News and deals roundup: CoverMyMeds ‘big bang’, Noom’s $540M Series F, insurtech Bright Health’s IPO, Grand Rounds-Included Health, GoodRx, Cedar-OODA, Huma, Bluestream Health’s outreach

McKesson shmushes four units into CoverMyMeds. McKesson’s Big Bang combines four McKesson business units–RelayHealth (pharmacy networking), McKesson Prescription Automation (software), CoverMyMeds (medication access for patients), and RxCrossroads by McKesson (therapeutic and drug commercialization). They are being reassembled into one massive unit under the CoverMyMeds name. The unit will have about 5,000 people and will be headed by Nathan Mott. More here in a blog post/announcement posting that’s short on information and long on cheerleading.

And the funding rounds keep marching down the alphabet. Noom, the weight loss app, gained a generous Series F of $540 million led by Silver Lake with participation from Oak HC/FT, Temasek (Singapore), Novo Holdings, Sequoia Capital, RRE and Samsung Ventures. Valuation is now at $4 billion. Adam Karol, a managing director at Silver Lake, and former TaskRabbit chief executive Stacy Brown-Philpot will join Noom’s board. The fresh funding will be used to expand into areas such as stress and anxiety, diabetes, hypertension, and sleep.

Noom had a banner year in 2020, with $400 million in revenues as people tried to shed Pandemic Pounds (aided by a near-ubiquitous ad push). The app has had 45 million downloads to date in 100 countries, largely in the US, UK, Canada, Australia, Ireland, and New Zealand. According to a (paywalled) Bloomberg News report, feelers are out for an IPO which may be valued at $10 billion. TechCrunch, Reuters, FierceHealthcare

Bright Health Group filed its S-1 registration statement with the Securities and Exchange Commission (SEC). Their rumored $1 billion IPO will be on the NYSE and trade under the symbol BHG. Timing, share value, and number of shares are to be determined. It’s speculated that the valuation at that point is expected to be between $10 and $20 billion. Bright Health is an insurtech operating exchange and Medicare Advantage (MA) health plans under Bright HealthCare  in 14 states and 50 markets, covering over 620,000 lives. They also have a separate care delivery channel called NeueHealth, 61 advanced risk-bearing primary care clinics delivering in-person and virtual care to 75,000 unique patients. Last month, they purchased Zipnosis, adding their white-labeled telemedicine for large health systems business. Bright Health Group release, Mobihealthnews

Short takes:

Doctor on Demand and Grand Rounds, which finalized their merger earlier this month, have agreed to acquire Included Health. Terms and timing were not disclosed. Included Health specializes in care concierge and healthcare navigation services for the LGBTQ+ community. FierceHealthcare, Release

GoodRx acquired rival RxSaver for $50 million in cash in late April to bulk up against Amazon. FierceHealthcare

Medical billing and pre-visit tech company Cedar is acquiring payer workflow tech company OODA Health for $425 million deal in a mix of cash and equity. It’s expected to close at end of May. OODA’s co-founder, chairman, and co-CEO is Giovanni Colella, MD, also co-founded Castlight Health and founded RelayHealth (see above), so another successful exit for him. FierceHealthcare, HISTalk

London-based Huma, raised $130 million in a Series C. Leaps by Bayer and Hitachi Ventures led the round. The former, mysterious Medopad now seems to have settled on a platform that supports ‘hospital at home’ plus pharma and research companies in large, decentralized clinical trials. There’s an add-on of $70 million to the Series C that can be exercised at a later date. Release, HISTalk

White-label telehealth provider Bluestream Health is partnering with The Azadi Project to provide virtual care services to refugee women and girls fleeing from countries like AfghanistanIranIraq, and Syria for safety in Greece. “Bluestream Health has teamed with The Azadi Project to provide a virtual care platform that stretches around the world. The women fleeing war-torn and conflict-affected countries have suffered unspeakable abuse, and while seeking safety in Greece, they are further exposed to terrible living conditions and hostility.”  said Matthew Davidge, co-founder and CEO of Bluestream Health.  Release

An unappreciated long term pandemic health effect? Increased frailty among older adults.

Some of the universal effects of the COVID-19 pandemic and the prolonged lockdown, lifting in practically all of the US and starting to lift in the UK, is weight gain (‘pandemic pounds’), a changed perception of ‘maintenance’, and in some, a certain reluctance to get back to what was normal life. We are reading that younger workers are reluctant to leave 100 percent remote work and go back to offices at all. Even older workers want to limit in-office time to once or twice a week, having lived free of brutal commutes. Anti-social has become fashionable, based on a simple search of t-shirts for sale (!).

