Mental health apps Headspace, Ginger to merge into $3B Headspace Health

August 27, 2021 | by

Two acquisition prospects, Headspace and Ginger, decided to beat the heat and merge. The two companies, currently headquartered in Santa Monica and San Francisco, will combine into Headspace Health. From the context of the release, the Ginger brand will be sunsetting. The merger is expected to close in Q4 subject to the usual regulatory and financial approvals. Financial terms were not disclosed. The combined company claims a valuation of $3 billion.

Leadership will combine from both companies. Russell Glass, Ginger’s present CEO, will be CEO of Headspace Health. CeCe Morken will remain CEO of Headspace and take on the additional role of President for the combined entity. 

Digital mental health continues to be hot in a hot August. Headspace, which started as a mindfulness and meditation app in 2010, then sidled into behavioral coaching to mitigate stress and aid in sleep, to date raised $216 million through a Series C (Crunchbase). Ginger, a cognitive therapy service with both self-guided coaching and psychiatric video consults, was founded in 2011 and raised $220 million through a Series E. Headspace has a direct to consumer focus with business partnerships with Google, Roche, and employers, while Ginger has developed into a benefit for payers like Cigna and Amerihealth Caritas. The combined company claims it will cover 100 million lives direct-to-consumer and through its more than 2,700 employers and health plan partners.

It is obvious from the management setup and the overpadded release (sorry, but it’s true!) that the lead company in this is Headspace. Can an IPO be far away? Release, Healthcare Dive

Telehealth Wars: Amwell’s raises game with buys of SilverCloud and Conversa Health (updated); Teladoc’s slow member, hospital growth lead to $133M Q2 loss

July 29, 2021 | by

Updated. Amwell’s announcement today (28 July) of the twin acquisitions of SilverCloud Health and Conversa Health for the tidy total sum of $320 million in cash and stock was, if not quite a ‘see ya and raise ya’ move, a confirmation that Amwell was going to raise its game, at long last, versus Teladoc. SilverCloud provides digital telehealth programs for common behavioral health conditions. A spinoff of Trinity College Dublin, it counts as US clients Kaiser Permanente, Optum, and Providence Health, plus over 80 percent of NHS’ mental health service. Conversa is a StartUp Health portfolio company that developed a scalable care management triage system for at-risk patients that provides automated patient outreach and engagement tools that can move them to higher levels of care where needed. Clients include Northwell Health, UCSF Health, UNC Health, Merck, MedStar Health, and Prisma Health. 

For Amwell, this expands their capabilities in the hot behavioral health area and, with Conversa, into a care management platform targeted to providers, pharma, and payers. They see digital workflows, patient engagement, a longer-term relationship with their consumer base through the continuum of care, through these two companies’ hospital, health system, health plan, and employer clients.

The wrinkle? Neither company is all that far along–SilverCloud has total funding of only $26 million but is more established with 750,000 clients and 300 organizations. Conversa’s Series B was a tiny $8 million for total funding of $34 million. Amwell also paid a premium price. According to Healthy Skeptic, a blog written by long-time UnitedHealth Group senior healthcare executive Kevin Roche, their combined revenue was $15 million–more than a 20x multiple of the purchase price. The other challenge for Amwell? Making all the systems work together in a meaningful way–and to market what can be a confusing picture properly. Amwell press release, Mobihealthnews

Update 2 August. The Irish Times, undoubtedly working a local contact at Silver Cloud, ascertained that Silver Cloud was purchased by Amwell for a price in excess of $250 million. That means a tidy payday of €23 million ($27.3 million) for the company’s founders – Ken Cahill, James Bligh, Karen Tierney, Dr John Sharry, and Gavin Doherty. If that is so, Conversa was bought for $70 million or less. One wonders why a shell game tactic was used, as Conversa is known to be an early-stage company. Hat tip to HISTalk today.

For Teladoc, growing beyond urgent care, plus integrating the former Livongo and InTouch Health, presents difficulties. Telehealth usage continues to shrink as in-person visits rebound save for behavioral health, which is also bad news for the payers as utilization goes up. Teladoc now struggles to add new members after last year’s pace. Their hospital business that came with last year’s acquisition of InTouch Health is growing more slowly than expected [TTA 16 July]. The expected cross-sales traction with the former Livongo hasn’t caught fire yet, but that may change with myStrength Complete and the myStrength app going live with health plans or employers starting this month. The first enterprise customers are a major Blues plan (likely HCSC) and a Fortune 100 employer. [TTA 14 May]. Teladoc is also growing into other areas with more continuous user engagement, such as chronic care, weight management, and primary care. That program, Primary360, is in “very very late-stage” discussions with multiple payers. Teladoc, which has never been profitable, lost $133.8 million for Q2.   Healthcare Dive

IBM Watson Health’s stumble and possible fall

July 21, 2021 | by

This Editor hadn’t thought about or seen news about IBM Watson Health in over a year…and likely, neither did you. Granted, our minds have been Otherwise Engaged, but for the company that was supposed to dominate AI and health analytics, it’s notable that TTA’s last two articles mentioning Watson Health was 25 April 2019, on a report that its Drug Discovery unit was being cut back as the latest in a series of executive cutbacks and lawsuits (MD Anderson on a failed oncology initiative), and 14 Feb 2020 on 3M’s lawsuit on unauthorized use of their software.

