Marketing alert! Age-positive image library launched by Centre for Ageing Better–and free to use

The UK non-profit Centre for Ageing Better has launched a much-needed resource for companies, healthcare organizations, and press–a photo library of hundreds of positive, realistic, and diverse images of older people in everyday life. It is free for use for non-commercial and commercial purposes, UK and internationally, with only a few restrictions on use such as crediting and non-alteration, which are clearly outlined in their short guide (downloadable PDF). They also provide information on how to search and guidelines for creating your own images. Link to the Centre’s information page on the photo library.

Categories on ResourceSpace are work, health, housing, communities, digital inclusion, finance, and planning. There are also icons free for use. At present, there are about 300 images which the Centre is adding to.

Sign up also for their newsletter, not only for updates on the library but also information on the Centre’s activities and policy updates.

Editor’s note: As a marketer (marketing director/head of marketing/consultant) in the past 15 years for several health care companies in the older adult market, including a payer, I can testify at length at the scarcity of images of older people in everyday activities including work and play. Searching stock libraries for photos that don’t depict infirmity, a medical setting, aloneness or sadness, or to represent diverse cultures and social groups, is wearying indeed. There aren’t many, which leads to overuse of the few royalty-free/single payment images that meet these needs. Is there lack of demand? (I don’t think so!) Larger organizations can and should set up photo shoots for their needs, but not all organizations or companies have that opportunity nor the resources. See these three images from the library at left/above for a sample (these are lower res suitable for PowerPoint). Easy to download and select. Another plus: there are relatively few that are identifiable as the UK or Europe, so this is a boon for marketers in many countries. 

Hat tip to Emily Wilson, Communications Assistant, at the Centre for Ageing Better.

News and deal roundup, 5 March: Oscar Health’s $1.4 billion IPO, telehealth expansion in Congress, what people *really* do during a telehealth visit

What a difference a month makes in a blazing healthcare market. ‘Neoinsurer’ Oscar Health went public on Tuesday, selling over 37 million shares at $39 each, reaping an eyeblinking $1.44 bn. While shares took a tumble on Wednesday and Thursday, closing at just above $32, the valuation of the company could be anywhere between $7.92 and $9.5 bn (calculating in options and the like). Quite a difference from the estimate in early February, which was a modest–and as now we know, totally sandbagged–$100 million [TTA 9 Feb]. A lovely payday for their backers and all at Oscar who had stock grants, indeed.

As we’ve seen from recent IPOs, they have all been underestimated (e.g. Signify Health’s $100 million filing transubstantiated into $561 million). The downward glide slope in share price is typical. Whether it will rise will depend very much on strong results for this quarter, half year, and full year as Oscar presses harder into the competitive Medicare Advantage, exchange, and small group markets. How they, and all the other payers do, will be dependent on health policy permutations and emanations from the DC Swamp. CNBC, TechCrunch, FierceHealthcare

Speaking of the DC Swamp, telehealth expansion is enjoying real traction in Congress and with Health and Human Services (HHS). The chair of the House Health Subcommittee, Rep. Anna Eshoo (D-Calif.) has called for many of the flexibilities on payments and locations granted temporarily during the pandemic’s liberalization of coverage to be made permanent. These affect Medicare and other types of Federal payments. [Review of the 2021 Medicare Physician Fee Schedule re telehealth here]  They expire after the public health emergency (PHE), extended in January to end of April, so a clock is ticking, quickly.

The basics are that Congress must pass legislation that removes restrictions on geography (currently rural only) and permits the patient home to be used as a ‘distant site’. Advocates also want to add to Medicare telehealth coverage hospice and home dialysis care, more types of eligible care providers such as physical therapists and other allied health professionals, and audio-only (telephonic) consults. Others are pushing for reinstating HIPAA compliance for telehealth platforms.

The Telehealth Modernization Bill that covers most of the above was introduced on 23 February in both the Senate and House, in a rare show of both bipartisanship and bicamerality. (Excluded: telephonic consults, HIPAA compliance) Rep. Eshoo’s remarks were made during last Tuesday’s Committee on Energy and Commerce Health Subcommittee hearing.

HHS is also backing this, based on HHS’ Office of the Inspector General’s recent statement praising the expansion of telehealth. Recognizing that concerns have been raised about ‘telefraud’, IG Christi Grimm noted that they have been vigorously prosecuting fraudulent claims [TTA 2 Oct 20] with telehealth being used in a broad sense for billing other goods and services such as medications and durable medical equipment. FierceHealthcare, Healthcare Dive, ATA News 26 Feb

Speaking of telehealth visits, what do the patients do during them? This Editor had filed away, waiting for an opportune moment to share it, a surprising study by DrFirst, a mobile telehealth and communications platform. It was conducted online during the Pits of the Pandemic (June 2020). It may not surprise you that most patients weren’t fully engaged in the process. Bored, isolated, mostly male patients–73 percent men, 39 percent women–multitasked and distracted themselves during the virtual visit by: 

Surfing web, checking email, texting – 24.5%
Watching the news, TV, or movie – 24%
Scrolling through social media – 21%
Eating a snack or a meal – 21%
Playing a video game – 19%
Exercising – 18%
Smoking a cigarette – 11%
Driving a car – 10% (!!!!)

And the best….Having a “quarantini” cocktail or other alcoholic beverage – 9.4%

Reasons for consults were unsurprising: annual checkup – 38%, mental health therapy – 25%, and specialist visits (e.g., dermatologist, hematologist, or oncologist) – 21%.  N=1,002 US consumers. 44% of Americans Have Used Telehealth Services During Coronavirus Pandemic but Some Admit Not Paying Attention. Also Advisory Board blog.