But for the older adult battling to keep engaged and mobile, the toll of prolonged ‘sheltering in place’ has been far greater and less reversible, if at all. A thought piece in Kaiser Health News found that “Large numbers of older adults have become physically and cognitively debilitated and less able to care for themselves during 15 months of sheltering in place.” This includes older adults who did–and did not–have COVID-19.

Doctors are seeing combinations of:

  •  Weight gain–and weight loss due to lack of interest in eating, not eating or hydrating well
  • Depression from lack of contact with family and the outside world
  • Cognitive difficulties
  • Physical deconditioning, leading to severe lack of mobility and falls. Lack of activity leads to muscle mass loss of up to 20 percent in as little as five days.
  • Exacerbation of chronic illnesses such as diabetes, congestive heart failure and chronic obstructive pulmonary disease (COPD)

For those in assisted living, a comeback is made even more difficult with restrictions still in place. Many have deteriorated so much that rehabilitative therapies do little good. The rest of the article describes rehabilitative outreach to those living at home, ranging from in-home physical therapy, to combinations of phone/video/in-home outreach, peer advocates, and encouraging older adults to go see their doctors in person. A follow-up article gives tips for older adults to reemerge in the post-pandemic world, with an emphasis on slowly increasing physical activity, reestablishing routines and social contacts, plus minding one’s diet.

The Theranos Story, ch. 72: a little lifestyle and celebrity is admissible at trial–but not too much. And no profanity, please!

The long-awaited update from the US District Court in San Jose. Judge Edward Davila ruled last Friday limiting the specifics on Elizabeth Holmes’ lifestyle that the prosecution wanted to present as evidence. Only general evidence of Elizabeth Holmes’ Silicon Valley CEO lifestyle would be admissible. The prosecution, in his words, “Each time Holmes made an extravagant purchase, it is reasonable to infer that she knew her fraudulent activity allowed her to pay for those items,” but that “Evidence of Holmes’s wealth can be construed as ‘appeals to class prejudice’ which are considered ‘highly improper’ because they ‘may so poison the minds of jurors even in a strong case that an accused may be deprived of a fair trial.” To the judge, evidence of Holmes’ wealth and fame are not even moderately related to the intent to defraud, the last of which is the heart of the charges.

The prosecution therefore has to walk a very fine line. It’s apparently fine to say that Holmes enjoyed a luxurious lifestyle equivalent to her Silicon Valley peers, with the usual perks. But details on brands of clothing, hotels, and other specifics “outside the general nature of her position as Theranos CEO,” is beyond the scope of the trial.

Judge Davila may be doing the prosecution a large favor by limiting this evidence. Too much reliance on lifestyle as the main motive to defraud is a crutch that could backfire with the jury, especially when they see in August a modestly dressed new mother Holmes. It could also open up an appeal on the basis of prejudicing the jury. To this Editor, there is abundant direct evidence of fraud of patients and investors in a technology that didn’t work, never could work, and the coverup. No need to overegg the pudding. Mercury News

And no profanity in the court! The jury will be spared the infamous employee meeting chants telling a rival testing company (Sonora Quest) and John Carreyrou of the Wall Street Journal to do something unprintable in a business article with themselves. The defense won the argument that these chants were the Silicon Valley Norm to motivate employees. Even the prosecution admitted that these might be “somewhat inflammatory”. Colorful, but inadmissible.  Mercury News

And lest we forget. Holmes is facing maximum penalties of 20 years in prison and a $2.75 million fine, plus possible restitution. The trial starts 31 August. Earlier chapters of this saga are here.

Connect America acquires Philips’ Aging and Caregiving, including Lifeline

Connect America is purchasing Royal Philips’ Aging and Caregiving (ACG) line of business, including one of the top basic personal emergency response system (PERS) device providers, Lifeline. The acquisition is expected to close in a few weeks. Purchase terms, including staff, were not disclosed. The release by Connect America contains two unusual statements: both companies will remain competitive until the closing and that Philips will retain an equity stake in the company.

In the World of PERS and safety for older adults, this is big news. Our Readers will remember that Connect America, a medical alert company located in suburban Philadelphia, purchased Tunstall Americas in January 2019. Readers who follow the PERS taxonomy will recall that in 2011, Tunstall acquired AMAC, the third-largest PERS company, yet after multiple presidents and acquisitions, failed to make much of a dent in the competitive US and Canada markets. Connect America now has the major ‘name’ brand in PERS, other than Life Alert, famous for the ‘I’ve fallen and can’t get up’ TV commercials of yore and the real pioneer of the PERS pendant. Lifeline itself dates back to 1974 and was acquired by Philips in 2006. Of late, Philips has been on a divestiture tear, especially in North America.

