TTA’s November Futures 2: the good, bad, ugly with Astrana, Veradigm, 23andMe, Ali Parsa, Forward, UnitedHealth, Sword Health, Masimo, more!

November 15, 2024 | by | No Comments

 

 

It’s the good, bad, and a ration of ugly this week. An under-the-radar company makes a big buy and Veradigm might finally get itself sold. DOJ drags UHG to court over Amedisys–after the election. 23andMe continues to perhaps oblivion. Forward meets oblivion after eight years. And Ali Parsa, one year after Babylon’s failure, serves up a new AI venture that gets a Gimlety view.

Bad News Roundup updates: UHG/Optum defends Amedisys buy fast via a website, digging deeper into Forward’s fast demise, former Masimo CEO Kiani booted–and sued (One lesson after another)
Bad News roundup: DOJ drops the hammer on UHG-Amedisys, 23andMe lays off 40% and closes therapeutics, Lyra Health lays off 2% in restructuring, Forward primary care + kiosks shuts down abruptly (We aren’t past it yet)
Babylon Health’s Parsa founds new AI medical assistant venture, Quadrivia, one year after Babylon Health’s failure (Parsa’s new AI-powered deal)
M&A action news: Astrana Health buys up Prospect Health for $745M after Centene MSO unit buy, Veradigm nears $1B+ sale, Sword Health lays off 17% of clinicians prepping for IPO using AI instead, Cigna is not buying Humana–really! truly! (M&A comes alive, with a new player)

The Big Race is over, 45 is now 47 come January, and health tech (plus related) news faces future. HLTH’s future is with UK’s Hyve Group. Cerebral faces an expensive DOJ/DEA Judgment Day for its Bad Behavior during the pandemic. 23andMe, CVS, and Walgreens face future survival. And what if in future healthcare sets a goal of zero failures, like aircraft makers and airlines?

News roundup: Cerebral forfeits $3.7M on federal Rx charges, Aetna president named, Stewardship Health sold to Rural Healthcare, Oura buys data company Sparta Science, Brook Health-Linus Health remote cognitive assessment 
Weekend reading: 23andMe’s up in the air future, including genetic data; Walgreens debates What To Stop and Start; what if healthcare pursued a zero-failure rate? (Some reckonings and a future view)
Surprise! HLTH conference group sold to UK’s Hyve Group Limited (Las Vegas barely a wrap)

A post-HLTH deluge of news–as the US rolls up to a major national election. CVS replaces its CEO and debates breaking up. Amwell takes on a new CFO. Decent-sized raises seem to have returned. Cigna isn’t buying Humana–as of now. And has Teladoc turned a corner?

News roundup: Teladoc’s improved Q3, PursueCare resuscitates Pear’s apps, AMA removes 16-day RPM requirement in 2026, PatientPoint intros Innovation Network, PeopleOne’s $32B raise, Cigna-Humana again a no-go (Earnings season and post-HLTH announcements)
Some thoughts on the takeaways from HLTH (Not that many, strangely)
News roundup 23 Oct: views on a CVS breakup and CEO replacement, Amwell’s interesting new CFO, CopilotIQ/Biofourmis merge (updated), raises by HealthEx, Counsel Health, Oshi Health (Will changes at top fix problems?)

As the weather chills, so do prospects for some very well known companies–and investment. Walgreens plans to shrink its retail footprint by 1,200 over the next three years, “monetize” VillageMD. CVS is exiting most of its infusion business. UHG stock, earnings hammered on Change Healthcare hack, Federal payment cuts. Masimo v. Apple patent slugfest continues with wins for both. DEA kicks the can on telehealth waivers into next year–maybe. FTC and DOJ chill M&A with more demanding Premarket Notification rule for M&A. The spot of good news–baby monitoring Owlet has its mojo back.

News roundup 16 Oct: Walgreens shuts 1,200 stores–500 in ’25, CVS exiting core infusion biz, Masimo v. Apple update, DEA recommends 3rd telehealth extension, Change hack costing UHG $705M, Owlet back in NYSE compliance (So many denouements..and only one good)
FTC drops the hammer on premerger notification requirements–what will be M&A and investment effects? (We told..and tell you so, no frills)

It’s unconfirmed, but CVS may be considering a breakup. Teladoc’s latest reorg puts its COO out to pasture. IPOs may revive by next year for ‘overdue for exit’ companies. In CEO Land, one former CEO strikes back at the Senate holding him in contempt, while another one, having lost her board, now can easily take 23andMe private. ATA announces 2025 Nexus and call for papers. And some new fundings and products…and why can’t VA stop stubbing its toe on Oracle EHR issues, or staff diving into politicians’ health records?

News roundup: Omada Health files S-1 for IPO in 2025–and a look at 2024 healthcare IPOs, Philips debuts new smart baby monitor, ActiveAlert launches in UK, ATA Nexus 2025 calls for speakers, abstracts (An small IPO revival?)
Breaking: another exit at Teladoc, with COO resigning effective 31 December (Something about ships? Spirals? Musical chairs?)
Industry news short takes: fundings for Qure.AI, Centivo, Rippl, Surescripts; M&A closings for GE Healthcare-Intelligent Ultrasound, LetsGetChecked-Truepill. And is Hinge Health going public soon?
Two ‘oops’ at VA: OIG finds VA, Oracle performance misalignments, makes 9 recommendations; VP candidates’ EHR records improperly accessed by VA employees (Enough already!)
Two follow ups: Steward Health CEO resigns–and sues the Senate HELP committee, Wojcicki will take 23andMe private (Time to take the yachts for a long trip?)
Now CVS Health may be reviewing ‘options’–including a possible breakup–report (PBM and health plan troubles)

Steward’s CEO will likely face prosecution on criminal contempt of Congress for not showing up at a hearing, Stefano Pessina’s net worth down by 97% as Walgreens tanks, and Joe Kiani, after founding Masimo 35 years ago, is booted from the board and ankles–now it’s up to Politan.  

What’s next for: Steward CEO now in criminal contempt of Congress; Walgreens’ Pessina’s fortune vanishes by 97%; Masimo’s Kiani now a man without a company

It’s the last week of summer and this Editor has been catching up all over. While away, there have been buys, M&A, and yet another PE ‘smush’ merger. In developing stories, the Masimo-Politan proxy war ends and Steward’s CEO no-show may result in charges–both on Thursday. Congress and the industry argue over continuing telehealth prescribing waivers. And it’s hard to see a future for a broke 23andMe controlled by its founder/CEO–and with a board that just exited today. 

News roundup: Owlet expands to EU, mPulse buys Zipari, New Mountain PE merges 3 payment integrity firms in $3B smush, Candid Health’s $29M raise, Oura buys Veri, Bloomer Tech’s cardio bra (M&A activity revives, as does Owlet. Oura doing just fine)
23andMe settles 6.9M data breach lawsuit for $30M. Breaking–all seven independent directors quit ($30M the best they could get–and the board throws the towel at Wojcicki)
Rounding up follow ups: Walgreens shareholder suit on pharmacy performance, Steward CEO no-shows Senate committee, Masimo-Politan proxy fight has court win for Politan–vote on for 19 September (Walgreens’ misery never ends. Masimo nears its end.)
US telehealth controlled substances prescribing waiver may expire at year’s end; DEA may further restrict (Controversy on continuing virtual prescribing of Schedule II)

One more jumbo deal announced before Labor Day–Evolent Health’s acquisition bids from payer Elevance Health as well as at least three large private equity firms, in a deal that could top $4 billion. (Sensibly, their CEO is cleaning up his stock option portfolio.)

Evolent Health talking major acquisition by payer Elevance, private equity (Could be over $4B)

Counting down before the Labor Day holiday, one large deal of note sneaks through–LetsGetChecked’s $525M deal for Truepill. SVB’s latest report confirms the ‘valuation trap’ for the overvalued companies of the 2020-22 period but that investment is crawling back. Generative AI is much talked about but no one is comfortable with it. And two surprising survivals–NeueHealth and Stewardship Health.

