TTA’s It’s Spring, Really?? 4: CVS closes Oak Street, ChatGPT’s ’empathy’ punctured, DEA extends Rx waivers, Bright Health dims, Centene’s Apixio sale, Teladoc turnaround, Amwell loss, more!

May 5, 2023 | by

 

 

Weekly Update

A week where a Gimlet Eye was needed. CVS closed on Oak Street, but it needs work. ChatGPT punctured on ’empathy’, companies rearranged and offloaded the deck chairs, DEA tossed in the towel on extending telehealth prescribing for controlled drugs–for now. Layoffs continue even with funding. A new Perspectives discusses rural specialty telehealth.

And for our UK Readers, our very best wishes for a festive Coronation Day. God Save The King!

Week-end roundup: Is ChatGPT *really* more empathetic than real doctors? Amwell’s $400M loss, Avaya emerges from Ch. 11, Centene sells Apixio, more on Bright Health’s MA sale, layoffs at Brightline, Cue Health, Healthy.io 
Mid-week roundup: CVS-Oak Street closes, DEA extends controlled substance telehealth waiver, Bright Health selling CA MA plans, Talkspace, Teladoc turnarounds? (updated)
Perspectives: Implementing technology in rural communities to support access to mental and behavioral healthcare

Acquisitions, consolidations, shutdowns, and failures, with some hope poking through. Kaiser and Geisinger’s novel approach to preserving community health systems, while eVisit and Bluestream complement telehealth and workflow systems. Amazon finally shuts down Halo wearables, GoodRx changes out CEOs, and Clover wilts. VA and Congress start kicking Oracle hard as their EHR keeps failing. Elizabeth Holmes gets a little more freedom during appeal. But some optimism with Centene and Humana improving their earnings and home health advocacy.

Short takes: Amazon dims to black Halo wearable line, eVisit acquires Bluestream Health, Moving Health Home launches to lobby Congress, government (More consolidation)
Mid-week roundup: Kaiser Permanente to buy Geisinger, setup separate system; GoodRx co-CEOs step down; strong earnings for Centene, Humana; Clover Health stock woes, settles $22M lawsuit (Consolidation and pivoting)
Breaking: Elizabeth Holmes’ surrender stayed by 9th Circuit Court of Appeals (Putting off the inevitable is a bad strategy)
VA completely halts Oracle Cerner EHR implementation for ‘reset’; House introduces new–fourth–bipartisan reform bill–and another outage (Oracle MUST make fixing VA, MHS EHRs Job#1)

A busy week with HIMSS23 (take HIStalk’s random walks), Theranos denouements, lots of trouble in VA and Insurtech Worlds. Teladoc sees gold in weight loss care. And a battle royale between business giants may be developing at, of all places, Cano Health.

Weekend recap from HIMSS23: Glen Tullman’s 5 predictions, HIStalk’s random four-day walk, Oracle Cerner integration ‘going great’, Seema Verma to Oracle, Caregility’s debuts three enhancements (Your weekend reads, especially HIStalk)
Theranos’ Sunny Balwani reports to Federal prison (New home for 12 years)
News roundup: Cano Health board fight, board shakeup; Memora Health’s $30M raise; Teladoc enters weight management race (A battle of the giants brewing at Cano?)
Insurtechs in the widening gyre: Bright Health sued for claims non-payment, fined $1M by Colorado; Clover Health lays off 10%, outsources operations (This centre may not be holding)
VA, GAO push back against proposed House overhaul measures (Just what you’d think)
Theranos’ Holmes files appeal seeking to overturn ‘unjust’ conviction, ‘excessive’ sentence (updated) (Yet another appeal)
VA pulls out the stick in contract renegotiation with Oracle Cerner, slams brakes on further EHRM rollouts–and is this trouble? (updated) (Oracle called on the carpet–and beaten like one?)

This week, in preparation for HIMSS next week and with many on holiday or going, news was relatively light but sadly of the “Debbie Downer” genre. Pear Therapeutics signed off of digital therapeutics with its Chapter 11 filing, while virtual therapy Workit Health let go of 100 anticipating controlled substance prescribing restrictions. And two late 2010s scandals reach their final chapters: Theranos and Outcome Health.

Mid-week roundup: Pear Therapeutics’ Chapter 11; Workit Health pinkslips 100; Outcome Health principals convicted of $1B fraud (The other late ’10s scandal)
The Theranos Two lose their fight for freedom on appeal as Federal prison surrender dates near (Settle affairs, appeal from prison)

We hope you had a Happy Easter and Passover! We lead with a vastly different picture of digital health and healthcare versus a year ago. In the widening gyre, the center is not holding for companies when investors bolt a board and a star insurtech is failing before our eyes. Digital health funding has gone entirely sideways and making 2019 look good. But one story brings us back to our purpose to spread better health into more hands in remote places and save children at minimal cost. Let’s think renewal–and starting afresh in the true spirit of this holy week.

When ‘the centre cannot hold’: three board members exit at Cano Health, failure looms at Bright Health Group (Yeats’ ‘Second Coming’ fits two dramatic ‘must read’ company implosion stories)
TTA Bright: THINKMD, Save the Children partner for digital child health assessment (A ‘do-good’ story about purpose)
Digital health’s funding time machine dialed back to 2019–before the SVB implosion: Rock Health (Entering uncharted territory)

Happy April Fool’s Week! Last week was ViVE (rhymes with vibe) week and reports were positive. VCs confessed that they led to the demise of SVB (well, some of them) and for companies they back, it’s ‘about face, march!’ CVS closes Signify, Oscar faces future and hires the Pro of Pros who used to work at CVS. Wellvana scores $84M, hospital HIT execs want ROI NOW. And both Senate and House kick Oracle Cerner’s patootie about their VA EHRM failures with three bills–but are they concerned? 

ViVE post-script: VC panel opines in midst of digital health new reality (depression?), and extra ViVE from an attendee (VCs confess to greasing SVB’s skids and the Profitability Push)
Is Oracle Cerner’s VA EHRM implementation going to be tied up? Senate Veterans Affairs Committee says yes–with two oncoming trains (bills). (Bit off more than…?)
Mid-week corral: CVS closes Signify Health; Bertolini to lead Oscar Health; ViVE highlights from Wellvana, AWS, Everly Health; Better Therapeutics lays off 35%, CoverMyMeds 815 (Magic8Ball picture–and Oscar Gets Smart)

It’s spring, but there’s a chill in the air, as perhaps fits this challenged time. CVS and Amazon are not out of the Federal woods with Oak Street and One Medical respectively. The Theranos Two clutch at their freedom as the creditors come around and their former lab director sues for defamation. FTC clutches its cudgels and struts its strategy. But the ‘green shoots’ of funding and acquisitions are poking to the surface, though the numbers are lower.

