News roundup: telehealth claims drop 9% in February; Amwell’s good news, bad news Q1; tech-enabled practice Crossover Health growing; NowRx and Hyundai test semi-self-driving delivery

FAIR Health’s February monthly tracker is pointing downward again. After a brief post-holiday rise to 5.4% of claims in January, it dropped to 4.9% in February, a 9% drop. Mental health claims seized the lead again by a country mile at 64.2% of claims. COVID-19 fell off the list of top 5 claim areas, though only 3.4% in January compared to 58.9% for mental health. This month lists categories of specialists delivering telehealth, and social workers topped the list at over 31%, which fits the telemental health picture. 

Amwell’s shaky opening to 2022. It should not come as any surprise to our Readers that Amwell, the Avis to Teladoc’s Hertz, didn’t have a good Q1. Most of their key indicators around total revenue, providers, and visits grew smartly. Unfortunately, their losses did too. Comparisons are to Q1 2021 unless noted:

Revenue grew to $64.2 million [$57.6 million], up 11.5%
Gross margin: 42.8% [38.0%], up 12.6%
Total active providers grew 12% from Q4 to approximately 102,000 [91,000] Total visits also grew 20% from Q4 to 1.8 million [1.5 million]

But there’s no turning the corner on losses this quarter, despite Converge, their unified platform, shifting over telehealth visits as planned, and adding SilverCloud, Conversa, and specialty telehealth with musculoskeletal (MSK) and dermatology programs to the totals.

Net loss was ($70.3) million, compared to ($39.8) million, an increase of 77%
Adjusted EBITDA was ($47.1) million, compared to ($26.4) million, an increase of 78%

Amwell’s projected 2022 is the same–growth mixed with financial losses: revenue between $275 and $285 million, adjusted EBITDA between ($200) million and ($190) million.

Inquiring investors may very well ask when Teladoc and Amwell, now smaller by a factor of just over 9, will ever be profitable. Mr. Market had its say over the past year, from a high of $14.26 in early June 2021, to today’s close of $3.09, an enterprise valuation loss of $11.17 or 78%, just a little better than Teladoc’s 81% in the same period. It will likely be no time soon. But the shares may be an excellent opportunity at a low cost. Yahoo Finance, FierceHealthcare, Becker’s 

Crossover Health, a hybrid virtual/in-person primary care practice group, announced that they would be opening new centers in Seattle, Austin, and another one in New York this year. Their virtual care operates in all states, while their in-person footprint consists of 41 health centers in 11 states which are generally about 5,000 square feet. They have 33 on-site clinics for employers, which are a combination of exclusive to one company and shared, and in total cover 400,000 eligible employees and dependents including for 115,000 Amazon employees and dependents. In addition to corporate clinics, Crossover offers individual membership plans in a concierge, under one roof type model. FierceHealthcare

In another tech area, med delivery company NowRx is partnering with Hyundai for a limited test of their self-driving cars in the LA area. Hyundai will be using slightly modified Hyundai Ioniq 5 electric vehicles with some autonomous capability, but using a driver. The purpose of the test is to simulate and gather data on autonomous vehicle delivery, such as delivery statistics, dispatch and customer interactions, and feedback. NowRx offers free same-day prescription delivery in the San Francisco Bay area, Orange County, and Los Angeles areas. FierceHealthcare

Friday news roundup: CVS filing for metaverse patents; Orbic-Verizon smartwatch debut, Amwell and LG partner for hospital digital health–and what *doesn’t* make for a good partnership

What’s a metaverse anyway? It’s a bright, shiny piece of jargon meaning the virtual reality or 3D virtual world. And CVS is rushing right to the US Patent Office to patent its goods and services–including their clinic services and telehealth–in the metaverse. While it’s hard to imagine prescription drugs, healthcare, wellness, beauty and personal care products being wholly virtual, shopping for them can be and obviously CVS doesn’t want to miss out on a world where we’re all wearing 3D headsets and ordering our healthcare in VR and AR. CNBC, USPO filing  

Orbic, a US-India manufacturer popular for being one of the more budget-friendly makers of mobile phones (including flips), tablets, laptops, routers, and accessories, has debuted a smartwatch in partnership with Verizon, the SmartWrist. It has monitoring features such as pulse oxygen levels, body temperature, heart rate, and sleep. It also sets and keeps track of fitness goals and, for those who need it, fall detection, autodial emergency services or contacts in event of emergency, and geofences safe zones. The watch face is 1.78” AMOLED, dock charging, and Android Go 8.1. All for an affordable $199. Our contact Erin Farrell Talbot tells TTA that the SmartWrist is integrated with EHRs plus currently going through FDA approvals that when completed will enable it to be prescribed for patients with medical issues or chronically ill.

