Roundup: Virgin Pulse, NextGen close fast; Elucid, Eleos, Vida, Neteera funding; One Medical-CommonSpirit; Indian Health $2.5B EHR to General Dynamics+Oracle; losses, layoffs at Cano Health, 15% digital cuts at Mass General Brigham

No surprise that some big deals in digital health closed at year’s end before we roll out the turkey and the holiday decorations.

  • The Virgin Pulse-HealthComp merger that adds benefits analytics to Virgin’s employee wellness platform closed last Thursday (9 November). It was announced only in late September [TTA 29 Sep]. This creates what they estimate is a $3 billion company. Ownership is also changing to New Mountain Capital, the owner of HealthComp, now as the majority owner of the new company with Marlin Equity Partners in minority ownership with others including Blackstone and Morgan Health. Other than Chris Michalak becoming CEO of Virgin Pulse and HealthComp, there is no confirmation of financing nor management/employee transitions or headquarters (Virgin is in Providence Rhode Island, HealthComp in Fresno California). Virgin release
  • EHR NextGen closed its $1.8 billion taking-private by private equity firm Thoma Bravo after shareholders approved it the previous Tuesday for $23.95/share in cash. This was announced around US Labor Day and closed in record time on Friday 10 November. As previously noted, this ended 41 years of public trading for a company that was one of the pioneers of EHRs and practice management. In its release, Thoma Bravo will “leverage its operational and software expertise” and “adding new products and capabilities, both organically and inorganically, to continue enabling NextGen Healthcare’s customers to deliver exceptional patient outcomes.” Healthcare Dive, FierceHealthcare (also Virgin Pulse)

Are these lights at the end of the dark M&A tunnel for health tech and related? Or avoiding the oncoming train of FTC and DOJ regulations that collide head-on with M&A with the pending imposition of the Draft Merger Guidelines and the Premerger Notification rules under Hart-Scott-Rodino (HSR)?

It seems like top digital health law firm Epstein Becker Green has caught up with Editor Cassandra [TTA 20 July, 20 June]  in this Diagnosing Health Care Podcast of 10 November. Fun estimate: the time in filing a premerger notification may be increased by 289%. The cloudy crystal ball was clear indeed….

Last week was also a busy time for smaller companies’ fundings–even letter rounds! 

  • Elucid scored $80 million in Series C funding led by led by Elevage Medical Technologies, bringing total funding for this AI-assisted cardiovascular imaging company. They have the “only FDA-cleared non-invasive tool able to accurately characterize arterial plaque, simulating what pathologists would see under a microscope and establishing a histologic ground truth. The company is also pursuing an indication for non-invasive measurement of fractional flow reserve (FFRCT), uniquely derived from its PlaqueIQ technology, to measure coronary blockages and the extent of ischemia.” Release
  • In behavioral health, Eleos Health now has $40 million in Series B funding to add to previous funding of $28 million. The Series B was led by Menlo Ventures, with participation from F-Prime Capital, Eight Roads, Arkin Digital Health, SamsungNEXT, and ION. Eleos has developed AI-assisted solutions for group therapy sessions, compliance automation, case management, concurrent documentation, and value-based care support. They will use the additional funding for further development as well as network expansion and EHR partnerships. Release
  • Vida Health, which offers health coaching for chronic conditions, primarily obesity and diabetes management, gained $28.5 million in an unlettered round led by existing investors Ally Bridge, Canvas Ventures, General Atlantic, Hercules Capital, and others. Vida also announced a change of CEOs. Joe Murad succeeds Stephanie Tilenius, who is stepping down after nine years as founder/CEO, transitioning to an advisory capacity. Mr. Murad joins the company’s board. He was previously with WithMe Health, where he was president/CEO for nearly five years and previously headed PokitDoc before its acquisition by Change Healthcare in 2018. Release  Also Mobihealthnews on Elucid, Eleos, and Vida.
  • Israeli RPM company Neteera now has an additional $6.7 million as part of a Series B extension. Their unique RPM uses sub-THZ radar to monitor vital signs through bedding and clothing, then analyzes the data and produces reports on its platform. Neteera partners with Foxconn on their RPM and currently sells to long-term care facilities in the US.  Pulse 2.0

Amazon’s One Medical announced a partnership with CommonSpirit Health’s Virginia Mason Franciscan Health (VMFH) in the Seattle Puget Sound metro. This will add integrated specialty care in that area to One Medical’s primary care focus. VMFH has 2,000 providers in an integrated network of providers, outpatient facilities, and hospitals. Financials weren’t disclosed, but according to Becker’s, in another One Medical partnership, a health system disclosed that it “reimburses One Medical for providing care on its behalf and collects the fee-for-service revenue from the patient visits. One Medical previously collaborated with Seattle-based Swedish (part of Renton, Wash.-based Providence) in the region.” VMFH release, FierceHealthcare