Truepill to be acquired by LetsGetChecked for $525 million (Throwing in together to survive?)
Signs of life: another view on healthcare investments and exits as of mid-year (SVB’s 14th POV)
Are patients and physicians ready for generative AI? How will it be most acceptable? (Resembles telehealth’s early days on the early curve)
“I will survive” updates: NeueHealth survives Q2 with small net loss, Steward sells off Stewardship Health practices to private equity firm for $245M (Dodging disaster)

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Babylon Health’s Parsa founds new AI medical assistant venture, Quadrivia, one year after Babylon Health’s failure

November 13, 2024 | by | No Comments

Ali Parsa back in the news, just over one year after Babylon Health’s implosion.  Babylon’s CEO/founder Ali Parsa has a new and stealthy AI-related venture called Quadrivia. It was announced, unusually, by a personal post on LinkedIn yesterday (12 Nov). As one might surmise, it’s AI-related (this year’s flavor) and provides an AI assistant to clinicians. The company is incorporated in Jersey (Channel Islands) and is UK-based. It is seed funded by Norrsken, a Swedish VC. The amount is undisclosed. (More on this below from Sifted-FT and JFSC registry research)

Information on Quadrivia’s capabilities is limited to Parsa’s posting, their website, and a ‘first-person AI assistant’ narrated demo video embedded in the post and the home page of the website. Qu, the personal medical assistant in beta, is designed to support clinicians in multiple tasks as diverse as type 2 diabetes check-in, daily care coordination, menopause hormone therapy, flu vaccination education, and chronic kidney disease (CKD) follow-up. Quadrivia promises that its “AI agent for healthcare” capabilities will extend across the entire healthcare ecosystem for the clinician and patient, including hypotheses around diagnosis, investigation, clinician selection, treatment plans, monitoring, and more. According to Quadrivia’s information in TechFundingNews, the platform has a dual structure based on types of cognitive reasoning processes: “System 1 includes tasks that rely on quick decision-making, such as answering direct questions or following standard procedures. System 2 involves more complex, analytical tasks, like assessing patient symptoms and considering multiple possible diagnoses.”

Quadrivia attributes Qu’s capabilities to its clinical knowledge base, the patient’s medical records in the EHR, natural language (but not real time) text/audio conversation, and proactive/reactive care. Beyond providers, Qu can be used by payers, pharma for research, and startups, much as Babylon Health was originally positioned.

Clinicians are invited to test drive Qu using a signup form featured on the website. Seven clinicians listed on the website constitute Quadrivia’s Global Clinical Advisory Council and are investigating various use cases. Per the website, the assistant will not be released until it meets regulatory and safety requirements. Though the website states that “Qu is tested rigorously to ensure clinical accuracy and safety in every action it takes,” it does not state whether eventually it will be submitted to the FDA, Health Canada, or for EU CE Marking.

In the US, there is growing concern about the rigor of FDA testing for AI assistants and interpretative/diagnostic models, with many falling into what is lately being seen as the looseness of 2016’s 21st Century Cures Act ‘breakthrough device’ category. 

Returning to Quadrivia financials, Sifted’s research indicates that the Jersey filing for Quadrivia Limited is for the parent company of a UK-based entity. Parsa is termed as a “person with significant control”. The VC Norrsken holds 638k shares in the company.

This Editor then took a dive into the Jersey Financial Services Commission (JFSC) registry for Quadrivia. Both listings filed in 2023 establish the company, the first for a “reserved name company” on 10 October 2023 (essentially empty) and then on 31 October 2023 for a “registered company private”. The incorporation documents are singularly unrevealing and procedural save for the Special Resolution document (PDF) of 24 May 2024 that determines that the company now has 9,440,000 A shares of no par value and the more revealing Entity Profile that confirms Norrsken holds 638,297 shares between NVC Fund 2 (D) plus (E) and ALP Partners Limited holds 9,444,000 shares. A check of ALP Partners Limited’s LEI (Legal Entity Identifier code) identifies its registration in St. Helier, Jersey. Its other entity name is Babylon Partners (Jersey) Limited.

Returning to Sifted’s article, Parsa was listed at HLTH as CEO of the company and was scheduled to speak before canceling. Based on Companies House (UK) filings, Parsa is a resident of Spain and holds more than 75% of the company, which corresponds to the 9.4 million share owned by ALP Partners and not owned by Norrsken. Two former Babylon research scientists, Damir Juric and Adam Baker, are early hires and the company is hiring others. Of note: Swedish investors have a long relationship with Ali Parsa. Major Babylon backers that owned–and lost–over 42% of the company included Kinnevik, VNV Global, pension fund AMF, and Swedbank Robur.

This Editor’s opinion–and to be clear, it is only my opinion: The speed of development–less than a year–and the scope of the AI assistant service does leave this Editor in a state of mystified wonder. For starters, accurate, responsive AI and vast stores of data are extremely difficult to build up to a clinically testable form in a year, much less clinical validity. The company is still at seed/stealth, yet inviting clinicians to test it.

Let’s look back at the Babylon Health parallel. It started to gain notice as early as 2014 at various UK conferences and won over GPs with its chatbot app. By 2017, GP At Hand debuted in parts of London allied to select GPs and was promoted in a flurry of tube adverts and billboards. It received huzzahs from none other than UK Health Secretary Matt Hancock in 2018. It also claimed a great deal in automated diagnosis of routine illnesses, not all of which were valid and problems surfaced fairly quickly. By 2020, with the pandemic barely on, Babylon’s accuracy was debunked at multiple stages by Dr. David Watkins, a consultant oncologist, better known as @DrMurphy11, cardiac activists on both sides of the Atlantic, and Hugh Harvey, Babylon’s former regulatory affairs head from 2016 to 2017 [recap and links TTA 14 Sept 2023]. Babylon moved into the US market, never gained FDA approval, IPO’d via a SPAC that later cracked, bought up a supermarket blood pressure tester (Higi), a few practices, worked with the government of Rwanda to bring care to rural residents, cut deals with major insurers…and then by August-September 2023, went thoroughly, completely belly up in US and UK. It left 2.4 million Rwandans in the lurch. GP At Hand survives with an NHS practice group in London and the rest acquired by eMed.

Based on the dates, it took no time–less than one month–for Ali Parsa to step out of the Babylon wreckage and create a new AI-based diagnostic and care assistant entity–and find another Swedish backer within that next year. One year to a new AI-powered concept. The resilience is…amazing. And leads to more than a few questions.

Some thoughts on the takeaways from HLTH

October 31, 2024 | by

HLTH, which was in Las Vegas last week (19-22 Oct), has moved from an ‘also-ran’ to a lead dog in healthcare conferences for the innovation oriented set, along with sister conference ViVE (with CHIME) for digital health in February. They offer an alternative to the broadly tech-focused CES and the HIMSS leviathan, which seems to have lost a bit of its mojo since HIMSS turned the management keys over to Informa. 

Like all industry meetings, there were the usual rash of announcements, panel meeting interpretations, and tea leaves reading by reporters on the scene. Both MedCity News and Healthcare Dive covered HLTH. MedCity News’ Katie Adams had seven hot takes resulting from conversations she had with various leaders from health systems, digital health, and VCs/investors. They were candid and as she put it, ‘refreshingly honest’. Your Editor’s comments follow.

AI could be worsening health disparities. This came from FDA commissioner Robert Califf who believes that health systems are using AI to segregate profitable patients from those who are not. “What we need is for AI to bring up the people who are currently disadvantaged.” Absent any proof at this stage that health systems are actually doing this while they are in at best early stages of attempting to integrate AI into an absurdly complicated network of systems without breaking them, this strikes me as Chicken Little-ism and Finger Wagging. 

