Mid-week roundup: Optum buying Amedisys home care for $3.3B; Clover Health settles 7 shareholder lawsuits around SPAC non-disclosures; Walgreens cuts 2023 outlook, stock plummets 11%

June 28, 2023 | by

UnitedHealth Group expands home health again, aces out Option Care Health in all-cash deal. Amedisys had previously accepted Option Care’s all-stock deal in May valued at $97.38 per share. Optum’s offer is at $101 per share in cash, a dollar higher than its previous offer, creating a valuation for the company at $3.7 billion. Amedisys will add to UHG’s $5.4 billion acquisition of the LHC Group in February, including the hospital-at-home market from its acquisition of Contessa Health for $250 million in 2021. 

Option Care is a public (Nasdaq: OPCH) post-acute and home infusion care company for which Amedisys in-home care delivery would have been an exceptional fit. It was last heard from in August making a run at Signify Health for home health and ACO providers. At that time, the not-well-known company was discovered to have some impressive backing from Goldman Sachs. Walgreens Boots Alliance also backed the company but cut its stake in March and sold the rest for $330 million earlier this month. Option Care will receive a termination fee of $106 million. Healthcare Dive, FierceHealthcare

Insurtech Clover Health settles seven lawsuits around its 2021 SPAC. Clover, with Medicare Advantage plans in eight states, went public in January 2021 at the very peak of ‘blank check’-dom. Almost immediately, after an explosive report by Hindenburg Research that revealed that the Department of Justice (DOJ) had been investigating the company on investor relationships and business practices starting in fall 2020 [TTA 9 Feb 2021], there were multiple lawsuits filed by shareholders (derivative litigation) over not revealing this material fact. Shares took the expected dive from their intro of $15.90 to today’s $0.85. The seven derivative lawsuits were in Delaware, New York, and Tennessee courts and are being settled without payment. According to Clover’s release, “the defendants in the derivative lawsuits will receive customary releases and the Company will implement a suite of corporate governance enhancements. The settlement does not involve any monetary payment, other than payment of an award of fees and expenses to plaintiffs’ counsel, which has not yet been set. The defendants have denied all wrongdoing and have entered into this settlement to avoid the burden, expense, and distraction of ongoing litigation.” In April, Clover settled a securities class action in which the class will receive $22 million, $19.5 million paid by the company’s insurance. Mobihealthnews

Walgreens Boots Alliance missed Wall Street expectations and lowered its outlook for the year. In their Q3, net earnings fell 59% to $118 million, mostly due to lower operating income. Their topline was healthy–$35.4 billion, up 9% year over year–driven by the US health provider segment (VillageMD, Summit Health, and CityMD plus at-home care provider CareCentrix and specialty pharmacy Shields Health Solutions) which was up 22%. However, both retail consumer sales and CityMD underperformed due to the absence of COVID and a mild respiratory illness winter. Together with VillageMD’s clinic expansions, this led to an adjusted operating loss of $172 million for US Healthcare. WBA cut its earnings guidance for the year to $4.00 to $4.05 per share from its previous outlook of $4.45 to $4.65. Walgreens has been selling off businesses or investments that are peripheral to providing healthcare services, such as its investment in Option Care (above). FierceHealthcare, Healthcare Dive

Amazon Clinic delays 50-state telehealth rollout due to Federal data privacy, HIPAA concerns on user registration, PHI–is it a warning?

June 27, 2023 | by

Amazon delaying Amazon Clinic national rollout from today (27 June) to 19 July. Amazon Clinic, which debuted last November as an asynchronous, message-based telehealth consult or prescription renewal referral platform [TTA 16 Nov 2022], has run once again into Federal scrutiny. This time, it’s two Senators from New England–the well-known Elizabeth Warren (D-MA) and the little-known Peter Welch (D-VT)–who are poking Amazon with the stick of whether sensitive health and personal data are flowing into Amazon’s other databases.

Their letter to CEO Andy Jassy was fair warning that, as this Editor predicted last February (see the list of open issues) after the One Medical buy closed to high-fives all around, the government is nowhere near finished with scrutinizing Amazon and how personal data, including health data, flows between their units and is monetized. 

In a two-page letter dated 16 June based on reporting in the Washington Post (100% owned by Amazon’s 12.6% shareholder and controller, Jeff Bezos–the irony runs deep here), the two senators believe that they have caught Amazon but good–and with some of the goods. 

  • Users of the Amazon Clinic service are asked, in the registration form, to authorize the “use and disclosure of protected health information.” They are told that agreement to this gives Amazon access to the “complete patient file” and that this information “may be re-disclosed,” after which it will “no longer be protected by HIPAA”. By agreeing to this, users waive any HIPAA personal health information protections.
  • If the user declines to agree, they are redirected and unable to complete Amazon Clinic registration and denied care. HIPAA regulations specifically prohibit conditioning care on agreement to disclose patient information. (This is known by anyone who has taken required training or certification on HIPAA when working for health plans or other regulated healthcare providers including RPM and telehealth vendors.)

The letter raises the sensible, usual questions on why personal data is being collected and what Amazon is doing with it. For instance, it requests responses on how patient data is used by Amazon, what data is shared with third-party entities, and what data is used in any analytics or algorithms. It cites as a non-compliance example the $1.5 million that GoodRx paid in an FTC penalty on their past Meta Pixel usage for ad tracking. (Interestingly avoiding the $7.5 million Teladoc paid for similar ad tracker misuse by BetterHelp.)

The $30/visit service has been available in 33 states since last year and currently through asynchronous messaging, provides care for minor conditions such as UTIs, herpes, and skin infections. The expansion will cover all 50 states and add synchronous video telehealth.

One would think that with billions on the line with One Medical, Amazon would be more cautious about poking the Antitrust Bear. They have already been put on notice by the Federal Trade Commission, the Department of Justice (DOJ), Congress, and multiple states. For Amazon Clinic, requiring individuals to waive their right to protect their PHI in registering for the service is downright brazen. How this got past their legal and compliance departments boggles the mind. Why Amazon is not ‘hiving off’ PHI collected through this small service is another question. Doing so would show to FTC and DOJ that Amazon can play by the rules. Instead, it confirms the widely held belief of those in healthcare that Amazon culturally cannot deal with the restrictions that come with the territory. Are they deliberately ‘playing chicken’ with the Feds? Pollo loco? This up-to-the-line behavior tends not to end well, as the telemental health providers that over-prescribed controlled substances found out.  POLITICO, The Hill, mHealth Intelligence

Babylon Health to go private with AlbaCore in planned ‘Take Private Proposal’, combine with MindMaze

June 26, 2023 | by

Babylon Health moving forward with AlbaCore Capital LLP ‘Take Private Proposal’ with AlbaCore affiliate MindMaze Group SA. On Friday, Babylon Health as Babylon Holdings Limited filed their Form 8-K with the Securities and Exchange Commission confirming their acceptance of AlbaCore Capital’s ‘Take Private Proposal’. No surprises here as announced in May along with AlbaCore’s interim funding proposal of $34.5 million plus the June timing of Babylon (inevitably) selecting the AlbaCore proposal. [TTA 11 May, 11 May followup]. Babylon did not disclose that there were other proposals under consideration between 10 May and last Friday. 

