Friday’s really quick takes: Oracle-Cerner starts Federal reviews, Curve Health, Signify buys Caravan, and a gaggle of single name companies!

February 11, 2022 | by

The long and winding road of Federal scrutiny–and other legal actions–begin for Oracle and Cerner. To be expected, the first hurdle is a review under the Hart-Scott-Rodino Act, by the Federal Trade Commission (FTC) and the US Department of Justice (DOJ). This should conclude by 22 February. The Securities and Exchange Commission (SEC) is also reviewing. As is routine in takeovers of public companies, there are seven civil filings by ‘supposed’ Cerner stockholders in either the District Court for the Southern or Eastern District of New York, their favorite venue, all claiming lack of information. Expect more. Kansas City Business Journal (which may be paywalled), Becker’s Health IT

New York-based newcomer Curve Health scored a $12 million Series A from Morningside Ventures with participation from Alumni Ventures and Recover-Care Healthcare, as well as returning investors Lightspeed Venture Partners, IDEO, Inflect Health, and others. Total funding is now $18 million (Crunchbase). Curve Health specializes in ‘virtual hospital’ telemedicine for skilled nursing facilities (SNFs) and community paramedicine, along with billing and health information exchange. Last July, they partnered with CareConnectMD, a California-based provider group that delivers value-based care for people living in nursing homes via its High Needs Direct Contracting Entity (DCE). Curve’s founder, Tim Peck MD, previously founded Call 9, a telemedicine/onsite service for nursing homes, which closed in July 2019 [TTA 15 May 2020] Release

Signify Health, a senior home care and value-based care provider, is acquiring ACO organizer and management services provider Caravan Health in a $250 million cash/stock deal with contingent additional payments of up to $50 million based on performance. Caravan’s founder and the current CEO will be joining Signify. It’s a move that may bolster Signify, which has had a few valuation challenges, because it expands Signify’s provider base and expands its current narrow episodes of care area (the former Remedy) into additional advanced payment models. Release, Mobihealthnews

Short short takes on single-word company news….

Expressable’s remote speech teletherapy platform closed a $15 million Series A funded by F-Prime Capital and including existing investors Lerer Hippeau, NextView Ventures, and Amplifyher Ventures. The new funding will go towards national expansion. FierceHealthcare  Hat tip to this Editor’s former colleague Amy VanStee, who recently joined them.

Balanced is a new digital platform for exercise coaching targeted to older adults. Users can modify based on assessed fitness level, input injuries, health conditions, and fitness goals. They added to an early seed round to total $6.5 million in seed funding, led by Founders Fund and Primary Venture Partners, with participation from Lux Capital and Stellation Capital. Cost for unlimited use is a gentle $20 per month. Given yesterday’s near-implosion of that expensive must-have of the aggressively fit and heavily dripping, Peloton, is fitness getting real?  Mobihealthnews

AndHealth, founded by the CEO plus veterans from CoverMyMeds, now has $57 million from Francisco Partners, with participation from the American Medical Association’s venture capital arm Health 2047, Kirkland & Ellis and Twofold Ventures. AndHealth specializes in Virtual Centers of Excellence (VCOE) programs for migraine and autoimmune disease reversal programs as an employer-sponsored benefit. Release

Berlin-based Ada extended its Series B by $30 million for a total of $120 million. Ada partners with major pharma for its AI-assisted symptom assessment app. TechEU

Nurx is merging into Thirty Madison. Nurx is primarily a provider of birth control, women’s and sexual health meds via telemedicine, while Thirty Madison specializes in telemedicine for chronic conditions. Thirty Madison was valued at over $1 billion after its Series C round in June. Nurx’s lines will be added to Thirty Madison’s menu which includes Keeps (hair loss) and Evens (GI issues). FierceHealthcare

Founder of Call9 springing back with Curve Health for nursing home telemedicine

May 15, 2020 | by

Tim Peck MD, founder of Call9, which provided in-facility emergency care staff with telehealth capability for nursing homes, announced a new venture also targeted to nursing home/skilled nursing home (SNF) and rehabilitative health. Curve Health will provide telemedicine and health information exchange technology to SNFs and physician groups. Physicians calling on SNF patients will be able to access patient information before a telemedicine visit. According to Dr. Peck, Curve Health’s telehealth and HIE software are built on that of Call9’s. POLITICO Morning e-Health.

