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

January 7, 2021 | by

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

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

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

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

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

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

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

Haven finds no haven in healthcare, will close in February

January 6, 2021 | by

Man Plans, God Laughs. Haven, the joint venture cobbled together by JP Morgan, Berkshire Hathaway, and Amazon to transform corporate healthcare three years ago, will be shuttering next month. The website has but a single page of signoff. All it is missing is a bit of sad synth music like the air crash simulations and analyses so popular on YouTube.

Haven’s founding in January 2018 made for expansive, far-seeing (sic) 50,000-foot quotes by JPM’s Jamie Dimon and B-H’s Warren Buffett about the ‘hungry tapeworm’ of healthcare costs and the need to simplify it for their million-odd employees. Surely it made for great speeches at annual meetings and glossy Annual Report pages. But in its three years of existence, Haven never found a home. It had the ambitious mission of “partnering on ways to address healthcare for their U.S. employees, with the aim of improving employee satisfaction and reducing costs” and setting up an independent company “free from profit-making incentives and constraints” [TTA 31 Jan 2018]. Yet it spent its first six months without a CEO, over a year without a name, and never created a clear direction. 

Atul Gawande, MD, one of the big thinkers on the broken US healthcare system, joined as CEO six months in, but oddly did not give up his teaching, clinical, and writing commitments. It left the sense that for the doctor, Haven was a part-time gig [TTA 21 June 2018]. One can imagine how Dr. Gawande, without a strong business management background, dealt with the egos of the Bezos-Dimon-Buffett trio without a strong backup team to deal with them, get a plan together, and execute.

The signs of failure were increasingly apparent by the Year of the Pandemic. Health systems and insurers–the ones with the data and the leverage–were never bought (though WellCare, a leading Medicare Advantage payer, was up for sale in 2019 and snapped up by Centene) or even engaged in partnerships. Management fled starting in 2019, accelerating in 2020: COO Jack Stoddard for personal reasons in May 2019, then in 2020 financial head Liam Brenner and people head Bryan Jones in April, Dr. Gawande in May, Head of Measurement Dana Safran in July, and CTO Serkan Kutan in September. Becker’s Hospital Review The one partner with retail consumer healthcare experience–Amazon–increasingly and publicly pulled off in its own beneficial directions, acquiring PillPack in mid-2019 as the first move towards a PBM, then in the past few months pushing Amazon Care for large employers and creating Amazon Pharmacy. The other two companies also, according to reports, executed their own projects with their own teams.

The small employee group (under 60) may find spots at one of the three companies. The official announcement states they will ‘collaborate informally’. Not with a bang, but with a whimper. Fierce Healthcare, CNBC, HISTalk.

News roundup, lockdown edition: Oscar Health’s $140M raise, IPO filing; Centene’s Diameter Health investment; Abbott’s telehealth-guided COVID antigen test

December 23, 2020 | by

Before we break for the Christmas and New Year’s festive season, though most of us are partially or fully locked down for travel and get-togethers, binge-watching the telly for comfort, a few items of interest–we’ll keep it short:

An Oscar Health Double Header. Not only did this relatively new payer in the individual, small group, and Medicare Advantage markets gain a $140 million funding round last week, adding to a $225 million raise in June (Fierce Healthcare), but they quietly filed their S-1 registration with the US Securities and Exchange Commission (SEC) to go public on Monday (Healthcare Dive, Oscar release). Since their founding in 2012, the company has raised $1.6 bn in 10 rounds. The fresh funding will go towards 19 new markets and four new states in 2021, adding to their current 18 states and 211 counties. 

Speaking of payers getting into other lines of business, Centene Corporation, which has Medicare plans with different brands in all 50 states, seems to be moving in a different direction with some recent acquisitions and investments. Centene was the lead investor in an $18 million Series B round for Diameter Health, an enterprise data interoperability developer. Optum Ventures, LRVHealth, Connecticut Innovations, and Activate Venture Partners also participated. Fierce Healthcare Centene recently finalized their acquisition of Apixio (AI-assisted clinical data mining of unstructured data) [TTA 14 Nov] and is acquiring Pantherx, a specialty pharmacy focused on orphan medications and rare diseases, to blend into their Envolve Pharmacy Solutions unit. It does appear that Centene is moving into the UnitedHealthcare/Optum model of dividing services and innovations which can be sold to third parties (Optum) from their health plan and pharmacy businesses (UHC), which may be less profitable in the next few years.

An antigen test for COVID-19 with a telehealth spin is Abbott Pharmaceuticals’ BinaxNOW 15-minute antigen test. It is the first at home, telehealth guided test to get an FDA emergency use authorization (EUA). The Ag Card Home Test requires a prescription and used telehealth to guide users through the sample self-collection process, then to help them read and understand their results. MedTech Dive  It was followed up this week by Quidel’s EUA for a dipstick-style collection with a reading in minutes, similar to that of a pregnancy test, but is only cleared for healthcare settings for now. MedTech Dive

Above: Rockefeller Center, 2011. This year’s tree was mangy and the decorations leading to the plaza scarce.

