to disastrous. On the metric “Users who feel the health software enables “high-quality care”, here were the results on positive answers by the doctors, nurses, and other users of Oracle’s EHR:

  • 19% for VA Oracle Cerner
  • 30% for DOD Oracle Cerner (MHS–Ed.)
  • 49% Average US Oracle Cerner
  • 71% Average Epic Systems Customer

That means that 81% of VA users, in the five facilities and offsite center where it’s been deployed, now for over a year and with consultants over it like paint on a brand new car, believe the Oracle Cerner system does not do Job #1 of healthcare–enabling high-quality healthcare. “There is a trend toward improvement, however, most users still indicate a negative experience,” according to VA researchers quoted in the report.

The other big surprise is that 70% of MHS users believe exactly the same. MHS is the ‘success story’ implementation, jointly with Leidos, and now complete. (Ken Glueck, please take note)

KLAS also contrasted this to their existing information for US EHR users. 49% of Cerner US users believe it facilitates high-quality care–contrasting unfavorably with 71% of Epic customers. However, these numbers are not comparable to either the VA or MHS as most hospital systems have been in place for years/decades, and have had abundant time to shape them against system needs plus work out the inevitable ‘bugs’. But the performance of Cerner versus Epic on this metric translates to preference in the small world of healthcare. 

Drilling down into the survey:

  • About 22% of VA respondents said their training on the new system was helpful
  • About 45% said they had received communication about why the VA was moving to the new EHR

The survey was conducted in March-April 2024 as part of VA’s ongoing evaluation of the Oracle Cerner EHR. Responders were 2,000 Cerner EHR users, with a 25% response rate of those solicited. The report was for VA leadership and for Congress. In a response to Bloomberg, Terrence Hayes, press secretary for the VA, said “That’s why we conduct surveys like this: to better understand the experience of our providers in the field, so we can make the EHR better for staff and veterans alike.”

Seema Verma has a long and troubled row to hoe to make this work for VA, MHS, and all Cerner users. Nowhere to go but up. Becker’s

News roundup: Teladoc’s new CEO from major payer, Steward Health lives with $250M injection, Waystar’s IPO raises $968M, NeuroFlow acquires Owl

Teladoc wraps up CEO search in record time–two months. On Monday, Charles “Chuck” Divita joined the company as chief executive officer with a board of directors seat. Divita comes from GuideWell, where he was executive vice president, commercial markets, earlier chief financial officer, and previously group VP and chief accounting officer at Florida Blue for a total of over 12 years. GuideWell is the parent of Blue Cross Blue Shield health plans in Florida and covers 38 million people in 50 states through Florida Blue, Triple-S Salud (Puerto Rico), Truli for Health, Florida Health Care Plans, and Capital Health Plans. Interim CEO Mala Murthy resumes her CFO position

Long-time CEO Jason Gorevic departed in early April in a haze of red ink. Mr. Divita will find the turnaround situation facing him at Teladoc a real challenge compared to Blue Health Plan World. Undoubtedly he was hired due to his extensive CFO experience plus understanding of the payer market. Teladoc needs to achieve profitability, something never accomplished in 20 years. It also faces heavy competition, the growing obsolescence of its foundational model accelerated by the boom/bust pandemic, self-inflicted damage created by the Livongo acquisition, the underperforming BetterHelp, and frankly, its mixed track record in good judgment and accountability [further analysis–TTA 9 Apr]. Mr. Market barely responded with a continuing deterioration in share price. Do not be surprised when (not if) there are major changes and cuts at Teladoc, including removing its HQ from high-tax Purchase, New York to Florida, the new CEO’s home state.  Release, FierceHealthcare, Healthcare Dive

Steward Health beats deadline of 14 June, finds $250 million to pay the bills. The lenders announced Tuesday 11 June are existing FILO (first in last out) private credit lenders Sound Point Capital and Brigade Agency Services, Chamberlain Commercial Funding, WhiteHawk Finance LLC, Owl Creek Investments I LLC, OneIM Fund I LP, MidOcean Credit Fund Management; Brigade Capital Management, LP which are now debtors in possession (DIP). They will be presented to the US Bankruptcy Court, Southern District of Texas, later this week, which is conducting Steward Health’s dissolution with sales starting in July. The FILO lenders were approached earlier, starting in March and up through last week, but could not come to an offer until now. The $250 million is structured as $75 million of the loan immediately upon court approval, with the remaining $150 million “available in draws not to exceed $50 million per draw.” The funds will keep Steward operations going and ‘maximize value’ until they can be sold in July and August. Healthcare Dive, FierceHealthcare, Release

Waystar finally drops IPO, raises $967.5 million. The offering of 45 million shares debuted at $21.50 a share on Nasdaq, midpoint in the indicated range and giving Waystar a fully diluted valuation of $3.69 billion.  It is the largest health tech IPO since 2022. Back in October 2023, Waystar projected an $8 billion valuation which was a non-starter [TTA 29 May]. WAY closed near-flat today at $21.70. Previous funders will continue with shares in the company, with EQT AB, Canada Pension Plan Investment Board (CPPIB), and Bain Capital will beneficially own approximately 29.2%, 22.3%, and 16.8%. Its payment and RCM tools claim 30,000 customers representing approximately 1 million distinct providers, but lost money in 2022 and 2023. FierceHealthcare, Reuters

Behavioral health platform NeuroFlow acquires Owl. Purchase price was not disclosed. Both companies are in the data insights and analytics portion of telemental health delivery and integration into care management programs. The combination now integrates NeuroFlow’s platform across primary and specialty care settings to provide a 360-degree view of a population’s behavioral health risk. In 2023, NeuroFlow acquired Capital Solution Design, the parent company of Behavioral Health Lab and BHL Touch which have provided workflow support to clinical teams at the Department of Veterans Affairs for over 15 years and other care organizations. The combined organizations will cover 17 million lives on the platform with payers and providers in all 50 states, including Atlantic Health System (NJ), Emory Healthcare (GA), and Colorado Access, Centennial State’s Medicaid plan. Eric Meier, Owl’s chief executive officer, will transition to NeuroFlow’s president of behavioral health markets. Other transitions and headquartering are not disclosed.Their funding topped $52 million between 2019 and 2022. Release, Mobihealthnews

Theranos’ Holmes and Balwani appeal fraud convictions, $450M investor restitution

An interesting Tuesday at the Ninth Circuit Court of Appeals in San Jose, California. A three-judge Federal appeals court held hearings yesterday (11 June) on separate appeals on the convictions found and restitution imposed on both Elizabeth Holmes and Ramesh ‘Sunny’ Balwani, the former CEO and president of Theranos. The Holmes hearing was 50 minutes before Judges Jacqueline Nguyen, Ryan Nelson, and Mary Schroeder.

Holmes is seeking a complete overturn of the trial and jury verdict primarily on the basis of Judge Edward Davila including evidence favorable to the prosecution and not including defense-favorable evidence. She was not there as serving her time to mid-August 2032 in Bryan, Texas. Representing her for the defense was Amy Saharia of Williams & Connolly LLP, considered to be one of the US’ top appellant litigators.

  • Favorable to the prosecution was Theranos’ chief scientist Kingshuk Das, MD’s testimony. Dr. Das was the final Theranos lab director who worked there March 2016 to June 2018–and voided two years of Edison Lab tests. Saharia is claiming that the prosecution was improper in putting him on the stand since he was not qualified by the court as an ‘expert witness’ and was allowed to express his opinion, specifically in statements allowed by Judge Davila including “I found these instruments to be unsuitable for clinical use.”

Going back to TTA’s original coverage of 11 Nov 2021 (which the coverage below largely has not), Dr. Das was hired to respond to CMS’ deficiency report that went to the prior lab director two months before. The subject line: “CONDITION LEVEL DEFICIENCIES – IMMEDIATE JEOPARDY.” The report went on to say that “it was determined that your facility is not in compliance with all of the Conditions required for certification in the CLIA program.” and concluded that “the deficient practices of the laboratory pose immediate jeopardy to patient health and safety.” After speaking with Holmes and dealing with her position that it wasn’t an instrument failure, but rather a quality control and quality assurance issue, he voided every Edison lab test made in 2014 and 2015–between 50,000 and 60,000. Holmes was told, but she didn’t believe Das or previous lab directors about the Edison problems. Also testifying was a contract offsite co-lab director in 2014-15 who expressed her reservations to one of Dr. Das’ predecessors –who also happened to be Sunny Balwani’s dermatologist. 

Judge Nelson said during the hearing that “There’s a pretty good story here for Ms. Holmes” and “They do have a pretty good basis for some unfairness here.” in how Judge Edward Davila allowed this testimony.  Judge Nguyen also seemed to agree with the defense position that Judge Davila went too far in allowing opinions from Dr. Das that under the rules would require his being vetted as an expert. Judge Nelson added that the conviction was supported by “pretty overwhelming evidence.” For Dr. Das, the conundrum was that he was called in as the former lab director to testify on Holmes’ knowledge of the problems the Edison lab had but he also had a level of expertise involving the labs. The Federal prosecutor on the appeal, Kelly Volkar, countered with how Judge Davila “carefully parsed” the Das testimony and sustained defense objections during the trial. While having concerns that Das strayed into opinions and Judge Davila allowed it, Judges Nguyen and Schroeder stated that much of Das’ testimony concerned what he observed at the company.

Reportedly, much of the hearing time focused on this one point. Saharia again insisted that “She [Holmes] in good faith believed in the accuracy of this technology” and did not knowingly misrepresent it.

  • Not including defense-favorable testimony was another alleged Davila mistake. In the defense presentation, Judge Davila allowed testimony from former laboratory director Adam Rosendorff without including more evidence of government investigations of his work after quitting Theranos in 2014. These were direct attacks on his competence in running a lab facility. However, in our 6 October 2021 coverage, the defense grilled Rosendorff on his work at uBiome and PerkinElmer; both came under Federal investigation during his tenure.