Call9 closed operations last July after four years and $34 million in investment. It achieved some success in New York state, covering 3,700 beds and a total of 11,000 patients treated. While they experienced measurable success–in a 200-bed SNF, they achieved a 50 percent reduction in ER admissions and a savings of $8M per year–made inroads with major payers like Anthem and Healthfirst plus expanded into community telemedicine, it ran into a funding wall all too common with this sector. While the book of business was decent and they had gone through two well-funded rounds, Call9 could not move easily into a Series C. Value-based care is a great buzzword and beloved by CMS, but it is a long payout curve, too long for many investors. More discussion on this is in our article 26 June 2019. 

It is a shame as New York has been the epicenter of COVID-19 nursing home fatalities, due to a foolish (and this Editor is understating) state mandate of returning recovering patients right back to their nursing homes, which could not provide the level of care or isolate them. These patients often worsened, but also infected other patients and staff. Perhaps this could have been mitigated by Call9 or similar–but likely not.

Sadly, there’s a spotlight on nursing homes, rehabs, and LTC because of this pandemic. We look forward to more news from Dr. Peck and Curve Health in this specialized and underserved area of telehealth.

A realistic look at why telemedicine isn’t succeeding in nursing homes

August 22, 2019 | by

It’s the reimbursement. Telemedicine in nursing homes by specialists on call seems like a natural. A nursing home resident is usually older and frail. Nursing homes don’t generally have doctors in the facility; only 10 percent are estimated to have on-site doctors. A telemedicine consult administered by a nurse or even a trained assistant can provide proactive, just-in-time care, and possibly prevent an expensive hospital/ER visit–two-thirds of which may be potentially avoidable. That ER visit also can start a disastrous and expensive decline in the resident. 

So the problem in the stars is…economics.What insurance companies pay for telehealth/telemedicine services. It varies if the patient is covered by Medicare, Medicaid, or dual-eligible–and also by private or LTC insurance. Some providers and payers are engaged with value-based care and payment models–others are not. CMS is concerned that telehealth drives up costs, not reduces them. Finally, administrators and nursing/clinical staff in the facility are not necessarily comfortable with technology in general. (Excel spreadsheets are, believe it or not, foreign to many.)

As Readers know, Call 9 couldn’t figure out the reimbursement problem nor how to keep up with payer demands–and ceased business [TTA 26 June]. Others like Curavi and Third Eye Health provide a video cart and provide on-demand consults. On the Federal level with Medicare, payments have been expanded for end-stage renal disease and stroke treatment, and Medicare Advantage plans can now offer telehealth. Still, there is no direct payment under Medicare for virtual emergency medicine. And telemedicine remains a rarity in SNFs, who prefer to send their residents to ERs ‘just to be sure’. POLITICO

Call9: we’ll be back — with a different model!

July 27, 2019 | by

“It wasn’t viable in the way that we did it,” Peck said. “We were very far ahead of the curve.”

Call9‘s founder, Tim Peck, MD, interviewed by local business publication Crain’s New York Business, shed a bit more light on the company’s planned reorganization as Call9 Medical. According to Dr. Peck, Call9 Medical will be in a much larger network of nursing homes and add primary care physicians to its services. The reopened company will be backed by its Silicon Valley lender, Western Technology Investment, which apparently forced the closing issue when the company’s cash on hand fell below the amount lent by WTI. No timing for resumption was given.

In the interview, Dr. Peck returned to reasons why the Call9 original model did not work. Insurers would pay for fee-for-service based telemedicine visits in nursing homes but not pay on their operating concept of fewer hospitalizations and better health outcomes that saved money, which had a longer-term payoff. 

Apparently this led to a standoff with controlling (over 50 percent) funder Redmile, which encouraged the FFS revenue stream. “We had to do services in a particular way that in no way brought value to our model,” Peck said. The ‘change in funders’ as noted in TTA’s article on the shutdown now is in a fuller context; Redmile will not be participating in the repositioned company. Confirmed in the article is that a few former investors, WTI, and some former employees will be part of it.