Weekend Must Read: The Future of Remote Care Technology and Older Adults 2020

December 10, 2020 | by | 1 Comment

Laurie Orlov, founder of Aging and Health Technology Watch and well-known industry analyst/advocate in health and aging-related technologies, has released her latest report, The Future of Remote Care Technology and Older Adults 2020 (PDF, free download). Recently, Laurie and I had an opportunity to catch up and review her findings.

This Editor immediately went to the ‘bleed lead’ which was:

COVID-19 HARMED THE WELLBEING OF OLDER ADULTS
Gap in technology access widened into connection chasm

The University of Michigan study from June (cited above and elsewhere in the report) illustrates the change in social isolation for those aged 50 to 80, with numbers that were slightly high to begin with in 2018. Isolation rocketed to 56 percent, putting a Klieg light on mental health that we’ve seen continued in the recent ‘lockdown loneliness’ PLOS One and SECOM studies. The reasons why will be no surprise, as they’re true for nearly all: a screeching halt to in-person experiences, severing in-person connections with family and friends, closing the doors of senior living and nursing homes to visitors (still closed in many states!), breaking healthcare contacts with providers, and losing timely diagnosis of health conditions, new and ongoing.

Most of the report documents the consequences: how telehealth rose, then fell (Epic and Commonwealth Fund last reports), how the experience wasn’t entirely satisfactory and held multiple structural limitations (e.g. tech, vision, hearing, dexterity) for the 50-80 age group (nor providers in obtaining a physical sense of the patient)–a POV you won’t see in mainstream healthcare/tech media nor the funding markets–and how technologies scrambled to fill the gaps (with plenty of examples).

But moving on to the future, which is the aim of this report, there are many gaps which need to be closed that are bigger than Teladongo:

  • synchronous and asynchronous telehealth–the latter primarily remote patient monitoring (RPM)
  • adoption of voice tech
  • broadband and device access, including training and management
  • governmental policy at all levels from Federal to local, including payer reimbursement

The last section of the report (page 18 to end) takes a look at where innovations could take remote care, where expectations are now, and where the opportunities are in connecting older adults. On page 22, there is a checklist for care providers and what they must consider in managing remote care. The summary of the future on page 23 wraps it all nicely.

The Future of Remote Care Technology and Older Adults 2020 (PDF, free download)

 

News roundup: Cera hits £89.5M revenues, Alcove Carephone in new elder housing, Everlywell home test kits raise $179M; FDA clears Lucira’s all-in-one COVID test kit, Apple Watch new ECG feature

December 10, 2020 | by

Farringdon, London-based Cera announced a high point in its revenues of £89.5 million ($120 million) since their 2016 launch. While it is primarily a home care company d/b/a-ing under Cera Care (and seeks to hire an additional 5,000 staff, mostly professional carers), we noted back in March their £52 million ($70 million) raise and the launch of SmartCare, a sensor-based analytics platform that uses machine learning and data analytics in real-time on behaviors to personalize care and detect health risks with a reported 93 percent accuracy. Cera also has a proprietary app to connect families with Cera on visits and progress. Unfortunately the Cera website is singularly uninformative on company news and SmartCare. Mobihealthnews

Alcove is partnering with Cornell Court in Saffron Waldon, Essex, an extra-care community developed and run by L&Q Living, to fit out apartments with their in-residence Carephone tablet. Having the access to the tablet, residents can easily initiate a group video call with family members, as well as attend virtual care and therapy sessions and activities including bingo and exercise classes. There is also access to a ‘virtual concierge’. The combination of onsite services and the Carephone access helps with resident independence. All helpful as the UK remains on a non-virtual lockdown in most places and Christmas looks distinctly un-festive this year, especially for older adults. Local Authority Building & Maintenance (LABM) Online.

COVID-19 has certainly been a boom of a boon for at-home testing companies.

  • Everlywell just raised a hefty Series D of $179 million. They market and process over 30 FDA-cleared kits, including (of course) symptomatic COVID-19 (SARS-CoV-2, lower nasal swab) with a follow up from the lab in 24-48 hours via their app coupled with a telehealth consult. Other kits include thyroid, indoor/outdoor and food allergies, and hepatitis C, at prices ranging from $49 to a comprehensive food sensitivity test at $259. Prediction: Everlywell and similar companies will be 2021’s 23andMe/Ancestry.com.  Fierce Biotech
  • An equally intriguing ‘home run’? FDA cleared the first ‘all-in-one’ home test for COVID-19 under an EUA (Emergency Use Authorization). The Lucira Health molecular test from a nasal swab sample is completed by a battery-powered handheld unit that includes all the reagents needed to process the test. The unit then shows the result with a green light for positive or negative. Average time: 2 minutes. Molecular tests are more sensitive and accurate than the current quick tests of antigens. Go-to-market of the single-use test kit is expected early spring 2021, at a cost of $50. The by-prescription test can also be performed in point of care settings. The company will be filing early next year to have as an option prescription via telehealth. Sutter Health in Northern California and Cleveland Clinic Florida in Miami-Ft. Lauderdale participated in the trials and will be first on distribution. Fierce Biotech, Lucira press release, FDA release