A final Holmes defense point was made on how these ‘errors’ made by Judge Davila unfairly shaped the jury decision, where she was found guilty by a jury on only four counts of the prosecution’s 11.

The panel did not provide any timeline for issuing a ruling, other than in ‘due course’. This can be anywhere from a few weeks to over a year. The track record for Federal Court appeals tends to be dismal for the defense. 

Far less coverage was given to the separate Sunny Balwani hearing. This centered on the fact that the restitution of $450 million to investors ordered by Judge Davila’s order was incorrect and part of the “nature of investing in a private company.”  His defense counsel, Patrick Looby, also representing Holmes, made a most interesting spin on how fraud did not rob Theranos of ‘residual value’. “The fact that the investors may have had difficulty selling their shares is not owing to the fraud.” Volkar for the prosecution stated that the investors had no opportunity to do any recouping of their losses. Looby also contended that the prosecution presented distorted evidence against Balwani in a different narrative than against Holmes. Balwani was convicted on all 12 charges and is serving 12.9 years at the Federal Terminal Island facility. No timeline for a ruling was reported.

Mercury News, AP, Yahoo Finance  The Ninth Circuit also has an unusual web page on the Holmes appeal with case information plus notifications of public proceedings.

Short takes: Holmes legal team appealing Tuesday 11 June; Steward Health asset sale OK’d, needs funding; fundings for Sword Health, Eko Health

Elizabeth Holmes may be in Bryan, Texas serving time, but the appeals go on. Her legal team will appear before the US Court of Appeals for the Ninth Circuit at 9am next Tuesday 11 June. Her initial appeal was filed in December 2022 [TTA 15 Dec 2022] with full 132-page legal briefs in April 2023 [TTA 19 Apr 2023].

Holmes’ team is seeking a complete overturn of the trial and verdict. The appeals center on an unjust conviction based on prosecutorial misrepresentations, such as Holmes being told that the Theranos technology worked and thus not misrepresenting it to investors at that time, and actions by Judge Edward Davila in the presentation of evidence in including evidence favorable to the prosecution and not including defense-favorable evidence. The appeal also includes, according to earlier reports, an accusation that Judge Edward Davila used the wrong legal standard in sentencing Ms. Holmes and thus over-sentenced her. Holmes will not be present for the appeal as is customary.

Her 11 year sentence is currently, based on Bureau of Prisons standards for good behavior, cut down to about 9 years. Her chances are slim that the appeal will succeed, based on overall rates, Judge Davila’s reputation for thoroughness, and his presiding over two identical cases, the other for ‘Sunny’ Balwani with the same evidence and a similar but longer sentence. There is no public word on whether Mr. Balwani is also appealing. He is serving his time at Terminal Island, California. Mercury News  Our back file on Theranos is best accessed through TTA’s search tab, keyword Theranos or Holmes.

Another fine legal mess is unfolding in Texas with the US Bankruptcy Court, Southern District of Texas, hearings on Steward Health’s dissolution.

  • On Monday 3 June, Judge Christopher Lopez approved a two part plan for the asset sale. Part 1 would be about the Massachusetts assets, with most of the system’s hospitals (eight) and its physician group. Bid deadline is 24 June and the first sale hearing is timed for 11 July. Massachusetts is the most contentious of the states Steward operated in, with state regulators taking the most actions against the company. Part 2 is the Florida and Texas asset sale, timed for a bid deadline of 12 August and first sale hearing of 22 August.
  • The US Department of Justice filed an objection 30 May to the sale, stating that it does not allow enough time for their regulatory review of the physician group sale to UnitedHealth Group’s Optum [TTA 18 Apr] and insisting that it must be reviewed before any sale. This effectively holds up the Part 1 sale. FierceHealthcare
  • The other spanner in the works for the DOJ is that Steward is flat out of money to run their hospital and practice assets. Without additional funds, on 14 June they will be broke, busted, skint by two Fridays from now. Steward’s lenders were before Judge Lopez yesterday (4 June) to try working that out. Current debtor-in-possession (DIP) Medical Properties Trust, which put up $75 million, won’t put up any more money until assets are sold. Other lenders want to put up only limited amounts of money. To lure lenders, Judge Lopez approved an emergency motion on Monday to permit a “commitment fee” offer of up to $6.75 million to third-party lenders and up to $750,000 to reimburse one or more lenders for expenses incurred during due diligence. Healthcare Dive. Will that attract another DIP? Only time, and not a lot of it, will tell.

In happier news, there are fundings for two health tech companies:

  • Sword Health announced a $130 million round in an unlabeled mix of primary and secondary sale. Their total funding is now $340 million, with lead from Khosla Ventures. Valuation is up to $3 billion, up 50% from its Series D valuation. The funding announcement was made in conjunction with a product announcement by the digital/remote MSK therapy company for Phoenix, the AI Care Specialist, which will be integrated across their entire offerings. Release
  • Eko Health’s Series D raised $41 million from ARTIS Ventures, Highland Capital Partners, NTTVC, and Questa Capital. Eko’s device and platform enhance the early detection of cardiac and pulmonary diseases during physical exams. Most recently, the FDA cleared Eko’s Low EF detection AI [TTA 5 Apr]. The new funding will be used for US expansion and expansion into key international markets, supported by new strategic investments from Double Point Ventures in the U.S., Singapore-based global investor EDBI (the corporate investment arm of the Singapore Economic Development Board), and LG Technology Ventures, backed by the LG Group of South Korea. Cardiac detection powered by AI are ‘perfect together’, at least for investors. Release, Axios

News roundup: Change responsible for data breach notices; 37% of healthcare orgs have no cybersec contingency plan; health execs scared by Ascension breach; CVS continues betting on health services; Plenful’s $17M Series A

HHS agrees with providers that the data breach notification is on Change Healthcare, not them. Health and Human Services’ Office for Civil Rights (OCR) moved quickly to formally change the FAQs that kicked off the 100+ provider letter [TTA 23 May]. Now “Covered entities affected by the Change Healthcare breach may delegate to Change Healthcare the tasks of providing the required HIPAA breach notifications on their behalf.” “Covered entities” in this case refers to the providers. Only one entity–Change or the provider–“needs to complete breach notifications to affected individuals, HHS, and where applicable the media.” Providers must contact Change Healthcare for the delegation. 

Chad Golder, general counsel and secretary at the American Hospital Association (AHA) said in their statement, “As we explained then, not only is there legal authority for UnitedHealth Group to make these notifications, but requiring hospitals to make their own notifications would confuse patients and impose unnecessary costs on providers, particularly when they have already suffered so greatly from this attack.” HHS notice, Healthcare Dive

Meanwhile, UHG still does not know the extent of the breach which started in late February. Knowing the extent of the breach is needed to start notifications. It has not formally notified HHS of the breach long past the 60-day mandated window (see #3 in the HHS FAQs). This may create an ‘unreasonable delay’ (see #6). Not all Change systems are back up either–see the Optum Solutions page that has plenty of red Xs.

Only 63% of healthcare organizations have a cybersecurity response plan in place, leaving 37% without a plan. This is based on a survey of 296 IT/data security/management executive respondents working at healthcare organizations in the US performed by Software Advice, an advisory and consulting firm. Other findings:

  • Nearly 1 in 3 have had a data breach in the last three years
  • 42% of practices have experienced a ransomware attack, and of those, 48% say the attack impacted customer data
  • 34% failed to recover data after the ransomware attack
  • 55% of medical practices allow access to more data than employees need to do their job which makes them more vulnerable to attacks
  • While 41% of data breaches are attributable to malicious hacking, another 39% are due to malware, 37% are due to social engineering and phishing scams, 36% are due to software vulnerabilities, and 30% are due to employee error.

It would have been helpful if Software Advice in its report had broken down the type of practices surveyed. Healthcare Dive

Meanwhile, healthcare executives were ‘scared’ by the Ascension Health breach, as they should have been. Katie Adams’ piece in MedCityNews explores reactions from five different C-suite hospital executives about the recent attack on Ascension. The IT and data officers are from MD Anderson, Yale New Haven Health, CommonSpirit Health, Allegheny Health Network, and UPMC. The overall take was that threats are more common than ever, bad actors are abundant and getting better (using tools that can make amateurs into pretty good “bad actors” via “LLM products and have them help you build ransomware code.”), managing weaknesses in third-party vendors that live in the cloud is a Herculean task, phishing, and the need for ‘government’ to be involved. 