The news hasn’t exactly made the headlines that it would have only a few years ago. One could say that the parade has passed traditional PERS pendants and home units. Replacing them are mobile and smartphones tied to assistance–GreatCall’s 5 Star services. There are bands and wristwatch forms, such as Buddi in the UK and UnaliWear’s Kanega, The latter haven’t yet the market penetration in the US but all three have in common one selling factor–none of them scream ‘old and frail at risk’ like a white pendant around the neck does. Classified now with PERS are more sophisticated but bulky devices mobile-based systems such as GreatCall’s Lively MobilePlus and Lively Wearable2, also listed as an AARP member benefit.

Connect America has been in business 35 years and has amassed a portfolio of PERS brands, traditional home and mobile devices including fall detection, plus 24/7 monitoring services. It claims to be the nation’s largest independent provider of medical alert systems under various brand names, with more than 1,000 healthcare network partners, and cumulatively over 1 million customers. Their other business is remote patient monitoring under the ConnectVitals brand and a cellular-connected device for medication management.

Another big win for Connect America is Lifeline’s agreement with AARP, marketed as part of their extensive member benefits, and other products that Philips has in this category. 

There are millions who still use traditional and mobile PERS pendants, including in the huge market of assisted living, and a multiplicity of brands, which indicate the size of the market and its longevity. The stats haven’t changed much since this Editor was with QuietCare, attempting to make PERS obsolete back in the mid-oughts. According to Freeus, the average customer is a woman, 78 years old, and keeps it for about 39 months–a little over three years. Not all of them, nor their families, feel comfortable with a smartphone which can be hard to use, break, or simply not be handy in the bathroom or bedroom. So the market is still there, albeit not a headline-making one. Hat tip to a UK Reader who wishes to remain anonymous.

‘Most Reputable’ healthcare technology companies ranked

RepTrak has a mission–quantifying reputation, brand, and ESG (environmental, social, and corporate governance) performance for their clients. Their product is software and algorithms that monitor real-time perception data for companies to increase reputation intelligence. A way to market themselves is to issue a Top 100 list (PDF link) of top-scoring companies primarily in mass-market and luxury brands, plus automotive, retail, financial, media and entertainment, and technology companies. Becker’s Health IT picked out health tech-related companies as follows:

Bosch (#4)
Microsoft (#10)
Philips (#13)
Google (#15)
3M (#20)
Apple (#46)
Hewlett Packard Enterprise (#49)
IBM (#54)
Salesforce (#89)
Amazon (#92)

These companies in the Top 100 averaged 74.9 in Global Reputation Scores, a composite of products and services, innovation, workplace, governance, citizenship, leadership, and performance. 

This Editor was surprised that Becker’s missed Samsung (#17), in medical imaging monitors, dedicated smartphones, monitors, and in many of the tablets that are used in remote patient monitoring and telehealth; LG (#67) in the same lines of business; Dell (#72) in computing, cloud, and monitors; and Honeywell (#77). 

Pharma and related companies were in the lower-ranked group: Lilly (#82), Roche (#87), BristolMyers Squibb (#94), and BASF (chemicals for pharmaceuticals and vitamins).

Notably, healthcare service companies such as health plans were not included in the ranking. Are they RepTrak clients? (Do they dare?)

The top three companies? Lego, Rolex, and Ferrari. The last only before the repairs come needing replacement parts!

Google’s Care Studio patient record search tool to pilot at Beth Israel Deaconess Medical Center

A cleaned-up Project Nightingale? Beth Israel Deaconess Medical Center (BIDMC) in Boston announced their participation in a pilot with Google of Care Studio, described in the BIDMC press release as “a technology designed to offer clinicians a longitudinal view of patient records and the ability to quickly search through those records through a single secure tool.” In other words, it’s like Google Search going across multiple systems: the BIDMC proprietary EHR (WebOMR), core medical record system, and several clinical systems designed for specific clinical specialties. All the clinician need do is type a term and the system will provide relevant information within their patient’s medical record from these systems, saving time and promoting accuracy. (See left)

The BIDMC pilot will use a limited group of 50 inpatient physicians and nurses, to assess the tool’s quality, efficacy, and safety of its use. Technical work starts this month.

At the end of the BIDMC release, it’s carefully explained that the tool is “designed to adhere to state and federal patient privacy regulations, including the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and industry-wide standards related to protected health information. BIDMC and Google Health have entered into a Business Associate Agreement (BAA) to ensure that both parties meet patient privacy obligations required under HIPAA. BIDMC patient data will be stored and maintained in a protected environment, isolated from other Google customers.” (Editor’s emphasis) The BAA was inked in 2018.