The 23 June Form 8-K (filed on a summer Friday when corporate news goes to hide till the following week) is brief in content despite its eight pages, half of which is devoted to the press release. It delivers the following:

  • The core operating subsidiaries of Babylon will be transferred to MindMaze. MindMaze is a private Lausanne, Switzerland-headquartered healthcare company in neuroscience and digital neurotherapeutics in areas such as stroke, traumatic brain injury, Alzheimer’s disease, and Parkinson’s disease. This apparently covers the ‘Go-Forward Business” mentioned in May. 
  • “The Proposed Transaction provides for a new capital structure and a reduction of pro forma company debt, and is expected to include immediate material funding for current business operations as well as a commitment to fund the combined business of MindMaze and the Company.” This presumably will resolve Babylon’s debt to AlbaCore of $300 million from the SPAC.
  • BBLN shares will cease trading upon closing. Class A ordinary shareholders or other equity instrument holders will receive no payment, as disclosed in May. (Shares are trading at $0.65 today, amazingly, but whatever shares are out there are being bought and sold, for instance in restricted stock units being vested and sold for whatever value could be obtained.)

There is no further mention in either the 8-K or the press release of the appointment of UK administrators (similar to a US Chapter 11). Per the May 8-K, these would be appointed by the High Court in London to supervise the transfer of assets from Babylon Holdings Limited to Babylon Group Holdings Limited and then their sale to the ‘NewCo’ formed after the reorganization by AlbaCore Capital as the Go-Forward Business. It may be that the transfer to MindMaze avoids that. Babylon is headquartered in Jersey (Channel Islands) along with Austin, Texas.

The transaction is expected to close in July, subject to regulatory approvals in the US and UK, with Babylon continuing in its business plan and in the press release’s terms, “accelerating its core mission” at least for the short term. In going private, Babylon will no longer have to disclose its ongoing problem of growing losses after this quarter. In Q1, they had a net loss of $63.2 million, a (20.3)% net loss margin, which was 117% greater than last year’s loss of $29.1 million or (10.9%) margin. Noticeably in the release, Babylon CEO and founder Ali Parsa is not quoted.

How it’s positioned: Both companies will operate independently until such time as they can become a “leading value-based care platform with cutting edge technological, clinical and operational ability to both provide holistic primary care and effectively diagnose, manage and treat major episodic and chronic diseases.” Over the longer term, the combination will “align the strengths of their organizations to deliver a truly novel care paradigm and deliver exceptional outcomes for all stakeholders.” No transition of headquarters, leadership, and staff was announced in the release.

The reality–one or the other will change: This Editor considers this a ‘marriage of convenience’ for their chief investor, AlbaCore, to financially reconcile two of their healthcare businesses. Neither are alike or complementary.

  • We know how Babylon is performing (or not) as a public company for now. We do not with MindMaze, hidden behind the veil of private financing and ownership.
  • Their core businesses are very different–primary care patient access and population health for Babylon, more rarefied and clinical neurotherapeutics for MindMaze.
  • Babylon Health is in a crowded primary care and enterprise telehealth sector of healthcare. Morphing to connect populations ‘from reactive sick care to proactive care’ has a few elephants in it named Teladoc and Amwell, along with multiple niche and private label players.
  • MindMaze’s public profile is that they have built a long-term clinical footprint–examples such as Izar, a FDA-cleared hand motor therapeutic, a partnership with the Vibra health system in two states, and Mount Sinai in NYC–along with two racing sponsorships in 2022–Andretti Autosport for US Indycar and internationally with Alfa Romeo F1 Team ORLEN, for promoting their MindMaze Labs R&D. According to Crunchbase, the company has raised $340 million over 10 rounds since 2012 including rounds by film star Leonardo DiCaprio, Concord Health Partners in NJ, and London-based Hambro Perks along with AlbaCore. 

Taking bets on which company and management survives.

Mobihealthnews and FierceHealthcare recap the releases and recent news for both companies.

Week-end roundup: Walmart Health adds 3 FL centers; wearables nudge close to 50%; Dandelion cardiac AI performance pilot; Aledade’s $260M Series F; $10M for DUOS’ older adult assistance platform; Friday Health Plans to close

June 23, 2023 | by

Walmart Health continues Florida expansion with three new centers opening this week–two in Orlando and one in Kissimmee. This adds to their present five in the central Florida area: Orlando, Kissimmee, Ocoee, Sanford, and Winter Garden. By fall, plans are to have 23 in Florida, tracking to the Q1 2024 plan for 75 total, including 28 new locations in the Dallas (10), Houston (8), Phoenix (6), and Kansas City MO (4) metros [TTA 3 Mar]. Becker’s

New study by AnalyticsIQ indicates nearly half the US population may be adopting wearables and using digital health. Usage doubled in the midst of the pandemic (2020-21) with 46% reporting using at least one type of consumer health technology over the past six months. 35% of the 8,000 respondents used smartwatches, with Fitbit (42%) edging out Apple Watch (38%) followed by Samsung Galaxy Watch and Garmin Vivoactive. By other wearable device type:

  • Blood pressure devices: 59% of survey respondents
  • Sleep monitors: 21%
  • ECG monitors are still a niche: 11%
  • Biosensors such as glucose monitors, hormone monitors, fall detectors, and respiratory monitors are still niche at 8%, but the business grew to $25 billion in 2021
  • Smart clothing: a surprising 6%.

Unsurprisingly, wearable health tech usage skewed heavily towards Generation X-ers and men. Among ethnic groups, black and Latino groups had the highest usage.  Healthcare Dive

Dandelion Health testing cardiac dataset for AI reliability and bias. Starting with their data on ECG waveform algorithms, this startup will be validating the performance and bias of artificial intelligence across key racial, ethnic and geographic subgroups. NYC-based Dandelion is a public-service focused precision analytics company that works with three healthcare systems–Sharp HealthCare (San Diego, California), Sanford Health (Sioux Falls, South Dakota) and Texas Health Resources (Arlington, Texas) to aggregate and de-identify clinical data for roughly 10 million US patients. The validation pilot will start on 15 July and last for an initial period of three months. It may be expanded to include additional clinical data modalities such as clinical notes and radiology imaging. According to their founder and CEO Elliott Green, the “pilot program answers the question, does your algorithm do what it’s supposed to do? And does it do it fairly, for everyone?”  Release, Healthcare IT News

Who said big, late raises are a thing of the past? Not if your company is Aledade, which has solidly succeeded in management services for independent primary care practices transitioning to value-based care models. They just gained a shiny new Series F of $260 million on top of last June’s $123 million Series E for a new valuation of $3.5 billion. The Series F round was led by Lightspeed Venture Partners along with Venrock, Avidity Partners, OMERS Growth Equity, and Fidelity Management. Aledade has grown to manage 1,500 practices and has acquired in recent months Curia (data analytics for advance care planning) and Iris Healthcare (care planning technology). The additional funds will be used to opportunistically add capabilities into its platforms. FierceHealthcare, Bloomberg (paywalled)

Somewhat more in the recent range is DUOS’ $10 million venture capital raise for a total of $33 million. Leading the round were Primetime Partners, SJF Ventures, and CEOc’s Aging Innovation Fund managed by Castellan Group. What’s unusual is that the platform addresses older adults’ needs as a personal assistant in areas such as care, support in social determinants of health (SDOH), housing, and transportation against Medicare Advantage plan benefits, local community resources, and government programs. The benefit for the older person is to close gaps in care and increase utilization of Medicare Annual Wellness Visits (AWVs). Originally targeted to older adults, the company is broadening its markets to health plans, providers and employers. Release, Mobihealthnews, Home Health Care News

Insolvent ‘insurtech’ Friday Health Plans loses last two health plans to state receivership, will close. Colorado and North Carolina were the last two states the company operated in. Both states’ insurance departments put Friday into receivership this week after the insurer notified them that they could not raise additional cash to continue operations. This affects 35,000 and 39,000 individual health policyholders respectively. Texas, Georgia, Oklahoma, and Nevada were previously placed in receivership. State insurance regulators have assured providers that they can expect to be paid for their services per their contracts. Members generally need to find new insurance companies quickly, however. 323 Friday employees in Alamosa, Colorado, their headquarters, will be laid off between 23 June (this Friday) and 6 July, without the previously promised 60 day notice nor any notice of severance or benefit continuation. Friday is the largest employer in this Denver/Colorado Springs suburb. In its brief lifespan, Friday raised over $300 million and lost over $700 million. FierceHealthcare 22 June, 21 June.  Alamosa Valley Courier  Additional commentary by industry analyst Ari Gottlieb on LinkedIn

Mid-week update: Cano Health CEO finally booted, interim named; further information on Oracle Cerner layoffs

June 21, 2023 | by

Cano Health CEO Marlow Hernandez stepping down, but remains on Cano’s board of directors. It looks like Florida-based value-based primary care provider Cano Health is finally starting to clean up its act. The fallout from the long-delayed shareholder meeting taking place last Thursday (15 June) was that the Cano 3 (resigned directors Barry Sternlicht, Elliot Cooperstone, and Lewis Gold), finally got their way with ousting Hernandez. Mark Kent, who was named chief strategy officer in April, will be taking over as interim CEO while the board performs an external search. No time frame was specified.

