Breaking: Walgreens lays off 5% of corporate staff; chief medical officer, chief of staff for CEO to depart (updated)

November 10, 2023 | by

The Walgreens shakeup and belt-tightening continues under new CEO Tim Wentworth–starting at the top. The first company memo that was leaked late Thursday 9 November to Bloomberg (paywalled) announced that Kevin Ban, MD, executive VP and chief medical officer, will depart tomorrow (10 Nov). He will be replaced by chief clinical officer Sashi Moodley, MD, not in the memo but according to Bloomberg‘s sources. Luke Sauter, chief of staff to the CEO, will also be leaving. No date was disclosed. In a separate memo, 5% or 267 of Walgreens’ corporate staff will be laid off across multiple departments at their Deerfield Illinois HQ, no notification or effective date disclosed. Bloomberg confirmed the departures with Walgreens, but no further details were provided. The cuts will not affect call centers, micro fulfillment centers, or stores.

Looking at LinkedIn, Dr. Ban joined Walgreens as CMO in January 2022 from Athenahealth. He replaced Patrick Carroll, MD, who left to take the CMO slot at Hims & Hers. Dr. Ban was promoted to global CMO of Walgreens Boots Alliance and added the EVP title in October 2022, a little over a year ago. Dr. Moodley joined in July 2021 from CareMore Health as WBA’s CCO for US Healthcare. Mr. Sauter, the chief of staff, is a long-time (15+ years) Walgreens executive in multiple positions, including VP of strategy and finance officer after multiple finance positions. He was named chief of staff to previous CEO Roz Brewer in July 2022.

It’s perhaps understandable in a cost-cutting situation that the functions of the CMO and CCO overlap to some degree, and the chief of staff to the CEO is an unusual position in today’s companies. It also demonstrates that Wentworth is willing to distribute at least some of the pain of trimming Walgreens staff and projects as part of the previously announced $1 billion cost reduction plan after a steep fiscal Q4 net loss of $180 million [TTA 18 Oct]. Crain’s Chicago Business is also paywalled but readable in part.

This is a developing story and will be updated with additional information when available.

Update: The 5% corporate layoff, which will affect the Deerfield office, is the second this year. There was a 10% reduction in Chicago and Deerfield in May. 393 were released in August at their manufacturing plant in Edwardsville, Illinois, in anticipation of its closing. Yahoo Finance/Chicago Tribune  On Reddit, commenters indicate that marketing and health & beauty departments were the hardest hit. There was also an employee town hall that wasn’t well received.

The Healthcare Dive article published today highlights the 45% drop in share price since January, particularly steep since August, and the struggle to attain profitability in their US Healthcare division, which includes Village MD. The October-announced $1 billion in cost reductions did not buoy stock as hoped, dropping further since then. Walgreens has not replaced the CFO who departed in July.

On Friday 10 November, Walgreens also sold a hefty share of Cencora common stock (the former Amerisource Bergen) in a combination of share repurchase at $250 million and variable prepaid forward transactions starting in Q4 2026 could potentially max out at $675 million. WBA continues to own about 15% of Cencora and remains on its board. Their release explains the financial pretzel, clearly designed to improve liquidity and cash management. 

Editor’s Note/Opinion 10/11: For an employer of this size, the layoffs represent an extreme downsizing that indicates several years of overhiring or wrong hiring in pursuit of corporate goals no longer in sight and strategic mistakes (like Theranos so long ago, but biting back with a $44 million settlement to Arizona patients). Some acquisitions may not be working out. Time will tell whether the majority buy-in of Village MD and financing its further acquisitions was smart or foolish, as already the office co-location scheme is being trimmed after little time in place [TTA 18 Oct]. As is true almost 100% of the time, hard times uncover the numerical and compensation bloat at the C-suite and senior level, and many strategic mistakes.

In short, leaving aside the Cencora stock sale to raise cash, drastic cuts like this usually leave an organization at many levels and the survivors staggering for some time. They have to be done with understanding, not blame, that most of those departing weren’t responsible for corporate strategic sins and, yes, mercy on those affected, beyond one line in a press release or a town hall. Circular firing squads don’t help recovery either.

Early news roundup: Envision exits Ch. 11, splits; Walgreens’ new CIO; Philips’ $60M from Gates Foundation; more on Walmart-Orlando Health partnership; Cigna may sell MA business

November 8, 2023 | by

Staffing firm Envision Healthcare exits Chapter 11 bankruptcy, splits off AmSurg clinics. One of the Big Bankruptcies earlier this year has been reorganized, cutting $8 billion in debt by 70% and spinning off its AmSurg surgical clinics to new ownership. The hospital and physician staffing company was hurt as early as 2020 with shortages of available staff, then the pandemic which cut patient volumes, and conflicts with payers around out-of-network billing charges. The last put the company in conflict with the ‘no surprises’ patient protection billing law that took effect this year. One particular legal spat with UnitedHealthcare tied up both companies for years, but was won by Envision after an independent arbitration panel this past spring awarded Envision $91 million, finding that UHC breached its in-network contract. KKR, which had taken Envision private in 2018, lost $3.5 billion in equity, one of their largest corporate investment losses. Henry Howe, the company’s chief financial officer, takes over as interim CEO on 1 December as current CEO Jim Rechtin leaves to join Humana. Healthcare Dive  Background: TTA 12 May, 16 May   

Walgreens fills its chief information officer vacancy with the interim CIO. Neal Sample was appointed last Wednesday (1 Nov) as CIO and EVP, reporting to new CEO Tim Wentworth and joining the executive and IT governance committees. Sample was appointed last month as an IT advisor after CIO Hsiao Wang left suddenly on 2 October. Both Wentworth and Sample worked with each other at Express Scripts, with Sample holding both COO and CIO positions there, then departing for the CIO position at Northwestern Mutual. Walgreens release, Retail Dive

Philips receives an additional $44 million from the Gates Foundation for further Lumify Ultrasound System development. The total of $60 million in grants starting in 2021 was for the development of AI-enabled applications to improve obstetric care in low- and middle-income countries. The Lumify handheld ultrasound system assists frontline health workers, such as midwives, in interpreting obstetric images and identifying possible complications during pregnancy in hours versus weeks of training. The system’s Kenya trial was successful. The additional funding will be used to expand global adoption in underserved rural communities. Philips release  This follows Gates Foundation grants to GE Healthcare ($44 million) and Butterfly Network ($5 million) for easily deployed ultrasound and imaging systems to support low-income countries’ rural maternal health and respiratory scanning. Mobihealthnews

More on Orlando Health’s partnership with Walmart. Briefly noted here last week in Walmart’s release and reporting on Walmart Health’s new partnership with Centene’s Ambetter plan in Florida was the Orlando Health hospital partnership. This will coordinate care for patients admitted to the health system’s hospitals or who need specialty care. It is a first for Walmart as it has not previously partnered with local health systems on specialty and hospital care as an extension of its clinics. Eight of its 48 clinics are in the Orlando area. Becker’s Health IT 1 Nov, 6 Nov