The New York Times in an investigative piece (may be paywalled or require signup for limited access), brings us up to date on what is happening at IBM Watson, and it’s not bright for Watson Health. IBM, like so many other companies, badly underestimated the sheer screaming complexity of health data. Their executives believed they could translate the big win on the “Jeopardy!” game show in 2011, based on brute computing power, into mastery of healthcare data and translation into massive predictive models. The CEO at the time called it their ‘moon shot’. Big thinkers such as Clayton Christensen chimed in. IBM managers sang its praises to all in healthcare who would listen. This Editor, on a gig at a major health plan in NJ that was ‘thinking big’ at the time and used IBM consultants extensively, in 2012 was able to bring in speakers from Watson for an internal meeting.

But we haven’t been on the moon since 1972 (though probes have visited Mars). Since the big push in 2011-12, it’s been one stumble after another. According to the Times:

  • The bar was set much too high with oncology. Watson researchers knew early on in their research at the University of North Carolina School of Medicine that their genetic data was filled with gaps, complexity, and messiness. The experience was similar with Memorial Sloan-Kettering Cancer Center. The products growing out of the UNC and MSKCC research, Watson for Genomics and Watson for Oncology, were discontinued last year. These were in addition to the MD Anderson Cancer Center initiative, Oncology Expert Advisor for treatment recommendations, that was kicked to the curb [TTA 22 Feb 2017] after $62 million spent. At the same time, IBM’s CEO was proudly announcing at HIMSS17 that they were betting the company on multiple new initiatives. 
  • Watson Health, formed in 2015, bought leading data analytics companies and then didn’t know what to do with them. TTA noted in August 2018 that Phytel, Explorys, and Truven Health Analytics were acquired as market leaders with significant books of business–and then shrank after being ‘bluewashed’. HISTalk, in its review of the Times article, noted that along with Merge Healthcare, IBM spent $4 billion for these companies. IBM’s difficulties in crunching real doctor and physical data were well known in 2018 with revealing articles in IEEE Spectrum and Der Spiegel. 

Six years later, Watson Health has been drastically pared back and reportedly is up for sale. Smaller, nimbler companies have taken over cloud computing and data analytics with AI and machine learning solutions that broke problems down into manageable chunks and business niches.

What’s recoverable from Watson? Basic, crunchy AI. Watson does natural language processing very well, as well as or better than Amazon, Google, and Microsoft. Watson Assistant is used by payers like Anthem to automate customer inquiries. Hardly a moonshot or even clinical decision support. For business, Watson applications automate basic tasks in ‘dishwashing’ areas such as accounting, payments, technology operations, marketing, and customer service. The bottom line is not good for IBM; both areas bring in a reported $1 billion per year but Watson continues to lose money. 

Volte-face: VA now puts their Cerner EHR implementation on hold

July 16, 2021 | by

The US Department of Veterans Affairs has pulled a 180° on the Cerner EHR implementation. In a move worthy of the old-time moonshine runners, VA Secretary Denis McDonough went before the Senate Veterans Affairs Committee on Wednesday to announce that the deployment of the Cerner system in the VA is on hold. This is after maintaining two weeks ago [TTA 2 July] that they were sticking with Cerner and the implementation, pending a further review.

In the interim, the VA Office of Inspector General (OIG) issued two reports that criticized the unreliable estimating process for various upgrades to the system, including lack of complete documentation, and the implementation of the Cerner EHR at Mann-Grandstaff VA Medical Center in Spokane, Washington, starting in October 2020. HealthcareITNews

In a classic ‘falling on one’s sword’ in the Wednesday hearing, Secretary McDonough told the committee that the project review found multiple “governance and management challenges” as well as patient safety concerns and system errors. He attributed them to VA and Cerner leadership, or lack thereof. For instance, VA clinicians couldn’t easily find help from Cerner on the initial rollout at Mann-Grandstaff VA Medical Center. The clinician using it called the help desk, reaching a Cerner employee there but a week. The Cerner EHR also generated duplicate prescriptions and confused patients.

The approach to implementing the modernized Cerner EHR approach will be ‘reimagined’ (DC-speak for redoing what should have been done right the first time, which started in 2017). This will start with a new, enterprise-wide governance structure to manage the project and integrate it with other modernizations, according to the Secretary. He admitted that the original plan to roll out the EHR by geographic area was a mistake. It will also not be synchronized with the Department of Defense rollout, which has proceeded without serious hitches. Go-lives will now be based on evidence of readiness, such as training, infrastructure, and management.

The Deputy Secretary has been designated to be directly in charge of the project. Acting undersecretary for health Richard Stone, MD, who had been in charge of the Cerner implementation, resigned in June after not being considered for the deputy secretary post. Secretary McDonough pitched the senators on quickly confirming nominee Donald Remy, with whom he will be speaking on big decisions. (One would hope. Mr. Remy, who was confirmed on 15 July. )

The final straw for the senators was budget. HISTalk summarizes: “The cost of the project, which was originally estimated at $10 billion when Cerner was awarded a no-bid contract in 2017, has risen to over $20 billion. McDonough has ordered a new budget estimate for the entire project, which will include the several billion dollars of infrastructure upgrades that the original estimate missed.”

Looks like the Old Gray Mare of EHRs, VistA, will be lingering for awhile. This Editor lays even money that the senators will be discussing the same issues, such as revenue cycle management, in 2025. Becker’s Hospital Review, Federal News Network

The implications of Teladoc’s integration into Microsoft Teams

July 16, 2021 | by

The Big News this week was the terse announcement by Microsoft and Teladoc that Teladoc’s Solo application for hospitals and health systems will be integrated into Microsoft Teams applications. The integration includes workflows and through Solo, integration into EHRs while remaining in Teams.