In this Editor’s view, Call9 had trouble accommodating both payment tracks, perhaps because they were overly invested in their concept. In the real world, it seems odd in a company of this size and investment level, which at one point employed close to 200 people and was about 100 at shutdown. Young companies, if anything, learn to be flexible when it comes to getting profitable cash flow into the exchequer, including standing their ground against ‘pilot-itis’–especially when their major investors encourage it.

One of their earliest customers also warned them of another flaw in their model. The author interviewed the CEO of one of Call9’s earliest clients, ArchCare, a Catholic nonprofit LTC organization in New York. ArchCare was able to “get its patients’ hospitalization rates low enough on its own that paying the startup no longer made sense.” “Their model wasn’t able to move the needle sufficiently to justify the ongoing expense,” CEO Scott LaRue explained. 

One hopes that Call9 Medical will avoid those pitfalls in being too far ahead of the curve and recast their telemedicine model to improve health outcomes for our most frail, vulnerable, and poorly served. Hat tip to HIStalk.

Health tech bubble watch: Rock Health’s mid-2019 funding assessment amid Big IPOs (updated: Health Catalyst, Livongo, more)

July 25, 2019 | by

Updated for IPOs and analysis. The big time IPOs add extra bubbles to the digital health bath. Rock Health’s mid-year digital health market update continues its frothy way with a topline of $4.2 bn across 180 deals invested in digital health during the first half of 2019. 2019 is tracking to last year’s spending rate across fewer deals and is projected to end the year at $8.4 bn and 360 deals versus 2018’s $8.2 bn and 376 deals.

This year has been notable for Big IPOs, which have been absent from the digital health scene for three years. Exits come in three flavors: mergers and acquisitions (43 in their count so far), IPOs, and shutdowns (like Call9). IPOs are a reasonable outcome of last year’s trend of mega deals over $100 million and a more direct way for VCs to return their money to investors. So far in 2019, 30 percent of venture dollars went to these mega deals. (Rock Health tracks only US digital health deals over $2 million, so not a global picture.)

Reviewing the IPOs and pending IPOs to date:

  • Practice intake and patient management system Phreesia closed its NYSE IPO of 10.7 million shares at $18 per share on 22 July. The company earned approximately $140.6 million and the total gross proceeds to the selling stockholders were approximately $51.6 million for a value over $600 million. The market cap as of 26 July exceeded $949 million with shares rising past $26. Not bad for a company that raised a frugal $92.6 million over seven rounds since 2005.  Yahoo Finance, Crunchbase
  • Chronic condition management company Livongo’s picture is frothier. Their 22 July SEC filing has their IPO at 10.7 million shares at $24 to $26 per share offered on NASDAQ. This would total a $267.5 million raise and a $2.2 bn valuation. This is a stunning amount for a company with reportedly $55 million at the end of its most recent reporting period, increasing losses, and rising cash burn. Livongo raised $235 million since 2014 from private investors. Crunchbase 
  • Analytics company Health Catalyst’s IPO, which will probably take place this week on NASDAQ with Livongo’s, expects to float 7 million shares. Shares will be in a range of $24 to $25 with a raise in excess of $171 million. Their quarterly revenue is above $35 million with an operating loss of $9.8 million. Since 2008, they’ve raised $377 million. IPO analysts call both Livongo’s and Health Catalyst’s IPOs ‘essentially oversubscribed’. Investors Business Daily, Crunchbase
    • UPDATE: Both Livongo and Health Catalyst IPOs debuted on Thursday 25 July, with Livongo raising $356 million on an upsized 12.7 million shares at $28/share, while Health Catalyst’s 7 million shares brought in $182 million at $26/share.  Friday’s shares closed way up from the IPOs Livongo at $38.12 and $38.30 for Health Catalyst. Bubbly indeed! Investors Business Daily, Yahoo Finance
  • Change Healthcare is also planning a NASDAQ IPO at a recently repriced $13 per share, raising $557.7 million from 42.8 million shares. With the IPO, Change is also offering an equity raise and senior amortizing note to pay off its over $5 bn in debt. The excruciating details are here. Investors here are taking a much bigger chance than with the above IPOs, but the market action above will be a definite boost for Change.
  • Connected fitness device company Peloton, after raising $900 million, is scheduled to IPO soon after a confidential SEC filing. (UPDATED–Ed. Note: Included as in the Rock Health report; however this Editor believes that their continued inclusion of Peleton in digital health is specious and should be disregarded by those looking at actual funding trends in health tech.) Forbes