Short takes and updates: FTC may not be done with CVS-Oak Street, VistA moves to cloud–why?, Oracle Cerner lays off 10%. at least (It continues)
Week-end update: Breaking–Theranos lab director suing Hulu, Disney for defamation; ‘green shoots’ for SonderMind, Cognito, Vital, MedArrive; 3 in Asia; Telstra Australia’s new CTO (Some hope in funding and a whistleblower strikes back) 
DOJ drops appeal to block UHG-Change; more hints that FTC will be hunting big game with Amazon (FTC priming itself for Amazon)
Theranos update: Holmes, Balwani reprieved on surrender–for now–and Theranos’ creditors try to claw back $25M (As the Theranos Two near Club Fed, prosecutors and creditors squeeze rocks)
FTC takes off the gloves, v2: a walk on the technical side of ad pixel tracking (Insight into their strategy)

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Week-end roundup: Is ChatGPT *really* more empathetic than real doctors? Amwell’s $400M loss, Avaya emerges from Ch. 11, Centene sells Apixio, more on Bright Health’s MA sale, layoffs at Brightline, Cue Health, Healthy.io

May 5, 2023 | by

Gimlet EyeA Gimlety Short Take (not generated by ChatGPT). This Editor has observed developments around AI tool ChatGPT with double vision–one view, as an amazing tool with huge potential for healthcare support, and the other as with huge potential for fakery and fraud. (If “The Woz” Steve Wozniak can say that AI can misuse data and trick humans, Tesla’s AI-powered Autopilot can kill you, plus quit Google over AI, it should give you pause.)

The latest healthcare ‘rave’ about ChatGPT is a study published 28 April in JAMA Network that pulled 195 questions and answers from Reddit’s r/AskDocs, a social media forum where members ask medical questions and real healthcare professionals answer them. The study authors then submitted the same questions to ChatGPT and evaluated the answers on subjective measures such as “better”, “quality”, and “empathy”. Of course, the ChatGPT 3.5 answers were rated more highly–78%–than the answers from human health care professionals who answer these mostly ‘should I see a doctor?’ questions. HIStalk noted that forum volunteers might be a little short in answering the questions. Another point was that “they did not assess ChatGPT’s responses for accuracy. The “which response is better” evaluation is subjective.” The prospective patients on the forum were also not asked how they felt about the AI-generated answers. Their analysis of the study’s shortcomings is short and to the point. Another view on compassion in communication as dependent on context and relationships was debated in Kellogg Insight, the publication of the Kellogg School of Management at Northwestern University, in Healthcare IT News.

Amwell posted a disappointing and sizable $398.5 million net loss in Q1. This was over five times larger than the Q1 2022 loss of $70.3 million and Q4 2022’s $61.6 million. The loss was due to a noncash goodwill impairment charge related to a lasting decline in the company’s share price. Current versus prior year Q1 revenue remained flat at $64 million, $15 million lower than Q4 2022 due to a decline in professional services revenue. Visits were 1.7 million visits in Q1, with 36% through the new platform Converge. Guidance for the year remains at $275-$285 million with an adjusted EBITDA loss between $150-$160 million. Mobihealthnews This contrasts with rival Teladoc’s optimistic forecast released last week, though remaining in the loss column [TTA 4 May]. 

Avaya emerged from Chapter 11 on Monday. According to the release, the company has financially restructured and now has $650 million in liquidity and a net leverage ratio of less than 1x. This was a lightning-fast bankruptcy and reorganization, usually referred to as ‘pre-packaged’, as it was announced in February with the company emerging from it in 60 to 90 days. Avaya provides virtual care and collaboration tools (and has contributed to our Perspectives series). 

Another restructuring continues at Centene. Their latest sale is Apixio, a healthcare analytics platform for value-based care. The buyer is private equity investor New Mountain Capital. New Mountain has $37 billion in assets under management. Centene acquired Apixio in December 2020 in the last full year of CEO Michael Neidorff’s leadership. Since 2022, Centene has been selling off many of their more recent acquisitions such as two specialty pharmacy divisions, its Spanish and Central European businesses, and Magellan Specialty Health. Transaction cost and management transitions were not disclosed. Based on the wording of the release, Centene will continue as an Apixio customer as well as other health plans. Given the profile of the 10 largest health plans, which includes Centene, and their diversification, Centene’s divestments coupled with the involvement of activist investor Politan Capital Management have led to speculation.

Another take on Bright Health’s projected divestiture of its California Medicare Advantage health plans is from analyst Ari Gottlieb on LinkedIn. If Bright sells the MA plans for what they paid for them–$500 million–according to Mr. Gottlieb they can pay off their outstanding JP Morgan credit facility as well as negative capital levels in many of the states where they had plans and are now defending lawsuits. It still leaves them $925 million in debt.

Unfortunately, we close with yet another round of layoffs.

  • Covid-19 test kit/home diagnostics Cue Health will be surplusing about 26% of its current workforce, or 325 employees. Most will be in the San Diego manufacturing plants. This is on top of 170 employees released last summer. The current value of the Nasdaq-traded company is estimated at $105 million, down from $3 billion at their 2021 IPO. Current share price is $0.68. HIStalk, San Diego Business Journal.
  • Another telemental health company is shrinking–Brightline–reducing their current workforce by another 20%. This affects corporate staff and is in addition to the 20% let go last November. Brightline’s focus is on mental health for children and teens, and has investment to date of $212 million. Becker’s 
  • Healthy.io, which offers in-home urinalysis and wound care, plus a new app for kidney care, laid off 70 staff while enjoying a fresh Series D raise of $50 million from Schusterman Family Investments.  Becker’s

“Big Story” update: where Elizabeth Holmes will spend 11 years, Cerebral sues former CEO Robertson, Amwell buying Talkspace?

November 30, 2022 | by | 1 Comment

Where will Elizabeth Holmes serve her sentence, whatever it is? A story that got lost in the Thanksgiving shuffle was Bloomberg News’ (paywalled) report that Judge Edward Davila recommended that she be remanded to a minimum security Federal women’s prison in Bryan, Texas, outside of Houston. What has previously been mentioned in the press and by legal commentators is that she would likely serve her time in a northern California minimum security prison about an hour from her present home, the Federal Correctional Institution in Dublin, California. According to commentators, the larger Bryan facility may be better than Dublin, which is a satellite camp. Bryan  “…compared to other places in the prison system, this place is heaven. If you have to go it’s a good place to go,” Alan Ellis, a criminal defense lawyer, told Bloomberg. The final say will be made by the Federal Bureau of Prisons. The selection is important because Federal inmates typically serve a minimum of 85% of their time, unlike time served in state prisons. Gizmodo reports on Bloomberg’s reveal

Holmes’ reporting to prison is scheduled for 27 April 2023. Her appeal to the Ninth Circuit Court of Appeals must be filed within two weeks of sentencing, which by this Editor’s calendar is 2 December but may be later due to the holiday. Holmes may be permitted to stay out of custody pending appeal if it extends beyond the surrender date if the judge permits. 

Editor’s commentary: One wonders whether Holmes’ appeal will be successful. One factor is what Judge Davila acknowledged: “What is the pathology of fraud? Is it the inability to accept responsibility?” Even in her personal statement during the sentencing, there is evasion. Holmes did admit some sorrow about patients and investors relating to her own failings (back to her again), but sorrow is not responsibility. Moreover, Holmes did not refer to making amends for that sorrow created by the Fraud That Was Theranos. Her defense continues to blame others, like Sunny Balwani, former president and live-in. Even the 130 character letters, many from others who knew her only briefly, blamed others including Balwani, almost tracking to the defense’s talking points. The case proved conspiracy with Balwani, who will likely be sentenced on 7 December for what is expected to be something close to the full 20 years as convicted on all 12 counts.