Retail companies should stop trying to be something they’re not. A hospital CEO is quoted as stating that retailers are trying to apply their model to the healthcare space because healthcare delivery is wholesale. This deduction has some truth and then veers into the woods. Yes, Walgreens and CVS tried to apply a transactional model to primary care and got into Big Trouble. From the customer (patient) perspective, that person wants to get in, get fixed or examined–and get out with maximum speed and convenience. This didn’t happen. Will Amazon, a far bigger retailer, pull this off with One Medical brick-and-mortars, or run it as a membership ‘division’ linked with Amazon Prime? Their building of relationships with 20+systems like Cleveland Clinic for specialty care referrals (and in return primary care referrals) indicates they have the flexibility that Walgreens and CVS lack.

And since when is healthcare wholesale? It surely isn’t to the end user, the patient. This mindset is puzzling.

Strict abortion laws are likely already resulting in economic consequences. It seems that states with few to no limits on abortion are attracting OB/GYN residents and practices versus states with restrictions. This is a sad commentary on both the state of medical practice and public perception in dealing with human lives. There are alternatives.

Many investors have realized they backed products, not companies. The bloated investments and valuations that we saw in 2021 and 2022 (in actuality, 2020 into early 2022) could not be sustained. Well, yes, and the bubble burst last year. There was more to this. Easy IPOs through SPACs and the Fear of Missing Out (FOMO) led otherwise sensible retailers into buying brick-and-mortar primary care practices as extensions of their stores, investors into another iteration of ‘value-based care’, copycat virtual mental health providers, and digital health businesses that were essentially sinkholes, like Babylon Health. The companies may have had a good product or a nucleus of same. Then investors woke up and started to think about how impossible their exits were.

Healthcare leaders should remember they’re in the customer service industry. Exactly the opposite of the ‘wholesale’ delivery model. Patients are customers–but a special type of customer.

Next year, exit activity will likely still be lifeless in the digital health space. “Private equity firms might start acquiring more healthcare businesses.” Agreed. We’ll be seeing a lot more mergers of convenience to rationalize services and in some cases, survival–below the line of DOJ/FTC scrutiny.

We need to stop treating AI like a buzzword. In this view, it’s a tool that can transform healthcare delivery and make it better for both providers and consumers in speed and efficiency. In this Editor’s view, AI still needs to prove it can do this in a way that it is trustworthy, secure, and easily integrated into present systems.

Healthcare Dive highlighted a report by Silicon Valley Bank (SVB) and a Monday panel discussion on the decline of healthcare sector funding after the highs it reached during the Covid pandemic. It was a ‘sugar high’ that drew in non-healthcare sector “tourist” investors. Even at that time, it was not considered sustainable. Now the funding buzzwords are ‘pruning’ and ‘consolidation’. Investors are also looking for senior leaders with financial acumen and for companies that can create a fast path to profitability. SVB’s Megan Scheffel said that “One opportunity is for private equity firms to buy up multiple companies to create a platform” and create synergies. However, as this Editor has previously noted, this is yet another area where the DOJ and FTC are also scrutinizing. 

Big Tech–Microsoft, Google, Amazon, GE Healthcare and Nvidia–also saw opportunities at HLTH to promote their AI offerings, emphasizing use cases and partnerships with health systems, to solve a range of problems in documentation and scheduling, creating platform solutions customized to a specific health system. The big questions out there are readiness of clinicians to use the tools and how to offer them to systems responsibly. The tech providers do step back from telling health systems what to do. As Google’s Greg Corrado put it in the Healthcare Dive article, “It does need to be pioneered by healthcare systems that are willing and able to do the research on the ground, and not every health system can do that.” Exactly, as well as the implementation research and modifications.

One last thought–it was surprising how little news was generated at HLTH, versus before and after.

Mid-week news roundup: HarmonyCares $200M round, Risant to buy Cone Health, Courier Health’s $16.5M Series A; Coalition for Health AI loses HHS/FDA members; Weekend Read–reining in AI’s Wild West?

July 11, 2024 | by

In further Signs Of Life in healthcare funding and acquisitions:

In-home primary care provider HarmonyCares obtained $200 million in an unlettered round. Lead investors are General Catalyst, McKesson Ventures, and interestingly, an unnamed large national payer. Other investors are K2 HealthVentures with existing investors Rubicon Founders, Valtruis, HLM Capital, and Oak HC/FT. HarmonyCares provides in-home primary care to 70,000 patients in 15 states via 175-plus providers. Care teams include nurse care managers, social workers, and pharmacists, reinforced by 24-7 on-call support. The integrated model serves higher-needs patients through value-based care partnerships with Medicare Advantage plans and Medicare ACO programs via Centene, Aetna, and others. The fresh funding will be used for market expansion and scale up new technology for clinical outcomes and patient satisfaction. The company was founded as US Medical Management in 2013, became majority owned by Centene Corporation, which then sold it off as part of their 2021 divestitures. Release, FierceHealthcare, MedCityNews

Risant Health, the nonprofit/community-based hospital system initiative of Kaiser, intends to acquire Cone Health of Greensboro, North Carolina. Cone has five hospitals and an insurance plan. Purchase price was not disclosed, but Cone’s 2023 operating revenue was $2.8 billion. Closing the deal is dependent on the usual approvals. Cone plans to continue to operate independently. It is the second of five planned acquisitions with a $5 billion war chest that kicked off with Pennsylvania-based Geisinger that closed in April, The systems are being chosen for value-based care and population health models–as well as financial health and geographic expansion. Geisinger added $4.6 billion in a one-time gain to Kaiser’s bottom line last quarter.  MedCityNews, Healthcare Dive

Geisinger also experienced a massive data breach initiated by a former Nuance Communications employee that potentially exposed 1.2 million records. While it took place in late 2023, it was reported only last week. TTA 2 July

Courier Health added a $16.5 million Series A from Norwest Venture Partners and existing investor Work-Bench to its existing $4 million in seed funding. NYC-based Courier is a customer relationship management (CRM) platform to manage specialty medications across the patient journey, coordinating information for biopharma companies from patients and providers for field access, patient services, and marketing teams. Release, Endpoints

The Coalition for Health AI (CHAI) is losing two members out of HHS: Micky Tripathi and Troy Tazbaz. They were named in March to the CHAI board of directors as non-voting Federal liaisons. Both withdrew from the BOD due to potential Federal regulatory conflicts surfaced by Congress with this primarily private and for-profit organization. Dr. Tripathi is head of the Office of the National Coordinator for Health Information Technology (ONC-HIT) and Acting Chief Artificial Intelligence Officer at the US Department of Health and Human Services (HHS). Mr. Tazbaz is Director of the Digital Health Center of Excellence (DHCoE) at FDA. An FDA spokesperson told Healthcare Dive that Mr. Tazbaz is stepping down after the agency decided it no longer needed to participate in CHAI as a non-voting member. Hmmmm…..

Weekend Read: despite CHAI and other well-meaning agencies, including Federal, AI still resembles The Wild West. The author of this MedCityNews influencer piece points out that a faulty algorithm can make the difference between life and death. While he credits AI scribes for lightening provider load, AI is no quick fix or a bucket of cherries. FTA:

  • Bold claims abound but aren’t backed up by clinical research or regulatory oversight
  • Healthcare has become saturated with AI solutions that blur the line between what’s regulated and what isn’t. Clinicians have been left in the dark and are pushing back–the nurses’ protest against Kaiser is but one example.
  • AI development should be viewed through a regulatory-grade lens. The ability to demonstrate that a solution is positively impacting the care of a patient and not creating patient safety issues is crucial.
  • Clinical AI needs to go through the FDA approval process and developers need to understand that process.
  • The solution is not there to replace the clinician

Of course, this is all happening as healthcare is targeted by ransomware bad actors–and while health systems are laying off experienced IT staff, who have to be part of this evaluation. The above-mentioned Kaiser laid off well over a hundred in the past few months. Becker’s

Breaking news: Veradigm may sell, merge, or seek ‘strategic alternatives’; appoints new interim CEO effective June (updated)

May 28, 2024 | by

Breaking: Veradigm puts itself up for sale or ‘strategic alternatives’–but in the meantime replaces its interim CEO. The pre-holiday week and weekend break was undoubtedly a busy one at healthcare data systems/services Veradigm, the former Allscripts.

