Breaking: CVS’ Signify Health buy under DOJ scrutiny in ‘second request’

Not unexpectedly, the US Department of Justice (DOJ) is taking a hard look at the Signify Health acquisition by CVS Health. The two companies were notified Wednesday on DOJ’s Second Request for information. This was disclosed on an SEC Form 8-K. The DOJ now has 30 additional days to investigate antitrust aspects of the merger, once that additional information is received. 

The timetable goes like this:

  • 19 Sept: CVS filed its premerger notification and report with the DOJ and the Federal Trade Commission (FTC) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR). This initiates a 30-day waiting period.
  • 19 Oct: At deadline, the request for additional information initiated by the DOJ was received by both CVS and Signify (Second Request)
  • The Second Request extends the waiting period under the HSR Act by 30 days after both CVS and Signify have substantially complied with the Second Request. The DOJ can terminate the waiting period earlier, or move it to an agreed-upon later date. 

CVS continues to affirm closing the deal by first half 2023 as planned, which is a fairly wide window.

The current government’s DOJ and FTC have made no secret of their policy-driven yen for using antitrust in the name of lowering healthcare costs (even favored pharma). The crashing failure of DOJ’s antitrust motions against UnitedHealthGroup and Change Healthcare [TTA 20 Sept] must have smarted. What this usually initiates is the search for a quick and easy win to put said embarrassment behind them. CVS Health is certainly a high-profile target, though Signify even at $8 billion, like Change, is not except in the industry. 

Signify’s competitive overlap with CVS/Aetna isn’t as large or obvious as UHG’s Optum with Change, but there is some: home health management and (in this Editor’s view), ACO management services with Signify’s Caravan, which participates in multiple Federal shared savings models where Aetna also is. One wonders if some divestment will be demanded by DOJ. Even before the auction, Signify started the complicated and long exit from the failing Bundled Payments for Care Improvement (BPCI) programs inherited from the Remedy Partners buy.

Could the DOJ action have played a role in CVS’ sudden cold feet in acquiring Medicare/Medicaid primary care provider Cano Health? [TTA 20 Oct] The timing is certainly close. 

DOJ is not working alone. The FTC also has a yen for Amazon in their 2 September second request for information on their acquisition of OneMedical, which also added 30 days to the Hart-Scott-Rodino (HSR) clock after compliance. Amazon is already going through this with their iRobot acquisition [TTA 15 Sept]. Reuters, FierceHealthcare, Home Health Care News

News roundup: CVS abandons (?) Cano Health buy; Signify adds home RPM; BioIntelliSense RPM acquires AlertWatch; GE Healthcare, AMC Health partner; Viome raises $67M, other fundings

CVS Health apparently backs away from a strategic primary care buy. Earlier this week, both Barron’s and DealReporter (via FactSet) reported that CVS Health is no longer pursuing an acquisition of Cano Health, a primary care provider group in Florida, Texas, Nevada, California, Illinois, New Mexico, and Puerto Rico that concentrates on senior health, Medicare Advantage patients, and value-based care. Cano has 4,000 employees and 280,000 members. Reasons why were not disclosed by either CVS or Cano. Cano shares listed on the NYSE fell on the news from Monday’s open of $8.22 to $4.50 today (20 Oct). An alternative buyer may be Humana, which has a right of first refusal on a sale dating back to 2019, but Humana has been quiet on the acquisition front of late.

Walking away seems contrary to CVS’ stated strategy of pursuing deals in primary care, provider enablement, and home health, but CVS can afford to be choosy. There’s speculation that CVS has a different provider/VBC enablement target in mind.  Jailendra Singh of Truist Securities identified ACO management services organization Privia Health as a potential buy that would fit well with CVS’ pending buy of Signify Health, which includes competitor Caravan Health (more on this here). But who knows if this ‘walk away’ is final? Healthcare Finance, FierceHealthcare

CVS’ pending deal, Signify Health, announced the addition of spirometry testing to evaluate patients for COPD. This will be added to their existing suite of in-home diagnostic testing and tracking, In-Home Health Evaluation, targeted to Medicaid and Medicare Advantage members. Mobihealthnews

If there’s a Cinderella this inflationary, recessionary year, it’s remote patient monitoring (RPM). BioIntelliSense has been in RPM since 2020 with on-body/stick-on sensors such as the BioButton and the BioSense 30-day monitor. Their latest addition through acquisition is the AlertWatch clinical intelligence and triage system. AlertWatch will join BioIntelliSense’s product group within Medtronic’s HealthCast portfolio in US hospital patient monitoring as part of their existing partnership. In the past ten years, AlertWatch achieved four FDA 510(k) clearances for its specialized product offerings for the operating room, intensive care unit, and labor and delivery unit.  BioIntelliSense release

Veteran RPM company AMC Health will be partnering with GE Healthcare (GEHC) for post-discharge in-home care monitoring. This will extend GEHC’s hospital-based monitoring into post-acute patient needs and anticipate future care needs, potentially reducing unnecessary readmissions. It’s also planned that eventually both hospital and home data will be integrated into GE’s Edison Health database. GEHC also announced additional details about its spinoff, due to happen in early 2023. [Also TTA 12 Nov 21 and 20 July] Mobihealthnews

Healthcare/health tech raises haven’t entirely disappeared. Viome, which uses AI to test the oral and gut microbiome to prevent, diagnose, and treat chronic diseases and cancer, just raised a $67 million Series C led by Bold Capital Group with participation from Khosla Ventures, West River Group, Glico, Ocgrow Ventures, and Physician Partners, for a total raise since 2017 of over $169 million (Crunchbase). Viome recently launched the CancerDetect test for oral and throat cancers under the FDA Breakthrough Device Designation. Last year, they expanded their partnership with GlaxoSmithKline to research and potentially develop interventions for some cancers and autoimmune diseases. Viome release  

Mobihealthnews rounds up several other financings from genomic tester Variantyx’s $20 million in debt financing to mental health app Mindful Care’s modest $7 million Series B and dataset research collaboration platform Rhino Health‘s $6.7 million seed round extension for an $11 million total.

