TTA’s Holiday Runup 2: 6.9M users hacked at 23andMe, Cigna & Humana talk M&A, Feds try ‘nutrition labeling’ for AI, health checks on Bright, Cano, and Clover Health, what’s up with HIMSS24, more!

 

 

More data grabs, this time at 23andMe–now revealing that nearly half of customers affected. Cigna and Humana talk M&A, but their PBM won’t make it easy with FTC and DOJ. Feds try ‘nutrition labeling’ (!!!) to regulate AI, but Google (and others) keep on gobblin’. We check on the health of Bright Health and Cano Health, while Clover repots and adds some MiracleGro. And whither HIMSS24–is anyone exhibiting?

23andMe hacking may have affected 6.9 million+ users–not 14,000–in massive PII breach (It’s hard to hide)
News roundup: ONC recommends ‘nutrition labeling’ for healthcare AI apps but Google moves forward; CVS’ health services rebranding as Healthspire (updated); Clover Health repots out of ACO REACH (ONC proposes, Google disposes)
Stayin’ alive–or trying. Bright Health Texas plan seized for liquidation; Cano Health reverse splits, up for sale (A dim future for both)
Short takes: a rumor of merger/buy with Cigna and Humana–what are the odds? (updated) And what’s up with the low number of HIMSS 24 exhibitors? (We spin the wheel, place your bets on both)

A cyber-week starting with a real turkey–multiple reports of millions of compromised records in hospitals–one originating (again) with a vendor. The near-inventor of Cyber Monday, Amazon, not quite the threat industry pundits envisioned. A major in-person healthcare conference in NYC, TASK enters the NI/UK market, and Theranos gets ‘The Simpsons’ treatment.

Has Amazon lost its ‘edge’ in healthcare? Or finally seeing reality? (Perception versus….)
NODE.Health’s 7th Annual Digital Medicine Conference 6-8 December (If you’re in NYC)
Another turkey: potential 9M patients affected by medical transcription vendor data breach (Hackers loooove vendors)
Ireland’s TASK Community Care launches TASK Connect in Northern Ireland for the UK market (A new UK competitor)
A Thanksgiving turkey for hospitals: multiple cyber and ransomware attacks (Inedible)
‘The Simpsons’ takes on Theranos (by another name, glub glub) (Parody becomes Theranos)

NY State to dictate cybersecurity regulations–with one year to implement in challenged hospitals. AstraZeneca’s new clinical trial business, UpHealth sells translation tech business, Tunstall partners with University of Edinburgh, VR focuses on pain management. And what can startups learn from Olive AI’s fatal errors?

New York State drafting proposed cybersecurity regulations for hospitals, allocates $500M for upgrades (Is top down the best way?)
News roundup: AstraZeneca’s Evinova to market clinical trial health tech; BehaVR-Fern merge; UpHealth sells Cloudbreak telehealth translation; MedwebX launches; Tunstall-UEdinburgh research partnership; NextGen loses 84 after going private
Some final words on Olive AI–what can we learn from its failure? (updated) (There’s a lot)

A newsy week before Thanksgiving is ‘back to the future’ with health kiosks or ‘pods’, VA grilled on Oracle Cerner progress, and NHS tracking behavioral changes as indicators of health changes (!!) Our Spotlight this week in both news and Perspectives is virtual nursing. One Medical builds up specialist networks and employer benefits. Indian Health Service awards $2.5 billion EHR to a partner with Oracle Cerner. Plus fundings, buy closings, and layoffs. 

Primary care provider Forward introduces CarePod kiosks, raises $100 million for deployment–but will it work this time? (We compare previous and present efforts)
Short takes: Oracle Cerner still has major hurdles, says VA, Congress; One Medical adds Hackensack Meridian to specialist network, HTA to employer benefits; NHS trialing AI tracking of home behavioral patterns for at-risk patients (NHS gets tried and true)
Virtual nursing comes to the forefront: Avera Health (SD) launches at two hospitals, Doccla launches ‘virtual wards’ at home with Up Care Derbyshire (UK) (News around our Spotlight)
Perspectives: The Impact of Virtual Nursing on Telehealth (In the Spotlight)
Roundup: Virgin Pulse, NextGen close fast; Elucid, Eleos, Vida, Neteera funding; One Medical-CommonSpirit; Indian Health $2.5B EHR to General Dynamics+Oracle; losses, layoffs at Cano Health, 15% digital cuts at Mass General Brigham

This week’s story is about more corporate shakeups at Walgreens, starting in the suites. There’s better news at Owlet, Best Buy, Envision, Walmart, and Philips. VR looks like its day in healthcare may finally come. And Amazon bites a bullet and deep discounts One Medical virtual services for Prime members. (But what if they actually use it?)

Breaking: Walgreens lays off 5% of corporate staff; chief medical officer, chief of staff for CEO to depart (The quake shakes the suites)
Short takes: Owlet Dream Sock FDA clearance; Best Buy-Mass General partner for at-home care; Amazon offers Prime members deeper One Medical discount (Need to pay off that $3.9 billion!)
Get your goggles on! Augmented and virtual reality finally taking off, from alleviating child pain to astronaut mental health (‘Bout time)
Early news roundup: Envision exits Ch. 11, splits; Walgreens’ new CIO; Philips’ $60M from Gates Foundation; more on Walmart-Orlando Health partnership; Cigna may sell MA business

A jam-packed week kicks off November with major payer and Amwell Q3 earnings. We catch up on Oracle Cerner and VA news, including a dubious AI effort. Some end-of-year signs of life with sales, financings, and partnerships. But sadly more layoffs (Centene, Carbon Health) and foldings (OliveAI). And once again, DOJ says it’s out to make M&A difficult.

Week-end short takes: payer earnings for Centene, Cigna, Humana; Centene and Walmart partner in FL; Dispatch Health and US Acute Care partner; Amwell widens loss; ProMedica $710M home health sale; AQuity’s $200M sale to IKS Health (Not beer and skittles for payers)
This ‘n’ that: HHS settles *2017* ransomware breach, Carbon Health lays off 114 in restructuring, why oh why VC General Catalyst wants a $3B health system, when Larry Met Billy, a lexicon of workplace terms
Catching up on Oracle Cerner and the VA, plus the AI ‘tech sprint’ (More distractions for the VA)
Olive AI selling rest of business to Waystar Health and Humata Health, winding down: reports (Another unicorn minus a horn)
News roundup: Walgreens & CVS pharmacy staff 3 day walkout, DOJ ramping up healthcare acquisition scrutiny, Cantata Health sold to TT Capital, Lancashire County Council chooses Progress Lifeline for TECS (UK) (On DOJ and M&A, we told you so!)
UHG’s Optum UK closes £1.24B buy of EMIS Group (One year later)

A busy week with some signs of life–and the first IPO in a year–in healthcare/tech funding. But others run out of money runway as year’s end approaches. Teladoc’s 2023 far better than their disastrous 2022–why stock doesn’t reflect it. Apple Watch violates patents again according to ITC. And can prescribed apps win in the UK?

Weekend reading: new study finds lack of GP and healthcare access driving 55% of UK patients to online/apps, desire for prescribed apps (Maybe now’s the time in the UK)
Breaking: ITC bans Apple Watch imports on violating Masimo blood oxygen measuring patents (updated) (David v. Goliath Redux)
Teladoc narrows loss in Q3 and YTD, grows revenue, adjusted profits…but stock sinks (Time to change direction again)
News roundup: Waystar’s $8B IPO plan, Perficient to buy SMEDIX, PicnicHealth buys AllStripes, MDLIVE buys Bright.md, Sage garners $15M, Cureatr shuts suddenly, Calibrate reorganizes, BetterUp lays off 16% (updated)

Big changes and losses roil the retail healthcare side through to primary care. Big reorganizations, closings, layoffs at Walgreens, VillageMD, and CVS Health. Rite Aid goes Chapter 11 to deal with litigation and losses. One Medical’s Iora Health finally rebrands in moving under Amazon.

Turmoil smacks retail healthcare (updated): Walgreens to shut 60 VillageMDs, as Village names 3 new presidents; CVS shakeup continues; Rite Aid bankrupt; Amazon’s One Medical rebrands Iora (Seems like the projections were more than a little off)

A busy HLTH brings news and a lot of resetting, notably Walgreens’. Big Investor General Catalyst gets into the ‘health assurance’ business (sigh) and merges two portfolio companies. Big Funding for rural health. Cano Health scrambles to survive, Babylon UK transitions but Rwanda shuts. And DEA kicks the controlled substances telehealth prescribing can down the 2024 road.

Short takes: follow up on Cano Health’s survival moves, eMed transitioning Babylon Health UK but Babyl Rwanda shuts, DEA extends telehealth prescribing for controlled substances thru 2024 (Closing chapters)
Walgreens’ transformation continues: new CEO enters, CIO exits, launches Virtual Healthcare in 9 states (The tap dance accelerates)
Two studies: telehealth’s ‘generation gap’ and $22B target for healthcare generative AI–by 2032
Funding/new business roundup: General Catalyst’s HATco ‘health assurance’ venture and $6B portfolio merger, Brightside Health expands, Diana Health’s $34M, Headway’s $125M, Main Street Health’s $315M (Back to ‘transforming healthcare’)

The EMIS acquisition cleared the CMA in the UK. Rock Health tries to put the best face on Q3’s US digital health funding doldrums.

Rock Health Q3 funding roundup: shrinking to fit ‘the new normal’ = the doldrums (Nothing mighty about being stuck in the horse latitudes)
CMA clears £1.2B EMIS acquisition by UnitedHealth Group’s Optum (UK) (It took a year, but UHG nabs the UK GP EHR leader)

It’s feeling like autumn in endings and change. Cano Health is being parted out like an old unrestorable car. Veradigm’s Nasdaq troubles accelerate with delisting and UpHealth is another cracked SPAC. Yet there is encouraging fresh growth with one big merger in employer wellness benefits and two fundings in women’s midlife health and home-based acute care.

