Should free-falling UnitedHealth Group be broken up? Or break itself up to survive, before it becomes another GE? (updated)

May 28, 2025 | by

Breaking up is hard to do. But should be done if UHG wants to survive and thrive.

Our proposition: UnitedHealth Group has become a victim of its own giantism, conflicts, and focus on financials–and its failure will drag down healthcare.

How big? By far, it is the largest US health insurance company based on 2023 enrollments with a 15% market share, 29 million members, and $371.6 billion in revenue. It leads by far Elevance Health (formerly Anthem, 12%), CVS Health/Aetna (12%), Cigna (11%) and Health Care Service Corporation (7%). A more realistic picture of its size is that it is now is the US’ fourth-largest firm by revenues, just behind Walmart, Amazon, and Apple. (Visual Capitalist 17 Dec 2024, based on American Medical Association data). Their growth has been led by acquisition into Optum, their health services division. It houses their owned physician practices as the largest owner of practices in the US with 90,000 physicians, their ACO relationships, data analytics, Change Healthcare, the largest billing and claims management company, home care/hospice, the third largest PBM Optum Rx, a venture investment arm, and much more. Optum is the massive symbol of the integration envisioned by former and current CEO Stephen (Steve) Hemsley. Other health plan companies have health services units, for instance PBMs–CVS has Caremark and Cigna Express Scripts, both larger than OptumRx, and analytics–but not to the vertical and horizontal integration depth and extent of UHG’s continuing search for revenue and profit.

The road this vision took under Mr. Hemsley and later Sir Andrew Witty took diversions along the way that have escalated into a cadence of legal troubles, a near-perfect storm of corporate misery, that have damaged them among customers, shareholders, and regulators. A list of the recent highlights (bold type links are new information; standard type links refer to earlier TTA articles):

  • The contentious two-year-long purchase for an eye-blinking $7.8 billion or $13 billion of Change Healthcare that finally closed in 2022. While opposed by the Department of Justice (DOJ), the District Court disagreed and said it wasn’t anti-competitive or prevented competitive entry. 
  • Change Healthcare was a House That Jack Built that collapsed spectacularly in February 2024 with the ALPH-V/BlackCat ransomware attack. It was evident that Optum didn’t conduct basic due diligence on Change Healthcare’s multiple systems, built up over multiple acquisitions, nor set to work fixing them after the closing, leaving the largest claims/payment system vulnerable. UHG’s response managed to anger patients, providers, and HHS. It took Optum most of 2024 to fix it at a loss of at least $2.3 billion. 
  • DOJ has been investigating certain relationships between the company’s UnitedHealthcare insurance unit and its Optum services unit, specifically around Optum’s ownership of physician groups. This started in March 2024.
  • The $3.3 billion acquisition of Amedisys home health has taken over two years (since June 2023) and has taken multiple rounds of divestitures–and still DOJ is grinding its Paul Bunyan-sized ax against it, filing their suit in Maryland along with four state attorneys general in November 2024.
  • DOJ’s insider trading investigations may have started as early as October 2023. The $300 million Hollywood (Florida) Firefighters Pension Fund filed a class action lawsuit in mid-December 2024 alleging that the sales were made while the Department of Justice (DOJ) was considering an anti-trust action against UHG that would revisit the so-called ‘firewall’ between it and Change Healthcare. Named in the lawsuit were Brian Thompson, head of UnitedHealthcare, Andrew Witty, and Steve Hemsley. (Sir Andrew resigned from UHG’s board effective 20 May, Becker’s and SEC Form 8-K)
  • DOJ is reportedly investigating UHG for criminal Medicare Advantage fraud, according to the WSJ earlier this month, reported in HealthcareFinance.
  • The latest accusation: kickbacks to nursing homes to reduce patient transfers to hospitals and thus costs, based on an investigative report from the UK Guardian reported in FierceHealthcare last week.

The Brian Thompson assassination earlier in December uncapped a boiling volcano of resentment against the health care system that crossed political lines, then focused on UHG itself and its claims treatment. Next it revealed something that UHG undoubtedly didn’t want known–that UHG’s AI-powered claims review system had a 33% rate of claims denial on marketplace plans across 20 states, the second highest in the US (first was BCBS Alabama, a single-state plan) (KFF). This eruption unleashed a tsunami of heartrending social media stories of denied care and approved then denied care by UnitedHealthcare, including one for a patient delivered to a surgeon post-operation.

  • Instead of examining their methods, UH doubled down on featuring ever-so-trendy AI. Revealed recently to the WSJ, half of their 1,000 + AI-powered apps use generative AI and the remainder a more “traditional” form, without explanation of “traditional” according to chief digital and technology officer Sandeep Dadlani, Their software, not necessarily AI-powered but usually rules-based or using algorithms, ‘auto adjudicate’ 90% of UHG claims. And this wasn’t new. UHG was sued in Federal Court as far back as 2023 in using an AI-powered application to evaluate and deny claims.

This is above and beyond the business conditions that have affected every insurer: high utilization costs resulting from accelerated care activity, more (and more expensive) benefit offerings, and higher costs associated with Medicare Advantage beneficiaries, along with a minor reduction in MA benchmark rates.

One healthcare observer’s–and marketer’s–opinion, drawn from her experience not only in healthcare but also outside it.

UHG has pursued profit and growth to justify an immense share price and return to its shareholders. It has become unmoored from its business customers, instead trapped in an ever-widening gyre of increasing its revenue, profit, share price, and dividend every quarter, every year, to satisfy investors. It remains profitable, yet its share price has collapsed from over $600 on 3 December 2024–the day before the Thompson murder–to $378 on 12 May, the day prior to Witty’s resignation, to today’s close of $295. This is despite massive share purchases by Mr. Hemsley and other UHG executives, presumably to demonstrate confidence. Last week, three major investment banks downgraded their recommendations on UHG.

It’s time to sell off businesses and refocus on either being an insurer or being a healthcare services company. Not both. 

  • If UHG chooses to be an insurer, refocus on a service mission, not the shareholders. Respect their members (and commercial businesses) who pay the premiums. Focus on member health, first preventative, then managing chronic care. Stop treating patients and providers as always trying to game the system or grift them. People depend on insurance at the time of need, when they are sick, and treatment is complicated. Make it easier for both members and their providers.
    • Bring back humans evaluating prior authorizations and claim approvals–and get better tools with a final review by humans. Treat providers in and out of network better.
    • Get back to being the insurer of choice for individuals and groups. Contract for the services you need, not own them and try to manage them too. UHG would not be the first insurer who has faced this–both Molina and Centene have divested all or many of their service businesses.
  • If UHG chooses to be Optum, it needs to focus on their services and how well they integrate. Divorcing Optum from UnitedHealthcare resolves a lot of conflicts around interest but there are still others.
    • Owning and controlling practices creates multiple conflicts and a closed system. The feedback from doctors in Optum-owned practices that this Editor has seen is that they are micro-managed down to the penny, escalating administrative costs and taking focus from patient care. Optum practice locations that this Editor has seen have a ‘bad look’–underused, often repurposed locations.
    • Abandon the Amedisys acquisition and rethink (or spin off) the entire home care business for the same reason as owning practices.
    • Refocus their ACOs from ‘captives’ to management services provisioning that more naturally integrates with Optum services–or get out of the business.
    • Expand analytics into providing the best and most convenient tools for hospital and practice management, which likely will require some acquisitions.
    • Optum Rx is facing its own challenges from new competitors and eroding market share–and simplification can help management focus on it. If Change Healthcare is kept, rework and reform how they process and pay claims across healthcare; harden it against the cyberattack/ransomware that cost the economy and healthcare billions. Optum Ventures and its role should also be examined for conflicts with the main business.

UHG is a company now demonstrating the end stage of integration: too many complex parts, too much administration needed to keep the juggernaut going, too many inherent conflicts, no central theme, too little focus, culminating in failure to customers and shareholders. It has become toxic in reputation to its own members, providers, and to businesses who sign commercial contracts. It’s become a falling knife, a rolling failure such as GE before its breakup or (returning to my airline days) Texas Air Corporation, once the world’s largest airline holding company. Unlike GE or TAC, UHG’s business size and outsized vertical integration choking off alternatives have created multiple situations, such as Change Healthcare’s failure, which can damage the entire healthcare system. It’s time that their new CEO and their C-levels sit down and have a long think about what their future, and the future of their role in being a healthcare leader, should be. Think…smaller.

Update 28 May: The American Hospital Association (AHA) has also provided comments to the Trump Administration, DOJ, and FTC, as part of the administration’s 10:1 deregulation initiative*, addressing payer vertical integration and its effects on providers. Payer control, concentrated among four payers that control half the market (UnitedHealth, Elevance, Aetna, Cigna) , far outstrip those of health systems, and have led to higher premiums and constraints on care. The AHA is demanding review of regulations within the Affordable Care Act (ACA) that permit insurers to circumvent medical loss ratio (MLR) requirements through high-priced practice acquisitions yet enjoy exclusions in the Stark Law (physician self-referral) that health systems cannot. Their comments also included simplification of prior authorization processes and other utilization management practices, and swiped at the increased Premarket Notification process for M&A, something that the new administration is already reviewing. FierceHealthcare published 27 May.

*For every new regulation passed, canning 10 rules, regulations or guidance documents

News roundup 22 May: an inflight ‘save’ and AliveCor’s KardiaMobile, rolling out the VA/Oracle EHR in ‘waves’, Fuze Health formed from LetsGetChecked/Truepill, hacking and ransomware 92% of PHI data breaches

May 23, 2025 | by

Leading our news with a short, heartwarming story.

A passenger on a 29 April KLM flight from Uganda to Amsterdam experienced, three hours in, heart attack symptoms and extreme pain. The Dutch passenger’s luck was that a group of passengers were medical volunteers with Cura from the World, a Oklahoma-based group returning from a medical mission to Uganda. Dr. TJ Trad, the founder/CEO and an invasive cardiologist, created an aid station for the passenger where his legs could be raised and his vitals monitored with the assistance of a nurse. The lucky part was that the team had most of its equipment aboard, including a 12-lead ECG to confirm his cardiac status, plus five medications used for emergency treatment. He was stabilized, but the interesting part was that Dr. Trad used his personal AliveCor KardiaMobile to monitor the patient for arrhythmia, the later and high emergency stage. Dr. Trad was carrying it because a year earlier, he had experienced his own heart attack that canceled out his last medical mission trip and used it to monitor himself. With the patient under monitoring and medications, the KLM flight did not have to divert to Tunisia and it landed at Amsterdam Schiphol three hours later. At the hospital, the Dutch patient was examined over 12 hours and eventually discharged, as he was not diagnosed with a heart attack, stroke or pulmonary embolism, according to the passenger’s wife speaking with CNN. Dr. Trad was able to catch his connecting flight home. From an aviation perspective, it underscores the need for medical training and an emergency kit for monitoring this type of incident. Hat tip to Dave Albert, MD, founder and chief medical officer of AliveCor.