Without referring to it, it addresses the controversy surrounding Google’s Project Nightingale and Ascension Health, a major privacy kerfuffle pre-COVID that broke in early November 2019. From the TTA article, edited: “Google’s BAA allowed them apparently to access in the initial phase at least 10 million identified health records which were transmitted to Google without patient or physician consent or knowledge, including patient name, lab results, diagnoses, hospital records, patient names and dates of birth.” Ascension maintained that everything was secure and Google could not use data for marketing or other purposes not connected to the project, but handling was under wraps and Google employees had access to the data. Ascension’s core agreement was about migration of data to Google Cloud and providing G Suite tools to clinicians and employees. But apparently there was also a search tool component, which evolved into Care Studio.

Health and Human Services (HHS) Office of Civil Rights, which governs privacy, announced at the time an investigation. The only later reference this Editor was able to locate was in HIPAA Journal of 5 March 2020 regarding the request of three Senators from both sides of the aisle demanding an explanation on the agreements and what information Google employees accessed. The timing was bad as then COVID hit and all else went out the window. In short, the investigations went nowhere, at least to the public.

It would surprise this Editor if any questions were raised about Care Studio, though BIDMC’s goal is understandable and admirable. Also Becker’s Hospital Review, FierceHealthcare

A smash Q1 for digital health funding–but the SPAC party may be winding down fast

An Overflowing Tub of Big Funding and Even Bigger Deals. The bubble bath that was Q1 deals and funding is no surprise to our Readers. Your Editor at one point apologized for the often twice-weekly roundups. (Better the Tedium of Deals than COVID and Shutdown, though.)

Rock Health provides a bevy of totals and charts in its usual quarterly summary of US digital health deals.

  • US funding crested $6.7 bn over 147 deals during January through March, more than doubling 2020’s $3.1 bn in Q1 over 107 deals.
  • Trending was on par through February, until it spiked in March with four mega-deals (over $100 million) over two days: Clarify (analytics), Unite Us (SDOH tech), Strive Health (kidney care), and Insitro (drug discovery). These deals also exceeded 2020’s hot Q3 ($4.1 bn) and Q4 ($4.0 bn).
  • Bigger, better. Deals skewed towards the giant economy size. $100 million+ deals represented 66 percent of total Q1 funding
  • Deal sizes in Series B and C were bigger than ever, with a hefty Series B or C not uncommon any more. Series B raises were on average $49 million and C $77 million. One of March’s megadeals was a Series B–Strive Health with a $140 million Series B [TTA 18 Mar].
  • Series A deal size barely kept up with inflation, languishing in the $12 to $15 million range since 2018.
  • Hot sectors were a total turnaround from previous years. Mental health, primary care, and substance use disorders, once the ugly ducklings which would get their founders tossed out of cocktail parties, became Cinderellas Before Midnight at #1, #2, and #3 respectively. Oncology, musculoskeletal (MSK), and gastrointestinal filled out the Top 6 list.
  • M&As were also blistering: 57 acquisitions in Q1, versus Q4 2020’s 45

Given the trends and nine months to go, will it blow the doors off 2020’s total funding of $14 bn? It looks like it…but…We invite your predictions in the Comments below.

Les bon temps may rouler, but that cloud you see on the horizon may have SPAC written on it. A quick review: Special Purpose Acquisition Companies (SPACs) typically are public companies that raise money through their own IPOs for the express purpose of buying other companies. Often called a ‘blank check’, they have no purpose other than buying one or two other companies–in the latter case, merging them like the announced Cloudbreak and UpHealth last November–and converting over to the company’s identity and business. The timeframe is usually two years. Essentially, the active company goes public with a minimum of the messy, long, expensive, and revelatory process of filing directly with the SEC (in the US). This quarter, Rock Health’s stat on SPACs was that they raised $83.1 bn this quarter, exceeding by $0.5 bn all SPAC activity in 2020, mainly late in the year. Their count was two SPACs closing in Q1 and 8 more announced but not yet closed (counting Cloudbreak/UpHealth as one).

As an exit door for investors, it’s worked very well–but is dependent on private equity and public investors having confidence in SPACs. One thinning of the bubble may be the scrutiny of Clover Health’s SPAC by the SEC [TTA 9 Feb] over not revealing that they were under investigation by the Department of Justice (DOJ). Certainly this was a material circumstance that could dissuade investors, among other dodgy business practices later unveiled. Mr. Market tells a tale; Clover went public 8 Jan at $15.90 and closed today at $7.61. Their YahooFinance listing has a long list of law firms filing class-action lawsuits on behalf of shareholders.