Cigna is exploring a sale of its Medicare Advantage (MA) business. According to the exclusive report by Reuters (may be paywalled), Cigna is in early stages, at this point consulting with an investment bank. Cigna is not much of a player in the difficult state-by-state, county-by-county MA business, with 599,000 members as of 30 September, which is about 3% of their 19 million total insurance members. But it has been problematic, with Cigna recently paying CMS $172 million to settle allegations that it violated the False Claims Act by submitting incorrect data to obtain higher payments. By comparison, UnitedHealthcare and Humana have nearly half (47% or 14.5 million) of the national 30.8 million MA members (KFF). Becker’s

Week-end short takes: payer earnings for Centene, Cigna, Humana; Centene and Walmart partner in FL; Dispatch Health and US Acute Care partner; Amwell widens loss; ProMedica $710M home health sale; AQuity’s $200M sale to IKS Health (updated)

November 2, 2023 | by

On the payer side, buyers of telehealth are trying maintain course:

Challenged Centene beat Wall Street estimates, but clouds loom. For Q3 they reported $38 billion in revenue, but year-over-year profit of $469 million was down 36%. 2014 forecast earnings were already downgraded. Centene is heavily dependent, as some other payers are, on state Medicaid. New Federal guidelines are ending the automatic eligibility redeterminations that took effect during the Covid pandemic. 2024 redeterminations may take millions more off the rolls, though many requalify. The payer contracts with 31 states to offer Medicaid coverage and has lost 1.1 million Medicaid members over redeterminations to date. Their Medicare Advantage (MA) plans were also hit in 2023 with low Star ratings, which reduce desirability and payment status with CMS, but recovered for 2024 with 87% over 3 stars (the minimum) compared to 53%. Layoffs also have bitten into Centene with a known layoff of 2,000 this summer, plus another unannounced layoff terminating staff in December, according to this Editor’s source. Healthcare Dive  Update: Centene is terminating 2,000, or about 3% of workforce, with an end date of 8 December. Becker’s Payer

Cigna also beat Wall Street estimates in a generally upbeat forecast. For Q3, they reported revenue of $49 billion, up 8% year over year. Net income was down 50% to $1.4 billion but understandably as Cigna sold businesses in six countries. Membership are up 9% year over year to $19.6 billion, mostly due to commercial membership. Cigna has little exposure to ACA business, but that grew as well and margins are improving. Healthcare Dive 

Humana saw increased Q3 utilization in its MA plans plus increased Covid hospitalization. This helped to drive its medical loss ratio (MLR) up for 2023. While beating the Street on revenue of $26.4 billion and profit of $1.1 billion and with projected MA growth MA of 19%, or about 860,000 members plus 2024 of 45,000, shares went a bit wobbly. In Star ratings, they did well and maintained a 4.5 Star (out of 5) in its largest contract with 40% of its MA members while the second largest contract improved from 4.5 to 5 stars. Healthcare Dive

A brighter spot for Centene is a partnership with Walmart in Florida on ACA plans. Ambetter from Sunshine Health in Florida is adding Walmart Health Centers to its preferred provider network. This will cover seven counties and focus on care coordination and referral management. Walmart is also working with Orlando Health, a private, not-for-profit network of community and specialty hospitals across Florida, to improve care coordination in the Orlando area initially. Walmart release, Becker’s

In partnerships, Dispatch Health announced today (2 Nov) that will be working with US Acute Care Solutions (USACS) to offer additional support for patients after a hospital stay or when they need hospital-to-home alternative care. Dispatch Health offers same-day, urgent medical care; hospital alternative care; and recovery care. USACS is owned by its physicians and hospital system partners for integrated acute care, including emergency medicine, hospitalist, and critical care services. Dispatch Health release

Back to Big Telehealth, Amwell didn’t have a good quarter. Their net loss of $137.1 million was up 94% year-over-year. This quarter included $78.9 million in impairment charges linked to sustained decreases in its share price and market capitalization. So far in 2023, these impairments have totaled $436.5 million. Another hit was that revenue declined 11% year over year to $61.9 million. Amwell is working to complete the transition of its customers to Converge. On the positive but very long term side, Amwell is partnering with the Leidos Partnership for Defense Health (LPDH) with the US Defense Health Agency as part of the Digital First initiative for the Military Health System (MHS). This will replace the MHS Video Connect system with Amwell Converge, a “comprehensive hybrid care enablement platform designed to power the full continuum of care using digital, virtual, and automated modalities”, and link to MHS GENESIS, the Oracle Cerner EHR. The contract may be worth up to $180 million over 22 months in a prolonged rollout. Healthcare Dive, Amwell release

In sale news, some big numbers are posting:

Ohio-based 12-hospital system ProMedica is selling its home health, palliative and hospice business to Atlanta-based Gentiva Health Services for a tidy $710 million. Gentiva is the largest hospice care company in the US. 4,000 employees will be transitioning. The hospice operations will go under the Heartland Hospice brand by the end of 2023, with home health also joining Heartland Home Health and the palliative care business under Empatia Palliative Care brand between the end of this year and 2024. Becker’s

AQuity selling to IKS Health for $200 million. The sale will add AQuity’s medical-coding, clinical-documentation and revenue-support capabilities to IKS’ technology-backed care enablement platform. This creates a $330 million company with a 14,000 person workforce that includes 1,500 clinicians, 350 medical coders, technology experts, clinical documentation specialists, and revenue integrity specialists. Another example of a larger trend in companies acquiring specific companies to build out their platforms and become more ‘one-stop shopping’, a more attractive proposition at least for now to VCs. Mobihealthnews. More discussion on why VCs are no longer hot on niche or point solutions in MedCityNews.

This ‘n’ that: HHS settles *2017* ransomware breach, Carbon Health lays off 114 in restructuring, why oh why VC General Catalyst wants a $3B health system, when Larry Met Billy, a lexicon of workplace terms

November 2, 2023 | by

It only took five years to levy a $100,000 fine. Doctors’ Management Services, a Massachusetts-based medical management company, had a ransomware attack back in 2017 that exposed 206,695 individuals to personal health information violations. The Health and Human Services (HHS) Office for Civil Rights (OCR), which is charged with actually enforcing penalties and remedies for data breaches, decided that Doctors’ management hadn’t done quite enough to protect their patients. The cyberattack was identified in December 2018, but Doctors’ didn’t report the breach to OCR until April 2019. Their network had been infected with GandCrab ransomware. After determining various protection failures, HHS put them on a three-year corrective plan to protect their data and collected the $100,000 fine, their very first. But still, nearly four years later? And with breaches, ransomware, and hacking going on every day?  Healthcare Dive

Another Covid unicorn comes down with a bang. Carbon Health, a 13-state network of primary care clinics along with virtual care in areas such as mental health, says ‘bye’ to 114 or 5% of its staff. It grew and got funded big during Covid as it set up testing and vaccine initiatives, achieving a valuation of $3 billion. In 2021, Covid accounted for 60% of their revenue, but as it waned in 2022, so did their revenue by 23%. To date, their funding has been over $622 million, with $100 million in January in a Series D funded by CVS Health Ventures. This isn’t their first big layoff–200 staffers said goodbye in January as well as 250 in mid-2022 which was about 8%. Becker’s

General Catalyst’s newest venture into Health Transformation Land, HATco, The Health Assurance Transformation Corporation, is in the market for a health system in the “$1 billion to $3 billion” range. Not too small to not have an impact in their communities, and large enough to have capabilities around value-based care plus a track record of excellence. This is to create their ‘blueprint’ for healthcare transformation. Interested parties should contact CEO Marc Harrison, MD. Their other plans to get there were announced at HLTH. As to why…General Catalyst has had a lot of experience with companies, and perhaps they feel they have a Better Way to Get There. Becker’s, TTA 10 Oct.