Rock Health/Stanford U Digital Health Adoption Report: high gear for telemedicine, digital health, but little broadening of demographics

It’s good news–and an antidote to the bubble at the same time. Rock Health and Stanford University Medicine-Center for Digital Health’s just-released report found that, unsurprisingly, that telemedicine/telehealth use rocketed during the pandemic and gained ground that would not have been true for years otherwise, as of September 2020. However, the growth was not largely from new demographics, but largely among the adopters of telehealth in 2019 and prior. It also rolled back to about 6 percent of visits. Wearable use also boosted, especially for better sleep, as did self-tracking. But overall healthcare utilization cratered from March onward, barely reviving in the late summer, and telemedicine use declined to a steady state of about 6 percent of all visits–far more than the near-zero it was pre-pandemic. Here’s our rundown of the highlights.

Telemedicine user demographics haven’t changed significantly. It accelerated among those in the 2019 and prior (through 2015) profile: higher-income earners ($150K+), middle-aged adults aged 35-54, highly educated (masters degree and higher), urban residents, slightly male skewed (74 percent men/66 percent women/67 percent non-binary)and those with one or more chronic conditions (78 percent) and high utilizers (87 percent with 6+ visits/year). This profile apparently sustains across racial and ethnicity lines. (page 15) The non-user profile tends to be female, over 55, lower-income, rural, not on a prescription, and Hispanic. (page 23)

More usage of live virtual video visits than before–11 points up from 32 to 43 percent. These reduced reliance on non-video communications: telephonic, text, asynchronous pictures/video, and email. (page 12) And respondents largely accessed live video and phone visits through their doctor, indicating a pivot on practices’ parts: 70 percent of live video telemedicine users and 60 percent of live phone telemedicine users. (page 17) But the reasons why were more acute than this Editor expected: 33 percent for medical emergency, then minor illness (25 percent), then chronic condition (19 percent). (page 16)

Barriers to use remain significant in telemedicine and have not changed year to year except for awareness of options. (page 22-23)

  • Prefer to discuss health in-person (52 percent)
  • Not aware of options (much less this year)
  • Provider didn’t recommend
  • Cost
  • Poor cellular or broadband connection is minimal (3 percent). There is also no barrier of ‘inability to use’, though this may be skewed by the survey group being online (see methodology).

Wearables and digital information tracking accelerated, but ‘churn’ continued. 54 percent of respondents adopted wearables, up 10 points, while information tracking increased by 12 points.  (page 11) Unpacking this:

  • The populations with the highest rate of digital tracking were those with heart disease, diabetes, and obesity as chronic conditions
  • The leading reasons for wearables remained fitness training and weight loss. However, right behind these were major year-to-year spikes in better sleep (27 to 52 percent), managing a diagnosed condition (28 to 51 percent), and managing stress (24 to 44 percent).
  • The surprise uses of wearables? Managing fertility tracking and menstrual cycle.
  • Yet wearables churn continues. From the study: 55 percent of respondents who owned a wearable in 2020 stopped using it for one or more purposes (though they may continue using it for another purpose). The demographics tend to mirror telemedicine users for adoption and stopping use. (pages 24-28)

Healthcare utilization overall, telemedicine or not, has barely revived versus the March baseline, using the Commonwealth Fund data TTA profiled here. The report usefully digs into the groups that delayed care: 50 percent of 35-54-year-olds, women, Northeast residents, chronic conditions, and mental health. (page 34)

Yet trust in health information remains with the person’s physician, family, hospital, payer, and pharmacy. Overall, there is a reluctance to share data with entities beyond these. Health tech and tech companies aren’t trusted sources, along with social media, and lag to less than 25 percent, along with less willingness to share data with them. COVID-19 data is broken out in sharing, generally following these trends except for more willingness to share this data with governmental entities and research. (pages 29-31) 

The report recommends that for telemedicine to go deeper into adoption, refocusing is in order: (page 21)

  • Shift from a transactional model to a continuous virtual care or ‘full-stack’ model
  • Seek a different kind of customer. One-third of telemedicine visits were for emergencies. A more sustainable model would concentrate on chronic condition management and lower-acuity care.
  • Accept that new care models are disintermediating the patient-provider relationship especially in the younger age groups

The methodology of the survey: N=7,980 US adults, matched to US demographics; dates conducted 4 September-2 October 2020; online survey in English only. Rock Health summary, link to free survey report download, Mobihealthnews article.

The Theranos Story, ch. 70: the lab director turns Federal evidence

A Tasty Appetizer of what awaits in July in Federal District Court, San Jose, showed up in the Wall Street Journal today (paywalled, link to full article below). Theranos‘ lab director Kingshuk Das, MD will testify in Elizabeth Holmes’ trial that the Theranos lab and technology did not work accurately enough to use–and that the company’s leaders ‘pushed back’ against his assessment.

Dr. Das’ comments, revealed in new court filings, represent his most extensive (and only revealed, in this Editor’s estimation) remarks on Theranos. His one-hour interview with Federal agents took place on 1 February. They indicate that Federal prosecutors continue to dig for damning evidence prior to the July trial.

Dr. Das held the lab director, later medical director, position at the Newark, California lab facility in Theranos’ final years (December 2015 in the article, the LinkedIn profile states March 2016, to June 2018). The Centers for Medicare and Medicaid Services (CMS) had already put Theranos on notice for“deficient practices” in November 2015. The WSJ, around that time, revealed Theranos’ dodgy practices.

Dr. Das’ fully credible and extensive pathology training is listed in his LinkedIn profile. It includes his MD at Case Western Reserve, internship at UCLA, residencies in clinical pathology at Washington University (St. Louis) and USC, and return to UCLA for a fellowship in molecular genetics, then rising to Associate Medical Director, UCLA Clinical Laboratories. As for many others, Theranos was challenging,  could not have been good for his career, but perhaps gave him a taste of how to do entrepreneurship right. He has worked in several positions and is currently listed with consumer genetics tester Invitae as a molecular pathologist and founder of AnimanDX from 2018.