This Editor notes that the rush for providers into generative AI, given this environment, is perhaps premature. Yet here they go; researchers from Mount Sinai’s Icahn School of Medicine used structured data, such as vital signs, and unstructured data, such as nurse triage notes, to develop models predicting hospital admissions using ChatGPT-4. It supposedly can learn from fewer examples than other machine-learning models currently used and use data from traditional models. Becker’s

Ascension is slowly coming back, now projecting that all their locations will have their EHRs restored by the week of 14 June. Currently, only Florida, Alabama and Austin are up and running. Ascension Rx retail, home delivery and specialty pharmacy sites are now open as well. They will have some ‘splainin’ to do to HHS OCR. Ascension update site

CVS is confident in the future of its retail health despite their struggles with Minute Clinics and Oak Street.  Despite the struggle of retail health clinics at other providers such as Walgreens/VillageMD and the shutdown of Walmart Health, Sree Chaguturu, MD, CVS Health’s executive vice president and chief medical officer, expressed complete confidence at a recent industry conclave, thINc360 – The Healthcare Innovation Congress. This is despite the closures of dozens of Minute Clinics in Southern California and New England [TTA 31 May] out of their 1,100 total plus that CVS seeking an investment partner for Oak Street [TTA 29 May]. Dr. Chaguturu returned time and again to the 10,000-odd CVS Pharmacy locations and their leverage within communities, leaning very hard on the 5 million people coming in daily and the ‘opportunity for their pharmacists to engage’. As a CVS customer at a small location, those busy pharmacists aren’t engaging with me unless I have a script to fill or need an OTC decongestant that’s on the state signoff list due to an ingredient. In fact, CVS locations have rather few people nowadays, including behind checkout counters. Then again, it was a meeting speech. FierceHealthcare

Concluding on a brighter note, Plenful’s Series A came in at a tidy $17 million. Plenful developed and markets an AI-assisted workflow-automation platform for pharmacy and healthcare operations, claiming that it automates over 95% of the work for disparate administrative workflows. Features include 340B audit, document processing, contracted rates optimization and inventory planning, and pharmacy cycle revenue and reporting. Founded in 2021, the company has already lined up some impressive clients. Lead investor TQ Ventures was joined by Mitchell Rales (cofounder and chairman of Danaher), Susa Ventures, Waterline Ventures, and Bessemer Partners, the lead for last September’s $9 million seed funding for a total of $26 million. Crunchbase, Mobihealthnews

Oracle’s Glueck kicks back hard at Business Insider’s ‘deadly gamble’ article, Epic’s Faulkner (now with additional audio commentary)

Oracle is making great progress at the VA. And they want EHR interoperability. Epic doesn’t. Take that, Business Insider! And Judy Faulkner! Ken Glueck, an EVP at Oracle, authored an Oracle blog post (or at least one written under his name) that has generated much industry controversy. It first goes after Business Insider for daring to criticize the problems on the Oracle Cerner rollout that made it into five (count ’em, five) VA regional systems, calling it a ‘regurgitated story’. It calls the ‘deadly gamble’ headline ‘clickbait’, moves to patting itself on the back for the apparently non-problematic EHR rollout in about 3,900 locations in the DOD-Military Health System (partnering with Leidos), then swerves to stating the obvious in kicking around poor old, outdated VistA that meets very different needs and a massive population at the VA, and ends with a tap dance around the Oracle Cerner EHR problems at the VA citing all the progress that Oracle is making. It builds to a final slam fest, taking a minor quote in the article regarding why Oracle’s Larry Ellison preferred to buy Cerner–a ‘more relaxed approach to data privacy’–and expanding that to hard personal takedowns of Epic and its founder Judy Faulkner.  It then gets personal with BI, depicting the publication as “rooting against us” which he finds “invigorating”.

One can understand the craving for Oracle management to respond to BI. It’s a media outlet that apparently doesn’t have the most friendly relationship with Oracle. (But since when is that a feature of the Fourth Estate?) The article vividly takes Oracle to task, weaving together an accessible story out of dry facts and the many technical failures well documented by the VA, the OIG, and in Congressional hearings. It’s framed in the noble ambitions of Oracle’s founder Larry Ellison to transform healthcare which, in this Editor’s view, are treated sympathetically. The extremely well-read review last week of the BI article notes all, as well as the lack of contrast with the non-eventful DOD-Military Health System’s implementation and why it went largely according to plan, including the joint Lovell MHS/VA EHR. While this Editor tends to cast a gimlet eye at the clichéd mention of ‘transforming healthcare’, she still has some hope that progress in simplification, transparency, better-informed decisions, and truly intelligent assistance that enables human providers to heal their patients will be made in the next decade. And in that, she is on the side of Mr. Ellison as well as most founders and companies in health tech chronicled in TTA’s articles since 2005.

You have to give Mr. Glueck some credit for not holding back on how he really feels. Unfortunately, he was writing a corporate communication even if it was slotted in Oracle’s blog pages. He’s worked in corporate for decades and early in his career in government in the late Senator Joe Lieberman’s (D-CT) office. From the blunt view of a marketer, he should know better. Tone matters. And the frostier the tone, the better. If even a response is needed. Consider: is responding to this a smart move? What are the knock on effects?

In fact, it’s almost a textbook on how not to respond to negative press.

  • The headline sets up a straw man argumentBusiness Insider is not responsible for healthcare modernization, nor conceivably will ever be. It’s a cheap shot. 
  • The overly personal tone, written (one can guess) as he was seething about the BI article, undermines the response.
  • Nearly all of the same points could have been made in a concise, objective, fact-by-fact rebuttal that would be far more powerful in its restraint.
  • It meanders. It’s defensive. It’s easy to read into the Congressional Record or at the next hearing of the Veterans Affairs committee by a House member or Senator who’d like to see Oracle Cerner derailed at the VA. 
  • Where it truly goes off the rails is the personal invective directed at their competition. “…Epic’s CEO Judy Faulkner is the single biggest obstacle to EHR interoperability. She opposes interoperability because it threatens Epic’s franchise.” Mr. Glueck goes further in stating that Oracle enables provider collaboration across silos, while “Epic’s contracts expressly appropriate all patient EHR data as Epic’s own.” This is a fair criticism if true but maybe Epic’s hospital customers like it that way for their own reasons like security.

The blog comes across as barely restrained and defensive, especially versus Epic, the #1 EHR. When your EHR is losing ground to the competition, this is not a good look. It hands Epic another club to beat Oracle with. When your audience consists of professional hospital and practice executives, plus the VA and Congress, who right now aren’t overly happy with your EHR and are firing Oracle or considering it, this is almost guaranteed to backfire. It also gives a provocative article in a small online publication (ask Elon Musk) what Oracle doesn’t want–very long legs and a long shelf life. Plus now, there is even more reason for BI to beat up on Oracle.

Perhaps ignoring it, coupled with a sober internal communication (email/intranet/Slack) on the progress being made with the VA EHR (given that internal comms leak onto Reddit and similar), would have been the best response choices. And what about a conversation with BI? 

Like the old Sicilian saying about revenge, dishes like this should be served cold. 

Some interesting responses to the Oracle blog post are in HIStalk Reader Comments 5-31-24   Also Becker’s

And if anyone at Oracle wants a free tutorial in what not to do to respond to negative press, from the perspective of someone who’s had to deal with it in two industries….donna.cusano@telecareaware.com

Listen to Editor Donna provide extra commentary–a take on this take–on the Ken Glueck blog and this article. Now on Soundcloud (~18 minutes).

Perspectives: How Collaborative Care Combats Physician Burnout

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 Sussan Nwogwugwu, DNP, PMHNP, Clinical Leader at Done. In this article, Dr. Nwogwugwu discusses physician burnout, how it can affect delivery of care, and how collaborative and comprehensive care can mitigate burnout.

Done is a leading provider of telehealth services for individuals with ADHD, dedicated to delivering comprehensive, patient-first care. With a network that spans more than 35 states, Done connects individuals with ADHD to experienced, board-certified providers for personalized treatment plans and medication management. 

Physician burnout is a significant concern, as it affects not only physician well-being but the quality of care they deliver.

The state of primary physician burnout
The American Medical Association found that at the end of 2021, nearly 63% of physicians had reported burnout symptoms. This was roughly a 66% increase from the preceding year, highlighting the urgent need for systemic changes to support physician mental and emotional health. Increasing burnout is attributed to excessive workload, administrative burdens and lack of support and resources.

Collaborative care and its benefits
Collaboration between a team of multidisciplinary healthcare professionals decreases clinician workload and leads to enhanced job satisfaction. Additionally, feelings of isolation and burnout among physicians are reduced. Most importantly, the continued skill building and exchange of knowledge contribute to professional growth.

For mental health patients, collaborative care ensures holistic care and access to specialized services and continuity of care, particularly for patients managing chronic conditions.

Comprehensive care supports providers
A collaborative care model is designed to reduce the burden on primary care providers; and enhance clinician well-being and patient care by integrating comprehensive behavioral health support within the primary care framework. Comprehensive care supports providers in several ways:

Impact analysis
Impact analysis, primarily powered by data analytics software, provides insights into treatment effectiveness. It is particularly helpful in guiding interventions.

Impact analysis further addresses burnout and other issues by identifying areas for improvement, ultimately guaranteeing effective resource allocation and helping track the progress of interventions over time for better adjustments.

Evidence-based interventions (EBI)
EBI enables providers to use resources efficiently by enlightening them on what works and does not. It also enhances job satisfaction and morale, ultimately leading to better patient outcomes. Finally, using evidence-based treatments reduces the chances of facing legal action if something goes wrong.

Physicians leverage technology to learn more about EBIs across various medical fields; that can include digital libraries/databases, clinical decision support systems, mobile applications, telehealth platforms and online resources.

Frequent reviews and an inclusive patient approach
Frequent reviews help identify and address areas for practice improvement due to informative feedback they provide. An inclusive patient approach reduces burnout and provides a sense of fulfillment among providers by nurturing greater patient engagement and increasing satisfaction.

Comprehensive care supports patients
In addition to benefiting health care providers, comprehensive care benefits patients, too.

Impact analysis
Impact analysis fosters an in-depth understanding of a patient’s needs and responses to treatment, leading to more personalized care. Patients can also make informed decisions about their health and treatment options, guided by physician recommendations on helpful online resources.

Evidence-based interventions
EBI supports patients, reduces the risk of adverse effects, and ascertains that patients receive appropriate, high-quality, rigorously tested and proven care. Additionally, since EBI is founded on research and clinical evidence, it guarantees better health outcomes.

Frequent reviews and an inclusive patient approach
Frequent reviews enable personalized care and continuous treatment plan adjustment per each patient’s progress and feedback. Remote patient monitoring technologies like smart watches or mobile health apps help to track key health metrics and symptoms, thereby fostering patient empowerment and ensuring adherence to treatment plans by involving them in their own care.

Why medicine is shifting toward value-based care
Medicine is gradually shifting to a value-based care model to deliver patient-centered, effective, cost-efficient healthcare. This is in response to the conventional fee-for-service model that incentivizes quantity over quality, which results in unnecessary procedures, fragmented care and unsustainable healthcare costs.

Technology, a key defining factor in value-based care, leverages EHRs, telemedicine platforms and data analytics tools to refine ADHD care and eliminate draining tasks that lead to burnout.