News roundup: Veradigm facing Nasdaq delisting, UpHealth files Chapter 11, Virgin Pulse-HealthComp $3B merger, MidiHealth’s $25M Series A, Inbound Health’s $30M Series B (Veradigm still hasn’t figured out a financial software problem after 6 months?)
Cano Health’s dismemberment: Texas, Nevada primary care centers sold to Humana’s CenterWell for $66.7M, more to come (Parting out the old car)

Catching up on industry fundings and pivots, ATA, Walgreens at a crossroads, and the controversies surrounding DocGo in New York.

Short takes: Intuition Robotics gains $25M funding, Akili Interactive abandons digital Rx therapeutics, NextGen goes private for $1.8B, ATA’s DC advocacy ‘fly in’ + launches new tools on disparities
Walgreens trying to reboot “healthcare transformation” momentum, looking for new CEO, settling with Theranos litigants
 (The high cost of an industry race)
Could DocGo be another Babylon Health or Theranos? CEO resignation may be only the start of their troubles. (NYC/NYS controversy that may forecast further problems)

Following up on Babylon’s bankruptcy and administration, was it simply another Theranos? The fate of the GP at Hand (UK) service seems to be separate from Babylon. 

Echoes of Theranos in Babylon Health? And additional information on GP at Hand.
Babylon Health UK in administration, assets sold to eMed Healthcare Ltd.

 


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Follow our pages on LinkedIn and on Facebook

We thank our advertisers and supporters: Legrand, UK Telehealthcare, ATA, The King’s Fund, DHACA, HIMSS, MedStartr, and Parks Associates.

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Telehealth & Telecare Aware: covering the news on latest developments in telecare, telehealth, telemedicine, and health tech, worldwide–thoughtfully and from the view of fellow professionals

Thanks for asking for update emails. Please tell your colleagues about this news service and, if you have relevant information to share with the rest of the world, please let me know.

Donna Cusano, Editor In Chief
donna.cusano@telecareaware.com

– – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –

News roundup: ONC recommends ‘nutrition labeling’ for healthcare AI apps but Google moves forward; CVS’ health services rebranding as Healthspire (updated); Clover Health repots out of ACO REACH

Straining toward a model for AI app information? The latest grope by Federal regulators towards the “trustworthy use of artificial intelligence”, as the American Telemedicine Association terms it, is a labeling system that has been likened to ‘nutrition labeling’. This near-incomprehensible analogy to food labeling was proposed back in April by the Department of Health and Human Services (HHS) Office of the National Coordinator for Health Information Technology (ONC), now headed by Micky Tripathi, Ph.D. This disclosure would consist of how the app was trained, how it performs, how it should be used, and how it shouldn’t, which does not sound onerous at all. The disclosures are designed to forestall issues around performance and bias that have previously appeared, such as Epic’s AI system designed to predict sepsis risk and an algorithm designed to flag patients needing assistance with complex treatment regimens. 

An optional proposed disclosure around how the app was trained and tested would be important to healthcare organizations but potentially problematic to developers. There are quite a few caveats expressed by Silicon Valley investors around hurting startups and even giants like Epic through over-disclosure of proprietary information, enabling reverse engineering and poaching of intellectual property. Everyone likes transparency, trust, safety, and efficacy, but the conundrum is to disclose what is needed for proper and cautious use without providing an entreé to IP. Wall Street Journal, Becker’s, ATA release and AI principles 

Google, predictably, damns the torpedoes, full speed ahead with healthcare AI. And intends to write the rules. They’ve deployed AI tools already with Mayo Clinic and HCA Healthcare–Mayo for medical records and research papers, HCA for clinical notes. EHR Meditech is using Google’s AI for clinical documentation and to summarize patient histories. Bayer is also working with Google. Their products include a licensed algorithm for breast and lung cancer detection, a tool for diagnosing diabetic retinopathy, and a question-answering bot. Google makes no secret that they plan to influence Federal efforts at setting standards by hiring lobbyists, most of whom are out of the Food and Drug Administration (FDA), and playing a large role in industry groups such as the Coalition for Health AI (CHAI).  If you believe that Google, Microsoft, Amazon (playing catchup), or other healthcare service companies like UnitedHealth Group’s Optum will twiddle their thumbs and wait for the Feds to set standards and (good grief) enforce disclosure on AI tools, this Editor has several lovely bridges for sale. POLITICO, Becker’s

CVS Health grouping health services and multi-payer assets under CVS Healthspire. Monday’s announcement at the Forbes Healthcare Summit will roll up new $20 billion acquisitions Oak Street Health and Signify Health along with 1,100 MinuteClinics, the CVS Caremark pharmacy benefit manager (PBM), CVS Specialty, and its new Cordavis operation that works with pharmaceutical companies to bring to market  biosimilars. The rebranding, a clever melding of ‘health’ and ‘inspire’, will start this month into 2024. It’s not revealed whether the current names will be sunsetted for CVS Healthspire, or whether they will keep their established brand names. The parallels are with Evernorth (Cigna), Optum (UnitedHealth Group), and Carelon (Elevance, the former Anthem) in creating a vertically integrated healthcare company. At Investor Day, CVS Pharmacy announced a cost-plus arrangement for retail prescriptions built on the cost of the drug, a set markup, and a fee that reflects the care and value of pharmacy services–clearly in competition with Mark Cuban CostPlus.  Forbes, FierceHealthcare, CVS release, Investor Day release  

Clover Health exits the advanced value-based primary care program, ACO REACH. Clover’s exit at the end of the 2023 performance year after two years disbands their practice arrangements for CMS’ advanced original Medicare shared savings program, formerly Direct Contracting, and provision of beneficiary services after completing their required wrapups and reporting. It is part of their recent moves to become profitable, focusing on their Medicare Advantage business and Clover Assistant management. They outsourced their Medicare Advantage plan administration to UST HealthProof for a savings of $30 million and laid off 10% of staff as part of restructuring. A 2021 SPAC on Nasdaq debuting above $16 that survived investigations by the SEC and DOJ now has shares trading currently under the $1.00 minimum for listing. Clover also finally settled seven shareholder lawsuits over its non-disclosure of the DOJ investigation at the time of the SPAC. Cleaning house is all part of living to fight another day, like other ‘insurtechs’ such as Oscar Health. Clover release, FierceHealthcare  Also: Looking back at insurtechs and their ‘disruption’,  Insurtechs in the widening gyre

TTA’s Holiday Runup: hackers grab the holiday data turkey, Amazon revealed as ‘not all that’ in healthcare, TASK enters NI/UK market, Theranos gets Simpsoned, NODE NYC, more!

 

 

A cyber-week starting with a real turkey–multiple reports of millions of compromised records in hospitals–one originating (again) with a vendor. The near-inventor of Cyber Monday, Amazon, not quite the threat industry pundits envisioned. A major in-person healthcare conference in NYC, TASK enters the NI/UK market, and Theranos gets ‘The Simpsons’ treatment.

Has Amazon lost its ‘edge’ in healthcare? Or finally seeing reality? (Perception versus….)
NODE.Health’s 7th Annual Digital Medicine Conference 6-8 December (If you’re in NYC)
Another turkey: potential 9M patients affected by medical transcription vendor data breach (Hackers loooove vendors)
Ireland’s TASK Community Care launches TASK Connect in Northern Ireland for the UK market (A new UK competitor)
A Thanksgiving turkey for hospitals: multiple cyber and ransomware attacks (Inedible)
‘The Simpsons’ takes on Theranos (by another name, glub glub) (Parody becomes Theranos)

NY State to dictate cybersecurity regulations–with one year to implement in challenged hospitals. AstraZeneca’s new clinical trial business, UpHealth sells translation tech business, Tunstall partners with University of Edinburgh, VR focuses on pain management. And what can startups learn from Olive AI’s fatal errors?

New York State drafting proposed cybersecurity regulations for hospitals, allocates $500M for upgrades (Is top down the best way?)
News roundup: AstraZeneca’s Evinova to market clinical trial health tech; BehaVR-Fern merge; UpHealth sells Cloudbreak telehealth translation; MedwebX launches; Tunstall-UEdinburgh research partnership; NextGen loses 84 after going private
Some final words on Olive AI–what can we learn from its failure? (updated) (There’s a lot)

A newsy week before Thanksgiving is ‘back to the future’ with health kiosks or ‘pods’, VA grilled on Oracle Cerner progress, and NHS tracking behavioral changes as indicators of health changes (!!) Our Spotlight this week in both news and Perspectives is virtual nursing. One Medical builds up specialist networks and employer benefits. Indian Health Service awards $2.5 billion EHR to a partner with Oracle Cerner. Plus fundings, buy closings, and layoffs. 

Primary care provider Forward introduces CarePod kiosks, raises $100 million for deployment–but will it work this time? (We compare previous and present efforts)
Short takes: Oracle Cerner still has major hurdles, says VA, Congress; One Medical adds Hackensack Meridian to specialist network, HTA to employer benefits; NHS trialing AI tracking of home behavioral patterns for at-risk patients (NHS gets tried and true)
Virtual nursing comes to the forefront: Avera Health (SD) launches at two hospitals, Doccla launches ‘virtual wards’ at home with Up Care Derbyshire (UK) (News around our Spotlight)
Perspectives: The Impact of Virtual Nursing on Telehealth (In the Spotlight)
Roundup: Virgin Pulse, NextGen close fast; Elucid, Eleos, Vida, Neteera funding; One Medical-CommonSpirit; Indian Health $2.5B EHR to General Dynamics+Oracle; losses, layoffs at Cano Health, 15% digital cuts at Mass General Brigham

This week’s story is about more corporate shakeups at Walgreens, starting in the suites. There’s better news at Owlet, Best Buy, Envision, Walmart, and Philips. VR looks like its day in healthcare may finally come. And Amazon bites a bullet and deep discounts One Medical virtual services for Prime members. (But what if they actually use it?)