Remember when any burp from Apple was Major News, breathlessly awaited? Now ho-hum. FDA cleared the latest update of the Apple Watch’s ECG monitoring. Now the feature enables heart rate detection up to 150 beats per minute and adds a classification category called A-Fib with high heart rate. The Apple Watch has been used in some studies to monitor for atrial fibrillation. No release date is set for the watch. However, AliveCor is suing Apple on patent infringement of three patents, from the Apple Watch Series 4 and later devices, so stand by. Mobilhealthnews

CMS expands telehealth, RPM in 2021 Physician Fee Schedule, creates post-pandemic temporary category (updated)

December 3, 2020 | by

On 1 December, the Center for Medicare & Medicaid Services (CMS) announced its all-important 2021 Physician Fee Schedule (PFS), which sets out the fees and rules for physicians providing services to Medicare fee-for-service beneficiaries and generally serves as a guideline to commercial payers. If one only reads the release headline, one would assume that the national telehealth payment expansion that was approved when the public health emergency (PHE) was declared in March would be largely retained permanently in the 2021 PFS after the earnestly desired end of the PHE, extended to 20 January 2021,

Interpreting CMS-speak is always a task, and so it is here. Your Editor will do her best to unpack it. 

Paragraph 5 is the sobering note for the telehealth ‘bulls’. Telehealth expansion, on a permanent basis, applies to Rural Health, Federally Qualified Health Centers (FQHC), and certain Medicare program models (e.g. two-sided Medicare Shared Savings Program ACOs, ESRD, Episode Payment models, and Medicare Advantage), and with a limited number of new codes. From the release:

“This final rule delivers on the President’s recent Executive Order on Improving Rural Health and Telehealth Access by adding more than 60 services to the Medicare telehealth list that will continue to be covered beyond the end of the PHE….These additions allow beneficiaries in rural areas who are in a medical facility (like a nursing home) to continue to have access to telehealth services such as certain types of emergency department visits, therapy services, and critical care services.”

The release then goes on to explain the kicker: “Medicare does not have the statutory authority to pay for telehealth to beneficiaries outside of rural areas or, with certain exceptions, allow beneficiaries to receive telehealth in their home.” (Editor’s emphases) 

What seems like a pullback in the PFS is a reversion to status quo ante in geographic and model restrictions, which can’t be changed except by Congress. What CMS can do is expand, and create, new Categories for covered codes.

  • CMS expanded Category 1 which is the basic list of telehealth covered codes (CPTs and HCPCS). If you are in a rural area or a covered model, the expansion is real but limited: the number of new codes in Category 1 is nine codes of the 60 stated in the release. 60 is also far less than the 144 service codes added since the start of the PHE.
  • The remaining telehealth codes of the 60 quoted are in a new, temporary Category 3, which will extend through the calendar year the PHE ends–which is, as of today, 31 December 2021. (If the PHE goes into 2022, unless the rule is changed, 31 December 2022.)
    • Category 3 includes over 50 telehealth service codes for the PHE that are not in Category 1–thus the count of 60 the CMS press release trumpeted. 
    • What is not spelled out in CMS’ press release or public Fact Sheet is if statutory geographic (rural) and model restrictions will apply to this category after the PHE ends. Given the above, this Editor’s interpretation is that statutory restrictions will apply unless there’s a Federal change.
  • The Fact Sheet also clarifies certain frequency limitations, who can deliver telehealth services in a practice, telephone-only interactions with a new HCPCS code, and direct practitioner supervision.  Fact Sheet–Final Policy, Payment, and Quality Provisions Changes

For remote patient monitoring (remote physiologic monitoring) services which were modified during the PHE, there are important clarifications and two finalizations of modifications to RPM services made during the PHE, also in the Fact Sheet. 

The exception to the above is apparently the Medicare Diabetes Prevention Program (MDPP). Virtual delivery of certain services, such as educational classes which shifted from in-person to virtual and weight measurement, will not continue past the end of the PHE. CMS MDPP release. Also mHealth Intelligence.

What this all really means. CMS has Kicked The Telehealth Can Down The Road for 2021. They have retained many of the changes that the pandemic forced, but the geographic and model restrictions remain. But practices have made serious procedural modifications to incorporate remote and telephonic visits. Many patients in the Medicare age group are still self-isolating to a significant degree, and depending on the path of COVID-19 (and the flu) have good reason to limit in-office visits. This year’s use of telehealth in this group, according to CMS, was astounding: between mid-March and mid-October 2020, over 24.5 million out of 63 million beneficiaries received at least one of those 144 Medicare telemedicine services. What remains unclear is if Category 3, after the PHS, could continue to apply nationally through Congressional action, as there are several bills before this soon-to-close Congress.

Certainly this, plus post-COVID usage, will influence the 2022 PFS and perhaps stimulate Congress to allow CMS to permit payment for telehealth services nationally.

Editor’s note: References in addition to above are Center for Connected Health Policy’s Telehealth and Medicare page, the proposed CY 21 PFS Fact Sheet (PDF), and COVID-19 Telehealth Coverage Policies. Hat tip to former colleague Madeline Short, COO of Wilems Resource Group.