During the pandemic, many health systems resorted to Microsoft Teams to communicate internally and one-on-one with patients. Integration means that while on the Teams consult, a clinician can securely access clinical data included within the EHR and workflows via Teladoc Health Solo without leaving it. It can also connect care teams on the consult. The release also mentions the magic words artificial intelligence and machine learning, without giving examples. 

As of now, with telehealth receding to perhaps 5% of visits based on claims [TTA 9 July], it’s a strategic win for Teladoc to integrate with a part of the Microsoft suite widely used by providers. It also builds on an existing relationship between the companies, as Teladoc already uses Azure as one of its cloud providers. Health systems still have to license Teladoc Solo if they do not already, and engineering work is yet to be done. Teladoc has a substantial foothold in this market due to its July 2020 acquisition of InTouch Health. InTouch’s hospital-to-home telehealth is now Teladoc Solo, with a separate line of business into the specialty telehealth consult market through its portable wheeled telehealth carts for in-hospital use. It’s notable that the InTouch brand remains, albeit visibly transitioning to Teladoc.

According to Credit Suisse’s analysis (page 3), 46% of C-Level executives from hospitals and health systems (combined representing 563 hospitals) said that they currently work with Microsoft Teams as a telemedicine vendor. 11% said they already work with Teladoc/InTouch Health.

As for telehealth already used by providers, such as Zipnosis’ ‘white label’ triage/telehealth system (now owned by insurtech Bright Health) and Bluestream Health, can they compete? Also FierceHealthcare

An ‘insider’ point of view on the Connect America acquisition of Philips Lifeline

July 9, 2021 | by | 2 Comments

This Editor, through a search initiated due to reader Adrian Scaife’s comment on the article below, happened on a back article from a news source on the Connect America acquisition of Philips Lifeline. Who knew (as they say) that there was a newsletter solely devoted to the PERS business? The article was written from a real insider point of view with a complete background on Connect America, Lifeline, and also why Philips put Lifeline up for sale.

  • It’s likely that Philips bought high and sold low. In 2006, Philips purchased Lifeline for a reported $750 million, then HealthWatch for an additional $130 million. At the time of the announcement, PE Hub put the value of the company in the $200-400 million range. It’s understandable that with the rise of smartphones and mobile, wrist-worn band-type PERS, the value of what is largely a traditional PERS company would suffer, but the best case is a 60 percent loss over 14 years.
  • The industry believes that Philips mismanaged the company. Example: dealers did not have 4G/LTE cellular equipment to replace the 3G in the field. The phrases ‘a mess’ for the organization and ‘run the Lifeline name into the ground’ aren’t used lightly.
  • For the past few years, Lifeline has been in the shadow of Philips’ other clinically-oriented healthcare systems. As this Editor noted, Philips has divested or spun off multiple businesses in North America.
  • Philips ran the business without understanding its unique dynamics, including dealer networks and a B2B +B2C market of home health agencies and senior housing combined with direct-to-consumer sales. They focused on the latter and kept it on short rations for the past few years.
  • They were also slow to market with innovations and had a significant amount of negative publicity on the performance of AutoAlert for fall detection starting in 2011 (Editor Steve) and in 2014.

The Philips Lifeline saga was a longer and more costly version of Tunstall’s acquisition of AMAC. At the time of sale, Lifeline was #1 in PERS, and AMAC was #3. Even with Tunstall’s expertise and the addition of remote patient monitoring, the US market was Too Tough For Tunstall. They sold in 2019 to…drum roll…Connect America.

The article includes excerpts from an interview with CEO Janet Dillione, a review of the Connect America team, and well wishes from those insiders. PERS Insider (Subscription to the weekly newsletter is free and found here.)

Another irony: Just prior to the acquisition, Dennis Shapiro, the former head of Lifeline, passed away on 16 February, aged 87. Mr. Shapiro was responsible for the company creating the first modern PERS radio pendant, telephone-connected base unit, and call center monitored service in 1980.

 

Lightning news roundup: AI for health systems Olive scores $400M, VA’s sticking with Cerner EHR, Black+Decker gets into the PERS game

July 2, 2021 | by

As here in the US we are winding up for our Independence Day holiday (apologies to King George III)….

Olive, a healthcare automation company for healthcare organizations, scored a venture round of $400 million from Vista Equity Partners. To date, it’s raised $856 million through a Series G plus this round and is now valued at $4 billion according to the company release. Olive’s value proposition is automating via AI routine processes and workflows, such as benefit verification discovery, prior authorizations, and billing/payments for health systems. About 900 US hospitals have adopted Olive’s systems. Mobihealthnews.

Breaking: The US Department of Veterans Affairs will be staying with Cerner Millenium for their EHR modernization from VistA. This follows a 12-week review of the implementation following failures within the $16 billion program itemized by the Government Accountability Office (GAO) in February [TTA 19 Feb]. Secretary Denis McDonough is scheduling two further review weeks to determine additional changes to the program. The intent is to build a cloud-based system fully interoperable with the Department of Defense’s Military Health System (MHS) also built with Cerner. FedScoop, Healthcare IT News

And in the What Are They Drinking in Marketing? I want some of that, stat! department…

Black + Decker is now becoming a PERS provider with the introduction of Black+Decker Health and the goVia line of mobile and home-based PERS with optional fall extension and call center monitoring through Medical Guardian . The devices are a fairly predictable line of cellular-connected (Verizon, AT+T) with a ‘classic’ home landline unit. The units are being sold through Amazon. B+D release

From a marketing perspective, the Black+Decker name, identified for decades with home and power tools, on a PERS line is also a classic–a classic mistaken line extension like Cadbury mashed potatoes or Colgate frozen entrees. Buy a PERS, get a drill? Relevance and fit to a older, female-skewing group?  It surely looks like their parent Stanley, which is a leading company in institutional alarm and location services. offloaded this legacy business to them. (Judging from the website, someone’s in a rush as some pages still have ‘greek’ copy under headings.) Hat tip to a Reader who wishes to remain anonymous.