Sale? Merger? Something else? Crossing the wires today (Tuesday) at 7am Eastern Time US was the announcement that Veradigm is exploring “potential strategic alternatives that may include, but are not limited to, a sale, merger, strategic business combination or other transaction.” What was a puzzle was the next line in the carefully worded release: “The Company cannot assure that its exploration will result in Veradigm pursuing a transaction or that any transaction, if pursued, will be completed on attractive terms, if at all.” The release goes on to explain that there is no timetable for “any transaction” and that it was the last word until if and when something happens.

The doubt around ‘attractive terms’ seems unwarranted, as the same release also reaffirms their 2024 guidance of annual revenue between $620 million and $635 million and adjusted EBITDA between $104 million and $113 million. As of calendar Q1 close, they had cash/equivalents on hand of $343 million, funded debt of $208 million (the principal of 2019 convertible notes), creating net cash of $135 million. 

Veradigm appears in good shape, despite their delisting from Nasdaq earlier this year due to financial reporting problems two years running (2022, 2023, and 2024 to date), created by bad software, leading to continuing violations of Nasdaq listing rules. This led to the December resignations of CEO Richard J. Poulton and CFO Leah S. Jones and their replacement for a six-month term by Dr. Shih-Yin (“Yin”) Ho, coming from the board, as CEO, and Lee Westerfield from Clearsense as CFO. At that time, the board announced a search for permanent replacements [TTA 14 Dec 2023].  

Shares trade on the ‘pink sheets’ (OTC Markets OTCPK) under MDRX closing today at $8.70, up over $1.00 from last Friday.

Interim CEO departs, interim CFO stays. A second release today announced that Dr. Ho will depart the interim CEO slot on 7 June but interim CFO Lee Westerfield will continue. Dr. Ho’s place as interim CEO will be taken by Tom Langan, Veradigm’s president and chief commercial officer (CCO), reporting directly to executive chairman Greg Garrison and the board. No interim president/COO was named. From the release, Dr. Ho will not be returning to the board or any other function with Veradigm which is a most interesting exit. During her time, the company in February acquired ScienceIO, a generative AI/LLM company to add AI capabilities, and in January bought Koha Health, which fit into their revenue cycle management functions for MSK [TTA 27 Feb]. Lee Westerfield will be continuing as interim CFO until 24 December. Another change: this release made it clear that no permanent executive appointments will be made “while the separately announced exploration of strategic alternatives is in process.”

What does this mean? This Editor projects that offers for parts or all of Veradigm’s business are in the pipeline, whether they are relisted on Nasdaq or not. In a company of this size, breadth, and apparent good health, the jobs of CEO, president, and chief commercial officer (CCO), typically two to three positions, are never collapsed into one person. In this unique situation, this eliminates one or two C-level compensation packages. Going back to December 2023, a CEO had to be temporarily slotted in as the company was still listed on Nasdaq. Leaving a vacancy would not have been acceptable. Regarding the CFO position, in a sale or other “strategic alternative to maximize shareholder value”, a CFO is more important than even a CEO in working out the financial details, which for Veradigm are more complicated than usual. 

In fact, this move could be seen as telegraphed in February. When accepting its Nasdaq delisting, Veradigm’s board adopted a limited duration stockholder rights plan that issues by means of a dividend one preferred share purchase right for each outstanding share of Company common stock to stockholders of record on the close of business on 8 March 2024. This becomes exercisable only if a person or group secures beneficial ownership of 10% or more of the outstanding shares in the next year. The rights plan is obviously designed to compensate shareholders in the event of a takeover not approved by the board (i.e. a hostile takeover) via accumulation of stock and make a sale to an unapproved buyer less attractive, though it hasn’t stemmed the filing of various shareholder class-action lawsuits. Crain’s Chicago Business,  Healthcare Innovation

Editor’s further note: It is not unknown to break up a company in order to maximize shareholder value. The parts can be worth more than the whole. GE is the most recent example. More akin to Veradigm, Cendant Corporation, in which this Editor was once part of as a manager/director in the Avis Rent A Car unit, was sold or spun off in parts in 2005-6. Once a giant in hotel, car rental, timesharing, real estate brokerage, online booking, and other parts of travel, by 2005 the primary shareholder/CEO decided that the share value was not reflective of the company value, and proceeded to sell and spin off its businesses–rather smartly before the real estate crash in 2007-8. Perhaps Veradigm does not see a way forward in running its diverse healthcare businesses even where it has a strong and currently profitable position or there is pressure from its largest shareholders to cash out. It is always worth looking at shareholders. Close to 22% of its shares are institutionally held but widely distributed among them. The largest holders are Silver Point Capital (2.29%), Tyro Capital Management (1.5%), and a host of Vanguard and DFA funds totaling under 10%. Insiders hold only 1.3%  Yahoo Finance

Our Readers should not be surprised at any one of several outcomes in the coming months.

Another icy bucket: who is liable when a healthcare AI system fails?

February 7, 2024 | by

When AI contributes to patient injury, who will be held responsible? That is the question that an article in the New England Journal of Medicine (NEJM, 18 Jan, subscription required). It examines over 800 cases, pulling out the most relevant information on the 51 cases with software creating physical injury.  If you are in a healthcare provider or vendor legal department and strategic sourcing, this article deserves your greatest scrutiny.

AI and even software represent a relatively new area of tort law (an act or omission that leads to injury or harm). Responsibility is not clear because there is a lack of clear direction in existing case law, plus cases involving AI are few to date. The study reviews aspects of AI that may elevate or minimize risk. Ultimately, it comes down to minimizing risk in the adoption of AI tools as it was in clinical decision support systems and EHRs–because not adopting them may eventually be construed as malpractice. 

Cases involving medical software and AI have generally clustered around three situations. From the study:

  1. Harms to patients caused by defects in software that is used to manage care or resources. Typically, plaintiffs bring product-liability claims against the developer.
  2. Physicians having consulted software in making care decisions (e.g., to screen patients for certain conditions or generate medication regimens). In cases of harm, those physicians’ decisions are evaluated against what other specialists would have done–standard of care.
  3. Apparent malfunctions of software embedded within devices, such as implantables, surgical robots, or monitoring tools. Plaintiffs may assert malpractice claims against physicians and hospitals, alleging negligent use, installation, or maintenance of these devices, including human error in reprogramming. Plaintiffs may also sue developers, alleging defects in manufacturing, design, and warnings.

Moving ahead, the study’s recommendations on weighing liability risk against the benefits of adoption of AI in direct patient care with a “human in the loop” (not fully autonomous software) are, from the study:

  • Resist the temptation to lump all applications of AI together. Some tools are riskier than others.
  • The hallmarks of risk are: low opportunity to catch the error, high potential for patient harm, and unrealistic assumptions about clinician behavior
  • In tools that can create high risk, expect to allocate substantial time and resources to safety monitoring and gather considerable information from model developers and implementation teams. Lower risk tools should be monitored in a more general, lower-touch way. 
  • Organizations can bargain, in a buyer’s market, for terms that minimize purchasers’ liability risk. Licensing agreements should, for instance, require developers to provide information necessary for effective risk assessment and monitoring, including developers’ assumptions regarding the data that models will ingest, processes for validating models, and recommendations for auditing model performance.
  • Purchasers should also insist on favorable terms governing liability, insurance, and risk management in AI licensing contracts–in other words, indemnification. If developed in-house, ensure that you have adequate insurance to cover claims.
  • Apply lessons learned from older forms of decision support. Courts examine whether the recommendation was evidence-based and whether the physician should have heeded it for the patient in question.
  • Document, document, document
  • Legal defenses for AI require different expertise and expert witnesses than typical malpractice cases.
  • It also may be prudent to inform patients when AI models are used in diagnostic or treatment decisions–informed consent

POLITICO commentary 

Two Must Reads: Is AI the next hype bubble replacing crypto–and capable of great harm?

February 7, 2024 | by

crystal-ballTwo articles that consider the current state of AI to read and ponder. On one hand, far less than what it’s hyped to business–especially healthcare–and on the other, more malevolent with great potential for harm.