The federal Indian Health System (IHS) is modernizing its EHR and moving to a General Dynamics IT-managed Oracle Cerner system. Its current system is the 40+-year-old Resource and Patient Management System–based on (surprise!) VistA. What is most interesting in the release is that General Dynamics Information Technology (IT) is listed as the primary contractor that will “build, configure, and maintain a new IHS enterprise Electronic Health Record system utilizing Oracle Cerner technology.” One very interesting bit of verbiage! The IHS used an “Indefinite Delivery, Indefinite Quantity” contract structure for this requirement which is explained as “the IHS will issue specific task orders for technical support and services. This gives the IHS the ability to adjust what it purchases, incorporate lessons learned, user input, and availability of new technology.” Reports indicate its ultimate value to General Dynamics IT in the 10-year contract to be close to $2.5 billion. IHS provides healthcare services for 2.8 million American Indians and Native Alaskans belonging to over 570 tribes. IHS release, Healthcare IT News

Cano Health continues its hemorrhage. Q3 loss was $497.1 million in Q3, with a cut of 21% of its workforce, or approximately 842 staff. Their loss was 4x times the year-prior Q3 on revenue of $788.1 million. Adding to operating losses, they were hit with a $354 million impairment charge and poor operating results from higher third-party medical costs. 52% of the staff cuts reflect the sales of operating units such as in Texas and Nevada to Humana CenterWell and exits in California, New Mexico, and Illinois. The remaining 48% is from restructuring. Now a Florida-only operation except for Puerto Rico (ending early 2024), they are concentrating on ACO REACH and Medicare Advantage there. Their clinics are now 126, down from 169 at the end of June. Cano is still looking for a buyer, which indicates that they anticipate further rough going. Healthcare Dive, Cano Health Q3 Financial Powerpoint

And winding up the bad news, Mass General Brigham, which is partnering with Best Buy for their Healthcare at Home programs, will be doing it with at least 15% fewer digital staff. They are offering voluntary separation packages to those employees in the hope of finding enough takers. The offer is a not especially generous two weeks of severance for every year of service. If the magic number of 15% is not reached, layoffs will start after Thanksgiving. Reportedly a state agency, the Massachusetts Health Policy Commission, has deemed that MGB’s cost growth is too much. MGB is the largest private employer in Massachusetts with 80,000 workers. The offers were floated starting from 1 November and will close on 15 November, with layoffs if needed to be announced on 4 December. The targeting of digital is claimed to be for modernization. The area is responsible for multiple areas of IT and maintaining patients’ electronic health records. Boston Herald, Healthcare Dive

Weekend news roundup: GE Healthcare spins off, adds CTO; Allscripts now Veradigm; NHS Brainomix AI stroke trial success; Withings home urine scanner; Careficient buys Net Health EMR; CommonSpirit’s class action suit on data breach

GE Healthcare now trading on its own. On Wednesday, GEHC rang Nasdaq’s traditional opening bell virtually on its first day of trading Wednesday (4 Jan). The bell ringing was unique as the first company in Wisconsin to do so from their plant in Waukesha. GE retained approximately 19.9% of the outstanding shares of GE HealthCare common stock with the remaining 80.1% distributed to current GE shareholders. Today it closed at $58.95 and remains headquartered in Chicago. (It moved from Amersham UK back in 2016.) Management is now independent, with Peter Arduini as CEO and adding yesterday a new chief technology officer, Taha Kass-Hout MD, MS, from Amazon’s health AI area to lead the company’s new science and technology organization through their four areas: Imaging, Ultrasound, Patient Care Solutions, and Pharmaceutical Diagnostics. Release, Yahoo Finance  Also Mobihealthnews

Remember back in 2019 when problematic EHR Practice Fusion was renamed Veradigm? Allscripts has now renamed the entire company as Veradigm, after expanding it to analytics and research. After two years of reorganizing and downsizing (plus paying off Practice Fusion fines), selling off their hospital/large practice EHRs to Constellation Software/N. Harris Group for $700 million last May, the slimmed-down Veradigm Network encompasses electronic health records, practice management systems, and patient communication platforms. Interestingly, a search first leads you to a main corporate website under Allscripts and doesn’t forward automatically to Veradigm, making this a softer-than-usual name change. Now Veradigm can pick up a few companies on the market, as they announced last year. Release    Hat tip to HISTalk

NHS using Brainomix AI to diagnose stroke faster, tripled near-full recoveries to 48%.  The key finding: patients diagnosed using AI made near full recoveries increased from 16 to 48%. The trial of e-Stroke Suite took place in 22 hospital trusts in England across 111,000 suspected stroke patients. The AI in the e-Stroke Suite cut average diagnosis to treatment time by an hour from 140 to 79 minutes. The AI technology was developed by UK company Brainomix. Daily Mail, Oxford Academic Health Science Network case study (Note: Oxford AHSN, Brainomix, and Royal Berkshire NHS Foundation Trust (RBH) are partners in the National Consortium of Intelligent Medical Imaging (NCIMI).)

