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

March 30, 2023 | by

CVS closed its acquisition of Signify Health today. This $8 billion transaction ($30.50/share) adds a network of more than 10,000 clinicians nationally, including the 170-provider Medicare ACO group originally organized by Caravan Health. It was beneficial to the major shareholder group, New Mountain Capital and their investors, which owned 60% of Signify and have a tidily profitable exit. The CVS press release stated that Signify would continue to operate as a ‘payer-agnostic’ business within CVS Health. As earlier stated, Kyle Armbrester, Signify’s CEO, will continue to lead the business. Also Healthcare Dive (updated)

The bulldog engineer of the CVS-Aetna merger, Mark Bertolini, now tapped to head Oscar Health. Bertolini, the former chairman/CEO of Aetna (center), in the past three years since his unwilling (according to him) departure from the CVS board of directors [TTA 6 Feb 2020], has not been idle. From 2022, he was co-CEO of asset management firm Bridgewater Associates, and in the last 18 months, he has been a ‘strategic advisor’ to insurtech Oscar. Now he moves to the CEO office effective next Monday (3 April) and joins their board. Co-founder Mario Schlosser (left) steps back from CEO to president of technology, reporting to Bertolini, and joins the board. Joshua Kushner, a co-founder and major investor (Thrive Capital), as well as executive chairman of the board, is on the right in the leadership picture supplied with the Business Wire release.

Once a skeptic of insurtechs like Oscar, Bertolini by his statements is now a true believer. In a call with investors on Tuesday, he cited their technology that included digitization, individualization, and personal care. A major factor is that consumers are more comfortable since the pandemic with telehealth. Oscar was a pioneer in offering free telehealth with their plans.

Investors have pressed Oscar to get over to a profitable state by next year. Oscar has not been profitable since its 2012 founding by Schlosser, Kushner, and the long-departed Kevin Nazemi. In the time since Bertolini joined as an advisor, they have largely shed their Medicare Advantage business and concentrated on their individual market and ACA plans, which have seen huge growth along with overall record enrollment on the exchanges. But Oscar paused on new ACA signups in Florida and hauled back its glitchy and over-featured +Oscar tech platform [TTA 24 April 2021], which is now available unbundled. 2022 financials were substantially in the red with a loss of $610 million on revenue of $4 billion (Oscar release). However, the news of Bertolini moving to Oscar’s helm was met with a round of investor confidence. Share price moved from Monday’s close of $3.41 to $6.70 midday Tuesday and has largely stayed in the $6.00 range. Oscar release on Business Wire, FierceHealthcare, Healthcare Dive, YahooFinance

ViVE, the digital health spinoff of HLTH, concluded its annual meeting in Nashville this year with an announced attendance of 7,500, including 650 startups, 425 investors, and 330 hosted buyers. The energetic start on Sunday was sadly marked on Monday with the shooting at the local Covenant School where six were killed. Impressions from an anonymous attendee to HISTalk today were that most of the sessions were panels (which gets more people up front, but can be sunk by a dull moderator) versus individual speakers (who can either be fabulous or duds). Content could have been more inspiring and, as usual, many speakers are throwing out headlines for those in media to write about. This Editor has read relatively little so far but more will come this week. Highlights so far:

  • Nashville-based Wellvana Health, which provides technology for healthcare providers and health systems to implement value-based care, raised a stunning Series B of $84 million for a total raise of $140 million. Heritage Group and Valtruis co-led the investment with participation from Memorial Hermann Health System. The funding will be used to expand from its present 22 states and over 100,000 lives. Their current agreements are with multiple payers, Medicare Advantage, and three national contracts for the 2023 ACO REACH model. FierceHealthcare, Mobihealthnews
  • Everly Health is moving beyond its current home testing kits to integrate lab testing with telehealth. This will cover certain conditions, such as COVID-19, flu, sexually transmitted infections (STIs), urinary tract infections (UTIs), thyroid, weight management, and men’s and women’s health. Cost is out of pocket $59 and if insurance covers, $10-50. In its weight management program, Everly will offer GLP-1 drugs, a class of drugs that includes Ozempic and Wegovy, to qualified patients. FierceHealthcare
  • Amazon Web Services (AWS) announced 23 startups for their 2023 Healthcare Accelerator: Global Cohort for Workforce. This year’s accelerator cohort is finding solutions for the healthcare industry in three core areas for healthcare employees: retention, deployment, and training. More on the accelerator here and the list here, including 10 from the UK. FierceHealthcare
  • Health systems are demanding a quick ROI on their digital expenditures, according to a panel of CIOs and digital officers from Providence, Allegheny Health Network, Sutter Health, and Adventist Health. It should not be a surprise to anyone that they are looking for returns in the next year or so–yet are pushing forward with investments because of inflation and increased workforce pressures. FierceHealthcare

Another digital cognitive behavioral therapy trims. Better Therapeutics is reportedly releasing 35% of staff, or 15 people, in yet another cutback of another company in the formerly high, wide, and flying sector. Better specializes in prescription digital therapeutics to address cardiometabolic diseases such as diabetes. Better SPAC’d in 2021 [TTA 8 April 2021] hitting the market at $10.25 and currently trading on Nasdaq at about $0.60. According to their SEC filing, they are trying to stretch remaining cash to reach potential FDA marketing authorization and subsequent commercial launch of BT-001 in Type 2 diabetes. Better is in the same jam as competitors Pear Therapeutics and Akili Interactive, both paring back to the bone and looking for buyers, according to Mobihealthnews. Also LayoffsTracker. 