Rosendorff stands pat on Theranos’ Elizabeth Holmes: “She needs to pay her debt to society”

Monday’s limited hearing in US District Court on Adam Rosendorff’s Mysterious Visit to Casa Holmes is likely to be a Defense Dud. Rosendorff walked Judge Edward Davila through the circumstances of his visit, what he said–which differed from Holmes’ partner Billy Evans’ recollection–and reaffirmed his testimony in the Holmes trial plus his sworn declaration given prior to the hearing.

  • He recounted his feelings of distress that Holmes’ and Evans’ son would “spend his formative years” without his mother in prison. The surprise contained here is his testimony that “It’s my understanding that Ms. Holmes may be pregnant again.” Follow-up by reporters outside of court was not answered by either Dr. Rosendorff or Evans.
  • Rosendorff reaffirmed that he testified “truthfully and honestly” on Theranos. “At all times the government has encouraged me to tell the truth and nothing but the truth.” 
  • Regarding telling Evans that the prosecution made the situation at Theranos sound worse than it was, Rosendorff did not recall that. He reconfirmed that he didn’t believe the prosecution did that. Rather, the prosecution “was trying to paint an accurate picture of Elizabeth Holmes.” 
  • As to another Evans statement that Rosendorff regretted that the prosecutors made people at Theranos look bad, he countered that “to the extent that other people looked bad, it was because of their association with Elizabeth.”
  • Overall, “I don’t want to help Ms. Holmes. At this point she needs to pay her debt to society.”

For anyone who has been through a legal process, Dr. Rosendorff’s all-too-human reactions after the extraordinary strain of two trials as well as the destruction of his career, his wanting to square things with, and confront, the cause of years of tsuris is understandable. That, of course, was ill-advised in the extreme. One only hopes that he has family and friends to comfort, counsel, and help him in moving toward a satisfying future, perhaps well away from California. He can also reflect that the four counts for Holmes and 12 for Balwani were on fraud, proved by the testimony of others who certainly aren’t running to Casa Holmes banging on her door.

Barring any other defense rabbits out of hats, Holmes is scheduled to be sentenced by Judge Davila on her four counts on 18 November to begin paying her debt to society. Mercury News

Theranos’ Holmes sentencing now 18 November, defense wants to expand hearing scope; Balwani can’t join in

Elizabeth Holmes will be receiving a limited hearing concerning The Mysterious Visit of Dr. Adam Rosendorff and her defense is attempting to expand the hearing. But Sunny Balwani won’t be joining in. The highlights of their recent District Court activities under Judge Edward Davila:

  • Holmes’ sentencing on her four counts has been reset to 18 November at 10am PT. This is despite the limited hearing on 17 October to determine whether Adam Rosendorff was really regretful about his testimony (as the Holmes defense maintains) and what he said and did. 
  • In a separate order, Judge Davila rejected Balwani’s defense move to join in the hearing. Rosendorff’s statements to Evans “related exclusively to his testimony during Ms. Holmes’ trial, not Mr. Balwani’s trial,” and provide “no basis for Mr. Balwani to examine” Rosendorff at the hearing.
  • In a filing, Rosendorff’s legal team asked Judge Davila to quash a subpoena sent by Holmes’ defense to obtain additional information from Rosendorff to use in next week’s hearing. “(Holmes) has sought to transform that limited inquiry into a free-for-all in which Dr. Rosendorff would be required to search through more than a year’s worth of sensitive emails, text messages, and other communications with family, friends, and others so that (Holmes) can try, yet again, to make him look like a liar.”
  • In that filing, the legal team also provided explanations of Dr. Rosendorff’s actions on that day. Driving around the area, he saw that the Theranos building had been torn down and a residential development complex built in its place, and the Palo Alto Walgreens where the first pilot took place had been replaced by a rug store. He wanted to “forgive her for the pain and suffering her actions have caused in his life” and to express his condolences on the child growing up without a mother. Unfortunately, he didn’t stop there on Memory Lane but took a drive up to the well-known location of her rental house, where recollections do differ and increased his tsuris as a result. 

Mercury News, Palo Alto Online

Q3 digital health funding craters nearly 50% to $2.2B: Rock Health

Returning to 2020 and prior trends? The recession and expensive money have hit quite comprehensively in digital health, with Rock Health’s quarterly/YTD tracking that Q3’s digital health funding of $2.2 billion declined to a little over half of Q2’s $4.1 billion. It is the lowest quarter in funding since Q4 2019’s $2.1 billion. Q3’s performance is also reflected in the number of deals completed, tracking at a scant 125 deals.

Are we returning to a prior norm? In looking at YTD 2022 funding ($12.6 billion, 458 deals), it is trending very close to the full year of 2020 at $14.7 billion and 481 deals which in turn was a decent increase from 2019. Allowing that it was kickstarted by carryover from 2021 (Q1 of $6.1 billion), it puts 2021 in sharp relief as a Covid-driven and (in this Editor’s estimation) ‘silly money’ outlier since Rock Health’s tracking started in 2012.