Hernandez’s departure was not a surprise since Cano had a miserable Q1, with a $60.6 million net loss versus 2022’s barely-there $100,000. Their adjusted EBITDA was only $5 million, compared to $29.2 million in Q1 2022 [TTA 12 May]. Their new chairman of the board, Sol Trujillo, also has a background in turnarounds.

The Cano 3 own about 35% of the shares and one, Barry Sternlicht, invested at least $50 million in the cracked SPAC’s PIPE. They started to push for change back in April. Today (20 June), they issued a statement approving of Mark Kent’s interim appointment though they were not able to prevent the reelection of directors Alan Muney and Kim Rivera as they urged shareholders to do in a 15 June public statement. 

Despite the ouster, the Cano 3 still have plenty of disagreements with how the company is run, nailing these to the door in their 20 June statement responding to what they called an “Offensive Friday Afternoon “News Dump” Regarding its Leadership Transition”:

  • Per his employment agreement, Hernandez is required to step down as a board director now that he is no longer CEO. “Dr. Hernandez’s employment agreement plainly states that ‘the Executive shall be deemed to have resigned from all officer and board member positions that the Executive holds with the Company or any of its respective subsidiaries and affiliates upon the termination of the Executive’s employment for any reason.” They also cite a “history of insider dealings and fiduciary delinquency.”
  • They demand that directors Angel Morales, Dr. Alan Muney, Kim Rivera, and Solomon Trujillo resign immediately as “Dr. Hernandez’s enablers for far too long”. The board permitted the reelection of directors Muney and Rivera despite 82% of shareholders withholding their votes, citing Cano’s post-meeting statement. 
  • Shareholders now must entrust the selection of a new CEO to a board that is not reflective of the majority of shareholders who have lost over 90% of their share value, and not collaborating with the Cano 3 on reforming the board and a new direction of the company. “In fact, it rejected our Group’s two highly qualified director candidates and a proposal to collaborate on a credible refresh of the Board. We are left to question whether Dr. Hernandez and his boardroom allies are continuing to box us out because they are hiding something nefarious. If not, we urge the Board to immediately align with us on a path forward that includes the addition of our candidates – Guy Sansone and Joe Berardo, Jr. – and other essential changes to leadership and strategy.” Both Sansone and Berardo are very senior executives with long, successful records in leading healthcare services and startups.

(Cano Health shares closed at $1.42 today, a decent bump from their valley last week.) To be continued….  Healthcare Dive

Last Friday, TTA was one of the first to cover the Oracle Cerner layoffs (along with HIStalk) affecting the Cerner Federal teams. This week’s coverage elsewhere confirmed that the layoffs were a minimum of 500 to possibly 1,200, plus rescinded job offers and reduced open positions as this Editor saw from employees posting on the Reddit group. They–in particular, The Register (below), confirmed where this Editor would not go in cause-and-effect–that the layoffs were largely due to VA holding further implementations after multiple failures in the five VA systems where it was implemented between 2020 and 2022. The layoffs were also due to the Department of Defense (DoD) Military Health System (MHS) implementation as largely completed, although not glitch-free. It’s a clear cleanout of what Oracle perceives as a problem. 

Oracle did not respond to these publications’ requests for comments.

The new contract’s focus is to fix these five and implement a sixth (James Lovell in Chicago) which is joint with MHS by 2024. This has to be accomplished before implementation starts in the 160 remaining centers plus satellite medical clinics (CBOCs). VA has much leverage in the five one-year terms and the monetary penalty structure [TTA 18 May]. The pressure to perform for an awakened VA–and Congress–is going to be intense on those remaining, and whomever is shifted over from Oracle. This Editor also noted speculation that Oracle Cerner may start to wash its hands of the just-renewed VA EHR implementation by outsourcing most of it.  The Register, Becker’s, Healthcare Dive   TTA’s coverage of the Cerner/VA implementation here.

Rounding up the week-end: Oracle Cerner layoffs hit 500+ in VA, DoD groups (updated); AWS cash cow stumbles; Transcarent-ViewFi team on virtual MSK; Veradigm delays annual, quarterly reports again; Olive AI sells BI to BurstIQ

June 16, 2023 | by

Oracle, which already laid off 3,000 since its Cerner acquisition and dumped its real estate, is proceeding with more layoffs in Cerner groups serving the Federal government, specifically DoD and VA. According to the Reddit group r/cernercorporation on this thread, the layoffs hit broadly within the Federal teams: VA and DoD professional services, Federal care delivery, Federal change management, support service owners, and consulting. The number is at least 500 but may be more. The severance package is four weeks plus an additional week for every year of service plus unused vacation with the layoff date 30 June. Offers made to start for new hires have been rescinded. This has fueled speculation that Oracle Cerner may start to wash its hands of the just-renewed VA EHR implementation by outsourcing most of it. There is precedent for this: Cerner partnered with Leidos for the DoD implementation from the start and Oracle Cerner brought in Accenture for training in February. Of course, the all-heart Mr. Market liked the layoff news coupled with Oracle’s Q4 ending 31 May results of net income of $3.32 billion, a rise of 7% versus last year. CNBC  Oracle is now at a $342 billion valuation, a new high. HIStalk 16 June    

Updated 16 June: details remain sketchy but confirmation that layoffs are in the ‘hundreds’ Reuters, Becker’s, KC Business Journal (paywalled); the last posits from CEO Katz’s statement that this is only the first of many to come.   Further details on the Reddit group is that consultants were onsite at clients working on projects and go-lives when they received their layoffs, that 80% of departments were affected, and that the layoff may go over 1,000. 