VA now dubbing the rollout of the Oracle Cerner EHR as a ‘wave’ strategy. Dr. Neil Evans, the acting executive program director of VA’s Electronic Health Record Modernization Integration (EHRM) Office elaborated on the ‘wave’ in an interview with GovCIO Media & Research. Each rollout will be clustered in sites that routinely work together and where patients flow for care from one location to another. For instance, the planned 2026 rollout previously announced in December 2024 will be in four Michigan locations: VA Battle Creek Medical Center, VA Detroit Healthcare System, VA Ann Arbor Healthcare System, and VA Saginaw Healthcare System. The nine additional sites in 2026, except for Alaska standing alone, are similarly clustered [TTA 4 April]. The new news? FTA:

  • The White House’s proposed discretionary budget for FY 2026 calls for an increase of nearly $2.2 billion in funding for the EHR program as a “top priority effort.”
  • The proposed budget also plans to streamline much of the agency’s over 1000 IT systems, which it claims are “decades old” and “duplicative.”
  • It pauses procurement of new systems and directs the U.S. Department of Government Efficiency Service (DOGE) to conduct a full review of the agency’s IT systems alongside the VA.
  • Other government agencies are going through the same process: National Oceanic and Atmospheric Administration (NOAA), Defense Department (MHS), and the Coast Guard also are modernizing their EHRs. VA is learning from them as well as the private sector, according to Dr. Evans.

The ‘wave’ needs to work. Veterans Affairs Secretary Doug Collins outlined VA plans at two House appropriations hearings last week on the 2026 and 2027 VA budgets. The total for the EHRM is $3.5 billion in FY 2026 (Federal budgets start in October; the total budget has been dubbed the ‘Big Beautiful Budget’) and is needed for additional rollouts in FY 2027. But given the failures at the six existing implementations and the continuing fixes and patches, in a process that seems like it started in 1900 (actually 2018), one can understand the consternation of Veterans Affairs committee member Rep. Greg Murphy (R-NC): “I’m still dumbfounded at the billions and billions and billions of dollars that have been poured into an EHR that should have never been done in the first place. It’s not a system that should be used for the largest healthcare system in the country.” Healthcare Dive

Fuze Health launches–phase 2 of a merged LetsGetChecked and Truepill ‘arranged marriage’. The merger of the two last October with digital/mail order pharmacy Truepill operating as a subsidiary of at-home diagnostics via testing kits LetsGetChecked was a $525 million deal that we classified as a ‘smush’ when it was announced last August. Both were heavily invested in by Optum and torching  through cash. While $525 million was the purchase value in the headline, only $25 million was in cash and the rest of the financing didn’t add up to the total. The Phase 2 of this entity, Fuze Health, now has a third partner, prescription deliverer Alto, and a new name, Fuze Health. No acquisition amount is mentioned for Alto, which has a total funding of $62.4 million through a June 2021 Series B plus equity crowdfunding (March 2024!) and no financing from Optum (Crunchbase). The only Fuze management mentioned in the release are Alicia Boler Davis, Alto’s CEO, and Paul Greenall, Fuze chief development officer. Their website links back to the four individual companies.

In 2022, LetsGetChecked acquired Veritas Genetics, now prominently featured as part of Fuze. Also in 2022, Truepill fell under DEA scrutiny with a ‘show cause’ action after being a fulfillment pharmacy for Cerebral and Done Health in their Schedule II controlled substance violations. This was settled in November 2023 with multiple requirements including continuing heightened compliance (DEA release). Fuze Health promotes itself as “a technology-powered home health screening, genomics and pharmacy services provider committed to transforming patient experiences and enabling its healthcare partners – including care providers, health plans, employers and life sciences companies – to excel in an outcomes-focused system.” No mention of investors or backing, as is typical in these announcements.  Now go forth and make money. Hat tip to HIStalk 5/23/25 

Hacking and ransomware now constitute 92% of healthcare data breaches. Once upon a time, when this Editor reported on what were then unusual data breaches, the more common causes were insider theft, unauthorized access/disclosure, and improper disposal or loss. They have nearly vanished as the ‘business of breaches’ has settled down and internal security has approved. A cross-sectional study published as a research letter in JAMA Network surveyed breaches from 2009 to 2024 using HHS’s Office of Civil Rights (HHS-OCR) reporting. Of 566 incidents in 2024, 457 were “IT incidents” and 61 were tagged as ransomware, totaling 92%. Despite the massive Change Healthcare breach, ransomware breaches fell to 11%.  Considering patient records, there were 170 million breached in 2024 and hacking/IT incidents accounted for 91% of the total. Of 732 million records affected from 2010 to 2024, hacking or IT incidents and ransomware (considered as a subset) accounted for 88% (643 million) and 39% (285 million) of incidents. Since 2020, ransomware has affected more than half of all patients annually, reaching 69% in 2024–again, the effect of Change Healthcare. Also Healthcare Dive

News roundup: Hinge Health public @$32/share, lower valuation. Is WeightWatchers game over? Calibrate replaces CEO, new prez for Oak Street, NMC gets ‘Smarter’ rolling up 3 portfolio companies, another splash of investor ‘cold water’

May 22, 2025 | by

Hinge Health now public. Today (22 May) Hinge Health debuts as HNGE on the NYSE, the first big IPO for healthcare tech in two years. Last night, the virtual MSK/physical therapy provider raised $437.3 million in its IPO. Shares were priced at the high end of the offering range at $32. The timing is a small surprise, as in early April insiders said to press that they had not committed to any dates due to the market’s roller coaster, but they stayed on their original schedule [TTA 8 Apr].

The nitty-gritty:

  • The floating is 13,666,000 shares of Class A common stock, 8,522,528 of which are being sold by Hinge Health and 5,143,472 of which are being sold by certain selling stockholders.
  • The underwriters have a 30-day option to purchase up to an additional 2,049,900 shares of Class A common stock at $32, less underwriting discounts and commissions.
  • The valuation comes in at the $2.6 to $3 billion range. This is a shave-and-a-haircut from the bubbly days of November 2021, when its Series E raise of $600 million gave it a valuation of $6.2 billion–and this was on top of a January 2021 Series D of $300 million [TTA 5 Nov 2021]. 
  • Hinge also has a Class B voting share class that ensures that major investors including Insight Partners (19% prior to the IPO) and Atomico (15%), along with co-founder and CEO Daniel Perez (18.9%), retain control of the company

The IPO was delayed repeatedly in an uncertain market for health tech raises, much less IPOs. Starting in 2024, rumors flew, early filings were made from last April then in October last year [TTA 3 Oct 2024]. Total raises for Hinge as a private company were $826 million from multiple investors, who were undoubtedly clamoring for OPM (other people’s money) and a full or partial exit. Hinge also let some positive results sink in; they reported a 50% increase in Q1 revenue to $123.8 million from $82.7 million in Q1 2024. Net income went positive at $17.1 million, reversing a net loss of $26.5 million in last year’s Q1.  Endpoints (requires registration), Hinge Health release, CNBC  Will competitor Omada Health be far behind?

The rest of the news is a bit more sobering, reflective of the real challenges health tech/digital health faces, in multiple businesses.

WeightWatchers’ bankruptcy and fast reemergence may be only a brief waypoint in its troubles. This Editor opined at the time of the 45-day prepackaged Chapter 11 that WW was simply kicking the can down the road. Their subscription model of low calorie diets, points, and exercise no longer worked when well-funded teleprescribers such as Hims & Hers, LifeMD, FuturHealth, and Ro, along with traditional telehealth providers like Teladoc, had long since jumped on the GLP-1 promise of quick and assured weight loss. WW didn’t enter GLP-1 prescribing until October 2024, well after it took off even in high prices and scarcity, but continued to lose subscribers. The coup de grace? The partnering deals that teleprescribers as well as CVS Health’s Caremark PBM worked with Novo Nordisk to stimulate their volume for Ozempic and Wegovy. Thus the Chapter 11 and the dumping of $1.15 billion in debt may buy time, but not solve, their market disconnect.

An article from earlier this week in MedCityNews takes the same tack in an interview with industry analyst Michael Schnell, a director in health consultant West Monroe’s healthcare M&A group. Mr. Schnell regards WW as a legacy company in representing the old ‘diet culture’, with the new teleprescribers representing “private, digital-first, affirming wellness experiences that are in themselves a rejection of ‘diet culture.’” It’s a positioning (real estate in the mind/Denny Hatch) dilemma that in its clarity somehow evaded this marketer. It’s echoed by another industry analyst and Virta Health’s CEO Sami Inkinen, a company that has focused on diabetes control and weight loss via nutrition but pivoted last year to add GLP-1s.

WW’s fundamental dilemma is encased in its fundamental 60 year old promise–that you can lose weight, but it requires commitment and work. Their traditional weight loss model of diet and exercise, once fairly simple, grew complicated and not cheap. Complicated and costly will be beaten every time by those who promise a lot less effort, even with cost and side effects that are significant. Now it costs even less. Cigna’s Evernorth announced yesterday that its PBM Express Scripts now will cap monthly out-of-pocket costs of Novo Nordisk’s Wegovy and Lilly’s Zepbound at $200/month, saving an estimated $3,600 annually versus typical DTC discount programs. FierceHealthcare Can WW buy enough time to solve their market problem? Based on prior marketing experience, it’s not likely even if WW completely reinvents itself.

Even among the weight loss teleprescribers, all is not keen and peachy. Calibrate changed out its second CEO in just over a year. Rob Rebak, most recently CEO for three months of Mosaic Diagnostics and earlier CEO of Forefront Telecare (sold to Access TeleCare), replaces Rob MacNaughton, who joined in February 2024 from venture chair of Redesign Health. Other executives have also departed: CFO Bert Smith and chief clinical officer Jane Ruppert. According to CEO Rebak, MacNaughton will remain on Calibrate’s board as an advisor to him. Joining is a new COO, Paul Merrick, another former Forefront Telecare exec. The breaking report is in Endpoints (may be paywalled) and oddly, not elsewhere including the Calibrate website which does not have an executive list, nor press releases on Business Wire.

Originally a portfolio company of Redesign Health, Calibrate has had its ups and downs. The company sold a 70% interest in a 2023 ‘reorganization’ to private equity firm Madryn Asset Management along with other investors  with founding CEO Isabelle Kenyon departing. An early entrant in the GLP-1 obesity management game, promoting ‘metabolic reset’, it also received the brunt of drug scarcity and social media backlash, refunding millions to subscribers.[TTA 26 Oct 2023]

A sidebar on GLP-1s. A systemic review and meta-analysis of 497 articles by a team at Sacred Heart University (CT), retaining eight randomized controlled trials comprised of 2372 participants, all with a BMI ≥ 27 kg/m2, indicates that after discontinuing GLP-1 therapy, weight regain was proportional to the original weight loss. The regain varied by type of GLP-1 drug, but the study labels it ‘significant’. Obesity Reviews (Wiley) 4 April 2025   GLP-1 weight loss is not one course and done–actually good news for the teleprescribers and pharmas as in ‘they’ll be back’. 