Update 3 December: The American Telemedicine Association published its comments on 2 December, agreeing with CMS Administrator Seema Verma’s comments on making telehealth permanent outside of geography, itemizing the present bills languishing in Congress, and also lamenting the short shrift that the final rule gave to remote patient monitoring. Also, Healthcare IT News includes additional comments from ATA chief Ann Mond Johnson. Some states like Texas and Wisconsin are pushing for updated parity rules applying to state-regulated plans, which would include commercial plans and Medicaid. Hat tip to reader Paul Costello for the heads-up.

The Theranos Story, ch. 68: the texts told the tech failure–and please omit Holmes’ ‘luxurious lifestyle’ and profane meeting language from trial

November 26, 2020 | by

The trials of Elizabeth Holmes and ‘Sunny’ Balwani churn on towards a March 2021 court date. Two major revelations have entered the record from last Friday 20 November’s flurry of filings on both sides. 

  • The prosecution introduced panicky Holmes/Balwani texts, iMessages, and Skype messages indicating that Theranos was having major trouble with validating its lab technology from 2014 on. One text from Balwani described a lab as a ‘disaster zone’. “The spreadsheets are replete with admissions by defendant and Balwani that demonstrate their knowledge that their statements to investors were false and misleading and that Theranos’s testing was beset with problems.”  CMS in 2015 concluded that their California lab posed an “immediate jeopardy to health and safety.” The messages were from previous civil cases and collected by securities regulators, with many still under seal from those cases.
  • The defense for Holmes moved to prohibit prosecutors as ‘unfairly prejudicial’ evidence of Holmes’ wealth, spending, and lifestyle,  citing Federal rules of evidence and that this information is not relevant to Holmes’ guilt or innocence on the fraud charges. In 2015, Holmes was worth an estimated (by Forbes) $4.5 bn despite what is claimed as a moderate salary and not selling equity. The government has detailed her company-paid perks such as a luxury SUV, a rented luxury house, and luxury-level travel, in addition to a ‘substantial salary’. 
  • The defense is also seeking to omit any references to Theranos employees making claims about the technology, including Theranos sales representatives falsely claiming that the FDA approved the company’s lab machines. The grounds to omit are that Holmes could not be responsible for their false statements.
  • The defense also seeks to omit transcripts of a company meeting that used profane language to refer to reporting in the Wall Street Journal investigating the company and a competitor at that time, on the grounds that such language is par for the course in High-Tech-Land. Mercury News (may be paywalled)

Fox Business 23 November, 24 November. BNNBloomberg.

In a separate case, a former Theranos lab scientist, Diana Dupuy, has claimed that she was wrongfully terminated from her job with medical testing company DiaSorin nine days after receiving a subpoena to testify at the Theranos trial. DiaSorin is claiming the reason is unrelated to Theranos. The suit has been filed in US District Court in San Francisco. Anecdotally, many former Theranos employees have reported that Theranos has been a glaring black mark in their resumes that make them close to unhireable. Mercury News

Weekend reading: HISTalk’s interview with Spirion’s CEO on healthcare data security

November 20, 2020 | by

A short but must-read if you care about data security and your customers/patients/residents. Where this HISTalk interview with Kevin Coppins, CEO of Spirion, excels is leading the reader through areas that are usually filled with fog and IT jargon. The view is from his company and a healthcare organization sitting in a conference room and scoping the problem without ‘paralysis by analysis’ or a turnkey ‘solution’ that may not be one. What’s different here is the clear, and few, logic steps, particularly the first three listed, that Mr. Coppins takes to get the ball rolling rather than befogging the discussion with too many factors or the punitive consequences of regulatory non-compliance.

“The concept of data and sensitive data is at the core of both security and privacy.”

  1. How much data do you have? (Nobody really knows, admit it)
  2. Of that data, what would you consider ‘sensitive’, and how do you define ‘sensitive’? Not only by regulation/compliance directives, but what your patients, clients and the board would consider ‘sensitive’.
  3. How much of that data is actually critical? 
  4. What’s the impact? How personal is it to your organization, not just in a compliance way but in your community, etc.
  5. How do I reduce the risk of loss?
  6. If I lost the data due to hacking or ransomware, what’s the backup? How fast can this happen?

This Editor notes that these points (quantity, definition, risk of loss and recovery, and community impact) can be applied to other situation analyses.

The litany of ransomware attacks that have ramped up during the pandemic waves has pushed data security issues to the ‘gotta tackle’ list. According to Emsisoft, a security company, there were 41 attacks on healthcare organizations in first half 2020. This didn’t stop during the summer, with a rash of them at end of October and a hit list of 400 hospitals, according to Becker’s.) Hacking attacks persist but aren’t getting the headlines.

And his conclusion is pertinent: “When it comes to security and privacy and all the drama and all the noise that you hear about it and read about it, just boil it down to this — am I doing everything I can today to protect what matters most to the constituents I serve?”

