Evolent Health talking major acquisition by payer Elevance, private equity

August 27, 2024 | by

Management services organization Evolent Health moving down the road in selling itself. Another deal perking below the Labor Day wire to brew into September or October coffee is a full or partial buyout of Evolent Health.  Potential buyers or partners include Elevance Health (the former Anthem), to position against Optum/UHG, and several private equity companies: TPG, KKR, and Clayton, Dubilier & Rice (CD&R). Evolent provides organizational and administrative services for primary plus specialty care physicians and payers for patients with complex conditions, within and outside of value-based care models such as ACOs, utilizing connected care and workflow automation technologies. In June, it agreed to acquire many of the AI utilization management assets of Machinify, not yet closed. 

Evolent’s (EVH, NYSE) current market capitalization is about $3.65 billion; stock price closing yesterday was $31.62 (Yahoo Finance). Industry analyst Jailendra Singh of Truist projected earlier this month, before this news dropped, that the stock was underpriced at the time in the ~$20 range and justified a target price at $33, citing their ability to manage utilization trends and rate adjustments for FY 2024. Seeking Alpha went so far as to state that at an acquisition price of $35, it would still generate a profitable internal rate of return (IRR).

A buyout won’t be cheap. With an estimated $114-116 billion shares outstanding, an outright purchase price at $35/share could approach or top $4 billion. Which means that the buyout lift could be shared. Projections with the information available range from PEs negotiating a leveraged buyout (LBO), a tuck-in by Elevance, or possibly a PE/Elevance partnership. Elevance already works with CD&R in the Mosaic Health care delivery platform partnership.  The shape of the buyout will develop over the next few weeks. FierceHealthcare

Another activist shareholder forcing a sale? Medical Buyer added to the above reports that long-time shareholder Engaged Capital pushed for this, to the degree that the board of directors needed to settle with them by forming a strategy committee focused on “value creation initiatives”.  As far back as 2021, Evolent was courting suitors or partners–at that time, Walgreens Boots Alliance, which may have been a far better but more complex buy than VillageMD. Hat tip to HIStalk 8/26

Evolent’s potential sale complicates the outlook for other MSOs such as Aledade, Optum, Privia Health, Health Catalyst, Accolade, Alignment Health, and Collaborative Health Systems (now part of Centene–disclaimer, CHS was this Editor’s former employer). In addition, a payer buying a large MSO with provider contractual relationships may pique the interest of FTC and DOJ, which already have Optum on their radar.

Sidebar: Revealed yesterday was Evolent’s CEO Blackley Seth cleaning up his stock option portfolio. According to Investing.com, he “sold shares totaling approximately $5.6 million at an average price of $30.00, with transactions ranging from $30.00 to $30.02. Additionally, the CEO acquired shares worth roughly $1.6 million through option exercises with prices between $6.87 and $10.27.” The sales were prearranged on 29 February under SEC Rule 10b5-1 to avoid insider trading charges. Both the sale and buy were over 100,000 shares.

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

October 21, 2022 | by | 1 Comment

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

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

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

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

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

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

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

Walgreens may acquire Evolent Health: report

October 1, 2021 | by

Walgreens in another ‘go big or go home’ move. Bloomberg reported yesterday that Walgreens Boots Alliance is considering an acquisition of Evolent Health, a Washington DC-based healthcare management and administrative services company. It’s another move that indicates that their growth plans continue to be in technology-based services, provider services, and diversifying away from brick-and-mortar pharmacy. 

An acquisition of Evolent would add to Walgreens a suite of management services around total cost of care for payers and providers through Evolent Care Services (administrative, operations), provider management services in value-based care models such as ACOs through Evolent Care Partners, and specialty care management for oncology and cardiology through New Century Health. Notably, Walgreens would grow ever closer to primary care providers through Evolent Care Partners, a 1,000 provider, six-state ACO network covering 90,000 lives. 

Last week, Walgreens bolstered its pharmacy operations through a majority investment of $970 million in specialty pharmacy company Shields Health Solutions, also a fit with the proposed Evolent acquisition with their specialty care management area.

Should this go through, it further differentiates Walgreens from rival CVS Aetna as a services provider.