Telemedicine platforms enable remote consultations, making it easier for patients to access specialized services without the need for physical visits. Additionally, data analytics tools track patient outcomes and identify trends, allowing for more personalized and effective treatment plans.

Through integrating EHRs, telemedicine platforms and advanced data analytics, multidisciplinary healthcare teams can streamline communication and coordination. EHRs provide team members access to up-to-date patient information, thereby reducing errors and enhancing continuity of care.

Collaborative + comprehensive care = value-based care
Collaborative and comprehensive care, combined with technology tools, contribute to value-based care by enhancing patient experience and treatment outcomes; and optimizing resource utilization.

These care models collectively promote improved population health, foster accountability and transparency and encourage continuous improvement.

Through collaborative care models, the value of health care is maximized and aligns with value-based care goals, alleviating increasing levels of physician burnout.

News roundup: Waystar $1B IPO is on (updated); CVS looking for Oak Street PE partner; 23andMe net loss doubles to $667M, may go private; Otsuka dives into digital therapeutics; HoneyNaps’ $12M no snooze

Waystar finally getting around to starring in its IPO. Again. The on-again/off-again public offering for this healthcare payments software platform developer is back on, according to their Form S-1 filed yesterday (28 May) with the Securities and Exchange Commission (SEC). Their first filing draft was in October 2023 on Nasdaq which would have valued the company at $8 billion. The IPO was again revived in December and postponed. This filing for WAY floats 45 million shares valued between $20 and $23 which would raise $1 billion with a far more reasonable valuation of $3.7 to $3.83 billion (latter updated per Waystar). Lead book-running managers are JP Morgan, Goldman Sachs & Co. LLC, and Barclays.

Cornerstone investors, who purchase stock before the formal listing, have expressed interest in buying up to $225 million in shares; these investors include funds managed by Neuberger Berman and a wholly-owned subsidiary of sovereign wealth fund Qatar Investment Authority. 

Underwriters have a 30-day option to purchase up to 6.75 million shares at the IPO price less the underwriter discount. Their current investors are EQT AB, Bain Capital, Francisco Partners, and the Canada Pension Plan Investment Board. The net proceeds from the offering will repay outstanding indebtedness. No timing is stated for when the IPO will happen. Usually, there are roadshows for institutional investors that showcase the prospectus (in the S-1) and positive points such as their $5 billion in annual transactions. After the listing, the current investors will still have substantial shares: EQT, CPPIB, and Bain will own about 29.2%, 22.3%, and 16.8% stakes respectively. 

Release, Morningstar, FierceHealthcare, Reuters

CVS Health is reaching out for a private equity partner to expand Oak Street Health’s clinics. Bloomberg News reported this unusual move by CVS with a handful of private equity firms to explore what was termed by ‘insiders’ as a joint venture. It’s all very preliminary and a JV may not be the final form. OSH is far smaller than rivals One Medical (Amazon) and VillageMD (Walgreens) but CVS apparently does not want to go it alone to fully take on the development cost. On February investor calls, CVS projected building out to 300 clinics by 2026. Reuters

Even in early 2023 with rivals Amazon (One Medical), Walgreens (VillageMD), and Walmart Health on primary care clinic buying and building binges, CVS’ buy for $10.6 billion for the ‘runt of the litter’ was widely derided as a waste of money [TTA 16 Feb, 2 Mar 2023]. OSH had only 169 offices in 21 states. It was also a money loser, $510 million in the red in 2022 and $200 million projected in 2023, with no breakeven predicted until 2025. A large part was due to OSH’s patient population, heavily skewed towards Medicare Advantage and underserved, high-risk patients. Those factors have gotten worse, not better. CMS has now tightened payments on MA with new rates and on reimbursement for diagnoses, making the growth of this population even riskier. Further dimming prospects for a willing partner: Walmart Health is shutting at end of June and VillageMD has shed or is shedding 140 locations to perhaps 620.  

23andMe’s losses double while revenue shrinks by 31%. Things continue to dim at the beleaguered genetics testing company. Their Q4 ending 31 March 2024 (FY24) closed with a net loss of $209 million on $64 million in revenue, compared to a net loss of $64 million on $94 million in revenue in the prior year Q4. In adjusted EBITDA, Q4 lost $33 million, compared to a loss of $39 million in prior year Q4. Net loss in full year FY24 was $667 million on revenue of $220 million, versus prior year’s loss of $312 million on revenue of $299 million. Adjusted EBITDA was $176 million versus prior year’s $161 million. As previously reported [TTA 20 Apr], CEO and co-founder Anne Wojcicki may offer to buy out the 80% of shares she does not already own. In developments, 23andMe has introduced an ancestry feature called Historical Matches, three new genetic reports for 23andMe+ members covering breast, colorectal, and prostate cancer based on polygenic risk scores, and some clinical trials moving forward. 23andMe also lost revenue in mid-year from GSK’s expiring agreement, had an impairment relating to Lemonaid Health, and of course (but not mentioned here) their massive 6.9 million record data breach. Shares closed today at $0.61, slightly up from April’s lows. Release

Otsuka America bucks the down trend, moves into digital therapeutics with Otsuka Precision Health. The Japanese pharmaceutical company’s US division is moving forward with a new digital health unit, Precision Health (OPH), headed by 14 year veteran Sanket Shah. Their first rollout later this summer will be based on the newly FDA-cleared Rejoyn, the first prescription digital therapeutic authorized for the adjunctive treatment of major depressive disorder (MDD) symptoms. Rejoyn was developed in conjunction with Click Therapeutics. Mr. Shah and Otsuka are taking the longer view in terms of development, that future developments will be about both partnerships and solo effort, and that the road is long–and littered with the burnt-out shells of failed companies like Pear Therapeutics, Babylon Health, and way back to Happtique. Otsuka has had its own digital health learning experience. They partnered in 2017 with Proteus Digital Health’s smart pill tech for its Abilify MyCite anti-depressant. After abruptly ending the partnership, Otsuka bought the smart pill technology out of bankruptcy [TTA 19 Aug 2020]. Release, Healthcare Dive 

One funding of note this week is HoneyNaps‘ $11.6 million Series B. Hi Investment Partners, QUAD Investment Management, and Industrial Bank of Korea led the South Korean sleep diagnostics company’s funding. HoneyNaps has an FDA-cleared (2023) bio-signal monitoring and AI-assisted sleep diagnosis software, SOMNUM, that will be introduced to the US market. In the release, the company CFO announced plans to “further advance the AI to expand its application to other critical areas such as cardiovascular disease, dementia, and Parkinson’s disease”. Mobihealthnews

Breaking news: Veradigm may sell, merge, or seek ‘strategic alternatives’; appoints new interim CEO effective June (updated)

Breaking: Veradigm puts itself up for sale or ‘strategic alternatives’–but in the meantime replaces its interim CEO. The pre-holiday week and weekend break was undoubtedly a busy one at healthcare data systems/services Veradigm, the former Allscripts.

Sale? Merger? Something else? Crossing the wires today (Tuesday) at 7am Eastern Time US was the announcement that Veradigm is exploring “potential strategic alternatives that may include, but are not limited to, a sale, merger, strategic business combination or other transaction.” What was a puzzle was the next line in the carefully worded release: “The Company cannot assure that its exploration will result in Veradigm pursuing a transaction or that any transaction, if pursued, will be completed on attractive terms, if at all.” The release goes on to explain that there is no timetable for “any transaction” and that it was the last word until if and when something happens.

The doubt around ‘attractive terms’ seems unwarranted, as the same release also reaffirms their 2024 guidance of annual revenue between $620 million and $635 million and adjusted EBITDA between $104 million and $113 million. As of calendar Q1 close, they had cash/equivalents on hand of $343 million, funded debt of $208 million (the principal of 2019 convertible notes), creating net cash of $135 million. 

Veradigm appears in good shape, despite their delisting from Nasdaq earlier this year due to financial reporting problems two years running (2022, 2023, and 2024 to date), created by bad software, leading to continuing violations of Nasdaq listing rules. This led to the December resignations of CEO Richard J. Poulton and CFO Leah S. Jones and their replacement for a six-month term by Dr. Shih-Yin (“Yin”) Ho, coming from the board, as CEO, and Lee Westerfield from Clearsense as CFO. At that time, the board announced a search for permanent replacements [TTA 14 Dec 2023].  

Shares trade on the ‘pink sheets’ (OTC Markets OTCPK) under MDRX closing today at $8.70, up over $1.00 from last Friday.

Interim CEO departs, interim CFO stays. A second release today announced that Dr. Ho will depart the interim CEO slot on 7 June but interim CFO Lee Westerfield will continue. Dr. Ho’s place as interim CEO will be taken by Tom Langan, Veradigm’s president and chief commercial officer (CCO), reporting directly to executive chairman Greg Garrison and the board. No interim president/COO was named. From the release, Dr. Ho will not be returning to the board or any other function with Veradigm which is a most interesting exit. During her time, the company in February acquired ScienceIO, a generative AI/LLM company to add AI capabilities, and in January bought Koha Health, which fit into their revenue cycle management functions for MSK [TTA 27 Feb]. Lee Westerfield will be continuing as interim CFO until 24 December. Another change: this release made it clear that no permanent executive appointments will be made “while the separately announced exploration of strategic alternatives is in process.”

What does this mean? This Editor projects that offers for parts or all of Veradigm’s business are in the pipeline, whether they are relisted on Nasdaq or not. In a company of this size, breadth, and apparent good health, the jobs of CEO, president, and chief commercial officer (CCO), typically two to three positions, are never collapsed into one person. In this unique situation, this eliminates one or two C-level compensation packages. Going back to December 2023, a CEO had to be temporarily slotted in as the company was still listed on Nasdaq. Leaving a vacancy would not have been acceptable. Regarding the CFO position, in a sale or other “strategic alternative to maximize shareholder value”, a CFO is more important than even a CEO in working out the financial details, which for Veradigm are more complicated than usual. 