Oak Street Health replaces its president. The CVS practice unit named Creagh Milford, DO, MPH as Oak Street’s new president. He comes from CVS’ Minute Clinic as head of retail health from January 2024. Dr. Milford replaces Brian Clem, a 10 year Oak Street veteran who according to the Crain’s Chicago Business article and his own LinkedIn posting, “had decided to move on” after being president since May 2019, prior to CVS. Previously, Mike Pykosz, CEO and co-founder of Oak Street Health, had moved up in the months after the May 2023 buy of Oak Street into CVS corporate, eventually heading up their Health Care Delivery unit. He departed fairly suddenly in November 2024 [TTA 27 Nov 2024]

New Mountain Capital (NMC) does the smush again with three portfolio companies. The new entity, Smarter Technologies, combines SmarterDx (AI for chart analysis catching missed billing codes and appeal denied claims), Thoughtful.ai (agentic AI for checking insurance eligibility and prior authorization), and Access Healthcare (RCM). The revenue cycle management (RCM) company for health systems and hospitals will be headed by Jeremy Delinsky, an executive advisor to NMC and founding COO of Devoted Health. It now totals according to their release 200 clients, including more than 60 hospitals and health systems with over 500,000 providers. It processes more than 400 million transactions and manages over $200 billion in combined revenue annually. No other management transitions are mentioned but on the website, the co-founders/CEOs of the three companies are listed alongside Mr. Delinsky. It’s the second big rollup in less than one year for NMC, which last September combined Apixio’s payment integrity business and Vario into The Rawlings Group to create one giant $3 billion payment integrity company. Last January, NMC acquired Machinify Inc. to roll into Rawlings.

NMC is a big investor with $55 billion in management assets that evidently buys with an eye to combining companies–and also isn’t afraid to back quickly out of deals that don’t work. Just ask Anne Wojcicki of 23andMe.

Gimlet EyeWe close with a Gimlety view from three health investors. MedCityNews’ recent INVEST conference hosted three investors who opined on three important topics: Raffi Boyajian, Principal, Cigna Ventures; Aman Shah, Vice President of New Ventures, VNS Health; Dipa Mehta, Managing Partner, Valeo Ventures. Your Editor’s comments follow.

  • Does every startup need to be AI-powered? Everyone may be pitching AI in their models, but it may not really mean anything. What really means something is building a good business first, then adding in AI to make it better, according to Aman Shah of VNS Health. When is AI just a buzz word and really machine learning? Much of the time. Do these companies really understand it? Or is it a money and time-burning diversion?
  • There aren’t a lot of new things to build anymore. It used to be that companies found a problem and invented a new way to solve it (ah, remember the cocktail parties of yore?), but that is not the way it works now. Where the most success is now is “creating companies with customers versus trying to create something on their own,” according to Dipa Mehta of Valeo. This is a partnership model that can go sideways if a young company is not careful. Customers may not want to pay and you remain in ‘pilot hell’.
  • Value-based care isn’t everything. For early-stage companies, “you can get upside down on your contracts very, very quickly in terms of a financial perspective,” according to Raffi Boyajian of Cigna Ventures. VBC is complicated for providers and for management service companies (MSOs)–imagine being an outsider. 

Update: Masimo’s website status and an analysis of the Sound United sale

May 22, 2025 | by

Things are apparently a lot more together for Masimo online. Their website structure has settled down since their cyberattack at the end of April brought down their websites, then by 6 and 13 May, a confusing and partial restoration [TTA 7 May]:

  • A new Masimo site at https://www.masimo.com/ that leads with Professional Health with a tab at the top for Consumer Health. Professional Health opens a series of sub-tabs leading with Technology and Products. A tab for Masimo Audio does not appear unless you open Consumer Health, leading to pages for their brands Bowers & Wilkins, Denon, and others. A new feature is at the top right with a dropdown for multiple languages/countries, including English and French for Canada, UK English, French, Spanish, and German. The footer is where the detail is for customer support, legal, investors, and internal links to pages–but not Audio. One drawback this Editor sees is that once on the foreign sites, you are unable to return to the US English website as the dropdown does not link back to the US.  
  • Entering masimo.com still redirects you to the Canadian shop domain and pages that feature the pulse oximetry device and app (SafetyNet Alert) monitoring prescribed opioid usage for difficulties in breathing (respiratory depression). Clicking on support features only ‘hearables’ and opioid safety–an educated guess is that this supports a specific Canadian initiative and is maintained for that only. Clicking on the tabs above will lead you to the new masimo.ca website pages which have no mentions or links back to opioid information. 

The investigation into the cyberattack that brought all Masimo IT systems down is ongoing. What is not known is 1) the type of the attack, 2) acknowledgement of the extent of the attack, and 3) any lasting damage to their internal systems, databases, and manufacturing systems. This Editor will be waiting to see if the new Masimo will be transparent with customers, investors, and the press as to what happened, the remediation of their systems, and securing their IT. Customers will need reassurance that their continuous monitoring and patient-worn monitoring devices are secure. Moreover, Health and Human Services’ Office of Civil Rights (HHS-OCR) requires reports of data breaches affecting or potentially affecting protected health information (PHI). I will also be waiting to see if their consumer health wearables bounce back and go back on sale (they are currently unavailable)–after winning their fights with Apple, it would be a shame if this investment is abandoned. 

More on this in Strata-gee 15 May. More good news–Editor Ted Green is recuperating and back at his desk, if only part-time. He has been invaluable for his inside looks at Masimo’s endless drama over the past few years. Thank you for the hat tip to TTA at the end of this article!

Masimo’s Sound United sale–the good and the not-so. Ted digs deep into the sale of Masimo’s ill-starred Sound United unit.  As we reported previously, Samsung’s Harman International unit picked it up for $350 million in cash, a mere one-third of its 2022 purchase price of $1.025 billion–a “shockingly low valuation for such great brands” such as Marantz, Denon, Bowers & Wilkins, Polk, Boston Acoustic, and others. Clearly, a sale was the desire of the new sheriffs running Masimo, Politan Capital, and shareholders, but a 66% haircut is still shocking. The share price rose prior to the annual meeting, but is now lower, likely from the cyberattack and uncertainty around tariffs affecting Masimo’s mainline medical device manufacturing.

Harman is the home of other storied audio brands such as Harman/Kardon, JBL, AKG, Mark Levinson, Arcam, and Revel. While a small part of giant Samsung, it is not puny in revenue, ending their 2025 at $10.2 billion. Because Strata-gee and Ted focus on the audio business, there is an extensive discussion here on how the Sound United brands will fit into the Harman portfolio and whether they will expand Harman’s business which has been rather flat. For Harman, consumer audio is their growth opportunity, from premium audio to headphones, and they just bought a quality group. The downside is that some of the brands collide in their market segments, notably B&W and Revel in the audiophile segment and Denon and Marantz versus ARCAM and JBL in audio video receivers (AVR). Interestingly, their largest segment is automotive electronics: car audio, telematics, and digital cockpits. For a more complete analysis, catch Ted’s Strata-gee article, ‘Temper Your Enthusiasm’, here.

23andMe sold to Regeneron for $256M in court-supervised bankruptcy, sans Lemonaid. And is it worth it? (Updated 27 May for delisting)

May 21, 2025 | by

Most of 23andMe bought for a lot more than one could have thought–and why? Yesterday, the board of 23andMe confirmed that they have a court-approved definitive agreement for the sale of their core genomics units to Regeneron Pharmaceuticals, Inc., a publicly traded (Nasdaq) biotech company based in Tarrytown, New York. The purchase price of $256 million includes the Personal Genome Service (PGS) and Total Health and Research Services business lines–but not Lemonaid. 23andMe will be operated as a wholly owned direct or indirect subsidiary.

The asset auction was completed on 16 May. The acquisition by Regeneron remains subject to approval by the US Bankruptcy Court for the Eastern District of Missouri, approval under the Hart-Scott-Rodino (HSR) Act, and customary closing conditions. The bankruptcy court will hold the approval hearing on 17 June. With the court’s and HSR approvals, the closing is anticipated to be sometime in Q3 this year, which is fairly rapid.

What didn’t sell to Regeneron or anyone else was Lemonaid, their DTC telehealth/prescribing business. It will be wound down “in an orderly manner, subject to and in accordance with the agreement” according to 23andMe’s press release. The lack of an approved bid for Lemonaid is puzzling, given the popularity of DTC telediagnosis and teleprescribing of various remedies stimulated by GLP-1 based weight loss. Perhaps Lemonaid’s business (or lack thereof), never reported by itself, along with its 2021 acquisition for an inflated $400 million ($100 million cash/$300 million in now-worthless stock), contributed. According to early April reports, Nucleus Genomics was interested in Lemonaid, to combine it with their own genetics marketing to add treatment to the ‘one and done’ of genetics testing, roughly along the lines of 23andMe’s original vision.  Nucleus had made a pass at 23andMe in 2024 but never got beyond the talking stage. [TTA 3 Apr]

Required in the Regeneron sale and otherwise agreed are:

  • Adherence to data privacy policies both under 23andMe’s privacy policy and ‘applicable law’. Presumably that also adheres to FTC chairman Andrew Ferguson’s statement re privacy and data security.
  • A court-appointed, independent Consumer Privacy Ombudsman. The CPO is responsible for examining the transition and the impact, if any, on consumer privacy once it is approved. Regeneron, a large and long established company, has a track record and programs in genetics research. The report is due to the court by 10 June, one week prior to the approval hearing.
  • Regeneron is offering employment to 23andMe’s remaining employees within the purchased business units. This promise may be less charitable than it seems. Two weeks ago, 23andMe filed a WARN notice with the California Employment Development Department that it plans to terminate 250 employees and close its San Francisco office by 17 June. Whether the successful sale will halt the layoffs in part or totally is not yet known. Preceding layoffs and operational closures had whittled down the employee group to an undetermined number.  SF Chronicle

Regeneron’s Aris Bara, MD, senior vice president and head of the Regeneron Genetics Center, commented on security in their statement:  “As a world leader in human genetics, Regeneron Genetics Center is committed to and has a proven track record of safeguarding the genetic data of people across the globe, and, with their consent, using this data to pursue discoveries that benefit science and society. We assure 23andMe customers that we are committed to protecting the 23andMe dataset with our high standards of data privacy, security and ethical oversight and will advance its full potential to improve human health.” Their Genetics Center has used in research deidentified data from nearly 3 million people.

Debtor-in-possession (DIP) financing continues. At the time of the Chapter 11, JMB Capital Partners had provided DIP financing of up to $35 million [TTA 28 Mar]. This continues with a second tranche of financing for an unknown amount.

Why did Regeneron make such a generous offer? What did they see? 23andMe was a company with essentially zero value, where assets and liabilities canceled each other out possibly as early as 2018 (Sergei Polevikov), three years before it went public. The only bids prior to the Chapter 11 were made by co-founder and then CEO Anne Wojcicki, with two take-private offers estimated at $12 million from her with the highest but short-lived bid of $71 million (Wojcicki with New Mountain Capital) [TTA 4 Mar]. Wojcicki, like other shareholders, has no chance of reward from this sale, unless some arrangement was made on her class of stock (purely speculative by this Editor).

The value to Regeneron is 1) more genetic data on 15 million users, minus the unknown number that deleted their data and samples as advised by multiple states or never provided consent, 2) research from terminated operations (e.g. drug discovery), and 3) survey data. 85% of 15 million users consented at the time to individual de-identified data being used for research. That research included an optional survey which added to their profiles. Once you consented to answering surveys, every time you visited the research page, you’d get questions to answer until they were all answered. How many of close to 13 million research-consenting users took the surveys? Reports deduced that deleting data and samples didn’t delete voluntary survey information.

The bottom line:  To start, Regeneron is a $66 billion company. $256 million is, basically, pocket lint. But what makes 23andMe a smart buy for them, at least on the surface?