Breaking: Walgreens lays off 5% of corporate staff; chief medical officer, chief of staff for CEO to depart (The quake shakes the suites)
Short takes: Owlet Dream Sock FDA clearance; Best Buy-Mass General partner for at-home care; Amazon offers Prime members deeper One Medical discount (Need to pay off that $3.9 billion!)
Get your goggles on! Augmented and virtual reality finally taking off, from alleviating child pain to astronaut mental health (‘Bout time)
Early news roundup: Envision exits Ch. 11, splits; Walgreens’ new CIO; Philips’ $60M from Gates Foundation; more on Walmart-Orlando Health partnership; Cigna may sell MA business

A jam-packed week kicks off November with major payer and Amwell Q3 earnings. We catch up on Oracle Cerner and VA news, including a dubious AI effort. Some end-of-year signs of life with sales, financings, and partnerships. But sadly more layoffs (Centene, Carbon Health) and foldings (OliveAI). And once again, DOJ says it’s out to make M&A difficult.

Week-end short takes: payer earnings for Centene, Cigna, Humana; Centene and Walmart partner in FL; Dispatch Health and US Acute Care partner; Amwell widens loss; ProMedica $710M home health sale; AQuity’s $200M sale to IKS Health (Not beer and skittles for payers)
This ‘n’ that: HHS settles *2017* ransomware breach, Carbon Health lays off 114 in restructuring, why oh why VC General Catalyst wants a $3B health system, when Larry Met Billy, a lexicon of workplace terms
Catching up on Oracle Cerner and the VA, plus the AI ‘tech sprint’ (More distractions for the VA)
Olive AI selling rest of business to Waystar Health and Humata Health, winding down: reports (Another unicorn minus a horn)
News roundup: Walgreens & CVS pharmacy staff 3 day walkout, DOJ ramping up healthcare acquisition scrutiny, Cantata Health sold to TT Capital, Lancashire County Council chooses Progress Lifeline for TECS (UK) (On DOJ and M&A, we told you so!)
UHG’s Optum UK closes £1.24B buy of EMIS Group (One year later)

A busy week with some signs of life–and the first IPO in a year–in healthcare/tech funding. But others run out of money runway as year’s end approaches. Teladoc’s 2023 far better than their disastrous 2022–why stock doesn’t reflect it. Apple Watch violates patents again according to ITC. And can prescribed apps win in the UK?

Weekend reading: new study finds lack of GP and healthcare access driving 55% of UK patients to online/apps, desire for prescribed apps (Maybe now’s the time in the UK)
Breaking: ITC bans Apple Watch imports on violating Masimo blood oxygen measuring patents (updated) (David v. Goliath Redux)
Teladoc narrows loss in Q3 and YTD, grows revenue, adjusted profits…but stock sinks (Time to change direction again)
News roundup: Waystar’s $8B IPO plan, Perficient to buy SMEDIX, PicnicHealth buys AllStripes, MDLIVE buys Bright.md, Sage garners $15M, Cureatr shuts suddenly, Calibrate reorganizes, BetterUp lays off 16% (updated)

Big changes and losses roil the retail healthcare side through to primary care. Big reorganizations, closings, layoffs at Walgreens, VillageMD, and CVS Health. Rite Aid goes Chapter 11 to deal with litigation and losses. One Medical’s Iora Health finally rebrands in moving under Amazon.

Turmoil smacks retail healthcare (updated): Walgreens to shut 60 VillageMDs, as Village names 3 new presidents; CVS shakeup continues; Rite Aid bankrupt; Amazon’s One Medical rebrands Iora (Seems like the projections were more than a little off)

A busy HLTH brings news and a lot of resetting, notably Walgreens’. Big Investor General Catalyst gets into the ‘health assurance’ business (sigh) and merges two portfolio companies. Big Funding for rural health. Cano Health scrambles to survive, Babylon UK transitions but Rwanda shuts. And DEA kicks the controlled substances telehealth prescribing can down the 2024 road.

Short takes: follow up on Cano Health’s survival moves, eMed transitioning Babylon Health UK but Babyl Rwanda shuts, DEA extends telehealth prescribing for controlled substances thru 2024 (Closing chapters)
Walgreens’ transformation continues: new CEO enters, CIO exits, launches Virtual Healthcare in 9 states (The tap dance accelerates)
Two studies: telehealth’s ‘generation gap’ and $22B target for healthcare generative AI–by 2032
Funding/new business roundup: General Catalyst’s HATco ‘health assurance’ venture and $6B portfolio merger, Brightside Health expands, Diana Health’s $34M, Headway’s $125M, Main Street Health’s $315M (Back to ‘transforming healthcare’)

The EMIS acquisition cleared the CMA in the UK. Rock Health tries to put the best face on Q3’s US digital health funding doldrums.

Rock Health Q3 funding roundup: shrinking to fit ‘the new normal’ = the doldrums (Nothing mighty about being stuck in the horse latitudes)
CMA clears £1.2B EMIS acquisition by UnitedHealth Group’s Optum (UK) (It took a year, but UHG nabs the UK GP EHR leader)

It’s feeling like autumn in endings and change. Cano Health is being parted out like an old unrestorable car. Veradigm’s Nasdaq troubles accelerate with delisting and UpHealth is another cracked SPAC. Yet there is encouraging fresh growth with one big merger in employer wellness benefits and two fundings in women’s midlife health and home-based acute care.

News roundup: Veradigm facing Nasdaq delisting, UpHealth files Chapter 11, Virgin Pulse-HealthComp $3B merger, MidiHealth’s $25M Series A, Inbound Health’s $30M Series B (Veradigm still hasn’t figured out a financial software problem after 6 months?)
Cano Health’s dismemberment: Texas, Nevada primary care centers sold to Humana’s CenterWell for $66.7M, more to come (Parting out the old car)

Catching up on industry fundings and pivots, ATA, Walgreens at a crossroads, and the controversies surrounding DocGo in New York.

Short takes: Intuition Robotics gains $25M funding, Akili Interactive abandons digital Rx therapeutics, NextGen goes private for $1.8B, ATA’s DC advocacy ‘fly in’ + launches new tools on disparities
Walgreens trying to reboot “healthcare transformation” momentum, looking for new CEO, settling with Theranos litigants
 (The high cost of an industry race)
Could DocGo be another Babylon Health or Theranos? CEO resignation may be only the start of their troubles. (NYC/NYS controversy that may forecast further problems)

Following up on Babylon’s bankruptcy and administration, was it simply another Theranos? The fate of the GP at Hand (UK) service seems to be separate from Babylon. 

Echoes of Theranos in Babylon Health? And additional information on GP at Hand.
Babylon Health UK in administration, assets sold to eMed Healthcare Ltd.

Best of back posts!

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

Weekend reading: Forbes picks the next $1B startups, is TV streaming analogous to the future of healthcare? (Yes, there may be unicorns, and the fracturing of TV and healthcare)

Babylon Health files for US Chapter 7 bankruptcy, winding down Babyl Rwanda and ending care for 2.8 million users (Hull loss for Babylon. Parting out starts 12 Sept)
 

M&A and FTC/DOJ antitrust changes

Healthcare M&A hit a 3 year low in Q2 2023, to the surprise of none: KPMG (Many reasons why-and we add a few observations)

FTC, HHS OCR scrutiny tightens on third-party ad trackers, sends letter to 130 hospitals and telehealth providers

Another antitrust shoe drops: FTC, DOJ publish Draft Merger Guidelines for comment–what are the effects? (New restrictions not good for founders, managers, VCs)

FTC, DOJ float enhanced information requirements for HSR premerger notification filing process–what will be M&A effects? (More dampers on a down market?)

Insurtechs and their pivots

Living to fight another day: insurtechs Bright Health, Clover Health, and Oscar Health report improved Q2s, H1s (updated) (Bright still at brink, but Clover and Oscar pivoting)

Legal roundup: Dorsata sues athenahealth, provider group on trade secret theft, Nevada terms Friday Health Plans (Dorsata as another ‘David’)

Why the ‘insurtechs’ didn’t revolutionize health insurance–and the damage they may have done (Back to the legacy payers)
Bright Health to exit insurance business, selling California plans to Molina for up to $600 million–contingent on surviving to 2024 (A dicey proposition all round)

Funding for telehealth and digital health
Rock Health’s first half funding roundup adjusts the bath temperature to tepid, the bubbles to flat (2020-22 an aberration)

“Hope is not a business model”–advice from two VCs, with a bit more advice on basic banking (We unpack good advice for early-stage companies)

‘Warning flare’ study: will pandemic-induced digital health solutions get renewed by hospitals in 2023-4, or will they churn? (Get cracking with your account relationships)

Watch your cash burn! Now 31 months average for startups between Series A and B. Now what do you do? (Cautionary advice for startups)


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Read Telehealth and Telecare Aware: https://telecareaware.com/  @telecareaware

Follow our pages on LinkedIn and on Facebook

We thank our advertisers and supporters: Legrand, UK Telehealthcare, ATA, The King’s Fund, DHACA, HIMSS, MedStartr, and Parks Associates.

Reach international leaders in health tech by advertising your company or event/conference in TTA–contact Donna for more information on how we help and who we reach. 


Telehealth & Telecare Aware: covering the news on latest developments in telecare, telehealth, telemedicine, and health tech, worldwide–thoughtfully and from the view of fellow professionals

Thanks for asking for update emails. Please tell your colleagues about this news service and, if you have relevant information to share with the rest of the world, please let me know.

Donna Cusano, Editor In Chief
donna.cusano@telecareaware.com

– – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –

Has Amazon lost its ‘edge’ in healthcare? Or finally seeing reality?