The tables are turned by Cerebral on co-founder/former CEO Kyle Robertson. Only a week or so ago, Robertson (through his attorneys) reportedly sent a letter to Cerebral management demanding access to documents detailing “possible breaches of fiduciary duty, mismanagement and other violations of law.” [TTA 18 Nov] Now Cerebral is suing Robertson for his default on a $49.8 million loan taken this past January to buy 1.06 million shares of common stock in the company. According to the filing in New York Supreme Court, he is personally liable for $25.4 million, plus interest and attorney’s fees. After his dismissal 18 May, he had six months to repay the loan or direct Cerebral to repurchase or cancel the shares. According to the lawsuit, “Robertson repeatedly asserted that he would not repay the loan.” The troubled company laid off 400 or more in October and is now valued at a fraction of last year’s $4.8 billion valuation.  Stay tuned. HealthcareDive, Mobihealthnews

A cracked SPAC may get itself sold. Talkspace, which has had a year of challenges since its SPAC, apparently is in talks to be acquired by Amwell. According to Calcalist, an Israeli business publication, Amwell is in advanced talks to acquire it for $1.50 per share, or about $200 million. This is quite a comedown from when Talkspace was valued in January 2021 at $1.4 billion. It executed its SPAC in June [TTA 25 June 2021] and hit Nasdaq at $8.90 per share. Today it closed at $0.88, so Amwell’s offer would be close to double. It would also remove another problem. Nasdaq notified Talkspace on 18 November that they were on the verge of delisting their stock, as it was trading for over 30 consecutive business days at under $1.00 per share.

The ‘advanced’ term is interesting because this past June, reports indicated that Talkspace rejected overtures by Amwell and Mindpath. The amount bandied about at that time was $500 million and a sale was expected during the summer. (What a difference six months of economic uncertainty makes.) 

In November 2021, founders Roni and Oren Frank stepped down and their COO resigned shortly thereafter on a conduct-related allegation. Shareholders started to sue starting then. YTD results have also been dismal, with losses of $61 million on revenues of $89 million.

Talkspace would bolster Amwell’s mental health capabilities in telepsychiatry with a DTC and enterprise product. If the company hung on to most of their $184 million in cash reported in June (of the SPAC’s $250 million), for Amwell it also would be a deal that almost pays for itself. HealthcareDive, FierceHealthcare

Week-end news roundup: Allscripts on the acquisition hunt, Amwell’s CVS telehealth deal, Cerner’s $1.8M racial discrimination settlement, predicting Parkinson’s progression via smartwatch data

August 12, 2022 | by

Another company on the hunt for strategic buys. Health IT and EHR company Allscripts is seeking to add to its Veradigm analytics, research, and provider/payer platforms with some strategic acquisitions. Announced on its Q2 earnings call by new CEO Rick Poulton is the intent to expand the company from its current provider base into a more diverse one serving payers and life sciences. Allscripts does have some free cash–about $700 million–having recently sold its hospital and large physician practice EHRs to Constellation Software/N. Harris Group, though there were some settlements around their Practice Fusion EHR now incorporated into Veradigm [TTA 2 Apr]. With a free cash flow from continuing operations around $120 million and about 7% growth, they feel the time is here for some accretive, strategic, and proven acquisitions–at the right price. FierceHealthcare

Amwell’s Q2 earnings call also had good news for shareholders, who of late haven’t had much to cheer. CEO Ido Schoenberg, MD announced that Amwell will provide CVS Health’s Virtual Primary Care, formally launched in late May  Amwell will be providing primary, behavioral health, and chronic care management through the platform. CVS will be providing these services to Aetna fully-insured, self-insured plan sponsors, and CVS Caremark clients effective first half 2023. As this Editor wrote earlier this week, CVS Health is making no secret of its intent to expand into delivering primary care and home health. One way Virtual Primary Care will be leveraged is converting in-store health services to virtual, such as non-emergency treatment and nutrition/wellness programs. CVS is even dabbling into blockchain with downloadable non-fungible tokens (NFTs) for virtual services. HealthcareFinance 

Cerner, on the other hand, is paying out $1.8 million to settle a racial discrimination lawsuit brought by the US Department of Labor. As a Federal contractor, Cerner went under review by the Office of Federal Contract Compliance Programs. That office alleged that Cerner systematically discriminated against qualified Black and Asian applicants who applied for positions at five facilities in Missouri and Kansas between 2015 and 2019. Cerner agreed to pay $1,860,000 in back pay and interest to 1,870 applicants in areas such as medical billing, system engineers and technical solution analysts. Certainly Oracle wanted to get this off the plate before the cutover on 1 October. HealthcareFinance, Department of Labor release

Can enough data collected build a predictive model for the progression of  Parkinson’s? Koneksa, a digital biomarker builder, is working with the Michael J. Fox Foundation for Parkinson’s Research to build a predictive model on how Parkinson’s will progress over time in an individual. The Fox Foundation already has a database to analyze — the Parkinson’s Progression Markers Initiative, launched in 2010, with health information and biosamples from Parkinson’s patients. Added to this will be data from Verily’s smartwatch:  activity tracking, gait analysis, and sleep cycles, which will be analyzed using Koneksa’s algorithms and additional machine learning. The award by the Fox Foundation was not disclosed, but it is the second for Koneksa after another grant awarded in mid-June to analyze vocal abnormalities relating to early progression of the disease, in conjunction with Northwestern University. FierceHealthcare

Amazon moves to acquire One Medical provider network for $3.9B (updated)

July 27, 2022 | by | 1 Comment

Amazon joining the in-person provider network space for real. Amazon Health Services last week moved beyond experimenting with in-person care via provider agreements (Crossover Health, TTA 17 May) to being in the provider business with an agreement to acquire One Medical. Earlier this month, news leaked that One Medical as 1Life Healthcare was up for sale to the right buyer, having spurned CVS, and after watching their stock on Nasdaq plummet 75%.

  • The cash deal for $3.9 billion including assumption of debt is certainly a good one, representing $18 per share, a premium to their $14 share IPO in January 2020. (The stock closed last Wednesday before the announcement at just above $10 per share then plumped to ~$17 where it remains.)
  • The announcement is oddly not on One Medical’s website but is on Amazon’s here.
  • The buy is subject to shareholder and the usual regulatory approvals. The IPO was managed by JP Morgan Securities and Morgan Stanley. It is primarily backed by Alphabet (Google).
  • One Medical’s CEO Amir Dan Rubin will stay on, but there is no other executive transition mention.
  • Also not mentioned: the Iora Health operation that serves primarily Medicare patients in full-risk value-based care models such as Medicare Advantage (MA) and Medicare shared savings, quite opposite to One Medical’s membership-based concierge model. However, Iora’s website is largely cut over to One Medical’s identity and their coverage is limited to seven states.

There is a huge amount of opinion on the buy, but for this Editor it is clear that Amazon with One Medical is buying itself into in-person and virtual primary care for the employer market, where it had limited success with its present largely virtual offering, and entree with commercial plans and MA. One Medical has over 700,000 patients, 8,000 company clients and has 125 physical offices in 12 major US markets including NYC, Los Angeles, Boston, and Atlanta. It has never turned a profit. Looking at their website, they welcome primarily commercial plans and MA (but not Medicare supplement plans).

