The implications of Teladoc’s integration into Microsoft Teams

The Big News this week was the terse announcement by Microsoft and Teladoc that Teladoc’s Solo application for hospitals and health systems will be integrated into Microsoft Teams applications. The integration includes workflows and through Solo, integration into EHRs while remaining in Teams.

During the pandemic, many health systems resorted to Microsoft Teams to communicate internally and one-on-one with patients. Integration means that while on the Teams consult, a clinician can securely access clinical data included within the EHR and workflows via Teladoc Health Solo without leaving it. It can also connect care teams on the consult. The release also mentions the magic words artificial intelligence and machine learning, without giving examples. 

As of now, with telehealth receding to perhaps 5% of visits based on claims [TTA 9 July], it’s a strategic win for Teladoc to integrate with a part of the Microsoft suite widely used by providers. It also builds on an existing relationship between the companies, as Teladoc already uses Azure as one of its cloud providers. Health systems still have to license Teladoc Solo if they do not already, and engineering work is yet to be done. Teladoc has a substantial foothold in this market due to its July 2020 acquisition of InTouch Health. InTouch’s hospital-to-home telehealth is now Teladoc Solo, with a separate line of business into the specialty telehealth consult market through its portable wheeled telehealth carts for in-hospital use. It’s notable that the InTouch brand remains, albeit visibly transitioning to Teladoc.

According to Credit Suisse’s analysis (page 3), 46% of C-Level executives from hospitals and health systems (combined representing 563 hospitals) said that they currently work with Microsoft Teams as a telemedicine vendor. 11% said they already work with Teladoc/InTouch Health.

As for telehealth already used by providers, such as Zipnosis’ ‘white label’ triage/telehealth system (now owned by insurtech Bright Health) and Bluestream Health, can they compete? Also FierceHealthcare

News and deal roundup: Zus Health’s $34M ‘back-end in a box’, Bright Health’s IPO, Lyra Health’s $200M done, Valo Health’s $2.8B SPAC; UK’s Alcuris, Clarity Informatics, GTX test; Google’s health blues, Facebook’s smartwatch

Athenahealth founder’s latest health tech venture lays track. Jonathan Bush’s new venture, Zus Health, is being pitched to tech founders as providing a ‘Lego’ like back-end for startup digital health companies. Variously compared to ‘Build-A-Bear’ or track laying, it’s an ‘in a box’ setup that provides a data record back end, a software development kit (SDK) with tools and services, and a patient interface. Presumably, this will also assist interoperability. Mr. Bush has enlisted an all-star team and is basing outside of Boston in the familiar area of Watertown, Massachusetts. Andreessen Horowitz (a16z) led the $34 million Series A, joined by F-Prime Capital, Maverick Ventures, Rock Health, Martin Ventures, and Oxeon Investments. The financing will be used for engineering the tech stack. Current clients developed in stealth include Cityblock Health, Dorsata, Firefly Health, and Oak Street Health. Not a breath about the revenue model other than ‘partnership’. Make sure you pronounce Zus as ‘Zeus’ (Athena’s father for those who aren’t up on their Greek myths). Zus release, FierceHealthcare

This week’s IPO filing by insurtech/clinic operator Bright Health with the Securities and Exchange Commission (SEC) confirmed earlier reports that the offering will crest over $1 billion [TTA 28 May]: 60 million shares with an initial valuation of $20 to $23 is at a minimum of $1.2 billion. Company valuation is estimated at $14 billion which is about midpoint of earlier estimates. It will trade on the NYSE under BHG. The cherry on the cake is a 7.2 million 30-day share purchase option to their underwriters at the initial IPO price. Timing is not addressed in the release but expect it soon. BHG release, Mobihealthnews

Lyra Health banks an additional $200 million. This week the corporate mental health therapy provider completed their Series F $200M financing backed by Coatue, new investor Sands Capital, plus existing investors, for a total of $675 million to date (Crunchbase). Valuation is now estimated at $4.6 billion. Mental and behavioral health tech remains warm, with the thundercloud on the horizon Teladoc’s myStrength app [TTA 14 May]. Lyra’s strong corporate footprint puts them, along with Ginger, in a desirable place for acquisition by a telehealth provider or payer. Lyra release, FierceHealthcare

Drug discovery and development company Valo Health is going the SPAC route with Khosla Ventures. The special purpose acquisition company (SPAC) Khosla Ventures Acquisition Co. will form with Valo Health a new company (KVAC) with a pro for­ma mar­ket val­ue of approx­i­mate­ly $2.8 bil­lion with an initial cash balance of $750 million including a $168 million PIPE led by Khosla Ventures. Valo’s flagship is the Opal Computational Platform that creates an AI-based platform for drug discovery. The current pipeline has two clin­i­cal-stage assets and 15 pri­or­i­tized pre-clin­i­cal assets across car­dio­vas­cu­lar meta­bol­ic renal, neu­rode­gen­er­a­tion, and oncol­o­gy fields. Khosla has been largely absent from digital health investments. The SPAC route to IPOs has also cooled. Valo release, Mobihealthnews  

And short takes on other news… (more…)

News and deals roundup: CoverMyMeds ‘big bang’, Noom’s $540M Series F, insurtech Bright Health’s IPO, Grand Rounds-Included Health, GoodRx, Cedar-OODA, Huma, Bluestream Health’s outreach

McKesson shmushes four units into CoverMyMeds. McKesson’s Big Bang combines four McKesson business units–RelayHealth (pharmacy networking), McKesson Prescription Automation (software), CoverMyMeds (medication access for patients), and RxCrossroads by McKesson (therapeutic and drug commercialization). They are being reassembled into one massive unit under the CoverMyMeds name. The unit will have about 5,000 people and will be headed by Nathan Mott. More here in a blog post/announcement posting that’s short on information and long on cheerleading.