CoverMyMeds, a division of healthcare giant McKesson, is also laying off 815 by mid-April and closing its Scottsdale, Arizona office. The Arizona office has the company’s patient support center; workers there will be given the option to move to Columbus, Ohio. Other offices including Columbus (Franklinton) and Atlanta will be condensed and space leased out. CoverMyMeds automates the prior authorization process for medications for payers. What is unusual is that the company, bought for about $1 billion in 2017, accounted for $1.1 billion of McKesson’s $70.5 billion in 2022 revenue, and $136 million in McKesson profit–the most profitable of their four divisions. Columbus Dispatch, Layoffs.fyi

Deal and news roundup: Therapy Brands’ big KKR investment, AppliedVR’s non-painful $29M Series A; Akili tests cognitive-boosting games; Firefly Health lights up $40M; Mastercard-b.well partner, two big IPOs filed, more

April 8, 2021 | by

Behavioral health stays on the bubble. Therapy Brands, a Birmingham, Alabama-based company with a suite of mental and behavioral health practice tools for providers, announced (7 April) that major investment firm KKR will take a majority interest in the company. Existing investor PSG will participate. Exiting are current investors Lightyear Capital LLC, Oak HC/FT, and Greater Sum Ventures. Neither expected closing nor financial terms were disclosed. Previous investment was private equity and is not available (Crunchbase).

Therapy, founded in 2013, has a suite of practice management, telehealth, and data collection tools encompassing practice management; software tools for substance, psychotherapy, and rehab treatment; two HIPAA-compliant telehealth/e-prescription platforms; billing; and staff performance evaluation. It’s remained under the radar yet boasts leadership from Greenway Health–their CEO, Kimberly O’Loughlin–Community Brands, Advance Publications, ADP, and Henry Schein. 

Virtual reality and its effects on the brain are growing warm as an approach to pain management. LA-based AppliedVR announced a $29 million Series A with F-Prime Capital, JAZZ Venture Partners, Sway Ventures, GSR Ventures, Magnetic Ventures, and Cedars-Sinai. Their EaseVRx was the first VR-based prescription therapeutic to receive FDA Breakthrough Device Designation late last year to care for treatment-resistant fibromyalgia and lower back pain. VR is used to modulate the brain’s perception of pain through cognitive behavioral therapy, mindfulness, and biofeedback, reducing it in intensity and emotional effect. Total funding is $35 million since 2016. While still in clinical trials for other types of pain management (recent release), EaseVRx is being used by 200 provider groups and 60,000 patients. This Editor noted their inclusion in a Louisville Thrive Center showcase back in 2017 when Care Innovations was there; they are still listed under Social Engagement. Release. FierceHealthcare includes AppliedVR with a roundup of March deals.

Related in brain management is therapy for a long-term effect of COVID-19 infection recovery–cognitive impairment. An emerging long-term effect of COVID-19 illness in some individuals has been ‘brain fog’. Akili Interactive of Boston is collaborating with Weill Cornell Medicine, NewYork-Presbyterian Hospital, and Vanderbilt University Medical Center to evaluate their video game-based digital therapeutic AKL-T01 as a treatment for patients with cognitive dysfunction following COVID-19. Their EndeavorRX has also been used with therapy for children with ADHD and includes a behavior tracking app. Release

Boston-based startup Firefly Health scored a luminescent Series B of $40 million. Their current platform provides integrated in-person and virtual primary health along with specialist referrals and behavioral support in what they term a ‘digital Kaiser’. The raise will be used to launch a targeted health plan offering. Firefly already works with Aetna, Anthem, Tufts Health Plan, and UnitedHealthcare, among others, but at this time is pretty much limited to Massachusetts and does not accept Medicare nor Medicaid. Jonathan Bush, former CEO of athenahealth, joined back in 2019 as executive chairman a year after his departure. FierceHealthcare

And in other news…

Two IPO filings plus a SPAC:

  • Privia Health, a national physician platform furnishing management services to providers such as group formation (ACOs) and technologies for coordination and value-based patient care, announced their S-1 with the SEC. No share offering information was disclosed. Lead managers are Goldman Sachs and JP Morgan, so it will be sizeable.
  • Agilon Health, another management services company organizing community physicians for Medicare Advantage in their ‘Total Care Model’ value-based care for 65+, announced their S-1 for 46.6 million shares priced between $20 to $23 per share. At the low price, this would be a raise of $932 million. JP Morgan, Goldman Sachs, and BofA Securities are leads. Hat tip on both to HISTalk Morning Headlines.
  • Better Therapeutics, a digital therapeutics/cognitive health platform addressing type 2 diabetes and cardiovascular disease, will be merging with a SPAC, Mountain Crest Acquisition Corp. II, closing by late summer for listing on NASDAQ. Projected: $113 million of cash proceeds, including a fully committed $50 million PIPE and up to $57.5 million of cash held in the Mountain Crest II trust account assuming no redemptions, for a valuation of about $187 million. Release, Mobihealthnews

Mastercard and b.well Connected Health, a consumer health management platform via employers, health systems, and health plans, are launching a patient identity verification tool for mobile phones. FierceHealthcare

And a health tech entrepreneur turns towards the payer side, for now. Karl Hess joins Texas Health Aetna, a joint venture between Arlington-based Texas Health Resources and Aetna, as interim CEO. Mr. Hess is better known to health techies on LinkedIn as principal of OnDigitalHealth Consulting, Kalico Partners in population health management, Welltok, and Collain Healthcare. Becker’s Payer Issues