News roundup: Transcarent raises $126M; 98point6 lays off; Oscar notches first profit; Steward Health’s Ch. 11; Amazon Clinic GM leaves; Amwell’s down but hopeful Q1; Hims founder gets political

May 8, 2024 | by

A study in contrasts

Already well-funded Transcarent gains another $126 million in a Series D round. Total outside funding is $424 million that boosts its valuation to $2.2 billion. This round will fund expansion and development efforts plus enhancing the platform’s AI capabilities. The Series D round was led by General Catalyst and Glen Tullman’s 7wireVentures, with participation from new investors Memorial Hermann Health System and Geodesic Capital, along with existing investors. As noted in our Rock Health analysis (but not in the company’s release), this raise had a ‘sweetener’ of a 2.5x return should the company IPO or M&A.  Transcarent is an enterprise health navigator that enables employees to use a single platform to navigate their needs for medical, surgery, pharmacy, and mental health care. Transcarent’s differentiator in this space for large self-insured employers is that Transcarent steers employees to higher quality, lower cost care settings. Their pricing is also based on actual users only in risk-based agreements, versus the more common per member per month (PMPM) care management model. Transcarent also pays health systems up front for surgical procedures.

Tullman, who is also Transcarent’s CEO, is well known for creating high profile companies that eventually are sold or IPO’d for high valuations. These deals make his followers money, but often not the buyers (ask Teladoc) or the employees left in the lurch. This Editor does wonder, given the state of US business right now, how this competitive enterprise care management niche earns this kind of investment and valuation. Release, Mobihealthnews 

One of Transcarent’s buys last year was 98point6’s virtual care and related assets that included 98point6’s physician group, self-insured employer business, and an irrevocable software license in a deal worth potentially $100 million according to publicity. 98point6 then had a well publicized and $32 million-financed pivot to being a software company and licensor, acquiring remaining assets from asynchronous telehealth provider Bright.md this past January for 55% in equity and 45% in cash. Despite all this, little noted was that at the end of April was that 98point6 laid off an undisclosed number of its estimated 100 US-based staff. One wonders if this affects service to Bright.md’s provider customers. GeekWire

On the health plan side, rebooted insurtech Oscar Health finally got into the black with $177.4 million in net income for Q1 and beat earnings per share estimates. It’s no surprise to those of us who’ve followed the modus operandi of Mark Bertolini, who took the reins a year ago March [TTA 30 Mar 2023] and stated at the time that his focus was moving Oscar to profitability. Total revenue was $2.1 billion, a 46% increase versus Q1 2023, driven primarily by higher membership, rate increases, and lower risk adjustment as a percentage of premiums. Release. Becker’s, FierceHealthcare Their full 2024 is projected at $8.3 to $8.4 billion in revenue, $125 to $175 million in adjusted EBIDTA. Oscar solely offers ACA exchange plans for individuals and small groups, having exited Medicare Advantage after 2022. Release

Steward Health Care filed Chapter 11 bankruptcy on 6 May. As forecast when the company moved to sell its provider group Stewardship Health to Optum [TTA 18 Apr], Steward’s debt load in its 31 hospitals and operations forced the restructuring on Monday. What’s owed: $1.2 billion in total loan debts, about $6.6 billion in long-term lease payments, north of $600 million to 30 of its largest lenders (Change Healthcare, Philips North America LLC, Medline Industries, AYA Healthcare and Cerner). There’s $289.8 million in unpaid compensation obligations: $68 million to its own workers in unpaid employee salaries, $105.6 million in payments for physician services and $47.7 million owed to staffing agencies. Topping it off–$979.4 million outstanding in trade obligations, of which approximately 70% are over 120 days past due.

Debtor-in-possession is now Medical Properties Trust (MPT) which will finance $75 million up front extending to $225 million more if Steward’s asset selloff milestones are completed on time. MPT will need to be far more forthcoming about Steward’s finances than Steward has been. The Stewardship Health sale to Optum now has to pass through the US Bankruptcy Court for the Southern District of Texas as well as Massachusetts regulators. Becker’s, Healthcare Dive 6 May, 7 May

Amazon Clinic loses its general manager, Nworah Ayogu, MD. He departed for Thrive Capital, a secretive VC (based on its website) that invests in technology, internet, and software companies. Dr. Ayogu, who doubled as chief medical officer of Amazon Pharmacy, stated the move will enable him to focus “exclusively on healthcare” after nearly four years with Amazon. He launched Clinic in November 2022 to a full 50-state rollout of the asynchronous and synchronous telehealth service last August, after a privacy challenge that escalated to the Senatorial level and forced a rollout delay [TTA 1 Aug 2023]. It sounds more like the doctor needs to go on a break. Amazon has not announced a replacement nor has Thrive issued any information. Becker’s, Modern Healthcare