Withings is debuting the U-Scan, an in-home urinalysis device, at CES. The 90 mm device sits in the toilet bowl and uses cartridges to analyze urine components, sending results to the Withings Health Mate app. Cartridges for Europe so far are Cycle Sync for menstrual period tracking and ovulation windows, and Nutri Balance for hydration and nutrition. Nutri Balance analyzes specific gravity, pH, vitamin C, and ketone levels. The U-Scan will debut in Europe at the end of Q2, with the U-Scan starter kit priced at €499.95.  Both await FDA clearance. Withings U-Scan page, Mobihealthnews

Careficient buys Net Health’s home health/hospice EMR. Careficient already is present in the home health, hospice and home care cloud EMR market. Net Health is selling its home health, hospice, home care and palliative solutions EMR, marketed under HealthWyse and Hospicesoft, as well as its revenue cycle management (RCM) division, to concentrate on wound care and rehabilitation therapy. This expands Careficient’s client base by 750 locations in 39 states. Transaction cost was not disclosed. Release

Add to the cost of hacking multiple class action lawsuits. CommonSpirit Health, based in Chicago and the second largest health system in the US covering 21 states under CHI and Dignity Health names, not only has to remedy a massive 600,000 patient data breach discovered last October [TTA 3 Dec], but also fight a class action lawsuit filed 29 December by a patient in the US District Court for the Northern District of Illinois. Financial, health insurance, and medical information were all breached. The suit requests damages exceeding $5 million and injunctive relief, including stronger data protection practices. It will be the first of many as a quick search indicates multiple law firms seeking claimants. FierceHealthcare, WGNRadio

Who’s buying, selling, funding wrapup: athenahealth IPO deux?, NextGen EHR buys reseller TSI for $68M, Cloudwave buys Sensato; fundings for Lumen, UpStream, Aide Health

athenahealth may go public a second time. This was teased by CEO Bob Segert in the Boston Globe (paywalled) earlier this week. He claimed in the article that since the company went private in 2019, they have added nearly 2,000 clients each year of the past three and that revenues are in the billions. Healthcare IT News recaps some of their moves from going from public to private and downsizing to today. Their other news is that they have instituted a clinical advisory board of 30 members (!) to provide feedback and guidance on clinical features and direction to athenahealth’s product team. One hopes that the sharper members advise a change in the first letter of their name from the oh-so-twee lowercase to an uppercase ‘A’. 

NextGen Healthcare, an EHR/EMR and revenue cycle management software provider for medical/dental practices, is acquiring reseller partner TSI Healthcare. The agreement is for $68 million in cash upfront, with a contingent consideration of up to $22 million in cash if TSI meets certain goals by March 2025. TSI has been a NextGen reseller for 16 years. The acquisition will enable NextGen to expand in key specialties including rheumatology, pulmonology, and cardiology. No mention is made of management or staff transition, nor of SEC review as NextGen is a publicly traded company on Nasdaq. Hat tip to HISTalk 2 Dec. Release, BusinessJournals Triangle

Massachusetts-based Cloudwave is acquiring Sensato Cybersecurity to increase cybersecurity capabilities. Cloudwave provides cloud services hosting with cybersecurity capabilities exclusively to healthcare organizations. Sensato adds cybersecurity-as-a-service (CaaS) to manage security needs, determine where security gaps are, and threat intelligence. Transaction price and details were not disclosed, but Sensato’s founder John Gomez will join CloudWave as chief security and engineering officer. Healthcare IT News  Cybersecurity continues to be top-of-mind for healthcare organizations. The latest Big Data Breach at CommonSpirit Health system hospitals got even worse, with the third-party breach of an undisclosed number of patient records at their Franciscan Health hospitals in September and October. This followed the ransomware attack on other CommonSpirit system hospitals’ EHRs in October. Healthcare IT News

As we near the end of the year, funding is wrapping up with a flurry in some surprising areas such as optimizing metabolism and care coordination for chronic conditions, reducing burden on primary care practices/GPs. One is for an early-stage company in the UK for the latter.