The first article by Gintaras Radauskas in Cybernews confirmed this Editor’s misgivings on exactly what is artificial intelligence (AI) and the unrealistic expectations around it. It seems that a lot of the thinking around AI is doubletalk–gibberish, as he put it, leading off with analyzing a recent interview of Sam Altman of Microsoft-backed OpenAI and its chatbot ChatGPT. 

“To me, AI looks like a solution to a problem that’s not a problem – or, actually, a non-solution to the very real problems that are not going away.”

  • He draws parallels to cryptocurrency, which was widely hyped in the past few years as a secure alternative currency that was off the dollar and global bank grid. Even large banks, financial institutions, and big VCs like Sequoia Capital were sucked in. And real people did lose real money–famous football quarterback Tom Brady to African and Indian students.

This Editor knew the high and nonsensical point of the bubble was when she was in her local Shoprite perhaps two years ago and after checkout, next to the NJ Lottery machine and containers of sidewalk deicer, there was a machine that would convert my very real US greenbacks to crypto. The end of the bubble was the FTX bankruptcy in November 2022, then the arrest followed by last year’s trial and conviction of FTX’s Sam Bankman-Fried. Gaining little notice was that FTX was itself hacked and drained in a SIM-card swapping scheme in late 2022 before its collapse that emptied the accounts of 50 people. Those three perpetrators were indicted earlier this month. CNBC

  • When crypto imploded, ChatGPT took its place in the TechWorld Hype Universe. Bank of America terms it a ‘defining moment–like the internet in the ’90s’. For those of us who were around then, there were bulletin boards (!), multiple platforms (AOL), something called search engines (AltaVista, Dogpile), and lots of websites that surfaced and then went under the waves. A lot of money changed hands and a lot of parties were thrown before the dot.com bust. Unlike the internet boom, AI is already dominated by the tech giants like Microsoft (OpenAI) and Google (Bard, now Gemini) so it’s actually less of a risk for the large companies eager to use it.

But then why are these large companies not on board yet? “Only 3.8% of businesses reported using AI to produce goods and services, according to November’s Business Trends and Outlook Survey. It’s safe to say we’re very, very far away from mass adoption and use of AI.”

Perhaps it’s this. AI has already been parodied as a highly sophisticated long-form autocomplete tool. Your Editor has experimented with generative AI via Microsoft’s Bing. Example: an article on a non-healthcare topic, antique auto restoration. It was largely but not entirely accurate. But it was written at about a fifth-grade level in a style that was flat and uninteresting–the dumbing-down of the value of copy to inform and persuade continues. (Companies look at writers and marketers as an expense to be eliminated, not managed. As a marketer from the start of my career, and who worked for or with some of the best-known US agencies renowned for creativity, I would not recommend that career path to anyone today.) 

  • And finally, the ultimate use of AI is to get rid of people. That is what automation does. And while it can increase accuracy, speed, and take away drudgery in tasks like healthcare billing and coding, healthcare is about people–and while it can make it appear more responsive, when the humans are gone, will only the chatbots be left, with coding that endlessly replicates itself, like the automated phone menus that leave you in the ether with your questions unanswered–except it’s your diagnosis or information that your doctor’s trying to obtain? And what happens to the professionals trained to do these tasks and who already use automation tools to do their work? What happens when AI picks up and propagates a wrong treatment or surgical technique? This is not quite the analogy of the blacksmith and horseshoes or film versus video. We are ill equipped to deal with the societal effects of training people for jobs that no longer exist and concentration of technology into a very few companies.

And if we leave these tasks to AI without human intervention and supervision, what will happen?

The second article, linked to in the first, could be titled after the 1960s movie ‘Experiment in Terror’. Imagine asking AI about you. It tells you you’ve died and gives links to your obituary. Alexander Hanff, a founder of IT companies, computer scientist, and privacy technologist did. And ChatGPT repeatedly told him he was dead, complete with fake links to his obit in the Guardian and very convincing text. Now imagine you’re applying for a job, a loan, a mortgage, or a passport. The AI tool tells the employer, the bank, and the Feds that you’re dead. Hanff was already warned by a professional colleague who conducted the same exercise and received a bio back with false information. This deep fakery, origin unknown and undiscoverable, is huge potential for harm. Conclusion:

“Based on all the evidence we have seen over the past four months with regards to ChatGPT and how it can be manipulated or even how it will lie without manipulation, it is very clear ChatGPT is, or can be manipulated into being, malevolent. As such it should be destroyed.” ®

Hanff has company with Steve Wozniak of Apple on this [TTA 5 May 2023]. Read this one all the way through. And be scared. The Register

Sell NHS medical records to fund AI, biotech? Not quite what’s in the Blair-Hague report. (updated)

February 2, 2024 | by

A ‘sale’ not quite what the press reports. The former political rivals of the 1990s and early 2000s, Sir Tony Blair and Lord William Hague, joined forces again last week to release their third report.  “A New National Purpose: Leading the Biotech Revolution”, the third joint report available on Lord Hague’s website, would be to capitalize on what they described as “the fastest and most far-reaching [technological] revolution in the history of human civilisation” to make Britain a world leader in developing “gene therapies, of discovering new antibiotics and of building molecular factories.”

The three major points of the report are:

  1. Formation of a new laboratory, the Laboratory of Biodesign, to focus on the invention of new biotechnology, biomolecules, and therapeutics that are at too early a stage for commercial investors.
  2. Establishment of an NHS Data Trust (NHSDT, pages 33-36),designed for public benefit, with a controlling stake owned by NHS England and additional investments from companies. 
  3. For scaling up biotech, an expansion of the work of the British Business Bank, improved rules for Venture Capital Trusts and consideration of scale-up grants where companies will list in Britain. The recommendations go further into reforms in venture capital funds and capital markets.

#2 is the point making the headlines in the Independent and Sky News. The reports do not explain that the sale of the NHS medical records would be done through the NHSDT.  It would negotiate data-sharing agreements with external organizations and be capable of joining profit-sharing arrangements, while guarding that data would not be sold to third parties and be strictly anonymized. The plain language of the recommendation: “Provide research entities with access to the anonymised data in return for financial profit, which would benefit the NHS. This could happen via a range of mechanisms, varying from direct financial payment to negotiating cost-price access for the NHS to any medicines developed based on the data provided.” (page 35) Profits would be reinvested into the NHS. The analogy is to the for-profit parts of the BBC.

The report goes on to stress producing high-scale companies that stay in the UK, versus the current situation of exporting technology to the US. It also proposes a Biosecurity Task Force “to keep Britain and the rest of the world safe from biotech accidents and bad actors.”

It also addresses how the UK should address a future pandemic as a national security issue (pages 55-58) and restructure the UK Health Security Agency.

In AI, the report recommends the formation of the MediMind laboratory network that would work towards relieving pressure on the NHS through creating personalized AI doctors. This would be done in partnership with industry and the NHS. Last June’s report concentrated on AI.

(Update 2 Feb, Editor’s note: It dismays me again that professional reporters writing for reputable news websites misinterpreted the report as advocating the straight-up sale of NHS medical data. All one had to do was what this poor Yank marketer/writer did–search within the report, past the executive summary, into that section. But ‘selling NHS data’ is more ‘clickbaity’. 

Unfortunately, this Editor believes that these reports will be read, filed, and the same mistakes will be made, putting the UK further behind the proverbial 8-Ball…standard operating procedure.

Open forum below for our UK (and elsewhere) Readers.)

News roundup: Owlet’s Dream Sock, BabySat go to market; General Catalyst’s HATco agrees to buy Summa; Cigna’s contrasting provider strategy; new ElliQ robot assistant debuts at CES

January 18, 2024 | by

JP Morgan’s Healthcare Conference (JPM) and CES are as expected big generators of news around digital health–here’s a selection from then and more:

Owlet launches Dream Sock and BabySat at CES. Both were FDA-cleared in November and June 2023 respectively. The Dream Sock baby monitor received first-of-kind de novo clearance for pulse oximetry and sends real-time Health Notifications for low pulse rate, high pulse rate, and low oxygen to parents’ smartphones. Target market is infants 1-18 months and 6 to 30 pounds with direct sale on the Owlet website at $299.