In fact, this move could be seen as telegraphed in February. When accepting its Nasdaq delisting, Veradigm’s board adopted a limited duration stockholder rights plan that issues by means of a dividend one preferred share purchase right for each outstanding share of Company common stock to stockholders of record on the close of business on 8 March 2024. This becomes exercisable only if a person or group secures beneficial ownership of 10% or more of the outstanding shares in the next year. The rights plan is obviously designed to compensate shareholders in the event of a takeover not approved by the board (i.e. a hostile takeover) via accumulation of stock and make a sale to an unapproved buyer less attractive, though it hasn’t stemmed the filing of various shareholder class-action lawsuits. Crain’s Chicago BusinessHealthcare Innovation

Editor’s further note: It is not unknown to break up a company in order to maximize shareholder value. The parts can be worth more than the whole. GE is the most recent example. More akin to Veradigm, Cendant Corporation, in which this Editor was once part of as a manager/director in the Avis Rent A Car unit, was sold or spun off in parts in 2005-6. Once a giant in hotel, car rental, timesharing, real estate brokerage, online booking, and other parts of travel, by 2005 the primary shareholder/CEO decided that the share value was not reflective of the company value, and proceeded to sell and spin off its businesses–rather smartly before the real estate crash in 2007-8. Perhaps Veradigm does not see a way forward in running its diverse healthcare businesses even where it has a strong and currently profitable position or there is pressure from its largest shareholders to cash out. It is always worth looking at shareholders. Close to 22% of its shares are institutionally held but widely distributed among them. The largest holders are Silver Point Capital (2.29%), Tyro Capital Management (1.5%), and a host of Vanguard and DFA funds totaling under 10%. Insiders hold only 1.3%  Yahoo Finance

Our Readers should not be surprised at any one of several outcomes in the coming months.

Short takes 2: Humana’s CEO changeover; Owlet Dream Sock CE Mark, UK approval; TytoCare goes to school; LG enters home health with Primefocus; Samsung $92M buys Sonio (FR); raises by Blackwell in health cybersec, Watershed Health

Keeping it short and sweet for the end of the week.

Payer Humana changing out CEOs. The wrap for current CEO Bruce Broussard is coming a little earlier than anticipated, with the planned changeover to Jim Rechtin on 1 July. Mr. Broussard will depart the board of directors but stay on as a ‘strategic advisor’ until 2026, which is a typical arrangement for CEOs usually tied to compensation. Mr. Rechtin’s experience prior to joining Humana as president/COO in January was as Envision Healthcare’s CEO and with OptumCare and DaVita. Last year, Humana and Cigna failed to merge after shareholders disapproved and the evident conflict in PBMs [TTA 13 Dec 23]. 2024 earnings were revised downwards in April due to ongoing losses in Medicare Advantage plans. Release, FierceHealthcare

Owlet’s Dream Sock now has EU CE Mark, UK medical device approvals. The European medical device clearance by the EU notified body was announced on 2 May, with the UK certification following on 14 May. As certified for the EU and UK, the Dream Sock is intended for use with healthy infants between 0-18 months and 2.5-13.6 kg. The Dream Sock measures oxygen saturation and pulse rate which are reported on a smartphone app and on a base station to provide baby sleep insights. In the US, it was FDA cleared under de novo last November. It is sold without prescription through retailers and directly through Owlet. Owlet plans to debut it in Germany, France, and the UK later this year. CE Mark, UK releases. Mobihealthnews

TytoCare expands a logical market–school RPM. Their school health initiative that started before the pandemic has added or expanded in five healthcare systems. This brings primary and urgent care services to over 2,500 schools in 31 states. Three of the five systems are Cone Health (North Carolina), Sentara Health (Virginia), and A Plus Family HealthCare (Kentucky). TytoCare works with school nurses and adminstrators for remote diagnostics, not only for children presenting with illness but also for monitoring children with chronic conditions. Blog, Mobihealthnews

LG NOVA launches Primefocus Health in North America. LG, well known for monitors and TVs in healthcare settings, is introducing a “provider-focused, patient-centric healthcare platform” to connect patients in home care with their providers. It will use “innovative non-invasive technology for tracking patient progress for multiple medical conditions, which can be integrated with the provider’s electronic health record system, artificial intelligence and machine learning capabilities for ease of use.” No demos or further specifics are provided.  LG NOVA is LG Electronics North America Innovation Center and demonstrates an interest in additional healthcare expansion. Release, Mobihealthnews

LG’s rival Samsung buying France’s Sonio for $92 million. The fetal AI ultrasound company originally partnered with Samsung Healthcare France in 2021 in order to confirm the efficacy of its AI for pregnancy/prenatal monitoring. It raised a $14 million Series A last year for a US commercial launch of their AI FDA 510(k) cleared Sonio Detect, a machine-agnostic AI assistant software for reporting and imaging. Samsung Medison, the ultrasound division of Samsung, must await French regulatory approvals, including the French Ministry of the Economy and Finance. Release, MedTech Dive

And in latest fundings:

Healthcare focused Blackwell Security now has a $13 million Series A, led by co-creators General Catalyst and Rally Ventures. The funding will expand their Managed Healthcare Extended Detection and Response (MHXDR) offering. They are also acquiring their first CEO, Geyer Jones, from cybersecurity/IoT companies Cylera and RSA.  Release, Mobihealthnews

New Orleans-headquartered Watershed Health completed a $13.6 million venture round funding. This was led by First Trust Capital Partners with participation from FCA Venture Partners, Create Health Ventures, Impact Engine, 450 Ventures, LDH Ventures II/Launchpad Digital Health, and others that adds to a 2022 $9.8 million venture round. The new funding will be to expand their SaaS platform plus grow the engineering, development, customer success and sales teams. Watershed is a care coordination platform with a community focus that connects clinical and non-clinical providers such as SDOH resources. Release

Short takes: Legrand acquires Enovation, FDA nixes Cue Health’s Covid tests, Ascension confirms ransomware attack–who did it? (updated), beware of ‘vishing’ courtesy of ChatGPT

Legrand Care acquires Enovation. Enovation is a Netherlands-based digital health company with a connected care platform for care monitoring across prevention, early detection, medication checks, and remote healthcare. Its customer base includes ambulances, pharmacies, clinics, hospitals, and home care. With distribution in healthcare organizations across 18 countries, including Scottish Digital Telecare [TTA 11 Aug 2021], it will join the equally international Legrand’s Assisted Living and Healthcare (AL&HC) business unit with Intervox, Neat, Tynetec, Jontek, and Aid Call. Acquisition cost was not disclosed. Release   Legrand and Tynetec are long-time supporters of TTA.

The hammer drops on embattled Cue Health. The US Food and Drug Administration (FDA) has invalidated Cue Health’s Covid-19 Tests for Home and OTC Use and for the authorized lab test version. Home users were advised to discard unused kits in household trash. Both consumers and providers were advised to retest if symptoms persisted after a negative test result. This followed an FDA inspection of their operations that determined that unauthorized changes to the test kit design were made along with failures in performance testing. A Warning Letter was issued to Cue on 9 May. The company has not yet responded. FDA Safety Communication

Cue was one of many biotech manufacturers that marketed Covid-19 point of care/lab, and home testing kits after obtaining Emergency Use Authorizations (EUA) in 2020 and 2021. It exploded in size and went public in September 2021 at $200 million and $16/share with a valuation of $3 billion. Today HLTH shares trade on NasdaqCM at a little bit over $0.13. Their headquarters facilities in San Diego that once had 1,500 employees must be a lonely place, as the company reported another layoff of 230 employees, about half of remaining staff, after earlier layoff rounds of 245 in February and 880 in 2023. Their remaining test is one for Mpox on a EUA. Two other tests developed for flu and RSV are still under FDA review.  Cue Health’s financial reports for 2023 were dismal with revenue down to $71 million, an 85% reduction versus 2022, and a net loss of $373.5 million. Recent reports indicate that the company will refocus on marketing its Cue Health Monitoring System. Management and board changes have also been drastic, with a CEO change in March (Yahoo Finance) and the CFO departing this past Monday. MedTech Dive

Ascension Health finally acknowledged that its cyberattack was ransomware-based. On Saturday 11 May, their website event update confirmed that the cyberattack was ransomware. The Saturday and Monday 13 May updates also confirm that system operations will continue to be disrupted with no timetable set for restoration to normal status. Impacted systems include their EHR, MyChart, and some hospitals are diverting emergency care. The update page now has 12 regional updates and a general + patient FAQ. Update: in these states, Ascension’s retail pharmacies cannot fill prescriptions: Florida, Wisconsin and the District of Columbia. Their website recommends that patients bring paperwork and prescription containers. Lab and imaging results are delayed. Since the hospitals are on manual systems, overall there are delays in admissions–bring documentation. And the class-action suits have started, with reports that three have been filed already. Healthcare IT News

Who dunnit? DataBreaches.net reported over the weekend that Ascension’s hack has been attributed to interestingly named ransomwareistes Black Basta. Late last week, the US Cybersecurity and Infrastructure Security Agency (CISA) issued an alert on Black Basta. It’s another charming ransomware-as-a-service (RaaS) with bad news affiliates like BlackCat/ALPHV wreaking havoc on over 500 organizations globally. No word on whether Ascension has paid ransom. 

Speaking of cybersecurity, now something else to worry about–‘vishing’. This is ‘voice phishing’, another generative AI-facilitated hack that uses snippets of a human voice to pose as people or representing organizations via phone call or voicemail. Not enough? There’s ‘smishing’–SMS or text phishing which can invade your phone with all sorts of nasty messages. These attacks, according to cybersec firm Enea, are up twelve-fold since the launch of ChatGPT. Vishing, smishing, and phishing (email) attacks have increased by a staggering 1,265%. 76% of enterprises lack sufficient voice and messaging fraud protection. Can we go back to the 1990s? 2000s? When we worried about “Nigerian princes” email scams? Becker’s, Enea survey report

Is Oracle Health’s Big Vision smacking into the wall of Healthcare Reality? Their business says so.