Of Note…The second wealthiest executive in healthcare, Oracle’s Larry Ellison, wasn’t too busy to hang out with the third wealthiest on Forbes’ list, former senator and HCA honcho Bill Frist, in Nashville at the inaugural Frist Cressey Ventures Forum. Ellison is also investing in a 70-acre, $1.35 billion campus on Nashville’s riverfront. It’s always nice to make nice with the neighbors, especially when they have major holdings in a large health corporation. Becker’s

To wrap up This ‘N’ That, Becker’s has a useful article that will keep you au courant on those workplace terms you see on places like LinkedIn. ‘Quiet quitting’, so popular in 2021-2, has had its day with layoffs leading to real ‘quitting’, leaving behind ‘grumpy stayers’ who try to get away with ‘Bare Minimum Mondays’. ‘Coffee badging’ was a new one on your Editor. The rest are catchy phrases for things as old as time in the workplace.

Catching up on Oracle Cerner and the VA, plus the AI ‘tech sprint’

November 1, 2023 | by

Since Congress passed appropriations for the VA in September/October [TTA 3 Aug on House bill] after a busy and acrimonious summer, things have been very, very quiet. The appropriations require multiple mandatories around reporting by Oracle and the VA, which have kept them busy. Prior to this, VA screeched to a halt any further implementations of the Cerner EHR until the five current ones are fixed. The exception–the Captain James A. Lovell Federal Health Care Center in Chicago, the only fully-integrated VA and Department of Defense (Military Health System) healthcare system, with a projected go-live of March 2024.. As MHS, a much smaller and focused system, is just about completed with Cerner and the VA implementation is now postponed, Oracle decided to lay off former Cerner staff in fairly substantial numbers–500 to a rumored 1,200 layoffs in June.

Additional updates:

  • As of a September report on FedScoop, VA and Oracle Cerner plan to resume implementations during the summer of 2024, according to Dr. Neil Evans, acting program executive director of the VA’s EHRM Office, during a House Appropriations Oversight hearing on implementation of the VA’s EHRM initiative with Oracle Cerner that included Oracle’s Mike Sicilia.
  • At that hearing, VA reported that the first round of fixes were completed on the EHR on 31 August in the first round of three-month increments.
  • But during the Appropriations Oversight hearing, leaders of the VA medical facilities already using the Oracle-Cerner EHR testified that productivity is still less than when they were on VistA. Workers are putting in longer hours to cover the workload. Overal, the five the medical centers have hired on extra staff to compensate and have reported “exhausted, sometimes tearful, and frankly distressed” staff in dealing with multiple errors.
    • Robert Fischer, director of the flashpoint Mann-Grandstaff VA medical center in Spokane, Washington, testified that they hired 20% more staff and 15% more clinicians to handle the same workloads. “I would say one of the root causes is related to Oracle-Cerner’s lack of appreciation for the complexity of VA operations,” Fischer said.
    • Since implementation, employees have investigated 1,600 Oracle-Cerner-related patient safety events, 15,000 “break-fix” IT help tickets, and 28,000 medical orders that “did not execute successfully as anticipated.
    • Example: at the VA Ambulatory Care Center in Columbus, Ohio, “Imagine being a doctor in Columbus, and receiving a critical message about a patient you have never seen, who’s been admitted to a Department of Defense site thousands of miles away, because his provider has a similar name,” Meredith Arensman, their chief of staff, testified. “Imagine being an optometrist and finding an eyeglass prescription that has your signature, that you know you never signed … These are not possibilities. It has been the reality.” Federal News Network
  • Perhaps as a backup, the VA inked a deal made public today (31 October) with 13 community hospital systems for data sharing.  The stated intent is by data sharing, they will improve veterans’ care in or outside the VA system, facilitate veterans taking advantage of VA and community resources, and connect veterans with VA benefits, including new benefits for toxic exposure-related conditions under the PACT Act. However, it’s also well known that VA offloads to community health systems. The systems are listed in the VA release. Work has already started and proof-of-concept is due in early 2024. FedScoop

VA also has to cover the now executive-ordered (EO’d) $1 million ‘tech sprint’ for healthcare innovation to 1) reduce staff burnout and 2) create AI-centered tools to save time for clinicians, such as clinicians’ note-taking and integration into veterans’ medical records. This one will consist of two three-month AI Tech Sprint competitions. More distraction. FedScoop

The Cerner blues, VA and health system driven, are affecting the Oracle share price. But Oracle chairman’s Larry Ellison need not worry. His net worth of $130.9 billion makes him the second wealthiest person in healthcare, topped only by Jeff Bezos of Amazon and followed by Thomas Frist and family, according to Forbes. Becker’s

News roundup: Walgreens & CVS pharmacy staff 3 day walkout, DOJ ramping up healthcare acquisition scrutiny, Cantata Health sold to TT Capital, Lancashire County Council chooses Progress Lifeline for TECS (UK)

October 31, 2023 | by

Kicking off the week, a walkout. Pharmacy staff at both Walgreens and CVS locations are participating in a three-day walkout that started today (30 October) and will go through Wednesday (1 November). The scope is limited–organizers are urging pharmacists to call in sick on those days and the actions appear to be somewhat scattered by state. This follows an earlier mid-October three-day walkout [TTA 11 Oct]. The Walgreens action, according to organizers, will end on Wednesday with  Wednesday with a planned demonstration outside Walgreens’ headquarters in the Chicago suburb of Deerfield, Illinois.

The organizer quoted by MedCityNews and CNN, Shane Jerominski, a former Walgreens pharmacist and now with an independent pharmacy, stated that the issues are over short-staffing and overwork. In addition to their main tasks of accurately filling prescriptions, he said that they also deal with requests for administering vaccinations, testing, setting up auto-refills and other tasks. Mr. Jerominski claims that 2,500 Walgreens pharmacists and technicians will participate, which is coming as a surprise to Walgreens management. He also claimed to CNN 25 store closures.