  • 85% of 15 million users consented to have their data used for research–12.75 million. (We will leave aside the question that this was ‘meaningful consent’, as the Electronic Privacy Information Center termed it in Recorded Future News.)
  • Let’s assume that 15% took the advice of their attorneys general and deleted (or will delete) their data, or that data is somehow compromised. Subtract 1.9 million.
  • That is data on 10.85 million users–not counting the unknown amount of deidentified survey information from the data deleters that may or may not be accessible.
  • Regeneron is acquiring genetic data and some research at $23.60 per user. That raw number does not count the value of other information and research, nor of talent being acquired in the company. This Editor does not know the going rate for genetic data, but it seems inexpensive to me. 

Given that Dr. Bara and the Genetics Center have been doing research using a database of only 3 million or less, Regeneron hit a jackpot of pre-consented data. That may make Ms. Wojcicki’s prediction back in December 2024 in a CBS interview that the company would be thriving in a year and ‘transforming healthcare’ in five. It just won’t be hers anymore.

Update 27 May: 23andMe announced that will be voluntarily delisting from Nasdaq on or about 6 June. The stock was suspended from trading on 31 March, a week after it filed for bankruptcy. Oddly, Nasdaq usually files the Form 25 Notification of Delisting with the Securities and Exchange Commission (SEC) but in this case it has not, so 23andMe is filing. CNBC, 23andMe release

This story is developing.

Theranos’ revenge? Holmes’ partner Billy Evans founds a startup for diagnostic testing, denies it is ‘Theranos 2.0’; Holmes loses Federal rehearing appeal.

May 14, 2025 | by

The technologies may differ, but the functions remain the same. Haemanthus, a biologic testing startup founded by hotel heir Billy Evans—widely recognized as Elizabeth Holmes’ partner and father of her two children—has suddenly and bumpily emerged–kind of–from stealth mode. Coverage in the New York Times and NPR has drawn unfavorable comparisons to Theranos’ failed blood-testing venture and highlighted Evans’ connection to Holmes, who is currently serving an approximately 11 year sentence at the women’s Federal Prison Camp in Bryan, Texas.

Haemanthus, named after the Latin name for the blood lily plant, has developed a prototype box-like device (right) that uses Raman spectroscopy, using lasers, photonics, and other light technologies, coupled to AI-based software that analyzes biologic samples. The initial diagnostics will focus on pet diseases and the veterinary market before entering the human market, with the machine analyzing blood, saliva, and urine for biomarkers such as glucose and hormones. Deep learning models based in the software would then have the ability to detect diseases such as cancer and infections. Raman spectroscopy is already used in human diagnostics to analyze biomolecules like proteins, DNA, and lipids, as well as studying cell structure, tissue composition, and cellular processes. The company, in its investment materials, intends to develop a stamp-size, wearable device for humans.

The company, currently backed by Evans, has raised money from friends, family and other supporters so far, according to one of the sources quoted by NPR. The NYT stated that was a $3.5 million raise. This spring, Evans has been reaching out to other investors in Austin, where he lives with the children, and the Bay Area. The goal is eventually $50 million. To expand to humans after pets, their investor materials state that it will take three years and a total raise of $70 million.

James Breyer of the eponymous Breyer Capital was approached for investment but turned it down for the same reasons as he did Theranos, twice. Michael Dell also passed, according to the NYT. A local investor the NYT identified is Matthew E. Parkhurst, an investor who is also the part owner of a Mediterranean tapas bar in downtown Austin.

The NYT article brings up regulatory oversight. The USDA, the US Department of Agriculture, regulates veterinary medicine and diagnostics. Yet Mr. Evans sent to the NYT a partially redacted document from the USDA that said, “It does not appear that the proposed product is within the regulatory jurisdiction” of the Center for Veterinary Biologics, which is a part of the USDA.” 

What has created the most news is that the NPR article explicitly stated that Elizabeth Holmes was advising Evans on the startup, without specifics on what and how. The company reportedly has about 12 employees, some of whom worked at Evans’ prior venture, Luminar Technologies, a developer of autonomous vehicle sensors, according to the company’s patent and Delaware incorporation paperwork.

The two articles generated enough stir that Haemanthus took to X on 11 May to state in several tweets (samples below):

We’re Haemanthus. Yes, our CEO, Billy Evans, is Elizabeth Holmes’ partner. Skepticism is rational. We must clear a higher bar. When @nytimes contacted us, we invited them: see our lab, tech, and team. They declined. The headline was already written. Our reality inconvenient.
2/This is not Theranos 2.0. Theranos attempted to miniaturize existing tests. Our approach is fundamentally different. We use light to read the complete molecular story in biological fluids, seeing patterns current tests can’t detect. Not an improvement. A different paradigm.
3/ Setting the record straight. Elizabeth Holmes has zero involvement in Haemanthus. We’ve learned from her company’s mistakes, but she has no role, now or future. NYT & @NPR implied otherwise. We’ve stayed quiet to build real tech, not conceal. Demonstrating, not promising.

Fast Company and the Mercury News also review Haemanthus’ sudden emergence. Hat tip to HIStalk 5/12/25

Elizabeth Holmes will likely be remaining in Bryan for the remainder of her sentence. The Ninth Circuit US Court of Appeals rejected her petition last week to have a full en banc or original panel review of her fraud conviction appeal. The District Court’s sentence of both Holmes and Sunny Balwani were upheld in February [TTA 5 Mar]. “The full court has been advised of the petition for rehearing en banc, and no judge of the court has requested a vote on whether to rehear the matter en banc,” the panel said in its short, four-sentence order. Unless the US Supreme Court issues a highly unlikely writ of certiorari based on her petition, this is the end of her long-running courtroom drama. Her 11 year sentence is at this point at about two years served with additional reductions of two years and four months, now with a release date of 18 February 2032.  There is also a small matter of Holmes and Balwani paying back $452 million in restitution for their fraud. Courthouse News Service, CNBC  

The only discussion of Balwani’s separate petition for a review (Court Listener) has been on Reddit by legal maven mattschwink. Balwani’s argument for a rehearing is based upon an assertion that a witness, investor Brian Tolbert, lied on the stand about being told by Holmes on an investor call that the Theranos machines were being used on Afghanistan medevac helicopters. The investor call was not played, nor the testimony brought up at Balwani’s trial, which based on precedent may constitute withholding of exculpatory evidence. In his view, this is likely not enough to constitute a falsehood by the prosecution.

Regardless of whether Haemanthus’ denials of Holmes’ “advisory services” are true, it’s unlikely that Holmes could provide substantial guidance to the company beyond brief, casual talks during Billy Evans’ visits—especially considering whether such activities are allowed while residing in an FPC.

News roundup: Omada Health files for IPO, UPMC-Redesign partner on chronic pain management, OK and PA AGs warn 23andMe users to delete data, Verily to build Parkinson’s dataset, what payers paid for exec security

May 13, 2025 | by

Omada Health’s IPO filing kicked off the week’s news. The chronic condition care management company is the second with a major IPO this year, stirring a dormant healthcare market. There aren’t a lot of offering details in the 9 May SEC Form S-1 registration and preliminary prospectus, but the IPO will launch on Nasdaq Global Markets under the symbol OMDA. There is no disclosure of timing, number of shares to be offered, or pricing. Their prior funding since 2011 is over $528 million through a Series E and debt financing, with lead investors including Andreessen Horowitz, Norwest Venture Partners, Wellington Management, New Enterprise Associates, and Founder Collective (Crunchbase).

Omada’s focus on ‘bending the disease’ curve via a ‘between-visit care model’ for diabetes, obesity, hypertension, and MSK patients has met with success. With a listing of 2,000+ customers and over 679,000 total members enrolled in one or more programs, their 2024 revenue grew 38% from $122.8 million to $169.8 million in 2023, with Q1 2025 by 57% to $55.0 million from 2024’s $35.1 million. Revenue does not mean profit, with net losses of $67.5 million in 2024 and $47.1 million in 2023, with $9.4 million in losses during Q1 2025 reduced from $19 million in Q1 2024. CNBC, Mobihealthnews, FierceHealthcare

Larger and MSK-focused competitor Hinge Health announced its own IPO back in mid-March [TTA 14 Mar] via a SEC S-1 filing and preliminary prospectus, but sent out word that it was postponing by April [TTA 8 April]. With markets doing much better, it’s anticipated that their debut on the NYSE will be this summer. Their funders which have invested over $826 million since 2012 are undoubtedly eager for ROI.

The Redesign Health-UPMC Enterprises partnership launches Glimmer Health. The new company supports primary care physicians to manage their patients’ chronic pain. Chronic pain affects 25% of, or 70 million, US adults. It addresses the lack of resources that primary care practices generally lack to manage the chronic pain of their patients. The Glimmer Health platform integrates advanced medical expertise, behavioral health support, and seamless care coordination via specialized nurse-practitioners, care managers, and social workers to coordinate care plans and guide patients. The company grows out of UPMC’s pain clinics and 12 years of experience in comprehensive assessment and multimodal treatment approaches. Ajay Wasan, M.D., M.Sc., professor of anesthesiology and psychiatry at the University of Pittsburgh and vice chair for pain medicine at Pitt and UPMC, who leads the clinics, is now medical director of Glimmer Health. CEO is Alissa Meade, previously CEO of Together Senior Health, sold last year to Linus Health according to her LinkedIn profile. UPMC release

“Delete Your 23andMe Data!” say Oklahoma’s and Pennsylvania’s Attorneys General. Oklahoma’s AG Gentner Drummond finally got the news (via the wind whistling down the plains?) along with Pennsylvania’s AG Dave Sunday that 23andMe went bankrupt in March and it, or parts, are up for sale. The two AGs advise citizens of their respective states to delete their data, instruct 23andMe to destroy their test sample, and revoke research consent for their data. Well, the rush is over at least…it’s better late than never. The instructions are clear, though their efficacy with 23andMe in actually removing it, including survey data, versus following FTC policies on securing the data, is in reasonable doubt [TTA 3 April]. After all, user genetic data and information is all that 23andMe has to sell.  Oklahoma AG’s release, The Oklahoman, Levittown (PA) Now

Alphabet/Google’s Verily health data/AI unit to build a Parkinson’s molecular research dataset. With a $14.7 million grant from the Michael J. Fox Foundation (MJFF), Verily will be building what they term is a comprehensive molecular dataset to advance Parkinson’s disease research. The dataset is based on data previously collected as part of the Personalized Parkinson’s Project (PPP), a collaboration with the Radboud University Medical Center, in a two-year longitudinal study of 520 people with Parkinson’s. It included detailed clinical histories, data from the Verily Study Watch, imaging data, and matched biospecimens such as blood and cerebrospinal fluid. It will be made publicly available to researchers through Verily’s Workbench solution. According to Verily’s release, the molecular data includes:

  • A comprehensive, high-resolution immunogenomic data resource to fuel research on the immune system’s association with Parkinson’s disease pathogenesis.
  • Whole genome sequences for those that have consented to enable discovery of genetic factors associated with different aspects of Parkinson’s disease.
  • Metabolomic and alpha-Synuclein data, which have shown promise for assessing and predicting disease activity and stages.

No deadline was disclosed. Mobihealthnews

How much does it cost to protect healthcare corporate executives? Executive security is one of those hidden costs that is not always easy to determine. Some receive it, others do not, at least for public consumption or paid for by the company.