Once again, ‘healthcare transformation’ may be A Bridge Too Far but definitely a Long Slog for Oracle. A highly critical Bloomberg report details the flat and deteriorating business of Oracle Health, the division that includes the former Cerner. Since their much-touted acquisition of Cerner two years ago [TTA 14 June 2022], Oracle has not righted the basic health system EHR business. Revenue and clients have stagnated with high-profile losses, versus the massive gains predicted only two years ago, and Cerner falling further behind the hospital/practice EHR leader, Epic, with a 26% hospital bed share compared to Epic’s 48%. 

  • Bloomberg’s internal sources indicated that sales reached $5.9 billion in 2023, but are projected to slip to $5.6 billion both in 2024 and 2025.
  • In 2023, 12 accounts did not renew and announced they would replace Cerner with Epic. These are major names such as Northwell Health and Boston Children’s Hospital. In 2022, clients with a combined capacity of 4,658 patients were lost, according to KLAS Research. This is despite the fact that EHRs are not moved lightly. The average commitment is 15 years or more since the ramp-up is taxing and costs are astronomical.
  • Common complaints cited by KLAS center around Cerner’s legacy software and the Cerner transition: tracking clinical revenue, tool integration, technical glitches, and uncertainty or worsened service associated with the Oracle takeover.Boston moved to improve data exchange with surrounding hospitals and Northwell for Epic’s set of better integrated tools.

Oracle laid off many involved with customer accounts. The consulting and sales area laid off 3,000 in one year from March 2023 to February 2024, according to Bloomberg. These may have been as early as May 2023. In June 2023, there were reports that the VA’s pause of Cerner Millenium for at least a year coupled with the completion of MHS Genesis triggered 500 to 1,200 additional Federal service area layoffs plus rescinded job offers. The layoff total may be as high as 4,200 on a pre-acquisition employee base of 28,000, with salaries and promotions frozen. On the executive level, Don Johnson, who once was a successor to CEO Larry Ellison, departed from leading Oracle Health and AI. Reportedly, Dr. David Feinberg, who briefly headed Cerner prior to the sale, is now a ‘ceremonial’ chairman of Oracle Health. [TTA 18 May 2023] Dr. Feinberg also joined Aegis Ventures as a senior advisor and is on Humana’s board, which sounds like a winddown of Oracle responsibilities [TTA 11 Jan]. The layoffs and freezes have improved the former Cerner’s operating margin from 22% to 33%, but not as high as Oracle’s 46% margin.

Since the acquisition and chairman Larry Ellison’s Big Vision promises of creating ‘healthcare transformation’ and ‘better information’, Oracle’s challenge with Cerner has been not only to move their legacy systems onto the cloud but also to integrate Cerner systems with Oracle–and Oracle may have underestimated that complexity as well.

  • Oracle has stated that most customers have been moved to Oracle’s cloud, but inside sources have qualified them as Oracle Health’s smallest and least technically complicated. The big systems with their own domains have yet to be touched.
  • Cerner applications had about 8,000 bugs to be fixed.
  • On the people management/integration side, there are substantial differences between ‘legacy’ Cerner and Oracle people, often centering around not understanding the nuances and complexities inherent in healthcare–as well as compensation and working conditions. This Editor, who as a marketer has had to deal peripherally with ‘legacy systems’ (to the point of tears) through acquisitions on the payer side, knows this is common.

Where Oracle has had success with Cerner’s EHR is in international markets less saturated with EHRs or with home-grown systems, winning contracts in Sweden, the UK and Saudi Arabia. As previously noted, they are a supplier for the NHS. Oracle has moved forward on population health software,  modernizing Cerner’s revenue-tracking tool, and planning for an AI-assisted ambient listening voice note system. 

What remains up in the air is if the VA will restart Millenium transitioning from VistA this year. Oracle is pushing to restart it and its revenue stream this summer as projected last year [TTA 18 May 2023]. This counters VA Secretary Denis McDonough’s testimony last month to the House Veterans Affairs Committee that the VA does not intend to resume deploying it until FY 2025, which does not start until October 2024, and use carryover funding. This FY, there are no funds or plans allocated except for Lovell FHCC, which seems to be going well. The contract, already tightened last April with multiple metrics, demanded improvements, oversight, and annual renewals, is running into more Congressional headwinds this year. Three senators on the Senate Veterans’ Affairs Committee called for the VA “to use the opportunity the new contract structure provides to re-review terms and add additional accountability and oversight provisions to protect veterans and taxpayers.” pointing to the OIG report issued in March. The contract is up for renewal this coming Thursday 16 May. NextGov, Becker’s

The final burden on Oracle–only alluded to in the article–is the debt load undertaken to finance the $28 billion Cerner acquisition. A complex set of bridge and term loans were used to finance the buy [TTA 27 Oct 2022]. At the time, Oracle’s $90 billion debt load was one of the largest in tech. While Oracle’s stock value has been buoyed by its investments in AI, in the current environment, this debt load becomes suspect. Yahoo Finance, Quartz

News roundup: Transcarent raises $126M; 98point6 lays off; Oscar notches first profit; Steward Health’s Ch. 11; Amazon Clinic GM leaves; Amwell’s down but hopeful Q1; Hims founder gets political

A study in contrasts

Already well-funded Transcarent gains another $126 million in a Series D round. Total outside funding is $424 million that boosts its valuation to $2.2 billion. This round will fund expansion and development efforts plus enhancing the platform’s AI capabilities. The Series D round was led by General Catalyst and Glen Tullman’s 7wireVentures, with participation from new investors Memorial Hermann Health System and Geodesic Capital, along with existing investors. As noted in our Rock Health analysis (but not in the company’s release), this raise had a ‘sweetener’ of a 2.5x return should the company IPO or M&A.  Transcarent is an enterprise health navigator that enables employees to use a single platform to navigate their needs for medical, surgery, pharmacy, and mental health care. Transcarent’s differentiator in this space for large self-insured employers is that Transcarent steers employees to higher quality, lower cost care settings. Their pricing is also based on actual users only in risk-based agreements, versus the more common per member per month (PMPM) care management model. Transcarent also pays health systems up front for surgical procedures.

Tullman, who is also Transcarent’s CEO, is well known for creating high profile companies that eventually are sold or IPO’d for high valuations. These deals make his followers money, but often not the buyers (ask Teladoc) or the employees left in the lurch. This Editor does wonder, given the state of US business right now, how this competitive enterprise care management niche earns this kind of investment and valuation. Release, Mobihealthnews 

One of Transcarent’s buys last year was 98point6’s virtual care and related assets that included 98point6’s physician group, self-insured employer business, and an irrevocable software license in a deal worth potentially $100 million according to publicity. 98point6 then had a well publicized and $32 million-financed pivot to being a software company and licensor, acquiring remaining assets from asynchronous telehealth provider Bright.md this past January for 55% in equity and 45% in cash. Despite all this, little noted was that at the end of April was that 98point6 laid off an undisclosed number of its estimated 100 US-based staff. One wonders if this affects service to Bright.md’s provider customers. GeekWire

On the health plan side, rebooted insurtech Oscar Health finally got into the black with $177.4 million in net income for Q1 and beat earnings per share estimates. It’s no surprise to those of us who’ve followed the modus operandi of Mark Bertolini, who took the reins a year ago March [TTA 30 Mar 2023] and stated at the time that his focus was moving Oscar to profitability. Total revenue was $2.1 billion, a 46% increase versus Q1 2023, driven primarily by higher membership, rate increases, and lower risk adjustment as a percentage of premiums. Release. Becker’s, FierceHealthcare Their full 2024 is projected at $8.3 to $8.4 billion in revenue, $125 to $175 million in adjusted EBIDTA. Oscar solely offers ACA exchange plans for individuals and small groups, having exited Medicare Advantage after 2022. Release

Steward Health Care filed Chapter 11 bankruptcy on 6 May. As forecast when the company moved to sell its provider group Stewardship Health to Optum [TTA 18 Apr], Steward’s debt load in its 31 hospitals and operations forced the restructuring on Monday. What’s owed: $1.2 billion in total loan debts, about $6.6 billion in long-term lease payments, north of $600 million to 30 of its largest lenders (Change Healthcare, Philips North America LLC, Medline Industries, AYA Healthcare and Cerner). There’s $289.8 million in unpaid compensation obligations: $68 million to its own workers in unpaid employee salaries, $105.6 million in payments for physician services and $47.7 million owed to staffing agencies. Topping it off–$979.4 million outstanding in trade obligations, of which approximately 70% are over 120 days past due.