Pharmacy workers are not currently unionized, but both the United Food and Commercial Workers International Union (UFCW) and the Service Employees International Union-United Healthcare Workers West (SEIU) are interested and support the walkouts. The American Pharmacists Association (APhA) also issued a statement of support from their CEO including issues such as patient harassment, burnout, quotas, and additional fees imposed by pharmacy benefit managers (PBMs) such as Express Scripts and Optum. Becker’s

Meanwhile, the Department of Justice (DOJ) continues its warning shots over the bow to Big Healthcare. POLITICO, the daily broadsheet of the political class, reported that Andrew Forman, a deputy assistant attorney general in the DOJ’s antitrust division, warned that DOJ would be 1) closely scrutinizing all deals for antitrust and 2) stepping up post-merger investigations. This is all about “monopoly’ of healthcare markets as deemed by DOJ–and the Federal Trade Commission (FTC), currently ax-tossing at Amazon. Mr. Forman cited national economic data, blame-gaming among health care providers, insurers and drug makers, and economic analysts–as well as the public comments registered as part of DOJ’s draft merger guidelines. Hiding behind value-based care isn’t going to help as DOJ is questioning whether payer/provider consolidation actually delivers on VBC, but instead “delivers on increased power and conduct that increases barriers and otherwise harms competition”. A far more complete summary of his remarks at the Health Care Competition Conference of The Capitol Forum is at Medical Economics. 

Our backgrounders on both DOJ and FTC actions around antitrust and mergers are summarized on 24 August (lead item) including our 20 July analysis of the Draft Merger Guidelines and this Editor’s educated guesses on the cloudy future of M&A. Also Becker’s

Slipping in under the DOJ radar is Cantata Health’s majority sale to a private equity group, TT Capital Partners (TTCP). Cantata developed and markets the Arize EHR and revenue cycle management platform for behavioral health, human services, acute and post-acute care. Arize is in 280 healthcare facilities across 45 states, as well as Canada, the Bahamas, Puerto Rico, and Guam. Investment amount nor percentage are disclosed, nor who exited or management changes. However, a look back at a 2017 release about Cantata’s formation states that another PE, GPB Capital, acquired NTT DATA’s healthcare software assets for acute and long-term care. TTCP release

In Lancashire, the County Council has chosen a new preferred provider for technology enabled care services (TECS), Progress Lifeline, in a competitive bid. The Council currently provides personal alarm button pendants, wristbands, and wireless home sensors and detectors to local residents for a monthly fee. A significant factor in these new bids is enabling a smooth analogue-to-digital changeover, a critical issue for UK telecare providers. Progress release   Hat tip to Diane Gannon of Progress

Short takes: Intuition Robotics gains $25M funding, Akili Interactive abandons digital Rx therapeutics, NextGen goes private for $1.8B, ATA’s DC advocacy ‘fly in’ + launches new tools on disparities

September 19, 2023 | by

Catching up on the catchup…

Israel-based Intuition Robotics raised $25 million. The unlettered round closed at end of August with $20 million in venture capital plus $5 million in venture debt. According to the release, the funding was led by Woven Capital, the growth fund of Toyota, with participation from Toyota Ventures, OurCrowd, Western Technology Investment, and additional investors. Intuition Robotics is the developer of ElliQ, an interactive desktop companion robot targeted to older adults and those with assistive needs, last covered in their 2.0 update last December and their involvement with New York’s Office for the Aging [TTA 25 May 22 and WSHU]. The Area Agency on Aging of Broward County, the Olympic Area Agency on Aging, and California’s Agency on Aging in Area 4 have also worked with Intuition Robotics on distributing the companion to older adults in their programs. According to the company, older adults who successfully engage with it average over 30 daily interactions with ElliQ and reduce the devastation of loneliness for 95% of users. 

Akili Interactive exits prescription digital therapeutics (PDT), pivots to consumer, drops 40% of staff. Much like Better Therapeutics and the now sliced-up Pear Therapeutics, the company realized that PDT was not a winning strategy for its interactive video game-based therapy for adults with ADHD. The EndeavorOTC version, released in June, is available via a subscription (SaaS) through the Apple App Store and the Google Play Store for $24.99 for a monthly plan or $129.00 for an annual plan. According to their release, Akili will pursue regulatory approval for over-the-counter labeling of its treatment products. Akili is yet another cracked SPAC facing a reckoning, currently trading on Nasdaq at $0.66 from its debut in August 2022 at $14 with a quick fall to $4.   HIStalk 15 Sept, Rock Health Weekly Newsletter

NextGen acquired by private equity firm Thoma Bravo for $1.8 billion, ending 41 years of public market trading. The offer price is $23.95 per share in cash, an over 46% premium to the Nasdaq share price on 22 August. NextGen Healthcare is an EHR with population health and practice management features designed primarily for specialty medical practices. NextGen went public as Quality Systems an eon ago in 1982.  Release, FierceHealthcare

And…the American Telemedicine Association (ATA) celebrates the third annual Telehealth Awareness Week (17-23 September) with a telehealth advocacy ‘fly in’ to meet with Congressional offices and Members in Washington DC on 18-19 September, plus their three tools to eliminate disparities in telehealth services developed by ATA’s Advisory Group on Using Telehealth to Eliminate Disparities and Inequities. They are a Digital Infrastructure Disparities Score and Map, an Economic and Social Value-Added Calculator, and a toolkit with all ATA and advisory group-developed resources. Releases 19 July (fly-in) and 18 Sept (disparities tools)

Walgreens trying to reboot “healthcare transformation” momentum, looking for new CEO, settling with Theranos litigants

September 19, 2023 | by

A $4.7 billion makeup for chairman Stefano Pessina. In the race among CVS Health, Walmart, and Amazon, something is not clicking with Walgreens Boots Alliance (WBA). WBA was a late entrant in the diversification race but they certainly went big when they did, acquiring VillageMD, Summit Health, and CityMD plus at-home care provider CareCentrix and specialty pharmacy Shields Health Solutions. But the results have been disappointing. Their Q3 reported in June was negative [TTA 28 June]. Roz Brewer, appointed as CEO 2 1/2 years ago for her expertise in retail operations at Starbucks and Sam’s Club, was also tasked with making Mr. Pessina’s healthcare diversification strategy, started in 2020 with VillageMD, a reality. Billions were spent, including a full $5 billion purchase of VillageMD along with their purchase of Summit Health and CityMD, plus CareCentrix. With no healthcare experience, she had to learn and execute from scratch–an adventure that ended on 31 August with her resignation. CNBC

How now, Stefano? Ms. Brewer’s temporary replacement is Ginger Graham, the lead independent director and a pharmaceutical veteran as former president and CEO of Amylin Pharmaceuticals plus group chairman in the office of the president for cardiology medical technology company Guidant. She will serve only until another CEO, now with healthcare background, is chosen. Mr. Pessina has an outsize vote in the choice as a 17% shareholder, engineer of the company, and himself CEO for five years after merging Alliance Boots with Walgreens in 2014.

Two other options for WBA are to go private, which Mr. Pessina has done before in 2007, but one that involves taking on heavy debt loads in addition to a high level of existing debt. Unlike 16 years ago, at 82 he has limited time to recoup the value of his personal 17% share. The other is to find an acquirer willing to pay a premium for the company higher than the current share price. That acquirer due to antitrust could not be a competitor like Walmart, but possibly a healthcare provider or a health insurer. But given the current attitudes at FTC and DOJ, even that approach may fall into the very wide Antitrust Net [TTA 11 Aug and previous].