Clover may be the leading edge of a SPAC bust. SPACs are losing their luster because there are too many going through, jamming bandwidth at the bank and law firm level. As time ticks by and deals are delayed, the private funders of SPACs are growing squeamish, according to this report in National Review’s Capital Note (yes, National Review has a finance newsletter). “In the past two weeks alone, four blank-check deals have been halted, with SPAC shares declining significantly from their highs early this year. The slowdown follows an influx of short-sellers into the opaque financial vehicles and a sell-off in high-profile SPACs such as Churchill Capital Corp IV.” Reasons why: lower quality of companies available to go public via SPAC–the low hanging ripe fruit has been picked–and the last mile in SPACs, which is PIPE funding (private equity-investment-in-public-equity financing) is getting skittish. The last shoe to drop? The SEC in late March announced an investigation into SPACs, making inquiries into several banks seeking information on their SPAC dealings, which is alluded to near the end of the Rock Health report. CNBC  (Read further down into the NR article for a Harvard Business Review dissection of the boom-bust dynamics of ‘controversial practices’ like reverse mergers as a forecast of what may happen to SPACs. Increased popularity led to increased negativity in reverse mergers.)

And speaking of SPACs...Health tech/digital health eyes are upon what Glen Tullman and the ‘late of Livongo’ team will be doing with their SPAC, Health Assurance Acquisition Corp., which is backed by Hemant Taneja’s General Catalyst, also a former Livongo funder. Brian Dolan, who is now publishing Exits and Outcomes. His opinion is their buy will be Color, formerly Color Genomics: opinion piece is here. Messrs Tullman and Taneja are also leading Transcarent, a company that brings together employers, employees, and providers in a seamless, app-driven integrated care model. Forbes

The cool-off in SPACs may burst a few bubbles in the bath–and that may be all to the good in the long term.

Zipnosis, health system telemedicine/triage provider, acquired by insurtech Bright Health Group

Breaking: Zipnosis, a telemedicine/telehealth company that provides telehealth and diagnosis triage for large health systems, had a stealthy announcement of its acquisition by Bright Health Group late yesterday. The announcement is not on either corporate website but was made by Zipnosis’ financial advisers in the transaction, Cain Brothers/KeyBanc. Neither the value of the transaction, the transition plans for Zipnosis management and staff, nor operating model, were disclosed. Both Zipnosis and Bright Health are HQ’d in Minneapolis. Release

Why This Is Verrrry Interesting. Zipnosis developed an interesting niche as a relatively early starter in 2009 by providing white-labeled telemedicine systems to large health systems. They made the case to over 60 health systems across the US, including large systems like Allina Health with a ‘Digital Front Door’ that provided initial triage for a claimed 2 million patients, moving them into synchronous or asynchronous care fully integrated with hospital EHRs. They were named as the ‘Hottest Digital Startup from Flyover Country’ by Observer.com, once upon a time in this Editor’s wayback machine an actual print weekly newspaper and, as is obvious, NYC-centric. Release Their funding to date is, surprisingly, limited: under $25 million from seven investors, including Ascension Ventures, Safeguard Scientifics, Hyde Park Ventures, and Waterline Ventures, with the last round back in 2019. Crunchbase

Bright Health Group, on the other hand, is an insurance provider in both the exchange and Medicare Advantage (MA) markets in 13 states and 50 markets, covering 500,000 lives. Their model integrates both technology like web tools and apps with their insurance plans to be an ‘insurtech’ like Oscar Health and Clover Health. They claim to be the third-largest provider of the highly specialized type of Medicare Advantage plans called Chronic Condition Special Needs Plans (C-SNP) for those with severe and/or disabling chronic conditions. Bright Health operates in 13 states and 50 markets. In January, they announced the acquisition of Central Health Plan in California with 110,000 MA members.

However, what is verrrry interesting about Bright’s model, compared to other ‘insurtechs’, is that they own or manage a care delivery channel–40 advanced risk-bearing primary care clinics delivering in-person and virtual care to 220,000 members. The ‘risk-bearing’ is also interesting as it leads one to believe that some of these practices may participate in Center for Medicare and Medicaid Services (CMS) value-based care models such as Primary Care First, the Medicare Shared Savings Program, or End-Stage Renal Disease (ESRD).

Bright Health is also extremely well funded now–and may be even better funded in the near future. Last September, they raised $500 million in a Series E led by New Enterprise Associates with Tiger Global Management, T. Rowe Price Associates, and Blackstone, as well as existing investors including Bessemer Venture Partners and Greenspring Associates (Crunchbase and Mobihealthnews). The purpose stated at the time was new market expansion both geographically and to small groups. Last week’s rumor was that they are preparing for an IPO in the $1 bn range with a valuation between $10 and $20 bn, which is Big Hay indeed. No paperwork has been filed yet with the SEC. Twin Cities Business, YahooFinance.

As an acquisition for Bright Health, Zipnosis brings in large healthcare systems with a unique triage platform that could be modified for primary care practices. It seems like a snack-sized acquisition that doesn’t require Federal approval but can be operated stand-alone–as health systems may be leery of an insurer’s ownership–with technology that can be integrated into other parts of the Bright Health business. This will be updated as additional news develops.