Telehealth usage going flat, off by 1/3 and declining: Trilliant Health study

June 30, 2021 | by

Trilliant Health, a healthcare data analytics and advisory shop based in Tennessee, has run some projections on the US healthcare market and telehealth, and they’re not as bright as many of us–and a lot of investors plus Mr. Market–have believed. It opens up on page 4 of the electronic document (also available in PDF) with this ‘downer’–that the largest sector of the largest global economy is overbuilt and unsustainable. Hospitals and health systems have operated for decades that basic economic factors–demand, supply, and yield–don’t apply, and there are more companies competing with them for the consumer healthcare dollar than they realize–with more proliferating every day. 

Sledding through their 160-page report, we turn to our sweet spot, telehealth, and Trilliant is not delivering cheerful news (pages 32-43). 

  • Unsurprisingly, demand for telehealth is tapering off. Based on claims data for face-to-face video visits, excluding Medicare fee-for-service (Original Medicare) and self-pay visits, they peaked above 12 million in April 2020 and, save for a bump up in December 2020-January 2021, steadily declined to about 9 million by March 2021.
  • Teladoc, the leading provider, is projecting that 2021 volume will only represent 4 percent of the US population–a lot more than before, but not growing as it did in 2020.
  • Telehealth’s growth was astronomical on both coasts–California, Massachusetts, Vermont, Oregon–and Hawaii–but relatively lower in middle and Southern America in places like Wyoming, North Dakota, Mississippi, and Iowa. Telehealth usage is declining sharply in that region as well but across the board in all states including California. In fact, Phoenix and Dallas had higher telehealth utilization pre-pandemic than during it.
  • Mental health drove telehealth growth during the pandemic, representing 35 percent of claims, almost four times the next group of categories at 8 percent. The largest group of diagnoses were for anxiety and depression among women 20-49. With the reopening of the US economy and children heading back to school, will this sustain or decline?
  • Women 30-39 are the largest users of telehealth–pre, during, and post-pandemic

Telehealth is not only proliferating, it is going up against now-open urgent care, retail clinics from Walgreens, Walmart, and CVS, plus tech-enabled providers that blend virtual care with home care, such as Amazon with a full rollout of Amazon Care and other employers. The cost of care is also a negative driver. FierceHealthcare analyzes other parts of the report impacting practices, health systems, and hospitals.

 

Weekend reading: 1/3 of global healthcare orgs ransomwared, 50%+ mobile privacy problems–BMJ study, med device insecurity

June 25, 2021 | by

Weekend reading to make you feel insecure, indeed. Healthcare continues to be one of the most vulnerable sectors to hacking, breaches, ransomware. (It likely was one of the top 5 on the list handed to Mr. Putin in Geneva a week ago.) It doesn’t help that many organizations from providers to payers, legacy devices to apps, figuratively have a ‘Welcome Hackers’ neon sign on their doors, virtual and otherwise.

Three articles from the always interesting Healthcare Dive, two by Rebecca Pifer and the third by veteran Greg Slobodkin, will give our Readers a quick and unsettling overview:

  • According to cybersecurity company Sophos in their 16-page report, 2020 was an annus horribilis for healthcare organizations and ransomware, with 34 percent suffering a ransomware attack, 65 percent confirming the attacks encrypted their data, but only 69 percent reported that the encrypted data was restored after the ransom was paid. Costs were upward of $1 million. Their conclusion: assume you will be hit, and at least three backups. Dive 24 June
  • The BMJ found that lax or no privacy policies were a key problem with over half of mobile health apps. 23 percent of user data transmissions occurred on insecure communication protocols and 28.1 percent of apps provided no privacy policies. There’s a lot to unpack in the BMJ study by the Macquarie University (Sydney) team. Our long-time Readers will recall our articles about insecure smartphone apps dating back to 2013 with Charles Lowe’s article here as an example. Dive 16 June
  • Old medical devices, continuing vulnerability that can’t be fixed. Yes, fully functioning and legacy medical devices, often costing beaucoup bucks, are shockingly running on Windows 98 (!), Windows XP, outdated software, and manufacturers’ passwords. It’s hard to believe that Dive is writing about this as it’s been an issue this Editor’s written about since (drumroll) 2013 when TTA picked up on BBC and other reports of ‘murderous defibrillators and pacemakers’. If too far back, try 2015 with Kevin Fu’s and Ponemon’s warnings then to ‘wash their hands’ of these systems even if they’re still working. Chris Gates quoted in the article: “You can’t always bolt-on security after the fact, especially with a legacy piece of equipment — I’ve literally handed checks back to clients and told them there’s no fixing this.” Dive 23 June

What to do?