Shock news: a very muted HIMSS 2021 set for 9-13 August, Las Vegas

November 13, 2020 | by

Yes, Virginia, there will be a HIMSS21, of sorts, we think. The news of a HIMSS21 in Las Vegas next August (when it will be 110° in the shade) is like the forecast of rain for this parched-of-business convention city and the parched-of-contact health tech community. The basics, mostly from the FAQ:

  • Registration will open in January (date TBD). If you paid your registration for the canceled 2020 conference, your registration will automatically be carried over to the 2021 conference, with details to come. If you cannot attend, no refunds.
  • Programming, exhibits, and events will be held at the Venetian-Sands Expo Center, Caesars Forum Conference Center, and Wynn 
  • The program and topics are sketched in (see the website dropdowns).
  • Proposals for the education track are closed, but open till mid-January for the optional events.  

Exhibitor registrations and paid badges will be carried over (unless you don’t plan on exhibiting, then again, no refunds). For whatever reason, the exhibit floor will be worthy of a Woman’s Christian Temperance Union (WCTU) convention in Des Moines, based on the published rules:

  • NO SOLICITING OUTSIDE THE CONFINES OF YOUR BOOTH (replicating their capitals, including hotels–what fun is this?)
  • All demos and promo activities must be performed five feet set into your booth space. It’ll get cozy for the small, poor exhibitors in a 10 x 10! In fact, straying outside your booth for anything is apparently prohibited.
  • No megaphones, loudspeakers, or what is quaintly called ‘sideshow’ tactics, for instance, clowns, whistles, or high school marching bands in the aisle. Noise must be less than 75db. If there are speakers, they must face into the booth–and better be small.
  • Tchotchkes must have logos on them, so no running out for brand-name candy needed to fuel a looong floor day
  • You have to stay in your booth during exhibit AND non-exhibit hours. (I guess this means no food, event attendance, bathroom breaks–or scoping out/chatting up the competition, a key activity at any trade show.) And don’t wear lights or signage of any type on your clothes.
  • Speaking of clothes, they’re NOT optional–tops and bottoms required. At all times. Even though it’s HIMSS. And Las Vegas.
  • No cameras or video equipment on the floor. (I guess this means you can’t shoot reference pictures, booths you like, or cute videos to share on your blog, Twitter feed, and LinkedIn. Sounds like a closed shop for HIMSS Media.)
  • Exhibitors must use the official booker (onPeak), or you can lose your badges and booth. No economizing! Rough on the small, poor companies.
  • “Event Participants are expected to behave responsibly and to treat each other – and treat the community – with respect, kindness, and compassion.” If you don’t, you lose Exhibitor Points. (No comment!)

This Editor wonders that with all these restrictions and the mid-summer timing, how many exhibitors will simply walk away from HIMSS21 and its high expense? Or wait till March 2022 in Orlando? After all, 2020 booth expense was in last year’s budget and written off. Is going to HIMSS worth it to you?  Hat tip to HISTalk.

Telemedicine office visits versus in-person recede to 6%, concentrating in behavioral health. Will the gains hold?

October 29, 2020 | by

Has the telehealth wave receded to a ‘new normal’ tide? An updated Commonwealth Fund/Phreesia/Harvard University study, including data through 4 October, confirms that we are far past the point of telemedicine dominance of the office visit. Office visits to providers have largely returned to the 1-7 March baseline and even slightly above for ages 6 and above. But telemedicine visits, from their high in this study of 13.9 percent on 18 April during the peak of the COVID-19 pandemic, have continuously dropped and have leveled off to 6.3 percent. (Telemedicine here includes both video and telephonic visits; the sample is 50,000 providers that are Phreesia clients.)

To put this in proper perspective, the pre-pandemic baseline of telemedicine in practice use was an infinitesimal .1 percent.

Larger organizations use more telemedicine than smaller ones. Primary care practices with 6 or more physicians in the group account for 9.4 percent of telemedicine visits, while practices of 1 to 5 physicians account for 4.3 percent.

Even so, by September, only 9 percent of practices were heavy users (20 percent +) of telehealth, compared to 35 percent in April. Minimal use (5 percent or less) moved up to 39 percent. One-third never used telemedicine at all–did they shut down completely?

For those seeking to segment the overall telehealth market, the chart detailing telemedicine in visits to medical specialists is of interest. It confirms the anecdotal information this Editor has heard that telehealth remains highly popular and used in behavioral health (psychiatry)–41 percent of visits. By comparison, the next most popular are rheumatology and endocrinology at 14 percent of visits. The pandemic apparently has forever changed the mental health visit and acceptance of non-face-to-face delivery, with interesting (isolating?) consequences for both patients and doctors.

crystal-ballCan telehealth hold this gain, and develop from this base? What will it look like for the average practice? Pay the lady with the crystal ball! CMS will eventually roll back the waivers on usage of non-HIPAA platforms such as Facetime (appropriately so for security and privacy reasons). Reimbursement by Medicare and commercial plans will be a major hot button. A recent survey of health system executives presented at the HLTH virtual conference indicated yawning uncertainty at the top level:

  • 30 percent of respondents said they were unsure what their plans are if telehealth reimbursements return to pre-COVID levels
  • 13 percent said they’d return to face-to-face visits
  • 20 percent said they’d continue doing virtual visits regardless
  • 17 percent said they’d analyze the financial viability of continued use

