What’s next for telehealth in the (almost) aftermath–and rating the US states on policies

January 8, 2022 | by

crystal-ballWhat’s in that cloudy crystal ball?  Last year, especially the first half, saw telehealth acquisitions, stock prices and valuations hit the roof. The roof proved to be high but sturdy, as they bounced right back down, not unexpectedly. 

But gee whiz, Fast Company’s article seems to be shocked, shocked at all this, calling it a bubble. This Editor sincerely doubts that any investor that tracked telehealth over the last 10 years would have NOT expected this ride on the rollercoaster after the urgent care and practice offices reopened starting in mid-2020 and worked slowly through 2021. The rebound, as with health insurance payers, took a few months to work through into 2021. Telehealth usage in 2021 receded steadily to single digits, and at last report to just above 4% of claims as of October 2021 (FAIR Health US claims data).  What remains is the continued dominance of mental health–62% for mental health codes. It’s turned out that Babylon Health‘s SPAC was the last of the major action for 2021, getting in under the wire in October. 

It’s obvious that investors will be more realistic in assessing telehealth companies, looking at the areas that sustained telehealth usage, such as behavioral health. Another surprising niche is LGBTQ telehealth–Grand Rounds’ buy of Included Health in May, which then led to the entire company, including Doctor on Demand, adopting the name [TTA 20 Oct].

The other move that telehealth companies are making is to take more of the patient than a few virtual visits. They’ve moved into offering primary care teams to patients in employer plans (Babylon360 and Teladoc’s Primary360). Amazon Care moved into in-home health and clinics with Crossover Health. Amwell acquired SilverCloud for expanding behavioral health capabilities internationally, and stuck a toe into care management with their Converge platform and acquiring startup Conversa‘s health coaching app. The flip side is retail health migrating into in-person and virtual primary care–CVS Health and Walgreens, via VillageMD.

What also held telehealth back for over a decade of less than 1% was reimbursement by Medicare, Medicaid, and private insurers. The pandemic broke through that barrier. While it has narrowed considerably, CMS will still reimburse audio-only telehealth for behavioral health services, addiction treatment, and in-home health visits. State policies on telehealth practices can positively influence telehealth growth for patients and physicians. Free-market organizations Reason Foundation, Cicero Institute, and the Pioneer Institute have reported on all 50 on several policy metrics: 

  • In-person requirements
  • Modality neutral (asynchronous or synchronous, technology including audio, video, store and forward, and remote patient monitoring.)
  • No state barriers
  • All providers can use telehealth
  • Independent practice (including nurse-practitioners)
  • No coverage or payment mandates
  • Cross-state compacts

Rating the States on Telehealth Best Practices

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

November 19, 2021 | by

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): 

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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.

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

July 29, 2021 | by

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

January 27, 2021 | by

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