  • If you are a healthcare organization, think security first. Other organizations in finance and BPO do, locking down to excruciating points. And yes, you’ll have to pay a premium for the best IT security people, up your budgets, and lower your bureaucracy to attract them. Payers are extremely vulnerable with their wealth of PHI and PII, yet tend to skimp here.
  • Consider bringing in all your IT teams to your home country and not offshoring. Much of the hacking occurs overseas where it’s tougher to secure servers and the cloud reliably and fully.
  • Pay for regular and full probes and audits done by outside experts.
  • If you supply a mobile app–design with security and privacy first, from the phone or device to the cloud or server, including data sharing. There are companies that can assist you with this. One example is Blue Cedar, but there are others.
  • If you supply hardware and software for medical devices, think updates, patches, and tracking every bit you sell to make sure your customers do what they need to do. Even if your customer is a past one.

(Side message to NHS Digital–don’t rush your GPDPR upload to the summer holidays. Make it fourth quarter. Your GPs will thank you.)

Suggestions from our Readers wanted! While your Editor has been covering security issues since early days here, she is not an expert, programmer, or developer, nor has stayed at a Holiday Inn Express lately.

GPDPR update: GPs must set own patient opt-out date prior to 1 September extraction (updated for ‘Data Saves Lives’)

June 24, 2021 | by

(Editor’s Note: Read till the end for Roy Lilley’s take on data and the NHS Bureaucracy. “Bureaucracy… creates delays, duplication, interfaces and costs lives.)

Is it 25 August–or earlier? Well, it depends… NHS Digital has informed GPs that, contrary to a prior announcement, the deadline for submitting those who wish to opt out of the General Practice Data for Planning and Research (GPDPR) database must be set by the GP practice, and is not 25 August. The deadline for the mass extraction remains 1 September. This puts practices into a dilemma–informing patients of their right to opt-out. setting a date for staff to process the forms, and processing the hard copy forms in time for the 1 September extraction. (And right during summer holiday time with the bank holiday on 30 August)

For patients wishing to opt-out, they must submit a type-1 opt-out form (a Word document) and send it to their GP practice via mail or email by the deadline which then submits with the data collection. If a patient wishes to opt-out after, it’s permitted but any data before the opt-out date will be collected. The National Data Opt-Out does not apply to the GPDPR. 

According to the 22 June update in Pulse,

The BMA GP Committee’s latest newsletter quoted IT lead Dr Farah Jameel as saying: ‘The public needs a clear deadline by which they can opt out, alongside clear instructions on how to do this if they so wish.

‘We have been urging the government and NHS Digital to consider making the process of opting out simpler, and in effect remove any additional burden [that] large volumes of Type 1 opt-outs could place on already under-pressure general practice.

‘We urge NHS Digital to clarify this with both the public and practices.’

Another GP from Bristol is quoted as pointing out that most opt-outs will be received last minute, jamming the practices.

In addition, each GP practice has more work to do before the extraction–a data protection impact assessment (DPIA).

The problems of patient awareness, particularly during the summer, obtaining the form, and submitting it in time remain. So, what’s the rush? This Editor closes once again with the thought that the fourth quarter would be far better timing both for the surgeries and NHS Digital.

Our prior coverage 11 June and 2 June.

Addendum: Roy Lilley’s eLetter on ‘Data Saves Lives’ (draft publication here) is a Must Read. It is a most interesting take on how the NHS is botching the opportunities around health data by drowning it in bureaucracy. The latest example is a draft document titled ‘Data Saves Lives’. A course in obfuscation where even a casual look will reveal its true awfulness. Mr. Lilley has counted 96 commitments, 10 new organizations, and six major pieces of legislation. “It is bad, bad, bad and a perfect example of why the NHS’ relationship with the IT sector is so bad.” The GPDPR gets one–one–mention in this document. Sounds like some imports from the US Congress wrote it! In any case, if you’re in UK healthcare, you should be subscribing to this free eLetter. ‘Data Saves Lives’ NHS news release may go down easier

News and deal roundup: Zus Health’s $34M ‘back-end in a box’, Bright Health’s IPO, Lyra Health’s $200M done, Valo Health’s $2.8B SPAC; UK’s Alcuris, Clarity Informatics, GTX test; Google’s health blues, Facebook’s smartwatch

June 18, 2021 | by

Athenahealth founder’s latest health tech venture lays track. Jonathan Bush’s new venture, Zus Health, is being pitched to tech founders as providing a ‘Lego’ like back-end for startup digital health companies. Variously compared to ‘Build-A-Bear’ or track laying, it’s an ‘in a box’ setup that provides a data record back end, a software development kit (SDK) with tools and services, and a patient interface. Presumably, this will also assist interoperability. Mr. Bush has enlisted an all-star team and is basing outside of Boston in the familiar area of Watertown, Massachusetts. Andreessen Horowitz (a16z) led the $34 million Series A, joined by F-Prime Capital, Maverick Ventures, Rock Health, Martin Ventures, and Oxeon Investments. The financing will be used for engineering the tech stack. Current clients developed in stealth include Cityblock Health, Dorsata, Firefly Health, and Oak Street Health. Not a breath about the revenue model other than ‘partnership’. Make sure you pronounce Zus as ‘Zeus’ (Athena’s father for those who aren’t up on their Greek myths). Zus release, FierceHealthcare

This week’s IPO filing by insurtech/clinic operator Bright Health with the Securities and Exchange Commission (SEC) confirmed earlier reports that the offering will crest over $1 billion [TTA 28 May]: 60 million shares with an initial valuation of $20 to $23 is at a minimum of $1.2 billion. Company valuation is estimated at $14 billion which is about midpoint of earlier estimates. It will trade on the NYSE under BHG. The cherry on the cake is a 7.2 million 30-day share purchase option to their underwriters at the initial IPO price. Timing is not addressed in the release but expect it soon. BHG release, Mobihealthnews