The BabySat is the prescription-only version (left) targeted to infants 1-18 months and 6-30 pounds, but with acute or chronic medical conditions. It also has the unique capability not only to track vital signs but also for the provider to customize alarms for oxygen saturation and pulse rate. Owlet’s BabySat information page explains in plain English the type of medical conditions where the BabySat would be of assistance and the steps to obtain a prescription that is fulfilled through their partner AdaptHealth. A virtual Rx and insurance reimbursement are in the works. A small drawback is that it is only usable with an iPhone. Happily, their stock is also on the rebound at the highest point in six months. Having followed them since the ‘telehealth for the bassinet set’ days of 2012-2013, their continued independence, their rebound from some dark days, as well as their focus on baby health, this Editor continues to wish them bonne chance. Owlet release (via Yahoo Finance).

Big Investor General Catalyst announced their first acquisition move for the Health Assurance Transformation Corporation (HATCo) not at JPM but today (17 Jan). Summa Health is a $1.8 billion (in revenue) non-profit integrated healthcare system headquartered in Akron, Ohio that encompasses hospitals, community medical centers, a health plan, an accountable care organization, a multi-specialty physician organization, medical education, research and the Summa Health Foundation. HATCo’s objective is to transform healthcare towards a goal of “health assurance”, defined as “a more affordable, accessible and proactive system of care” where presumably their extensive experience in investing in healthcare gives them expertise. [TTA 10 Oct 2023] The letter of intent initially sets up a partnership with immediate investment in Summa while due diligence takes place, then when completed moves to a definitive agreement with details of the acquisition and a transaction price in the next few months. Summa would move from a non-profit to a for-profit in becoming a subsidiary of HATCo. According to their information, current management will remain in place.

Summa’s incentive is to stem losses, reportedly at $37 million through Q3 2023, more than double the prior year. HATCo in November stated its desire to buy a health system in Summa’s $1 to $3 billion range. As usual, the buy is subject to regulatory approvals and a final closing date.  HATCo release, Summa Health statement on “our future”, FierceHealthcare

To the contrary, Cigna prefers to partner, not own, healthcare providers. As a payer closer by many degrees to hospitals and practices than General Catalyst, structured much like UnitedHealth Group with Evernorth its counterpart to Optum, they have avoided the aggressive ownership of physician practices. UHG employs about 10%–90,000–physicians through ownership of practices as of December 2023. MedPageToday  At JPM, Cigna CEO Eric Palmer emphasized ‘strategic relationships’ like a minority share of VillageMD (majority owned by Walgreens) in their acquisition of Summit Health, and creating an ‘ecosystem’ that connects to the best partners. Their investments will be wrap-around services in home health, behavioral and virtual care now that a merger with Humana is once again off the table. Becker’s Payer They’ll have some cash to do so; Cigna’s sale of their Medicare Advantage business will likely be to Health Care Service Corporation (HCSC) and fetch $3 to $4 billion. Becker’s Payer

Intuition Robotics debuts ElliQ 3 at CES. An interactive desktop companion robot designed to improve social connection and alleviate loneliness of older adults and those with assistive needs, the new version updates the robot hardware and software capabilities including generative AI capabilities powered by Large Language Model (LLM). The new design from Yves Behar’s design studio, Fuseproject, is also 1.3 pounds lighter and has a 36% smaller footprint which makes it easier to both place and handle, along with a fully integrated screen. Technical improvements include an octa-core SoC and a built-in AI processing unit (APU); 33% more RAM, twice the amount of computing power and memory, and an inclusion of a dual-core AI processing unit (APU), all of which are needed to power generative AI for greater ‘conversant’ capabilities. The LLM technology integrated into the Relationship Orchestration Engine makes real-time decisions regarding actions, scripted conversation, and generative AI conversations. For instance, the person speaking with ElliQ may talk about activities and beliefs, which are stored and classified. In another conversation, ElliQ may use that information to suggest participation in activities and social interactions, while ensuring that the context and flow of conversation is ‘guardrailed’ and appropriate. The AI can also assist the person in activities such as painting or writing poems together.

Current partners include the New York State Office for the Aging, Inclusa (a Humana company), and the Area Agency on Aging of Broward County, as well as newer partners like The Olympic Area Agency on Aging, Ypsilanti Meals on Wheels, and others. Release

Israel-based Intuition Robotics most recently raised $25 million in August 2023 in an unlettered round with $20 million in venture capital plus $5 million in venture debt. TTA 19 Sept 2023

Some final words on Olive AI–what can we learn from its failure? (updated)

November 21, 2023 | by

“To the extent Olive might have sold something, they didn’t deliver – otherwise they’d still be in business.”–Emily Evans, managing director, Hedgeye Risk Management (quoted in Columbus Business Review)

Seeing this article on how Olive AI ‘ran out of time and money’ in Becker’s Hospital Review, this Editor hoped that it would be a final word, a summing up of what was likened to the seismic equivalent of Theranos’ failure in the health IT and ‘changing healthcare’ space. It wasn’t, but a terse summary of a very long article in Columbus Business Journal–Columbus, Ohio being their headquarters city. 

It’s a decade-long story (2012 as CrossChx to 2023). Up to March 2020, it seemed to be a reasonable narrative of a company and entrepreneur, Sean Lane, who built on his USAF background and founding an earlier successful software business (BTS Software) to transform healthcare through automating routine tasks through what they termed ‘AI’ but was more like software programming coupled with machine learning. With General Catalyst’s $52 million in hand and the encouragement of industry experts, he evangelized, hard, at multiple conferences. Some savvy investors and advisers (Ms. Evans above) saw that Mr. Lane didn’t know much about healthcare even during the ‘throw money at anything health tech’ days of 2020-21. But Olive AI easily gained two more 2020 raises totaling over $330 million, plus the capper in July 2021 of $400 million, for a total of over $850 million.

With the funds, Mr. Lane acquired or developed multiple businesses for Olive including prior authorizations, revenue cycle management, population health, business intelligence, and analytics for surgery. He even put $50 million into designing a Medicaid managed care insurer, Circulo Health, which was sold off in 17 months. The pivots came thick and fast, but the sales didn’t follow and the negative client reviews (KLAS) plus non-renewals started to pile up. Come 2022 with healthcare paying the Pandemic Piper and interest rates inflating, the VC funding spigots turned suddenly to ‘OFF’. The grow-at-any-cost early-stage companies found that when it came to VC funding, as they say in New Jersey, they couldn’t get arrested. So the end, as with Pear, Olive, and Babylon, came quickly. (Cue the tinny piano playing ‘Melancholy Baby’ in a dive bar.)

So for your startup or early stage company… A Guide to Avoiding A Train Wreck.

  • Don’t believe your own press releases, no matter how well written. And make sure your marketing people are seasoned pros who say what you do accurately and have been there, done that. (And when the most seasoned gives the raised eyebrow…ask why.)
  • Don’t constantly bang the gong that your solution/s will transform healthcare (memo to Larry Ellison). Stick to solving client problems and do that well, though you may have to evangelize a little. In the end, create ‘raving fans’. 
  • Don’t go it alone. Create strong supplier alliances where you need them. Then treat your partners and their corresponding account managers well and give them the resources they need.
  • Take the absolute minimum of Other People’s Money, even when it’s being thrown at you and everyone else, including your competitors which you will keep a cynical eye on. Stow cash away in the old fashioned way, in a reputable and not overextended bank, for the rainy days that will come.
  • There are certain investors and ‘thought leaders’ to smile at and run away from. (Two of them are mentioned in the article.) Their track records are dubious or they have their own agendas.
  • Get to positive cash flow as quickly as you can. 
  • Hire well, but not too many. And beware of execs with non-competes. They tie up your legal counsel who may also be keeping an eye on your IP, compliance, and finances.
  • Overdeliver and create happy clients who renew and expand your business–but don’t give away the store doing it
  • If you have to buy another company, don’t buy when the streets look paved with gold. Buy when there is some Type A on the pavement. And when you buy, ensure it makes sense in your business model, the acquisition actually does what they claim, their IP is free and clear, and the company owners aren’t overeager to sell (a clue to hidden problems).
  • Don’t, whatever you do, step on Superman’s cape. Avoid getting into conflicts with big guys like Epic, Oracle, or UnitedHealthcare. Especially don’t say that you will put them out of business. (You won’t.)
  • Know that healthcare, no matter what the conferences say, is an entrenched, over-regulated, risk-averse, and thus extremely slow-moving business. The risk level is high, the reward may be incremental, at best. And the big guys–the payers, big health systems, and their vendors, will always have it all over you.