WBA’s troubles are coming at a bad time, with CVS Health and Amazon also struggling with perhaps too-aggressive approaches in a down market, especially for healthcare.

The analysis in Crain’s Chicago Business (PDF) is worth your time–see pages 1 and 39.

Update  The class action lawsuit by customers who purchased Theranos blood tests at Arizona-located Walgreens, originally filed in 2016, was settled two weeks ago. Walgreens will pay $44 million into a fund for affected customers. There are two levels of individual payments. One group of customers will receive double the cost of their Theranos tests, plus an additional $10 base payment. Then there are members of a Walgreens Edison subclass, presumably more damaged, who will receive an additional $700 to $1,000 for medical battery claims. The plaintiffs’ memorandum has additional detail to be approved by the US District Court in the District of Arizona. There was also a settlement with Sunny Balwani that involves the successor company, Theranos ABC, but none with Elizabeth Holmes. MedTech Dive   Hopefully the new CEO will avoid the Fear of Missing Out (FOMO) that powered Walgreens’ involvement with Theranos.

Could DocGo be another Babylon Health or Theranos? CEO resignation may be only the start of their troubles.

September 18, 2023 | by

Another ‘fake it till you make it’ healthcare enterprise? Only a short month ago, things were fair and warmer for DocGo. They had recently transitioned from a mobile Covid-19 testing company under various contracts back to their original purpose–a telehealth/RPM, mobile urgent care, disease management, and medical transportation provider, with mobile vans covering the NYC metro. Founded in 2015 by Stan Vashovsky, now chairman, new CEO Anthony ‘Al’ Capone had successfully leveraged their mobility into a $425 million no-bid contract with New York City to provide medical services and more for over 19,000 migrants flooding into the city and being housed in the surrounding upstate counties. The company also plumped that they were up for a multibillion-dollar Federal contract with the US Customs and Border Protection agency.

DocGo’s stumbles starting in July continuing into August in both medical and non-medical services to migrants housed upstate put them on the press radar, notably the capital’s paper of record, the Albany Times-Union, in the weeks after their bright Q2 report [TTA 10 Aug, 16 Aug].

On 14 August, some basic checking by the Times-Union uncovered that Mr. Capone’s masters in computer science from Clarkson University not only was never granted but also he never attended Clarkson, according to the university. This degree claim was included in the SEC filing and touted to investors by him as an MS in computational learning theory, a subset of artificial intelligence. His undergraduate degree from SUNY Potsdam was not confirmed by that university or by his spokesperson. Mr. Capone had worked for DocGo since 2017, previously serving as president, chief technology officer, and CPO, becoming CEO only this year. In nearly six years, no one had checked his credentials.

On Friday 15 Sept, Mr. Capone resigned from DocGo, citing typical ‘personal reasons’. His apology and taking ‘full responsibility’ did not save him. He has been replaced by Lee Bienstock, the company president and chief operating officer.  Mr. Bienstock came to DocGo from Google in 2022 and holds an MBA from Wharton (University of Pennsylvania). Times-Union 15 Aug, Release

But…there’s more.

  • The no-bid NYC contract was contested two weeks ago (6 Sept) by the city comptroller, Brad Lander. Mr. Lander, like a corporate CFO, can send back a contract to a city agency, in this case to Housing Preservation Development (HPD). His review cited insufficient budget detail, possible inadequacy of the vendor to provide services, and a few other important items. Unlike a CFO, Mr. Lander’s office is largely toothless and can’t say no. HPD plans to sign off on it anyway as DocGo is quite tight with Mayor Eric Adams. Mayor Adams spoke at the DocGo in-person Investor Day on Tuesday 20 June about their partnership with the city. Adams has already stated that “We are going to move forward with it.” FierceHealthcare  
  • According to the New York Post and Fortune, New York State Attorney General Letitia James and Gov. Kathy Hochul have launched investigations into the company, focusing on how DocGo could contract for logistical operations to transport, house, feed, and care for these thousands of migrants in New York State, an outcome of DocGo’s failures reported last month by the Times-Union.

DocGo is a public company traded on Nasdaq under DCGO. Share prices fell 12% on Mr. Capone’s resignation but rebounded to about 7% down off off the recent $10 high after their mid-August reporting.  Seeking Alpha  DocGo went public through the then-popular SPAC method with Motion Acquisition in November 2021, raising $158 million in cash at that time. Unlike other SPACs, their share price generally hovered around the introductory $10 pricing and recovered fairly quickly from two bad dips to $6 in May and December 2022. NS Medical Device

DocGo’s response to the AG’s office and to the comptroller, the politics of the New York State and City crisis around thousands of migrants flooding housing, the streets, and schools, whether their contracts continue, and their internal financials will determine DocGo’s viability in the future. For those of us with long memories though, DocGo is repeating a pattern: first Peak Hype Altitude, then the Pileup of Problems on their wings, finally crashing to Total Hull Loss. Those are the ominous parallels with Theranos and Babylon Health.

Echoes of Theranos in Babylon Health? And additional information on GP at Hand.

September 14, 2023 | by

Was Babylon Health all a fraud, and where would it place on the Theranos scale? There is an excellent article in MedCityNews that if true, exposes Babylon’s technology as, at minimum, far less than ever claimed. From the perspectives presented, their crash was inevitable.

MedCityNews returns to the original debunker, best known to our UK Readers as @DrMurphy11. In February 2020, while Babylon rode a tide of UK hype (not yet in the US), Dr. David Watkins, a consultant oncologist, revealed himself publicly via BBC’s Newsnight [TTA 27 Feb 2020]. He had been documenting Babylon’s chatbot diagnosis problems in GP at Hand to the government’s MHRA (Medicines and Healthcare products Regulatory Agency) and the independent CQC (Care Quality Commission) since 2017. Scenarios offered to the chatbot missed events such as probable heart attack offering instead panic attack (for a female) and gastritis (for a male). According to MedCityNews, Dr. Watkins had earlier debated a Babylon representative in a debate at the Royal Society of Medicine in London, presumably leading to Newsnight host Emily Maitlis interviewing both Babylon’s Dr. Keith Grimes and Dr. Watkins. Dr. Watkins also received emails from past and current Babylon employees confirming that the “AI chatbot”, the Probabilistic Graphical Model (PGM), was not built on any good quality data.

Cardiac activists in the UK and Canada (Carolyn Thomas, the “Heart Sister”, also listed in our sidebar) also criticized how Babylon’s chatbot ‘diagnosed’ possible events at the time. [TTA 9 Jan 2020]. 

Hugh Harvey, Babylon’s former regulatory affairs head from 2016 to 2017, was also interviewed on Newsnight in 2020. After the Babylon failure, he spoke to MedCityNews about how the AI software was ‘jury-rigged’ to impress the BBC. After he left, Babylon continued to misrepresent the accuracy of its AI system. “To publicize the accuracy of its AI system, the firm set-up a promotional event where it pitted its system against the Royal College of General Practitioners exam used to assess trainee doctors. Babylon conducted this test itself rather than turning to an independent body, and Harvey claims that the company cherry-picked the questions included in the test….Babylon announced that its AI scored 81% on the exam, surpassing the average score of 72% for UK doctors.” 