Lyra Health banks an additional $200 million. This week the corporate mental health therapy provider completed their Series F $200M financing backed by Coatue, new investor Sands Capital, plus existing investors, for a total of $675 million to date (Crunchbase). Valuation is now estimated at $4.6 billion. Mental and behavioral health tech remains warm, with the thundercloud on the horizon Teladoc’s myStrength app [TTA 14 May]. Lyra’s strong corporate footprint puts them, along with Ginger, in a desirable place for acquisition by a telehealth provider or payer. Lyra release, FierceHealthcare

Drug discovery and development company Valo Health is going the SPAC route with Khosla Ventures. The special purpose acquisition company (SPAC) Khosla Ventures Acquisition Co. will form with Valo Health a new company (KVAC) with a pro for­ma mar­ket val­ue of approx­i­mate­ly $2.8 bil­lion with an initial cash balance of $750 million including a $168 million PIPE led by Khosla Ventures. Valo’s flagship is the Opal Computational Platform that creates an AI-based platform for drug discovery. The current pipeline has two clin­i­cal-stage assets and 15 pri­or­i­tized pre-clin­i­cal assets across car­dio­vas­cu­lar meta­bol­ic renal, neu­rode­gen­er­a­tion, and oncol­o­gy fields. Khosla has been largely absent from digital health investments. The SPAC route to IPOs has also cooled. Valo release, Mobihealthnews  

And short takes on other news… (more…)

The Theranos Story, ch. 74: defense questionnaire trimmed; Holmes loses attorney-client privileges on 13 emails, doctor/patient testimony allowed

June 18, 2021 | by

This week’s update as Elizabeth Holmes’ Federal trial nears its 31 August start. 

The defense’s 112-page whopper of a jury selection questionnaire was, as most expected, nixed by Judge Edward Davila. He provided the defense with a slimmed-down version that apparently, from press reports, edited the media coverage issues. The prosecution had previously objected to the length, intrusiveness, and over-specificity around juror media usage. Judge Davila remarked in Tuesday’s hearing that jurors could be asked about their sources of news in an open-ended response. According to the Fox Business report, “He said both sides might be surprised to see how many potential jurors don’t know anything about the case.” Impartiality is also an issue in high-profile cases, but “impartiality does not require ignorance,” in the words of a previous Federal decision in the Enron CEO’s criminal case.

The jury will also hear testimony from patients and doctors who used Theranos tests and said they got inaccurate results. The testimony will be limited to facts about the inaccurate test and the money they lost by paying for it. Emotional and physical harm will be off-limits. Fox Business  What won’t be admissible, at least for now, is how Theranos “destroyed” its Laboratory Information System, or LIS, database. The defense argued that the prosecution took years to acquire it and then sat on the evidence. Judge Davila reserved the right to revisit that issue if appropriate. Fox Business

Elizabeth Holmes cannot keep her 13 emails with law firm Boies Schiller Flexner LLP out of the trial on attorney-client privilege grounds. US magistrate Judge Nathanael Cousins ruled that it did not apply to these emails since Boies Schiller was the corporation’s legal counsel and not hired by her personally. According to the Wall Street Journal (partial article as paywalled), the receiver who wound down Theranos after it closed in 2018 waived the company’s privilege to the documents, yet another factor. Boies Schiller represented Theranos up to 2016. Managing partner David Boies was a Theranos board director and a bulldog of an advocate from the company until then. Mr. Boies is now aged 80 and remains chairman of the law firm. (One wonders if the well-seasoned litigator, or his deposition, will be part of the trial.)

Judge Davila has also set the trial schedule–three days per week from late August into December, earlier disclosed as Tuesdays, Thursdays, and Fridays, with relatively short days to fight ‘juror fatigue’. Since Elizabeth Holmes will also have delivered her child by the time the trial starts, there will be a “quiet room” in the courthouse provided for her special needs during the trial.

TTA’s previous coverage of Theranos

Disruption or giveaway: Amazon Care signs on employers, but who? Amazon Pharmacy’s 6 months of meds for $6. (updated)

June 16, 2021 | by

Is this disruption, a giveaway, or blue smoke requiring IFR? An Amazon Care VP, Babak Parviz, said at the Wall Street Journal’s Tech Health virtual event that all is well with their rollout of virtual primary care (VPC). Washington state is first, with VPC now available nationally to all Amazon employees as well as companies. However, Mr. Parviz did not disclose the signed-up companies, nor a timetable for when in-person Amazon Care practices will be expanding to Washington, DC, Baltimore, and other cities in the coming months.

Mr. Parviz also provided some details of what Amazon Care would ultimately look like:

  • Clinician chat/video connected within 60 seconds
  • If an in-person visit is required, a mobile clinician arrives within 60 minutes, who can perform some diagnostic tests, such as for strep throat, provide vaccinations and draw blood for lab work. For other diagnoses, that clinician is equipped with a kit with devices to monitor vital signs which are live-streamed to remote clinicians.
  • Medication delivery within 120 minutes

FierceHealthcare

The timing of the Amazon Care rollout has not changed since our coverage of their announcement in March. This Editor noted in that article that Credit Suisse in their overview was underwhelmed by Amazon Care as well as other efforts in the complex and crowded healthcare space. Amazon Care also doesn’t integrate with payers. It’s payment upfront, then the patient files a claim with their insurer.