Rock Health itself raised the ‘bubble’ question in considering 2018 results. Their six points of a bubble are:

  1. Hype supersedes business fundamentals
  2. High cash burn rates
  3. High valuations decoupled from fundamentals
  4. Surge of cash from new investors
  5. Fraud or misuse of funds
  6. Unclear exit pathways

This Editor’s further analysis of these six points [TTA 21 Jan] wasn’t quite as reassuring as Rock Health’s. As in 2018, #2, #3, and #6 are rated ‘moderately bubbly’ with even Rock Health admitting that #2 had some added froth. #3–high valuations decoupled from fundamentals–is, in this Editor’s experience, the most daunting, as as it represents the widest divergence from reality and is the least fixable. The three new ‘digital health unicorns’ they cite are companies you’ve likely never heard of and in ‘interesting’ but not exactly mainstream niches in health tech except, perhaps, for the last: Zipline (medicine via drone to clinics in Rwanda and Ghana), Gympass (corporate employee gym passes), and Hims (prescription service and delivery).

Editor’s opinion: When there are too many companies with high valuations paired with a high ‘huh?’ quotient (#3)–that one is slightly incredulous at the valuation granted ‘for that??’–it’s time to take a step back from the screen and do something constructive like rebuild an engine or take a swim. Having observed or worked for companies in bubbles since 1980 in three industries– post-deregulation airlines in the 1980s, internet (dot.com) from the mid-1990s to 2001, first stage telecare/telehealth (2006-8), and healthcare today (Theranos/Outcome Health), a moderate bubble never, ever deflates–it expands, then bursts. The textbook #3 was the dot.com boom/bust; it not only fried internet companies but many vendors all over the US and kicked off a recession.

Rock Health also downplayed #5, fraud and misuse of funds. It’s hard to tell why with troubles around uBiome, Nurx, and Cleo in the news, Teladoc isn’t mentioned, but their lack of disclosure for a public company around critical NCQA accreditation only two months ago and their 2018 accounting problems make for an interesting omission [TTA 16 May]. (And absurdly, they excluded Theranos from 2018’s digital health category, yet include drones, gym passes, connected fitness devices…shall we go on?)

Rock Health’s analysis goes deeper on the private investment picture, particularly their interesting concept of ‘net liquidity overhang’, the amount of money where investors have yet to realize any return, as an indicator of the pressure investors have to exit. Pressure, both in healthcare and in early-stage companies, is a double-edged sword. There’s also a nifty annual IPO Watch List which includes the five above and why buying innovation works for both early-stage and mature healthcare companies. 

(Editor’s final note: The above is not to be excessively critical of Rock Health’s needed analysis, made available to us for free, but in line with our traditionally ‘gimlety’ industry view.)

SNF emergency telehealth provider Call9 shuts down most operations, after $34M raise (updated)

June 26, 2019 | by

Is it a symptom of a bubble’s downside? In an interview with CNBC, Dr. Timothy Peck, the CEO of Call9, profiled in TTA only a month ago, confirmed that his company will be shutting down operations. Call9 provided embedded emergency first responders in skilled nursing facilities (SNFs) on call to staff nurses. The first responders not only could provide immediate care to patients with over a dozen diagnostic tools, but also would connect via video to emergency doctors on call. 

Headquartered in Brooklyn, the shuttering of the four-year-old company has laid off over 100 employees as it winds down operations. They claimed 142,000 telemedicine visits and 11,000 patients who were treated via its services. In the past few months, Call9 had inked deals with Lyft for patient transportation and was expanding to Albany NY. They also operated a community paramedicine division utilizing their emergency doctor network.  