Amazon’s long and winding road to Healthcare Reality is no surprise to those tracking Amazon’s moves over the past few years. And Bloomberg agrees. In the eyes of many of the industry, Amazon was one of the top companies revolutionizing healthcare in a consumer-focused, tech-driven model. They were making The Big Moves along with giants CVS and Walgreens with an open wallet, with Walmart lagging and tagging behind. But when you turn a Gimlet Eye to the track record, The Big Moves were marked by hubris, uncertainty, lack of focus, lack of healthcare expertise, and just plain bad judgment.

  • First, there was the sinkhole known eventually as Haven, 2018-2021. This partnership with JP Morgan and Berkshire Hathaway (RIP to the legendary Charlie Munger) generated truckloads of 50,000-foot quotes by JPM’s Jamie Dimon and B-H’s Warren Buffett about the ‘hungry tapeworm’ of healthcare costs and the need to simplify it for their million-odd employees. It was clear that Amazon was relegated to the ‘junior partner’. Their reaction was to go their own way well before the shutdown and make its own acquisitions, acquiring PillPack in mid-2019 as the first move towards a PBM, Amazon Pharmacy, then pushing Amazon Care for large employers. TTA 6 Jan 2021
  • Then there was the brief and mysterious life of Amazon Care, 2019-2022. Their mix of virtual care, in-home, and telehealth services signed up large employers such as Hilton and (of course) Amazon with the eventual vision of delivering in-home care of visits and medications via mobile providers. Despite plenty of pivoting behind the scrim but eventually going nationwide with some, not all, of their services, their vision wasn’t attractive to most large employers. Even before One Medical was acquired in July 2022, Amazon decided to ditch Care by end of 2022. TTA 25 Aug 2022
  • And $3.9 billion later, there is One Medical, acquired earlier this year. It has never made money and won’t for at least two fiscal years. It doesn’t resemble an Amazon-style delivery model either. It’s a membership model practice group with individual paying members plus 9,000 corporate service contracts and telehealth. Of course, memberships including telehealth are being offered to the millions of Amazon Prime members at a drastically discounted rate starting earlier this month.
  • Bubbling under this is Amazon Clinic, an asynchronous virtual consult service leaked in November 2022, formally announced in June 2023 but delayed until August on data privacy issues that attracted Senatorial scrutiny on whether information would be passed to other Amazon services for merchandising [TTA 27 June]. Visits cost an average of $50. Amazon is surprisingly mum on Clinic’s status.

From the collection of articles linked above, plus TTA’s ongoing chronicle of FTC’s (and DOJ’s) consistent scrutiny (some call it vendetta) re Amazon [TTA 24 Aug, 27 Oct], one cannot conclude that Amazon has lived up to its publicity, dominating coverage earlier this year, that it would be a leading Healthcare Transformer. In that last article, this Editor’s obvious doubts were summarized as “What we view as a juggernaut is facing more than their share of distractions and changing circumstance.”

It is awfully nice to know that Bloomberg has taken our small ball of misgivings and run with it. Their article describes, through interviews with current and former employees, patients, competitors, and industry analysts, a “culture of hubris”, believing that “Silicon Valley-style invention could outsmart industry incumbents” and management not listening to the industry people they did hire. The hubris goes back to the very beginning. Even transitioning a young but deep in the red company like PillPack, bought for a truly ridiculous amount of money but that fit easily into the Amazon model, took an inordinate amount of time–about two years. Amazon Pharmacy, built on the PillPack bones, doesn’t seem to be meeting expectations, running headlong into local retailers such as CVS, Walmart, and Walgreens, discounters such as GoodRx, and deliverers such as Mark Cuban Cost Plus. No surprises there when you waste two years. Wall Street doesn’t like it much either, despite the promises from CEO Andy Jassy that healthcare is their long-term growth area, carrying through the vision of former CEO and now chairman Jeff Bezos.

It also doesn’t help to be the corporate target of the FTC, not mentioned in the Bloomberg article.

This Editor will quote herself from a recent article. While it was in the context of learnings from Olive AI, it applies equally to those with lots of success in other businesses or even other parts of healthcare. 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.

TTA’s Hello to Fall 9: Spotlight on Virtual Nursing, Forward’s CarePods, VA grilled on Oracle Cerner, One Medical bulks up, NHS tracks behavioral changes, Indian Health EHR award, more!

 

 

A newsy week before Thanksgiving is ‘back to the future’ with health kiosks or ‘pods’, VA grilled on Oracle Cerner progress, and NHS tracking behavioral changes as indicators of health changes (!!) Our Spotlight this week in both news and Perspectives is virtual nursing. One Medical builds up specialist networks and employer benefits. Indian Health Service awards $2.5 billion EHR to a partner with Oracle Cerner. Plus fundings, buy closings, and layoffs. 

Primary care provider Forward introduces CarePod kiosks, raises $100 million for deployment–but will it work this time? (We compare previous and present efforts)
Short takes: Oracle Cerner still has major hurdles, says VA, Congress; One Medical adds Hackensack Meridian to specialist network, HTA to employer benefits; NHS trialing AI tracking of home behavioral patterns for at-risk patients (NHS gets tried and true)
Virtual nursing comes to the forefront: Avera Health (SD) launches at two hospitals, Doccla launches ‘virtual wards’ at home with Up Care Derbyshire (UK) (News around our Spotlight)
Perspectives: The Impact of Virtual Nursing on Telehealth (In the Spotlight)
Roundup: Virgin Pulse, NextGen close fast; Elucid, Eleos, Vida, Neteera funding; One Medical-CommonSpirit; Indian Health $2.5B EHR to General Dynamics+Oracle; losses, layoffs at Cano Health, 15% digital cuts at Mass General Brigham

This week’s story is about more corporate shakeups at Walgreens, starting in the suites. There’s better news at Owlet, Best Buy, Envision, Walmart, and Philips. VR looks like its day in healthcare may finally come. And Amazon bites a bullet and deep discounts One Medical virtual services for Prime members. (But what if they actually use it?)

Breaking: Walgreens lays off 5% of corporate staff; chief medical officer, chief of staff for CEO to depart (The quake shakes the suites)
Short takes: Owlet Dream Sock FDA clearance; Best Buy-Mass General partner for at-home care; Amazon offers Prime members deeper One Medical discount (Need to pay off that $3.9 billion!)
Get your goggles on! Augmented and virtual reality finally taking off, from alleviating child pain to astronaut mental health (‘Bout time)
Early news roundup: Envision exits Ch. 11, splits; Walgreens’ new CIO; Philips’ $60M from Gates Foundation; more on Walmart-Orlando Health partnership; Cigna may sell MA business

A jam-packed week kicks off November with major payer and Amwell Q3 earnings. We catch up on Oracle Cerner and VA news, including a dubious AI effort. Some end-of-year signs of life with sales, financings, and partnerships. But sadly more layoffs (Centene, Carbon Health) and foldings (OliveAI). And once again, DOJ says it’s out to make M&A difficult.

Week-end short takes: payer earnings for Centene, Cigna, Humana; Centene and Walmart partner in FL; Dispatch Health and US Acute Care partner; Amwell widens loss; ProMedica $710M home health sale; AQuity’s $200M sale to IKS Health (Not beer and skittles for payers)
This ‘n’ that: HHS settles *2017* ransomware breach, Carbon Health lays off 114 in restructuring, why oh why VC General Catalyst wants a $3B health system, when Larry Met Billy, a lexicon of workplace terms
Catching up on Oracle Cerner and the VA, plus the AI ‘tech sprint’ (More distractions for the VA)
Olive AI selling rest of business to Waystar Health and Humata Health, winding down: reports (Another unicorn minus a horn)
News roundup: Walgreens & CVS pharmacy staff 3 day walkout, DOJ ramping up healthcare acquisition scrutiny, Cantata Health sold to TT Capital, Lancashire County Council chooses Progress Lifeline for TECS (UK) (On DOJ and M&A, we told you so!)
UHG’s Optum UK closes £1.24B buy of EMIS Group (One year later)

A busy week with some signs of life–and the first IPO in a year–in healthcare/tech funding. But others run out of money runway as year’s end approaches. Teladoc’s 2023 far better than their disastrous 2022–why stock doesn’t reflect it. Apple Watch violates patents again according to ITC. And can prescribed apps win in the UK?

Weekend reading: new study finds lack of GP and healthcare access driving 55% of UK patients to online/apps, desire for prescribed apps (Maybe now’s the time in the UK)
Breaking: ITC bans Apple Watch imports on violating Masimo blood oxygen measuring patents (updated) (David v. Goliath Redux)
Teladoc narrows loss in Q3 and YTD, grows revenue, adjusted profits…but stock sinks (Time to change direction again)
News roundup: Waystar’s $8B IPO plan, Perficient to buy SMEDIX, PicnicHealth buys AllStripes, MDLIVE buys Bright.md, Sage garners $15M, Cureatr shuts suddenly, Calibrate reorganizes, BetterUp lays off 16% (updated)

Big changes and losses roil the retail healthcare side through to primary care. Big reorganizations, closings, layoffs at Walgreens, VillageMD, and CVS Health. Rite Aid goes Chapter 11 to deal with litigation and losses. One Medical’s Iora Health finally rebrands in moving under Amazon.

Turmoil smacks retail healthcare (updated): Walgreens to shut 60 VillageMDs, as Village names 3 new presidents; CVS shakeup continues; Rite Aid bankrupt; Amazon’s One Medical rebrands Iora (Seems like the projections were more than a little off)

A busy HLTH brings news and a lot of resetting, notably Walgreens’. Big Investor General Catalyst gets into the ‘health assurance’ business (sigh) and merges two portfolio companies. Big Funding for rural health. Cano Health scrambles to survive, Babylon UK transitions but Rwanda shuts. And DEA kicks the controlled substances telehealth prescribing can down the 2024 road.