Debtor-in-possession is now Medical Properties Trust (MPT) which will finance $75 million up front extending to $225 million more if Steward’s asset selloff milestones are completed on time. MPT will need to be far more forthcoming about Steward’s finances than Steward has been. The Stewardship Health sale to Optum now has to pass through the US Bankruptcy Court for the Southern District of Texas as well as Massachusetts regulators. Becker’s, Healthcare Dive 6 May, 7 May

Amazon Clinic loses its general manager, Nworah Ayogu, MD. He departed for Thrive Capital, a secretive VC (based on its website) that invests in technology, internet, and software companies. Dr. Ayogu, who doubled as chief medical officer of Amazon Pharmacy, stated the move will enable him to focus “exclusively on healthcare” after nearly four years with Amazon. He launched Clinic in November 2022 to a full 50-state rollout of the asynchronous and synchronous telehealth service last August, after a privacy challenge that escalated to the Senatorial level and forced a rollout delay [TTA 1 Aug 2023]. It sounds more like the doctor needs to go on a break. Amazon has not announced a replacement nor has Thrive issued any information. Becker’s, Modern Healthcare

Amwell’s soft Q1 reflective of telehealth as a whole. Its Q1 revenue of $59.5 million was 7% below Q1 2023’s $64 million, and missed Mr. Market’s forecasts. Where there was improvement was that net loss narrowed considerably to $73.4 million from prior year’s $398.5 million, when it took a hefty non-cash goodwill impairment charge. The bright spot Amwell is forecasting is that their Federal contract with Defense Health Agency, jointly with Leidos, will impact by Q4. Their part of the Digital First initiative for the Military Health System (MHS) will replace the current system, MHS Video Connect, with Amwell Converge [TTA 15 May]. Their pending NYSE stock delisting they plan to remedy with a reverse stock split to be announced.  Healthcare Dive, Amwell’s SEC Form 10-Q

Hims CEO and founder Andrew Dudum Does a Dumb. Mr. Dudum made a statement that on X that was interpreted by most to be encouraging the disruptive anti-Israel university and elsewhere protests which have roiled cities like New York and Los Angeles for weeks and are canceling graduations at Columbia University and University of Southern California. A statement like “If you’re currently protesting against the genocide of the Palestinian people & for your university’s divestment from Israel, keep going. It’s working.” and went on to say that companies would be eager to hire them is plain and clear. It immediately garnered criticism from investment group, industry, and software heads, as well as conservative and moderate media. This Editor will put on her marketing cap and remind Mr. Dudum of Marketing 101–be memorable, but do not offend the customer or investors who give you money. You have, after all, a company that depends upon appealing to a wide spectrum of people with easy and recurring telehealth prescriptions for hair loss, weight loss, skin problems, women’s health concerns, and erectile dysfunction. Your statement was not only completely unnecessary but also inflammatory at a bad time–it offended many customers no matter what religion or beliefs. Stock dropped. Customers canceled. Note to Mr. Dudum: if you want a thriving business, don’t live up to your name. FoxBusiness

News roundup: UHG CEO’s Bad Day at Capitol Hill; Kaiser’s 13.4M data breach; Walgreens’ stock beatup; Cigna writes off VillageMD; Oracle Cerner shrinks 50%; Owlet BabySat gets Wheel; fundings for Midi, Trovo, Alaffia, Klineo

It was a Bad Day at Boot (Capitol) Hill for UnitedHealth Group’s CEO Andrew Witty. On May Day, he was the Man In The Arena facing two Congressional grillings–the first from the Senate Finance Committee in the morning, and the second in the afternoon from the House Energy and Commerce Committee’s Subcommittee on Oversight and Investigations. The precipitating event was the Optum/Change Healthcare data breach and system hacking by ALPHV/BlackCat, a disruption which is as of today not fully resolved.  Millions of patients may have had data stolen and exposed–a number that has yet to be determined, but an outcome for which UHG, while paying the ransomwaristes, has prepared. Already, the VA has notified 15 million veterans and families of that possibility.

This Editor will be linking below to multiple articles and Mr. Witty’s prepared testimony. Interested Readers can also refer to YouTube for extensive links to video testimony. Highlights:

  • Both houses criticized the slow response and amount of financial assistance given to providers after the shutdown of Change’s systems prevented (and still is preventing) timely claims processing and payment. While ‘near normal’ volumes of medical claims and 86% restoration of payment processing sounds good, that leaves a lot of wiggle room on over two months of totally disrupted processing and payment. The billion or so cited sounds impressive but much of this is in loans. Most practices and groups simply do not have the financial cushion or billing skillset to bridge this disruption, to pay back loans, or to bookkeep this.
  • Also criticized at this late date was UHG being unable to determine how many individuals had PHI exposed in the breach.
  • As to cause, the description of UHG finding that surprise, surprise, Change’s systems were way out of date, stored on physical servers versus the cloud, and used Citrix remote access without multi-factor authentication (MFA) was utterly savaged. According to Mr. Witty, ALPHV after days of knocking around got in on the one server that did not have MFA authentication.

The blunt fact is that UHG had close to two years (January 2021-Oct 2022) before the buy closed. Due diligence consisting of a full audit had to have been done on Change’s IT systems. They processed what UHG wanted to buy. In this Editor’s estimation, Job #1! for UHG should have been ensuring that Change’s systems were hardened, then upgrading to what Mr. Witty called UnitedHealth’s standards. This Editor will go further. A minimum requirement for the sale should have been security hardening. There was time before the closing.

Senator Thom Tillis, R-North Carolina, had the best riposte. He brought a copy of “Hacking for Dummies” to the hearing, highlighting MFA. I doubt he was much moved by UHG now bringing in cybersecurity company Mandiant to both investigate and harden their systems, nor by UHG having to pay ransom, without knowing whose data was compromised.

  • Beyond the breach, UHG was called ‘monopolistic’ by both Republican and Democrat Members. There were calls to break up UHG as not ‘too big to fail’. UHG has grown by acquisition and consolidation of services. As this Editor has speculated, this is likely coming to an end with the new, much more stringent Merger Guidelines. This sentiment paints a large, unmissable target on UHG’s back for aiming FTC’s and DOJ’s missiles. (DOJ also has a huge score to settle with UHG dating back to the failure to block the Change sale.)

By the end of the day, Mr. Witty looked quite the worse for wear–tie and collar askew, slightly sweaty, versus the perfect poses of the various Members. Becker’s, FierceHealthcare, Axios, HealthcareDive    Mr. Witty’s Senate testimony statement, House testimony statement

Speaking of data breaches, Kaiser Permanente reported a big one to Health and Human Services (HHS). This relates to ad tracker information shared with third-party advertisers such as Google, Microsoft, and X. Kaiser used it in secured areas of their website and mobile apps. Information disclosed could be name and IP. Kaiser reported it on 12 April but only disclosed on 25 April that 13.4 million records may have been affected. The ad trackers have since been removed. TechCrunch, FierceHealthcare 

Walgreens stock not recovering. April was WBA’s worst month in five years and May is no better, with the stock muddling around $17.50. The month slid around 18%. Their 52-week high was $33. As of now, CEO Tim Wentworth’s actions such as closing locations and writing down VillageMD haven’t convinced Mr. Market of WBA’s worth, but in fairness it’s early in his tenure. In the Insult to Injury Department, it was revealed that the IRS is seeking to claw back $2.7 billion in unpaid 2014-2017 taxes. Crain’s Chicago Business

Cigna is also writing down its interest in VillageMD. Almost forgotten is that in late 2022, Cigna invested $2.5 billion into VillageMD. They have now written down $1.8 billion of that ‘low teens’ ownership. The planned tie was connecting Village Medical into Evernorth, Cigna’s medical services area. It was also supposed to provide Cigna with an annual return on investment, but one assumes it did not. The writeoff threw Cigna’s Q1 into the red with a net loss of almost $300 million versus a prior year profit of $1.3 billion, despite a strong quarter that grew revenue 23% versus prior year to $57.3 billion. Healthcare Dive

Oracle Health has been successful–in shrinking Cerner by close to half. Records of employment at Cerner’s Kansas City-based operation have declined from 11,900 people in 2022 (Kansas City Area Development Council) to a current 6,400 (internal documents). Cerner itself reported 12,778 local full-time-equivalent employees in 2022. Oracle had multiple layoffs of Cerner affecting Kansas City workers and has consolidated multiple office buildings and campuses. Becker’s

In more cheerful news:

Baby monitor Owlet announced a strategic partnership with Wheel for Owlet’s BabySat. BabySat is Owlet’s FDA-cleared prescription vital signs monitor for infants 1-18 months. Wheel clinicians can now prescribe BabySat which enables parents to order BabySat from Owlet and other suppliers. With Wheel, BabySat also integrates with durable medical equipment (DME) suppliers who accept and can bill for the product through many insurance providers for partial or full reimbursement. Wheel is a virtual care platform and physician/nurse-practitioner online network available direct to consumer and to enterprises. Owlet release

And rounding up funding:

MidiHealth closed a $60M Series B funding. This was led by Emerson Collective with participation from Memorial Hermann, SemperVirens, Felicis, Icon Ventures, Black Angel Group, Gingerbread Capital, Able Partners, G9, and Operator Collective for a total of $99 million in funding. Midi provides virtual support for women going through peri- and full menopause. The fresh funding will help them expand national insurance coverage, hire and upskill an additional 150 clinicians by end of year, diversify service lines, and scale to care for 1 million+ women per year by 2029. Release

Trovo Health launched with $15 million in seed funding, led by Oak HC/FT. The NYC-based AI-powered provider task assistance platform will use the funding to build its technology platform, clinical operations, and leadership team. Mobihealthnews 

In the same roundup, NYC-based Alaffia Health scored a $10 million Series A round. This was led by FirstMark Capital with participation from Aperture Venture Capital. Alaffia creates generative AI solutions for payment integrity in health insurance claims operations, with the aim of eliminating insurance fraud, waste, and abuse for health plans, third-party administrators, self-insured employers, stop-loss carriers, and government agencies. Their total raise to date is $17.6 million. Paris-based Klineo also raised €2 million for its oncology clinical trials search platforms, assisted by AI, for the use of doctors and patients. BPIFrance and business angels participated in the round.

Teladoc’s Q1: increased revenue, increased net loss, dealing with slowing growth–as is CVS Health

Teladoc had a passable Q1, given the sudden departure of their CEO, a lackluster 2023, and a downbeat (realistic?) 2024 forecast. The highlights were versus Q1 prior year:

  • Revenue increased 3% to $646.1 million. This exceeded their 2024 projection of $630 to $645 million but the percentage increase is below the 5.2% Teladoc is forecasting for the full year. Their US revenue grew 1% to $547.6 million while international revenue grew 13% to $98.5 million.
  • But net loss also increased far more on a percentage basis–18% to $81.9 million, or $0.49 per share. Some of the loss was due to stock-based compensation expense, severance expenses, and amortization of acquired intangibles. Due to these, the increased revenue did not offset or narrow losses.
  • Adjusted EBIDTA increased 20% to $63.1 million, which is positive.