Updated–Some more advice from different points of view:

“Hope is not a business model”–advice from two VCs, with a bit more advice on basic banking

ViVE post-script: VC panel opines in midst of digital health’s new reality (depression?), and extra ViVE from an attendee

Your thoughts on the above and your real-world examples invited as comments!

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

November 1, 2023 | by

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

Additional updates:

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

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

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

Week-end roundup: Walmart Health adds 3 FL centers; wearables nudge close to 50%; Dandelion cardiac AI performance pilot; Aledade’s $260M Series F; $10M for DUOS’ older adult assistance platform; Friday Health Plans to close

June 23, 2023 | by

Walmart Health continues Florida expansion with three new centers opening this week–two in Orlando and one in Kissimmee. This adds to their present five in the central Florida area: Orlando, Kissimmee, Ocoee, Sanford, and Winter Garden. By fall, plans are to have 23 in Florida, tracking to the Q1 2024 plan for 75 total, including 28 new locations in the Dallas (10), Houston (8), Phoenix (6), and Kansas City MO (4) metros [TTA 3 Mar]. Becker’s

New study by AnalyticsIQ indicates nearly half the US population may be adopting wearables and using digital health. Usage doubled in the midst of the pandemic (2020-21) with 46% reporting using at least one type of consumer health technology over the past six months. 35% of the 8,000 respondents used smartwatches, with Fitbit (42%) edging out Apple Watch (38%) followed by Samsung Galaxy Watch and Garmin Vivoactive. By other wearable device type:

  • Blood pressure devices: 59% of survey respondents
  • Sleep monitors: 21%
  • ECG monitors are still a niche: 11%
  • Biosensors such as glucose monitors, hormone monitors, fall detectors, and respiratory monitors are still niche at 8%, but the business grew to $25 billion in 2021
  • Smart clothing: a surprising 6%.

Unsurprisingly, wearable health tech usage skewed heavily towards Generation X-ers and men. Among ethnic groups, black and Latino groups had the highest usage.  Healthcare Dive

Dandelion Health testing cardiac dataset for AI reliability and bias. Starting with their data on ECG waveform algorithms, this startup will be validating the performance and bias of artificial intelligence across key racial, ethnic and geographic subgroups. NYC-based Dandelion is a public-service focused precision analytics company that works with three healthcare systems–Sharp HealthCare (San Diego, California), Sanford Health (Sioux Falls, South Dakota) and Texas Health Resources (Arlington, Texas) to aggregate and de-identify clinical data for roughly 10 million US patients. The validation pilot will start on 15 July and last for an initial period of three months. It may be expanded to include additional clinical data modalities such as clinical notes and radiology imaging. According to their founder and CEO Elliott Green, the “pilot program answers the question, does your algorithm do what it’s supposed to do? And does it do it fairly, for everyone?”  Release, Healthcare IT News

Who said big, late raises are a thing of the past? Not if your company is Aledade, which has solidly succeeded in management services for independent primary care practices transitioning to value-based care models. They just gained a shiny new Series F of $260 million on top of last June’s $123 million Series E for a new valuation of $3.5 billion. The Series F round was led by Lightspeed Venture Partners along with Venrock, Avidity Partners, OMERS Growth Equity, and Fidelity Management. Aledade has grown to manage 1,500 practices and has acquired in recent months Curia (data analytics for advance care planning) and Iris Healthcare (care planning technology). The additional funds will be used to opportunistically add capabilities into its platforms. FierceHealthcare, Bloomberg (paywalled)

Somewhat more in the recent range is DUOS’ $10 million venture capital raise for a total of $33 million. Leading the round were Primetime Partners, SJF Ventures, and CEOc’s Aging Innovation Fund managed by Castellan Group. What’s unusual is that the platform addresses older adults’ needs as a personal assistant in areas such as care, support in social determinants of health (SDOH), housing, and transportation against Medicare Advantage plan benefits, local community resources, and government programs. The benefit for the older person is to close gaps in care and increase utilization of Medicare Annual Wellness Visits (AWVs). Originally targeted to older adults, the company is broadening its markets to health plans, providers and employers. Release, Mobihealthnews, Home Health Care News

Insolvent ‘insurtech’ Friday Health Plans loses last two health plans to state receivership, will close. Colorado and North Carolina were the last two states the company operated in. Both states’ insurance departments put Friday into receivership this week after the insurer notified them that they could not raise additional cash to continue operations. This affects 35,000 and 39,000 individual health policyholders respectively. Texas, Georgia, Oklahoma, and Nevada were previously placed in receivership. State insurance regulators have assured providers that they can expect to be paid for their services per their contracts. Members generally need to find new insurance companies quickly, however. 323 Friday employees in Alamosa, Colorado, their headquarters, will be laid off between 23 June (this Friday) and 6 July, without the previously promised 60 day notice nor any notice of severance or benefit continuation. Friday is the largest employer in this Denver/Colorado Springs suburb. In its brief lifespan, Friday raised over $300 million and lost over $700 million. FierceHealthcare 22 June, 21 June.  Alamosa Valley Courier  Additional commentary by industry analyst Ari Gottlieb on LinkedIn

‘The Future of AI and Older Adults 2023’ now published

June 14, 2023 | by

Laurie Orlov of Aging and Technology Watch in her latest paper tackles the latest iterations of AI and ML, tracing their roots back to 2014 to the original smart speakers and voice assistance, technologies that enabled older adults to access services with convenience and at reasonable cost. What will be the impact of AI using tools such as large language models (LLM) like ChatGPT to develop improved search, voice assistance, answers to health questions, and care plans written in understandable and empathetic language? For care facilities and senior housing, will they leverage AI with voice and sensor tech to improve safety monitoring for both residents and caregivers, plus the dream of predictive health for residents or those living at home with limited assistance? Will chatbots get a lot smarter versus obnoxious? Find out what both the short term and long term (5+ year) impact could be. 

Ms. Orlov’s somewhat gimlety view includes Gartner’s infamous Hype Cycle chart on page 5. As of today, most AI technologies reside in the balmy Peak of Inflated Expectations, the place where whatever investment funding is going. There’s lots of innovation and kitchen table hackathoning. Looming about two years out is the inevitable Trough of Disillusionment which has already been kicked off by Big Thinkers such as Steve Wozniak. As this Editor observed last month, it is a double-edged sword, with the bad side in its potential for data misuse, fraud, fakery, and malicious action. It’s already created controversy that this Editor predicts will crest in the next year with demands for regulation. We’re not there yet, however.

Download of the PDF is here and free.

Perspectives: How AI and ML can accelerate the growth of telemedicine across the globe

May 31, 2023 | by

TTA has an open invitation to industry leaders to contribute to our Perspectives non-promotional opinion area. Today’s Perspectives is from Deepak Singh, a thought leader in AI and telehealth. In his work, he builds AI-powered healthtech and telehealth solutions that can reach from big cities to remote areas of the world. With double master’s degrees in business and information systems, he has 10 years of experience in product development, management, and design ranging from telecom to multimedia and from IT solutions to enterprise healthcare platforms. This article discusses how artificial intelligence (AI) and machine learning (ML) can accelerate the global growth of telemedicine, including a consideration of risks and possible solutions.