Short takes: follow up on Cano Health’s survival moves, eMed transitioning Babylon Health UK but Babyl Rwanda shuts, DEA extends telehealth prescribing for controlled substances thru 2024 (Closing chapters)
Walgreens’ transformation continues: new CEO enters, CIO exits, launches Virtual Healthcare in 9 states (The tap dance accelerates)
Two studies: telehealth’s ‘generation gap’ and $22B target for healthcare generative AI–by 2032
Funding/new business roundup: General Catalyst’s HATco ‘health assurance’ venture and $6B portfolio merger, Brightside Health expands, Diana Health’s $34M, Headway’s $125M, Main Street Health’s $315M (Back to ‘transforming healthcare’)

The EMIS acquisition cleared the CMA in the UK. Rock Health tries to put the best face on Q3’s US digital health funding doldrums.

Rock Health Q3 funding roundup: shrinking to fit ‘the new normal’ = the doldrums (Nothing mighty about being stuck in the horse latitudes)
CMA clears £1.2B EMIS acquisition by UnitedHealth Group’s Optum (UK) (It took a year, but UHG nabs the UK GP EHR leader)

It’s feeling like autumn in endings and change. Cano Health is being parted out like an old unrestorable car. Veradigm’s Nasdaq troubles accelerate with delisting and UpHealth is another cracked SPAC. Yet there is encouraging fresh growth with one big merger in employer wellness benefits and two fundings in women’s midlife health and home-based acute care.

News roundup: Veradigm facing Nasdaq delisting, UpHealth files Chapter 11, Virgin Pulse-HealthComp $3B merger, MidiHealth’s $25M Series A, Inbound Health’s $30M Series B (Veradigm still hasn’t figured out a financial software problem after 6 months?)
Cano Health’s dismemberment: Texas, Nevada primary care centers sold to Humana’s CenterWell for $66.7M, more to come (Parting out the old car)

Catching up on industry fundings and pivots, ATA, Walgreens at a crossroads, and the controversies surrounding DocGo in New York.

Short takes: Intuition Robotics gains $25M funding, Akili Interactive abandons digital Rx therapeutics, NextGen goes private for $1.8B, ATA’s DC advocacy ‘fly in’ + launches new tools on disparities
Walgreens trying to reboot “healthcare transformation” momentum, looking for new CEO, settling with Theranos litigants
 (The high cost of an industry race)
Could DocGo be another Babylon Health or Theranos? CEO resignation may be only the start of their troubles. (NYC/NYS controversy that may forecast further problems)

Following up on Babylon’s bankruptcy and administration, was it simply another Theranos? The fate of the GP at Hand (UK) service seems to be separate from Babylon. 

Echoes of Theranos in Babylon Health? And additional information on GP at Hand.
Babylon Health UK in administration, assets sold to eMed Healthcare Ltd.

Best of back posts!

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

Weekend reading: Forbes picks the next $1B startups, is TV streaming analogous to the future of healthcare? (Yes, there may be unicorns, and the fracturing of TV and healthcare)

Babylon Health files for US Chapter 7 bankruptcy, winding down Babyl Rwanda and ending care for 2.8 million users (Hull loss for Babylon. Parting out starts 12 Sept)
 

M&A and FTC/DOJ antitrust changes

Healthcare M&A hit a 3 year low in Q2 2023, to the surprise of none: KPMG (Many reasons why-and we add a few observations)

FTC, HHS OCR scrutiny tightens on third-party ad trackers, sends letter to 130 hospitals and telehealth providers

Another antitrust shoe drops: FTC, DOJ publish Draft Merger Guidelines for comment–what are the effects? (New restrictions not good for founders, managers, VCs)

FTC, DOJ float enhanced information requirements for HSR premerger notification filing process–what will be M&A effects? (More dampers on a down market?)

Insurtechs and their pivots

Living to fight another day: insurtechs Bright Health, Clover Health, and Oscar Health report improved Q2s, H1s (updated) (Bright still at brink, but Clover and Oscar pivoting)

Legal roundup: Dorsata sues athenahealth, provider group on trade secret theft, Nevada terms Friday Health Plans (Dorsata as another ‘David’)

Why the ‘insurtechs’ didn’t revolutionize health insurance–and the damage they may have done (Back to the legacy payers)
Bright Health to exit insurance business, selling California plans to Molina for up to $600 million–contingent on surviving to 2024 (A dicey proposition all round)

Funding for telehealth and digital health
Rock Health’s first half funding roundup adjusts the bath temperature to tepid, the bubbles to flat (2020-22 an aberration)

“Hope is not a business model”–advice from two VCs, with a bit more advice on basic banking (We unpack good advice for early-stage companies)

‘Warning flare’ study: will pandemic-induced digital health solutions get renewed by hospitals in 2023-4, or will they churn? (Get cracking with your account relationships)

Watch your cash burn! Now 31 months average for startups between Series A and B. Now what do you do? (Cautionary advice for startups)


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Telehealth & Telecare Aware: covering the news on latest developments in telecare, telehealth, telemedicine, and health tech, worldwide–thoughtfully and from the view of fellow professionals

Thanks for asking for update emails. Please tell your colleagues about this news service and, if you have relevant information to share with the rest of the world, please let me know.

Donna Cusano, Editor In Chief
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Short takes: Oracle Cerner still has major hurdles, says VA, Congress; One Medical adds Hackensack Meridian to specialist network, HTA to employer benefits; NHS trialing AI tracking of home behavioral patterns for at-risk patients

VA’s All Quiet on the EHR Front doesn’t mean nothing is happening. With the House hard at work with a new speaker, negotiating budget extensions, and generally trying to get work done before the Christmas-New Year recess, the work of subcommittees goes on. Rep. Matt Rosendale (R-Montana), chairman of the House Committee on Veterans’ Affairs’ Subcommittee on Technology Modernization, yesterday (15 Nov) in what was titled “Electronic Health Record Modernization Deep Dive: System Uptime” got an update on the status of Oracle Cerner from Kurt DelBene, the VA’s chief information officer. His testimony wasn’t exactly reassuring. “Overall we still think there’s a ways to go. I don’t want to present the system as all set and ready to go.” In a rare show of bipartisanship, ranking member Rep. Sheila Cherfilus-McCormick, D-Florida, said that “[Oracle] training and change management are still woefully inadequate and user satisfaction is still critically low.” And despite being invited by Chairman Rosendale, Oracle’s Mike Sicilia didn’t show up or send regrets, which made Rep. Cherfilus-McCormick a little livid. FedScoop  HISTalk in its recap also pointed out that Rep.Rosendale “cited a report saying that it will take Oracle Health 15 more years to match VistA’s functionality. [VA deputy CIO Laura Prietula] responded that she doesn’t think it will take that long.” Oracle Cerner, in the few VA locations where it is operative, has not had a complete system outage in six months. Hearing and 1 hour 46 min. video (YouTube), hearing documents

Amazon continues to build out One Medical to, perhaps, ubiquity. On the East Coast, Amazon’s One Medical adds a major New Jersey health system relationship, Hackensack Meridian Health. Like its newly inked relationship with CommonSpirit Health, it will add integrated specialty providers to One Medical’s primary care focus. Specific locations based on patient needs are not specified yet nor financials. Implementation timing is unusually long–by the end of 2024. On a faster track may be One Medical’s deal with Health Transformation Alliance (HTA), a consortium of large US employers comprising 67 employers including Coca-Cola, Intel, Boeing, and many others totaling nearly 5 million employees. Timing and financials were not disclosed. This adds to One Medical’s current contracts with 8,500 companies that offer its primary care services as an employee health benefit. Becker’s, FierceHealthcare

NHS experiments with predictive health indicators and AI modeling for at-risk patients to prevent unnecessary admissions. Four GP practices in Somerset will be using an AI system that will flag registered patients who have complex health needs first, and are most at risk of hospital admission or who rarely contact their GP. Monitored in Buckinghamshire, the most interesting part of this is that the AI is linked to electronic sensors on kettles and fridges that spot changes in Somerset patients’ eating and drinking habits, obviously as an indicator of changes in health. (Does this remind anyone of 3rings or QuietCare?) Changes are reported to an Onward Care team of health coaches, nurses, and GPs who speak to patients and ask about any health or living issues. They can provide, based on patient input, deliveries of food parcels, arranging for cleaning or shopping services, home alterations to help to avoid falls, or to link them up with local voluntary groups to reconnect them with community resources or simply to help avoid loneliness. Clinical care can also be scheduled including specialist care. The NHS reports that GP practices can use this system to solve 95% of their issues or escalate anything clinical. Why this is important: hard winter and isolation, even with the holidays, loom after an autumn of wild weather and the persistent shortage of hospital beds and GP capacity/timeliness of appointments.  DigitalHealth.net

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

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

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

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

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

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

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

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

Teladoc narrows loss in Q3 and YTD, grows revenue, adjusted profits…but stock sinks?

Teladoc seemingly can’t get any respect from Mr. Market. 2023 seems to be a waypoint in the company’s recovery after their disastrous 2022 (TTA 4 May 22, 23 Feb). Focusing on operational efficiencies since then, Teladoc posted some decent numbers compared to 2022 in their Q3 report:

  • Q3 revenue increased 8% to $660.2 million; nine-month revenue increased 10% to $1,941.9 million
  • Q3 net loss went down 10 cents per share to a total of $57.1 million, or $0.35 per share. Nine-month net loss was $191.5 million, or $1.17 per share (2022’s was $61.09)
  • Adjusted EBITDA in Q3 increased 73% to $88.8 million; nine-month EBITDA increased 40% to $213.7 million
  • Finally, cash flow from operations was $105.6 million in Q3, a 68% increase. For the nine months, $219.9 million, up 77%.