What was at stake? Babylon got where Theranos never did. A year later, it went public via a SPAC in October 2021 at a valuation of $4.2 billion, with the SPAC organizer Alkuri providing $575 million in gross proceeds to Babylon, including $230 million in a private placement from investors such as AMF Pensionsförsäkring and Palantir Technologies. Two years later, its total hull loss was valued at $5,000.

Some of that money, more than $30 million, went to buying Higi, a health kiosk placed in supermarkets and drugstores that is still in operation in 6,000 locations that uses Babylon’s technology. By early 2023, Higi had separated itself in its public releases from Babylon. It’s unknown how the US Chapter 7 will affect the Higi operation.

Now the commentaries by Dr. Watkins and Mr. Harvey are based on their experiences from some years ago. Babylon could have then created a reliable AI system in GP at Hand and their other diagnostic technologies. But generally, it’s very hard to fix the aircraft as it’s being flown.  The situation usually winds up in an episode of ‘Air Disasters’ (‘Air Crash Investigation’ in UK). For those who believe that the problems were never fixed, Dr. Watkins’ analogy would apply. “[Babylon founder and CEO Ali Parsa] should spend some time with Elizabeth Holmes”. Ms. Holmes, as we know, is serving her time in Bryan, Texas for about the next 11 years.  That would be an interesting albeit improbable conversation indeed.

Interestingly, over one month later, there’s evidently no one left at Babylon Health who can pull down the website. It’s fully operational save for this banner on the home page:

Babylon’s US clinical services and appointments are no longer available. For details about your health plan benefits and to find a new provider, contact your health plan.

The investor page, including the stock ticker symbol and last price, is intact. Will the last person out the door turn out the lights and turn off the website?

Additional information on GP at Hand (UK)

This Editor while away sought clarification from Alvarez & Marsal’s press office on the status of GP at Hand. GP at Hand is not part of the administration. The ownership contracted with Babylon for the app. According to their website, there are three partners: Dr. Stephen Jefferies, Dr. Matt Noble, and Rita Bright. How this arrangement will continue is not disclosed. 

This dovetails with their response:

  • GP is a completely separate 3rd party partnership that is a GP practice that contracted with the Babylon Group.
  • It therefore hasn’t gone through any insolvency process and is still contracting with Babylon Healthcare Services Limited (which has remained outside of an insolvency).
  • The GP at Hand practice wasn’t part of the deal because it couldn’t be as it’s not part of the Group.

Previously: Babylon Health in UK administration, assets sold to eMed Healthcare Ltd.

Short takes: FTC’s Lina Khan’s vendetta on tech, employers disillusioned with virtual care, telepsychiatry cuts LOS and inpatient ED, Lotte’s AI-assisted telepsych diagnostics, ThymeCare’s $60M Series B

August 24, 2023 | by

FTC, the new three-letter Headache for Healthcare. Your Editor has been closely following the Federal Trade Commission (FTC) and Department of Justice (DOJ) changes to antitrust filing processes and merger guidelines. She has been alarmed by the weaponization of the previously fast-asleep 2009 Health Breach Notification Rule against ad trackers to collect quick fines from GoodRx and Teladoc/BetterHelp and creating new policy. In fact, she has been feeling a bit like Cassandra shouting into a Category 4 hurricane. Comes along City Journal, published by the Manhattan Institute think tank, that delves deep into the belief system of FTC chair Lina Khan. In a phrase, she has an ax to throw at businesses that seek to expand or sell through M&A, based upon her subjective philosophies about antitrust that often conflict with established case law.  The article features where she and the FTC commissioners routinely overstep guidelines and recusals, plus get reversed in Federal court. Khan’s nemesis is Amazon. Beware, Bezos. Our articles on the FTC follies, such as the changes to the HSR premerger notification filing process and the Draft Merger Guidelines, so you can Share The Alarm:

Healthcare M&A hit a 3 year low in Q2 2023, to the surprise of none: KPMG (scroll down to last paragraphs)

FTC, DOJ float enhanced information requirements for HSR premerger notification filing process–what will be M&A effects?

Another antitrust shoe drops: FTC, DOJ publish Draft Merger Guidelines for comment–what are the effects?

Just in time for the downturn in digital health funding, employers are becoming tired of telehealth hype. Virtual health may have been touted too loudly as a cost and time-saving panacea to enterprises, ‘transformative’ in and of itself. In the Business Group on Health’s omnibus survey of employer healthcare, they have concerns including a lack of integration among solutions. They are also less confident that it will impact health delivery: from 85% of employers in 2021, boosted artificially by the pandemic, it dropped to 74% in 2022 and 64% in 2023. Employers are also demanding more of partnerships and vendors for value and cost–and demanding reporting on metrics such as health equity. 152 large companies with 19 million workers were polled between 1 June and 18 July.  Business Group release, FierceHealthcare

Telepsychiatry can help hospitals with emergency mental health, as well as shorten length of stay on med-surg floors and the ICU. Allina Health, a health system in Minnesota and Wisconsin, implemented Iris Healthcare, a telepsychiatry service to cover the shortage of psychiatrists and more fully utilize psychiatry in other areas. Psychiatric patients in the ED were staying the longest on average. With telehealth support, the length of stay (LOS) decreased by 25%–from 12 to 9 hours. Behavioral health is now part of ED evaluation and it moved 63% of patients to an outpatient plan from 55% plus shortened LOS in Allina’s Med-Surg and ICU floors by half a day. HealthcareITNews

South Korea’s Lotte Healthcare is partnering with iMediSync to create new AI-utilizing evaluation tools. iMediSync has EEG screening capability for diagnosing neuropsychiatric disorders like Alzheimer’s disease that Lotte will integrate into their mobile health app, Cazzle. Cazzle then creates personalized health recommendations for users. The South Korean market is unusual in that the rate for accessing mental health services is only about 1/10th of the population, yet mental illness is growing. Mobihealthnews 

To end on a positive funding note, ThymeCare scored $60 million in a Series B round. This was led by Town Hall Ventures and Foresite Capital with participation from existing investors Andreessen Horowitz Bio + Health, AlleyCorp, Casdin Capital, and Frist Cressey Ventures. ThymeCare is a platform for those diagnosed with cancer to better understand their diagnosis and recommend personalized interventions and care navigation to patients to quickly connect them to care with its platform, Thyme Box. It utilizes data analytics to crunch information from payer, EHR, and health information exchange sources. FierceHealthcare

Babylon Health UK operations on fire sale–buyers to be announced Friday 25 August (updated)

August 23, 2023 | by

Quickly and softly, softly, Babylon Health’s UK operations are being sold. The sale will include the proprietary tech stack. If you planned to bid, the deadline passed on Monday 21 August. Winning bids will be announced on Friday 25 August at the latest.  Update: As of 29 August, the bidders have not been announced.