Existing players are already established in large chunks of what Amazon wants to own.

  • Both Amwell’s Ido Schoenberg [TTA 2 April] and Teladoc’s Jason Gorevic (FierceHealthcare 12 May) have opined that they are way ahead of Amazon both in corporate affiliations and comprehensive solutions. Examples: Amwell’s recently announced upgrade of their clinician platform and adding platforms for in-home hospital-grade care [TTA 29 Apr], Teladoc’s moves into mental health with myStrength [TTA 14 May].
  • Even Walmart is getting into telehealth with their purchase of a small player, MeMD [TTA 8 May].
  • CVS has their MinuteClinics affiliated with leading local health systems, and Walgreens is building out 500 free-standing VillageMD locations [TTA 4 Dec 20]. CVS and Walgreens are also fully integrated with payers and pharmacy benefit management plans (PBM).

Another loss leader is pharmacy. Amazon is also offering to Prime members a pharmacy prescription savings benefit: six-month supplies of select medications for $6. The conditions are that members must pay out-of-pocket (no insurance), they must have the six-month prescription from their provider, and the medication must be both available and eligible on Amazon Pharmacy. Medications included are for high blood pressure, diabetes, and more. The timing is interesting as Walmart also announced a few days earlier a similar program for Walmart+ members. Mobihealthnews.

crystal-ballThis Editor’s opinion is that Amazon’s business plans for both entities and in healthcare are really about accumulating data, not user revenue, and are certainly not altruistic no matter what they say. Amazon will accumulate and own national healthcare data on Amazon Care and Pharmacy users far more valuable than whatever is spent on providing care and services. Amazon will not only use it internally for cross-selling, but can monetize the data to pharmaceutical companies, payers, developers, and other commercial third parties in and ex-US. Shouldn’t privacy advocates be concerned, as this isn’t being disclosed? 

Telemental Health Care Access Act introduced in US Senate to repeal in-person requirements for mental telehealth care

June 16, 2021 | by

Eliminating the Medicare requirement for an in-person visit prior to telehealth used for mental health services. Yesterday, the Telemental Health Care Access Act of 2021 (PDF link) was introduced in the US Senate. It is a bipartisan bill sponsored by four senators, Bill Cassidy, MD (R-LA), Tina Smith (D-MN), Ben Cardin (D-MD), and John Thune (R-SD). It specifically amends Title XVIII of the Social Security Act to ensure coverage of mental health services furnished through telehealth without a prior in-person visit.

The 2021 Consolidated Appropriations Act on one hand removed the geographic restrictions for Medicare, but on the other imposed a restriction that requires physicians to see their mental health patients in-person at least six months prior to a Medicare-reimbursed telehealth visit. It’s significant as Medicare and the Physician Fee Schedule (PFS) [TTA 3 Dec 20] set the standards for commercial payers on coverage and reimbursement. The bill, so new it does not have a number yet, is designed to eliminate that requirement.

In the US, there is an acute shortage (at least 6,000) of mental health providers, particularly psychiatrists. Back in 2013, 70 percent of psychiatrists were over the age of 50 and due to retire. As to the top of the funnel, few medical graduates choose psychiatry due to compensation issues (paying for expensive medical education). Those who do are trained in residencies and tend to stay near large cities, further exacerbating the existing geographic imbalance. It’s a situation that hits this Editor close to home as her own brother is one of those semi-retired psychiatrists. He apparently has not been replaced in the clinic practice in which he worked for over 20 years and his private practice is self-limited. Most of the psychiatrists in his suburban area are retiring as well. Psychiatric mental health advanced practice registered nurses (PMH-APRN) fill only part of this gap. (For a further discussion of APRNs and their role in mental health practice, see this issue of Psychiatric Times)

Telemental health can fill some of the gap in rural areas, for continued support in mental health counseling and medical management, and for those who would benefit from cognitive therapies, a burgeoning area for telehealth companies.

The bill is supported by the American Telemedicine Association (ATA), the American Psychiatric Association, the American Psychological Association, and at least 30 companies (including the leading telehealth providers such as Teladoc and Doctor on Demand) and non-profit organizations such as the American Foundation for Suicide Prevention. ATA release and overview of present in-person requirements;  Senator Bill Cassidy release.

The Theranos Story, ch. 73: the defense tries to stack the jury deck in Holmes’ favor, prosecutors say. And Theranos swag and memes are hot!

June 10, 2021 | by

Law and Order Proceeds. For those of us who follow US trials, or have served on a local or county jury, smart attorneys do a fair amount of ruling jurors in–and out. The voir dire process in high-profile trials is critical. Jury consultants make comfortable livings creating profiles of their ‘ideal juror’.

Thus it should not be a surprise that Elizabeth Holmes’ spare-no-expense-or-strategem defense would file in May with the court an over-the-top 41-page, 112 question jury document. Their rationale is to screen jurors for issues related to the extensive news coverage around la scandale Theranos, Holmes herself, and even the pandemic (!).

In the prosecution’s view, questions such as “Do you have investments?”, “Do you have health insurance?”, and inquiries about social media use, were “untethered” from pretrial publicity and the coronavirus pandemic.

By comparison, the prosecution presented to Judge Edward Davila a modestly sized nine-page questionnaire with a scant 51 questions. Typically, many of these questions are routine, such as reading about the case and if they had any pre-existing opinions which would prevent that person from a fair judgment of the facts presented in the case. On pandemic issues, the prosecution drew from previously used questionnaires that addressed them, though this Editor cannot see how the pandemic is pertinent to this case.

