A mixed picture for CVS Health. Their Q2 reporting was almost schizophrenic, depending on whose reporting you read. Healthcare Finance highlighted their $1.12M net income loss–tiny when compared to the size of the company– but apparently one of the factors driving a layoff of 5,000 corporate, non-customer facing staff. From FierceHealthcare, CVS is still quite profitable at $1.9 billion, but that is down 36%. Revenue of $88.9 billion was up 10% from prior year. The results beat Wall Street analyst estimates of $2.12/share with adjusted earnings of $2.21/share.
Despite the overall good picture of Q2, financial projections trended down for the full year. CVS in Q2 started a restructuring plan which cost $496 million in pre-tax income, expected to be completed by year’s end. 2023 is projected to have increased Medicare Advantage costs, higher drug utilization, and lower consumer spending expectations affecting retail operations. Added to their acquisition binge of Signify Health and Oak Street Health, which together totaled $18.6 billion, their 2024 earnings per share projections for 2024 fell from $9 to a range of $8.50 to $8.70. Timing was not disclosed for the 5,000-person reduction among corporate staff. It is not known whether this will affect Aetna and CVS Caremark (pharmacy benefit). CVS has 300,000 employees (75% full time) including part and full-time retail workers. They are also reducing corporate travel, plus the use of consultants and vendors. (CVS is known to have extremely low contractor rates already.) The restructuring is projected to save $700 to $800 million next year, but cold comfort to the 5,000 who won’t be there. FierceHealthcare. We’ll see.
One of those CVS purchases, Signify Health, is moving forward with an in-home option for evaluating kidney function as part of in-home exams of Medicare Advantage members. This evaluation will include urinalysis and estimated glomerular filtration rate testing which are relatively simple and cost-effective to administer in-home. It fits within their in-home exam protocols and will support early detection and diagnosis of kidney disease plus management of those with chronic kidney disease for earlier and better treatment. End-stage renal disease (ESRD) costs $37.3 billion to Medicare. FierceHealthcare
Going far, far East to Indonesia, virtual health provider Halodoc scored $100 million in a Series D funding round. Lead investor was Astra International with Openspace and Novo Holdings. This brings their total funding to $245 million. Halodoc provides online and app-based health services for 20 million active platform users claimed. Services include telehealth, medicine ordering, lab test, and doctor appointment booking. They also manage third-party health insurance purchase and at-home health testing. Their network includes more than 20,000 medical practitioners, 3,300 hospitals, and 4,900 pharmacies. On the website, there are a wide variety of services, including wellness. Unfortunately, to read it, you’ll have to know Indonesian (Malay)–and there are some pictures of intriguing recipes there! Mobihealthnews
Contrasting this to an exceedingly modest raise by a new Boston/Tel Aviv medication management company, FeelBetter. Their $5.9 million unlettered raise was led by Firstime Ventures and Shoni Health Ventures, with participation from Random Forest VC, The Group Ventures, and previous investor Triventures for a total of $8 million. FeelBetter uses AI tools to create what they call Pharmaco-Clinical Intelligence to identify patients at risk and deliver insights on gaps in care to personalize medication management to change the risks of polypharmacy. Release, Mobihealthnews They also issued a study on how FeelBetter could be used to effectively risk stratify emergency department use and hospitalizations among patients 65+ with multiple chronic conditions and complex medication regimens to avoid the 10-30% of hospitalizations that include medication issues. Release
No week seems to pass by without a data breach of some sort, but it’s unusual when Health and Human Services (HHS) and the Centers for Medicare and Medicaid Services (CMS) are attached to it. A contractor to the Medicare program, Maximus Federal Services, Inc. (Maximus), used a vendor, Progress Software, and their MOVEit Transfer software, which is a popular file transfer software for transmitting sensitive data. There was a vulnerability in this software that has previously been exploited by Russian ransomwareistes CLOP with Johns Hopkins currently being sued for their breach [TTA 19 July]. Maximus detected the unusual activity, an outside entity copying files, from 27 to 31 May. CMS is reporting that about 612,000 Medicare beneficiaries may have been affected by the breach which may have exposed personally identifiable information (PII) and/or protected health information (PHI). CMS and Maximus are notifying the beneficiaries this week and offering 24 months of free credit monitoring service. CMS release, Federal News Network, Progress page, Deep Instinct backgrounder on MOVEit’s zero-day vulnerability