Amwell goes into the hospital to connect with LG on TVs and monitoring devices. LG is the leading provider of smart TVs in the hospital market, and where Amwell will initially partner is with Converge, its unified provider-patient platform, inputting information from LG peripheral devices already in or being introduced into acute care. Amwell and LG are also looking beyond the hospital setting into home or sub-acute care. As Healthcare Dive noted, this is not Amwell’s first fling with TV-based care–they demonstrated at last April’s Client Forum a TV-based hospital-to-home integration with Solaborate. LG release (Yahoo)

Sometimes digital health partnerships start at a low level–and auger in from there. Becker’s Hospital Review quizzed three hospital executives, including one from Geisinger Health, an early adopter, on three signs that your digital health partner is not one for the long haul:

  1. It doesn’t have a genuine mission. The mission that hospitals are interested in are about patient outcomes and interest in the hospital partner’s business, not the digital health company’s funding or press.
  2. It hasn’t earned your trust. It seems obvious, but do your due diligence on how the company has handled other partnerships. Red flags include inadequate funding and the terms of the partnership fluctuating.
  3. It lacks responsiveness. This is a big one that this Editor has experienced as both a vendor and buyer. It’s a willingness to listen to and address pain points in “the never-ending troubleshooting” that’s across the board.

As a digital health company, the first is attitude, the second is performance, but #3 is generally the grind point where internal frustrations build and relationships go south.

Short takes: Athenahealth close to sold, Teladoc wants More of the Patient, CVS fewer store customers

Some thought starters for your weekend…

Reportedly, EHR and systems provider Athenahealth is thisclose to being sold. Via Becker’s Health IT, Seeking Alpha, a stock analysis site, connects the dots. In September, Bloomberg reported that private equity firms Veritas Capital and Elliot Investment Management (Evergreen Coast Capital) were considering selling Athenahealth for $20 billion or filing an initial public offering (IPO), two dramatic ways to exit. They entered in 2019 for $5.7 billion when it was already public, taking it private and combining it with a GE acquisition, Virence Health.

Timing is now Q1 2022. The most interested investors apparently are Hellman & Friedman, Bain Capital, KKR, Thoma Bravo, and Brookfield Asset Management. While no longer the powerhouse it once was in EHRs and related systems, it still can fetch a good return and provide a favorable exit for the two companies. Athenahealth had no comment for Becker’s. 

Teladoc and Big Telehealth wants More of the Patient, but will it be profitable? Our Readers are well aware of the War of the Roses (because it’s gone on so long) among the traditional telehealth players: Teladoc, Amwell, Included Health (Grand Rounds-Doctor on Demand), MD Live, with other smaller players jumping out of the juggernauts’ way and sticking to their knitting. With the addition of primary care (and, one can assume, the pandemic push), health systems and companies like Amazon Care and Babylon Health have jumped into the mix with ‘hit them where they ain’t’ offerings–Amazon offering house calls and services direct to employers, and Babylon 360 being offered to health plans and employers. Babylon and Teladoc’s Primary360 cover much the same ground, though, in connecting the patient users with an assigned doctor and primary care team for ongoing care.

As noted last month [TTA 7 Oct], the walls between payer and provider in primary care are collapsing in multiple ways in telehealth and payer models like insurtechs. Another model is Amwell’s reinforcing behavioral health capabilities (SilverCloud) and sliding into care management (Conversa and Amwell’s Converge platform).