Looking at their main market segments, their Integrated Care segment revenue grew 8% to $377.1 million, Once again, BetterHelp, their behavioral telehealth unit and one-time hope for growth, continued to disappoint with a 4% decrease in revenue to $269.0 million.

The forecast for Q2 is: 

  • Revenue $635 – $660 million
  • Net loss per share ($0.45) – ($0.35), slightly lower than Q1
  • Adjusted EBITDA $70 – $80 million

Integrated Care’s forecast is an increase of 2 to 5% in revenue, while BetterHelp’s remains weak with a decrease of 4 to 8% in revenue.

So far, cutting costs, higher margins, cutting jobs in data science and engineering, third-party (supplier?) costs, and getting on that ‘path to profitability’ has had limited results, at least to Mr. Market which continues to drop the stock–40% to date and deteriorating. On the earnings call, interim CEO and CFO Mala Murthy, in referring to this, said “We are not waiting. We have a plan to deliver, we have investments to execute, and that is absolutely our focus.” Will Mr. Market believe this in a shrinking market? The search for a permanent CEO is underway, and the replacement is expected to be named later this year. Teladoc release, Mobihealthnews, FierceHealthcare

The broader meaning? This Editor explored what happened at Teladoc and the aftermath after some of the dust settled [TTA 9 April]. The Teladoc foundational model as a stand-alone, mostly urgent care service is not growing but shrinking. It doesn’t coordinate care nor does it integrate well into providers. While the pandemic gave that model a lift, it also boosted integrated services as modules into patient portals, EHRs, population health, and other provider-based platforms. Among higher care need Medicare beneficiaries, usage was there but minimal detailed in two recent studies. Even asynchronous and telephonic telehealth gained since they were reimbursed or low cost. Before, during, and after the pandemic, there were too many telehealth companies for the limited demand. Add in the continuing proliferation of telementalhealth providers, still popping up like tulips in spring–another reason why BetterHelp, one of the earlier entrants, isn’t getting traction. FierceHealthcare adds more points such as over-supply cratering price (and the revenue model) and hybridization: white-labeling with providers, virtual specialty clinics such as those under Included Health’s, and partnerships with health plans and employers. 

CVS Health’s Q1 also wasn’t swell for reasons that are impacting their full year. High medical costs affected their Aetna plans, with high utilization in Medicare Advantage, inpatient admissions, and outpatient services were all high in Q1–$900 million higher than CVS expected. Lower MA STAR ratings will affect their forward Federal reimbursements, with one of their largest MA plans falling from 4.5 to 3.5 rating in 2024. According to CEO Karen Lynch, most of this utilization was from a patient usage reversion to pre-pandemic patterns. Their Q1 revenue of $88.4 billion was up 4% versus prior year with net income falling by almost half to $1.1 billion, both significantly below analysts’ expectations. CVS adjusted their full year downward, which led to their stock falling another 19%. Change Healthcare’s data breach is also affecting their forecasts with delayed claims, leading CVS to set a reserve of $500 million. HealthcareDive

Midweek news roundup: Optum exiting telehealth, laying off; Advocate Health selling MobileHelp; VA notifying 15M veterans re Change PHI breach, Oracle moving to Nashville–maybe? (updated)

Optum Virtual Care closing, staff layoffs in progress. Optum Everycare CEO Jennifer Phalen on an 18 April internal conference call announced that the unit would close. According to sources, some employees would have layoff dates in July. No further details were available on other layoffs or plans for integrating Virtual Care’s capabilities into other Optum units, except for generalities. “We are com­mit­ted to pro­vid­ing pa­tients with a ro­bust net­work of providers for vir­tu­al ur­gent, pri­ma­ry and spe­cial­ty care op­tions,” and “We con­tin­u­al­ly re­view the ca­pa­bil­i­ties and ser­vices we of­fer to meet the grow­ing and evolv­ing needs of our busi­ness­es and the peo­ple we serve.” a spokesper­son for Unit­ed­Health said to End­points, a biopharma publication from the University of Kansas which broke the story.

For Optum, this is the second shoe drop about layoffs and closures in less than two weeks. Reports from social media and layoff-specific boards indicated that thousands were being laid off, from their plans to urgent care and providers [TTA 23 Apr]. These were not confirmed by Optum nor by UnitedHealth Group. It’s not known if this unit’s closure was included in the total. 

The larger picture is that it is symptomatic of the sudden growth, then equally sudden consolidation, of general telehealth. Optum opened the unit in April 2021 as the pandemic entered year 2. Utilizing existing capabilities, UHG claimed it facilitated more than 33 million telehealth visits in 2020, up from 1.2 million in 2019. The number looks sky high but in that time of practices closing it was a free-for-all in telehealth–and ‘facilitating’ is a nebulous catchword that could mean a practice using Facetime, telephones, or an EHR/population health platform module. Commercial claims for telehealth have remained at 4 to 5% since (FAIR Health, Jan 2024). Even during the pandemic’s first year, telehealth claims hit a peak of 13 percent in April 2020 that dropped fast to 6% by August 2020. Well over 60% are for behavioral telehealth claims.

A leading indicator: Last June, Optum Everycare’s CEO from their 2021 start, Kristi Henderson, a former Optum SVP for digital transformation, departed to become CEO of Confluent Health, a national network of occupational and physical therapy clinics. It was about as far away as one could get from telehealth, digital transformation, and Amazon Care, her former employer that expired in 2022.

Apparently, UHG and Optum see no further need for a virtual care specialty unit, instead integrating it into plans and other Optum services. According to MedCityNews, industry analysts aren’t surprised. Both Amwell and Teladoc have had well-known struggles. The latest: Walmart, after investing millions into their unit that included full clinics and a virtual care service, also made news on 30 April that it is closing both. Also greatly on UHG’s mind: cleanup after the Change debacle, making Mr. Market happy, and the looming antitrust action by DOJBecker’s, Healthcare IT News, 

In another sign that healthcare investors are selling off ancillary businesses, Advocate Health is selling PERS provider MobileHelp. It “no longer fit the strategic priorities of Advocate Health” according to their 22 April audit report (see document pages 10 and 13) and was authorized last December.

Advocate, through its investment arm Advocate Aurora Enterprises, acquired both MobileHelp, one of the earliest mobile PERS, and sister company Clear Arch Health, a remote patient monitoring provider, in April 2022. Cost was not disclosed at that time but later was reported to be $290.7 million. The plan at the time was to combine both MobileHelp and Clear Arch with a senior care/home health provider earlier acquired by Advocate for $187 million, Senior Helpers. That company was sold in March to Chicago-based private equity firm Waud Capital Partners for an undisclosed amount. The MobileHelp sale is expected to close later this year. Buyer and price are not disclosed. The expected loss on the MobileHelp sale was figured into FY 2023 as part of an asset impairment write-down of $150 million, which Advocate said was “related to the expected loss on the sale of MobileHelp.” The PERS and RPM business is a largely consolidated ‘cash cow’ type of business that (Editor’s prediction) will be snapped up by another player like Connect America, Alert One, or a smaller player like ModivCare. Milwaukee Business Journal, Becker’s, Crain’s Chicago Business (requires subscription)

VA admits that some veterans may be affected by Change Healthcare data breach, PII/PHI disclosure. While Department of Veterans Affairs Secretary Denis McDonough at this time believes that “there’s no confirmation yet” that veteran data was exposed, the scope of the Change Healthcare breach has led VA to formally alert via email 15 million veterans and their families of the possibility. The email also included information “about the two years of free credit monitoring and identity theft protection” that Change Healthcare is offering to those affected by the attack. The VA maintains that the attack resulted in only a temporary delay in filling 40,000 prescriptions but did not cause “any adverse impact on patient care or outcomes,” according to a department spokesman. NextGov/FCW 26 April, 23 April 

In related news, HHS as of 19 April had not received any notification from Change Healthcare nor UHG. They are required to file a breach report as providers and also as covered entities. They have 60 days from the breach occurrence on 21 February to report, which is coming right up. Becker’s

If Larry said it, it must be true…assemble the moving boxes. At an Oracle conference in Nashville last week, Oracle chairman Larry Ellison said to Bill Frist of investment firm Frist Cressey Ventures that he planned to move the company to that city as “It’s the center of the industry we’re most concerned about, which is the healthcare industry.” It’s their second public Larry and Billy meetup in the last few months, the last in November at the Frist Cressey Ventures Forum where Ellison had previously touted Nashville. Ellison is investing in and building a 70-acre, $1.35 billion campus on Nashville’s riverfront. Oracle is currently HQ’d in Austin, Texas having moved in 2020 from Redwood City, California but with extensive facilities remaining in the state. Texas and Tennessee have one thing in common–a superior business climate. Both are long on lifestyle, though Austin is not as temperate (read, hot) as Nashville. What Nashville has that Austin doesn’t is being a healthcare hub. At least in Ellison’s view, healthcare is where it’s at and so is Nashville. So as long as he’s running Oracle from his manse on Lanai, Oracle does what Larry says. Healthcare Dive, Healthcare IT News, The Tennessean

More fun facts about Larry Ellison and Nashville: David Ellison, his son, is founder of Skydance Media, a major Hollywood production company (Mission: Impossible and others) and negotiating a zillion-dollar merger with Paramount Pictures. David’s wife is a singer trying to make it in Music City and they have a home there. Kind of like the age-old trend of moving the HQ near where the CEO’s living. On moving the HQ to Nashville from Austin, this would affect perhaps 2,500 workers based there currently. Most of Oracle’s workers are dispersed and work remotely. 6,400 of former Cerner-ites are still in Missouri and 7,000 remain in California. Big hat tip to HIStalk—scroll down and see more about Larry and Billy’s talk, which also covered cybersecurity, the NHS (which uses Cerner), and automating hospitals and the hospital-payer interface.