And the funding rounds keep marching down the alphabet. Noom, the weight loss app, gained a generous Series F of $540 million led by Silver Lake with participation from Oak HC/FT, Temasek (Singapore), Novo Holdings, Sequoia Capital, RRE and Samsung Ventures. Valuation is now at $4 billion. Adam Karol, a managing director at Silver Lake, and former TaskRabbit chief executive Stacy Brown-Philpot will join Noom’s board. The fresh funding will be used to expand into areas such as stress and anxiety, diabetes, hypertension, and sleep.

Noom had a banner year in 2020, with $400 million in revenues as people tried to shed Pandemic Pounds (aided by a near-ubiquitous ad push). The app has had 45 million downloads to date in 100 countries, largely in the US, UK, Canada, Australia, Ireland, and New Zealand. According to a (paywalled) Bloomberg News report, feelers are out for an IPO which may be valued at $10 billion. TechCrunch, Reuters, FierceHealthcare

Bright Health Group filed its S-1 registration statement with the Securities and Exchange Commission (SEC). Their rumored $1 billion IPO will be on the NYSE and trade under the symbol BHG. Timing, share value, and number of shares are to be determined. It’s speculated that the valuation at that point is expected to be between $10 and $20 billion. Bright Health is an insurtech operating exchange and Medicare Advantage (MA) health plans under Bright HealthCare  in 14 states and 50 markets, covering over 620,000 lives. They also have a separate care delivery channel called NeueHealth, 61 advanced risk-bearing primary care clinics delivering in-person and virtual care to 75,000 unique patients. Last month, they purchased Zipnosis, adding their white-labeled telemedicine for large health systems business. Bright Health Group release, Mobihealthnews

Short takes:

Doctor on Demand and Grand Rounds, which finalized their merger earlier this month, have agreed to acquire Included Health. Terms and timing were not disclosed. Included Health specializes in care concierge and healthcare navigation services for the LGBTQ+ community. FierceHealthcare, Release

GoodRx acquired rival RxSaver for $50 million in cash in late April to bulk up against Amazon. FierceHealthcare

Medical billing and pre-visit tech company Cedar is acquiring payer workflow tech company OODA Health for $425 million deal in a mix of cash and equity. It’s expected to close at end of May. OODA’s co-founder, chairman, and co-CEO is Giovanni Colella, MD, also co-founded Castlight Health and founded RelayHealth (see above), so another successful exit for him. FierceHealthcare, HISTalk

London-based Huma, raised $130 million in a Series C. Leaps by Bayer and Hitachi Ventures led the round. The former, mysterious Medopad now seems to have settled on a platform that supports ‘hospital at home’ plus pharma and research companies in large, decentralized clinical trials. There’s an add-on of $70 million to the Series C that can be exercised at a later date. Release, HISTalk

White-label telehealth provider Bluestream Health is partnering with The Azadi Project to provide virtual care services to refugee women and girls fleeing from countries like AfghanistanIranIraq, and Syria for safety in Greece. “Bluestream Health has teamed with The Azadi Project to provide a virtual care platform that stretches around the world. The women fleeing war-torn and conflict-affected countries have suffered unspeakable abuse, and while seeking safety in Greece, they are further exposed to terrible living conditions and hostility.”  said Matthew Davidge, co-founder and CEO of Bluestream Health.  Release

Zipnosis, health system telemedicine/triage provider, acquired by insurtech Bright Health Group

Breaking: Zipnosis, a telemedicine/telehealth company that provides telehealth and diagnosis triage for large health systems, had a stealthy announcement of its acquisition by Bright Health Group late yesterday. The announcement is not on either corporate website but was made by Zipnosis’ financial advisers in the transaction, Cain Brothers/KeyBanc. Neither the value of the transaction, the transition plans for Zipnosis management and staff, nor operating model, were disclosed. Both Zipnosis and Bright Health are HQ’d in Minneapolis. Release

Why This Is Verrrry Interesting. Zipnosis developed an interesting niche as a relatively early starter in 2009 by providing white-labeled telemedicine systems to large health systems. They made the case to over 60 health systems across the US, including large systems like Allina Health with a ‘Digital Front Door’ that provided initial triage for a claimed 2 million patients, moving them into synchronous or asynchronous care fully integrated with hospital EHRs. They were named as the ‘Hottest Digital Startup from Flyover Country’ by Observer.com, once upon a time in this Editor’s wayback machine an actual print weekly newspaper and, as is obvious, NYC-centric. Release Their funding to date is, surprisingly, limited: under $25 million from seven investors, including Ascension Ventures, Safeguard Scientifics, Hyde Park Ventures, and Waterline Ventures, with the last round back in 2019. Crunchbase