The rush is due to the extreme position that Babylon Health’s operations are in. A UK shutdown is likely without a quick sale. Their UK business is with Bupa insurance, a little left with the NHS, some B2B, and GP At Hand/direct to consumer. Business consultancy Alvarez and Marsal are running the sale, presumably as part of the UK receivership.

Bidders, who were invited by letter, may include Bupa, Vitality, tech companies HealthHero and Cera–and even CEO Ali Parsa, which might lead to questions by customers or the court. Kry/Livi stated to press that they were not bidding. Customers Bupa, with a contract to 2025, and the NHS may have a say in the eventual deals.

The proceeds of the sale are projected not to exceed the $300 million debt owed to AlbaCore Capital nor its last $34.5 million tranche. Other debtors and vendors will be left in the proverbial lurch. Sifted.eu, Becker’s

The sale does not include the US operations that are included under the Chapter 7 liquidation which is still in the filing of documents stage. Babylon US, which generated most of Babylon’s revenue, has already shut down. Close to half its business was with Centene entities such as Ambetter and WellCare, which terminated their contracts on 8 August, the day after the collapse of the AlbaCore deal. The only operating part of Babylon is the Meritage Medical Network, a medical practice IPA. Next steps start tomorrow, Thursday 24 August, for documentation of its secured and unsecured debtors and summaries of assets and liabilities. Babylon’s creditors will meet on Tuesday 12 September.

The UK fire sale also does not include Babyl Rwanda, a semi-independent unit that is engaging with the Rwandan government to find a buyer. There is no further information available on other operations in India or other countries. 

Most recent coverage on Babylon in TTA: 23 August, 17 August, 10 August, 8 August

Mid-week roundup: Babylon Rwanda update, CVS Health laying off 1,700+, Optum laying off too, Veradigm’s third non-compliance Nasdaq notice, AireHealth auctioning assets, Viome’s $86M raise + CVS retail kit deal

August 23, 2023 | by

It’s another jump into the unknown between bankruptcies, layoffs, and funding raises for the Lucky Few. Emblematic of this year as we prepare to wind up this Crazy Summer in the next few weeks.

Rwandan government scrambling to keep Babyl services going. According to a local website, The EastAfrican, on 7 August “Health Minister Sabin Nsanzimana convened a meeting with the head of Babyl’s operations in Rwanda, Shivon Byamukama, to formulate a contingency plan to mitigate the impact of the company’s bankruptcy.” The Rwanda Ministry of Health is trying to secure the Babyl Rwanda operation that serves 2.4 million Rwandans (not Babylon’s 2.8 million, but still close to 20% of population) and employs over 600 people–doctors, nurses, call center agents, and software developers, Babyl is maintaining normal daily operations for now while Babyl Rwanda’s managing director, Dr. Shivon Byamukama, told the publication that the Rwanda operation is in active discussions with potential investors and partners either as a standalone entity or in partnership with another body. One wonders where the $2.2 million in funding from the Bill & Melinda Gates Foundation went.

CVS Health is starting to wield the knife on its promised (to investors) 5,000-person layoff, starting with at least 1,200 in October. The bulk of the layoffs will be in Connecticut and Rhode Island, both home to much of the Aetna operations. State labor departments in Rhode Island and Connecticut have already received WARN notices from CVS that over 1,200 employees in those states will be terminated effective 21 October. In other states, WARN notices have been filed for another 580 also effective 21 October.

  • The Woonsocket, RI headquarters and a neighboring office in Cumberland will lose 770 workers. 198 live in RI, the others are remote workers reporting to RI-based supervisors.
  • 306 employees are based at the insurer’s headquarters in Hartford, Connecticut. An additional 215 work remotely but are supervised out of the Connecticut offices, for a total of 521.
  • Other employees will be terminated in New York (167), Plantation, Florida (288), and Arizona (134), according to notices filed in each state.
  • Updated 24 Aug: another 825 across four additional states. In NJ, 207 employees at multiple locations starting 15 November. In Texas, 167 employees in Richardson and Irving; in Pennsylvania, 157 employees at an Aetna office in Blue Bell; in Illinois, 294 employees in Chicago, Buffalo Grove, and Northbrook starting 21 October.  Becker’s
  • CVS refused to disclose other layoffs to Healthcare Dive in other states where the number fell below WARN notice requirements

These positions include assistants, data engineers, customer care pharmacists, actuary executives, corporate vice presidents, project managers, program managers, and managers/directors of network development. While these constitute only 2% of CVS’ overall workforce of 300,000, it is cold comfort to those affected, many of whom have worked years for Aetna or CVS.   Becker’s  

The timing is revealed in the Becker’s Payer Issues article: When CVS acquired Aetna, “its agreement with state insurance regulators included a promise to keep employment levels at Aetna and its subsidiaries at 5,300 for at least four years after the closure of the deal. The employment levels reflected staffing as of Oct. 1, 2018, and the agreement expired in 2022.” Notice the similarities in the numbers.

In the interim, CVS went on an acquisition binge of $18.6 billion, buying Signify Health and Oak Street Health only months apart in strategic moves to buy up practices and network extenders such as ACOs in value-based care and home health.

  • Oak Street Health and its 169 practices do not project profitability until 2025–maybe–and clocked an over $500 million loss last year [TTA 4 May]. In the views of many on the Street, Oak Street was a $10 billion waste.
  • No one knows if Signify Health is profitable or not with practices and home health, but that company took a bath on Remedy Partners in Episodes of Care models and wound down that business right before the auction. CVS Health got caught up in a four-way bidding war only a year ago (in a universe that feels quite far away) that topped out at over $8 billion in cash. Ill-considered in retrospect?

CVS Health is already dealing with 2023 and 2024 projections that are downtrend: increased Medicare Advantage costs, higher drug utilization, and lower consumer spending expectations affecting retail operations. Mr. Market does not ignore Where The Money Comes From, and the piper that is paid comes from where it usually does–the people working for the company.

Optum not immune from layoffs either. Optum Health’s MedExpress Urgent Care clinics are eliminating registered nursing positions at nearly 150 facilities as part of a larger group of layoffs at Optum. MedExpress’ RNs are circulating an online petition protesting the change as ‘negligent’. Social media has also posted about gradual current layoffs at UnitedHealth Group and Optum building to major layoffs affecting worldwide operations. There are no WARN filings so these are suspected to be below the 50-100 WARN threshold (number and time period e.g. 6 months may vary by state) but cumulatively across UHG substantial. Becker’s    Becker’s updated coverage today 23 August

Veradigm’s ‘problem’ with Nasdaq continues. The former Allscripts still has not filed an annual report for 2022, nor Q1 or Q2 financial reports, with the Securities and Exchange Commission (SEC) which are required for Nasdaq stock listing under Nasdaq Listing Rule 5250(c)(1). TTA previously reported in June that Veradigm is not reporting because they had a software flaw that affected its revenue reporting going back to 2021. This has been going on since March. Veradigm has requested multiple extensions from the exchange and are set to ask for another. Veradigm stock closed today at $12.89, which is well out of the usual trouble, but an accounting software problem this long unresolved from a software company specializing in practice EHRs and practice management software…does not compute. Healthcare Dive, Business Wire