Amazon Web Services’ business continues to slow, with the AWS cash cow’s growth slowing to half versus last year’s, with further decline expected this quarter. This Editor noted that market analysts at Seeking Alpha called it back in February when we looked at Amazon’s ability to spend cash so freely in healthcare, for example on OneMedical. Google and Microsoft have been tough competitors and while their growth is off too, they are starting with smaller pie slices. Companies are using more than one cloud provider in a ‘belt and suspenders’ approach; Gartner predicts that by 2026, more than 90% of businesses will use multiple providers, from 76% in 2020. AWS’ plans continue to build outside of the US, with a $12 billion investment in cloud infrastructure in India by 2030 as well as five data centers in Oregon due to a controversial $1 billion tax break. Google and Microsoft have also led in generative AI, while AWS has not. AP

Enterprise health navigator Transcarent has made another bid in the virtual health area. It’s a partnership with ViewFi, which helps MSK providers to diagnose and treat MSK injuries in real time. ViewFi providers are affiliated with the NYC-based Hospital for Special Surgery. The idea for ViewFi came from retired tennis champion Andy Roddick who, with his orthopedist Josh Dines, MD turned their bad experiences during the pandemic using FaceTime for virtual consults into a new platform. ViewFi’s platform now takes patients through an intro screener that records physical and mental health, through diagnosis and a recovery care plan with personalized diagnostic tests and exercises with real-time support from their health guides. For Transcarent-contracted companies, a ViewFi initial appointment can be set in as little as two days as opposed to the usual average of 17 days. Transcarent bought the virtual care platform developed by 98point6 in March. FierceHealthcare

We noted back in March and last month that Veradigm (the former Allscripts) had serious problems with their Q4 and FY 2022 reporting due to a software flaw (!) that affected its revenue reporting going back to 2021. Nasdaq has extended for the second time–from 14 June to 18 September–their 2022 annual 10-K filing and their 10-Q for the quarter ending 31 March 2023. Not filing the reports will mean delisting. Seeking Alpha

Olive AI’s reorganization continues [TTA 23 Feb], with data solutions company BurstIQ buying its business intelligence platform.  LifeGraph Intelligence uses AI tools such as natural language processing and machine learning to extract insights from clinical notes and EMR fields. The platform presents cost and clinical data in a meaningful way through cohort comparisons. According to an example on their website, it contributed to $90 million in savings for one health system. Acquisition cost and management transitions were not disclosed. BurstIQ release  Hat tip to HIStalk 16 June

‘The Future of AI and Older Adults 2023’ now published

June 14, 2023 | by

Laurie Orlov of Aging and Technology Watch in her latest paper tackles the latest iterations of AI and ML, tracing their roots back to 2014 to the original smart speakers and voice assistance, technologies that enabled older adults to access services with convenience and at reasonable cost. What will be the impact of AI using tools such as large language models (LLM) like ChatGPT to develop improved search, voice assistance, answers to health questions, and care plans written in understandable and empathetic language? For care facilities and senior housing, will they leverage AI with voice and sensor tech to improve safety monitoring for both residents and caregivers, plus the dream of predictive health for residents or those living at home with limited assistance? Will chatbots get a lot smarter versus obnoxious? Find out what both the short term and long term (5+ year) impact could be. 

Ms. Orlov’s somewhat gimlety view includes Gartner’s infamous Hype Cycle chart on page 5. As of today, most AI technologies reside in the balmy Peak of Inflated Expectations, the place where whatever investment funding is going. There’s lots of innovation and kitchen table hackathoning. Looming about two years out is the inevitable Trough of Disillusionment which has already been kicked off by Big Thinkers such as Steve Wozniak. As this Editor observed last month, it is a double-edged sword, with the bad side in its potential for data misuse, fraud, fakery, and malicious action. It’s already created controversy that this Editor predicts will crest in the next year with demands for regulation. We’re not there yet, however.

Download of the PDF is here and free.

Mid-week roundup: Promising Langone AI/LLM predicts hospital readmits; Huma gains FDA 510(k) Class II clearance; telepsychiatry’s challenges; layoffs/asset buys/losses from 23andMe, Cityblock, Thirty Madison, Butterfly

June 14, 2023 | by

New York University’s Langone Health’s large language model (LLM) accurately predicting hospital readmissions, more. NYU’s academic medical center NYU Langone Health has developed an LLM using medical language, NYUTron, from unstructured clinical notes in patient records, then fine-tuned it across a wide range of clinical and operational predictive tasks. The dataset was immense:  ‘NYU Notes’ covers 7.25 million clinical notes (for example, radiographic reads, history, and physicals) from 387,144 patients across four hospitals, and more. According to their study published in Nature on 7 June, it was tested for predictive ability in five areas: 30-day all-cause readmissions, in-hospital mortality, comorbidity index, length of stay, and insurance denial. The NYUTron system in testing has achieved results improved over conventional structured models’ baselines. From the Nature study:

  • For 30-day readmission prediction, it had a median area under the curve (AUC) of 79.9% ± 0.168% with a 5.36% improvement
  • On in-hospital mortality prediction, NYUTron had a median AUC of 94.9% ± 0.168% with a 7.43% improvement.
  • On comorbidity index imputation, NYUTron had an OVR median AUC of 89.4% ± 0.275%
  • On binned LOS prediction, NYUTron had a median AUC of 78.7% ± 0.179% with a 12.3% improvement 
  • On insurance denial prediction, NYUTron had a median AUC of 87.2% ± 0.246% with a 14.7% improvement.

In a test of the system during January-April 2022, the system analyzed 29,286 discharged encounters, with 3,271 patients (11.17%) returning within 30 days. NYUTron predicted 2,692 of the 3,271 readmissions (82.30% recall) with 20.58% precision. Also HealthcareITNews

London-based Huma (the former Medopad) gained US FDA 510(k) Class II clearance for their Software as a Medical Device (SaMD) platform. This is defined as disease and age-agnostic digital health pathways through which data are collected from patients for self-management or to be assessed remotely by healthcare professionals. Huma also recently obtained EU MDR Class IIb approval and with Health Canada through the FDA’s joint eStar program. Huma’s tech also includes remote patient monitoring (RPM) systems and companion apps to enable disease management, with third-party device integration. For providers, the platform hosts AI algorithms that use automated data analytics to support screening, diagnosis, dosing recommendations, clinical decision making, and prognostication for identification of at-risk patients and early intervention. In 2020, Huma acquired BioBeats and TLT; more recently, last year iPLATO patient engagement and in January clinical trials data specialist Alcedis.   Huma release, Mobihealthnews

The growth of behavioral health has come to a screeching halt with the demonstrated abuse of online prescribing, then the US Drug Enforcement Administration (DEA)’s uncertainty around controlled substance prescribing. This interview with the CEO of Array Behavioral Care, one of the Ur-companies in telepsychiatry (1999, originally InSight Telepsychiatry and Regroup Telehealth), points out how the DEA’s post-Public Health Emergency (PHE) policies around Schedule II and higher teleprescribing disrupted their operations. The flexibilities established during the PHE have been waivered to 11 November, though a final rule must replace the temporary extension rule and comply with the Federal Ryan-Haight Act [TTA 11 May]. Other issues addressed are dealing with medical affairs (clinical licensure, primary source credentialing, facility privileging, and payer enrollment), and the potential for AI to create new tools to aid clinicians in evaluating mental health, such as natural language processing (NLP) in transcribing video sessions and suggesting clinical notes, as well as scanning patient intake stories and analyzing that information for the likelihood of certain diagnoses. HealthcareITNews

The slow drip-drip-drip of layoffs, folded companies’ asset sales, and company losses that started in 2022 continue, though at a diminished pace compared to consumer companies:

  • Genomics and DNA testing company 23andMe announced layoffs of 9% of staff or 75 people. This will take place by the end of their FY 2024, which ends next 31 March. In a 9 June filing, the company claimed that it would reduce annualized payroll and benefit expenses by $12.8 million, which leads one to wonder about the compensation level of those 75 and from what area they are in. South San Francisco-based 23andMe continues to be money-losing, increasing annual net losses from $217 million to $317 million in the 12 months ending in March, according to its May earnings report despite a 10% revenue gain. 23andMe is yet another ‘cracked SPAC’, having gone that route in 2021 with a Virgin-backed SPAC. Once trading at highs of $12-13 on the NYSE, it closed today at $1.96. However, they don’t have debt, are hanging on to a valuation of $924 million, and their cash position is apparently strong enough to hold it for two years.  Becker’s, SF Chronicle, Yahoo Finance, SimplyWallStreet
  • Another well-financed company, Cityblock Health, is laying off 12%, or 155 staff. Spun off from Sidewalk Labs (Alphabet Health-Google) at the end of 2017, their CEO announced the layoffs in a blog post late last week and effective immediately for those affected. Cityblock serves Medicaid and low-income ‘duals’ with both Medicare and Medicare in value-based care models with a heavy reliance on technology. Their CEO who joined the company in March phrased it as a restructuring, using technology to automate processes, and reducing staff layer. In contrast to others, Cityblock has had no trouble raising funding in the past; in December 2020 they raised $160 million in a December 2020 Series C, plus another $192 million in a Series C extension in March 2021, then a reported $400 million Series D in September 2021 with total raises over $890 million. But their cash burn with high-cost operations in six states (HQ New York, Massachusetts, Indiana, North Carolina, Ohio, and Washington DC) is also likely high. FierceHealthcare
  • Thirty Madison buys assets from bankrupt The Pill Club. The assets? Over 100,000 patient files for $32.3 million. The Pill Club entered Chapter 11 in April after being charged by California authorities of defrauding the state Medicaid program. It paid $18.3 million to settle the charges. But that wasn’t all. According to Mobihealthnews, “the settlement came just days after a state court unsealed a whistleblower complaint against the company in which former nurse practitioners alleged it had defrauded private insurers in at least 38 states. According to a statement from their attorneys regarding the settlement, the whistleblowers would receive approximately $5 million.” The patients covered by The Pill Club’s prescriptions will be converted over to another Thirty Madison brand, Nurx, and offered other services such as behavioral health and dermatology services. The Pill Club raised a lot of money from 2016–$51 million in Series B funding in 2019 and another $41.9 million in 2021. Thirty Madison is a private multi-line of consumer-marketed brands such as Keeps (hair), Picnic (allergies), Cove (migraine), and Facet (psoriasis, eczema) and is at a Series C with a total raise of $209 million. Axios, 
  • Butterfly Network, which some years back developed a hand-held ultrasound device (Butterfly iQ) and entered a crowded field with GE HealthCare’s VScan, Mobisante (apparently defunct), and Philips Lumify, reported Q1 revenue of $15.5 million, flat year-over-year compared to Q1 2022 and which missed analyst estimates (again). Somewhat better news was narrowing last year’s loss to a Q1 loss of $33.5 million which was less than Q1 2022’s loss of $44.5 million. It’s another early SPAC that hasn’t had a great time of it. Since its debut on the NYSE in December 2021, the stock has had the typical drop in altitude from $19.79 to $2.42. It has since expanded to enterprise imaging with Blueprint. Mobihealthnews, Yahoo Finance, Zachs

Theranos restitution status: Holmes’ defense claims $250/month repayment *after* release is unfair

June 13, 2023 | by

Is this thinking ahead or a high-priced legal exercise in futility? The US District Court decisions by Judge Edward Davila pertaining to restitution were clear: $452 million is owed jointly by Elizabeth Holmes and Sunny Balwani to 14 victims, including Safeway and Walgreens [TTA 31 May]. The question is how it will be repaid. The original order by the District Court for Holmes stated only a $25 per month payment while she is at the Bryan FPC. The Justice Department has now requested that the error be amended to now stipulate a $250 per month payment, or at least 10% of her income, after completion of sentence. Holmes’ legal counsel has now filed papers objecting to this assessment, which will take place at least nine years in the future. They cite her “limited financial resources”.

It seems that Holmes will have more trouble paying the $25/month from Bryan, as her financial resources will be even more limited. By some estimations, $25 per quarter is the average earning from prison work. What’s also apparent: her legal counsel is costing her much more than that just for the filing.

Balwani, on the other hand, has been ordered to pay $1,000 per month after his release. The District Court also fined him $25,000 for reasons not disclosed in news sources. Holmes has not been fined. 

One wonders how the lenders will be repaid–proportional checks for pennies? Monthly or quarterly? This Editor is sure that the Murdoch family interests will be waiting eagerly for the payment, while the investments for Murdoch and most others were written off years ago. The small investors whose investment advisors bought shares on the secondary (resale) market get not even that penny.

Much has been made of her net worth circa 2015 when her Theranos stock was valued on the bubble at $4.5 billion, but that was then and this is now. The Feds continue to search for hidden assets held by both Holmes and Balwani. CBSNews, NY Post

Friday roundup: VA Spokane quashes staff cuts; EHR market share ex-US; Epic’s proposed UK HQ expansion; Apple watchOS 10 adds health features; Nox Health on Pear buy; GP2U Telehealth sold

June 9, 2023 | by

VA assures Mann-Grandstaff VA Medical Center staff that they won’t face cuts due to their budget deficit of about $35 million. The Northwest regional network director Teresa Boyd said to staff in a 1 June message that  the hospital had “not been asked to cut current staff or reduce services to Veterans to mitigate any effects of the deficit.” Mann-Grandstaff was The Last Straw for the Oracle Cerner implementation, and problems with the EHR and the loss of productivity (estimated at 18%) contributed significantly to the ongoing deficit. This follows on the earlier center director’s statement that Mann-Grandstaff would face at least a 15% cut to make up the shortfall [TTA 31 May]. The Spokesman-Review story goes on to recap the mound of miseries around the Oracle Cerner rollout as well as the local angle with Senator Patty Murray and Representative Cathy McMorris Rodgers, a Spokane Republican who has called for the VA to scrap the Cerner system, but who also called on VA Secretary Denis McDonough to pledge to use money Congress had already appropriated to prevent cuts to staff or services in Spokane.

Speaking of Oracle Cerner, KLAS’ 8 June report on EHR hospital market share outside of the US has Softway Medical by far the leader. Oracle Cerner has the #3 ranking while Epic, tops in the US, is #10. The top 13 are (by 2022 number of hospital beds):

1. Softway Medical: 17,805
2. Dedalus: 9,436
3. Oracle Cerner: 7,564
4. CompuGroup Medical: 6,039
5. IQVIA: 5,803
6. MV: 4,309
7. Philips: 3,486		8. InterSystems: 2,876
9. System C: 2,706
10. Epic: 2,564
11. ezCaretech: 2,376
12. Maincare Solutions: 2,222
13. Meditech: 2,027

Leading in Europe are Softway Medical, Dedalus, System C, and CGM (not on list), while in Asia/Oceania IQVIA, InterSystems, ezCaretech lead. In Latin America, MV and Philips in Brazil with NTT DATA (not on list) in Argentina. Becker’s

But Epic has plans to expand. One sign: plans to move their UK headquarters staff currently located in several buildings in Bristol to a much larger campus on the outskirts of town in nearby Long Ashton. The campus site is currently pasture fields and the village cricket club. This coincides with plans to develop a ‘garden village’ with 2,500 homes to the south that may include a rail station. The public hearing is 12 June in Long Ashton. Bristol Post

Apple debuted its latest iteration of its Watch, OS10, on Monday at its annual Worldwide Developers Conference, with new mental health, vision health, fitness, and medication tools.

  • Mental health: Mindfulness app logs emotions and daily moods, with a Digital Crown that turns to choose a shape to represent their feelings. The Health app adds depression and anxiety assessments which can be turned into a PDF that can be shared with appropriate health resources. 
  • Vision health: this allows users to track time spent outdoors, which can be good for mental and physical health, but supposedly can create nearsightedness through sun exposure (!). This Editor finds this most curious as most of us myopics were ‘that way’ by age 5 or earlier.
  • Fitness tools: a boon for cyclists with workout reminders, fall detection (unless it’s obvious), and an automatic connection to the person’s iPhone to display heart rate, elevation, race route, custom workouts, and cycling speeds. 
  • Medication: follow-up reminders to log medication sent 30 minutes after the scheduled time

Mobihealthnews, CNET video

Nox Health, which bought $3.9 million of Pear Therapeutics assets [TTA 24 May] spilled a bit to Mobihealthnews on their plans for Somryst, the Pear FDA-cleared insomnia treatment. Nox is already in the sleep health business and has several lines of business around benefits for self-insured employers and payers, plus sleep diagnostics and related technologies targeted to hospitals and health systems including the VA. Nox’s origins are in Iceland and while developing sleep diagnostics from hospital to home got to know Pear while they were developing Somryst. Their CEO also has some thoughts on why Pear got sliced up.