Amwell’s soft Q1 reflective of telehealth as a whole. Its Q1 revenue of $59.5 million was 7% below Q1 2023’s $64 million, and missed Mr. Market’s forecasts. Where there was improvement was that net loss narrowed considerably to $73.4 million from prior year’s $398.5 million, when it took a hefty non-cash goodwill impairment charge. The bright spot Amwell is forecasting is that their Federal contract with Defense Health Agency, jointly with Leidos, will impact by Q4. Their part of the Digital First initiative for the Military Health System (MHS) will replace the current system, MHS Video Connect, with Amwell Converge [TTA 15 May]. Their pending NYSE stock delisting they plan to remedy with a reverse stock split to be announced.  Healthcare Dive, Amwell’s SEC Form 10-Q

Hims CEO and founder Andrew Dudum Does a Dumb. Mr. Dudum made a statement that on X that was interpreted by most to be encouraging the disruptive anti-Israel university and elsewhere protests which have roiled cities like New York and Los Angeles for weeks and are canceling graduations at Columbia University and University of Southern California. A statement like “If you’re currently protesting against the genocide of the Palestinian people & for your university’s divestment from Israel, keep going. It’s working.” and went on to say that companies would be eager to hire them is plain and clear. It immediately garnered criticism from investment group, industry, and software heads, as well as conservative and moderate media. This Editor will put on her marketing cap and remind Mr. Dudum of Marketing 101–be memorable, but do not offend the customer or investors who give you money. You have, after all, a company that depends upon appealing to a wide spectrum of people with easy and recurring telehealth prescriptions for hair loss, weight loss, skin problems, women’s health concerns, and erectile dysfunction. Your statement was not only completely unnecessary but also inflammatory at a bad time–it offended many customers no matter what religion or beliefs. Stock dropped. Customers canceled. Note to Mr. Dudum: if you want a thriving business, don’t live up to your name. FoxBusiness

News roundup #2: Bright.md sells remaining customers to 98point6; Netsmart EHR up for $5B possible sale; Caregility intros two new telehealth systems

January 19, 2024 | by

More from JP Morgan’s Healthcare Conference (JPM), CES, and after:

Bright.md’s remaining assets sold to 98point6. Now stay with your Editor as we sort through this. Bright.md was sold, we thought, to Cigna’s Evernorth MDLIVE telehealth unit last October, announcing at HLTH that MDLIVE would add Bright.md’s asynchronous telehealth technology to their platform. Evidently, Bright.md had other assets not included in that sale, namely the right to service 17 asynchronous telehealth provider customers such as Baptist Health and UAB Medicine. Those customers have been purchased by 98point6, a company that last year transitioned out of direct care into being a licensor of real-time and asynchronous telehealth, plus other software for clinical decision support and EMR integration.

98point6 pivoted last March by selling their physician group, self-insured employer business, and an irrevocable software license to Transcarent, in a deal worth potentially $100 million. What they bought from Bright.md can only be interpreted as those 17 customers were not obliged to go with MDLIVE in that earlier transaction. Those 17 customers now will license 98point6’s asynchronous telehealth. 98point6’s purchase price is 45% in cash and 55% in equity. 98point6 is also taking on six former Bright.md staff in commercial and sales. Another small puzzle is that the Bright.md website remains unchanged with last entries in July 2023 and no mention of MDLIVE. The company’s most recent LinkedIn posts also end in July 2023, yet a sample of the executive staff indicates that they remain employed at Bright.md. Axios, 98point6 release

Netsmart Technologies exploring $5 billion sale. The company is reportedly exploring a sale of its EHR and related software business via Goldman Sachs and William Blair in the coming weeks which could fetch up to $5 billion. The EHR has an estimated 754,000 users at community health centers, behavioral health centers, hospice care, and non-profits. This year’s EBITDA is estimated to be about $250 million. 

The current owners, GI Partners and TA Associates, bought it between 2016 and 2018, but its roots go back to 1992 (with an acquired company back to 1968). It went public in 1996, moved private in 2006, then went through various private equity owners including Allscripts, moving from NYC to Great River, Long Island and presently to Overland Park, Kansas. If the sale, likely to another group of PE investors, is successful, it would demonstrate signs of life in the dead healthcare M&A market.  Reuters   Axios’ sources estimate closer to a $4 billion sale

Another during CES announcement came from Caregility, which announced two new point of care telehealth edge devices. The APS200 Duo is the company’s first dual-camera, all-in-one system with onboard edge computing and a dedicated graphics engine. The new APS100 Pro is a second generation model of their all-in-one system with a wide-angle camera for remote patient observation. This can be upgraded with the APS FlexCam, an external high-definition 40x power zoom video camera for virtual nursing programs and remote patient examinations. The devices connect to the Caregility Cloud virtual care platform with multiple audio and video streams for clinical and care applications supporting workflows in acute and ambulatory settings. Release. Caregility also contributed a Perspectives on virtual nursing and telehealth in November.