  • Lumen’s $62 million Series B was led by Pitango Venture Capital with Hanwha Group and Resolute Ventures.   Lumen measures metabolism via a handheld, breathalyzer-like device equipped with a CO2 sensor that analyzes whether the body is burning fats or carbs for fuel which can promote weight loss, energy for fitness, and sleep. With that data, the app delivers to users personalized meal plans and nutrition along with when to eat. The new funding will be used to expand these nutrition and lifestyle coaching services. The device is sold direct to consumers, with the app services sold on a SaaS basis: three yearly plans with a range of services from $249 to (on sale) $349.  Mobihealthnews, MedCityNews
  • Another Series B raise of $140 million went to UpStream, for total funding of $185 million. UpStream is in the decidedly unsexy area of care coordination, workflow, and financial platform technology for groups of advanced primary care practices enrolled in value-based full-risk care models, most of which are centered around Medicare and Medicare Advantage. They also deploy pharmacist-led care teams into primary care practices. Their platform and services are free to the practice, with a risk-sharing agreement that pays UpStream through savings (upside risk) but also holds them accountable if savings are below the benchmark (downside risk). Practices are paid on quality during the performance year versus having to wait for CMS to pay in Q3-4 of the following year. This is an MSO (management services organization) ‘in a box’ versus organizing ACOs that is mainly technology-based, a new wrinkle for this Editor who used to be in marketing this area. MedCityNews, Mobihealthnews
  • Aide Health is a clinician-to-patient platform for better management of chronic conditions now bolstered with £1 million in pre-seed funding. Founded by Ian Wharton, CEO, and Brian Snyder, COO, the platform measures physical, mental, and social wellbeing markers for more proactive care. Aide is piloting with the NHS for asthma or Type 2 diabetes with a cohort aged 18 to 75.  Funding was led by Hambro Perks through its EIS fund, with participation from Fuel Ventures, 1818 Ventures, and APX. BusinessCloud (UK)

Two telehealth case studies: St. Luke’s University Health, CommonSpirit Health

Telehealth effectiveness measured in two different US health systems. Some of our Readers are marketers like your Editor, who are always searching for references on program effectiveness. Healthcare IT News in recent days has presented two, one using Amwell and the other using Teladoc:

St. Luke’s University Health is a small health system with 14 hospitals and multiple clinics covering eastern Pennsylvania and western New Jersey. They were addressing several problems:

  • Network coverage expansion and time to consult reduction
  • Integration with EHR and multiple systems
  • Maintaining high privacy standards
  • Introducing behavioral telehealth for both patients and employees, especially during the Covid pandemic

The case study is primarily about the implementation of Amwell Psychiatric Care for 24/7 coverage and the SilverCloud Health platform, part of Amwell. This accelerated at the start of the pandemic. St. Luke’s instituted a Virtual Remote Monitoring Center (VRC) that monitored more than 6,000 patients supported by a 24/7 operations team.

With SilverCloud, they custom-built a support program for employees that included a self-paced program for stress, anxiety, and depression with support from a social worker and app-based 24/7 coaching interventions. If needed, the employee could be referred to an Employee Assistance Program or a St. Luke’s therapist. 

For the mental health programs, using the PHQ-9, comparing results between in-person and virtual visits from July 2021 to March 2022, results were close to identical in 6-point reductions in both virtual (96%) and in-person (90%) populations. In overall telehealth visits, between March 2021 and March 2022, they had over 205,000 unique patients use telehealth. Another metric that telehealth affected was outpatient care. St. Luke’s reduced no-show rates from 14% to 6%. Article

CommonSpirit Health is the largest Catholic and second-largest non-profit health system in the US.  The problem they were attempting to solve was primarily onboarding patients in crisis in the shortest possible time, well within the four hours recommended by the Joint Commission. They expanded their use of Teladoc in the CommonSpirit Telehealth Network to include behavioral health, instituting a.”round and respond” model to improve access to behavioral health specialists in several hospital emergency departments (EDs) and quickly assess patients as mild, moderate or severe based on patient risk. They also added services such as geropsychiatric and crisis intervention with medication-assisted treatment as consultation-liaison services. Results were:

  • Decrease in length of stay, cost; increased satisfaction and expectations of care met
  • 1,200 telebehavioral health consultations per month, through three states and across 25 hospitals
  • Establishing a standard of care of response within 60 minutes to all ED consult requests, have actionable recommendations within 90 minutes, and an ED disposition plan within the first four hours
    • 61% of cases seen within 30 minutes, 79% within 60 minutes with average response 42 minutes
    • 65% rate for discharge recommendations and a 35% rate for transfer at specific locations.

Article