Down Under, GP2U Telehealth is being sold, the second change of ownership in just over two years. The seller is UK-based Doctor Care Anywhere (DCA) Group. Australia’s Connected Medical Solutions, operating as My Emergency Doctor (MED), agreed to buy GP2U for A$3 million (US $2 million): A$500,000 in cash and A$2.5 million in Connected Medical Solutions shares. DCA bought it in September 2021 for A$11 million (US$7.4 million), which is quite a haircut in any currency, but announced that the sale is to reinforce its focus on its core UK market. MED partners for telehealth services with over 40 healthcare services, including ambulances, primary health networks, residential aged care facilities, hospitals, urgent care centers, and multi-purpose centers. DCA’s current UK consults in April/May totaled 121,200, up 30%. Mobihealthnews, MarketWatch

Watch your cash burn! Now 31 months average for startups between Series A and B. Now what do you do?

June 8, 2023 | by

Yes, it’s an even longer way from Series A to B. Add some rockslides to that picture (left) and that’s what the road looks like. A thoughtful article in Crunchbase illustrates the changes over the past dozen years. We are certainly not in the palmy throw-money-at-great-ideas-devil-take-the-hindmost days of 2020-21. Their chart has both median and average time from Series A to B and both are at an all-time high: 31 months on average and 26 months for the median, sharply up from 2022’s 26 and 22 months respectively. The lowest quartile of startups took a stunning 38 months median to get to a Series B–that is over three years.

The question for most startups is how long they can hold out till the next successful fundraising. The pattern has been that once the Series A is completed, the founders put most of their time and energy into raising the next round. What they should be doing, according to the article, is cutting costs and extending runways till the time that things improve among funders. Startups should also keep in mind that investors now prefer lower-risk, slower growth, lower ongoing loss startups to the high flying (in 2020-21). high-cash burn/high-growth startups. 

There are exceptions of course in hot sectors, notably AI and generative AI, but formerly scorching mental health has distinctly frosted over. And if your startup is already profitable, that also attracts funding if the sector is appealing.

The CB conclusion is cautionary and to the point: 

Sooner or later, however, Series A companies will have to do one of five things: Get acquired, go public, become self-sustaining, raise more financing, or shutter. If enough years pass with none of the first four options happening, it becomes increasingly likely the startup will not make it.

This Editor will add that the latest shutterings have been in women’s health which never has received a lot of investment (5% according to Rock Health) and to funders is too niche: NYC-based Bunnii (fertility planning) and SimpleHealth (birth control), which sold its assets to Twentyeight Health. Both got trapped in the funding trough between promises and actual funding. Axios

What’s the way forward from the tough picture above? Well, digital therapeutics probably should be avoided as their track record from Happtique’s vetted app prescribing (failed by 2014) to Pear Therapeutics (failed 2023) has been a losing one. This Editor saved a January MedCityNews article to see if their thumbs up-and-down projections on startups raising capital held up six months later. 

  • Thumbs up: companies that serve multiple stakeholders by creating value for providers, pharma, payers, employers, and consumers; those that not only save clients money but also make them money after one year (!); labor/staff-saving systems; anything with clear ROI; concretely addressing issues with affordability, accessibility, and accuracy. 
  • Thumbs down: niche players that serve highly targeted markets; care navigation (and other-Ed.) services where ROI is hard to track; too crowded sectors like patient engagement and clinical documentation unless they can provably be the lowest cost, most efficient provider versus competition

This Editor would add as ‘thumbs up’ technologies that facilitate simple and less expensive deployments that address extreme pain points around Federal/state compliance and legal/safety cost issues such as staff safety, drug diversion, and patient/resident elopement. 

FTA: Companies are advised to diversify their funding as well: reduce dependence on private capital by looking for investments from alternative sources like the government for non-dilutive funding.

What’s your thoughts and experience?

Perspectives: How AI and ML can accelerate the growth of telemedicine across the globe

May 31, 2023 | by

TTA has an open invitation to industry leaders to contribute to our Perspectives non-promotional opinion area. Today’s Perspectives is from Deepak Singh, a thought leader in AI and telehealth. In his work, he builds AI-powered healthtech and telehealth solutions that can reach from big cities to remote areas of the world. With double master’s degrees in business and information systems, he has 10 years of experience in product development, management, and design ranging from telecom to multimedia and from IT solutions to enterprise healthcare platforms. This article discusses how artificial intelligence (AI) and machine learning (ML) can accelerate the global growth of telemedicine, including a consideration of risks and possible solutions.

Introduction

The ongoing technological advancements have led the way towards greater opportunities for the growth of the global health business, particularly telemedicine through increased connections via the internet, robotics, data analytics, and cloud technology that will further drive innovation over the next ten years. It is obvious that artificial intelligence (AI) usage plays a noteworthy part in the maneuvering and execution of medical technologies when considering the bulky amount of data handling needed by healthcare, the requirement for consistent accuracy in complex procedures, and the rising demand for healthcare services.

Telemedicine is the practice of performing consultations, medical tests and procedures, and remote medical professional collaborations through interactive digital communication. Telemedicine is an open science that is constantly growing as it embraces new technological developments and reacts to and adapts to the shifting social circumstances and health demands. The primary goals of telemedicine are to close the accessibility and communication gaps in four fields: teleconsultation, which is having all kinds of physical and mental health consultations without an in-person visit to a medical facility; teleradiology, which uses information and communication technologies (ICT) to transmit digital radiological images (such as X-ray images) from one place to another; telepathology, which uses ICT to transmit digitized pathological results; and teledermatology, which uses ICT to transmit medical information about skin conditions.

AI has been progressively implied in the field of telemedicine. AI deals with machine learning (ML) that discloses complex connections that are hard to figure out in an equation. In a way that is similar to the human brain and neural networks that encrypt data using an enormous number of interconnected neurons, ML systems can approach difficult problem-solving in the same way that a doctor might do by carefully analyzing the available data and drawing valid judgments.

A growing understanding of artificial intelligence and data analytics can help to broaden its reach and capabilities. Telemedicine’s goal is to boost productivity and organize experience, information, and manpower based on need and urgency and it can be augmented by the use of AI and ML.

Evolving application of AI and ML in Telemedicine

In order to enable clinicians to make more data-driven, immediate decisions that could enhance the patient experience and health outcomes, AI is being employed in telemedicine more and more. The use of AI in healthcare is a potential approach for telemedicine applications in the future.

Al and ML were able to bring about the necessary revolution in so many sectors due to their competence, increased productivity, and flawless execution of tasks. AI is now surpassing the boundaries of being a mere theory and stepping into a practical domain where the need for human supervision for the execution of jobs by machines will be minimized all due to the presence of enormous datasets along with an increment in the processing power of that data. A computer-based algorithm that uses AI has the ability to analyze any form of input data such as ‘training sets’ using pattern recognition which eventually predicts as well as categorize the output, all of that is beyond the scope of human processing or analytical powers that uses traditional statistical approaches. In the field of telemedicine, the adoption of AI and ML still has to go a long way till its vital concepts are understood and applied likewise, nevertheless, the current scenario gives a promising picture where many research projects have applied AI to predict the risk of future disease incidence, decrypting cutting-edge imaging, evaluating patient-reported results, recording value-based metrics, and improving telehealth. The perspective to mechanize tasks and improve data-driven discernments may be comprehended by profoundly improving patient care with obligation, attentiveness, and proficiency in prompting AI.