Reviewing Rock Health’s numbers:

  • They project that 2022 will not even attain half of 2021’s funding levels
  • Average deal size YTD is $27 million, $3 million less than 2020 and $12 million less than 2021
  • Raises of Series C and above nearly vanished: only 6, accounting for less than 5% of total funding. Q2, by contrast, had 19 Series C+ raises. And there were only two digital health mega raises of $100M or more compared to 2021’s average of 22 per quarter. Rock Health speculates on the reasons why, including that some were diverted into other funding types such as round extensions and venture debt.
  • Mental health continues to lead the composition of funding by clinical indications, with oncology and cardiovascular moving into the #2 and #3 spots YTD versus 2021, with diabetes moving back to #4. In value propositions, non-clinical workflow jumped to #1 with on-demand healthcare holding on to the #2 spot. R&D fell back to #3 from last year’s #1 spot.

Certainly for those seeking funding, this confirms that the open wallet days for anything labeled digital health are over and not returning.   

Catchup News Roundup: UHG-Change buy final; Theranos’ Holmes sentencing delayed, ‘limited hearing’ agreed to

Note: your Editor is on the mend after returning from vacation with a nasty bug that’s laid her low for the better part of a week.

UnitedHealth Group’s Optum unit completed its acquisition of Change Healthcare, after the 10-day agreed waiting period post-decision. As planned, Change will be folded into the OptumInsight unit. The all-cash deal was either $7.8 billion or $13 billion, depending on what source you go with [TTA 20 Sept].

The Department of Justice has a generous quantity of Grade A, Extra Large Egg on its metaphorical face. The District Court decision found that the DOJ did not conclusively prove its allegations of antitrust and loss of competition in services. Statements from UHG’s competitors such as Cigna, Aetna, and Elevance (Anthem) that the acquisition would not lead them to ‘stifle innovation’ also weakened the DOJ’s case. The major conflict, ClaimsXtend, was already in progress of divestiture to TPG.

Challenging acquisitions post-closing is difficult but has happened. Readers may recall the 2019 nine-month long District Court Tunney Act review drama over the final approval of the CVS buy of Aetna, dragging on long after the buy was final and reorganization was underway. If the Tunney Act applies, and this goes to a certain Judge Richard Leon, watch out!  Optum’s release did not disclose reorganization plans or management changes. Healthcare Dive, FierceHealthcare 

Elizabeth Holmes’ sentencing delayed to allow a ‘limited hearing’ on The Mysterious Visit of Adam Rosendorff.  The ‘crafty strategy’ [TTA 16 Sept] scored a win today (3 October). Judge Edward Davila accepted the defense’s request for a limited hearing on whether there was any prosecutorial misconduct in Dr. Rosendorff’s testimony and delayed Holmes’ sentencing originally scheduled for 17 October.

In August, according to Holmes’ partner Billy Evans, in a scene lifted out of TV’s Perry Mason, Dr. Rosendorff arrived at Holmes’ home doorstep disheveled and apologetic, allegedly telling Evans that the prosecution “made things sound worse than they were.” Yet Dr. Rosendorff swore a declaration to the prosecution after the Mysterious Visit that he testified “completely, accurately and truthfully” and stood by his testimony, while expressing “compassion” for her and her family. Rosendorff’s testimony was more about the Theranos labs and how they defrauded patients based on specious PR and inflated claims, not the investor fraud of which she was convicted. 

The limited hearing has been scheduled for 17 October (the original sentencing date). Judge Davila has already stated that the hearing will not last the full day. He also offered to both the prosecution and defense options for new sentencing dates: mid-November, early December, or mid-January. How this will affect Sunny Balwani’s upcoming sentencing on 12 counts is not known. Mercury News 

Meta facing some Senate scrutiny on Meta Pixel’s health data collection–and how it’s used

A member of the Senate Homeland Security and Governmental Affairs Committee, Sen. Jon Ossoff (D-GA) has requested that Facebook’s parent, Meta, account for healthcare information that it has collected as a result of the Meta Pixel being used on leading hospitals’ websites as an ad tracker. During a hearing, Meta chief product officer Chris Cox was questioned about Meta’s having and using the data and responded, “Not to my knowledge.” According to this latest report in The Markup, Cox will follow up with a written response to the committee.

The June investigation by The Markup and STAT [TTA 17 June] investigated how these snippets of code, routinely used by developers to track website performance, could be sending to Facebook through online appointment schedulers and patient portals highly sensitive patient information. As we noted then from the article, “None of the hospitals using the Pixel have patient consent forms permitting the transmission of individual patient information, nor business associate agreements (BAAs) that permit this data’s collection.” Facebook’s defense is that it does not use this information in any identifiable way.  

Developments have moved quickly since then. According to The Markup, 28 of the 33 hospitals in the initial report have removed the Meta Pixel from their appointment schedulers or blocked it from sending patient information to Facebook. At least six of the seven health systems had also removed the pixels from their patient portals. In August, Novant Health notified patients of a code misconfiguration of their Meta Pixel tracker that may lead to unauthorized disclosure of their personal health information (PHI) [TTA 19 Aug]. North Carolina’s attorney general may investigate. Five class action lawsuits have been filed by patients, including against Novant and Medstar [TTA 23 June].