Evolent is a public company trading on the NYSE with a current valuation of $2.71 billion, so it won’t come cheaply. Reuters

Virus-(almost) free news: Cera’s $70m raise, Rx.Health’s RxStitch, remote teledentistry to rescue, Alcuris responds, Caravan buys Wellpepper, and Teladoc’s heavy reading

March 21, 2020 | by

Keeping calm and carrying on (but taking precautions, staying inside, and keyboarding with hands that resemble gator hide), yes, there IS some news that isn’t entirely about COVID-19:

This Editor had put aside the $70 million funding by the UK’s Cera at end of February. What is interesting is that Cera Care is a hybrid–specializing in both supplying home-based care, including dementia care, and providing tech-enabled services for older adults. The funding announcement was timed with the intro of SmartCare, a sensor-based analytics platform that uses machine learning and data analytics on recorded behaviors to personalize care and detect health risks with a reported 93 percent accuracy. It then can advise carers and family members about a plan of action. This sounds all so familiar as Living Independently’s QuietCare also did much the same–in 2006, but without the smartphone app and in the Ur-era of machine learning (what we called algorithms back then).

The major raise supports a few major opportunities: 50 public sector contracts with local authorities and NHS, the rollout of SmartCare, its operations in England and Wales, and some home healthcare acquisitions. Leading the round was KairosHQ, a US-based startup builder, along with investors Yabeo, Guinness Asset Management, and a New York family office. Could a US acquisition be up next?  Mobihealthnews, TechEU

Located on NYC’s Great Blank Way (a/k/a Broadway), Rx.Health has developed what they call digital navigation programs in a SaaS platform that connect various programs and feed information into EHRs. The interestingly named RxStitch engine uses text messages (Next Gen Reminder and Activation Program) or patient portals to support episodes of care (EOC), surgeries, transitions of care (TOC), increasing access to care, telehealth, and closure of care gaps. Their most recent partnership is with Valley Health in northern NJ. Of course they’ve pitched this for COVID-19 as the COVereD initiative that supports education, triage, telehealth, and home-based surveillance as part of the workflow. Rx.Health’s execs include quite a few active for years in the NY digital health scene, including Ashish Atreja, MD.

Teledentistry to the rescue! Last summer, we focused on what this Editor thought was the first real effort to use telemedicine in dentistry, The TeleDentists can support dentists who are largely closing shop for health reasons to communicate with their own patients for follow up visits, screen new patients, e-prescribe, and refer those who are feeling sick to other telehealth providers. For the next six weeks, patients pay only $49 a visit. More information in their release. Hat tip to Howard Reis.

What actions are smaller telehealth companies taking now? Reader and commenter Adrian Scaife writes from Alcuris about how their assistive technology responds to the need to keep in touch with older people living alone at home. Last week their preparations started with giving their customers the option to switch to audio/video conferencing with their market teams. This week, they reviewed how their assistive technology and ADL monitoring can keep older people safe in their homes where they may have to be alone, especially after discharge, yet families and caregivers can keep tabs on them based on activity data. A smart way for a small company to respond to the biggest healthcare challenge of the last 30 years. Release. 

Even Caravan Health, a management services company for groups of physicians or health systems organizing as accountable care organizations (ACOs) in value-based care programs, is getting into digital health with their purchase of Wellpepper. The eight-year-old company based in Seattle works with health plans to provide members with outpatient digital treatment plans, messaging services, and an alert system to boost communication between care teams and patients. Purchase price was not disclosed, but Wellpepper had raised only $1.2 million in debt financing back in 2016 so one assumes they largely bootstrapped. Mobihealthnews

And if you’re stuck at home and are trying to avoid chores, you can read all 140 pages of Teladoc’s Investor Day presentation, courtesy of Seeking Alpha. 