This Editor would bet that Dr. Das had far more to say than what was cited in the WSJ article. At least this is more like Joe Friday’s ‘just the facts’ (Dragnet) and not mired in the swamp of ‘motivations’ represented by the filings around Silicon Valley’s Lifestyles of the Rich, Famous, and Busted.

Full article at StockXpo. Hat tip to reader William T. Oravecz. For those interested in the full sturm und drang by chapter, it is here.

Funding roundup, 16 Feb: virtual mental health gains two (more) unicorns, Zocdoc’s fresh $150M, Owlet’s $325M SPAC

Virtual behavioral health continues its hot run with two companies’ funding launching them into Unicorn Stratosphere valuations. The latest is San Francisco-based Modern Health which closed a $74 million Series D investment round, led by Founders Fund with participation from Lachy Groom. Total funding now exceeds $167 million over the past two years. The company claims a valuation of $1.17 bn plus status as the fastest entirely women-founded company in the US to hit the magic unicorn mark. Modern Health provides for about 220 mid-sized companies an app platform combining therapy, coaching, and self-guided courses in 35 languages. On 1 February, Modern Health acquired Kip, another mental health platform that was also woman-founded, for an undisclosed amount.

In January, corporate mental health provider, Lyra Health, gained a Series E of $187 million, bringing its valuation to $2 bn. Lyra claims 2 million members in large companies like Pillsbury, Uber, and Morgan Stanley. Talkspace, a direct-to-consumer digital therapy provider, went public earlier in January via a $1.4 bn SPAC. [TTA 29 Jan] According to Crunchbase News, among mental health startups, 141 were venture-backed within five years to the tune of $1.3 bn in investment. The pandemic and ‘lockdown loneliness’, as we’ve noted, kicked digital health and mental health funding into overdrive. FierceHealthcare, Crunchbase 

Patient appointment setter Zocdoc also gathered $150 million in fresh funding–what’s termed growth financing from Francisco Partners, bringing their total financing to $376 million in 10 rounds. Zocdoc has changed its model in the past two years from a subscription basis–priced per provider–to a per-booking charge. They also added virtual visits. Zocdoc now claims to be profitable and has grown its network by 50 percent in some states. It was one of the early healthcare unicorns, controversial in its business practices as far back as 2016, with customer churn, low margins, and high customer acquisition costs leading to unprofitability [TTA 11 May 2016, 21 Jan 2019], plus a former CEO suing about his ouster after eight years. HISTalk, Zocdoc release

Owlet socks it to a Q2 SPAC. Baby monitoring system Owlet Baby Care becomes a unicorn of just over $1 bn through a SPAC (special purpose acquisition company) merger with Sandbridge Acquisition Corporation, backed by Sandbridge Capital and PIMCO private funds. It will trade on the NYSE (OWLT) and close in Q2. Anticipated value is as much as $325 million through cash ($230 million) and concurrent private placement (PIPE) of common stock ($130 million). Owlet started in 2013 with a ‘Smart Sock’ (left) using pulse oximetry to monitor baby heart rate, oxygen levels, and sleep patterns with readouts via their app, but has expanded to include an Owlet Cam. Owlet stated 50 percent revenue growth in 2020 after approximately $50 million in net revenue for 2019. Amazingly, Owlet in seven years raised a modest $48 million through 27 investors concluding with a two-year Series B. Awwww-worthy indeed. Release, Mobihealthnews

Lasting effects of the pandemic lockdown on health and wealth

A PR hook for healthcare-related companies is a survey that tells us More Bad News about the effects of the pandemic and the US lockdown. Some of it is marketing content scrum, but the quantification of lasting effects has value.

  • Early surveys came from non-profits working with (largely) non-vendors, such as the Epic Health Research Network and Commonwealth Fund/Harvard/Phreesia studies.
  • Then later tracking studies such as those published in PLOS One, by FAIR Health and the Harvard study published in Health Affairs.
  • Focused studies such as those by GoodRx, the prescription discounter, with a surprisingly deep survey concentrating on the CoronaDepressed–mental health and the worsening of anxiety and depression, inferring from prescription usage. SECOM CareTech in the UK concentrated on the effects of ‘lockdown loneliness’ on older adults.

The latest survey comes from another free prescription coupon platform, RxSaver, concentrating on financial and medication adherence:

  • 51 percent of adults reported a negative financial impact resulting from the pandemic. 65 percent of them were Hispanic.
  • Over 60 percent of millennials reported continuing financial impact one year after the pandemic’s start.
  • Where are they economizing? Unsurprisingly, medication.
    • 15 percent of adults surveyed stopped taking medication in the past year. Of this group, the under 30 cohort comprised the largest demographic segment at 23 percent.
    • Trying to manage, 21 percent have used a prescription savings coupon, but 31 percent either didn’t fill prescriptions, skipped doses, or split their pills/capsules–all of which are risky.

Phoenix Research performed a Public Insights Survey for RxSaver, N=1,000 nationally representative adults ages 18 and older, and performed 20-22 January. There was no disclosure on survey methodology. This Editor hopes that other entities use this directional information in conducting larger and less product promotional research to be used by health organizations and policy groups. RxSaver web page, release.

‘Neoinsurer’ Oscar Health goes for $100 million IPO; Clover Health’s big SPAC under SEC microscope

Oscar Health, one of a number of US ‘insurtech’ or ‘neoinsurance’ private health insurance companies that have nipped at the heels of the Big 9, announced late Friday an IPO on the NYSE. The number of shares and their value is not on the SEC S-1 filing but the estimate of the raise is $100 million. Timing is not disclosed but rumored to be by March or early Q2. The offering is underwritten by Goldman Sachs, Morgan Stanley, and Allen and Company.

Oscar was one of the first to offer members apps, telehealth, and fitness trackers–revolutionary back in 2012 but routine now. Expanding beyond its original base of individual health insurance coverage, it now offers Medicare Advantage and small group coverage in 18 states to over 500,000 members. Oscar remains a virtual-first platform with the majority of its members in Florida, Texas, and California. Oscar makes much of member engagement and its partnerships; 47 percent of its overall subscribing membership and 44 percent of its 55-and-up subscribers are monthly active users. Oscar has also partnered with Cleveland Clinic and other larger insurers like Cigna. 