Weekend reading: the strange reasons why Amwell doesn’t consider Amazon a competitor; ground rules for the uneasy marriage of healthcare and technology

Yahoo Finance interviewed co-CEO/founder of Amwell Ido Schoenburg, MD on the company’s 2020 results and forecast for 2021. It makes for interesting but convoluted reading on their growth last year in what is a consolidating field where Amwell was once one of the undisputed two leaders. They now compete against payers acquiring telehealth companies (MDLive going to Optum) and mergers like Doctor on Demand-Grand Rounds that are taking increasing market shares. Then there are specialty providers like SOC Telemed and white-labels like Bluestream Health. However, there are a couple of whoppers in the happy talk of growth for all. Dr. S pegs the current run rate of telehealth visits at 15-20 percent. The best research from Commonwealth Fund (October) and FAIR Health (August) tracked telehealth at 6 percent of in-office visits. Epic Health Research Network measured 21 percent at end of August. [TTA summary here

Then there’s the tap dance around Amazon Care. His view is that telehealth companies all need a connective platform but that each competitor brings ‘modular components’ of what they do best. What Amazon excels at is the consumer experience; in his view, that is their contribution to this ‘coalition’ because healthcare doesn’t do that well. There’s a statement at the end which this Editor will leave Readers to puzzle through:  

“And Amazon and others could bring a lot of value to those coalitions, they should not be seen as necessarily competing unless you’re trying to do exactly what they do. And there are some companies, including some telehealth companies, that that’s what they do. They focus on services. They try to sell you a very affordable visit with a short wait time and a good experience. They should be incredibly concerned when someone so sophisticated as Amazon is trying to compete in that turf.”

The last time this Editor looked, none of these companies were non-profit, though nearly all are not profitable.

Gimlet EyeLooking through her Gimlet Eye, Amazon Care is a win-win, even if the whole enterprise loses money. In this view, Amazon accumulates and owns national healthcare data far more valuable than the consumer service, then can do what they want with it, such as cross-analysis against PillPack and OTC medical shopping habits, even books, toys, home supplies, and clothing. Ka-ching!

A ‘bucket of cold water’ article, published in Becker’s Health IT last month, takes a Gimlety view of the shotgun marriage of healthcare and technology. Those of us laboring in those vineyards for the better part of two decades might disagree with the author in part, but we all remember how every new company was going to ‘revolutionize healthcare’. (The over-the-top blatherings of ZocDoc‘s former leadership provide a perfect example.) The post-Theranos/Outcome Health/uBiome world has demonstrated that the Silicon Valley modus operandi of ‘fake it till you make it’ and ‘failing fast and breaking things’, barely ethical in consumer businesses, are totally unethical in healthcare which deals in people’s lives. Then again, healthcare focused on ‘people as patients’ cannot stand either. Stephen K. Klasko, MD, President and CEO, Thomas Jefferson University and Jefferson Health in Pennsylvania, advocates for a change–far more concisely than Dr. Schoenburg. You may want to pass this along.

CareCentrix files ‘corporate espionage’ on trade secrets lawsuit against Signify Health, former employee

Usually, laundry like this is not aired or dried in public, but it’s on the line nevertheless in a lawsuit. CareCentrix, a post-acute care/transitions of care management company, has sued in US Federal Court for the District of Delaware both Signify Health, a diversified home care company overlapping the same line of business, and CareCentrix’s former general manager, VP post-acute care Marcus Lanznar.  Initial charges were filed on 23 December and motions are piling up fast based on what is listed (paywalled, unfortunately) on PacerMonitor.

The Federal charge is covered under the Defend Trade Secrets Act of 2016 (DTSA), Cause 18:1836(a) Injunction against Misappropriation of Trade Secrets. The basics are that Mr. Lanznar was a senior executive of CareCentrix, had access to proprietary information, and had a restrictive covenant that would not allow him to go to a competitor for nine months. Yet he was engaged in interviews starting in July 2020, by August-September was having regular meetings with his counterpart, chief product officer Peter Boumenot, and passed CareCentrix information not only to his personal email but also to Signify into October, when Mr. Lanznar resigned. He joined Signify Health in November 2020 and is listed on LinkedIn as SVP product, though not on their management page. 

The lawsuit claims that Signify “targeted, recruited, and hired former CareCentrix executive Marcus Lanznar in a covert scheme that succeeded in providing access to CareCentrix’s confidential information and trade secrets” and also was aware of the conflict presented by the restrictive covenant. It seeks to prevent Mr. Lanznar and Signify Health from using its trade secrets and to award it damages and attorneys’ fees. 