Yet the share price has taken a tumble from July’s end above $29, closing today at $16.09.

This Editor is no stock picker, but informed heads think that CEO Jason Gorevic has emphasized operational efficiencies over sales and profitable revenue growth. Yet EBITDA is booming with a 2023 guidance of $320-330 million. Amazon’s aggressiveness in taking over virtual care is much on the minds of these ‘informed heads’. In this context, too much pullback on sales and growth is not a positive sign of Teladoc’s long-term future, an indication that Mr. Gorevic, now trimmed, needs to trim his sails to the now-prevailing winds to increase share value. The much-touted BetterHelp in telemental health is not quite panning out with flat revenue and wobbly EBITDA. There’s such a thing as depending on one part of the business, with the rest going too lean and not having capacity, walking away from growth while the competition picks off your business. Seeking Alpha

Is Amazon a chimera of blue smoke and mirrors? The comparison with Amazon is despite their being a target of the Federal Trade Commission (FTC) on monopoly and anticompetitive charges (see the FTC release and the Vox discussion on why the US government wants to break up Amazon). More pain points are AWS’ slowing growth and emerging difficulties (ahem) in implementing their healthcare strategy with One Medical and Amazon Clinic, which this Editor has previously noted. What we view as a juggernaut is facing more than their share of distractions and changing circumstance. Even Jeff Bezos is pulling back his support of the Washington Post. (Need we remind our Readers that 2024 is a general election, and Amazon Hater Senator Elizabeth Warren is up for reelection?)

Mid-week roundup: Colorado terms Friday Health Plans; Cano 3 continue to savage board; Amazon Pharmacy layoffs; hacking attacks: QuickBlox, Barts Health; Phreesia buys MediFind; financing pops for K Health, Amino

Colorado liquidates, terminates insolvent insurtech Friday Health Plans. The Colorado Division of Insurance (DOI) had placed it into receivership in June after the company declared it would close, unable to find funds to operate its plans. On Monday, the DOI moved to liquidate its operations and terminate the plan effective 31 August. Their 30,000 policyholders on individual Affordable Care Act (ACA) exchange plans will be scrambling to find new coverage. In the receivership move, DOI had hoped that Friday had enough funds to keep the state plan solvent through end of year, but they did not. According to the Colorado Sun, Friday still owed unpaid Federal taxes as well as roughly $2 million in fee payments to the state’s insurance exchange, Connect for Health Colorado, which left the DOI without much hope. Friday had previously just about shut down its headquarters in Alamosa. This leaves not only 30,000 individuals scrambling, but also out eight months and perhaps thousands of dollars in deductibles as these plans tended to be high deductible. Colorado DOI opened a special enrollment period (SEP) for Friday policyholders and insurance brokers starting immediately through 31 October.  Providers are protected somewhat through the state’s Colorado Insurance Guaranty Association but many stopped taking Friday-covered patients last month. Friday’s crash-and-burn is the worst example of an insurtech’s demise to date and not promising for policyholders in other states such as Texas, Georgia, Oklahoma, and Nevada. Healthcare Dive

The Cano 3 attack in the continuation war with the Cano Health board. In the latest episode of this telenovela, resigned directors Barry Sternlicht, Elliot Cooperstone, and Lewis Gold, who among them have about 35% of the company’s shares, are still supporting interim CEO Mark Kent but pressing hard to oust three of the directors reelected at the last shareholder meeting, including Marlow Hernandez, the founder and former CEO. What’s new is that they have declared war on Sol Trujillo as chairman and Angel Morales as chair of the audit committee as allies of Dr. Hernandez. In addition to divesting five directors and the interim chief legal officer plus ending their high monthly equity awards, they support divesting non-core assets. Mark Kent will have to be Clark Kent ducking into the phone booth to succeed in this. Press release  Mr. Sternlicht cannot be in a good mood, as Starwood Capital Group is in default on a $212.5 million mortgage on an Atlanta office property, Tower Place 100, in the continuing souring of the commercial real estate market. Fortune

Amazon Pharmacy has laid off 80 employees, mostly pharmacy technicians and team leaders, in continuing cutbacks there. This is the former PillPack. One would think that it would be expanding based on the growing medical needs of One Medical and Amazon Clinic. About the latter which was to roll out nationally today but was questioned on data privacy grounds, as of today there is no update announcement. To date, Amazon has released an amazing 27,000 workers. Semafor, Becker’s

Cybersecurity also racked up some hacks in the past week or so:

  • A popular software framework used in telehealth and financial applications, QuickBlox, was found to have several critical security flaws. The QuickBlox SDK (Software Development Kit) and API (Application Programming Interface) that are used for developing chat and video applications had a vulnerability that led researchers to take over multiple accounts and compromise the user database and extract PHI. The vulnerability also permitted a hacker to impersonate a physician or patient and alter health records. This was reported by Team82 and Check Point Research (CPR) teams but have since been fixed. Blow-by-blow with screenshots in Cybersecuritynews and overview in Becker’s.
  • Barts Health NHS Trust was hacked by BlackCat, a/k/a ALPHV. What was stolen was about 70 terabytes of data, which BlackCat claims as the largest breach in UK medical history. ALPHV listed the stolen data, including employee identification documents, including passports and driver licenses, and internal emails labeled “confidential”, around 30 June. Barts runs five London-based hospitals and serves more than 2.5 million patients. The Barts Health hack adds to NHS misery with an earlier attack on a University of Manchester NHS dataset with information on 1.1 million patients across 200 hospitals. The same CLOP Russian ransomware gang that got Johns Hopkins [TTA 19 July] also got Ofcom, the UK’s communications regulator.  TechCrunch

Yes, there is good news in M&A and funding:

Phreesia is buying MediFind. No purchase price or management transition was disclosed. Phreesia is a patient intake platform that grew from a tablet used in practices for scheduling and patient check-in to a fully featured platform for workflow, claims, outreach and patient education. MediFind uses machine learning and analytics to connect patients with leading experts, clinical trials, health systems, and healthcare technologies. Phreesia is one of the few 2019 vintage IPOs to not crater–it’s trading on the NYSE at above $32 though as recently as end of 2021 its share price was double. Phreesia release.

K Health gained an unlettered venture round of $59 million from Cedars-Sinai, its new partner, plus current investors, including Valor Equity Partners, Mangrove Capital Partners, and Pico Venture Partners. This brings funding for this Israeli company to $330 million through a Series E. K Health’s platform uses a chat function that pre-screens patients with symptoms, uses AI to suggest possible diagnoses based on that person’s medical history, age, and gender, and will connect with a doctor or nurse if needed–which sounds somewhat like Babylon Health and Zipnosis. The chat can be used for primary care, some pediatric areas, urgent and chronic care management. K Health claims that 10 million individuals have interacted with K Health’s AI, and 3.1 million patients in 48 states have chatted with a doctor or nurse. FierceHealthcare

Amino, a navigation platform, received $42 million in credit financing from Oxford Finance. This was the final part of its $80 million venture raise in May. Amino connects physical and mental healthcare providers and benefits programs with members at self-insured employers and health plans, managed by third-party administrators, brokers, and human resources. Members access recommendations for providers and relevant benefits. Amino’s total funding is $125 million, mostly in venture rounds. Its last letter round was a Series C in 2017. It’s a busy sector with similar companies like Accolade, Rightway, and Transcarent.  Mobihealthnews

Rock Health’s first half funding roundup adjusts the bath temperature to tepid, the bubbles to flat

The ‘new normal’ continues, as the bubbles vanish and the poor duck’s feathers are getting soggy and cold. Rock Health’s roundup of digital health funding (US only) continues the chilly flat-to-downward trend to funding. What money and fewer funders are out there which persist in their dedication to healthcare are betting cautiously, minimizing their risk on the table in lower unlabeled funding rounds and pre-vetted concepts. 

  • First half 2023 (H1) funding closed at $6.1 billion across 244 deals. Average deal size was $24.8 million, the lowest since 2019.
  • Breaking down by quarter, Q2 2023 funding hit a new low– $2.5 billion in funding across 113 deals, lower than Q4 2022’s ‘hole’ of $2.7 billion. By comparison, Q1 2023 funding totaled $3.5 billion over 131 deals, adjusted from the earlier report of 132 deals [TTA 5 Apr]. The collapse of three banks, most notably Silicon Valley Bank in March, clearly affected Q2.
  • Given the trend, Rock Health projects that 2023 funding will fall well below 2022, between 2019’s $8.1 billion and 2020’s $14.3 billion

Delving into the numbers:

  • Those ‘generalists’ who jumped into the digital health pool in 2021-22 jumped out. H1’s 555 investors had a 71% repeat rate, meaning that those who knew the water saw some opportunity or put on their wet suits. The overall total dropped from 775 in H1 2022 and 832 in H1 2021.
  • Unlabeled raises were suddenly the way to go. 101 of 244 deals–41%–had no series or round attached. This unprecedented move avoids the spectre of down rounds for companies needing to raise funds–down rounds affect valuation. Interestingly, 67% of these companies’ prior raises were in 2021 and 2022. 37 of them were Series B or lower. 
  • Mega deals inhabit a different territory. H1 had 12 mega deals, 37% of total funding dollars, and was at the 2021 norm of $185 million. Half were at Series D and growth/PE. They clustered in value-based care, non-clinical workflow, and that former mouse in the pumpkin coach, in-home and senior care. This level of funding also gravitated to the pre-vetted: incubated by VCs included Paradigm (clinical trials) and Monogram Health (kidney care).  Recently funded Author Health, long in stealth, will operate in a narrow slice of mental health funded by Medicare plans.
  • Zero IPOs, but acquisitions and shutdowns/selloffs continue. Acquisitions continued on a track of about a dozen per month, down from 2022’s average of 15. On the gloomier side, quite a few companies simply ran out of runway after raising a little or a lot of funding. These hit the lights at the end resulting in hull loss: Pear Therapeutics, SimpleHealth, The Pill Club, Hurdle, and Quil Health. If they were lucky, they had intellectual property worth something to someone–Pear to four buyers including a former founder, 98point6’s AI platform business to Transcarent–or subscriber bases worth acquiring, such as Pill Club to Nurx, SimpleHealth to TwentyEight Health. This does not count Amazon shuttering Halo and leaving subscribers in the lurch. (Nor Amazon’s dodgy approach to privacy getting Federal and private scrutiny, which this Editor explores here and here.)