Financing for Oscar to date is over $1.5 bn. It has tidily grown in geographic coverage, members, and revenue–$1.67 billion in 2020 and $1.04 billion in 2019–no simple feat against the Big 9. Oscar’s problem is profitability–operating losses grew proportionately, $402.3 million (+56% from $259.4 million). Operating expenses also grew by 16 percent. TechCrunch gives additional crunch in the financial analysis (article in part, full paid access). Mobihealthnews

Oscar is one of a few health-tech heavy survivors of insurance companies that bloomed like flowers–and wilted–during and post-Obamacare. Clover Health, which thrived in a slice of the Medicare Advantage market, went the SPAC (blank check) route 8 January with Social Capital Hedosophia Holdings. Now with an enterprise value of approximately $3.7 billion, the SPAC indeed put Clover in the clover [TTA 14 Jan].

But perhaps short-lived. Clover’s SPAC is now being scrutinized by the SEC based on last week’s explosive charges by short-seller maven Hindenburg Research (!). Hindenburg’s research report alleges that Clover “lured retail investors into a broken business” by not disclosing a Department of Justice (DOJ) investigation that started (at least) last fall. Clover countered that the investigation is “routine” since Clover is in the Medicare business. Thus, it was not disclosed by Clover to investors as ‘non-material’. DOJ investigations are far more serious than CMS fines for compliance violations, which are not uncommon. Back in 2016, Clover was fined just over $106,000 by CMS on misleading marketing practices.

In short, DOJ investigations are never routine. They usually are the start point for enhanced claims scrutiny and a concatenation of charges, as WellCare, then a scrappy upstart insurer, found out over six agonizing years, 2006-2012, that were serious enough to send much of top management to Club Fed.  The Hindenburg paper (linked above) details other business practices that if true, are dodgy at best and fuel for further investigations.

The SEC notice of investigation was disclosed by Clover last Friday evening, usually a good time to disclose Bad News. This SPAC may have feet of clay.  PYMNTS.com, CNBC

23andMe will go the SPAC route with Virgin Group in a $3.5 bn valuation

Have we reached a peak? 23andMe, the genomic testing and genome research company, has struck gold, oil, and platinum in a merger with ‘blank check’ SPAC (special purpose acquisition company) VG Acquisition Corp. VG was formed by Richard Branson’s Virgin Group for the purposes of the acquisition. By end of Q2, the company will be trading on the NYSE under the ticker symbol ME. The company’s valuation is estimated as $3.5 bn.

23andMe’s SPAC follows on December’s $85 million Series F round, bringing their total funding pre-SPAC to about $900 million. The transaction will result in 23andMe having around $984 million in cash to invest. The deal also includes the private investment in public equity (PIPE) transaction in which Richard Branson and 23andMe founder/CEO Anne Wojcicki will invest $25 million each. There is no disclosure of the status of GSK’s ongoing investment in 23andMe, reportedly 50 percent, and Sequoia Capital’s. 

For 23andMe, this is a massive turnaround–and exit from stagnant private ownership–from their precarious state one year ago, which required layoffs of 14 percent of their staff, about 100 people. While the direct-to-consumer testing for diseases and ancestry model fell apart after holiday 2019 (TTA examined why here), the gold in genomics is monetizing that data with large drug and clinical trial companies for drug discovery and therapies. With GSK, they began clinical trials of a cancer drug last year, as well as licensing its first drug candidate to Spanish dermatology drugmaker Almirall. 

Going public via a SPAC and with a PIPE is definitely a one-up on rival Ancestry.com. Last August, they sold 75 percent of the company to Blackstone Group for $4.7 bn. TechCrunch, Becker’s Health IT, Financial Times

Telehealth parity, coverage, access debated in New Hampshire, South Dakota; CMS issues corrections to RPM in 2021 Medicare PFS rules

Two US states are taking opposite tacks on the permanence of payment parity, telehealth coverage, and access recently broadened during the COVID pandemic

  • New Hampshire’s legislature is debating a bill (HB 602) that would eliminate the payment parity requirement for all telehealth consults, as well as eliminate coverage for telephonic (audio) consults and faxes. Parity was first permitted on an emergency basis at the start of the COVID pandemic in 2020, then passed through the legislature and signed into law by Governor Sununu in July. Parity requires provider reimbursement at the same rate as in-person visits for state Medicaid and private plans.  mHealthIntelligence
  • South Dakota’s Governor Noem, however, is proposing to make permanent the emergency telehealth expansions directed in two 2020 executive orders in two bills she’s submitted to the legislature:
    • Eliminate the in-person exam requirement before a care provider begins telehealth treatment with a new patient
    • Enable providers to prescribe certain medications via telehealth
    • Eliminated the requirement for telehealth on an audio-visual platform, thus enabling providers to conduct telephonic consults for some services
    • In the second bill, South Dakota could recognize medical licenses from states included in the Uniform Emergency Management Assistance Compact (EMAC), a mutual aid agreement that allows states to share resources during natural and man-made emergencies. mHealthIntelligence

Both payment parity and coverage access are hot topics in physician reimbursement and patient services. The argument in favor of parity is to incentivize usage among physicians. Opposing this is the notion that telehealth has a lower value than in-person visits and that payers should be able to negotiate coverage and rate with care providers. In New Hampshire, a rural state but adjacent to Massachusetts, there is sparse availability of many healthcare services, especially for mental health and substance abuse services. The same is true in South Dakota, a state 8.5 times geographically larger than New Hampshire and truly ‘big sky’ country. Here parity is not an issue but ‘existing patient’ requirements, prescribing, telephonic, and licensing are. Telephonic consults in rural areas with spotty broadband are also considered to be a vital inclusion.