This is a David versus Goliath matchup. Signify Health in February had a highly successful IPO gaining over $560 million and is valued with a market cap of over $7 bn. CareCentrix to date is most definitely the David in this scenario in terms of size, having raised all private equity funding via Summit Partners starting in 2011. However, it has made two acquisitions of its own recently: Vesta Healthcare at $30 million and Turnkey Health for an undisclosed amount (Crunchbase). The stakes are piled high in this hot segment of healthcare. 

There are a number of high-powered law firms dueling in this lawsuit, which also includes CareCentrix’s parent, NDES Holdings. Note: this article is based on both reporting in Healthcare IT News, which initially filed the story, and FierceHealthcare’s close on follow-up.

Two major moves and what they mean: Doctor on Demand, Grand Rounds to merge; Amazon Care will go national by summer (updated)

This week’s Digital Health Big Deal (as of Wednesday!) is the merger agreement between telehealth/virtual visit provider Doctor on Demand and employer health navigator Grand Rounds. Terms were not disclosed. It’s important because it extends Grand Rounds’ care coordination capabilities beyond provider network navigation and employee clinical/financial tools for six million employees into an extensive telehealth network with 98 million patients in commercial, Federal, and state health plans.

Both companies had big recent raises–$175 million for Grand Rounds in a September 2020 Series E (Crunchbase) and Doctor on Demand with a $75 million Series D last July (Crunchbase). The transaction is a stock swap with no cash involved (FierceHealthcare, CNBC), and the announcement states that the two companies will operate under their own brands for the time being. Owen Tripp, co-founder and CEO of Grand Rounds, will run the combined company, while Doctor on Demand CEO Hill Ferguson runs DOD and joins the board. The combined company is well into Double Unicorn status with over $2 bn in valuation. Also Mobihealthnews.

What it means. Smaller (than Teladoc and Amwell) telehealth companies have been running towards M&A, with the most recent MDLive joining Optum’s Evernorth [TTA 27 Feb] creating interstate juggernauts with major leverage. Doctor on Demand was looking at their options for expansion or acquisition and decided 1) the time and the $ were right and 2) with Grand Rounds, they could keep a modicum of independence as a separate line while enjoying integration with a larger company. The trend is profound enough to raise alarms in the august pages of Kaiser Health News, which decries interstate telehealth providers competing with small and often specialized in-state providers, and in general the loosening of telehealth requirements, including some providers still only taking virtual visits. Contra this, but not in the KHN article, this Editor has previously noted that white-labeled telehealth providers such as Zipnosis and Bluestream Health have found a niche in supplying large health systems and provider groups with customized telehealth and triage systems.

UPDATED. In the Shoe Dropping department, Amazon Care goes national with virtual primary care (VPC). To no one’s surprise after Haven’s demise, Amazon’s pilot among their employees providing telehealth plus in-person for those in the Seattle area [TTA 17 Dec 20] is rolling out nationally in stages. First, the website is now live and positions the company as a total care management service for both urgent and primary care. Starting Wednesday, Amazon opened the full service (Video and Mobile Care) to other Washington state companies. The in-person service will expand to Washington, DC, Baltimore, and other cities in the next few months. Video Care will be available nationally to companies and all Amazon employees by the summer.

Notably, and buried way down in the glowing articles, Amazon is not engaging with payers on filing reimbursements for patient care. Video Care and Care Medical services will be billed directly to the individual who must then send for reimbursement to their insurance provider. The convenience is compromised by additional work on the patient’s part, something that those of us on the rare PPO plans were accustomed to doing back in the Paper Age but not common now. It also tends to shut out over 65’s on Medicare and those on low-income plans through Medicaid. It is doubtful that Amazon really wants this group anyway. Not exactly inclusive healthcare.

TechCrunch, FierceHealthcare. Jailendra Singh’s Credit Suisse team has a POV here which opines that Amazon continues to have a weak case for disruption in VPC, along with their other healthcare efforts, and an uphill battle against the current telehealth players who have already allied themselves with employers and integrating with payers.

News roundup: Hacks, ransomware of medical records, security cameras spike; Withings launches new mobile-direct devices; Bluestream Health adds Leon Medical (FL) to telehealth

In recent weeks, hackermania has been romping in healthcare. A compilation of incidents revealed just in the past few weeks have affected hundreds of thousands of patients, employees, and providers:

  • Security cameras produced by Verkada, Inc. were hacked across the US, including at Tesla. Healthcare organizations affected by the hack were Daytona Beach, Fla.-based Halifax Health, where the video showed “what appeared to be eight staffers tackling a man and pinning him to a bed.” Texarkana, Texas-based Wadley Regional Medical Center and Tempe (Ariz.) St. Luke’s Hospital were also hacked. The means in was described by one of the hackers (appropriately female for this month) as through a “super admin” account where the username and password appeared online. Becker’s Health IT 10 March, Bloomberg News
  • 210,000 MultiCare patients, providers, and employees of Tacoma, Wash.-based MultiCare had personal information exposed in a December ransomware attack on their medical practice management company’s IT services vendor. Becker’s Health IT 9 March
  • A clinic in North Carolina had a six-day ransomware attack starting 23 February. Hackers demanded a $1.75 million payment in exchange for giving back the clinic access to its data. The clinic came back online 1 March but did not disclose any payment. Becker’s Health IT 5 March
  • NBC News revealed that hackers stole employee files from Gallup, New Mexico-based Rehoboth McKinley Christian Health Care Services after a ransomware attack on its computer network in February. Those employee files were posted online; information included employee job applications and background check authorizations with Social Security numbers. Earlier attacks by the same hacker group included Leon Medical Centers of Miami-Dade Florida (see following) and Nocona (Texas) General Hospital resulted in the online publishing of tens of thousands of patient records. Becker’s Health IT 4 March
  • Hackers attacked biochemical machines used to prepare samples in Oxford University’s Division of Structural Biology. Forbes received the information from Hold Security chief technology officer Alex Holden, who provided screenshots of the hackers’ access to Oxford University systems, and notified the university.
  • The cutely-named DopplePaymer attacked a county government office in Chatham County, North Carolina, and stole residents’ PHI and PII between November 2020 and this past January. Becker’s 10 Feb 
  • And on the ‘Someone Got Fired For This One’ list is the response to hacking at Boise, Idaho’s Saint Alphonsus Health System. The health system had a data breach in January. Patients were routinely notified. However, the mail merge, not the hack, created an incorrect status for some patients, sending them letters as if they were deceased or a minor. Becker’s Health IT 10 March

It’s cold comfort when the US Department of Justice announces that they are indicting three North Korean hackers who inflicted the WannaCry malware and $1.3 bn in extortion damage on the world back in 2018. All three were members of North Korea’s intelligence agency, the Reconnaissance General Bureau (RGB). The likelihood of their extradition is one word: none.

And in other news….

Withings unveils new professional devices. The Body Pro smart scale and BPM Connect Pro, distributed to doctors, out of the box will transmit health data directly from patient to doctor. Neither require Wi-Fi nor a mobile phone, since they have embedded SIM cellular cards to directly connect to a mobile network. They are both sold through Withings’ professional division. FierceHealthcare

Telehealth provider Bluestream Health has added Leon Medical Centers, a seven-location Miami-Dade FL provider. Bluestream Health provides whitelabeled secure telehealth services that combine with medical workflows to approximately 50,000 providers in 500 facilities. Release.

Healthcare ad/patient ed network PatientPoint combining with once-hot Outcome Health

Can’t retreat from advertising in a doctor’s office, at least in the US. Point of care ad/patient education ad network giant PatientPoint is combining with one-time unicorn Outcome Health. The combined company, called PatientPoint Health Technologies, will operate under the PatientPoint brand. The transaction is effective immediately and the company will be headquartered in Cincinnati. Financials are not disclosed, but claimed to reach 150,000 providers and 750 million patient visits a year.

Management of the combined company, and all the senior leadership, is from PatientPoint: CEO Mike Collette, Chief Client Officer Linda Ruschau, CFO Pat O’Brien, and Chief Provider Officer Chris Martini. The only two carry-overs from Outcome Health mentioned in the announcement are tech executives Glenn Keighley and Sean Barden. CEO Matt McNally and COO Nandini Ramani, who stabilized the company after Outcome’s 2017 advertiser fraud scandal, are thanked but not remaining with the company. The Outcome Health website has no leadership page and popups on every page announcing the new company. 

PatientPoint is now majority-owned by a group of investors, including funds managed by L Catterton and Littlejohn & Co., LLC. Both funds also backed Outcome Health, so one can assume their role in engineering the combination; the word ‘acquisition’ is nowhere to be found.

One-time $5.5bn unicorn Outcome Health lost its horn, rainbow sparkle, and its Chicago high-rise office building in autumn 2017 when Big Pharma/Biotech companies like Pfizer, Sanofi SA, and Biogen Inc. discovered that their advertising exposure was wildly inflated, affecting tens of millions in ad revenue, embarrassing investors like Goldman Sachs and Alphabet. By 2019, their principals were in Federal District Court in Chicago: former Chief Executive Rishi Shah, former President Shradha Agarwal, and former executives Brad Purdy (COO/CFO), and Executive VP Ashik Desai. Mr. Desai cooperated with the prosecution, leaving the rest to their tender mercies. The trial, now classified as a $1bn fraud, is still pending. PatientPoint release, MM&M, Chicago Tribune. TTA’s back file on Outcome Health here.

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.