Holmes is facing 12 felony fraud charges. The trial will start 31 August and will be held on Tuesdays, Thursdays, and Fridays through 17 December, according to a filing last week by Holmes’ legal team. She faces maximum penalties of 20 years in prison and a $2.75 million fine, plus possible restitution. East Bay Times

Attention eBay Shoppers!  According to CNBC, original Theranos-labeled items are fetching real coin on auction sites like eBay and Poshmark. An original Theranos lab coat is supposedly listed for $17,000. Over at Etsy and Redbubble, which sell artist-created items, logo-printed t-shirts and masks, including those with Holmes’ face and the Silicon Valley meme, ‘Fake It Till You Make It’, “Girl Boss” signs, throws, posters (left), and greeting cards. (Good things? Yeesh!) are all over. The funniest is a sweatshirt with ‘Theranos Testing–A Guaranteed Result’. Over on Etsy, a merchant’s most popular Theranos item is a mug emblazoned ‘Theranos Early Investor’. (Is it cracked?) Perhaps Holmes could put her Theranos trinkets and trash online to defray a few costs. Or copyright her image like Bogart?

NHS Digital GPDPR medical database plans criticized by Royal College of GPs, privacy advocates (updated 8 June)

June 2, 2021 | by | 2 Comments

What our UK Readers may have missed on the long bank holiday weekend. And why this matters outside the UK.  NHS Digital is being roundly criticized by privacy advocates, the Royal College of GPs (RCGP), the Doctors’ Association UK (DAUK), and individual GP surgeries on plans for creation of the General Practice Data for Planning and Research (GPDPR).

The GPDPR will compile information on 55 million patients–every patient in England registered with a GP surgery–into a database available to academic and commercial third parties for research and planning purposes. NHS has been collecting patient data on patients in a database, the General Practice Extraction Service (GPES), for the past decade. The GPDPR will replace it. Data collection on patients in England starts 1 July. What will be collected is at the end of this article as background.

The objections center on the sensitivity of the data, the short window of notification to patients, the lack of a clearly notified opt-out with sufficient time, and how it will be used.

  • The data apparently can include mental and sexual health data, criminal records (!), and other sensitive information. 
  • The short time–six weeks–between the announcement in late April (a low key affair with Matt Hancock-signed blog posts on the NHS Digital website, YouTube videos, and flyers at GP surgeries), and the start of data collection from the surgeries
  • How many patients are actually aware that this is happening and of their options is debatable. (See next two bullets)
    • If a patient didn’t pick up on it in the six-week window ending on 23 June (and go to the page with the Type 1 Opt-Out), a patient can opt out for data going forward, but cannot withdraw any data collected into the database prior to that date.
    • If a patient is in the National Data Opt-out program, their medical data will be collected anyway, since it applies to only identifiable and confidential patient information.
  • Many GPs are concerned about further erosion of the physician-patient relationship and the lack of communication to patients on how the data will be used, the ethical questions around the organizations to which it will be sold, and how patient privacy will be preserved.

The blackest mark here on NHS Digital is that the groups ostensibly involved in the development of the database–the RCGP and the British Medical Association (BMA)–are the ones sounding the alarm, along with the aforementioned DAUK and privacy groups such as MedConfidential and Foxglove. There is also a rebellion starting among London GPs. Reportedly, 36 doctors’ surgeries in Tower Hamlets, east London, will withhold data. An email is circulating to about 100 surgeries in north London questioning the legitimacy of the NHS data collection. This is despite penalties if they don’t submit.

Why does this matter if you’re not in England? Medical data–collecting, manipulating it, connecting it, finding insights, and selling it–is the Gold Rush of the 2020s. Pharma and payers as markets are just the start. Nearly every Roundup or deal this Editor covers has companies with a chunk of this gold rush. Why are telehealth companies worth their IPO/SPAC/funding prices? Why is McKesson ‘big banging’ four separate businesses into one division? Why do we follow ‘data warehouses’ like Sensyne [TTA 26 May],  Mayo Clinic’s big bet on a multi-line Remote Diagnostics and Management Platform [TTA 23 Apr], and virtual pharmacies like Capsule?  Why are insurtechs like Oscar and Bright Health hot? Why is it the #1 target of hackers?

It’s not altruistic. Services can be duplicated. Companies can be a hair away from failure. But ah, their data…the data has huge market value, even if its potential is not fully understood yet. Ask any data analytics person. Ask China, probably the most aggressive nation in collecting the health and personal data of its citizens, with Chinese capital for years now leading investment in global health tech companies.

In an article back in October 2015, this Editor described the many ways that deidentified patient data, in this case genomic data, can be identified by researchers through cross-checking via research database “beacons”, a network of servers. Referring to the 23andme and Ancestry.com collection of innocently given genomic data from consumers, this Editor proposed a Genomic Bill of Rights in 2018 and again in 2020. If this Editor, no data geek, can deduce it (hat tip to Toni Bunting back in 2015), this information has to be well known to researchers and to privacy advocates.

The controversy is just starting to ramp up. And it should. It’s about time there was a reckoning. The Guardian 30 May, 1 June

More background. According to the NHS Digital page on the GPDPR, patients will be anonymized by a process where de-identification software will replace their NHS Number, date of birth, and full postcode with unique codes produced by de-identification software. The data collected from GPs in England starting 1 July will be on: (more…)