It may be that Meta may have a very hard time ‘splainin’ to Sen. Ossoff how the data flow and is used for any given account, based upon their own internal engineers’ assessments in a leaked 2021 privacy memo. But given Meta’s and the founder’s pull in the Federal government, one wonders how far all of this will go. Your Editor is not optimistic. TTA’s articles on Meta Pixel

Breaking: Judge permits UnitedHealth acquisition of Change Healthcare, denies DOJ motion (updated)

US District Court judge dismisses Department of Justice motions to prevent UHG acquisition. The decision on Monday by Judge Carl Nichols of the District of Columbia district court denies DOJ’s action to stop the deal. It also orders the planned divestment of Change’s ClaimsXten claims payment and editing software to an affiliate of TPG Capital for $2.2 billion in cash.

The DOJ and entities such as the American Hospital Association had objected to UHG’s folding Change into OptumInsight as anti-competitive. As both Optum and Change offered competing claims processing software that covers 38 of the top 40 health insurers, UHG would then solely have access to nearly all competitive payers’ information. There were other competitive issues that were dismissed in the judge’s brief opinion. (For insight, see our earlier coverage starting here.) The full opinion, originally expected in October after the bench hearing in August, is under seal due to proprietary, sensitive information and will not be released. (US v UnitedHealth Group, 22-cv-481)

DOJ’s top antitrust official, Jonathan Kanter, said they are “reviewing the opinion closely to evaluate next steps”.  DOJ’s short statement surely sounds like the DOJ will appeal. UHG and Change are moving forward “as quickly as possible”. Stay tuned.  Reuters, Healthcare Dive

Update: As reported in HISTalk from Bloomberg the all-cash deal is $7.8 billion, not the earlier reported $13 billion.

Elizabeth Holmes’ three swings and a miss in overturning her trial verdict reveal a crafty strategy

Putting off the inevitable? Elizabeth Holmes’ legal team in the past two weeks has filed a flurry of motions in US District Court to have her verdict thrown out prior to sentencing on Monday 17 October.

  • The filing on 1 September sought to have the verdict of guilty on four counts [TTA 4 Jan] tossed with no new trial. This was denied in a preliminary ruling by Judge Edward Davila, stating that the verdict by the jury was supported by the evidence. A final ruling is pending arguments by the defense and prosecution.
  • The three filings on Tuesday 6 and Wednesday 7 September seek to have Judge Davila rule, on the basis of new evidence, for a new trial.

According to the Mercury News, the first motion on Wednesday, which states that arguments presented in the Sunny Balwani trial could have acquitted her, has little chance of being successful and in fact may be counterproductive in annoying the judge in that case–also Judge Davila. The second motion filed has a better shot, including on appeal. It centers on the “Brady rule” that requires prosecutors to disclose and turn over information that could be helpful to the defense. This was the database of patient test results that the prosecution failed to preserve. It didn’t factor in the trial, but could in the expected appeal. 

The filing on Tuesday is straight out of an episode of Perry Mason. Holmes’ partner (and father of her one-year old son) Billy Evans declared that former Theranos lab director Dr. Adam Rosendorff showed up at the door of her home in a ‘desperate and disheveled’ state. In the declaration, Evans stated that “He said he wants to help her. He said he feels guilty. He said he felt like he had done something wrong. He tried to answer the questions honestly but that the prosecutors tried to make everybody (in the company) look bad” and that prosecutors “made things sound worse than they were.” Legal experts interviewed by the Mercury News believe it’s not the remorse, but the pressure prosecutors may have put on the witness. A hearing on this would be extensive and involve both prosecution and defense. Of course, this neglects that during the trial, the defense attempted to rip apart Dr. Rosendorff’s testimony as self-serving and essentially incompetent.

Net-net, Elizabeth Holmes has a best-money-can-buy legal strategy designed to delay her serving time, if not negate it, on the four of 12 counts on which she was convicted.  Mercury News 1 Sept, Mercury News 10 Sept  Adam Rosendorff’s testimony during trial summarized in Chapters 1 and 2

News briefs, catchup edition: UnitedHealth/Change decision October?, CVS wins $8B Signify Health auction, Walgreens majority buy of CareCentrix, FTC requests more info on Amazon-One Medical

Your Editor is semi-returned from Almost Two Weeks in Another Town, with a few more days to close out September (and summer into autumn) coming up. A lot of big news broke despite the usually slow Labor Day holiday week.

UnitedHealthcare Group/Change Healthcare Federal lawsuit to be decided in October–reports. The bench trial in the US District Court in Washington DC pitted the Department of Justice and state plaintiffs against UHG’s massive $13 billion acquisition of claims and EDI/data processing giant Change. It concluded 16 August with closing arguments presented 8 September. Dealreporter via Seeking Alpha reported that UHG and Change effectively countered DOJ’s antitrust objections to the acquisition. Change Healthcare had previously sold their claims editing business to TPG Capital to ease antitrust concerns.  Whether that will be enough in the current environment with greater sensitivities around healthcare consolidation remains to be seen. If approved, Change will be folded into OptumInsight. For a deeper dive into the issues, see TTA’s earlier reporting 3 August and 23 March.

CVS Health beat out other contenders with an $8 billion cash bid for Signify Health. It was a busy Labor Day for CVS as Signify’s board met and decided that day on CVS’ cash offer of $30.50 per share in their unusual auction. Amazon, UnitedHealth Group, and little-known Option Care Health were the other bidders. Signify is a strategic boost for CVS in becoming a major player in primary care, provider enablement, and home health as we’ve summarized here from CVS’ Q2 earnings call. Signify’s capabilities in in-home health delivery and provider services were cheaper to buy than to develop. Based on the weight given to it in the CVS release, Signify’s Caravan Health and their Medicare ACOs furnishing value-based care management services to 170 providers was a significant factor in the top price paid.