AireHealth auctioning off assets. This respiratory health company based in Winter Park, FL founded in 2018 developed a FDA-cleared nebulizer with Bluetooth functionality plus AI and machine learning software to generate predictive data on patients’ clinical conditions. The online auction of patents, software, hardware, and intellectual property for the company’s remote patient respiratory care platform will be held by Florida-based Fisher Auction Company. Apparently, there was no bankruptcy filed but the early-stage company decided to shutter anyway and sell assets. Mobihealthnews

On the other hand, gut health is hot and Viome scored a Series C of $86.5 million for a total $175 million raise plus gut testing in 200 CVS locations. Lead investors are Khosla Ventures, Bold Capital, and WRG Ventures. With the raise, Viome announced the launch of its Gut Intelligence Test in 200 CVS locations. Online, the Gut Test retails for $149 on current sale. Viome also markets oral and throat tests plus a ‘full body’ test in the $200+ range. The gut test is not currently FDA-cleared, though its saliva-based oral and throat cancer test received FDA breakthrough device designation in 2021. They claim that its RNA sequencing technology that utilizes AI and advanced algorithms to analyze the world’s largest gene expression data from over 600,000 samples, was originally developed out of research from the Los Alamos National Laboratory, “is clinically validated, fully automated, exclusively licensed by Viome [to analyze] biological samples at least 1,000 times greater than other technologies.” Release, Mobihealthnews, TechCrunch

Cano Health appoints interim CEO as permanent; founder Hernandez steps down from board

August 22, 2023 | by

Cano Health made the obvious, and perhaps the only, choice. Interim chief executive officer Mark Kent was  appointed both as permanent CEO and joined the company’s board of directors. Founder Dr. Marlow Hernandez, the founding and former CEO up to 16 June when Mr. Kent was appointed, immediately stepped down from the board.

Mr. Kent has a strong background as an RN, as well as a senior executive in hospitals and as a founder of three startup healthcare management services organizations (MSOs) for Florida primary care providers in value-based care, most recently as CEO of Care Management Resources, Total Health Medical Group, and Your Partners In Health. Before then, he was a regional president of Humana. From his LinkedIn profile, he sounds like an accomplished and interesting executive. Another interesting facet: he runs investments for his Florida-based family office Kent Capital Investments which maintains investments in the above MSOs and others. Turning around a company staring at the abyss,  laying off 17% of staff and exiting states right and left in a restructuring, and successfully selling what’s left is another matter. It is not disclosed whether Kent Capital has an investment in Cano Health or if there are ties between the practices and Cano. The Care Management Resources website displayed on LinkedIn or in a routine search is not to be found.

The company release does not refer to any other members of the board, the Cano 3, or Dr. Hernandez’ future, though he is a shareholder. The Cano 3, who hold 35% of near-worthless shares in their collective portfolios (resigned directors Barry Sternlicht, Elliot Cooperstone, and Lewis Gold), remain silent. Healthcare Dive   Previous coverage of Cano Health: 15 August includes restructuring; 21 June

Weekend reading: Forbes picks the next $1B startups, is TV streaming analogous to the future of healthcare?

August 18, 2023 | by

Will we have any more unicorn startups? Forbes seems to think we will and picked out 25 with TrueBridge Capital Partners. They’re a potpourri of cybersecurity, ID fraud, IT, fashion, financial, farming, and even an aircraft company. Only a few are healthcare-related and Becker’s picked them out:

Chapter, co-founded by Republican Party presidential hopeful Vivek Ramaswamy. uses its database to fit the best Medicare plan options (Medicare Advantage, supplements) to individuals. Unlike brokers, their consultants get paid the same no matter the plan. It’s raised $61 million and has revenue of $15 million.

Medallion does the dog work of verifying medical licenses and enrolling doctors in insurance networks. They have more than 300 customers, including Oak Street Health and VillageMD. It’s raised $85 million   and has revenue of $13 million.

Pendulum Therapeutics is in microbiomes–gut health–and what early usage can produce over a lifetime. Many babies given antibiotics have now been found to be more susceptible to chronic lifelong problems that include asthma, ADHD, diabetes, and celiac disease. Its flagship is a glucose-control pro­biotic for mana­ging Type 2 diabetes. It’s raised $116 million and has revenue of $11 million.

Verifiable verifies the credentials of medical professionals using machine tools. It’s raised $47 million and has revenue of $6 million.

Is there a usable analogy between the TV streaming wars and healthcare’s future? This essay in Becker’s Hospital Review is unusual for them. It draws a line between the fragmentation, redundancy, and overlap in entertainment that streaming services such as Hulu, Disney+, and Netflix have created, to the fragmentation, redundancy, and overlap between health systems and health companies such as Optum, Humana, CVS Health, Walgreens, and even Amazon in taking care away from the hospital setting into clinics and the home, breaking the centralized hold that health systems have had on patients. Too much á la carte, confusing, and fragmented for patients at usually a very bad time, unlike sitting on the couch and wondering which home improvement or celebrity reality show to watch.

Week-end short takes: Amazon Pharmacy automating couponing of insulin and supplies, Mendaera imaging/robotics wins $24M, Access Group acquires Oysta (UK)

August 18, 2023 | by

An automation innovation that will attract diabetics. Amazon Pharmacy, in an attention-grabbing move, is working with several manufacturers to automate coupons that discount diabetic drugs (insulin) and supplies. These will come from 15 diabetes care brands and include some of the most commonly prescribed products from Novo Nordisk, Eli Lilly, Sanofi, Dexcom, and Insulet, such as insulin vials, pens, continuous glucose monitors, and pumps. The coupons are sponsored by the manufacturers and can drive the cost for these supplies to start at $35 a month. The cost of insulin and diabetic supplies has been a major issue, and while manufacturers have offered coupons, actually obtaining them from manufacturer websites can be a complicated procedure. Amazon’s program was applauded by the head of the American Diabetes Association.  Amazon is also offering them for COPD, weight loss medications, and EpiPens. MedCityNews, HealthcareFinance

A notable Series A this week is San Mateo, California-based Mendaera, which developed a robotic system that merges real-time imaging, AI and robotics for minimally invasive care. Still in semi-stealth, their raise is $24 million led by Lux Capital with participation from Founders Fund, Operator Partners, and Allen & Company, LLC. Other investors include Intuitive Surgical and Auris Health founder Dr. Fred Moll and former U.S. Senator Bob Kerrey. They have moved into a new production facility in Silicon Valley. Release, Mobihealthnews

Access Group acquires Oysta Technologies. Oysta, a provider of care technology solutions for safe, independent living in the UK and Spain, will be part of Access Group’s Health, Support and Care (HSC) division that provides software for health, local government, and care organizations. In the UK, Oysta works with local authorities, social care providers, housing associations, care homes, and NHS Trusts. Acquisition cost was not disclosed. Oysta announcement, Access announcement   Hat tip to Adrian Scaife, Business Development Manager for Assure, via LinkedIn