  • UnitedHealth Group in 2024 totaled $1.7 million in security costs.  The largest cost was for executive protection for Optum CEO Heather Cianfrocco, $926,989. CEO Andrew Witty’s security costs, not included in the $1.7 million, totaled $150,951. He was also required to use the company’s corporate aircraft for business travel (cost not itemized) and was encouraged to do so for personal travel, should the plane be available. Witty did not use it for the latter in 2024. Brian Thompson unfortunately received no security.
  • CVS Health did not itemize direct security costs for CEO David Joyner in 2024. His disclosed expenses from October on were $15,787 on personal use of the company plane; $7,713 for the use of a company car and driver; and $82,603 on home security. Personal travel expenses using company resources must be reimbursed over $250,000 (!). Previous CEO Karen Lynch racked up expenses of $242,051 on personal aircraft use; $95,199 on the use of a company car and driver; and $44,645 on personal protection. Security totaling $56,610 was extended to her for six months after she was replaced by David Joyner.
  • Cigna’s CEO David Cordani is required to use the company aircraft for business and personal travel. The latter totaled $231,008 in 2024. Spending for executive protection was not disclosed. Cigna does not consider security a perquisite for executive compensation purposes. There is no further information about executive security.
  • Elevance Health lists executive security as “other perquisites” and apparently it is modest. For CEO Gail Boudreaux, they spent $93,387 and for Peter Haytaian, president of Elevance’s Carelon unit, $36,213. Boudreaux also was permitted limited use of corporate aircraft for up to 50 hours of personal flight time each year not to exceed a total of $199,000 in costs. 
  • Centene Corporation discloses few costs around executive security, only providing it to CEO Sarah London until December 2024. Her 2024 security totaled $69,133. Interestingly, CFO Drew Asher received $98,358 in protection services and COO Susan Smith $33,244. London also had $143,854 in expenses for personal aircraft usage. Centene policy is that the aircraft is available for security reasons but did not disclose whether London or other executives were required to use the plane for business use.
  • Finally, Humana’s only disclosures around security was for the perquisite of personal corporate plane usage, and it’s limited. CEO Jim Rechtin incurred $36,166, with former CEO Bruce Broussard spending $37,434 .

FierceHealthcare’s Paige Minemeyer did the dig.

This just in: UnitedHealth Group CEO Andrew Witty steps down immediately, replaced by former CEO Stephen Hemsley (updated 15 May)

May 13, 2025 | by

This was drastic. This morning (13 May), UnitedHealth Group announced that CEO Andrew Witty is stepping down immediately “for personal reasons” which are not specified. Replacing him is former (2006-2017) Stephen (Steve) Hemsley, who will remain chairman of UHG’s board of directors. Mr. Witty has been named as “senior adviser to Hemsley” which is a typical resignation/separation workout for CEO/president departures, indicating continuity to soften the immediacy of the change.

The quotes in the release are also typical of these ‘friendly’ transitions. Mr. Witty:  “Leading the people of UnitedHealth Group has been a tremendous honor as they work every day to improve the health system, and they will continue to inspire me.”  Mr. Hemsley: “We are grateful for Andrew’s stewardship of UnitedHealth Group, especially during some of the most challenging times any company has ever faced. The Board and I have greatly valued his leadership and compassion as chief executive and as a director and wish him and his family the best.

Mr. Hemsley is 72. There is no mention in the release that he is interim or of an executive search.

Sir Andrew Witty, aged 60, is British, knighted in 2012 for his leadership of GlaxoSmithKline. He became CEO of UHG in February 2021 after three years as Optum CEO starting in 2018. Previously, he was CEO of GSK from 2008 to 2017. Witty led the National Health Service’s Accelerated Access Collaborative for a year after, 2017-2018, and had been chancellor of the University of Nottingham while heading GSK 2013-2017. Certainly he experienced many challenges during his UHG/Optum tenure that accelerated in the past two years: the Covid pandemic, the assassination of Brian Thompson, Change Healthcare’s massive cyberattack that disrupted the entire provider payment structure for months and exposed patient data, and the continuing Federal opposition to the Amedisys home health buy. Notably, Witty was one of the pioneers aggressively pursuing the ‘payvider’ structure. According to STAT News, by 2024 almost 10% or 90,000 US physicians were affiliated with Optum, either via 10,000 owned practices, or 80,000 affiliated through various value-based care arrangements.

At 8am EDT, UHG held an investor call, so there will be developing news from it. At the very bottom of the release is that UHG has now suspended its revised its 2025 outlook due to high utilization costs: accelerated care activity, more benefit offerings, and higher costs associated with Medicare Advantage beneficiaries. These primarily affect the UnitedHealthcare unit but also have knock-on affects on the non-insurance business (25% of the company) that presumably Mr. Hemsley and company are calculating. Also FierceHealthPayer

An exceedingly tart take on Mr. Witty’s tenure at UHG was posted today by Sergei Polevikov today in his ‘AI Health Uncut’ Substack, ‘UnitedHealth Bleeds, CEO Witty Steps Down’. In his view, Witty left a trail of damage during his tenure that includes far more than my challenges above, that include discrimination, claims denials, class action lawsuits around earnings manipulations, and the ever-popular insider trading–but UHG always seems to get away with minimal damage. Till today. UHG stock closed down today (Tuesday 13 May) 22% from its price on Monday.

A thought among many is that UHG should be broken up as a healthcare monopoly–the end game of integration. That seems to be a lead taken by Substack commenters and on other social media. MedCityNews takes a look at the impact today. And almost as an aside–what will be the future of top management identified as part of the Witty tenure? Exits done with prejudice at the top are usually the start.

Update 15 May: This Editor underestimated Mr. Market’s continued agita. The share price of UnitedHealth Group (UNH) has gone from one month ago at $585 (16 April 4pm close) to 11:07am today (15 May) at $258 and change. That is a slide of 56%. What is worse is since that the CEO changeover was announced on Tuesday, the price has continued to slide from $311 to today, a 17% drop. The management change did not stabilize the price even in a bouncy market. For some reason unknown to the general audience and certainly to us chickens, UNH is being pummelled. Hard. We will see what happens next week.

Best wishes to Strata-gee’s Ted Green on a fast recovery!

May 13, 2025 | by

Our expert on all things Masimo is down, but certainly not out. Last Monday (5 May) Ted Green, the founder of audio business website Strata-gee, while out power walking, was hit by something (spaceship, meteorite–your Editor will let him tell you), and wound up hospitalized for a few days with a variety of injuries. He’s now recuperating at home. Our very best wishes for his recovery from multiple bang-ups, bruises, and a nasty shoulder.

If you like audio, Ted’s website is a must-read for the business behind the brands. Even if you are old-school audio like me, you’ll find it fascinating and written from the perspective of a real Business Insider. 

He digs deep. Right before his ‘airborne’ event, Ted’s last Masimo story for Strata-gee dated 1 May investigated what was going on with their website. I had casually mentioned to Ted that the Masimo website was down after picking up his analysis of former CEO Joseph Kiani’s claim to 13.2% share ownership. Ted is the one who investigated that Masimo’s website remained down with no explanations that made sense and it had spread internally. He was the first to bring to everyone’s attention on the healthcare side that Masimo Had A Problem, and it was bigger than a temporary outage. Commenters weighed in with updates. Masimo finally admitted in their SEC Form 8-K on 6 May that they had a cyber incident that affected most of their systems, including manufacturing and customer service. The story developed last week as you’ll see here—while Ted was in the hospital–as well as the Sound United sale.

If you’ve liked our coverage on Masimo–and the ‘hits’ indicate that you, our Readers, have–you can thank Ted.

Add your good wishes to comments under his story on his ‘event’. (BTW, the care he received at JFK Hospital in Edison, New Jersey was excellent.)

Short takes: HHS forms NIH/CMS autism data project; Oscar Health beats Street w/Q1 $275M net; Centene’s $1.3B earnings; UHG has class action suit on earnings, 1K AI apps in production; Cedars-Sinai and Redesign Health partner on development; FDA, Lilly, Novo Nordisk win vs. compounders

May 8, 2025 | by

NIH, CMS to create autism data platform to enable research. The National Institutes of Health (NIH) and the Centers for Medicare & Medicaid Services (CMS), both under Health & Human Services (HHS), are partnering to enable NIH to build a real-world data platform. The purpose is to advance research around the root causes of autism spectrum disorder (ASD) that now affects 1 in 31 US children, according to HHS. The data gathered include claims data, electronic medical records, and consumer wearables focused on Medicare and Medicaid enrollees with a diagnosis of ASD. The first step establishes a data use agreement under CMS’ Research Data Disclosure Program.

Researchers will focus on autism diagnosis trends over time, health outcomes from specific medical and behavioral interventions, access to care and disparities by demographics and geography, plus the economic burden on families and healthcare systems.

The pilot program, intended to be a model for other conditions, will create a secure tech-enabled mechanism to enhance data sharing with timely, privacy and security compliant data exchange.  HHS release, FierceHealthcare

Payers, other than UnitedHealth, had an upbeat Q1.

  • Oscar Health, the feisty provider of ACA exchange individual and small group plans, notched a Q1 net income of $275 million with adjusted EBITDA of $329 million on revenue of $3 billion, up 42% from Q1 2024. Membership exceeded 2 million, up 41% from prior year. The ever-feisty CEO Mark Bertolini (center) railed on the earnings call against a shortened Federal enrollment period cutting off at 15 December versus January, as well as other enrollment changes. Oscar release, FierceHealthcare
  • Centene Corporation, one of the main rivals to UnitedHealth Group and a significant player in Medicaid state plans, had a decent Q1 turnaround with $1.3 billion in earnings and a  17% jump in premium and service revenues to $42.5 billion from $36.3 billion in Q1 2024. Their current membership versus Q1 prior year was down about 500,000 with the losses in Medicaid and traditional Medicare. They also increased their 2025 premium and service revenues guidance range by $6.0 billion to a range of $164.0 billion to $166.0 billion due to ACA exchange plans and Medicare Advantage (MA) revenue forecast performance. However, it’s projected by analysts that Centene will exit the Medicare Advantage market after this year in Alabama, Massachusetts, New Hampshire, New Mexico, Rhode Island and Vermont–about 3% of MA membership. CEO Sarah London criticized proposed cuts to Medicaid. Centene release, HealthcareFinance
  • UnitedHealth Group, after an anemic Q1 financial report driven by increased utilization and rising costs, cut its 2025 earnings per share (EPS) guidance by 12% to between $26 and $26.50 (Healthcare Dive). This just in: a shareholder group filed in Federal Court in the Southern District of New York on violations of securities laws affecting share price. It centers on the 2025 financial guidance provided prior to Brian Thompson’s assassination and how group CEO Andrew Witty did not account for: 1) the impact of that act but doubled down on the EPS forecast, 2) the increased scrutiny around the company for denials of claims even prior to the act, and 3) the general ill will generated as more information reached the general public. The affected group are those shareholders purchasing UHG stock between 3 December 2024 and 16 April 2025. Healthcare Dive, SDNY filing
  • Meanwhile, UHG has doubled down on AI development, totaling over 1,000 apps. According to a report in the Wall Street Journal, the company has these apps in production in their health delivery and pharmacy units, transcribing conversations from clinician visits, summarizing data, helping process claims, powering customer-facing chatbots, and in engineering to write software. According to chief digital and technology officer Sandeep Dadlani, half of the apps use generative AI and the remainder a more “traditional” form, without explanation of “traditional”. According to Dadlani in the article, “AI has a role to play in the claims evaluation process, but it will never be allowed to deny a claim”. Software, not necessarily AI powered but usually rules-based or using algorithms, ‘auto adjudicate’ 90% of UHG claims. UHG was sued in Federal Court as far back as 2023 in using an AI-powered application to evaluate and deny claims.