New Mountain Capital and their investors own 60% of Signify and will be exiting. Signify had in July announced their own exit from the costly and problematic Episodes of Care/BPCI business acquired with Remedy Partners back in 2019. This led to most of the over 480 staff layoffs announced last month. The sale is, as usual, pending regulatory approvals and isn’t expected to close until first half 2023. Kyle Armbrester, Signify’s CEO Kyle Armbrester will continue to lead the company as part of CVS Health. Healthcare Finance, FierceHealthcare

Rival Walgreens Boots Alliance completed their acquisition of a majority share of home care coordination platform CareCentrix. Walgreens’ final payment was $330 million for 55% of the company at an $800 million valuation. As noted previously, Walgreens ‘go big or go home’ strategy in primary care kicked off in 2020 with growing investments in VillageMD, culminating in last year’s $5.2 billion for 63% of the company. The plan is to co-locate Village Medical offices with 600 Walgreens locations by 2025 [TTA 14 Oct 2021]. CVS’ recent actions can be seen as a reaction to Walgreens’ aggressive moves. Healthcare Finance

Amazon now under FTC scrutiny for One Medical acquisition. If shutting down the much-publicized Amazon Care wasn’t quite enough last month, the Federal Trade Commission (FTC) will be reviewing Amazon’s $3.9 billion buy of One Medical. This was announced in a 1Life Healthcare (parent of One Medical) 8-K filing with the Securities and Exchange Commission (SEC). Both 1Life and Amazon received requests for additional information on 2 September, above and beyond the usual required Hart-Scott-Rodino Act (HSR) reports that will be reviewed by the FTC and DOJ. Effectively it extends the HSR waiting period by 30 days after One Medical and Amazon have substantially complied with the additional information ‘second request’.

The FTC isn’t winning popularity contests with Amazon’s legal department, as the agency is reviewing their acquisition of iRobot, maker of robot vacuum cleaners. Mobihealthnews

News roundup: RPM at 79 ScionHealth hospitals, 74% of employers like virtual care despite concerns, Alma Health garners $130M, NIH’s $25M for cancer care telehealth research, Parks’ virtual Connected Health Summit 30-31 Aug

Winding up August with one last roundup…get along lil’ dogies….

Remote patient monitoring coupled with home care debuting at ScionHealth hospitals. Louisville, Kentucky-based ScionHealth, a network of 79 hospitals in 25 states, is working with Cadence Care monitoring to manage qualifying chronic care patients. Cadence’s Care in Sync RPM will first support managing hypertension, heart failure, diabetes, and chronic obstructive pulmonary disease for ambulatory patients in 18 community hospitals across 12 states, with plans to roll out to the full network. Monitoring includes blood pressure, heart rate, pulse oximeter, glucose levels, and weight. These are tracked by care teams backed up by Cadence clinicians and telehealth. ScionHealth was formed from last year’s acquisition of Kindred Healthcare by LifePoint Health to create a network of 61 long-term acute care hospitals and 18 community hospital campuses. Cadence release, HealthcareITNews

What’s not to like about virtual care? 74% of the 135 employers surveyed like the idea, but 84% had real concerns about its ability to integrate virtual and in-person services, leading to duplication of services, unnecessary care, wasteful spending, and a fragmented care experience. These concerns ranged from 57% to 69% of those surveyed. The survey by the Business Group on Health found that these large employers were very interested in virtual primary care, with 32% offering these services in 2022, projecting out to over double — 69% — doing so in three years, 2025. In terms of spending, for the first time cancer care drives more cost than musculoskeletal (MSK) conditions, attributed to pandemic-related care delays. Business Group on Health release, FierceHealthcare

A cheery note to close August is that New York City-based Alma Health has raised a Series D of $130 million in this depressed market. While its website is very much patient-facing, Alma is primarily a membership network for mental health providers to help them be in-network with payers and simplify reimbursement to thrive in private practice. Alma claims guaranteed payback for every session in two weeks and credentialing with major insurance payers in under 45 days. It also provides a practice platform for providers in all 50 states. The Series D builds upon its August 2021 Series C of $50 million, with total outside funding since 2018 of $220 million. Investors include lead on the Series D Thoma Bravo, Cigna’s venture arm, and Optum Ventures, plus lead on the Series B and C Insight Partners, lead on the Series A Tusk Venture Partners, with Primary Venture Partners and Sound Ventures. Valuation is estimated at $800 million. FierceHealthcare, Alma release

NIH’s $25 million for research into telehealth and cancer care. Four universities and institutions will lead NIH/National Cancer Institute-funded research on the effectiveness and demographic makeup of those using telehealth as part of their cancer care:

  • NYU Grossman School of Medicine: the Telehealth Research and Innovation for Veterans with Cancer (THRIVE) Telehealth Research Center will work with the Veterans Health Administration (VHA) to uncover information about the impact of demographics on care delivery
  • University of Pennsylvania: Telehealth Research Center of Excellence (Penn TRACE) takes another aspect, telehealth strategiesand their impact on shared decision-making for lung cancer care 
  • Northwestern University: Scalable Telehealth Cancer Care (STELLAR), which will study how telehealth can be used to manage and limit behaviors such as smoking and inactivity
  • Memorial Sloan-Kettering:  MATCHES (Making Telehealth Delivery of Cancer Care at Home Effective and Safe) Telehealth Research Center, focusing on telehealth’s effectiveness on treatment of breast and prostate cancer, including remote patient monitoring and telehealth. 

mHealth Intelligence, NIH release

Not too late for Parks Associates’ virtual sessions as part of their Connected Health Summit series. Two new Summit Sessions will be online Tuesday 30 and Wednesday 31 August. More information and registration here.