CMS also did some revising on the 2021 Medicare Physician Fee Schedule (PFS) to clarify and correct coding plus other information around remote patient monitoring (RPM) effective 1 January:

  • 20 minutes of time includes, but is not limited to, “Interactive Communication” with patient
  • RPM billing by one practitioner, per patient per period
  • Many codes can be used for billing RPM, including codes for collecting and monitoring the data, and treatment/management services of the conditions monitored with the data. (In the US, certified billing and coding professionals are the most frequent ‘brain benders’ on these issues. It is that complex.)

The Foley & Lardner blog has a concise summary, but you can enjoy the CMS-corrected document in the Federal Register here

Funding, acquisition news roundup, round 2: Lyra Health’s $187M Series E, DarioHealth-Upright, GetWellNetwork-Docent Health, Hillrom-BardyDx (updated)

Our cowgirl has been keeping busy rounding up more news on funding and acquisitions. Significance? Nearly all are major rounds only dreamed of a year ago for these relatively small companies boosting valuations into the stratosphere. The acquisitions also extend these companies into multiple lines of business.

Lyra Health, a mental health therapy benefit company for employers, closed an additional $187 million in a Series E round led by Addition Capital. This adds to a torrid 2020 $185 million Series C and D bringing their total funding to $475 million. The company claims a valuation of $2.3 billion and doubling its customer base in 2020 to 2 million members, with marquee clients such as Genentech, Morgan Stanley, and Zoom. Lyra Health uses cognitive-based therapy (CBT) models using virtual self-care, coaching, and therapists. Also announced was a partnership with ICAS World, an employee-assistance provider. Lyra is one of many companies in an increasingly crowded category using the CBT model to save employers and payers money on employee and member mental health with and without chronic conditions such as diabetes. Earlier this month, the Talkspace app, which focuses on direct to consumer therapy, announced they were going public through a ‘blank check’ SPAC with Hudson Executive Investment Corp, in a deal valued at $1.4 billion, including debt. Release, Mobihealthnews

DarioHealth, an Israeli-US company concentrating on digital diabetes and hypertension management, extended into musculoskeletal (MSK) therapeutics with the $31 million acquisition of Upright Technologies Ltd., another Israeli-US company. Upright uses a $100 sensor that provides biofeedback and vibration reminders to correct posture plus digital coaching. Last year, Upright was heavily advertised on US television. The buy will transfer to Upright $1.5 million in cash and $29.5 million in stock, and is expected to close in about 10 days. Dario also completed a $70 million private placement for 3,278,688 shares of its common stock at a purchase price of $21.35 per share. Dario has about 150,000 users and Upright 90,000 users. Dario is projecting a 2020 revenue of $7.6 million. Release, Mobihealthnews

GetWellNetwork, a relatively small player in patient engagement and communications in the inpatient care journey, announced it has acquired patient-messaging company Docent Health for an undisclosed sum, beefing up capabilities in data analytics and directing patients to additional services. According to Crunchbase, GetWellNetwork has funding to date of $19 million.  Release, Mobihealthnews

Wrapping it up is cardiac monitoring giant Hillrom’s acquisition of Bardy Diagnostics for $375 million plus future potential payments based on the achievement of certain commercial milestones. Hillrom is also acquiring net operating losses valued at more than $20 million and 230 employees. The BardyDx Carnation Ambulatory Monitor (CAM) is a lightweight cardiac patch monitor for heart rhythm diagnostics using P-wave-centric ECG detection. The irony here is that BardyDx positioned itself squarely against Hillrom’s Holter monitors. Nothing like buying out the competition! Release, MedCityNews

Comings, goings, and more: YouTube goes healthy, COVID vax distribution and EMA hack, IPO/M&A roundup, Japan’s health tech startups highlighted at CES

Short takes on news snippets from just about everywhere. It’s been that kind of a week. (Picture: the famous Raymond Loewy-designed ’49 Studebaker Commander, of which it was joked ‘you can’t tell whether it’s coming or going)

Google-owned YouTube has decided to take a more organized approach to healthcare content with the hiring from CVS Health of Garth Graham, MD, who will serve as its director and global head of healthcare. At CVS, he was chief community health officer and president of the Aetna Foundation. His portfolio will include the development of content from providers including the Cleveland Clinic, the Mayo Clinic, the National Academy of Health, and Harvard’s School of Public Health. It’s seen as a platform for video-formatted health education both US and globally. The importance to Google is evident in the reporting line: Dr. Graham will report to Karen DeSalvo, MD, the chief health officer at Google. One wonders if the next step is the curating (a/k/a demonetizing or removal) of health content not Google-generated. FierceHealthcare, YouTube press release

Some states have done well on COVID-19 distribution. Others haven’t. It apparently doesn’t matter if you’re large or small. In the US, states were given vaccines based on CDC information and consultation with them. The states then designed their own distribution and priorities. Here’s a running tally on Becker’s Hospital Review Meanwhile, back in Hackerville, the European Medicines Agency (EMA) confirmed on 12 January that data relating to regulatory submissions by Moderna, Pfizer, and BioNTech that were on a hacked server was leaked to the internet. Becker’s

In IPO/M&A news:

Centene Corporation is acquiring Magellan Health, a behavioral health, specialty healthcare, and pharmacy management company, for $2.2 billion. Centene continues its transformation into a UnitedHealthcare structured company, with payer programs on one side and health services including population health management, data analytics and other areas of health tech on the other side. Magellan will be operated independently. The deal requires Federal and state review, and is expected to close in second half 2021. Release  Magellan this week announced its lead investment in a $20 million Series B raise by Philadelphia-based NeuroFlow, a clinical behavioral health monitoring system. Philadelphia Business Journal

Amwell announced a public offering of over 11 million shares. The date and pricing for the offering were not mentioned in the release, but at the current share price of $28, this would raise in excess of $308 million. This is on top of their socko IPO last September which raised in excess of $700 million. 