Will Matt Hancock be a refreshing change for NHS? Or another promise unfulfilled? (updated)

July 26, 2018 | by
[grow_thumb image=”https://telecareaware.com/wp-content/uploads/2018/07/matt-in-a-binder.jpg” thumb_width=”200″ /]Matt In A Binder? With the sudden departure of Jeremy Hunt from the Department of Health and Social Care in the Cabinet’s ‘change partners and dance’, the new Secretary of State Matt Hancock comes over from heading Digital, Culture, Media and Sport. A couple of weeks in, it can be determined that he is a big advocate of technology and looking forward, not back (which Mr. Hunt spent a great deal of time doing):

Technology has a proven ability to radically change the world for the better – be it in finance, in education and in transport. But nowhere does technology have greater potential to improve lives than in healthcare. (Statement on Gov.UK/Health Service Journal 12 July )

And he glows again about increasing the use of apps within the NHS, though Digital Health goes a little overboard in calling the Rt Hon Mr. Hancock ‘app-happy’ even though he’s built his own this year so that his West Suffolk constituents can keep track of his activities. 

In his maiden speech, Mr. Hancock promoted a drive to replace pagers with smartphone apps as part of a £487 million funding package and connecting Amazon Echo with the NHS Choices website. It was overshadowed by a seeming walking back of the 95 percent four-hour A&E treatment target. Telegraph

Much of the criticism comes from those who see his appointment as yet another step in the privatization and regional devolution of the NHS due to campaign donations from the chair of pro-market group the Institute of Economic Affairs (IEA). However, Mr. Hunt faced the realization that NHS trusts are $1.2bn in debt and sought workarounds such as adoption of an ACO-type model (which in the US has a strong element of public incentive) and increased use of private health insurance to cost-shift. He wasn’t a technophobe, having inked a deal with the UK Space Agency to repurpose space tech for health tech and funding innovators in this conversion up to £4 million–which can be said to be ‘out there’.

Mr. Hancock also announced this week the £37.5 million funding of three and five ‘Digital Innovation Hubs’ over the next three years. These will connect regional healthcare data with genetic and biomedical information for R&D purposes.

Will he last? Will there be positive changed fueled by technology? Will the May Government last? Only time will tell.

What are your thoughts? (If you’d like to post anonymously, write Editor Donna in confidence)

Here’s select opinion from across the spectrum:

Don’t be fooled, Matt Hancock will be no better for the NHS than Jeremy Hunt was (The Independent)

New health secretary Matt Hancock received £32,000 in donations from chair of think tank that wants NHS ‘abolished’ (The Independent)

Roy Lilley’s always tart take on things NHS extends to the new Secretary dubbed ‘No18’. A deft wielding of Occam’s Razor and a saber on reflexive phraseology such as ‘driving culture change’ (it can be cultivated not driven–this Editor agrees but the tone and structure need to be set from the top), dealing with suppliers, and the danger of creating an electronic Tower of Babel due to lack of interoperability. (Does this resonate in the US? You bet!) (See NHSManagers.net if the link does not work.)

Margaret McCartney: Health technology and the modern inverse care law (BMJ) — to paraphrase, that the greatest need for healthcare is by those least likely to have the right care at the right time available. She points to Babylon Health, which counts Mr. Hancock as a member, as not only unproven, but also not needed by those able to afford other options. (But didn’t we know that already?)

Telehealth reimbursement: a major growth obstacle overcome this year?

March 4, 2016 | by

[grow_thumb image=”https://telecareaware.com/wp-content/uploads/2016/03/Hurdle.jpg” thumb_width=”150″ /]Will 2016 be the year where the hurdles are jumped? Telehealth systems and platforms are becoming more comprehensive and compatible with mobile technologies. While there are still discussions (arguments!) as to telehealth remote patient monitoring effectiveness in care models, with the occasional naysaying short-term or IVR study ‘proving’ RPM doesn’t work, the long-term positive VA Home Telehealth results since 2003, and the large body of research prove otherwise when integrated within a chronic or transitional care model. Yet at $14 million or .0025 percent, it was in 2014 a tiny part of Medicare payments because of CMS’ emphasis on rural telehealth at that point (and still). Medicaid (state programs for low-income children and adults under CMS oversight and administered through private payers) is more generous, with most states providing some payment and some having parity (with in-person visits) regulations.

A retrospective look at telehealth reimbursement is in a just-published paper by the Health Care Cost Institute (full PDF of report) which analyzed thousands of claims from four major insurers (Aetna, Humana, Kaiser Permanente and United Healthcare).to track trends in telehealth billings from 2009-2013. Key findings are summarized by senior counsel René Quashie of leading health tech law firm Epstein Becker Green in this article. It’s evident that the private payer sector didn’t exactly lead the way on commercial adoption of telehealth and telemedicine.