(Nokia-UPMC Center for Connected Medicine and Klas Research, Healthcare Dive)

More on this: The hazy post-pandemic future of telehealth and From back-to-work to telehealth to retail rebranding: HLTH 2020 takeaways   

Previously: As practices reopen, telemedicine visits continue to plunge from 69% to 21%: Epic (September), COVID effect on US practices: in-person visits down 37%, telehealth peaks at 14% (Commonwealth Fund through July)

Weekend reading: contact tracing in assisted living/LTC facilities via sensor-based ADL technology raises ethical issues

October 24, 2020 | by

Contact tracing for COVID-19 is still ‘not quite there’ in many countries, especially those countries like the UK which had created centralized models and were slow to move to the decentralized systems based on Apple and Google’s APIs, the (Gapple? AppGoo?) Exposure Notification system now in use in Ireland and Germany. For the most vulnerable in assisted living, who aren’t using smartphones that ping adjacency to other smartphones and are moving around most of the time within the residence, other approaches have been developed. Already in place in many communities are sensor-based trackers for activities of daily living (ADLs) for both safety and predictive health analytics, as well as provide conveniences such as apartment entry for residents.

As we noted in July, a number of ADL and location trackers have repurposed themselves into highly accurate contact tracers since they retain the history of resident and staff movement. Profiled are CarePredict (ADLs), ZulaFly (location tracking), and CenTrak (location tracking). Residents in many facilities with these systems are early adopters of contact tracing, even if they don’t know it.

While the article is detailed and fairly laudatory about how these systems can assist residents and staff in arresting the spread of COVID-19 which has ripped through nursing homes and senior living, it then diverges into other issues, some worth considering even if some of the verbiage is over the top:

  • These location monitoring systems haven’t been used for infectious disease outbreaks before, but the article admits that the pandemic has presented extraordinary circumstances
  • Use of these systems cannot substitute for effective infection control: staff and resident handwashing, mask wearing, and staff PPE. (Something like wearing a used mask and not washing your hands for the rest of us)
  • These systems are dependent on facility-wide internet/Wi-Fi. Many LTCPAC facilities do not have it, thus creating a digital divide in care even in residences proven to have high-quality care.
  • Resident rights and privacy. Residents apparently have only limited choices in using these technologies, even if they are restricted to their rooms. Not all see the need for monitoring technology for their safety and intrusive ‘alarms’ that bring in staff. There is a real issue around older adults’ autonomy and privacy rights which tends to be forgotten in the balance of privacy and safety, with prediction of illness based on behavior a step further.

Interviewed for this article, Laurie Orlov of Aging in Place Technology Watch, believes “It’s pretty darn useful if you’re in independent living, and you decide to go for a walk. If it’s night, and there’s ice, having a full detection capability that knows where you are is really useful. I think with fall detection, and anything that can help when you’re alone, the benefits exceed the cost of the privacy — assuming that you’re with it enough to opt in.”  Senior Sensors (The Verge)  (Disclosure: Editor Donna consulted for CarePredict in 2017-18)

A counterpoint to this article is also by Laurie Orlov and published on her website, reviewing the future of remote care technology and older adults in 2020. It’s a preview of a to-be-released later this year report.

Digital health investment smashes the ceiling: $9.4 bn invested through 3rd Q

October 8, 2020 | by

$9.4 bn is a whole lot of bubbly! To no one’s surprise in the industry, kick-started by telehealth, Rock Health’s tracking of US digital health company investment through 3rd Q smashed through 2018’s full-year high point ($8.2 bn) with a cannonball of a total. Adding $4.0 bn to first half’s $5.4 bn, it represents 311 deals and is 27 percent above last year’s oddly fading-in-the-stretch $7.4 bn [TTA 7 Feb]. Rock Health projects the year total to be about $12 million and 400 deals. 

  • Average deal size topped $30.2 million, 150 percent greater than the $19.7 million average in 2019.
  • Driving this total were “mega deals” of $100 million or more, accounting for 41 percent of all deals (compared with 30 percent for year 2019). Even with the inclusion of fitness companies that this Editor does not consider true health tech, such as Zwift (interactive fitness entertainment), ClassPass (online fitness), and Tonal (more online fitness), the 20+ remaining companies indicate a concentration of Big Capital into Big Deals. The Big Deals concentrate in three sectors: on-demand virtual care delivery, R&D process enablement, and fitness/wellness.
  • Not surprisingly, telehealth and telemedicine are soaring: $1.6 bn in funding compared to $662 million same period 2019
  • Also pointing to concentration: 64 percent of this year’s investors have previously made investments in digital health, which exceeds any prior year. Institutional venture firms have the largest share of transactions (62 percent), with corporate venture capital accounting for 15 percent of transactions.
  • Given COVID and election year craziness, IPO action has moved right along and matched 2019’s six. Accolade and GoHealth in July; Amwell, Outset Medical, and GoodRx in September. Hims Inc. is merging with a blank-check company as SOC Telemed did in August. MDLive may be going public in early 2021.
  • What is down so far this year is merger and acquisition activity. Through September, there are only 63 acquisitions, which will likely trail by year’s end 2019’s 113. Teladoc is the 9,000 Elephant in M&A, with InTouch Health closing in August ($1 bn final due to the stock value soaring) and Livongo at $18.5 bn dwarfs the remainder. Optum-AbleTo has been reported in ‘advanced talks’ but there’s no confirmation of closing; it was reported to be at $470 million. 