To this Editor, 2023 will be a ‘grind it out and survive’ year for most health tech and digital health companies. Survivors will carefully tend their spend, their customers (who will be doing their own cutbacks), and watch their banks. The signature phrase this year was written in 1950, another uncertain time, by Joseph L. Mankiewicz and uttered with flair by Bette Davis in a classic film about the theatre, ‘All About Eve‘: “Fasten your seatbelts; it’s going to be a bumpy night.”   Rock Health Insights

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

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

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

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

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

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

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

Short takes: Amazon dims to black Halo wearable line, eVisit acquires Bluestream Health, Moving Health Home launches to lobby Congress, government

Amazon shuttering Halo health and fitness product line and services. On Wednesday, Amazon emailed Halo users that the line (View, Band, and brand new Rise sleep tracker) and services, including apps, will be switched off on 31 July. Users will be able to download or delete health and other data. Subscriptions will be refunded as well as all purchases made in the last 12 months. Remaining staff in the Halo unit will be laid off. This was not unanticipated given that Amazon cut jobs at Halo back in February as part of their mass layoff of 18,000 then and another 9,000 last month. Amazon is being quite ruthless in reacting to its 2022 loss and changing up its bets in healthcare to buying F2F care, like One Medical–as the Federal Trade Commission cleans its sights to hunt big game [TTA 23 Feb, 23 March] and the Department of Justice lurks in the wings, despite the sale closing. Engadget, Amazon notice, The Verge, Becker’s

Virtual care platform eVisit acquires virtual care platform Bluestream Health. Bluestream adds ‘white labeled’ telehealth as a customized “front door” for health systems along with virtual care workflow and LanguageLine translation to eVisit’s capabilities in automating patient care management for large health systems. eVisit picks up Bluestream’s 50,000 providers and 500 health systems to add to its 100 healthcare delivery organizations, 2,000 sites of care, and access by over 275,000 clinicians.  Acquisition cost and leadership/workforce transition are not disclosed. eVisit is based in Phoenix while Bluestream is HQ’d in NYC. This Editor first met with founder Brian Yarnell about 2015 or possibly earlier, when the company was operating out of two offices in shared workspace. Release, eVisit Bluestream acquisition page. FierceHealthcare

A new industry organization launches to lobby Congress and government for home health. Moving Health Home announced in March that it was forming to unify healthcare organizations to advocate for home health and to make the home a reimbursable site of care from insurers and Medicare. This spans prevention such as fall risk assessment and nutrition as well as direct care in the home including hospital at home. Members include Amazon, Hackensack Meridian Health, DaVita, Signify Health, Dispatch Health, and many others from the clinical, vendor, and provider areas. It’s headed by Krista Drobac, who has been for some time an activist in the connected health and health policy areas. Earlier this month, they announced that there will be a House bill, Expanding Care in the Home Act (ECHA) which is similar to prior bills both in the House and Senate.

DOJ drops appeal to block UHG-Change; more hints that FTC will be hunting big game with Amazon

DOJ has walked away from trying to stop the already-closed UHG-Change Healthcare merger. The US Department of Justice, which had appealed in November the District Court of DC approval in late September of UnitedHealth Group’s acquisition of Change Healthcare, on antitrust grounds, decided ‘enough egg on face’ and dropped its appeals court filings on 21 March. DOJ did not respond to Reuters’ report. Change is being integrated into OptumInsight and will be kept separate from the health plans. The DC District Court ruling found that DOJ did not conclusively prove its allegations of antitrust and loss of competition in services to hospitals and other providers. Statements from UHG’s competitors such as Cigna, Aetna, and Elevance (Anthem) that the acquisition would not lead them to ‘stifle innovation’ also weakened the DOJ’s case. Had the appeal been successful, it would have forced separation of Change Healthcare’s businesses, which are being quickly integrated into OptumInsight.  Healthcare Dive, Becker’s. Also TTA 4 Oct and 22 Nov 22.

Elsewhere in DC, it’s hunting season for the FTC, and its sights are fixed on Big Game called Amazon. POLITICO confirmed the speculation (or gave advance notice) [TTA 3 Mar], that FTC was building a multi-layered case beyond the Amazon-One Medical buy and warnings about failing to maintain consumer privacy [TTA 3 Mar] to include multiple practices. The POLITICO report indicates that there are at least six ongoing investigations by the FTC’s competition and consumer protection teams, with three apparently near the boiling point of action:

  • Blocking the acquisition of iRobot, famous for its Roomba robot vacuums. Amazon’s $1.7 billion acquisition has stalled with FTC rumoring action and Amazon apparently shutting down any further information. It does not have UK or EU approvals, which gives the FTC some more time to build a case. iRobot is the largest maker of robot vacuums. An acquisition would be expected to shut out competitive manufacturers marketing on Amazon such as Samsung. Their report indicates that FTC’s staff attorneys are leaning toward suing to stop the deal. Court action is expected in the next few months or sooner. 
  • Privacy investigations involving data security from their Ring camera/security system business and the Alexa voice assistant. The Alexa investigation also involves potential violations of the Children’s Online Privacy Protection Act. iRobot, Ring, and Alexa also tie into another FTC concern that Amazon is cornering the market on connected home devices.
  • Retail operations. These possibly could be around bundling services through the Prime subscription business and how competitor data is used on the Amazon platform to ‘outmuscle’ them. There is also a deceptive advertising probe around the use of the “Amazon Choice” label for certain products, including pay-to-play practices.

There is also scrutiny of how Prime and other Amazon services entice customers in with offers for expensive subscriptions, then make it extremely difficult or opaque to unsubscribe. This deceptive practice is called a “dark pattern”. Stay tuned.

FTC takes off the gloves: $7.8M fine for Teladoc’s BetterHelp, warns Amazon (and everyone else) on One Medical patient privacy

The Federal Trade Commission (FTC) goes to ‘bare knucks’. BetterHelp, Teladoc’s promising telemental business, settled a complaint brought by the FTC in a 4-0 vote over ad trackers and sharing consumer health data with third parties. The ad trackers shared data with  Facebook, Criteo, Pinterest, and Snapchat for ad retargeting to these customers, knowing their situation. While the $7.8 million fine has to be approved by a Federal judge (as does GoodRx’s), the $7.8 million will be returned to consumers whose data was shared. How this will be done is a question mark to this Editor, but the tracking was done from 2013 (prior to Teladoc’s buy in 2015) to 2021, so quite a few will be eligible. According to the complaint, BetterHelp made false and deceptive statements to users about the disclosure of their information and formally “disseminated, or caused to be disseminated, misleading and deceptive representations regarding its compliance with federal health privacy laws.”

BetterHelp did not disclose to users that it was sharing personal information with third parties and never obtained consent. In fact, they assured users on intake that their information would be private, between them and their therapist. BetterHelp did not offer disclosure of information sharing and an opt-out form until October 2021. The information shared was extensive:

  • Intake questionnaire answers, such as whether the user was experiencing suicidal thoughts, and if they belonged to a group such as LGBTQ, teens, or Christians
  • Prescriptions
  • Prior therapy history if any
  • Email addresses and IP addresses
  • Financial status

The decisions on sharing information were delegated to a junior marketing analyst without training in PHI and protecting privacy from 2017. There was no formal compliance review or employee training in HIPAA practices. BetterHelp also displayed various logos, including HIPAA, to assure users that their information adhered to governmental standards and practices for health, when it clearly did not. (Editor’s note: as a marketer, both are shocking with Teladoc as a parent company well aware of these issues.)

Why this is important: Ad tracking is a form of revenue for companies, which now will be effectively shut off. This presents a decline in revenue hopes for Teladoc, which in January positioned BetterHelp as a bright spot of ‘balanced growth’. Expect that BetterHelp will be only the first of these companies in telemental health counseling to receive a working over from a newly-aggressive FTC–and with a return to in-person visits required for Schedule 2 meds, further depressing the entire category.  Complaint, Healthcare Dive, Mobihealthnews

FTC’s shot across the bow to Amazon and everyone in DTC digital health. With Amazon closing the buy of One Medical, the FTC issued a 1 1/2 page public statement warning both companies that because of privacy representations they have made prior to and after the acquisition, any failure to maintain consumer privacy will be in violation of Section 5 of the FTC Act. FTC will be looking at ‘false net impressions’ and “make clear not only how they will use protected health information as defined by HIPAA but also how the integrated entity will use any One Medical patient data for purposes beyond the provision of health care. ” And in closing, a broader warning:

The Commission has long taken the position that personal health information is sensitive data and has reaffirmed this position through recent enforcement actions. Further, companies that fail to have adequate safeguards or controls in place to protect sensitive data or fail to obtain consumers’ express affirmative consent for marketing based on sensitive data such as health data may be in violation of the law.

The law requires companies to treat sensitive data with great care. Accordingly, the parties and the market more broadly should be on notice that the Commission will continue to monitor this space and bring enforcement actions whenever the facts warrant.

