Short takes: improving healthcare worker safety; CareMax may ax 530 jobs in bankruptcy/sale, finds 2nd buyer; $15M Series A for Evidently, $35M Series B for Hyro AI

December 11, 2024 | by

 

Healthcare workers–not executives–are far more likely to be victims of violence in hospital and clinic settings. The bare facts are that pre-pandemic, health workers were five times more likely while at work than other industry workers to be physically attacked (2018, Bureau of Labor Statistics). Post-Covid, the lid came off, based on American Hospital Association reports and the Massachusetts Health and Hospital Association (MHA). In the American College of Emergency Physicians (AECP) annual poll this year, 91% of emergency physicians were either personally threatened or knew a colleague who had. MHA developed a list of recommendations here as part of a code of conduct. AI and security alert companies have also found that hospitals are prime customers. Much more by Neil Versel in Healthcare Dive.

CareMax delivers Christmas coal to 530 stockings. The senior healthcare provider that filed Chapter 11 on 17 November agreed to sell their management services organization (MSO) assets to Revere Medical, formerly Stewardship Health [TTA 8 Nov]. On Thanksgiving week CareMax disclosed that most of the clinical care centers (core centers) would go to ClareMedica Health Partners. in a ‘stalking horse’ purchase agreement that requires bankruptcy court approval. Both the Revere Medical and ClareMedica purchases were part of the Prearranged Plan with the secured lenders, often called a pre-packaged bankruptcy. ClareMedica is a value-based care provider with 12 clinics in Florida.   Release

Their turkey was just about finished when CareMax filed a WARN notice to Florida Commerce notifying the state that the purchasers are not obliged to retain CareMax employees. The letter to Florida states that any retained employees will be notified by 17 January for the MSO/Revere Medical portion and by ClareMedica by 16 January for non-physician employees and 25 January for physicians. All the rest will be terminated by 31 January. Positions included are C-level executives, VPs, various officer titles down to pharmacists, RNs, and care managers. Until the sales receive final approval as part of the restructuring, the notice is conditional.

Another interesting wrinkle. Ralph de la Torre, MD, the former CEO of Steward Health, is a 15% owner of CareMax and is on the board of directors. This has aroused a serious level of Federal interest, since de la Torre has had a contempt of Congress warrant served and is at the center of a Federal probe on international corruption.  Healthcare Dive, Becker’s, Becker’s ‘9 things to know…’

Funding rounds in the year-end closeout.

Evidently closed a pre-Christmas $15 million Series A. Evidently is a developer of cognitive AI healthcare workflow platforms that automates low-level tasks involving clinical data and knowledge – tasks that underlie patient care, revenue cycle, clinical research, and population health. The funding for the Palo Alto-based company was led by DN Capital with participation from FRAMEWORK, Clear Ventures, and Fellows Fund. Previous funding was a lean $1.1 million. The improved workflow is designed to increase financial and efficiency gains. Their own study indicates that it reduces transplant referral chart prep time by over 90%. Financial News UK (release), CityBiz

Hyro AI extended its Series B with a $35 million raise. New York-based Hyro’s fresh funding was led by Healthier Capital, joining previous investors including Macquarie Capital, Liberty Mutual, Twilio Inc., and Black Opal Ventures. Their total funding now tops $50 million. Hyro uses LLMs to power plug-and-play chat and voice interfaces automating the usual tasks of contact centers, including patient registration, routing, scheduling, IT helpdesk ticketing, frequently asked questions, and prescription refills. These can be up to 60-70% of call activity. The additional funding will be used for expanding their outbound calling offering and conversational intelligence analytics suite. Hyro blog/press release, FierceHealthcare

News roundup: CVS Health cedes 4 new board seats to Glenview, Oscar’s strong Q3, telehealth controlled substance prescribing in 3rd extension, new Revere Medical to buy CareMax assets (updated), Oura picks up $75M Dexcom financing and partnership

November 19, 2024 | by

This pre-Thanksgiving week stuffs the turkey, not with giblets and savory fillings, but with Big Developments on the Big Stories of the past few weeks.

CVS feeds the crocodile, gives Glenview Capital four new seats on the board. CVS’ startling move with the hedge fund Glenview Capital Management that adds Leslie Norwalk, Glenview CEO Larry Robbins, Guy Sansone, and Doug Shulman, expands their board of directors to an unwieldy 16. According to the CVS release, Norwalk, from Epstein Becker Green, will join the Health Services Committee. Sansone, CEO of H2 Health, will join the Audit Committee.  Shulman, chairman/CEO of OneMain Holdings, will join the Management Planning and Development Committee. It’s unknown whether Robbins will need to join a committee given his prime position.

Despite CVS’ lack of confirmation after their reported breakup/spinoff discussions that kicked off October [TTA 1 Oct], it’s apparent to anyone with clean glasses that Glenview is driving multiple changes at the company including the ouster of CEO Karen Lynch even after she took direct control of Aetna. She was replaced by a CVS ‘lifer’, David Joyner, head of CVS Caremark. Glenview owns 1% of CVS stock as of last report in October, according to the Wall Street Journal, but that 1% accounts for over $700 million of its $2.5 billion war chest. That gives them cause for concern–and leverage.

