Two Must Reads: What’s Glen Tullman’s real game with Transcarent and the Accolade buy? (updated) Plus an extra helping on the VC ‘mafia’ and Hippocratic AI.

February 19, 2025 | by

Make some time over the morning cuppa or lunch for a brilliant investigative report on Transcarent and Glen Tullman. Arundhati Parmar over at MedCity News pulls aside some of those Great Oz curtains, surveys the scene, then asks the questions that few have dared to. Such as:

  • Is Transcarent’s model not working? Are they successful or not?
  • Or are those corporations and benefits consultants so hidebound, so powerful, so exclusive, that they forced Glen Tullman to buy into the traditional care navigation model–and he is a Victim of the System?

Those of us in the healthtech/digital health industry have looked with amazement, mixed with dismay, at Mr. Tullman. The amazement is the powerful voice he has among us, reinforced by his investment funds. The dismay comes from the $18 billion sale of Livongo to Teladoc in the palmy days of 2020. As we reported, even then it was regarded as a dubious move. It then became a case study in What Not To Buy–Or Do. From Mr. Tullman’s and his management’s perspective, Teladoc’s offer proved to be Grand Theft Auto. In other words, a heist to end all heists. For Teladoc, it was a disaster. Mr. Gorevic, as we know, is gone and Teladoc is rebuilding. In many ways, Teladoc has never recovered and may never. 

Mr. Tullman, who founded two VCs, 7wireVentures and most recently 62 Ventures, after selling Livongo almost at once founded Transcarent with a vision that it would do the job through software that human corporate care navigators and benefits consultants couldn’t do–take out all these middlemen and deliver to both companies and their employees better quality healthcare at a much lower cost. It would also turn the PMPM (per member per month) pricing scheme into a risk-sharing model based on use. He made the rounds at every conference pitching against traditional care navigators, including the most prominent, Accolade.

Last month, he and Transcarent made a substantial offer to buy, yes, Accolade, for $621 million [TTA 8 Jan]. Publicly traded and struggling for years, recently losing major accounts, Accolade was on the block–yet its model is so different than Transcarent’s that it feels like double vision. In fact, this deal had been in the works since last July–initiated by Glen Tullman. Why?

A clue from one of Ms. Parmar’s sources, most of whom have had to be anonymous for obvious reasons:

“He is an amazing storyteller and amateur magician. But like any story and magic trick, sometimes it’s hard to tell what is real and the trick doesn’t work. ”

Ms. Parmar’s path to answering these questions is top notch, and this Editor invites you to read it, start to finish–and return to it again. When you finish it, you’ll not only know about Transcarent’s current business realities, but also learn a great deal about how companies regard care navigation plus the economics. The discrepancy, as always, is between the ‘vision’ and reality. Is he in it for the mission, or has reality bitten? Is Glen Tullman a Hypocrite or a Victim of the System He Aimed to Disrupt? (I also want to commend MedCity News for publishing this)

Update: See Ms. Parmar’s video on LinkedIn regarding the response to her article. Of note: 1) the complete lack of response from Transcarent’s corporate communications team*. 2) If you want investigative journalism, you have to be willing to be a source, so when you see something wrong, you have to reach out. That means risk. (*No surprise to this Editor, who directly contacted Transcarent’s corporate comms team to clarify whether 98point6’s telehealth service, purchased for $100 million, still was operating–no reply to this simple ‘layup’. TTA 5 Feb)

Our ‘extra of the day’ is from AI Health Uncut. Sergei Polevikov, publishing on Substack, puts on the scuba gear and dives deep not only into Hippocratic AI, which promotes AI agents for various types of healthcare contact requirements, but also its key funder, General Catalyst and its head, Hemant Taneja. For starters: Hippocratic AI is the most expensive AI company on Planet Earth if viewed as valuation x revenue multiple. Mr. P brings the numbers and the heat.

If you’ve looked at fundings in the past two years, versus the ‘olden days’, and wonder why the same names always seem to pop up, it is because VC fundings have become concentrated among very few companies. As this Editor noted in the Rock Health 2024 results, of 391 VC funds, 30 raised 75% of all US committed capital. Nine of those funds accounted for 50% (Pitchbook). Sitting at or near the top is General Catalyst, which has moved into wealth management and through HATco, owning hospitals such as Summa Health. But there are other reasons as well, and Mr. Polevikov gets into the murk.  It’s another one for a long cuppa or lunch. And it is part one of two, upcoming!

I encourage our Readers to support Sergei’s work on Substack–for a modest annual subscription amount, you gain full access to his work, past and present, charts, videos, and articles. (I did, and have noted his site among Websites We Like.) The link above may be paywalled as a result for non-subscribers. [Disclaimer: through commenting in this article, I pointed out GC’s move into GC Wealth, and my short news item is linked.] He also recently posted a lively panel discussion video with Alex Koshykov, Matthew Holt, and James Wang.  

2025 is proving to be a year of massive change in healthcare. It may be a year of comeuppance for those we’ve regarded as all powerful and fearsome. Yes, the cliché ‘sunshine is the best disinfectant’ is true, but a good dose of hydrogen peroxide, boric acid, or Lysol helps.