Here, the public sector is forcing change. Medicare rules on chronic care management changed for year 2015 to permit telehealth integration, and while complex (and not especially generous), CMS has further expanded them for ACOs in the Medicare Shared Savings Program (MSSP) and for new Next Generation ACOs. Yet only 20 percent of ACOs in the 2015 MSSP program actually used telehealth in care programs.

You can understand why from practices’ past experiences with payers. Becker’s Hospital Review cites from excerpts that while telehealth claims reimbursement on average rose 2009-2011 from $60 to $68/visit, in 2013 they dropped precipitously to $38. For all the hand-wringing over mental health, psychiatrists get the short end once again: a diagnostic interview exam (which is generally 1-2 hours if not more) cost $200 via telehealth (telemedicine) and $288 when the exam was conducted in person, but reimbursement was $77 and $105 respectively. After needing to invest in equipment and software, it’s understandable why physicians don’t look forward to getting paid less for their trouble.

But the argument is that things are changing for the better, and that is advocated by Nathaniel Lacktman, partner of tech law firm Foley & Lardner in his optimistic article in Advance Executive Insights, which maintains that 2016 is going to be the Year of Telehealth and remote patient monitoring. (more…)

Drive to ACOs and value-based care may make 2016 The Year of Telehealth (US)

November 6, 2015 | by

An encouraging prediction? Two Foley & Lardner attorneys with evidently a great interest in healthcare predict that 2016 may very well be The Year of Telehealth. Why? They cite accountable care organizations (ACOs) and the coordinated care at the heart of their model as a protected activity under the Medicare fraud and abuse waivers. “Coordinating care, such as through the use of telehealth, remote patient monitoring, and other enabling technologies”is “an activity reasonably related to the purposes of the Medicare Shared Savings Program and therefore is eligible for protection under one or more of the fraud and abuse waivers”. National Law Review, mHealth News. While from the legal point of view this may be significant, there’s been a concatenation of other factors.

What are the drivers for telemedicine and telehealth in ACOs? In the Medicare Shared Savings Program (MSSP), which is one model, ACOs must leverage savings, and perhaps the largest is avoiding unnecessary hospitalization costs among ‘high-risk’ patients–those with chronic disease–and usually more than one. They are also over half of high ER/ED utilizers. The Federal agency behind Medicare, the Centers for Medicare and Medicaid Services (CMS) has since 2011 been signing up ACOs in risk and value-based payment models that offer incentives such as shared savings. In 2014, only 28 percent of ACOs in the MSSP program earned shared savings bonuses. (more…)

Short-shorts for an autumn Friday

November 13, 2014 | by

As we in the US get our first, much too early blast of Polar Vortex this season with New York area temperatures dipping into the 30s F with a snow alert tonight, we should reminisce about what seems only a few weeks ago when the keyword was ‘short’….

Coming up short in the data breach this past Monday was Anthem Blue Cross of California with their TMI emailer–containing in the subject line specific targeting/sorting patient information that direct marketers love, but don’t want you to know they see, such as “Don’t miss out — call your doctor today; PlanState: CA; Segment: Individual; Age: Female Older; Language: EN; CervCancer3yr: N; CervCancer5yr: Y; Mammogram: N; Colonoscopy: N”. Ooops!…Another day, not quite another breakthrough for Mount Sinai Hospital here in NY, which had your typical laptop theft compromising over 10,000 records but fortunately not SSI or insurance information….More alarming were the malware/hacker attacks. In North Carolina, Central Dermatology of Chapel Hill was compromised by malware in a key server. And further south, Jessie Trice Community Health Center of Miami, Florida was hacked by a criminal identity theft operation accessing personal data of almost 8,000  patients.  iHealthBeat, also Privacy Rights Clearinghouse, NY Times (Anthem)

A short opinion piece in HealthWorks Collective promisingly leads with:

What if we paid for patient recovery rather than just patient services? What if we paid to treat patients rather than just conditions? What if we paid to personalize care rather just population health quality measures? (more…)