Behavioral therapy continues to be hot, with online behavioral therapy company Talkspace going the SPAC ‘blank check’ route in merging with investor company Hudson Executive Investment. It provides them with $250 million cash. Estimated net revenue is $125 million in 2021, up 69 percent from 2020, creating an enterprise value of $1.4 bn, which is quite a reach. Healthcare Dive, release.

Medicare Advantage payer Clover Health of Jersey City, NJ also went the SPAC route this week with Social Capital Hedosophia Holdings Corp. III, giving it an enterprise value of approximately $3.7 billion. Clover Health styles itself as a health tech company as it analyzes member health and behavioral data to improve medical outcomes and lower costs for patients, many of whom have multiple chronic conditions or are classified as underserved.  Release

Israel’s Itamar Health, which focuses on integrating sleep apnea management into the cardiac patient care pathway, is buying SF-based Spry Health for an undisclosed amount. Founded in 2014, Spry has an FDA-cleared wrist-worn device, the Loop System, that monitors SpO2, respiration rate, and heart rate. Itamar plans to develop a wrist-worn device based on their Peripheral Arterial Tonometry (PAT) immediately, with initial market launch anticipated in 2022. Release

Hinge Health’s Series D raised $300 million and a new valuation of the company at $3 bn. (Remember when $1 bn was a unicorn amount?) Hinge’s specialty is musculoskeletal–a virtual MSK Clinic for back and joint pain care and rehab including access to physical therapists, physicians, health coaches, and wearable sensors to guide exercise therapy. Release

In startup news…Under the radar, Japan has been developing a crop of health tech startups. They were highlighted at this year’s virtual CES by Jetro–the Japan External Trade Organization. Their CES web page has a teaser video and sortable profiles on companies, many of which look very interesting. According to their materials, there are perhaps 10,000 Japan startups but few of them make it out of Japan. This Editor looked forward to their presentation on ‘Turning the Super Aging Society into a Super Smart Society’ yesterday evening, but virtual doesn’t mean that links work or events actually happen, so our reporting will attach some statistics on their super-aging society, as well as a comparison with other countries (PDF).

2021 predictions: telehealth law and if at all possible, stay away from FDA (US)

crystal-ballFoley & Lardner rolls out five predictions for telehealth/digital health law and policy in the US:

1. Licensing: More Efforts to Increase Reciprocity and Reduce Barriers. During the current PHE, HHS and states waived many telehealth requirements, including HIPAA and licensing. As the PHE does not look to be ending anytime soon, look for this to continue and eventually be part of Federal policy as soon as the fall. The status quo in Medicare is rural telehealth only–and that restriction is being recognized as absurd. (Related TTA article on the 2021 Physician Fee Schedule [PFS])

2. Modalities: Technology-Neutral State Laws that Prioritize Quality of Care. States are all over the place with telehealth. Currently, changes have been through legislation with others by executive order or regulation. The American Telemedicine Association published a guide to standard practice and terminology language mid-last year (revised in September) to help guide state lawmakers. One can only hope they follow this recommendation from the ATA. 

3. Privacy: Greater Sensitivity to Patient-as-Consumer in Digital Health. Increased privacy regulations will run up against interoperability and data sharing. In this Editor’s view, this will continue to be a battleground, as in data sharing, there’s Gold In Them Thar Hills and Big Tech has its eye on it.

4. Enforcement: OIG/DOJ Will Build on Prior Investigations. This is the area of Medicare overpayment, wrong payment, and fraudulent tele- and TV marketing of medications, genetic testing, and DME. This massive takedown including opioids made headlines last year [TTA 2 Oct] and included $4.5 bn in fake telemedicine claims. It’s kind of a no-brainer that with the expansion of telehealth, this will continue. It’s always been on the Fed’s radar screen.

5. Payment: Continued Expansion of Telehealth Reimbursement. Again, a ‘Captain Obvious’ with the changes in the 2021 PFS plus resistant states like NY and Massachusetts finally on board with parity (ATA on NY and MA). There are some interesting adds that employers will increasingly pay for tele-primary care, behavioral health, and specialty care like fertility, which again is a no-brainer when your workforce is remote and you want to keep them online. Where telehealth needs a permanent boost is in Federal value-based care programs run by CMS, like shared savings and Primary Care First.

So you’re introducing a telehealth platform or device that you’d like to say ‘FDA-cleared’. This may not be the time to deal with FDA.  Bradley Merrill Thompson of Epstein Becker & Green, P.C., well known to be one of the leading lights in telehealth law and advocacy since Ur-Days, makes a very convincing case to avoid the FDA 510(k) process–if you can. 1) FDA is jammed. 2) it’s a long haul, nearly a year as of 2019, probably longer for 2020 and 3) if you are de novo without any predicate device, you have maybe a 50 percent chance of success.  His anecdotal take is that FDA clearance doesn’t lead to a boost in revenue. Mr. Thompson has also studied the fearsome Warning Letters, and the few for 2020 mostly involved exaggerated or unproven claims around COVID-19. None involved unapproved claims for a digital health product. 

In this Editor’s view, customers won’t be hung up on an FDA clearance if you do what you say you’re going to do at the price they want to pay. Investors need to know this. Some markets do require FDA clearance, however. This Editor experienced this working for her first digital health company, Living Independently Group, where GE Healthcare before acquiring insisted that we take the system through an unnecessary Class I (!) approval. In dealing with vital signs monitoring and Federal purchasing, our Class II filing at Viterion was required. His advice is to watch your claims and work on your business model. Much, much more from Mr. Thompson in Mobihealthnews.

COVID-19 and telehealth–promise or peril? And the perils of digital health in conflict countries and India.