Redesign Health gets freshened up with a Cedars-Sinai partnership. Redesign Health is a combination funder and company builder which has launched over 60 healthcare-related companies, some clear successes such as Calibrate (weight loss) and Jasper Health (cancer care navigation), with others on the development curve such as Vault Health and Uptiv Health. They announced a partnership with the Cedars-Sinai health system in Los Angeles to add their clinical expertise and innovative research. Other strategic value additions through the new partnership are tapping into funding support, access to clinical environments within Cedars-Sinai’s network, and their dataset for validation of technologies and design. Redesign release

And in the pharma compounders versus Big Pharma war, the former have lost two battles. The compounder’s trade group, the Outsourcing Facilities Association (OFA), had separate lawsuits filed in Texas to force the FDA to reclassify both tirzepatide and semaglutide as still in shortage, which would permit compounding pharmacies to produce weight loss drugs with these active ingredients. The Texas judge found yesterday (7 May) for both FDA and Eli Lilly, the producer of Zepbound, that tirzepatide was no longer in shortage, which closed the door on the OFA. At the end of April, the same Federal judge ruled against the continued compounding of semaglutide, the active drug in Novo Nordisk’s Wegovy and Ozempic [TTA 27 Feb]. 22 May is the end date for the large compounding pharmacies for semaglutide, while smaller state-based compounders must cease immediately. Biospace 8 May, 25 April  Novo Nordisk’s new partnerships for Wegovy-based weight loss prescribing: TTA 1 May, 8 May

News roundup: WeightWatchers in 45-day prepackaged Ch. 11, Neuralink BCI successful in ALS subject, telehealth VR reduced TMD pain–study, AliveCor maxes up KardiaMobile 6L, TytoCare-Allina Health partnership, UHG-Amedisys divest some more

May 8, 2025 | by

WeightWatchers (WW) unburdens itself of debt in a prepackaged Chapter 11 bankruptcy. The reorganization under the bankruptcy filed yesterday in the US Bankruptcy Court for the District of Delaware will take $1.15 billion of a total $1.62 billion (as of March 2025) in debt off their books while providing it with enough capital to reemerge in an estimated 45 days or around 1 July, or less. The Chapter 11 plan retains $175 million from their revolving credit facility, reduces its annual interest payments by $50 million, and extends their debt maturity dates. With bankruptcy court approval, their lenders receive new secured debt and equity. In the company statement, CEO Tara Comonte expressed confidence about WW’s future:  “The decisive actions we’re taking today, with the overwhelming support of our lenders and noteholders, will give us the flexibility to accelerate innovation, reinvest in our members, and lead with authority in a rapidly evolving weight management landscape.” The first day hearing is on 8 May. WW release, Kroll case information

WW entered the GLP-1 prescription weight loss drug race relatively late, last October, with compounding semaglutide, which boosted their fortunes for a time. They acquired telehealth provider/clinical weight manager Sequence in mid-2023 [TTA 2 Mar 2023], then formed the WeightWatchers Clinic program by December [TTA 21 Dec 2024] Results this year were projected at 140-160,000 subscribers. But that was not enough to correct WW’s problems, which were a profound loss of total subscribers: in Q1 2025 3.4 million subscribers versus 4 million in Q1 2024, with 2.8 million of them. Stock had traded on Nasdaq for some months below $1, with today’s trading below $0.50. Shares had lost 71.9% over the past 12 months, making it a (money) loss for nearly all common stock holders. Morningstar

The (physical) weight loss segment now dominated by Hims & Hers, Ro, LifeMD–now with prescription deals for Novo Nordisk’s Wegovy—and other telehealth providers and teleprescribers such as Teladoc, FuturHealth, RemedyMeds, Eden, and many others, made WW a latecomer. Even CVS Caremark got into the partnering act when it switched over to Wegovy from Lilly’s Zepbound in its standard formulary. This move may lure more members to its weight management program. As with Ro and LifeMD, the lowered cash pricing is $499/month. Healthcare Dive. For WW, is this a lasting cure or just kicking the can down the floor?

Brain-computer interfaces (BCI) notch a big win. At the end of April, Neuralink confirmed its third successful implant, this one in an ALS patient, Brad Smith. The disease rendered him non-verbal, on a ventilator, and paralyzed below the shoulders. With the Neuralink brain implant, about the size of five quarters, he can now communicate verbally through his MacBook Pro and play video games only with his thoughts–essentially telepathy. He created a video using a voice cloned from previous recordings when he could speak, and using a mouse to create the narration. Previously, he used an eye gaze controller to communicate. This is truly miraculous and flying under the radar. Mobihealthnews, RedState  The previous recipients, Noland and Alex, are both paraplegics[TTA 21 Feb 2024].

Next up is Blindsight, which Elon Musk has said that will be tested in humans by the end of 2025 [TTA 10 Apr]. There is also a Canadian clinical trial, the “Canadian Precise Robotically Implanted Brain-Computer Interface” (CAN-PRIME) for subjects with tetraparesis or tetraplegia resulting from cervical spinal cord injury or the neurological disease ALS [TTA 27 Nov 2024].  A competitor of Neuralink, Precision Neuroscience, closed a Series C at $102 million last December.

A telehealth virtual reality (VR) solution effective for reducing chronic pain. A study published last month in Nature/NPI Digital Medicine demonstrated significan reductions in a 54-participant group, with some receiving telehealth-based immersive VR intervention on chronic orofacial pain (temporomandibular disorders or TMD) versus an audio-only (MP3) same-content control intervention and non-intervention on five-day ‘waves’. Pain intensity, unpleasantness, anxiety, sleep disturbance, and mood were monitored. There was significant reductions achieved with the immersive VR on pain intensity and other factors, with lesser results achieved with the MP3 intervention. The study directionally confirms results in other studies on lower back pain and other pain studies. Researchers were based in the University of Maryland School of Medicine, School of Nursing, and Towson University.

Short takes:

AliveCor is adding to its new KardiaMobile 6L Max KardiaAlert. KardiaAlert is now integrated into KardiaCare, a subscription service for the KardiaMobile 6L Max AI-assisted ECG monitor. The consumer purchase of the KardiaMobile 6L Max includes the device and a one-year subscription to KardiaCare, which now includes the KardiaAlert feature. The six-lead KardiaMobile 6L Max identifies up to 20 arrhythmias with a clinician review. Introductory price is $169. Release

Allina Health deploying TytoCare at 12 urgent care locations. The Midwest health system is adding the TytoCare Pro Smart Clinic service to a dozen of its urgent health locations in order to shorten wait times and offer additional remote treatment. For Allina, this allows their urgent cares to see more patients, offer hybrid care, and additional services such as heart and lung exams (featuring AI-driven wheeze and crackle detection), throat and ear assessments, skin exams and body temperature measurements. Allina Health, with hospitals in Minnesota and western Wisconsin, already uses TytoCare remote monitoring in hospital settings. TytoCare release

UnitedHealth Group and Amedisys persist. The long-running and DOJ-challenged acquisition by UHG of Amedisys home care is once again trying to remove the anti-competitive stumbling block by divesting more home care and hospice operations, this time to BrightSpring Health Services and Pennant Group. This was disclosed in Amedisys’s SEC Form 8-K. It is contingent of course on the closing of the UHG buy. BrightSpring is based in Kentucky and Pennant in Idaho. Pennant’s own SEC filing lists their purchase price as $102.5 million. The total number of operations to be sold is not disclosed. UHG and Amedisys extended their runway on closing to 31 December in January.  Healthcare Dive, Home Health Care News

The Department of Justice has been prominently blocking the $3.3 billion UHG acquisition, announced in what seems an eon ago in June 2023, on anti-trust grounds nearly immediately after the Hart-Scott-Rodino Act (HSR Act) premarket notification was filed, but most recently in a civil lawsuit filed last November in District Court in Maryland. The DOJ was joined by the Attorneys General of Maryland, Illinois, New Jersey, and New York. It alleges elimination of competition, harm in over 100 markets, falsely certifying compliance with HSR Act requirements, withholding documents, and much more. Additional background on that lawsuit is here. As this Editor said when UHG won in Federal court on acquiring Change Healthcare, a win they have 190 million reasons why to regret, “DOJ has a long memory, a Paul Bunyan-sized ax to grind, and doesn’t like losing.”

Breaking–Masimo Mystery SOLVED–cyberattack, website down for days, new websites up–and where’s the public explanations? Sound United sold.

May 7, 2025 | by

The Masimo website goes offline–coinciding with their investor meeting. When this Editor posted an article on former Masimo CEO Joseph Kiani’s “beneficial ownership” SEC filing (Schedule G/A, for amended) last Tuesday late evening (29 April), as we generally do, we included a link to the main corporate website. I noted the following day that the home page was down and displayed a ‘performing some maintenance’ message. This is not especially unusual in the evening, as our Readers know, but unusual to continue beyond that.

Checking Wednesday, the website remained down. Yet their consumer-direct sales ‘Shop’ and Investor Relations pages remained up if you linked to them directly, though the medical monitoring smartwatches listed on the shop page were ‘coming soon’. Consulting with Ted Green of Strata-gee, who follows Masimo from their now-sold audio business (see update below) and an excellent source for us, he followed up as it remained offline into Thursday. Press contacts there were unresponsive. An “inside source” provided the only answer obtainable, which was ‘we’re working on it’. Ted called their main line–and received a recorded message that “All circuits are busy, please try your call later”. Calling Customer Service as a final attempt, even they did not know what was going on with the website…and, while phones were working, their internal systems had gone down. Finally, late on Thursday, Ted received an email from a PR representative who pointed him to their changed message on their website stating that the website was down and that they were working to resolve the issue. Ted relates this far more entertainingly in his Search for Information. 

Certainly an unusual and embarrassing situation for a tech-based medical device company, especially one that, at least for investors, is backing up its claims of a new transparency to the max. (See their working Investor Relations page for their postings of their Q1 financial presentation, webcast, and press release). For those of us in the business, an extended ‘offline’ means that we automatically think ‘hack’–another victim of cyberattack or ransomware.

And that is exactly what it turned out to be. Masimo’s SEC Form 8-K filed yesterday led with the following:

On April 27, 2025, Masimo Corporation (the “Company” or “we”) identified unauthorized activity on the Company’s on-premise network. Upon detection, we activated our incident response protocols and implemented containment measures, including proactively isolating impacted systems. We promptly commenced an investigation and are actively working to assess, mitigate, and remediate the incident with the assistance of third-party cybersecurity professionals. The Company has also notified and is coordinating with law enforcement.

As a result of the incident, certain of the Company’s manufacturing facilities have been operating at less than normal levels, and the Company’s ability to process, fulfill, and ship customer orders timely has been temporarily impacted. The Company has been working diligently to bring the affected portions of its network back online, restore normal business operations and mitigate the impact of the incident.