Note: Rock Health only counts US deals in excess of $2 million, so international activity by companies like Doro are not included.

Also Mobihealthews.

The Theranos Story, ch. 66: Walgreens and Safeway aren’t investors, they’re business partners!

October 8, 2020 | by

The difference is not hair-splitting in the defense effort to have charges tossed. In Federal District Court on Tuesday (6 October) in San Jose, Elizabeth Holmes’ defense made the case to Judge Edward Davila on dismissing some of the prosecution’s charges against her. As petitioned in late August, the defense maintains that two of the entities, Walgreens Boots and Safeway (a Western regional supermarket chain), were unfairly classified as investors versus ‘business partners’. As investors, the prosecution could charge Holmes with fraud crimes with a longer statute of limitations. If they were to be classified as business partners and ‘transactions’, while there were crimes committed, the statute of limitations has expired.

The prosecution’s rebuttal is that Walgreens and Safeway could be considered as both investors and partners. The defense response was that the government took too much time to file the charges and failed to get the proper consent, which may be the hair that splits the ability of the prosecution to use these charges.

Let’s look back at both companies’ involvement with Theranos. 

  • Walgreens reportedly invested over $140 million in Theranos. This consisted of direct funding (a $40 million loan convertible into equity), and an “innovation fund’ designed to fund the rollout of Theranos Wellness Centers in Walgreens US locations starting in 2013. Walgreens filed suit against Theranos in November 2016 to recoup that investment based on breach of contract, after civil lawsuits were filed against them jointly, halted development, and settled for $25 to 30 million in late July 2017 when Theranos assets were dwindling to barely breathing status [TTA 3 Aug 17]. More details on their Partnership from Hell are recapped here from the 2016 lawsuit.
  • Safeway’s involvement as the exclusive supermarket partner was planned to be even more extensive. Their 2012 deal was $350 million for building 800 clinic locations in Safeway stores. This was dropped in November 2015 [TTA 20 Nov 15], around the same time as Walgreens halted the expansion of the Theranos Centers. According to reports at the time, Safeway had already built out the 800 locations, later repurposing them for flu shots and similar. Direct investment was estimated at $10 million (WSJ). Safeway settled with Theranos for $30 million in June 2017. 

The publicly available history shows that both funded Theranos directly in addition to being business partners. Both took substantial additional risk investments from building out facilities to showcase Theranos’ services for their customers. Both settled civilly for amounts far below the fair recoupment of their investment.

While this sounds like legal nitpicking, the defense strategy, in this Editor’s layperson’s calculation, is to erode the number of charges against Holmes and their seriousness so that her inevitable sentence becomes lighter. Another move in this vein is the mental defect defense [TTA 18 Sept] alleging Holmes’ psychic inability to discern right from wrong in her business dealings. Start with something over the top like ‘insanity defense lite’, and then chip away at the rest of the charges. Fox Business, Mercury News. 

The Theranos Story, ch. 65: Elizabeth Holmes’ “mental disease or defect” defense revealed

September 18, 2020 | by

Going the ‘Twinkie Defense’ one better? While this Editor was enjoying a much-needed break from the Insanity of the World, hurtling across the wires was the revelation that Elizabeth Holmes’ pricey defense attorneys have prepared a defense for her that includes evidence “relating to a mental disease or defect or any other mental condition of the defendant bearing on the issue of guilt.” Interpreted, her mental state may have affected her intent and judgment in her business dealings. 

According to the filing, the defense is introducing testimony from Mindy Mechanic, Ph.D., a clinical psychologist and professor at California State University at Fullerton. According to her bio, her “work focuses on the psychosocial consequences of violence, trauma, and victimization with an emphasis on violence against women and other forms of interpersonal violence. Her work has addressed the mental health consequences of violence, such as Post-Traumatic Stress Disorder and depression as well as other important physical and social health outcomes.” 

The defense attempted to introduce this evidence without further examination by the Federal prosecution. Unfortunately, US District Judge Edward Davila did not agree. Ms. Holmes will be examined by two experts for the prosecution: Daniel Martell, Ph.D., a forensic neuropsychologist for the forensic litigation consulting firm Park Dietz & Associates, and University of California San Francisco psychiatrist Renee Binder, MD. Over the objections of the defense, the examination will be videotaped. The trial will commence with jury selection on 9 March 2021 [TTA 27 Aug].

Most of our Readers who care about this will be wondering, after they’ve picked themselves off the floor laughing at the above notion, that any person with a mental defect of this type could have fooled the savviest Sand Road VCs, Stanford/Hoover Institution luminaries, an admiral, a Marine general later Secretary of Defense, and Rupert Murdoch for years, to the tune of nearly $1 bn. That they should be gulled and fooled is disturbing enough. What is equally disturbing is the desperation of the defense to attempt an ‘insanity defense lite’ that sources and justifies Ms. Holmes’ inability to discern right from wrong.