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

June 16, 2023 | by

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

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

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

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

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

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

News roundup: Transcarent buys 98point6’s virtual care; Best Buy-Atrium hospital-at-home; Walgreens/VillageMD buys another practice group; WW-Sequence digital weight management; UKTelehealthcare events; 300 out at Color

March 9, 2023 | by

Enterprise health navigator Transcarent is buying 98point6’s virtual care platform and related assets. 98point6’s tech is a text-based virtual care platform that uses an AI chatbot to collect and relay health information to a provider. According to CEO Glen Tullman’s interview with Forbes, the assets picked up in addition to the tech include 98point6’s physician group, self-insured employer business, and an irrevocable software license in a deal worth potentially $100 million. This fits in Transcarent’s platform that works with large employers to steer their employees to higher quality, lower cost care settings based on actual users only in risk-based agreements, versus the more common per member per month care management model. 98point6 will continue in a leaner form, licensing its software to third parties, but out of the treatment business. Its major relationship is with MultiCare Health System in Washington state. 98point6 had raised over $260 million from 2015 through a 2020 Series E.  Mobihealthnews

Best Buy Health is providing telehealth equipment and installation to North Carolina-based Atrium Health’s hospital-at-home program. In the three-year deal, Best Buy’s Geek Squad will install peripherals based on the patient’s needs, transmitted through a Current Health telehealth mobile connectivity hub and using their software. Terms were naturally not specified, but Atrium is purchasing the devices from Best Buy. The Geek Squad services serve for both installation and retrieval after care. Atrium is paid via insurance including Medicare and Medicaid. Atrium, part of Ascension Health, has 10 hospitals in the program already and is aiming for 100 patients in the program each day. CNBC

VillageMD expands again, adds Starling Physicians in Connecticut. Starling has 30 primary care and multi-specialty practices, including cardiology, ophthalmology, endocrinology, and geriatric care. VillageMD’s total is now over 700 locations. Transaction costs were not disclosed. VillageMD has been on an acquisition tear, powered by Walgreens’ and Evernorth-Cigna funding for Summit Health, Family and Internal Medicine Associates in central Kentucky, and Dallas (Texas) Internal Medicine and Geriatric Specialists. HealthcareFinance, Healthcare Dive.

WW (the former Weight Watchers) has an agreement to acquire Sequence, a subscription telehealth platform for clinical weight management. Sequence is targeted to healthcare providers specializing in clinical care, lifestyle modification, and medication management for patients being treated for overweight and obesity. It also manages the navigation of insurance approvals. Terms were not disclosed, but Sequence since going live in 2021 serves 24,000 members and has a $25 million annual revenue run-rate business. WW is building out a clinical weight management pathway and intends to tailor a nutrition program for this segment. Release

UKTelehealthcare has an upcoming digital event, TECS Innovation Showcase 2 on Wednesday 15th March 2023 (10:30-12:30 GMT). Also, there are links to the webinars given during today’s event, TECS Innovation Showcase 1, January’s Analogue to Digital Transformation Update, and several more. Register for the 15 March event and links/passwords for previous events here or click on the UKTelehealthcare advert at the right and go to the Events page. These events concentrate on the analogue-digital switchover and TECS in the UK.

Color, a population health technology company that expanded into Covid-19 testing and later telemental health during the pandemic, is now laying off 300. Their CEO Othman Laraki confirmed in a post on LinkedIn (which seems to be a corporate communications trend) that this reflects decreased demand for Covid testing and the end of the public health emergency. Their future direction will be in distributed testing and telehealth for government programs and prevention tools for employers and large healthcare companies. The CEO’s post included a spreadsheet of the laid-off individuals including links to their LinkedIn profiles and desired positions, another corporate trend in addition to those laid off posting about it almost immediately. It seemed to be heavy on software engineers, data scientists, support leads, and product managers.

The company pivoted from genomics to public health with major Series D and E raises of $167 and $100 million respectively in 2021, totaling $482 million since start in 2014, and was valued at $4.6 billion by November 2021. It bought into behavioral health services with the acquisition of Mood Lifters, an online guided group support system, in 2022. The (happy) decline of Covid is affecting testing-dependent businesses across the board. Lucira Health, which had received a EUA for its combination Covid/flu testing, filed for Chapter 11 bankruptcy reorganization in February.  Beckers, Mobihealthnews 3 Mar, 27 Feb