Drawbacks of artificial intelligence in telemedicine (more…)

Mid-week roundup: Holmes turns herself in, ChatGPT as good ER explainer, VA Spokane to cut staff to pay for Oracle Cerner EHR problems?, former Cerner campus conversion

May 31, 2023 | by

Holmes’ time at Bryan begins. Today (30 May) in a Texas morning, Elizabeth Holmes self-surrendered to the Federal Prison Camp (FPC) at Bryan to begin her 135-month sentence (11 years+). With good behavior and enrollment in certain programs, she may serve about 85% or about 9.5 years as No. 24965-111. The ‘shakycam’ video link here from Sky News (scroll to 3:18) initially from across the street then at the fence shows her delivery in a NY state-plated Ford Expedition to the facility parking lot. Her parents give her paperwork to the officers, then she with the officers walk into the camp facility, with a goodbye wave by partner Billy Evans (ballcap by the car). After all the drama, the denouement is bog-standard save for the paparazzi. She is wearing glasses, a tan sweater and blue jeans, the latter two which will be exchanged for a uniform. Many might be surprised that the prison camp has green grass lawns and trees, without towers or impenetrable fences. This is a low security facility for 650 women on 37 acres, but it remains a prison with all the schedules and restrictions that entails.

Her appeals to the Ninth Circuit Court on her conviction and sentencing, with now the restitution, continue as does the puzzle of how to compensate the victims identified by the US District Court as being owed $452 million payable jointly by her and Sunny Balwani. The order of restitution is here (PDF) There are a dozen identified financial victims from the relatively small (the Eisenmans’ $150,000) to the $125 million of Keith Rupert Murdoch. Both Safeway ($14.5 million) and Walgreens ($40 million) are identified separately. At this point at Bryan, she will be earning between $0.12 and $1.15, earning perhaps $25 every four months based on older data. According to the BBC article today, half of that will go to her victims, said Randy Zelin, a professor at Cornell Law School. The Feds will continue to scrutinize for hidden assets. Mercury News

Our Theranos Saga that started in October 2015 now endeth here, except for news on appeals or changes in circumstances.

On a somewhat lighter note, this non-paywalled Insider article charts the up and downsides of using ChatGPT as an explainer to patients in the ER/ED.  Joshua Tamayo-Sarver, MD, has been an ER doctor for almost 14 years as well as a VP of innovation for two healthcare tech companies, Vituity and Inflect Health. He recently started using ChatGPT4 as an adjunct to treatment, to explain difficult emergency situations to patients and family in simple non-medical language. Dr. Tamayo-Sarver’s article in Fast Company provides a solid narrative of how the simplicity and empathy of ChatGPT’s explaining treatment (in this case of a 96 year old woman with lung edema and dementia) works and helps the staff de-escalate the situation developing with her children and give them a chance to start her correct treatment determined by the doctor, not ChatGPT. (What was her outcome?) As the doctor explains, working with ChatGPT is inadequate for diagnostics, but adequate for ‘hungover intern’ level actions: taking patient history, creating long-form communication for patients and staff, and explaining highly technical information with empathy and compassion.

Will the Spokane VA location which proved to be The Last Straw for the VA with Oracle Cerner from October 2022 pay for it with cuts in staff? This year, Mann-Grandstaff VA Medical Center is projected to run a budget deficit of about $35 million. In a March email, the Mann-Grandstaff director Robert Fischer stated that the Northwest VA VISN (regional) director said this will require Mann-Grandstaff to cut about 15% of staff. Yet the VA chief of VA health care, Shereef Elnahal, has denied this. The controversy around this has prompted VA’s secretary, Denis McDonough, to issue a statement that he will look into these reports but stopped short of confirming that no staff would be cut. Spokesman-Review (Spokane)  Hat tip to HISTalk 31 May

Cerner’s Continuous Campus in Kansas City, Kansas, apparently will be redeveloped. Two local developers are in contract with Oracle to buy the empty 63.5 acre property with twin nine-story office towers. Last week, local authorities approved rezoning with an amended master plan. Developer plans are to convert the north tower to 224 to 232 market-rate apartments above ground-floor commercial space. While the plan for the south tower is to stay as 660,000 square feet of office space plus parking, no interest has come from lessees. According to reports, Oracle’s purchase of Cerner and shutdown of many operations in the area dumped 4.1 million square feet of real estate in the area.  Fox4KC

Another Bright Health selloff: Zipnosis sold to Florence Labs

May 24, 2023 | by

Bright’s money-raising continues. Bright Health’s Zipnosis was sold to Florence Labs for an undisclosed amount. Zipnosis, acquired stealthily by their Minneapolis neighbor Bright in the latter’s Happy Time of April 2021, is a telemedicine/telehealth company that provides white-labeled ‘digital front door’ asynchronous telehealth and diagnosis triage for large health systems fully integrated into hospital EHRs. Today’s release does not mention acquisition cost or management/employee transitioning, though Zipnosis is confirmed in their boilerplate to have about 60 employees. One suspects the sale amount was not large.

Notably, the Zipnosis website has been cleansed of any Bright Health identification or releases. A quick look at Zipnosis staff on LinkedIn indicates the cutover (and presumably the sale) took place in March but for various reasons such as financial closings was not announced until today.

Zipnosis is one of telehealth’s Ur-companies, founded in 2009 and gaining 50-60 health systems before their sale. Zipnosis was a good buy, lightly funded, and with a unique technology that fit well and conveniently into EHRs. It was a smart addition for Bright’s practices under NeueHealth along with entree to health systems. Their later and larger competition at least in synchronous telehealth for health systems was Bluestream Health, bought last month by eVisit as more evidence of healthcare consolidation. 

Florence Labs is a just-out-of-stealth startup based in NYC that automates clinical workflows and patient-facing access to address the problem of acute care clinical capacity. It was founded in 2021 by Aniq Rahman (president of Moat, acquired by Oracle in 2017 for $850 million). It was recently and modestly funded (March release) with $20 million in seed capital from Thrive Capital, GV (Google Ventures), and Salesforce Ventures with participation from Vast Ventures, BoxGroup, and Atento Capital. It’s currently working with about 40 healthcare systems, the most recently announced Luminis Health in Maryland.  It’s not to be confused with the significantly larger Florence Healthcare (clinical trial site enablement).  FierceHealthcare

Mid-week roundup: Pear assets fetch paltry $6M *updated*, Bright Health’s reverse stock split, Oracle Cerner loses hospital EHR share, Lifeforce health optimization scores $12M Series A

May 24, 2023 | by

From a $1.6 billion valuation to $6 million in a bankruptcy court is sad. Pear Therapeutics‘ assets were sold at a bankruptcy court auction for $6 million. Even that took four bidders slicing themselves individual pieces.

  1. Nox Health Group of Atlanta ponied up the major bid of $3.9 million for Pear’s Somryst, their FDA-cleared insomnia treatment. Nox Health offers sleep-related treatments to employers and payers.
  2. Harvest Bio anted up $2.03 million for the ISF licenses and patents, plus Pear assets related to schizophrenia, multiple sclerosis, depression, and the remaining pipeline projects. They also bought the corporate trademarks, the PearConnect commercial platform, and the rights to the FDA-cleared reSET and opioid-specific reSET-O programs. Editor’s view: with no discernable website or Crunchbase listing, Harvest’s purpose could be to buy themselves the core of a business. (See below for more)
  3. Click Therapeutics paid $70,000 for the patents that powered Pear’s platform, except Invention Science Fund (ISF) licenses and patents. Click is an NYC-based developer of digital therapeutics to treat migraine, smoking cessation, schizophrenia, depression, and more.
  4. WELT Corp. of Seoul, South Korea, put down $50,000 for Pear’s migraine-focused program. Samsung-backed WELT develops digital biomarkers tracked by smartphones and sensors to track, monitor, and predict health outcomes.