This then proceeds to exactly what was the ‘interpersonal violence’ or post-traumatic stress that caused her judgment to warp quite this way. Was it her upbringing, which apparently was a bit upper-middle-class flaky–the ‘it’s not High Anxiety, it’s parents!’ reason? Was it a head trauma (the Howard Hughes defense), drugs, or surgery gone wrong? Did Sunny get Blue (in more than one way) on her? Stock up on the popcorn–la scandale Theranos has just gotten even more interesting. CBS Bay Area, Bloomberg News, Forbes, MedCityNews

A historical footnote. The term ‘Twinkie Defense’ came into usage in 1978 during the defense of the murderer of San Francisco mayor George Moscone and the better-known supervisor Harvey Milk. While not used per se by the defense team, the testimony of a psychiatrist for the defense that the murderer excessively consumed junk food, including Twinkies, as an indicator of depression and a sign of diminished capacity was hyped by the press as the ‘Twinkie Defense’. The term has passed into the vernacular. Ironically, both trials are occurring in the Bay Area.  Hat tip to The Crime Report.

Anthem-Cigna merger lawsuit finally wraps with ‘No damages for you! Or you!’

September 2, 2020 | by

Not with a bang, but a whimper and a large bill. The long, drawn-out (May 2017!) lawsuit and countersuit in Delaware Chancery Court between payers Anthem and Cigna ended with the decision by Vice Chancellor J. Travis Laster to refuse to award damages to either party in the litigation.

Cigna, which was seeking nearly $15 bn from Anthem, seemed to receive the worst of his judgment. In his decision (PDF), VC Laster stated that Cigna was unable to prove that Anthem breached the Efforts Covenants and in fact, Cigna sought to derail the deal by pulling back on integration efforts, thus itself breaching the covenants. Thus, Cigna was not entitled to the $1.85 bn breakup fee or additional damages. Anthem proved that they sought to complete the merger and Cigna did not, thus seeking $20 bn in damages. In counterpoint, Cigna was able to prove that the deal would have been blocked regardless of their actions to demo the deal.

VC Laster’s conclusion, “In this corporate soap opera, the members of executive teams at Anthem and Cigna played themselves. Their battle for power spanned multiple acts….Each party must bear the losses it suffered as a result of their star-crossed venture.” The testimony revealed the deep divisions and battle lines between both companies during the merger preliminaries, until the Federal courts and DOJ put paid to it.

Yet the denouement of this Merger Made In Hell may not be fini. Anthem said in a statement to Fierce Healthcare that it feels “this decision is in the best interests of Anthem and our stakeholders.” But a Cigna spokesperson said they are not finished and considering a potential appeal. “We are pleased that the Court agreed with us that Cigna did not cause the merger to fail. We continue to strongly believe in the merits of our case, and we are evaluating our options with respect to appeal.” Certainly not the peaceful-in-public parting after the Federal denial of their merger by Aetna (acquired by CVS) and Humana (still in play).

The chief beneficiaries of this three-year drama? The law firms listed on page 1 of the opinion. Also Wall Street Journal (paywalled in part).

As practices reopen, telemedicine visits continue to plunge from 69% to 21%: Epic (US)

September 2, 2020 | by

The extreme high tide has receded–but still way up than before the pandemic.  The Epic Health Research Network (yes, that Epic EHR), updated its earlier study through 8 May [TTA 22 July] to compare in-office to telehealth visits through 12 July. The trend that EHRN spotted (as well as Commonwealth Fund/Phreesia/Harvard) continued with telemedicine visits declining as practices reopened. As of mid-July, telehealth visits, as a  percentage of national ambulatory visits, declined to 21.2 percent compared to 78.8 percent in-office. 

The new EHRN study used a broader sampling than previously. They surveyed healthcare providers of data: 37 healthcare organizations representing 203 hospitals and 3,513 clinics in 50 states. The decline in telehealth visits noted in early May continued, with May finishing with a national 50/50 split.

But in context, telehealth visits immediately before the COVID-19 pandemic were a whopping .01 percent. 

Regionally, the Northeast leads in July telehealth visits with 25 percent. The South has the least adoption of telehealth with only 13 percent. In terms of total office visits, neither the South nor West have rebounded to pre-pandemic levels, whereas the Northeast and Midwest have.

The key to the future of the telehealth bubble bath is if telehealth usage versus in-person stabilizes for several months. But there’s another factor which has come about through higher telehealth usage. Noted in our July article was speculation on the reasons why the sudden decline, other than practices reopening, most of which pointed to practice training, reimbursement, and older/sicker patients falling into the smartphone/digital divide. The STAT article has statements from telehealth providers which are quite bubbly and quotable, with the CEO of MDLive stating that new bookings are up 300 percent and mental health hasn’t declined. But a problem now surfacing is providing patients with the right care at the right time–and fitting it into the office schedule. What visits can best be handled as telehealth and which require an in-person visit? This Editor recalls that Zipnosis, a white-labeled telehealth system we haven’t heard from in a while, incorporated for health system applications a triage intake which would direct the patient to the right level of care. Can this be rolled out in a similar way to the practice level?