Readers do not have to go far for confirmation that Teladoc aggressively wants most or all of the patient and isn’t going to settle for less. This is conveniently summarized by HISTalk from Teladoc’s Investor Day (with Editor’s emphasis)

image

Teladoc’s investor day presentation predicts that consumers will expect virtual-first encounters whose quality equals in-person ones and that offer them a variety of coordinated care services. The company says it has evolved from fee-for-service video visits and will become a partner with its customers in offering whole-person care at under value- and risk-based arrangements. It says it will be “the first place consumers turn to for all healthcare needs” for “whole-person care that is personalized, convenient, and connected.” TDOC shares dropped 8% on the day and have shed 25% in the past 12 months, with the company’s market value being $20 billion versus the $18.5 billion in cash it paid to acquire Livongo in late October 2020.

As we’ve previously noted, Teladoc has never made a profit. Many felt it overpaid for Livongo and cut loose too many in the leadership with truckloads of gold. Investors weren’t quite on board with the whole-person vision either, looking at the share price trends. 

CVS Aetna, on the other hand, wants fewer store customers, more patients. Their announcement this week is that they are closing 10% of their stores (900 of 9,900) to focus on urgent/chronic care HealthHUBs, expand those services, and cut down on the brick-and-mortar. This responds to Walgreens buying a majority interest in VillageMD/VillageHealth with adjacent full-service primary care practices and CareCentrix for home care [TTA 14 Oct]. Reuters

Say goodbye to the local, easily navigated ‘boulevard’ CVS, often furnishing food, writing tablets, wrapping paper, and paper towels along with prescriptions and shampoo, often patronized by an older age group, for a barn-like, coldly-lit superstore that you have to drive to. (And say goodbye to pharmacy head Neela Montgomery.) And why is every HealthHUB this Editor has seen unimpressive–strangely under-staffed or no-staffed, tatty waiting areas with a couple of plastic chairs, expanded with ugly outside trailers that cut down on parking spaces?

Cui bono? According to CNN Business, it’s Dollar General, which loves those local locations and has been planning to beef up its health-related OTC meds. They also now have a chief medical officer who is evaluating in-store eye exams, telemedicine, and partnerships with local pharmacies. Given inflation, more customers will be checking Dollar General out.

Short takes: Now J&J splits up, a Color(ful) $100M, Cue Health goes DTC, Amwell’s busy Q3, Teladoc’s Investor Day 19 Nov

Breaking up seems to be the thing this month. Now Johnson & Johnson is spinning off its consumer brands into a separately traded public company, retaining the pharmaceutical and medical device businesses. The consumer business includes such J&J global signature products such as Band-Aids, Neutrogena, Q-tips, Baby Powder and Shampoo, and the Listerine line of products. It’s expected to take 18 to 24 months. The pharma/med device business will retain the J&J brands, sub-brands like Janssen, and development in AI and robotics. The consumer products divisions will have to hunt around for a new one. Outgoing CEO Alex Gorsky must be heaving a sigh of relief and dreaming of a long vacation, as he won’t have to shepherd this one– incoming CEO Joaquin Duato starts in January. Pharma/med device is much larger, with $77 billion in revenue. Consumer accounts for $15 billion, with four products alone accounting for $1 billion each. The reason behind it, of course, are the talc lawsuits around Baby Powder and Shower to Shower which have been adroitly hived off, but continue. CNBC, Reuters

Population health and genomics is more Color(ful) than ever, with the company’s $100 million Series E topping off last year’s $167 million Series D for a total of $497 million since 2014 (Crunchbase). Valuation of the company is now at $4.6 billion. Color’s platform is targeted primarily to the public sector–health agencies, research institutions, employer organizations, health systems, and others for custom-built software that can integrate patient information and genomics with lab results and education.  It previously teamed up with the National Institutes of Health for the ‘All of Us’ project collecting research data from a broad scope of the US population. Mobihealthnews

San Diego-based Cue Health, which up to now was known for a molecular COVID-19 at-home test, is expanding its direct to consumer market with a virtual health platform featuring their COVID-19 test (on FDA EUA, CE marked) starting on 15 November. It’s expanding ‘on cue’ with a membership offering, Cue+, with 24/7 online medical consults, e-prescriptions, what they term CDC-compliant test results for travel through in-app video proctoring, and same-day delivery of their products. Membership starts at $49.99 per month for the lowest level plan, escalating to $89.99/month for supervised COVID-19 testing. To make this work requires a Cue Reader that costs $249 along with testing packs priced at $225 for three. Cue also has in development testing for other factors–where it started prior to the annus horriblis of 2020. Not for those on a tight budget, but if you need it…. Cue release, Mobihealthnews