Aug 30 – New Opportunities in Connected Health Services: Monitoring and Home Care
• Health and Safety Monitoring
• Home Care Services

Aug 31 – Successful Strategies for Engaging Consumers
• Choice in Care: Telehealth, Kiosks, and Retail Clinics
• AI in Health: Creating Personalized Insights
• Wellness and Consumer Engagement

Part of Wednesday’s session will include “Who’s Paying for Healthcare? New Business Models”. There’s a surprising finding–74% of US internet households with children at home have used telehealth services in the past 12 months versus 32% without kids at home, and 70% are likely to use telehealth the next time they are sick. If you cannot make these sessions, their last virtual  TTA is a past supporter of the Connected Health Summit. Parks release.

Oracle in Federal court class-action lawsuit on global privacy violations; Cerner VA EHR had 498 major outage incidents, 7% of time since rollout

Oracle’s miseries multiply, both in Federal Court and with the VA. The first is taking place in the US District Court for the Northern District of California. Three plaintiffs in a class-action suit charge in a complaint filed on Friday 19 August that Oracle is running a giant ‘surveillance state’ on billions of people. From the complaint, “the regularly conducted business practices of defendant Oracle America, Inc. (“Oracle”) amount to a deliberate and purposeful surveillance of the general population via their digital and online existence. In the course of functioning as a worldwide data broker, Oracle has created a network that tracks in real-time and records indefinitely the personal information of hundreds of millions of people” and sells this information to third-parties, without consent of course.

The complaint, filed 19 August, states that Oracle’s BlueKai Data Management Platform, which includes the Oracle Data Marketplace–likely the world’s largest commercial data exchange–and to the point, the Oracle ID Graph “synchronizes the vast amounts of personal data Oracle has amassed; that is, it matches personal data that can be determined to share a common origin with other personal data.” The charge is essentially that Oracle spies on you and has set up the world’s largest surveillance database of billions of people using the billions of data points most everyone generates online over decades.

All three plaintiffs are privacy-rights advocates: Michael Katz-Lacabe of the Center for Human Rights and Privacy; Dr. Jennifer Golbeck, director of the University of Maryland’s Social Intelligence Lab; and Dr. Johnny Ryan, a Senior Fellow at the Irish Council for Civil Liberties (ICCL), and at the Open Markets Institute. 

Dr. Ryan’s organization, the ICCL, stated that “Oracle’s dossiers about people include names, home addresses, emails, purchases online and in the real world, physical movements in the real world, income, interests and political views, and a detailed account of online activity: for example, one Oracle database included a record of a German man who used a prepaid debit card to place a €10 bet on an esports betting site.”

No dates have been set for hearings or as requested, a jury trial.

In Europe, Oracle had faced similar action along with Salesforce on privacy violations under GDPR. The Privacy Collective’s case was ruled inadmissible by a judge in the Netherlands last year, but is being appealed.

If the action proceeds, this strikes at the heart not only of Oracle’s data business but also Google and any data analytics or brokerage company. Look over your shoulder…someone’s coming after you.  TechMonitor.ai

Meanwhile, back at the endless tsuris called the VA EHR implementation, Oracle Cerner got more verbal beatdowns from the VA’s Secretary of Veterans Affairs and Senate committee members. FedScoop, through a FOIA (Freedom of Information Act) request living up to its name, was able to quantify the system outages in the Cerner Millenium system between 8 Sept 2020 and 10 June 2022. Of the 640 days the system was in place, it was out or nearly out for about 45 days, or 7%, when time lost in all of the 498 incidents is calculated.

  • 428 incomplete functionality incidents (930 hours of the system partially not working)
  • 49 degradations (103 hours of degraded performance)
  •  24 outage incidents (40 hours of complete down time) 

Where responsible parties could be identified, Oracle Cerner was responsible for about two-thirds of the incidents. Interestingly, the remainder were attributed to the VA. As to root causes, the VA could not identify them in about 50% of the cases. There’s some squirreliness in VA’s internal reporting on multi-day outages, which are more serious because the longer the outage, the more damage and the harder it is to pin down a cause.

Secretary of Veterans Affairs Denis McDonough said to FedScoop: “The bottom line is that my confidence in the EHR is badly shaken.” which has to count as an understatement significant enough to hold off further implementation until 2023. House Veterans Affairs Subcommittee on Technology Modernizing Ranking Member Mike Bost, R-Ill., said: “The number of incidents listed in this disclosure is alarming. Some part of the Cerner system has been down more often than not for nearly two years.” 

The Showboat of Misery keeps Rollin’ Down the River: the 4 Aug outage, the Senate hearing with Oracle’s Mike Sicilia, the infamous ‘unknown queue’ 21 July and 21 June

Week-end news roundup: Fitbit revives with 3 new watches, Sena Health hospital-at-home, SteadyMD surveys telehealth clinicians, 9.4% fewer adult dental visits in England, save the date for ATA 2023

Fitbit’s three new wearables–will they revive the brand? Fitbit, now owned by Google, announced the debut of two new smartwatches and one fitness tracker, available now for preorder and shipping in September. Will buyers find them more attractive than their predecessors? From left to right:

Fitbit Inspire 3 upgrades from the predecessor with a color display and similar $99.95 price. Monitors for irregular heartbeat, reminders to move, wakey-wakey alarm, apps, and more.