The Journal of the International Society for Telemedicine and eHealth (JISfTeH) has published its latest issue today (13 Jan). JISfTeH is one of the few journals which shine a bright spot on digital health in developing countries. This month concentrates on conflict countries and COVID in India: 

  • Scaling Up Digital Health In Conflict Countries discusses the lack of any form of digital health and coordination in Afghanistan, Somalia, Sudan, and, with some exception, Nigeria. It compounds the extreme lack of healthcare services–for instance, 23 percent of Afghanis have poor access to healthcare, resulting in a high mortality rate. It can change. Rwanda, once synonymous with war, has one of the best healthcare systems in Africa due to the use of digital health services. India is using digital health in combating the TB explosion of 300,000 cases in one year. The exception in Nigeria is the liftoff of 54Gene, a genomic studies company in the world’s most genetically-diverse continent, which has secured $4.5 million in seed funding.
  • Speaking of India, telehealth has been kickstarted there due to COVID-19. The Indian Government is prioritizing the use of telehealth in the population and both public and private institutions have rolled out initiatives. India’s challenges are how patients pay for it (70% of healthcare expenses out of pocket) and how it reaches the two-thirds of population in rural areas where there is inadequate telecom and broadband for services. The irony, of course, is that India is a huge exporter of software and telecom services to the world. COVID-19 As A Catalyst for Telehealth Growth In India: Some Insights.

The editorial by Richard E. Scott of Canada and Prof. Maurice Mars of South Africa, COVID-19 and eHealth: A Promise or Peril Paradox?, cautions on the floodgates opening for telehealth in COVID’s wake. Spontaneous telehealth, where “healthcare providers themselves saw the value of an eHealth solution and implemented it independently and without traditional steps or approval” is quite separate from evidence- and needs-based telehealth. There is a lot of pressure at the national level, by the WHO, and by vendors to ‘make hay while the sun shines’. “Enthusiasm must be tempered with thoughtful guidance” on multiple and quite variable factors.

The Theranos Story, ch. 69: Elizabeth Holmes ‘faked it till she made it’–like other Silicon Valley startups? (Updated)

Lifestyles of the Rich, Famous, and Busted, Silicon Valley Style. As promised by the prosecution in the cases being brought against Elizabeth Holmes, the CEO/founder of Theranos, and separately with COO Ramesh ‘Sunny’ Balwani, they are proceeding with filings that connect Theranos’ continued defrauding of investors with Holmes’ extravagant lifestyle and desire for fame. “The causal connection between Defendant’s fraud and the benefits at issue is strong,” the filing stated, going on to detail how the fraud funded hotels, private jet travel, and “multiple assistants” paid by the company who also assisted with her personal needs.  “In addition to the tangible benefits that she received from her fraud, she also was the beneficiary of a great deal of favorable attention from the media, business leaders, and dignitaries”. Sustaining the illusion was necessary to continue the lifestyle and recognition.

Countering the prosecution filing on Friday was–of course–a defense filing that attributed Silicon Valley’s ‘fake it till you make it’ startup culture as a rationale for Holmes’ and Theranos’ actions. That filing states “founders in this area frequently use exaggeration and dramatic promises to generate needed attention for their companies and attract capital.” The “culture of secrecy” that concealed Theranos’ fraud?  “…if it is admitted Ms. Holmes surely could present evidence that other Silicon Valley start-ups used similar practices, and that persons at Theranos were aware of these practices.” In November, they also filed to block as ‘unfairly prejudicial’ any mention of Holmes’ lifestyle as irrelevant to her guilt or fraud. 

Another fake was pretending that problems didn’t exist and everything was just ducky. The prosecution also introduced emails that confirmed Holmes’ direct awareness of problems with the blood tests in 2014. One example was from her brother Christian, who worked in product management. It requested a meeting to discuss a customer complaint where it was “pretty obvious that we have issues with calcium, potassium and sodium specifically.” According to the filing, “Theranos emails contain many examples of customer complaints routinely being escalated” to Elizabeth Holmes and other senior company personnel. At trial, the evidence will show that defendant shaped Theranos’s response to those complaints, prioritizing the company’s reputation over patient safety.” This Editor would argue that it’s no different with car manufacturers (Ford and the now lower-case GM) than startups to spin a response, but the proper reaction to clinical product faults would be to pull back the offending tests and solve the problem before going any further. But the Edison lab and their technology didn’t work.

Updated with further analysis. In retrospect, it’s obvious that Theranos crossed the ethical line between massive hype (expected) and outright fraud (not), which is why the defense is fighting so hard to keep Silicon Valley Lifestyle and Startup Culture out of the case unless it can be spun their way. A key: Holmes’ emotional state and a psychiatric evaluation have also been introduced by the defense, countered by the prosecution. In this case, the fraud was based on dual ethical nightmares, the first worse than the second: faking of medical results, then defrauding small and large investors by faking company performance. Too many just wanted to believe, like the X Files. But we should not forget another high-profile hype and fraud that happened around the same time, Outcome Health [TTA’s articles here].  Outcome Health’s fraud was strictly financial–ad performance falsification leading to fraud and money laundering. They defrauded Big Pharma advertising and some of the largest global investors like Goldman Sachs. The Federal lawsuits on Outcome have gone very quiet after settlements, plea bargains, and COVID halting court actions.

Thanks in large part to Theranos and Outcome Health, that startup culture is mostly kaput. The lessons are learned–we believe. A modicum of modesty along with a large dose of telehealth/telemedicine/data analytics is The 2020-2021 Thing. A lasting effect? Perhaps. Small-batch blood testing is only now recovering from being radioactive.

Before the start of the company’s collapse in 2016, Theranos had raised a reported $900 million ($700 million in some accounts) and was privately valued at $9 bn. Few of the investors clawed back their money. Fraud doesn’t work. It never works.