Amazon, with both a virtual plus provider network, now has a huge advantage over Teladoc and Amwell, both of which have previously brushed off Amazon as a threat to their business. There is the potential to run two models: the current Amazon Care pay-as-you-go model and the One Medical corporate/concierge model. This puts Amazon squarely in UHC’s Optum Health territory, which owns or has agreements with over 5% of US primary care practices, is fully in value-based care models such as Medicare shared savings through its ACOs, and is aggressively virtual plus integrating services such as data analytics, pharmacy, and financial. Becker’s

What doesn’t quite fit is Iora Health and the higher cost/higher care needs Medicare market that is less profitable and requires advanced risk management, a skill set that Amazon doesn’t have. This Editor will make a small prediction that Iora will be sold or spun off after the sale.

This Editor continues to believe that the real game for Amazon is monetizing patient data. That has gained traction since we opined that was the real Amazon Game in June and October last year, To restate it: Amazon Care’s structure, offerings, cheap pricing, feeds our opinion that Amazon’s real aim is to accumulate and own national healthcare data on the service’s users. Then they will monetize it by selling it to pharmaceutical companies, payers, developers, and other commercial third parties in and ex-US. Patients may want to think twice. This opinion is now shared by those with bigger voices, such as the American Economic Liberties Project. In their statement, they urged that the government block the buy due to Amazon’s cavalier attitudes towards customer data and far too much internal access, unsecured, to customer information (Revealnews.org from Wired). Adding PHI to this is like putting gasoline on a raging fire, and One Medical customers are apparently concerned. For what it’s worth, Senator Bernie Sanders has already tweeted against it.   MarketWatch

Whether this current administration and the DOJ will actually care about PHI and patient privacy is anyone’s guess, but TTA has noted that Amazon months ago beefed up its DC lobbying presence last year. According to Opensecrets.org, they spent $19.3 million last year. In fairness, Amazon is a leading Federal service provider, via Amazon Web Services. (Did you know that AWS stores the CIA’s information?)  One Medical is also relatively small–not a Village MD/Village Medical, now majority owned by Walgreens Boots. This is why this Editor believes that HHS, DOJ, and FTC will give it a pass, unlike UHG’s acquisition of Change Healthcare, especially if Amazon agrees to divest itself of the Iora Health business.

Treat yourself to the speculation, including that it will be added as an Amazon Prime benefit to the 44% of Americans who actually spend for an Amazon Prime membership. It may very well change part of the delivery model for primary care, and force other traditional providers to provide more integrated care, which is as old as Kaiser and Geisinger. It may demolish telehealth providers like Teladoc and Amwell. But as we’ve also noted, Amazon, like founder Jeff Bezos, deflects and veils its intents very well. FierceHealthcare 7/25, FierceHealthcare 7/21, Motley Fool, Healthcare Dive

Weekend reading roundup: Amwell’s Schoenberg opines to Politico; Teladoc’s new CMO also opines, SPACs are done, done, done

July 15, 2022 | by

If Teladoc’s Jason Gorevic [TTA 1 July] and new CMO Vidya Raman-Tangella (below) are suddenly available to the health press, can a Schoenberg brother be far behind? This brief Q&A with Politico is with Roy Schoenberg of Amwell and covers the state of telehealth, obstacles, abortion, consolidation, and automation. He stays pretty much on message with no surprises as the questions are short and, as is the practice, pre-submitted:

  • Telehealth is a distribution arm of healthcare, not just videoconferencing
  • The biggest war in telehealth remains state licensure–as it was pre-pandemic, past the ‘jumping in’ stage
  • Telehealth will not be a ‘pill mill’ for abortion pills (abortifacients) or controlled substances–it will be based on clinician professional judgment. (In the Editor’s opinion, this ‘hot potato’ was pre-written by the legal department.)
  • Consolidation as a question is not answered. We will see telehealth delivered by large healthcare organizations and telehealth that works with multiple brands. (What is not addressed is what telehealth services large healthcare organizations will go forward in using–the ‘high-priced spread’ of all-inclusives or the white-labels)
  • His opinion around automation is that it will be split between the camps of replacing clinicians, or augmenting them plus giving patients the opportunity to manage their health reality. (One wonders for what reality Amwell is preparing)

Teladoc’s new chief medical officer Raman-Tangella is also on the healthcare charm offensive with a Healthcare Dive interview on strategy and new products. She discusses enterprise clinical strategy and whole-person care, which echoes the Gorevic interview. There’s a diversion to ‘health equity’ which is first defined as a continuum [Editor’s term] of gathering data, taking solutions to customers, and seeking outcomes that validate the first two. She then moves on to closing care gaps through this information, especially in musculoskeletal and physical therapy, and returning to health equity, disparities and then (what we used to define as) proactive care based on all this patient information.

Forget the fork. SPACs as an IPO method are burnt and heading to the trash bin. Again [TTA 9 June] we have PrivCo’s Daily Stack addressing their demise, this time quantifying the crack of the full SPAC market (in and outside healthcare):

  • From one in 2009 to 248 in 2020
  • 2021: an estimated 50% of the total US IPO market in Q1 with 299 listings valued at $98.3 billion
  • 2022: 18 registrations this entire 2022 year and still in the process of raising $2 billion. (This Editor noted that the only healthcare SPAC apparently in progress is VSee and iDoc Telehealth with Digital Health Acquisition Corporation to close in Q3.)

As we’ve previously noted, SPACs are under attack by the SEC and by perpetual hair-on-fire for the press Senators such as  Elizabeth Warren. According to Bloomberg (sign-in needed), 30 SPACs have been called off this year. And as we’ve noted, there are healthcare SPACs like SOC Telemed which went private at a fire sale discount. Others like Owlet, Headspace, and Talkspace are struggling. Watchful eyes are on late SPACs such as Pear Therapeutics and Babylon Health. It’s a less-than-grand finale to what was touted as a low-muss way to IPO.

Weekend news roundup: Teladoc adds to Primary360; Novartis, Medtronic support UK digital cardiac startups; Bluestream adds PrimaryOne Health; NoKo ransomware threatens healthcare; more Fed scrutiny on telehealth Rx, billed time may be coming

July 8, 2022 | by

Teladoc had some positive news this week with additions to Primary360, its new primary care service for the provider/payer market. It added in-network referrals and care coordination capabilities, free, same-day prescription delivery from Capsule, and in-home, on-demand phlebotomy from Scarlet Health. The release notes that about half of patients fail to pick up their prescriptions. In addition, Priority Health, a nonprofit health benefits company serving Michigan, has added Primary360 to its fully insured virtual first plan design for employers. FierceHealthcare