The board appears to be looking towards maximizing performance now, not later. The new executive chair of CVS Health, Roger Farah, from the release: “In our discussions with the leadership at Glenview, we agreed that we can deliver greater value from our integrated businesses to all of our stakeholders, including our customers, consumers, colleagues, and shareholders.” New faces tasked with quick turnarounds include group president Prem Shah and at the head of shaky Aetna, Steve Nelson from ChenMed [TTA 8 Nov]. That means achieving profitability and cash flow at a very tough time for nearly all insurers. CNBC, Becker’s

How Centene did it after a similar move by Politan Capital Management. Since early 2022, Centene has been selling off in pieces what turned out to be an abundance of ancillary, only partly digested businesses, such as Ribera Health, Magellan, Apixio, and most recently their MSO/ACO organizer Collaborative Health Systems [TTA 13 Nov, 5 May 2023, 30 July 2022], along with a deep portfolio of real estate such as a projected Charlotte HQ, all bought by the late CEO Michael Neidorff. These ‘fat pads’ were easy cuts along with several thousand people. CVS Health, however, may not have the padding that Centene had to generate ready cash from willing buyers as it has the reputation of being fairly lean. Their big missteps may have been in 2022 (FOMO Time) pursuing a management-led Big Objective of entering brick-and-mortar and buying never-profitable Oak Street Health primary care for $10 billion, buying home health’s Signify Health for $8 billion, and investing $100 million in Carbon Health, all at inflated post-pandemic prices with the latter two having significant issues within their lines of business. 

The proposal of splitting up the company sounds drastic to achieve profitability. It may be a ‘worst case scenario’ thrown out to keep the crocodile sated. Much depends on how both Glenview Capital and Mr. Market behave next year with the opportunities presented, while facing a new administration and HHS and CMS heads without ties to or fondness for payers. 

Meanwhile, Oscar Health, helmed by Aetna’s former and ousted head Mark Bertolini, posted a strong Q3 closing September 30. Versus prior year, their revenue went up 68% to $2.4 billion, medical loss ratio remained fairly stable at 84.6%, up 80 basis points (bps=.01%), and expenses improved by 3.6%, but importantly they narrowed their net loss to $54.6 million, or $(0.22)  of earnings per share, a $10.8 million improvement. Revenue for the year was adjusted upward to the $9.2 billion to $9.3 billion range, $200 million above the prior range of $9.0 billion to $9.1 billion. It’s quite a turnaround from the dancing-with-disaster Oscar of only 18 months ago. Look hard, there’s a schadenfreude-ish smile on the middle guy’s face….  Oscar release

DEA extended telehealth prescribing of controlled substances for a third round. The kicking the can down the road was easily predicted last month. The “Third Temporary Extension of COVID-19 Telemedicine Flexibilities for Prescription of Controlled Medications” exited the registry of the White House Office of Management and Budget (OMB) 14 November. On the 15th, the rule was posted to the Federal Register and officially published today (19 Nov). It gives the Drug Enforcement Administration (DEA) a clean extension of the pandemic time flexibilities on Schedule II-V remote prescribing. The industry will wait and see if the incoming Trump 47 administration will bring this up to Congress to repeal, as by a whisker the extension fell outside the 60-day vacate window. But it’s not a hot button issue and is very likely to continue into 2025. FierceHealthcare, ATA release

CareMax goes into Chapter 11, agrees to sell to the new Revere Medical. The senior healthcare provider based in Miami filed Chapter 11 on 17 November but already has entered an agreement to sell assets to Revere Medical, formerly Stewardship Health, sold out of Steward Health’s bankruptcy to Brady Health Buyer, an entity of Rural Healthcare Group-Kinderhook Industries [TTA 8 Nov]. The sale that had to be planned for some time is part of a restructuring plan approved by the company’s secured lenders, commonly called a pre-packaged bankruptcy. Revere is acquiring CareMax’s management services organization (MSO) and ACO assets, including the Medicare shared savings program (MSSP) part of its MSO business that supports about 80,000 Medicare beneficiaries. CareMax will wind down and exit their Medicare Advantage and ACO REACH businesses which will take some time, likely 2026. The operating clinic business assets will go to a third-party buyer. Further restructuring is part of a restructuring support agreement (the “RSA”) with lenders holding 100 percent of the Company’s secured debt obligations, according to the 17 November release. Becker’s  Update: CareMax was related to Steward Health as the exclusive value-based managed service organization (MSO) for Steward Health Care’s Medicare network. Steward’s failure was the final crack that broke CareMax’s back, as it had been losing money for several years, according to Paul Rundell, CareMax’s chief restructuring officer. Not helpful was their leasing many of their properties from real estate investment trust Medical Properties Trust, same as Steward.  HealthcareDive   And where in the world is Dr. de la Torre, Steward’s CEO?

Finland’s Oura health tracker ring now discloses where the money’s coming from. Oura picked up $75 million from Dexcom in a Series D funding round, their first since a $100 million Series C in May 2021 and an undisclosed venture round the following year. Their total financing is $223 million and the valuation at $5 billion. Dexcom and Oura are also in partnership to integrate Dexcom glucose data with vital signs, sleep, stress, heart health, and activity data from Oura Ring. The two-way integration will flow data between Dexcom and Oura products, including Dexcom glucose biosensors, Dexcom apps, Oura Ring and the Oura App. Oura release, FierceHealthcare Oura purchased Sparta Science earlier this month and metabolic tracker Veri in September. Veri, however, works with the Abbott FreeStyle Libre to guide users to the right foods, habits, and timing versus common health metrics such as sleep for their bodies.