Hat tip to HISTalk 3 March   TTA on FTC issues with Amazon post-closing 23 Feb

More gimlety views on CVS-Oak Street Health, Amazon-One Medical acquisitions

Perhaps this Editor is not that much of an Outlier in thinking that these deals don’t beat, say, sliced bread. Oak Street Health (OSH) disclosed its financials in an SEC 10-K filed on Tuesday. One must wonder what CVS is seeing in the company other than bulking up its primary care profile. Their loss grew to $510 million from 2021’s $415 million. While OSH grew impressively in 2022 with a 51% increase in revenue to $2.2 billion, driven by 40 new centers ending with a total of 169 facilities in 21 states, expenses grew exponentially for the new patients: medical claims expenses grew 48%, cost of care went up 49%, and sales and marketing up 38%. Scalable, so they claim; profitable, not till 2025 at earliest.

Other problems were revealed in the 10-K. OSH has substantial business from other payers, which may not be pleased that CVS owns a small payer called Aetna, though has pledged to keep OSH payer-neutral. OSH leases or licenses most of its care centers from Humana. That payer also accounted for 32% of its 2022 capitated revenue. Centene’s plans and HealthSpring made up an additional 23%. Other, more routine concerns are regulatory review, attrition of physicians and clinician staff, and last but not least, breakup fees ($500 million if CVS walks away, $300 million if it’s OSH). When you add these to other factors as outlined in our earlier article, such as the Medicare Advantage and high-need populations, CVS is cutting off a hefty slice of loaf, especially considering that the more complex Signify Health buy is due to close this quarter. Earlier opinions on the buy [TTA 16 Feb], Healthcare Dive

Now to Amazon and One Medical. This Editor received her invitation to buy a One Medical membership earlier this week (left). Countering this Editor’s analysis from last week, which maintains that Amazon is already under a broad antitrust microscope viewed by the Federal Trade Commission (FTC) and the Department of Justice (DOJ), Healthcare Dive counters, quite logically and in the view of their experts, that if either agency was going to object, they would have done so before the closing, and the grounds were likely too novel. The article concedes that the FTC could take action further down the road, for instance if Amazon violates HIPAA or consumer privacy with ad trackers. Instead, the focus is on objections by consumer groups, Amazon leveraging health data, privacy violations, and a general consumer unease around Amazon dealing with their health issues.

  • Consumer protection group Public Citizen urged regulators to block the deal in a letter to regulatory groups after it was announced last summer. For instance, it could bundle One Medical and Prime membership (a no-brainer). By tying the two together, Amazon could gain consent for using patient data from health records. Amazon could also serve ads for products related to medical conditions without that access (that old Pixel/ad tracker business again). These concerns are publicly shared by two FTC commissioners.
  • Analysts said that data acquisition was likely a big driving factor for the deal. After linking One Medical’s data with that from its other products and services, Amazon can analyze petabytes of healthcare data in the cloud and use the findings to better manage the health of One Medical’s Medicare population, build new products and pinpoint people with rare diseases to solicit participation in clinical trials, according to (market research firm) Forrester’s (Natalie) Schibell.” [Editor] That would, of course, require patient consent. 
  • Forrester noted that the consumer unease around Amazon in healthcare is substantial. 34% of surveyed adults weren’t at all comfortable with Amazon for healthcare needs with an additional 17% only somewhat more comfortable (tier 2). Trust levels are low, and it would take only one or two incidents, such as a security breach or HIPAA violations, to destroy it. This Editor would add that if One Medical practices were not managed impeccably, that would go viral among individual and corporate members, in a way that Amazon Care did not.

Breaking: Amazon closes One Medical $3.9B buy, despite loose ends–and is the Antitrust Bear being poked?

The Big Deal closes, but loose ends and larger issues remain. Today’s news of Amazon closing its purchase of the One Medical primary care group is being received in the press, especially the healthcare press, enthusiastically. This Editor cannot blame her counterparts, as since last year there’s not been much in the way of good news, compared to 2020-21’s bubble bath. Her bet as of a couple of weeks ago was that the deal would not go through due to Amazon’s financial losses in 2022 and/or that the FTC would further hold it up, both of which I was wrong, wrong, wrong on. (Cue the fresh egg on the face.)

Wiping off said egg, here is what Amazon is buying and their first marketing move. (Information on size and more from the 1 Life 2022 year end 10-K):

  • Amazon acquired 1Life Healthcare Inc. for $3.9 billion, or $18 per share in cash.
  • The practices are primarily branded as One Medical, closing out 2022 with 836,000 members and 220 medical offices in 27 markets
  • It is a value-based primary care model with direct consumer enrollment and third-party sponsorship across commercially insured and Medicare populations. Their Net Promoter Score (NPS) is an extremely high 90. (NPS is a proprietary research metric that indicates customer loyalty and satisfaction.)
  • They also have at-risk members from the $2.1 billion Iora Medical acquisition in seven states, in Medicare Advantage (MA) and Medicare shared savings value-based care (VBC) arrangements [TTA 27 July 22].
  • One Medical has contracts with over 9,000 companies, establishing Amazon at long last in the desirable corporate market.
  • One Medical also provides a 24/7 telehealth service exclusively to employees of enterprise customers where there are no clinics.
  • Amazon will be offering a discounted individual membership of $144 versus $199 for the first year, without an Amazon Prime subscription.

The Federal Trade Commission (FTC), which had additional questions about the buy as part of a Second Request in the Hart-Scott-Rodino Act reporting process, did not act in time to prevent the closing. Nor did the SEC or DOJ. This is CEO Andy Jassy’s first Big Deal at Amazon and certainly, the champagne and kvelling are flowing at HQ plus One Medical’s investors and shareholders for a successful exit. But should Amazon be looking over their shoulder? 

What are the open issues? Is a large, hungry Bear called Antitrust being poked, or lying in wait for its prey?

  • The FTC has the right to probe into the transaction despite the closing and a deadline passing for antitrust review. In FierceHealthcare and STAT, FTC spokesman Douglas Farrar is quoted as telling the WSJ (paywalled) in a statement that “The FTC’s investigation of Amazon’s acquisition of One Medical continues. The commission will continue to look at possible harms to competition created by this merger as well as possible harms to consumers that may result from Amazon’s control and use of sensitive consumer health information held by One Medical.”
  • As previously reported here, only in December did the FTC send out subpoenas to current and former One Medical current and former customers as part of its investigation. That’s late to stop a buy–unless FTC had something else larger in mind.
  • Early February reports in Bloomberg and the WSJ indicated that this may be part of a larger FTC action in developing a wide-ranging antitrust lawsuit against Amazon on multiple anticompetitive business practices. Their chair, Lina Khan, is highly critical of Amazon’s business practices. Amazon’s buy of iRobot, maker of Roomba, which at $1.7 billion was a comparative snack, is still not closed and has received a lot of negative attention for possible misuse of consumer information. 
  • Sidebar: This FTC is ‘feeling its oats’ on antitrust. GoodRx found itself making history as FTC’s first culprit of the 2009 Health Breach Notification Rule, used to prosecute companies for misuse of consumer health information. This was for their past use of Meta Pixel, discontinued 2019, to send information to third-party advertisers. One Medical is a HIPAA-covered entity which puts it at a far higher risk level. 
  • The Department of Justice (DOJ) has not publicly moved to approve or disapprove–yet. 
  • The change of ownership has not been reported as passing muster by regulators in multiple states. Example: Oregon approved it, but with multiple stipulations [TTA 6 Jan]–and there are only five One Medical clinics in Oregon. States like New York, Massachusetts, Connecticut, and California are not exactly pushovers for approval, with California alone having two approval entities.
  • Congress is increasingly feisty on data privacy–consumer health information and its misuse in telehealth [TTA 9 Feb]. 

Will this be ‘buy now, regret later’, a lá Teladoc’s expensive acquisition of Livongo, or Babylon Health going public with a SPAC? Is this a clever trap laid for Amazon?

  • Amazon is already under a Federal and state microscope on data privacy. Information crossing over from One Medical to their ecommerce operations such as Pharmacy and Prime will just add to the picture. 
  • Accepting Medicare/Medicare Advantage increases scrutiny on quality metrics and billing, to name only two areas. At-risk patients in Medicare and other VBC models, especially Medicare Shared Savings Program (MSSP) fall under CMS scrutiny. Amazon may take a look at that and spin-off/sell off the former Iora Health practices/patients.
  • Amazon has failed in healthcare previously, as a partner in the misbegotten Haven and in its own Amazon Care ‘home delivery’/telehealth model selling to companies, now closed. Its asynchronous virtual care service, Amazon Clinic, is too new to judge its success. 
  • Office-based, brick-and-mortar healthcare provided by doctors, nurses, and allied health professionals is an entirely new area for Amazon. Will they be satisfied with their new masters–and new metrics? It is also expensive. One Medical has never been profitable and did not project breakeven for years. (If one asks how this is different than CVS acquiring Oak Street Health, or Walgreens acquiring VillageMD and Summit Health, CVS and Walgreens have experience for decades in multiple aspects of providing healthcare–profitably and in compliance.)
  • One wonders how heavy of a hand Amazon will place on One Medical’s operations. How their management, doctors, and other professionals will feel after a year or two of Amazon ownership is anyone’s guess. This Editor doubts they will remain in place or silent if unhappy.
  • Selling to enterprises–and account retention–is a vastly different relationship-building process and buyer journey than 1:many consumer transactions. One Medical made a go of it with 9,000 companies and enrolling employees at about a 40% rate, so they did something right. By contrast, Amazon failed to sell Amazon Care well to companies. Humility and service, for starters, are required.
  • Last but certainly not least, is how Amazon will deal with regulation and compliance at multiple levels.

Expect that the FTC and DOJ will not be done with Amazon any time soon in what looks like a wider antitrust pursuit that may take some time, which they have. Amazon has tens of millions in government business (AWS) at stake and shareholders expecting a reversal of losses. Pro tip to Amazon: run One Medical as a separate operation with minimal integration and no information sharing until past this. And then some.  Healthcare Dive, Becker’s