Some good news from the UK in a time of government upheaval. Novartis is supporting cardiac digital health startups through the Novartis Biome UK Heart Health Catalyst 2022. This investor partnership is to identify and scale innovations for non-invasive lipid testing and at-home blood pressure testing using software as a medical device. Partners in support are Medtronic, RYSE Asset Management and Chelsea and Westminster Hospital NHS Foundation Trust and its official charity CW+. Successful applicants will receive support from partners during the competition process, the opportunity of investment up to £3 million provided by RYSE Asset Management, subject to due diligence at RYSE`s discretion, access to the Novartis Biome UK eco-system located in White City, and opportunities to work with our NHS partners to set up and deliver a pilot evaluation of the winning innovation. Applications must be in by 31 August–form is here. FierceBiotech

Bluestream Health adds PrimaryOne Health. Bluestream provides a white-labeled customized virtual care service that will be integrated into PrimaryOne’s services. This medical group of 11 community healthcare facilities across central Ohio serves 48,000 patients with primary care, OB-GYN, pediatric, vision, dental, behavioral health, nutrition, pharmacy, physical therapy, and specialty care.  Release

North Korea’s Maui Ransomware is no Hawaiian vacation. The threat has built enough since May 2021 for the Federal Bureau of Investigation (FBI), Cybersecurity and Infrastructure Security Agency (CISA), and the Department of the Treasury (Treasury) to release a joint Cybersecurity Advisory (CSA) on Thursday warning healthcare and public sector health organizations. It is state-sponsored North Korean malicious cyber activity. The CSA provides a sample of how it executes, what it targets, how it encrypts files, and how to respond. Hackermania, NoKo Style, is Running Wild with breaches piling up [TTA 7 July], and not only in healthcare. Healthcare Dive, Healthcare IT News

And in Dog Bites Man News, a former US assistant district attorney for Massachusetts predicts that Federal entities such as the Department of Justice (DOJ) may not stop with telemental prescribing. They will not only be ramping up their scrutiny of telemental health companies–but also telehealth billing. For Cerebral and Done Health that facilitate the prescribing of Schedule 2 drugs, this assumption of scrutiny has become a no-brainer. What it also is: a caution for mainstream telehealth providers such as Teladoc and Amwell charging into psychiatric telehealth.  But the former ADA, Miranda Hooker, now a health sciences area partner with Troutman Pepper in Boston, makes a broader prediction. Prosecuted telehealth fraud, as this Editor has noted, has grown in other areas, such as prescriptions for durable medical equipment (DME) billed to Medicare [TTA 6 May] and cardiologists moonlighting as Dr. Mabuse, Master Cybercriminal [TTA 19 May]. But the next frontier may be time-specified telehealth consults billed to Medicare under various CPT codes (e.g. 994XX). A 15-minute consult billed as a more lucrative 30-minute consult can be considered fraud. The Cerebral investigation, according to Hooker, marks a shift by the DOJ into investigating the actual provision of telehealth services and whether they are being billed properly. FierceHealthcare

Weekend news, deal roundup: Teladoc CEO’s tapdance interview, VA EHR cost reporting now law, Tunstall-Doncaster Deaf Alliance partner, Cleveland Clinic’s $33M medtech spinoff

July 1, 2022 | by

Teladoc CEO Jason Gorevic’s curious tapdance of an interview. Teladoc has had a rough 2022 to date. Their 2022 Q1 financials [TTA 4 May] were disastrous, their share price has not recovered since it cracked in late April with a 62% year-to-date plunge, the Livongo acquisition is shaping up to be the healthcare equivalent of Eastern Airlines’ takeover by Texas Air Corporation circa 1986, and shareholders are filing class action lawsuits. Now this Editor doesn’t mean to pile on. As a professional in two fields, she does understand the value of the press and leadership being available. But FierceHealthcare’s Heather Landi cleverly got Mr. Gorevic to stake his ground for growth yet again on “holistic, integrated solutions” that combine multiple care services from primary to complex care as the ‘longitudinal’ way to go. Yet Ms. Landi does have the nerve to bring up recent history and their long-time competitors like Amwell and Doctor on Demand (now Included Health) in the same space. Then there are the slices taken by players in the direct-to-consumer and niche target players (she cites troubled Cerebral and Talkspace–I’d offer DTCs like Babylon Health and the ‘white-labels’ like Bluestream Health and Zipnosis, now owned by BrightHealth, which are directly and cost-effectively working with providers). Think of this: in an economic downturn, will providers buy the ‘premium spread’ that requires a big implementation lift, or get by a less comprehensive solution that’s easier to implement and costs less?  Surprisingly, given the ‘everyone wants everything’ strategy, he again blames the cost of paid search advertising and brushes off Microsoft and Amazon. I’m not so sure that so soon after their Q1 bad news in May, with lawsuits centering on statements to investors, and nothing new in good news, this interview was particularly good timing.

VA corralled by Congress on Cerner EHR. The Department of Veterans Affairs now, by Federal law enacted late last week, has to prepare quarterly reports on its transition to the Cerner Millenium EHR to both House and Senate Veterans committees on performance and cost, including a breakdown of program funding sources. The new bipartisan law’s title is the VA Electronic Health Record Transparency Act.  Healthcare Dive

Tunstall Healthcare is now working with a local trust, the Doncaster (UK) Deaf Trust, to provide support for deaf and hearing-impaired children and adults. With Whitley Parish Council, Tunstall is working with the specialist gardening team at Communication Specialist College, part of Doncaster Deaf Trust, to secure over 100 plants for the planters which have been grown at the Trust’s gardens. Tunstall volunteers planted them in the planters across the village. Doncaster Free Press

Cleveland Clinic’s successful spinoff, Centerline Biomedical, closed a $33 million Series B equity financing. Leading it was Cleveland Clinic with participation by GE Healthcare, RIK Enterprises, JobsOhio, Jumpstart Ventures, and G2 Group Ventures. Centerline’s technologies improve visualization and guidance of stents, catheters, and guidewires in endovascular procedures, reducing dependence on radiation and contrast agents with the goal of improving patient outcomes. These include sensors and electromagnetic tracking that create 3-D color visualization and navigation of the human vascular system. Release, Becker’s

Wednesday news roundup: March telehealth claims down to 4.6%, state telehealth waivers expiring, UnitedHealth’s Optum bids for EMIS, Talkspace reportedly rejected Amwell, Mindpath bids

June 22, 2022 | by

Telehealth usage continuing its downward trend. At 4.6%, telehealth medical claims in March were off over 6% (0.3 points) versus February’s 4.9%. Again, 65% of claims were for mental health conditions, and social workers were the leading providers of telehealth at 32% for primarily one hour of psychotherapy at 26%. FAIR Health monthly US tracker.

One possible contributing factor is states pulling back on the broad telehealth provider location and other waivers (such as platforms) that were enacted during the Covid emergency. These waivers primarily permitted out-of-state providers. The expiration of waivers thus return telehealth delivery to in-state licensed providers unless covered by other regulations, for instance Medicaid. Last year, 26 states waived in-state licensure requirements; this year, only 12 states have these waivers. California and New Jersey are due to expire soon.  NBC News with a hat tip to HISTalk.