Fitbit Versa 4 is a thin, light fitness smartwatch with sleep, SpO2 monitoring, GPS, irregular heartbeat, stress, pay hands free, Amazon Alexa, and connects to your smartphone. Four colors, will set you back $229.95.

Fitbit Sense 2 is chunkier with more information and tracking on health and stress than Versa 4 for a higher price at $299.95.

Readers can weigh in on whether these will be attractive, as the Fitbit brand has, over the past two years, almost vanished from the fitness smartwatch consciousness. GearPatrol, Mobihealthnews

New entrant in the developing hospital-to-home service provision area Sena Health is partnering with southern New Jersey’s Salem Medical Center to deliver Salem’s hospital-to-home program. Sena’s capabilities with Salem include up to 23 hospital-level services at home and 24/7 care coordinators. To qualify, patients must have been seen in the ER and evaluated on certain criteria. When cared for at home, they receive two in-person nursing visits daily and can connect with a dedicated clinical team if needed. Hospital-to-home is being trialed all over the country and is considered to be ‘hot’, but at this point is not all that widespread. HealthcareITNews

SteadyMD conducted a survey among a group of potential workers for their telehealth care team, among 1,700 clinicians: doctors (35%), nurse practitioners (52%), and therapists (12%). Some interesting findings such as:

  • Experienced (10 years +) doctors and therapists are most interested in telehealth practice, with nurse-practitioners (NPs) less so
  • Flexible schedules and working from home are the main attractions
  • Night shifts are attractive to 86% of therapists. Doctors and therapists average about 60%. But the latter two are far more interested in weekend work–not the therapists.
  • Telehealth as a full time delivery of care goes between 50 and 69% for each. Clinicians want more hours if the arrangement is part-time.

SteadyMD is a telehealth infrastructure provider that works with healthcare organizations, labs and diagnostics companies in 50 US states.

Something that can’t be delivered by telehealth except for diagnosis is your annual dental visit and treatments, and it’s down 9.5% in England, based on a report published by NHS Digital. The tracking of NHS adult dental visits covers the 24 months prior to June 2022 compared to the 24 months prior to June 2021. When compared to the 24 months up to June 2019, the reduction is 25.3%. Since dental practices closed except for emergency care due to Covid in March of 2020, there is an overlap in the numbers. They do indicate that dental treatments have not recovered in volume from before the pandemic. One good sign is that child dental treatment has strongly rebounded, up 42.1% in the 12 months prior to June 2022 versus up to June 2021, but still down over 20% compared to the 12 months prior to June 2019. Regional data is included in the NHS Digital report (link above).

The American Telemedicine Association announced its 2023 ATA annual conference will be in San Antonio, 5-7 March 2023. More information on “From Now What? to How To! The Vision and Realities of Telehealth Adoption” already is up on their website here.

Breaking: Amazon Care shutting down after three years–what’s next? (updated)

Amazon Care to cease operations after 31 December. Amazon Health Services is throwing in the towel on its primary care service for enterprise customers, after failing to make much headway with its mix of virtual care, in-home, and telehealth services. An internal email from Neil Lindsay, Amazon Health Services senior vice president, sent today (24 Aug) to employees but leaked to the press, stated that “This decision wasn’t made lightly and only became clear after many months of careful consideration. Although our enrolled members have loved many aspects of Amazon Care, it is not a complete enough offering for the large enterprise customers we have been targeting, and wasn’t going to work long-term.”

Employees who have been part of Amazon Care may have the opportunity to transfer to other parts of Health Services, according to the memo, or will be ‘supported’ in finding other roles within or outside the company. The total number of employees was not disclosed, but this Editor expects layoffs to be announced by the fall as Amazon Care winds down.

Amazon has been moving in a different direction with enterprises for some months. Reportedly the decision was made to ditch Amazon Care prior to agreeing to acquire One Medical, which was announced late in July. However, recently revealed negotiations actually started last February, with One Medical pitting Amazon against CVS until CVS dropped its bid effort [TTA 19 August]. 

As this Editor noted last month with the One Medical acquisition, “…for this Editor it is clear that Amazon with One Medical is buying itself into in-person and virtual primary care for the employer market, where it had limited success with its present largely virtual offering, and entreé with commercial plans and MA.” With One Medical, they will be acquiring an operation with 790,000 patients (including 40,000 at-risk, presumably Iora’s), 8,000 company clients, 125 physical offices in 21 US metros (including projected), and an established telehealth/telemedicine protocol. In other words, a ready-made provider and enterprise base to build on and sell into, for instance Amazon products like Pharmacy and PillPack.

Not addressed is what will be done, if anything, to transition current employer agreements for Amazon Care to One Medical.

It’s now a matter of whether HHS, DOJ, and FTC will agree to the buy or ask for additional divestitures. One conflict–Amazon Care–has just been removed. And this may clear the deck for other acquisitions, such as Signify Health [TTA 24 Aug], if Amazon wins the auction against CVS, UnitedHealth Group, and Option Care Health, though for a newcomer to healthcare Signify may very well be A Bridge Too Far.

What’s in play?

