Telehealth Wars: Amwell’s raises game with buys of SilverCloud and Conversa Health (updated); Teladoc’s slow member, hospital growth lead to $133M Q2 loss

Updated. Amwell’s announcement today (28 July) of the twin acquisitions of SilverCloud Health and Conversa Health for the tidy total sum of $320 million in cash and stock was, if not quite a ‘see ya and raise ya’ move, a confirmation that Amwell was going to raise its game, at long last, versus Teladoc. SilverCloud provides digital telehealth programs for common behavioral health conditions. A spinoff of Trinity College Dublin, it counts as US clients Kaiser Permanente, Optum, and Providence Health, plus over 80 percent of NHS’ mental health service. Conversa is a StartUp Health portfolio company that developed a scalable care management triage system for at-risk patients that provides automated patient outreach and engagement tools that can move them to higher levels of care where needed. Clients include Northwell Health, UCSF Health, UNC Health, Merck, MedStar Health, and Prisma Health. 

For Amwell, this expands their capabilities in the hot behavioral health area and, with Conversa, into a care management platform targeted to providers, pharma, and payers. They see digital workflows, patient engagement, a longer-term relationship with their consumer base through the continuum of care, through these two companies’ hospital, health system, health plan, and employer clients.

The wrinkle? Neither company is all that far along–SilverCloud has total funding of only $26 million but is more established with 750,000 clients and 300 organizations. Conversa’s Series B was a tiny $8 million for total funding of $34 million. Amwell also paid a premium price. According to Healthy Skeptic, a blog written by long-time UnitedHealth Group senior healthcare executive Kevin Roche, their combined revenue was $15 million–more than a 20x multiple of the purchase price. The other challenge for Amwell? Making all the systems work together in a meaningful way–and to market what can be a confusing picture properly. Amwell press release, Mobihealthnews

Update 2 August. The Irish Times, undoubtedly working a local contact at Silver Cloud, ascertained that Silver Cloud was purchased by Amwell for a price in excess of $250 million. That means a tidy payday of €23 million ($27.3 million) for the company’s founders – Ken Cahill, James Bligh, Karen Tierney, Dr John Sharry, and Gavin Doherty. If that is so, Conversa was bought for $70 million or less. One wonders why a shell game tactic was used, as Conversa is known to be an early-stage company. Hat tip to HISTalk today.

For Teladoc, growing beyond urgent care, plus integrating the former Livongo and InTouch Health, presents difficulties. Telehealth usage continues to shrink as in-person visits rebound save for behavioral health, which is also bad news for the payers as utilization goes up. Teladoc now struggles to add new members after last year’s pace. Their hospital business that came with last year’s acquisition of InTouch Health is growing more slowly than expected [TTA 16 July]. The expected cross-sales traction with the former Livongo hasn’t caught fire yet, but that may change with myStrength Complete and the myStrength app going live with health plans or employers starting this month. The first enterprise customers are a major Blues plan (likely HCSC) and a Fortune 100 employer. [TTA 14 May]. Teladoc is also growing into other areas with more continuous user engagement, such as chronic care, weight management, and primary care. That program, Primary360, is in “very very late-stage” discussions with multiple payers. Teladoc, which has never been profitable, lost $133.8 million for Q2.   Healthcare Dive

Funding news roundup: Philips buys Capsule, Hims’ SPAC + Privia partnership, Signify Health’s $100M IPO; closed funding for K Health, Aledade, Conversa Health

Royal Philips buys Capsule Technologies for $635 million, extending their integrated solutions platforms for patient care management. Capsule is a developer of medical device integration and data technologies, including vital signs monitoring and clinical surveillance services, for hospitals and healthcare organizations. These technologies connect medical devices and EMRs in hospitals through a vendor-neutral system. The deal will close in this quarter and Capsule’s approximately 300 employees will join Philips’ connected care segment. MassDevice, Philips release.

It’s all about the integration: Hims & Hers $1.6 bn SPAC completes, partners with Privia Health for telehealth and in-person visits. Now that Hims & Hers is now on the NYSE (courtesy of a ‘blank check’ with a division of Oaktree Capital Management) and valued at $1.6 billion, it continues its elevation out of e-commerce home delivery of erectile dysfunction and hair restoration meds to telehealth and in-person medicine. Starting about 18 months ago with virtual visits for minor maladies and mental health, Hims recently went beyond its homegrown capabilities with major providers such as New Orleans-based Ochsner Health System and New York City-based Mount Sinai Health System. Privia is a physician organization consisting of regional groups, ACOs, and specialty verticals in value-based care. Their addition to Hims will be for in-person and telehealth visits in the District of Columbia, Georgia, Maryland, Texas, and Virginia. In past months, it has been eagerly partnering with technology and analytics suppliers to build its management services portfolio. Another sign of more integration: Hims is also moving into pharmacy fulfillment after using outside suppliers. Hasn’t turned the profit corner yet, though. FierceHealthcare, Mobihealthnews

Signify Health signals an IPO. Going the more traditional route is Signify Health, which filed an S-1 registration statement with the SEC for a $100 million offering on the NYSE in the near future. Signify’s analytics and technology platform delivers through its mobile provider networks in-home health and care management services supporting major payers and value-based payment programs. Signify merged in 2019 with fellow, smaller New Mountain Capital company, the former Remedy Health, which specializes in managing providers through episodes of care/bundled payments under the CMS BPCI-A and commercial programs. It is not confirmed if New Mountain, a private equity company based in New York, will be exiting with the IPO. Signify Health release, FierceHealthcare.

Closing funding rounds:

Telehealth/AI platform K Health closed a $132M Series E round of funding led by GGV Capital and Valor Equity Partners, for a total since its 2016 start of $271 million. It also launched a pediatric version of the app, K for Parents. The app connects with doctors in 49 states but also uses health data, curated by AI, to provide patients with guidance for primary care, anxiety, and depression conditions. Release

Even non-telehealth or app-based healthcare companies are taking advantage of funding bounties. Aledade, a management services organization (MSO) for primary care practices, closed a $100 million Series D led by Meritech Capital Partners. Aledade partners with independent practices to organize ACOs in value-based care models. To date, Aledade has raised $249 million. Aledade release.

More modestly, Conversa Health closed its Series B at $20 million, up from $12 million. The round was led by Builders VC and Northwell Ventures. Conversa’s automated virtual care and triage platform remotely monitors, analyzes, and communicates with patients. During COVID, they developed COVID-19 Virtual Care Solutions, a mobile platform for hospitals to increase capacity by automating the outreach to and monitoring of vulnerable patient and employee populations. Release