This Editor can now reveal that through a reliable industry source, I was informed of Call9’s difficulties earlier this month. Not wanting to ‘run with a rumor’, I contacted Dr. Peck. He confirmed to me information that later appeared in the CNBC article: that the company was refining its model in the face of a change in previous funders and working with some new partners to stay in a model with embedded clinical care specialists in nursing homes. While they would scale back, they still had current contracts. However, the changes in their model would mean that the company would be in a ‘bit of a stealth mode’. After we discussed the business situations that most early-stage health tech companies have faced with funding, we agreed to touch base in a few weeks when things developed.

CNBC, with a different source, had essentially the same information from Dr. Peck on the winding down of the company but in this case also confirmed layoffs, including a ‘pivot’ of the company into a different model around technology in nursing homes. They also confirmed that a part of the company, Call9 Medical, will remain in operations.

Update: Skilled Nursing News had additional detail on Call9’s partnerships which included SNF providers Centers Health Care, CareRite, and the Archdiocese of New York’s long-term care arm, ArchCare. Their first client was Central Island Healthcare, where Dr. Peck lived for three months testing the model. The article goes on with Central Island’s executive director explaining that he is now seeking a telemedicine provider, as they adjusted their services to Call9’s capabilities.

Payer providers included Anthem, Blue Cross Blue Shield, and Healthfirst, plus some Medicare Advantage plans, splitting the savings from avoiding unnecessary ER admissions. Another appeal made by the company for its services was to keep in place higher acuity–sicker–patients in SNFs who would otherwise have to go into the hospital.

As our Readers know, these pages have covered the comings and goings of many health tech and app companies. Some succeed on their own, are acquired/combined with others and go on in different form, or are bought out at their peak, leaving their founders and some employees cheerful indeed. On the other hand, and far more common: the demise of some is understandable, others regrettable, and nearly none of them are cause for celebration in our field–Theranos and Outcome Health being exceptions. This Editor has been a marketing head of two of them (now deceased except for their technology, out there somewhere), and has discussed marketing, funding, and business models with more startups and early-stage companies than she can count.

If anything, investors have less patience than they did back in the Grizzled Pioneer period of the early 2000s, when a $5 million round put together from a few personally (more…)

Call9 and an ’embedded’ approach to emergency response in nursing homes

May 29, 2019 | by

Back in March, this Editor noted the substantial $34 million raise over the past three years by Call9. The Brooklyn-based company has pioneered an innovative approach filling a non-glamorous but badly needed gap in care–providing in-facility emergency care in SNFs and rehab facilities. Embedded in-facility first responders summoned by SNF nurses provide immediate care at a higher level than nursing home staff, married to telehealth capability that connects to remotely located emergency medicine doctors via a video cart and diagnostics.  The goal is to provide care immediately, avoid unnecessary and potentially harmful ER/ED admissions (estimated at 19 percent of ambulance transports), and generally keep SNF patients healthier while on site.

The numbers are there. Call9 reported in their studies a 50 percent reduction in ER admissions and a savings of $8M per year for a 200-bed nursing facility. Even if these numbers are high, a reduction is welcome news to SNFs, payors, Medicare, and one would think nursing home patients and families. Hospital readmissions within 30 days are also a CMS quality measure important to SNFs–the lower the better.

The Hunter College Center for Health Technology in their blog reported that one Call9 feature is special training for staff at their in-house Call9 Academy in the unique emergency care demands present in a SNF. These were initally learned first hand by the founder, Dr. Timothy Peck, who lived three months in a Long Island SNF’s conference room in order to better understand staff and patient needs.

It not only saves money, but fills other gaps in care and social determinants of health. Part of the Academy training covers the gap in palliative care with residents, and can facilitate Medical Orders for Life-Sustaining Treatment (MOLST) preparation with families. Last year, Call9 partnered with Lyft to provide transportation for family members of nursing home residents who have had a change in condition. Other partnerships serve the needs of community paramedicine services to connect with telehealth services as part of CMS’ ET3 model. The company currently covers over 3,700 beds in New York State, recently expanding to Albany, its third city.

A similar company, Third Eye Health, based in Chicago, covers about 15,000 beds but is a ‘lighter’ system that concentrates on remote care without the embedded staff and purely tablet based remote consults initiated by staff nurses. Both indicate through their growth and funding a surge in realization that both improved care and major savings to healthcare can be realized here.