The trial in Federal District Court, San Jose, is now scheduled for jury selection 13 July. It was moved just before Christmas from 9 March by Judge Edward J. Davila due to California’s COVID-19 surge (MassDevice). So here we are five years later It promises to be popcorn-worthy, with possible appearances by famous men such as Henry Kissinger, Rupert Murdoch, and former Defense Secretary James Mattis. CNBC, Bloomberg For those interested in the full sturm und drang by chapter, it is here.

Digital Health as Boom Town: 2020’s dizzying funding rounded up by Mercom Capital, StartUp Health

BOOM! Mercom Capital Group published their Q4 and 2020 roundup of global digital health investment and, no surprise, the investment picture for just about anything digital health was in sharp contrast to most of the COVID-afflicted world economy.

The topline:

  • Global VC funding (private equity and corporate venture capital) was $14.8 bn across 637 deals. It was a 66 percent increase in funding compared to 2019’s $8.9 bn in 615 deals. The modest increase in deal number and huge increase in funding points to the acquisition of more established companies requiring Big Deals.
  • Total corporate funding, including VC, debt, and public market financing, totaled $21.6 billion

 

In a stunning change, telemedicine was Top Of The Pops, with $4.3 bn in investment, 139 percent over 2019’s $1.8 bn. It was over double the former star categories of data analytics and mHealth apps.

The top five disclosed M&A transactions in 2020 they tracked were:

  • Teladoc’s acquisition of Livongo Health for $18.5 bn
  • Blackstone’s acquisition of a majority stake in Ancestry.com for $4.7 bn (despite the ‘bloom off the rose’ of consumer genetic testing)
  • Philips’ acquisition of BioTelemetry in cardiac monitoring for $2.8 bn
  • Invitae’s acquisition of ArcherDX for $1.4 bn
  • WellSky’s acquisition of Allscripts’s CarePort Health (CarePort) for $1.35 bn

The Executive Summary is available for free download at the link in the release. The full report will set you back $599 – $999, depending on the version.

StartUp Health has slightly different numbers but in total investment tracks almost to Mercom Capital’s estimate at $21.5 bn. For telemedicine, it still triples year-over-year but StartUp’s totals are lower: 2019’s $1.1 bn to 2020’s $3.1 bn. Part of the difference may be remote monitoring, which StartUp considers separately. It doubled from $417 million to $941 million. Their deal counts were also higher: 764 in 2020 compared to 716 in 2019. Another fun fact in their tracking are their city leaders in health innovation funding: Beijing, Tel Aviv, and London, confirming that New York and the San Francisco metro no longer have money, interest, or their former attraction. A fuller list would have been interesting. More is in their Part 1 study. Part 2, to be released next week, will cover their dozen ‘health moonshots’.

New Year’s Deal and Event Roundup: Optum-Change Healthcare, Walgreens-Amerisource Bergen, December’s deal potpourri, CES and JPM

Mutated COVID virii may be spreading, the UK locked down tight, but the deals with big numbers just keep on coming….

Change Healthcare not sold for pocket change. $13bn from the coffers of UnitedHealth Group’s Optum took it, though word was that it wasn’t for sale. Change will be part of OptumInsight to reinforce data analytics, technology-enabled services, and revenue cycle management. The deal pays common stock shareholders $25.75 per share in cash plus assumption of Change’s debt. Closing is slated for second half 2021. Neil de Crescenzo, Change’s CEO, will be CEO of OptumInsight which will integrate Change into its structure.

Change houses a dizzying group of diverse businesses including radiology, imaging, revenue cycle and payment management, consumer experience, clinical decision support, workflow integration, communication and payment solutions, network optimization, value-based care enablement….and that is about half of the list. The release emphasized RCM, provider payment, claims transaction analysis, and clinical decision support. It will be interesting what Optum chooses to retain and discard.  Press release, Fierce Healthcare, Forbes. Credit Suisse has also published a lengthy financial analysis (PDF) of the deal which opines that it’s likely to not run afoul of Federal anti-trust interest or significant conflicts of interest (Optum currently serves many payers other than UHC). There may be Federal concern about a concentration of data and transaction information as Change alone serves 19 of 20 major US payers and is a leader in network services and payments.

Walgreens Boots Alliance sells the majority of their Alliance Healthcare pharmaceutical wholesale businesses to AmerisourceBergen, a leading US drug wholesale company, for about $6.5 billion in cash and stock ($6.275 billion in cash and 2 million shares of AmerisourceBergen common stock). Interestingly, Walgreens is the single largest shareholder of Amerisource Bergen at 30 percent of common shares. Both Walgreens and Amerisource Bergen will continue their US distribution agreement until 2029 and Alliance UK with Boots until 2031. One way of interpreting this is fattening their ‘war chest’ for expansion, including their major bet with Village Medical. Perhaps a payer or a health tech company? Press release

December’s potpourri of Big Deals was rounded up by FierceHealthcare:

  • Alphabet’s Verily closed out 2020 with a massive $700 million funding round primarily from Alphabet to fund its commercial work
  • 23andMe got a lifeline of $82.5 million in Series F funding from an offering of $85 million in total equity shares. TTA analyzed why the bloom had faded from the genetic testing rose, so hot only a few years ago, last August and February. Bloomberg
  • New Agey Calm is meditating on $75 million in Series C funding and visualizing a valuation of $2 bn.
  • Pear Therapeutics, developer of prescription apps to treat addiction and insomnia, counted $80 million in Series D sheep. 
  • Provider CityBlock Health raised $160 million to support care for marginalized populations with complex needs and now has an estimated value of $2 bn.
  • On the payer side, Oscar Health raised $140 million in a venture round as we reported before Christmas.
  • And we reported on Everlywell’s digital home testing/telehealth consult Series D of $179 million in early December.

And the Big January Events Roll On, Virtually.  CES 2021 and the JP Morgan Healthcare conference for their clients will be held next week as usual, along with the usual constellation of independent conferences. These are usually a major venue for deals and deal announcements, and even in the virtual space, will likely be no different. One wonders if Haven’s closure [TTA 5 Jan] will be even whispered.