The investigation of the incident remains ongoing, and the full scope, nature, and impact of the incident are not yet known. At this time, the Company believes that the incident appears unrelated to and is not affecting the Company’s cloud-based systems.

Comments below Ted’s Strata-gee article, from an anonymous commenter, said that the FBI had visited the Masimo Irvine headquarters, which lines up with the last sentence of the first paragraph. The filing confirms that the intrusion was detected on Sunday, 27 April–which does not mean that they started then, just that it was found.

It is also evidently broad and deep, not only affecting the website and internal systems used by customer service, but also internal systems used in manufacturing and at all Masimo locations are ‘locked down’ in the words of another commenter. It’s serious when orders can’t ship and most employees are reportedly being told to stay home for the better part of the week, according to commenting insiders.

According to the report in FierceBiotech, CEO Katie Szyman stated that the cyberattack will not dent the company’s financial guidance for the year.

What’s not here: what Masimo is doing to inform customers of the outage, how long it will be, changes in delivery dates of devices, and if performance of any devices has been affected.

Back to the ‘restored’ websites:

A questionable restoration of their website(s). As of Tuesday (6 May, 9 pm EDT), the Masimo website is back live–but it depends on how you enter the URL! There are apparently two websites: a finished corporate and professional product website with a Personal Health section under construction with placeholders, but other live web pages which are accessible, apparently mainly for Canada–or for US under construction or discarded designs. 

  • Masimo.com entered as this link (https://www.masimo.com) features a home page with Masimo SET and their professional products such as SafetyNet Alert, a ‘cloud-based telehealth platform’. It is a tidy, respectable, and up-to-date corporate website featuring the full line of Masimo’s many professional monitoring products. Links in header and footer are standard, including corporate information and links to investor relations. Where it is not complete: clicking on Personal Health in the footer links will take you to a URL with a path that indicates a US ‘Shop’ page but is titled Support–Masimo Customer Service. Links for four individual product areas, including ‘Health at Home & Opioid Safety’, lead only to customer support information and a repeated, annoying cookies permission popup. This website appears finished except for Personal Health.
  • But if you enter only Masimo.com, the URL immediately redirects to a Canadian shop domain page and path that features how their pulse oximetry device and app (SafetyNet Alert) can monitor prescribed opioid usage for difficulties in breathing (respiratory depression) which can prove, from their tragic case study example, fatal. The new Halo app can be downloaded on the Apple App Store or Google Play. Want to find out more about it? It goes to a page that no longer exists. 
  • Clicking on the Personal Health tab at the top, it links to another Canadian ‘Shop’ domain page highlighting that their noninvasive monitoring used by hospitals is now available for home use, but the only item for sale is the Denon PerL Pro earbuds with a Canadian dollar price. No mention of SafetyNet Alert. 
  • To find their personal health devices, one has to go to the links on the footer under Customer Service>>Track Order’. This takes you to the US ‘Shop’ path page. There three ‘Health at Home’ devices are featured without descriptions. Clicking on the ‘Shop All’ button takes you to a US path page featuring the MightySat home pulse oximeter, the W1 smartwatch, and the RadiusT temperature tracker. Unfortunately, clicking on the ‘Find A Retailer’ button on each individual page leads you to a 404 page–‘That Page No Longer Exists’. 
  • These pages are in layout and style unlike the corporate website. Formats vary all over the lot.
  • On other pages linked in the footer, it appears there are some new pages, along with old web pages restored without updating.
  • Extremely annoyingly, on every page or return to a page, a permission popup for accepting cookies blocks the page until you accept or decline.

Where’s the project/marketing manager supervising this? Again, it’s embarrassing for a digital health technology company, even post-cyberattack, to have this level of visible website disorganization, coupled with days offline and reports of complete disruption. The best approach would be a minimal website until a finished website, working on all URLs and paths, is completed. Other than the main corporate website, the ‘Canadian’ and other pages should be offline until discarded or finalized.

As of 13 May, there are still problems and ‘holes’ in the websites, with the tracking the same.

Update–Sound United sold. Also announced yesterday (6 May) was the $350 million cash sale of Sound United to HARMAN International, a wholly-owned subsidiary of Samsung Electronics Co., Ltd. The definitive agreement release did not mention staff transitions. HARMAN’s audio products include Harman Kardon, JBL, and AKG. The sale is scheduled to close by the end of 2025. The sale was mentioned several times during the Q1 earnings call but HARMAN was not mentioned. The sale is not included in Masimo’s 2025 forward outlook, versus the considerable impact of tariffs on their imports from China and Malaysia.

Sound United’s sale for a third of its purchase price is the finale of a very big, very bad billion-dollar bet made by Joe Kiani and his management team in 2022. The ‘vision’, such that it was, was that the audio brands would leverage consumer health wearables into retailers such as Best Buy. It didn’t. The buy immediately tanked the value of the company by an estimated $5 billion in one day, and kicked off a long trail of investor unrest that resulted in a takeover by Politan Capital and the ouster of Kiani and his board members last year. The rest, as they say, is history. (And Joe Kiani is likely enjoying a good bottle of vintage Pol Roger and shivering with schadenfreude.) Wall Street Journal

This just in: Teladoc acquires UpLift for $30M, bolstering struggling BetterHelp telemental health; Q1 revenue down 3%

May 1, 2025 | by

Teladoc closed out a down Q1 with buying UpLift. The $30 million acquisition is clearly strategic in bolstering BetterHelp, their floundering direct-to-consumer mental health provider. It closed on 30 April, the same day as Teladoc’s Q1 results call. UpLift was bought in an all-cash transaction, with up to $15 million in additional contingent earnout consideration. UpLift’s 2024 revenue was approximately $15 million. It is small compared to BetterHelp’s Q1 revenue of $239.9 million, which fell 11% versus Q1 2024 and continuing a decrease from Q4 2024, when its revenue was $250 million, after sinking through the entire fiscal year. 

What UpLift adds is insurance-reimbursable mental health coverage with all major commercial insurers, including Medicare and Medicaid, something that the cash-pay-only BetterHelp lacked. It also adds coverage of 100 million lives and a network of over 1,500 mental health providers. According to the release, BetterHelp will work with its customers to help them access insurance coverage. Their network providers will “have an opportunity to be considered for inclusion in the benefits coverage network, based on the respective requirements, needs and interests”, which is an interesting way to present it.

Teladoc said in the release  and on the earnings call that UpLift will be reported under BetterHelp’s results, although it will be run separately under its current CEO Kyle Talcott. There is no further indication as to management transitions. The impression given from the release at least in the short term is that it will be run separately for management of their provider network, quality and patient outcome oversight and the acceptance and administration of insurance coverage. 

What does this mean? How much of a lift UpLift will give this year to BetterHelp is anyone’s guess, but adding insurance coverage is a much needed move by Teladoc, given BetterHelp’s expensive DTC cash model.

  • Teladoc has known for some time that lack of insurance coverage was a key part of BetterHelp’s performance problems. UpLift will help in that regard.
  • In the past 18 months, it moved from Teladoc’s great hope, one which former CEO Jason Gorevic bet ‘large’ on only for him to depart in a haze of red ink [TTA 5 Apr 2024], to a slowly eroding asset or worse, a rolling failure. It is particularly inexplicable given the growth of virtual mental health.
  • In the past year, BetterHelp operations were responsible for a $790 million impairment that hit Teladoc’s Q2 and a nasty, embarrassing rap by short seller Blue Orca Capital on ChatGPT being used in therapeutic responses [TTA 25 Feb], vigorously denied by Teladoc [TTA 25 Feb]. 
  • BetterHelp’s revenue for the remainder of 2025 is expected to shrink by up to 9.75%.

The main Teladoc operation, segmented as Integrated Care, also performs virtual mental health care within its services. This is noted in the release: “Teladoc Health’s Integrated Care segment offers a range of digital tools, coaching, therapy, and psychiatry services for employers and health plans (Editor’s emphasis), and completed nearly a million mental health visits in 2024.” Since those virtual mental health services are within Integrated Care, its performance is not public. 

Is a real solution a rebranding of BetterHelp when it is integrated (as it eventually will be) with UpLift?

HIT Consultant, FierceHealthcare, Mobihealthnews

Teladoc Q1 financial highlights:

There wasn’t much encouragement across the board in Teladoc’s Q1 report.

  • Total Q1 revenue decreased 3% to $629.4 million from prior year’s $646.1 million in First Quarter 2024
  • The bright spot was that their main business under Integrated Care had a revenue increase of 3% to $389.5 million 
  • As mentioned, BetterHelp’s revenue decreased by 11% to $239.9 million
  • By domestic versus international, US revenue decreased 4% to $525.0 million. International revenue grew 6% to $104.4 million.
  • Net loss also increased to $93.0 million, or $0.53 per share, versus prior year’s Q1 $81.9 million, or $0.49 per share.
  • Adjusted EBITDA for Q1  decreased 8% to $58.1 million, versus $63.1 million in the prior year. \
    • Integrated Care’s adjusted EBITDA increased 6% to $50.4 million.
    • BetterHelp’s adjusted EBITDA decreased 50% to $7.7 million.

The release also confirms full year 2025 revenue projections of $2,468 – $2,576 million. BetterHelp’s revenue is projected to continue to shrink by 3.75 to 9.75%.

News roundup: Hims, Ro, LifeMD and Novo Nordisk partner on Wegovy prescribing (updated); Commure partners with HealthTap for virtual care after hours; WebMD Ignite adds texting to member health ed; hellocare.ai raises $47M for virtual nursing

May 1, 2025 | by

Partnerships and add-ons are much in the news this week.

Hims & Hers isn’t worrying about GLP-1 drug sourcing. Neither are Ro and LifeMD. All three made a deal with Novo Nordisk on providing branded Wegovy to cash-paying members with a prescription. Wegovy is supplied through NovoCare Pharmacy through each of the telehealth suppliers.

Hims & Hers received immediate benefit–their stock jumped 23% on Tuesday above $33. Wegovy is already available to Hims & Hers members, but  those without a membership, they will bundle a membership with Wegovy and supply services including 24/7 care, nutrition guidance, and clinical support, starting at $599/month. Longer term, the two companies plan to match up Novo Nordisk’s technologies with Hims & Hers’ ability to scale access to care. Novo Nordisk’s programs with competitive telehealth prescribers Ro and LifeMD start at $499/month, but may be more based on services provided.