The court filing (PDF) is here. The hearing to finalize the approved bids took place yesterday (22 May) in the United States Bankruptcy Court for the District of Delaware. The $6 million is nowhere near the $32 million in debt that Pear had on the books at the time of their Chapter 11 filing [TTA 13 Apr]. The $1.6 billion was the valuation of Pear at the time of its SPAC in December 2021 and Pear had raised over $400 million previously. Mobihealthnews, STAT

Update 30 May: The mysterious Harvest Bio LLC is now a little less mysterious with the tracking down by STATNews‘ Mario Aguilar that the signatory for the purchase of over $2 million in assets from Pear is none other than Pear’s former CEO, Corey McCann. @mariojoze. Brian Dolan on LinkedIn adds the tracks of a molto stealthy Boston-based funder, T.Rx, which is using a recently set up fund (1/23) to back up McCann’s bid. Former Pear exec (head of search, evaluations, and in-licensing), independent investor, and Zus Health investor Michael Langer appears to be a co-founder and managing director of T.Rx, according to Mr. Dolan. Zus Health raised $40 million back in March and is headed by former athenahealth head Jonathan Bush.

In other implosion news, Bright Health on Monday executed its reverse stock split buying itself time on the NYSE from delisting. The board and shareholders approved a 1:80 split. It is now trading as BHG1 and closed today (Tuesday 23 May) at $14.38. Bright is in real extremis–selling its California health plans, either fined or under investigation in four states, in a lawsuit over unpaid claims with SSM Health, and needing a quick $500 million to pay off their outstanding JP Morgan credit facility. Ouch.  [TTA 7 Apr, 20 Apr, 4 May, 5 May  Mobihealthnews, Becker’s Payer Issues, Seeking Alpha    See 24 May update on their sale of Zipnosis

Oracle needs to execute a turnaround at Cerner. Stat. And it’s not just at the VA. KLAS Research in a report published today calculated EHR hospital market share by both location and hospital beds. Epic is running away with the core hospital market with a 39.5% market share while Oracle Cerner has 24.9%. The KLAS findings are access-restricted, but the publicly available toplines are that Epic is the only vendor with positive net change in hospital market share and beds, while Oracle Cerner has lost beds and gained share in small hospitals, losing large ones. Third ranked is Meditech with a 16.3% share. It’s not unthinkable to shrink out of this business. Once upon a time, GE Healthcare was a major player in this sector with Centricity–and exited back in 2015, retreating to specialty physician practices. Becker’s

In contrast, if it has some celebrity shine, money gets raised. Lifeforce closed a Series A round at what is now a strong amount–$12 million. It promises a clinically integrated approach to health optimization for longevity based on physical and psychological biomarker data, clinical expertise from doctors and health coaches, and validated interventions on a telehealth-based platform. Blood draws every three months are done by registered phlebotomists. It also markets nutriceuticals, peptides, and hormones as part of treatments to members. Co-founded by Dugal Bain-Kim, Peter Diamandis, and Tony Robbins, Lifeforce is endorsed by Serena Williams. The $12 million raise was co-led by M13 and Peterson Ventures with participation by Ridgeline Ventures, Rosecliff Ventures, and Seaside Ventures. The maintenance program starts at $349 for an initial baseline assessment and $129 per month for membership thereafter. However, when this Editor as a marketer sees claims in the release headline such as “World’s Most Effective Health Optimization Platform”, yellow flags start flying. Mobihealthnews, Lifeforce release

Thursday roundup: Kaiser-Geisinger won’t close till ’24, Validic buys Trapollo, Veradigm’s ’22 financials delayed again, ORA telehealth’s $10M Series A, ATA adds 3 to board

May 18, 2023 | by

Some more reveals on the Kaiser Permanente/Risant Health/Geisinger Health deal. Perhaps the most significant one in Kaiser’s quarterly financial statements was that the closing with Geisinger is projected to be sometime in 2024, subject to the usual regulatory approvals. As announced in April, Geisinger will be the founding system of a new non-profit group, Risant Health, that will bring together a targeted five to six non-profit community health systems. Financial disclosures were also made that were centered on the timing of substantial investments and commitments:

  • Kaiser’s financial commitments to Risant will be made in the five years following closing. The $5 billion previously announced is the upper end of the support. Confusingly, Kaiser is also committing to a minimum investment of $400 million over five years inclusive of funds generated by Risant Health. 
  • Risant’s support and investment into Geisinger will end earlier, in 2028, but in that time will make an investment of a minimum of $2 billion to support Geisinger’s hospital, technology, and strategic development. It will be inclusive of funds generated by both Risant and Geisinger.
  • Risant will also make available to Geisinger no less than $100 million” through 2028 to support expansions of Geisinger’s health plan and care delivery services into bordering Pennsylvania communities.
  • Risant will also make available to Geisinger funds for research and education for 10 years after the 2024 closing

Kaiser’s Q1 was far better than its money-losing ($4.5 billion) 2022, with $1.2 billion in net income. Geisinger has not yet reported Q1, but it had a $842 million net loss in 2022.  FierceHealthcare

Digital health/personalized care company Validic is buying Trapollo, a similar connected care company. Both have platforms facilitating chronic care patient management via remote care and EHR integration. The acquisition price and workforce transitions were not disclosed. Trapollo’s former owner, Cox Communications, will become a shareholder in Validic. Trapollo senior VP/general manager Steve Nester will have the same title at Validic. It will remain at the Validic HQ in Durham, NC, with Trapollo’s former distribution center remaining in Sterling, VA. This continues the trend of consolidation of businesses in similar or complementary services. Release

Veradigm, the former Allscripts, 2022 financials continue to be in a tangle. As previously reported [TTA 3 Mar], Veradigm delayed its Q4 and FY 2022 reporting due to a software flaw that affected its revenue reporting going back to 2021. On 22 March, this expanded to their extending their year-end audit and 10-K filing because of “internal control deficiencies related to revenue recognition.” In a recent SEC filing, they stated that they may be able to file their 10-K by 14 June, but cannot guarantee it. The revenue impact may be as high as $40 million and affect their 2021 closing. HIStalk 5/17/23

Singapore’s ORA Telehealth just scored the region’s largest Series A raise–US$10 million. It was co-led by TNB Aura and Antler with participation from Gobi Partners, Kairous Capital, and GMA Ventures for a total funding to date above US$17 million. ORA is unique in that it’s a vertically integrated platform that markets to a young customer base (average age: 38) on three platforms: Modules (676 different formulations of prescription skincare), OVA (women’s health), and andSons (men’s health).

The American Telemedicine Association (ATA) welcomed three additions to its board this week:

  • Marc Adelson, JD, Teladoc Health’s deputy chief legal and global chief compliance officer. Prior to joining Teladoc in 2011, he was  co-founder and executive legal director of the Institute for Patient Safety & Quality in Virtual Care, the first federally qualified patient safety organization (PSO) focused on virtual care.
  • Kavita Patel, MD, MS, a practicing primary care physician at Mary’s Center, a Federally Qualified Health Center in Washington DC and Maryland. She is also a venture partner at New Enterprise Associates, an NBC/CNBC/MSNBC contributor, and was formerly director of policy for the Office of Intergovernmental Affairs and Public Engagement in the Obama administration
  • Sarah Pletcher, MD, MHCDS, system vice president and executive medical director for strategic innovation at Houston Methodist, and responsible for advancing a wide range of virtual and other innovative care models and solutions.