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

March 31, 2023 | by

Not everything at ViVE this week was fun and music. The organizers included a timely panel discussion with four VCs exploring the crash of digital health funding, enterprises, and whither the fall of the VCs’ favorite bank, Silicon Valley Bank (SVB). It was moderated by MedCityNews‘ editor-in-chief Arundhati Parmar, who published an interview with Zane Burke, late of Livongo and now CEO of Quantum Health, pointedly asking whether Livongo’s sale to Teladoc was a smart one given the troubling post-script [TTA 3 Feb]. The participants — Lee Shapiro, managing partner at 7wireVentures, Emily Melton, managing partner at Threshold Ventures, Richard Mulry, president and CEO of Northwell Holdings, and Ambar Bhattacharyya, managing partner of Maverick Ventures–evidently weren’t given a diet of softballs, either. 

Parmar started with a quote from a recent article in another publication: “The run on SVB was a textbook result of the myopia and egoism that has swallowed the venture capital industry whole.” This refers to the advice that many VCs gave their invested companies–get your money out now. That was the same invested money that the VCs insisted be in SVB, in accounts such as payables and receivables. At least these VCs seemed to realize that now, somewhat obliquely. Shapiro called it a ‘tragedy of the commons’, B-school terminology that refers to too many people using a common resource ruining it because no one is responsible for it. More to the point, he pointed to some in the VC ‘community’ advising their companies to move their money out of SVB, creating the self-fulfilling prophecy of a run on the bank killing it. Melton pointed to social media and everyone rushing to take care of themselves without reflecting on the consequences of their actions.

The next quote and chart that Parmar presented had to do with that Old Devil Profitability in companies that IPO’d. Only two of 17 are profitable and they’ll be a surprise–Privia Health (VBC models for providers), and Progyny (riding the fertility and benefits bubble). Rather abashedly, the panel admitted to valuation frothiness leading to over-valuation, and a new sobriety and realism leading to (drum roll) an emphasis on profitability. Bhattacharyya noted that VCs were pushing growth up until last year. Now, it’s value, ruled by the “Rule of 40” –combined growth rate and profit margin that exceeds 40%, even better cash flow positive, which are tough bars to achieve for all but the most well-positioned (and fortunate) companies. “That’s now the playbook. So we’ve all transitioned to that.” A defensive playbook, in Shapiro’s view. (A close to impossible one that may stifle innovation, in this Editor’s view, though bootstrapped companies have always earned her admiration.)

To that point, Melton, noted that now more than ever, banking institutions like SVB and similar institutions need to work with founders and VCs to bring innovations to market. “One of the things I’m very fearful of is that we get into an environment where people are risked off and retreat right when we need people to be actually leaning in more now than ever.” Larger banks will be happy to take the money–according to Kruze Consulting, an accounting firm that focuses on startups, about half of its clients that recently changed banks moved to JPMorgan Chase–but will a JPM take up ongoing startup risk? 

Does this begin to feel like Catch-22? (Apologies to Joseph Heller) Or health tech back around 2006-2010?  

One comment towards the end hit home for this Editor, having seen it way up close. Too many founders 1) have an idealistic view of the business they started and can’t separate from it, and 2) there’s a time to exit stage left and do something else with your life. One company that may pull it off in its changeover of CEOs is Oscar Health. I’d add that no CEO should be in that seat for more than 5 years, even in well-established, doing-well companies–much less coming close to dying in place as CEO after 25 years as happened recently at one large, publicly traded payer. Very important: every company should have a succession/coverage plan operative from Day 1, because Stuff Happens. The full article in MedCityNews here. Another shorter take, same panel, in Mobihealthnews.

The next chapter for SVB is that after a Federal bailout (and the realization that the SF Federal Reserve was wearing blinders when it came to watchdogging the bank’s health and solvency), it was mostly sold this past week to First Citizens Bank & Trust Company, a regional bank from Raleigh, North Carolina. SVB’s UK holdings were bought much earlier by HSBC. Also up for sale: Leerink Partners, an investment banker for health care and life sciences companies, that was rebranded as SVB Securities. Jeff Leerink, the founder who still heads it, is trying to get it back through a management buyout. WBUR

A more ViVEcious view of the meeting is over at HISTalk, The most substantive sessions this attendee heard were the opening Tuesday by Micky Tripathi, the National Coordinator for HIT at the Office of the National Coordinator (ONC) for Health Information Technology, and a presentation by Shiv Rao (Abridge) and Joon Lee (UPMC) on generative AI. The downside was that most of the Tuesday presentations came off like walking ads, the CHIME track was separate with some members-only, and that exhibitors got little value by staying over Wednesday as the crowd vanished to 20%. Money quote: “ViVE shoots for a vibe of youth, energy, innovation, and fun in its branding, themes, opening remarks, and evening entertainment. Sounds great until you remember that your ticket cost nearly $3,000.” Ouch! That stings! Well, nobody’s perfect. A successful 2023 means that ViVE will be landing in Los Angeles 25-28 February 2024. For many, it’s on to HIMSS23 in a couple of weeks.