Bright Health Group, on the other hand, is an insurance provider in both the exchange and Medicare Advantage (MA) markets in 13 states and 50 markets, covering 500,000 lives. Their model integrates both technology like web tools and apps with their insurance plans to be an ‘insurtech’ like Oscar Health and Clover Health. They claim to be the third-largest provider of the highly specialized type of Medicare Advantage plans called Chronic Condition Special Needs Plans (C-SNP) for those with severe and/or disabling chronic conditions. Bright Health operates in 13 states and 50 markets. In January, they announced the acquisition of Central Health Plan in California with 110,000 MA members.

However, what is verrrry interesting about Bright’s model, compared to other ‘insurtechs’, is that they own or manage a care delivery channel–40 advanced risk-bearing primary care clinics delivering in-person and virtual care to 220,000 members. The ‘risk-bearing’ is also interesting as it leads one to believe that some of these practices may participate in Center for Medicare and Medicaid Services (CMS) value-based care models such as Primary Care First, the Medicare Shared Savings Program, or End-Stage Renal Disease (ESRD).

Bright Health is also extremely well funded now–and may be even better funded in the near future. Last September, they raised $500 million in a Series E led by New Enterprise Associates with Tiger Global Management, T. Rowe Price Associates, and Blackstone, as well as existing investors including Bessemer Venture Partners and Greenspring Associates (Crunchbase and Mobihealthnews). The purpose stated at the time was new market expansion both geographically and to small groups. Last week’s rumor was that they are preparing for an IPO in the $1 bn range with a valuation between $10 and $20 bn, which is Big Hay indeed. No paperwork has been filed yet with the SEC. Twin Cities Business, YahooFinance.

As an acquisition for Bright Health, Zipnosis brings in large healthcare systems with a unique triage platform that could be modified for primary care practices. It seems like a snack-sized acquisition that doesn’t require Federal approval but can be operated stand-alone–as health systems may be leery of an insurer’s ownership–with technology that can be integrated into other parts of the Bright Health business. This will be updated as additional news develops.

CVS’ bid for Aetna–will it happen, and kick off a trend? (updated)

We have scant facts about the reported bid of US drugstore giant CVS to purchase insurance giant Aetna for a tidy sum of $200 per share, or $66 billion plus. This may have been in development for weeks or months, but wisely the sides are keeping mum. According to FOX Business, “an Aetna spokesperson declined to chime in on the reports, saying the company doesn’t “comment on rumors or speculation” and to Drug Store News, a CVS Health spokesperson did the same. Aetna’s current market cap is $53 billion, so it’s a great deal for shareholders if it does happen.

Both parties have sound reasons to consider a merger:

  • CVS, like all retailers, is suffering from the Amazon Effect at its retail stores
  • Retail mergers are done with the Walgreens Boots AllianceRite Aid merger going through considerable difficulties until approved last month
  • The US DOJ and Congress has signaled its disapproval of any major payer merger (see the dragged-out drama of Aetna-Humana)
  • It has reportedly had problems with its pharmacy benefit management (PBM) arm from insurers like Optum (United HealthCare), and only last week announced that it was forming a PBM with another giant, Anthem, called IngenioRx (which to Forbes is a reason why this merger won’t happen–this Editor calls it ‘hedging one’s bets’ or ‘leverage’)
  • Aetna was hard hit by the (un)Affordable Care Act (ACA), and in May announced its complete exit from individual care plans by next year. Losses were $700 million between 2014 and 2016, with over $200 million in 2017 estimated (and this is prior to the Trump Administration’s ending of subsidies).
  • It’s a neat redesign of the payer/provider system. This would create an end-to-end system: insurance coverage from Aetna, CVS’ Minute Clinics delivering care onsite, integrated PBM, retail delivery of care, pharmaceuticals, and medical supplies–plus relationships with many hospital providers (see list here)–this Editor is the first to note this CVS relationship with providers.

We will be in for more regulatory drama, of course–and plenty of competitor reaction. Can we look forward to others such as:

  • Walgreens Boots with Anthem or Cigna (currently at each others’ throats in Delaware court
  • Other specialized, Medicare Advantage/Medicare/Medicaid networks such as Humana or WellCare?
  • Will supermarkets, also big retail pharmacy providers, get into the act? Publix, Wegmans, Shop Rite or Ahold (Stop & Shop, Giant) buying regionals or specialty insurers like the above, a Blue or two, Oscar, Clover, Bright Health….or seeking alliances?
  • And then, there’s Amazon and Whole Foods….no pharmacy in-house at Whole Foods, but talk about a delivery system?

Also Chicago Tribune, MedCityNews.

UPDATED. In seeking an update for the Anthem-Cigna ‘Who Shot John’ court action about breakup fees (there isn’t yet), this Editor came across a must-read analysis in Health Affairs 

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