Updated: The smaller LifeMD, a below $10 Nasdaq stock, also jumped 40% to above $8 and settled in around $7 this morning (Friday 1 May). (Ro–Roman Health–is a private company.) FierceHealthcare LifeMD also recently acquired assets of women’s telehealth provider Optimal Human Health MD as their entrée into the women’s health market. The new service will be focused on menopause and osteoporosis, monitoring hormone health, bone density, metabolism and long-term wellness. Debut is this summer. No financials were disclosed.  Release, FierceHealthcare

This was just in time to meet the FDA deadline on GLP-1s. All three teleprescribing companies were using less expensive compounding pharmacies to supply generic versions of semaglutide up until recently. In February, the FDA reclassified the drug as no longer scarce, which ended that authorization to sell the compounded drugs as of now [TTA 25 Feb, 27 Feb]. Hims, as the largest, stood to lose the most and fought very hard to keep the compounded versions of these drugs including an aggressive ad blitz blasting the pharmas. Evidently, they’ve now reconsidered–as has Novo Nordisk in lowering prices and selling through the teleprescribers. If you can’t beat them, join them. However, based on what this Editor hears on the radio, companies like FuturHealth are selling compounded versions alongside branded GLP-1 medications. Mobihealthnews, CNBC

Software integration meets virtual healthcare for after-hours coverage. Healthcare software integrator Commure is partnering with HealthTap‘s online primary care network and telehealth services to provide what they term a ‘unified solution that bridges the gap between in-person and virtual care’. Commure’s slightly bewildering tech stack centers on EHR integrations for workflow, scribing, RPM, RCM, and AI-powered agents–along with a workplace security system, Strongline. The partnership now offers to providers turnkey implementation for services such as after-hours coverage and virtual primary care, with the big plus of not adding staff. Mobihealthnews, Release 

Commure’s interesting developments in the past year or so included a fire-sale priced buy of Memora Health for $30 million in December 2024, adding its conversational AI-powered agent to its ‘stack’, undoubtedly to the relief of in-common investors General Catalyst and Andreessen Horowitz (a16z). In October, Commure bought ambient AI medical documentation company Augmedix (one of the few SPACs that didn’t crack) in a $139 million deal [TTA 8 Jan].    Axios‘ further analysis of the Memora Health buy is worth a read.

WebMD Ignite’s Coach health education and engagement platform adds text messaging. The Coach platform, used by care managers for health plan members, has added an integrated SMS text messaging app. This provides for plan care managers:

  • Real-time reach: Push notifications ensure messages are seen promptly, keeping health education and motivation top of mind.
  • Custom branding: Text templates can be customized to reflect each health plan’s brand and messaging.
  • Member convenience: Deliver concise, actionable information directly to members’ mobile devices.
  • Seamless workflow integration: Care managers can select, send and track text-based education within Coach, including opt-in and opt-out management.

The text messaging can also be used for population-wide campaigns to engage members at scale for health initiatives. Text’s advantages over email delivery is immediacy and also more narrow targeting, as many have multiple emails but only one (or two) mobile phone numbers. Release, FierceHealthcare  (Disclaimer: this Editor previously worked as a marketing consultant to what was then Krames, now part of the services under WebMD Ignite)

Our one significant raise of the week is (again) in virtual nursing. hellocare.ai‘s $47 million raise was led by HealthQuest Capital led the round with participation from several health systems and digital health investors, including UCHealth, Bon Secours Mercy Health, LRVHealth and OSF Ventures. hellocare.ai provides an in-room AI-assisted virtual nursing platform for “smart hospital” rooms plus telehealth and hybrid care services for hospitals, home care, and primary care. The platform includes virtual sitting in up to 32 rooms 24/7 on a single remote clinician’s monitor, virtual consultation, ambient documentation, digital whiteboards, patient engagement, and hospital-at-home integrated into the hospital’s EHR. hellocare.ai claims installations in 70+ health systems that include the investors. Since 2012, the Clearwater, Florida company has raised over $88 million. Release, Mobihealthnews

Masimo updates: former CEO Kiani claims 13.2% ownership, and a review of the new management’s style (updated)

April 30, 2025 | by | 2 Comments

Medical device company Masimo may not be able to rid itself entirely of its meddlesome former CEO, Joe Kiani. In fact, if a court awards him the shares exercised under his various employment agreements, he could be 1) a billionaire and 2) the second largest shareholder in the company after Fidelity Investments (FMR). He currently and undisputedly holds 7.5% of Masimo’s shares (Nasdaq: MASI), trading today at over $163.00 and ironically up substantially since his departure. The latest is that Mr. Kiani cleverly filed with the SEC a mandatory “beneficial ownership” report (Schedule G/A, designating an amended form) stating that he owned 13.2% of shares.

The difference? The options, restricted stock units (RSUs), and performance stock units (PSUs) that he attempted to exercise, but have not been granted by the current management, controlled by Politan Capital Management, owner of 8.8% of common shares. Mr. Kiani maintains  that he resigned from Masimo on 19 September 2024, the day of the Annual Shareholders Meeting, “for good reason” after losing his board seat and control of the company to Politan. The new, Politan-controlled board on that day placed him on indefinite leave, named an interim CEO (Michelle Brennan), then in October expanded the board by two directors and formally terminated him on 24 October ‘for cause’, invalidating the terms of his eye-watering (and questionable) $400 million severance agreement. That difference–5.7%–is a whopping 3,226,702 shares on top of his existing 4,085,799 shares. In the Schedule 13G/A comments section, the non-granted shares are delicately termed as “subject to a dispute between the Issuer and the Reporting Person” (Mr. Kiani).

This Editor’s source is the excellent and detailed analysis done by Ted Green of Strata-gee. His reporting on Masimo is from close attention to their audio business as they attempt to shed Sound United, comprising major brands such as Polk, Marantz, Denon, and Boston Acoustics. As of this writing, that has not happened though in 2025 financial reporting, it is classified as a “discontinued operation”. His opinion on the strategy behind the unusual filing on shares claimed to be owned, but not in the possession of Mr. Kiani, is that it is a legal tactic thrown into the ongoing dispute around Mr. Kiani’s employment and severance/change of control agreements. Quentin Koffey, Masimo’s vice-chairman plus CIO of Politan, has argued that the previous board controlled by Joe Kiani signed off on compensation packages so rich that they threatened the company’s stability, among other things. 

As previously noted in our 6 March and 30 January updates, both Mr. Kiani and Masimo ever since have been going mano-a-mano in the courts–the Southern District of New York (SDNY), Delaware Chancery Court, and in California with the Private Attorneys General Act (PAGA) notice submitted to the California Labor & Workforce Development Agency (LWDA) alleging multiple Labor Code violations concerning wages, multiple stock options, and severance owed to Mr. Kiani under his employment agreements. None of these have been resolved yet to this Editor’s knowledge. 

Masimo has been going about its business, holding their annual stockholders’ meeting today. They’ve had good news since September regarding share price, with its rise largely maintained in this roller coaster market, despite a 2024 that was in the red. Strata-gee has an excellent delving into their SEC Schedule 14A filing issued in advance of the stockholders’ meeting. Mr. Green notes that it is full of disclosures and rationales on board and management duties, longer-term compensation structures, and more, written to be investor-friendly in contrast to the over-stuffed filings of the prior regime:

Written in a highly professional, precise, and clear tone, the company is changing many long-held policies – policies related to business management, board oversight, management performance, compensation, and more. And this document delves deeply into these many changes, often explaining what was done in the past, how it will be changed in the future, and why it needs to be done.

Mr. Green’s prognostication is that he expects all directors to be elected (there are no holdovers from the prior regime) and proposals to pass. Masimo’s emphasis on growth and R&D will mean developments in the medical device area. The company is now led by a 100% medical device CEO. They have a core market in hospital monitoring with some extensions into wearables. What direction they go in digital health will play out over this year and next.  

Update 30 April: The main website (masimo.com) has been ‘down’ for two days–unusual–while the ‘shop’ pages are still up but not really working. And their W1 watch is no longer for sale as ‘coming soon’. What is afoot?

Product & funding very short takes: South Australia 1st with Sunrise EMR; S. Korea pain research, new emergency services app; BCI + telehealth for stroke patients; VirtuSense monitoring launches at Emory; Series B raises for Nourish, Healthee

April 25, 2025 | by

Starting with international health tech developments…

South Australia Health has rolled out Altera Digital Health’s Sunrise Electronic Medical Record (EMR) and Patient Administration System (PAS). The EMR and PAS is being implemented across over 100 hospitals and health services, in both metropolitan and rural areas, in South Australia. South Australia is fourth-largest state in Australia, covering 983,482 square kilometres, which makes it five times larger than Texas and 10 times larger than the UK–but has only 1.7 people per square kilometer, which makes healthcare service challenging. Altera Release

In South Korea, researchers at Asan Medical Center have developed a pain assessment model which can be used during surgery, a time when the patient cannot provide feedback. The metrics include tracking a patient’s heart rate, blood pressure, and blood volume change during surgery, then using a machine learning algorithm combining them that confirms pain during and after surgery. The study tracked  242 AMC surgery patients. Mobihealthnews Also in South Korea, their Ministry of Health and Welfare’s emergency services 129 app has added new features to access health counseling via the web chat feature.  A 24/7 chatbot feature now answers inquiries about health and welfare-related policies. The Ministry has been developing health tech features to compensate for staff shortages, including a regional emergency system for patient classification and transfer, a multi-institutional real-time critical patient transfer management system, and an AI-based clinical decision support system for predicting cardiac arrest, cardiovascular diseases, and sepsis in emergency departments. Mobihealthnews

Back in the US, an intriguing combination of brain-computer interface (BCI) and telehealth for stroke. Neurolutions, a BCI company, is merging with telehealth provider Kandu Health. and have raised $30 million from Ally Bridge Group and AMED Ventures. Now known as Kandu, Inc., the combined company will provide an end-to-end solution for stroke survivors. Kandu’s app and care navigators provide support in the hospital-to-home transition for stroke patients and families. Neurolutions’ IpsiHand device is designed to improve arm and hand movement, reporting improvement in 70% of clinical trial patients. Kandu will now be able to offer telehealth rehabilitation, therapy monitoring, education, caregiver support, advocacy and navigation. Release, MedTech Dive

VirtuSense monitoring launched at Emory Healthcare for virtual nursing. The VirtuSense VSTOne monitoring and telemetry platform is being integrated into Emory’s virtual nursing initiative in Peoria-area (Illinois) hospitals, Midtown as the first and later Emory Hillandale Hospital for a total of eight inpatient units and 1,000 beds this year. VSTOne uses LIDAR (Light Detection and Ranging) technology in patient rooms to detect falls, continuous monitoring of patient data to anticipate deterioration or emergencies, and care staff to call directly into patient rooms to expedite admission, discharge, and general documentation. At Emory, it integrates with Epic MyChart Bedside TV. Release

In company fundings:

  • In the burgeoning ‘food as medicine’ segment, Nourish raised $70 million in a Series B funding round. Nourish works with national commercial, Medicare, and Medicaid plans to better manage and guide those with chronic conditions through nutrition. Users work virtually with registered dietitians along with a support app with AI meal tracking, wearable and lab integrations, recipes, and more. The funding was led by JP Morgan Private Capital’s Growth Equity Partners, with participation from Thrive Capital, Index Ventures, Y Combinator, Maverick Ventures, BoxGroup, Atomico, G Squared, and Pinegrove. The fresh funding will be used for product development, expand Nourish’s Registered Dietitian (RD) network, and strategic partnerships. Nourish is also a founding member of ATA Action’s new initiative, the Virtual Foodcare Coalition [TTA 10 Apr]. Release, Mobihealthnews
  • Healthee raised $50 million in an oversubscribed Series B round from Key1 Capital, with participation from Fin Capital, Glilot Capital Partners, and Group11. Healthee’s health benefits platform uses AI to help employees navigate healthcare and benefits and simplify a complex enterprise benefits system. Interestingly, Healthee management claims that they did not seek the funding but were sought after. They will use it for scaling their product suite, go-to-market operations, and deliver intuitive, AI-powered tools for benefits. Release, Mobihealthnews