  • One Medical’s Iora Health and its high needs/high costs Medicare patient base. This has very much been held in the background, leading this Editor to think it will be sold to another health plan.
  • The status of the previous agreement with Crossover Health for 115,000 Amazon employees and dependents, delivered through their employer-based onsite clinics in 11 states in addition to concierge care [TTA 17 May]
  • Another previous agreement with Ginger for telemental health, only announced last week.

Amazon was touting Amazon Care as recently as earlier this year to shareholders. They had acquired employers outside Amazon such as Hilton, but not quickly enough. Expansion talk and the usual touting within the industry weren’t happening. There was an ‘air of mystery’ about what Amazon Care was doing, going back to the beginning.

Perhaps a major ‘tell’ was that Kristen Helton, general manager in charge of Amazon Care, was reported two weeks ago by Bloomberg News to be taking an “extended break to spend the summer with her family.” She had been in the GM position for three years after joining Amazon in 2015.

Count Amazon Care as one expensive learning course in the insanely costly University of Healthcare Delivery. This won’t be the first lesson, but Amazon can afford the tuition.

Geek Wire, FierceHealthcare

Signify Health bidding war ensues, waged by Amazon, UnitedHealth Group, CVS, Option Care Health

What a difference less than two weeks makes. We noted on 11 August that in-home health and value-based provider services company Signify Health was up for sale in an unusual auction, with CVS Health the first disclosed bidder. Yesterday, three more companies jumped into the mix, UnitedHealth Group (the 9,000 elephant of US health), Amazon (with One Medical still pending), and little-known Option Care Health, a public (Nasdaq: OPCH) home infusion care company.

Reports in the Wall Street Journal (paywalled) indicate Signify’s value in the auction may top $8 billion. Bids are due around Labor Day. The board will be meeting next Monday to discuss the bids to date. Signify’s current value is about $5 billion.

The share price closed today just above $27, a major rise from last week’s close of $21 (Yahoo Finance).

The UHG bid is above $30, with Amazon close by, according to Bloomberg News sources. The CVS bid is not known. A buy by Amazon would put the company in Instant Major Healthcare Player territory. This Editor believes that with UHG and CVS, antitrust may factor in, especially considering Signify’s recent ownership of the ACO MSO Caravan Health.  

Option Care may not be well known, but it has impressive backing from Goldman Sachs and has been profitable. Their interest is Signify’s home health network and access to providers through Caravan. Another backer, Walgreens Boots Alliance, just sold 11 million shares on the secondary market, reducing its holdings from 20.5 percent to approximately 14.4 percent.

There’s no bar, of course, to the board ending the auction at any time and awarding the company. Healthcare Finance, FierceHealthcare

Babylon Health: fending off bubbly rumors of acquisition this week

On Monday, the New York Stock Exchange stopped trading of Babylon Holdings Limited (NYSE:BBLN), the corporate name of Babylon Health. The reason was a sudden spike in the share price along with a huge spike in trading volume. Price moved from $0.76 to $0.96 from 12.45 pm ET to 1.15pm, with volume spiking from ~3,000 to 1 million (see the bottom bar chart). The volume and price shift automatically trigger a stop trade. Based on the Yahoo Finance chart, it resumed Tuesday morning and cruised down to just above recent prices at $0.77 closing today at $0.79, along with a drop in trading volume nearer the recent averages.

Babylon issued two terse press releases: the first on Monday 3.59pm ET which stated “that it is not engaged in nor has it had contact or discussions with any potential acquirer”, then a second on Tuesday at 6am which briefly addressed the ‘M&A speculation’ and the sudden (but short-lived) 20% rise in share price. The response from CEO Ali Parsa was that they “delivered very strong financial results and operational performance that demonstrate its continued momentum. Babylon is taking active steps to maximize shareholder value and to improve its shareholder base and capital structure.” 

Babylon Health went public last October in likely the last of the major healthcare SPACs at a debut of over $10 and a valuation that exceeded $4 billion. Its current value represents a 90% loss, not much different than what happened to the share values of Amwell and Teladoc, as well as other health tech SPACs [TTA 15 July]. Before the SPAC, they raised $200 million and bought Meritage Medical Network and First Choice Medical Group, opening an office in Palo Alto. Babylon also bought the remainder of Higi health kiosks they did not own in December, closing out an investment option with Higi in May that this Editor thought was puzzling for starters.

Babylon’s Q2 financials were, as we noted, a mixed picture but encouraging [TTA 11 Aug] in their US growth and lack of drama. The company had previously stated that it intends to save $100 million in Q3 and discharge about 100 people as part of this. This is nothing that would prompt a sudden swoop by an investor or investors–not disclosed–reminiscent of the buccaneering days of T. Boone Pickens. But in recent weeks there’s been a change in the investment climate. Certain companies such as CVS and Allscripts plus health plans have signaled that they want to buy healthy health tech companies at the right (discounted) price that fill in their tech gaps. ‘Second generation’ remote patient monitoring (RPM) and telehealth are having a hot moment. For traders, it’s the boring dog days of August in a market that’s had more down than up days this year.

The market action was a blip, but one that benefited Babylon and certainly put it back in the news. Which can’t hurt.

Mr. Parsa announced back in January at JPM that Babylon’s goal was to close 2022 at $1 billion in revenue, triple that of 2021. With Q2 revenue of $265 million, they are on track (he quoted a run rate of $80 million per month). There is also the Transcarent/Glen Tullman (late of Livongo) investment connection that came over via the Higi acquisition. Transcarent is heavily invested in value-based care models for self-insured employers as a benefit for their employees, as is Babylon. Dots are here and ready to be connected.

 Also HISTalk.