Optum bids to buy UK health software provider EMIS. The bid of £1.24 billion ($1.5 billion) was announced last Friday. A UK affiliate of Optum, Bordeaux UK Holdings II Limited, is the actual entity for the acquisition, recommended by the EMIS board. The offer is in cash and represents a 49% premium to the current share price. EMIS is a leading provider of software and systems to the NHS, serving primary care, community care and pharmacy, acute care, and the Patient.info website. When completed, EMIS would be UnitedHealth’s largest acquisition in the UK and Europe. FierceHealthcare 

Troubled telementalhealth provider Talkspace reportedly rejected a bid from Amwell pretty much out of hand, leading to speculation that it’s up for sale but being picky-picky-picky.  According to the report in Behavioral Health Business, from Seeking Alpha, their talks did not even reach number discussions. This is after Talkspace rejected another bid in May from another telementalhealth provider Mindpath, backed by Centerbridge Partners and Leonard Green & Partners. Sources were split on whether $500 million was offered or not (Axios).

Talkspace is one of the poster children for Cracking SPACs. It hit the market in January 2021 at a valuation of $1.4 billion, opening above $8, hitting a peak of about $11 per share. Share price declined to as low as $1.06 before rising on this acquisition talk to $1.58. Current valuation is $58 million, but it is sitting on a reported $184 million in cash. Reportedly their CEO search is going nowhere. Much like Teladoc, one year after their SPAC, investor lawsuits were filed against the company for misleading investors. Look for Talkspace to be sold over the summer.

Weekend review: FDA clears Apple Watch ‘AFib History’, OS9 adds health features; Amwell’s new CMO; 2M records breached at New England provider, largest this year

June 10, 2022 | by

Apple Watch adding first-ever ‘AFib History’ in watchOS 9 software release. Announced 6 June, Apple received their FDA 510(k) clearance for this new feature which adds on to the existing ECG app and irregular rhythm notification. The History feature includes an estimate of how frequently a user’s heart rhythm shows signs of atrial fibrillation, including additional weekly notifications to understand and track this on a printable PDF. According to their release, users can view a detailed history in the Health app, including lifestyle factors that may influence AFib, like sleep, alcohol consumption, and exercise, which can be downloaded and printed.

Other health-related features on the watchOS9 release include:

  • Medications app for managing medications, vitamins, and supplements, including a medications list, schedules and reminders, and directly view medication information in the Health app
  • Sleep Insights, an add-on to the existing sleep tracking that informs users of sleep stages. Using signals from the accelerometer and heart rate sensor, it will detect and track when users are in REM, core, or deep sleep.

Apple release 6 June, FierceHealthcare

Amwell names new chief medical officer. Carrie Nelson will be working with payer and provider organizations in care delivery from Amwell’s new platform, Converge. In addition, she will be heading up the Amwell Medical Group, their clinical partner. Dr. Nelson was formerly Advocate Aurora Health’s senior vice president and CMO for Population Health and Health Outcomes, where she was also chief clinical officer for Advocate Physician Partners, their value-based care physician group. Amwell is transitioning practices from its prior platforms and needs to maintain their presence with both groups as many are finding alternative telehealth systems. Amwell release, Healthcare Dive

And what week wouldn’t be complete without a massive healthcare data breach? The leading event so far this year took place over two weeks in March at 60 healthcare facilities affiliated with Massachusetts-based Shields Health Care Group. While it was only 7 to 21 March and discovered 28 March, apparently the quaintly-titled ‘unknown actor’ was able to compromise data. The investigation by Shields and Federal and state regulators is ongoing as to what data was accessed and taken; to date, there is no evidence to indicate that any information from this incident was used to commit identity theft or fraud. The difference in breaches between now and the past is how rapidly it’s discovered.  Shields Health notice, Healthcare Dive

Wednesday AM roundup all about money: $28B Oracle-Cerner closes today, 9 June strategy talk; Teladoc class-action lawsuits begin; Cigna’s look at loneliness

June 8, 2022 | by

As you read this, Oracle has closed on their acquisition of Cerner Corporation. According to the Oracle release, approximately 204,280,589 shares, or 69.2% for $28 billion, have been validly tendered and other conditions, such as passing antitrust approvals, have been satisfied. If there are other loose ends to tie off, they aren’t impediments to the closing.

Interested Readers can register to hear Larry Ellison, Oracle’s chairman, and other speakers outline Oracle’s strategy to “redefine the future of healthcare” (a song we’ve heard before) on 9 June at 3pm Central Time. If our UK Readers have been wondering what former PM Tony Blair’s been up to, he’ll be on this call. Other UK speakers are David Walliker, chief digital officer of Oxford University Hospitals, and Kevin Jarrold, joint CIO of Imperial College Healthcare. Another outside speaker is Meharry Medical College‘s CEO, James E.K. Hildreth, MD, PhD. Meharry, located in Nashville, is the second oldest medical school founded (1876) to educate black Americans in medicine and dentistry.  

Here we go with class-action lawsuits against Teladoc based on loss of share value and misleading statements. Teladoc, whose stock has taken a long jump off a very tall building (90% loss from the high), is being sued in US District Court for the Southern District of New York by a shareholder, Jeremy Schneider. This is a Federal securities class-action lawsuit (text here) with Mr. Schneider representing shareholders who purchased Teladoc shares between 28 October 2021 and 27 April 2022 (the date of announcing Q1 2022 results). The charges involve materially false statements that Teladoc made on its business, operations, and prospects including minimizing competition leading to increased advertising costs, unrealistic projections for revenue made in the period, and the impact of the Livongo writeoff announced Q1–a noncash goodwill impairment charge of $6.6 billion, or over $41 per share [TTA 4 May recaps Q1].

A lookup on Justia indicates that Mr. Schneider is being represented by Jeremy Alan Lieberman of Pomerantz LLP. The filing names Jason Gorevic, CEO, and Mala Murthy, CFO as individual defendants along with Teladoc. Mr. Schneider is not a large shareholder; his investment was a little over $250,000 from December 2021 to February 2022. Other shareholders may join the suit by contacting Pomerantz.

What usually happens after this is other firms file class-action suits in the same court representing other shareholders. An example of this trolling is this announcement/release from Bernstein Liebhard LLP. 

If you like risk and volatility, TDOC and AMWL shares remain relatively cheap (the latter below $5) and haven’t recovered. TTA reflected on Amwell’s equally shaky Q1 and growing losses in May 

If and when they’ll recover is anyone’s guess, with increased direct-to-consumer competition from retail (CVS, Walmart) and with providers maintaining their own telehealth systems, homegrown and whitelabeled (Bluestream Health, Zipnosis). Healthcare Dive, Mobihealthnews recap much of what led to this point.

If you feel a little lonelier after your Teladoc (or other telehealth) shares tanked, or you feel like life hasn’t gotten back to normal now that the pandemic is really over (despite the hoo-hah over monkeypox), Cigna’s latest research commissioned from Morning Consult will be on point. Isolation is a function of lower income, lower physical and mental health, and being a single parent or mother. Contrary to the usual assumption, young adults 18 to 24 feel lonelier and more left out (79%) compared to those aged 66 and over (41%). (Your Editor speculates that the office and workplace are more necessary for socialization by those starting their careers than those toward the end who’ve built their networks.) What’s also a little surprising is the increased indication of loneliness among racial lines with black/African American (68%) and Hispanics (72%) feeling significantly lonely. The impact at work is less productivity and more unhappiness with their jobs. The study recommends increases in work and community activities, work flexibility, improved benefits, and workplace inclusion. A bit more along with quotes from Cigna’s Evernorth subsidiary in FierceHealthcare. 