Amwell’s busy Q3 in visits reflected the uptick in the ‘delta’ variant of COVID-19, but was disappointing on the earnings side as urgent care brings in less revenue than behavioral health or specialty care. Amwell’s year-to-year revenue was down less than 1% to $62.2 million, but the decrease is forcing a revision in 2021 full year forecasted revenue. The Converge platform [TTA 29 April] has reached 4,000 providers and 43 enterprise clients which was far more than forecasted. Newly acquired SilverCloud and Conversa Health [TTA 29 July] are integrated into Converge and already cross-selling. Amwell, however, remains in the red with a quarterly net loss of $50.9 million. Healthcare Dive  

The Telehealth Wars continue to see-saw, with Teladoc’s Investor Day on Thursday 19 Nov next week. According to Seeking Alpha, a stock analysis site, “Bank of America is cautious on TDOC ahead of the event, citing questions about the near-term margin trajectory and competition. Shares of Teladoc rose 22% in the three weeks following its last investor day.”

Amwell debuts new telehealth platform, Converge; previews Carepoint for hospital care into the home

Amwell, which of late has been low-profile except for a puzzling interview by Ido Schoenburg, MD about Amazon and others as competitors, announced its new telehealth platform, Converge, at its annual Client Forum. According to the platform web page and the release, their key features are designed to make them extremely attractive and differentiated to clinician users. 

  • A single meeting place for providers and patients across mobile, tablet, and desktop
  • High-quality connections with adaptive video for low-bandwidth situations
  • Integration with existing workflows, EHRs, patient portals, and consumer experiences
  • Open platform and app marketplace. The open architecture and APIs are designed to host apps and services such as Google Cloud, Tyto Care, virtual second opinions from the Cleveland Clinic, and the Biobeat wearable wrist and chest monitors.

What may be even more interesting for Amwell’s future is a TV-based initiative that can bring hospital care into the home. At the same conference, Amwell previewed Home TV Carepoint. Developed in partnership with Solaborate, the software uses advanced AI. Information on Carepoint was limited to a few lines buried in the body of the release, indicating a ‘stealth mode’, but the potential is that it could open up a new market with health systems and home care if leveraged and marketed right. FierceHealthcare

Conference report: MedCityNews CONVERGE

Guest columnist Sarianne Gruber (@subtleimpact) attended Breaking Media’s annual MedCityNews CONVERGE two-day conference at Philadelphia’s Hyatt at Bellevue earlier this month, and has a few observations on the surface contradiction of innovation and health insurance.

Breaking Media rightly titled this year’s MedCity News conference “Converge”. Listening to the speakers, meeting the founders of new startups and talking to presenters, it became clear that today’s healthcare ecosystem is interdependent on the all the players to move the needle for better quality health. It was fascinating to learn was how innovation is breaking down the old silos of engagement, and is emerging from all the industry players, as well as joining at new intersections. The proliferation of better products, methodologies and engagement is closing the gap with more data, technology and ideas.

When you think of your health insurance company, usually two words comes to mind, cost and coverage. Keynote Speaker, Daniel Hilferty, President and CEO of Independence Blue Cross, wants to change the focus to consumer and care. Hilferty paralleled the new ventures at Independence to the work of the great innovator, Thomas Edison. Not only did Edison invent the light bulb, but his work is evidenced in the scalability of electricity that changed the world and how we now live.

In what directions is Independence Blue Cross converging? (more…)

September-October digital health events (US)

While enjoying the last weeks of the Lazy Hazy Crazy Days of Summer (thank you Nat Cole, BBC clip), it’s time to put the fall’s upcoming events on the calendar, if you haven’t already. A selection starting with our partners:

  • Parks Associates’ Connected Health Summit (9-10 September)–see banner advertising above or here
  • ATA Fall Forum (16-18 Sept)-see sidebar or here
    • If you are attending and would like to report on either conference, email Editor Donna (her schedule unfortunately does not permit her to attend)

Others of interest:

And in London, our partners at The King’s Fund have a wealth of events on their calendar into 2016.