Introduction

The ongoing technological advancements have led the way towards greater opportunities for the growth of the global health business, particularly telemedicine through increased connections via the internet, robotics, data analytics, and cloud technology that will further drive innovation over the next ten years. It is obvious that artificial intelligence (AI) usage plays a noteworthy part in the maneuvering and execution of medical technologies when considering the bulky amount of data handling needed by healthcare, the requirement for consistent accuracy in complex procedures, and the rising demand for healthcare services.

Telemedicine is the practice of performing consultations, medical tests and procedures, and remote medical professional collaborations through interactive digital communication. Telemedicine is an open science that is constantly growing as it embraces new technological developments and reacts to and adapts to the shifting social circumstances and health demands. The primary goals of telemedicine are to close the accessibility and communication gaps in four fields: teleconsultation, which is having all kinds of physical and mental health consultations without an in-person visit to a medical facility; teleradiology, which uses information and communication technologies (ICT) to transmit digital radiological images (such as X-ray images) from one place to another; telepathology, which uses ICT to transmit digitized pathological results; and teledermatology, which uses ICT to transmit medical information about skin conditions.

AI has been progressively implied in the field of telemedicine. AI deals with machine learning (ML) that discloses complex connections that are hard to figure out in an equation. In a way that is similar to the human brain and neural networks that encrypt data using an enormous number of interconnected neurons, ML systems can approach difficult problem-solving in the same way that a doctor might do by carefully analyzing the available data and drawing valid judgments.

A growing understanding of artificial intelligence and data analytics can help to broaden its reach and capabilities. Telemedicine’s goal is to boost productivity and organize experience, information, and manpower based on need and urgency and it can be augmented by the use of AI and ML.

Evolving application of AI and ML in Telemedicine

In order to enable clinicians to make more data-driven, immediate decisions that could enhance the patient experience and health outcomes, AI is being employed in telemedicine more and more. The use of AI in healthcare is a potential approach for telemedicine applications in the future.

Al and ML were able to bring about the necessary revolution in so many sectors due to their competence, increased productivity, and flawless execution of tasks. AI is now surpassing the boundaries of being a mere theory and stepping into a practical domain where the need for human supervision for the execution of jobs by machines will be minimized all due to the presence of enormous datasets along with an increment in the processing power of that data. A computer-based algorithm that uses AI has the ability to analyze any form of input data such as ‘training sets’ using pattern recognition which eventually predicts as well as categorize the output, all of that is beyond the scope of human processing or analytical powers that uses traditional statistical approaches. In the field of telemedicine, the adoption of AI and ML still has to go a long way till its vital concepts are understood and applied likewise, nevertheless, the current scenario gives a promising picture where many research projects have applied AI to predict the risk of future disease incidence, decrypting cutting-edge imaging, evaluating patient-reported results, recording value-based metrics, and improving telehealth. The perspective to mechanize tasks and improve data-driven discernments may be comprehended by profoundly improving patient care with obligation, attentiveness, and proficiency in prompting AI.

Drawbacks of artificial intelligence in telemedicine (more…)

Weekend reading: HHS Office of Information Security presentation on security risks in AI, 5G, nanomedicine, more

September 20, 2022 | by

Earlier this month, the US Department of Health and Human Services (HHS) Office of Information Security’s Health Sector Cybersecurity Coordination Center issued a presentation/paper that discussed the cybersecurity risks for healthcare organizations in implementing artificial intelligence, 5G cellular, nanotechnologies in medicine (nanomedicine), ‘smart hospitals’, and quantum computing.

Each area is defined, benefits listed, and then security concerns.

Highlights of the cybersecurity risks:

  • AI: requires very large collections of data in order to learn; privacy and security concerns regarding personal health information (PHI); de-identified data can be re-identified (as TTA posited several years ago!)
  • 5G overlaps with IoMT (internet of medical things) tech: both devices and data need to be secured end-to-end as they connect to the network and on devices themselves; design and implementation of the software in medical devices should include a specification of cybersecurity features and validation of those features; regular updating needed
  • Nanomedicine: remote connectivity leading to ransomware and the disruption of nanotechnology devices with theoretically fatal consequences; weaponized inhalable particles as a delivery system for bioterrorism
  • Smart hospitals: an expanded attack service; considerations same as above; resilience and continuous monitoring critical
  • Quantum computing: affects all cryptographic algorithms, requiring review and updating of those that are part of  information infrastructure

Emerging Technology and the Security Implications for the Health Sector (34 slides)  Also Becker’s Health IT

Week-end news roundup: Fold Health launches OS ‘stack’; admin task automator Olive cuts 450 workers; 38% of UK data breaches from cyber, internal attacks; hacking 80% of US healthcare breaches; does AI threaten cybersecurity?

July 21, 2022 | by

Startup Fold Health launched this week. It’s developed a suite of modular tools that are interoperable with existing EHRs or platforms to enable them to work better, together. Fold’s main claim is to “move primary care beyond the constraints of a 15-minute visit and provide a revolutionary consumer first experience through micro, automated workflows and campaigns of care.” There is an athenahealth connection, in that the founders were from Praxify, a virtual assistant/patient engagement app bought by athenahealth for $65 million in 2017. It has a $6 million seed investment from athenahealth. FierceHealthcare

On the other side of the funding mountain,  Olive, an AI-enabled data cruncher that automates routine administrative healthcare processes such as revenue cycle management, has pink-slipped 450 employees, about one-third of its staff. In a letter to employees excerpted in Axios, Olive cites ‘missteps’ and ‘lack of focus’. It follows hiring freezes, major staff departures, and overpromising/underdelivering, including not using AI or machine learning for automating tasks, featured in an April Axios investigation. Olive has gone through over $850 million in nine rounds of funding (the last July 2021, Series H–Crunchbase). FierceHealthcare

Cyber attacks with internal breaches account for 38% of UK organizations’ (of all types) data losses in 2022. This is based on the Data Health Check survey of 400 IT decision makers compiled by Data Barracks, a cloud-based business continuity organization. The second and third reasons for data loss are human error and hardware failure. Of those surveyed, over half have experienced a cyber attack, most commonly caused by ransomware. 44% paid the ransom, 34% didn’t and used backups. Their recommendations include frequent backups and keeping track of how many data versions–both will minimize downtime and data loss. Release, full report

By contrast, returning to the US and healthcare, malicious hacking activity accounts for nearly 80% of all breaches. Fortified Health Security’s mid-year report on the state of healthcare cybersecurity, reviewing HHS Office for Civil Rights (OCR) data,  noted that in first half 2022:

  • Healthcare data breaches primarily originated at providers– 72%. The remainder were at business associates at 16% and health plans at 12%.
  • The number of records affected was 138% higher than the first half of 2020 at over 19 million records
  • Breaches were concentrated in relatively few organizations: Seven entities experienced breaches of more than 490,000 records each, in total 6.2 million records or 31% to date.  
  • OCR’s data breach portal recorded 337 healthcare data breaches that each impacted more than 500 individuals, a small decline from 2021’s 368
  • Hacking incidents rose to 80% from 72% in 2021. Unauthorized access/disclosure incidents totaled 15%; loss, theft, or improper disposal accounted for only 5 percent of breaches.
  • AI and ML-enabled security offerings can bolster cyber infrastructure. Organizations should also look at how IT staff shortages impact their planning and security.    HealthITSecurity

Can AI (and machine learning-ML) lessen breaches–or open the door to worse problems, such as algorithmic bias, plus data privacy and security concerns? Vast quantities of data pumped through AI or ML algorithms are harder to secure. If the algorithms are built incorrectly–such as eliminating or underrepresenting certain populations–what comes out will be skewed and possibly misleading. In the Healthcare Strategies podcast, Linda Malek of healthcare law firm Moses & Singer, who chairs their healthcare, privacy, and cybersecurity practice group, discusses the problems. She suggests some best practices around transparency, security, privacy, and accuracy when developing an AI algorithm, including collecting as much data as possible, and as diverse as possible, for accuracy. Additionally, the design should incorporate privacy and security from the start. HealthcareExecIntelligence