News roundup: telehealth claims drop 9% in February; Amwell’s good news, bad news Q1; tech-enabled practice Crossover Health growing; NowRx and Hyundai test semi-self-driving delivery

May 17, 2022 | by

FAIR Health’s February monthly tracker is pointing downward again. After a brief post-holiday rise to 5.4% of claims in January, it dropped to 4.9% in February, a 9% drop. Mental health claims seized the lead again by a country mile at 64.2% of claims. COVID-19 fell off the list of top 5 claim areas, though only 3.4% in January compared to 58.9% for mental health. This month lists categories of specialists delivering telehealth, and social workers topped the list at over 31%, which fits the telemental health picture. 

Amwell’s shaky opening to 2022. It should not come as any surprise to our Readers that Amwell, the Avis to Teladoc’s Hertz, didn’t have a good Q1. Most of their key indicators around total revenue, providers, and visits grew smartly. Unfortunately, their losses did too. Comparisons are to Q1 2021 unless noted:

Revenue grew to $64.2 million [$57.6 million], up 11.5%
Gross margin: 42.8% [38.0%], up 12.6%
Total active providers grew 12% from Q4 to approximately 102,000 [91,000] Total visits also grew 20% from Q4 to 1.8 million [1.5 million]

But there’s no turning the corner on losses this quarter, despite Converge, their unified platform, shifting over telehealth visits as planned, and adding SilverCloud, Conversa, and specialty telehealth with musculoskeletal (MSK) and dermatology programs to the totals.

Net loss was ($70.3) million, compared to ($39.8) million, an increase of 77%
Adjusted EBITDA was ($47.1) million, compared to ($26.4) million, an increase of 78%

Amwell’s projected 2022 is the same–growth mixed with financial losses: revenue between $275 and $285 million, adjusted EBITDA between ($200) million and ($190) million.

Inquiring investors may very well ask when Teladoc and Amwell, now smaller by a factor of just over 9, will ever be profitable. Mr. Market had its say over the past year, from a high of $14.26 in early June 2021, to today’s close of $3.09, an enterprise valuation loss of $11.17 or 78%, just a little better than Teladoc’s 81% in the same period. It will likely be no time soon. But the shares may be an excellent opportunity at a low cost. Yahoo Finance, FierceHealthcare, Becker’s 

Crossover Health, a hybrid virtual/in-person primary care practice group, announced that they would be opening new centers in Seattle, Austin, and another one in New York this year. Their virtual care operates in all states, while their in-person footprint consists of 41 health centers in 11 states which are generally about 5,000 square feet. They have 33 on-site clinics for employers, which are a combination of exclusive to one company and shared, and in total cover 400,000 eligible employees and dependents including for 115,000 Amazon employees and dependents. In addition to corporate clinics, Crossover offers individual membership plans in a concierge, under one roof type model. FierceHealthcare

In another tech area, med delivery company NowRx is partnering with Hyundai for a limited test of their self-driving cars in the LA area. Hyundai will be using slightly modified Hyundai Ioniq 5 electric vehicles with some autonomous capability, but using a driver. The purpose of the test is to simulate and gather data on autonomous vehicle delivery, such as delivery statistics, dispatch and customer interactions, and feedback. NowRx offers free same-day prescription delivery in the San Francisco Bay area, Orange County, and Los Angeles areas. FierceHealthcare

Some thoughts on Teladoc and the Week That Was in telehealth

May 4, 2022 | by

Yes, your Editor has, for the past few weeks, felt like Pepper the Robot, moving at two speeds–crazed and off. (‘Off ‘ to the left. Now cart me off.) Home renovations, with strangers tramping through your abode, noise, dust, and the corresponding moving of furniture, packing and unpacking, pre- and post-cleaning, then trying to put things right and get your life back will do that. Add to that an unexpected gushy kitchen sink that took three ‘fixes’ to get actually fixed. Then there were technical problems with our email sender that Editor and Administrator Emeritus Steve had to work through. One becomes more appreciative of order, routine, and Peace and Quiet.

Speaking of Peace and Quiet, there is little to be found in telehealth. Instead, there is a lot of Feeling Off. The Big News of late last week, of course, was Teladoc’s troubles. In the words of Seeking Alpha, they had one horrific quarter. The horror show started with writing off the Livongo acquisition– a noncash goodwill impairment charge of $6.6 billion, for a massive loss of $41.11 per share for a total of $41.58 per share. To compare, last year’s Q1 loss was $1.31 per share. While revenues were up almost to projection (25%), it was still a $3 million miss and in context, it was the cherry on a very nasty sundae. After rosy projections last year, Teladoc lowered their 2022 revenue guidance from $2.6 billion to $2.45 billion.  

Moving forward from the questionable Livongo acquisition at the absolute peak of the market, CEO Jason Gorevic admitted some hard truths to investors that deepened the hole: much more competition, particularly in telemental health; the rising cost of paid search advertising and the keywords driving towards direct-to-consumer telehealth driving up the cost of acquisition; and difficulty closing B2B deals. This creates, in the terms of analyst SVB Leerink’s Stephanie Davis quoted in FierceHealthIT, “a direct-to-consumer air pocket that business-to-business sales (and their inherently longer cycles) are too slow to fill” at least, in her view, until the end of the year.

Teladoc’s difficulties, as this Editor has noted, started after a peak in early 2021 as the pandemic started its protracted wind-down and telehealth volumes plunged to well below 5% of claims as practices reopened. The stock value is down over 90% from last February, not helped by a volatile market triggered by war and inflation. Similar difficulties are plaguing Amwell (down 92% since February 2021), Talkspace (down to a paltry 16 cents and in court for misleading investors), SOC Telemed (taken private at a 70% drop in value, TTA 8 Feb), and other health tech companies. For our Readers, this is no surprise: the telehealth bender is ovah.

One industry leader in a post-ATA conversation with this Editor cited a less obvious factor–that hospitals and other health providers are now putting together their own telehealth/triage packages tied into population health and case management software, with and without ‘white label’ providers such as Bluestream Health and Zipnosis (acquired by insurtech/payvider Bright Health a year ago). Teladoc is a late entry to this provider/payer market with Primary360, where they also compete with Babylon Health [TTA 7 Oct 22]. And health retailers have joined the primary care telehealth game. Walmart last week announced a virtual health diabetes care program for employers through their recently acquired MeMD.

Big Telehealth’s troubles may depress investment in related earlier stage companies–or help those in niches such as telemental and population health, or remote patient monitoring (RPM) systems that have telehealth features (e.g. TytoCare), as VC investment seeks a brighter home. Right now, this Editor’s Magic 8 Ball is saying ‘outlook, cloudy”. 

Friday news roundup: CVS filing for metaverse patents; Orbic-Verizon smartwatch debut, Amwell and LG partner for hospital digital health–and what *doesn’t* make for a good partnership

March 11, 2022 | by

What’s a metaverse anyway? It’s a bright, shiny piece of jargon meaning the virtual reality or 3D virtual world. And CVS is rushing right to the US Patent Office to patent its goods and services–including their clinic services and telehealth–in the metaverse. While it’s hard to imagine prescription drugs, healthcare, wellness, beauty and personal care products being wholly virtual, shopping for them can be and obviously CVS doesn’t want to miss out on a world where we’re all wearing 3D headsets and ordering our healthcare in VR and AR. CNBC, USPO filing  

Orbic, a US-India manufacturer popular for being one of the more budget-friendly makers of mobile phones (including flips), tablets, laptops, routers, and accessories, has debuted a smartwatch in partnership with Verizon, the SmartWrist. It has monitoring features such as pulse oxygen levels, body temperature, heart rate, and sleep. It also sets and keeps track of fitness goals and, for those who need it, fall detection, autodial emergency services or contacts in event of emergency, and geofences safe zones. The watch face is 1.78” AMOLED, dock charging, and Android Go 8.1. All for an affordable $199. Our contact Erin Farrell Talbot tells TTA that the SmartWrist is integrated with EHRs plus currently going through FDA approvals that when completed will enable it to be prescribed for patients with medical issues or chronically ill.

Amwell goes into the hospital to connect with LG on TVs and monitoring devices. LG is the leading provider of smart TVs in the hospital market, and where Amwell will initially partner is with Converge, its unified provider-patient platform, inputting information from LG peripheral devices already in or being introduced into acute care. Amwell and LG are also looking beyond the hospital setting into home or sub-acute care. As Healthcare Dive noted, this is not Amwell’s first fling with TV-based care–they demonstrated at last April’s Client Forum a TV-based hospital-to-home integration with Solaborate. LG release (Yahoo)

Sometimes digital health partnerships start at a low level–and auger in from there. Becker’s Hospital Review quizzed three hospital executives, including one from Geisinger Health, an early adopter, on three signs that your digital health partner is not one for the long haul:

  1. It doesn’t have a genuine mission. The mission that hospitals are interested in are about patient outcomes and interest in the hospital partner’s business, not the digital health company’s funding or press.
  2. It hasn’t earned your trust. It seems obvious, but do your due diligence on how the company has handled other partnerships. Red flags include inadequate funding and the terms of the partnership fluctuating.
  3. It lacks responsiveness. This is a big one that this Editor has experienced as both a vendor and buyer. It’s a willingness to listen to and address pain points in “the never-ending troubleshooting” that’s across the board.

As a digital health company, the first is attitude, the second is performance, but #3 is generally the grind point where internal frustrations build and relationships go south.

The end of the bubble? SOC Telemed, SPAC’d at $10 per share, acquired for $3 and $300M by Patient Square Capital

February 8, 2022 | by

SOC Telemed (NASDAQ: TLMD), one of the earliest health tech SPACs [TTA 4 Aug 2020], is going private in a deal with the Sand Hill Road healthcare investment firm Patient Square Capital. Patient Square is paying $3 per share in cash.

Based on the 100,840,000 shares outstanding (MarketWatch), this Editor’s best estimate of the transaction is about $303 million. Holders of 39% of the outstanding shares have already voted in favor of the transaction. The deal includes a 30-day “go shop” period in which SOC Telemed’s board of directors can solicit additional bids. Unless there is a superior bid, the deal with Patient Square is expected to close in the second quarter of 2022. 

According to the release, Dr. Chris Gallagher, CEO since September of 2021 will remain. He was previously co-founder/CEO of Access Physicians, a multi-specialty acute care telemedicine business acquired by SOC Telemed in March of 2021. SOC Telemed claims to be the largest telemedicine provider in the US acute care market, supplying virtual consults in specialty areas such as neurology, psychiatry, and ICU. 

Here is where it gets interesting–and worrisome for telehealth. SOC Telemed’s SPAC in August 2020 started at $10.00 per share and a valuation of $720 million. On 2 February, two days before the announcement, SOC Telemed was trading at $0.64 per share. That is a plunge of 94% from the SPAC, with a 72.6% drop in the prior three months that was only arrested by the buyout. The reality is that the Patient Square offer represents a 368% premium over SOC Telemed’s closing share price on 2 February. It is currently trading in about the $2.75 range. 

The worrisome trend is that since August, the publicly traded and established industry giants, Teladoc and Amwell, have also taken it in the shins on their share prices. Teladoc has tumbled by half and Amwell (American Well) by 60%. Even the private companies like MDLive and Included Health (Grand Rounds + Doctor on Demand) must take note that telehealth consults have plunged to about 4% of claims. SPACs, which had opened up an alternate, less complicated channel of public financing for health tech and had its own role in inflating company valuations, have faded due to a combination of circumstances. Will more cautious investments and fewer IPOs be the trend in telehealth for 2022?

What’s next for telehealth in the (almost) aftermath–and rating the US states on policies

January 8, 2022 | by

crystal-ballWhat’s in that cloudy crystal ball?  Last year, especially the first half, saw telehealth acquisitions, stock prices and valuations hit the roof. The roof proved to be high but sturdy, as they bounced right back down, not unexpectedly. 

But gee whiz, Fast Company’s article seems to be shocked, shocked at all this, calling it a bubble. This Editor sincerely doubts that any investor that tracked telehealth over the last 10 years would have NOT expected this ride on the rollercoaster after the urgent care and practice offices reopened starting in mid-2020 and worked slowly through 2021. The rebound, as with health insurance payers, took a few months to work through into 2021. Telehealth usage in 2021 receded steadily to single digits, and at last report to just above 4% of claims as of October 2021 (FAIR Health US claims data).  What remains is the continued dominance of mental health–62% for mental health codes. It’s turned out that Babylon Health‘s SPAC was the last of the major action for 2021, getting in under the wire in October. 

It’s obvious that investors will be more realistic in assessing telehealth companies, looking at the areas that sustained telehealth usage, such as behavioral health. Another surprising niche is LGBTQ telehealth–Grand Rounds’ buy of Included Health in May, which then led to the entire company, including Doctor on Demand, adopting the name [TTA 20 Oct].

The other move that telehealth companies are making is to take more of the patient than a few virtual visits. They’ve moved into offering primary care teams to patients in employer plans (Babylon360 and Teladoc’s Primary360). Amazon Care moved into in-home health and clinics with Crossover Health. Amwell acquired SilverCloud for expanding behavioral health capabilities internationally, and stuck a toe into care management with their Converge platform and acquiring startup Conversa‘s health coaching app. The flip side is retail health migrating into in-person and virtual primary care–CVS Health and Walgreens, via VillageMD.

What also held telehealth back for over a decade of less than 1% was reimbursement by Medicare, Medicaid, and private insurers. The pandemic broke through that barrier. While it has narrowed considerably, CMS will still reimburse audio-only telehealth for behavioral health services, addiction treatment, and in-home health visits. State policies on telehealth practices can positively influence telehealth growth for patients and physicians. Free-market organizations Reason Foundation, Cicero Institute, and the Pioneer Institute have reported on all 50 on several policy metrics: 

  • In-person requirements
  • Modality neutral (asynchronous or synchronous, technology including audio, video, store and forward, and remote patient monitoring.)
  • No state barriers
  • All providers can use telehealth
  • Independent practice (including nurse-practitioners)
  • No coverage or payment mandates
  • Cross-state compacts

Rating the States on Telehealth Best Practices