News and deals roundup: CoverMyMeds ‘big bang’, Noom’s $540M Series F, insurtech Bright Health’s IPO, Grand Rounds-Included Health, GoodRx, Cedar-OODA, Huma, Bluestream Health’s outreach

McKesson shmushes four units into CoverMyMeds. McKesson’s Big Bang combines four McKesson business units–RelayHealth (pharmacy networking), McKesson Prescription Automation (software), CoverMyMeds (medication access for patients), and RxCrossroads by McKesson (therapeutic and drug commercialization). They are being reassembled into one massive unit under the CoverMyMeds name. The unit will have about 5,000 people and will be headed by Nathan Mott. More here in a blog post/announcement posting that’s short on information and long on cheerleading.

And the funding rounds keep marching down the alphabet. Noom, the weight loss app, gained a generous Series F of $540 million led by Silver Lake with participation from Oak HC/FT, Temasek (Singapore), Novo Holdings, Sequoia Capital, RRE and Samsung Ventures. Valuation is now at $4 billion. Adam Karol, a managing director at Silver Lake, and former TaskRabbit chief executive Stacy Brown-Philpot will join Noom’s board. The fresh funding will be used to expand into areas such as stress and anxiety, diabetes, hypertension, and sleep.

Noom had a banner year in 2020, with $400 million in revenues as people tried to shed Pandemic Pounds (aided by a near-ubiquitous ad push). The app has had 45 million downloads to date in 100 countries, largely in the US, UK, Canada, Australia, Ireland, and New Zealand. According to a (paywalled) Bloomberg News report, feelers are out for an IPO which may be valued at $10 billion. TechCrunch, Reuters, FierceHealthcare

Bright Health Group filed its S-1 registration statement with the Securities and Exchange Commission (SEC). Their rumored $1 billion IPO will be on the NYSE and trade under the symbol BHG. Timing, share value, and number of shares are to be determined. It’s speculated that the valuation at that point is expected to be between $10 and $20 billion. Bright Health is an insurtech operating exchange and Medicare Advantage (MA) health plans under Bright HealthCare  in 14 states and 50 markets, covering over 620,000 lives. They also have a separate care delivery channel called NeueHealth, 61 advanced risk-bearing primary care clinics delivering in-person and virtual care to 75,000 unique patients. Last month, they purchased Zipnosis, adding their white-labeled telemedicine for large health systems business. Bright Health Group release, Mobihealthnews

Short takes:

Doctor on Demand and Grand Rounds, which finalized their merger earlier this month, have agreed to acquire Included Health. Terms and timing were not disclosed. Included Health specializes in care concierge and healthcare navigation services for the LGBTQ+ community. FierceHealthcare, Release

GoodRx acquired rival RxSaver for $50 million in cash in late April to bulk up against Amazon. FierceHealthcare

Medical billing and pre-visit tech company Cedar is acquiring payer workflow tech company OODA Health for $425 million deal in a mix of cash and equity. It’s expected to close at end of May. OODA’s co-founder, chairman, and co-CEO is Giovanni Colella, MD, also co-founded Castlight Health and founded RelayHealth (see above), so another successful exit for him. FierceHealthcare, HISTalk

London-based Huma, raised $130 million in a Series C. Leaps by Bayer and Hitachi Ventures led the round. The former, mysterious Medopad now seems to have settled on a platform that supports ‘hospital at home’ plus pharma and research companies in large, decentralized clinical trials. There’s an add-on of $70 million to the Series C that can be exercised at a later date. Release, HISTalk

White-label telehealth provider Bluestream Health is partnering with The Azadi Project to provide virtual care services to refugee women and girls fleeing from countries like AfghanistanIranIraq, and Syria for safety in Greece. “Bluestream Health has teamed with The Azadi Project to provide a virtual care platform that stretches around the world. The women fleeing war-torn and conflict-affected countries have suffered unspeakable abuse, and while seeking safety in Greece, they are further exposed to terrible living conditions and hostility.”  said Matthew Davidge, co-founder and CEO of Bluestream Health.  Release

Walmart Health moves into the hot telehealth area with MeMD buy

Retail giant Walmart’s health arm, Walmart Health, has agreed to purchase privately held telehealth provider MeMD. MeMD provides telehealth services in primary care, urgent care, women’s/men’s health, and mental health services to both individuals and organizations for their employees. Neither purchase price nor executive leadership transitions were disclosed. The transaction, which requires regulatory approval, is expected to close in the next few months.

The relatively low profile MeMD was founded in 2010 by ER physician and entrepreneur John Shufeldt, MD. The company is headquartered in Scottsdale, Arizona, and offers national coverage for its five million members.

A big move that indicates a strategic wobbliness? Walmart Health’s strategy has been a roller coaster over the past few years. Aggressively starting out of the gate in 2018 with high-profile exec Sean Slovenski leading and plans to open up 1,000 clinics, they retrenched in 2020 with his departure and slowed down the opening of Walmart Health locations. Virtual visits, which are merchandisable in-store and online, signal a different direction that may be easier to scale than brick-and-mortar locations, and have proven their market. Meanwhile, back at the stores, last month Walmart announced a partnership with Ro to put its trendy Roman men’s sexual health and vitamin product lines into 4,600+ Walmart stores starting 1 May. RetailBrew 

Looming in the background, of course, is CVS with their MinuteClinics, Walgreens with 500 free-standing VillageMD locations [TTA 4 Dec 20], and Amazon rolling out Amazon Care nationally. Walmart’s employees have used Doctor on Demand’s services, with the company dropping the visit cost to $4 during the pandemic. With the Grand Rounds merger [TTA 18 Mar], this may have been another reason for Walmart to bring in-house a telehealth provider. Who may be feeling the most heat from Walmart’s and Amazon’s moves? Teladoc and Amwell. Walmart release, Becker’s Hospital Review, Engadget

Weekend reading: the strange reasons why Amwell doesn’t consider Amazon a competitor; ground rules for the uneasy marriage of healthcare and technology

Yahoo Finance interviewed co-CEO/founder of Amwell Ido Schoenburg, MD on the company’s 2020 results and forecast for 2021. It makes for interesting but convoluted reading on their growth last year in what is a consolidating field where Amwell was once one of the undisputed two leaders. They now compete against payers acquiring telehealth companies (MDLive going to Optum) and mergers like Doctor on Demand-Grand Rounds that are taking increasing market shares. Then there are specialty providers like SOC Telemed and white-labels like Bluestream Health. However, there are a couple of whoppers in the happy talk of growth for all. Dr. S pegs the current run rate of telehealth visits at 15-20 percent. The best research from Commonwealth Fund (October) and FAIR Health (August) tracked telehealth at 6 percent of in-office visits. Epic Health Research Network measured 21 percent at end of August. [TTA summary here

Then there’s the tap dance around Amazon Care. His view is that telehealth companies all need a connective platform but that each competitor brings ‘modular components’ of what they do best. What Amazon excels at is the consumer experience; in his view, that is their contribution to this ‘coalition’ because healthcare doesn’t do that well. There’s a statement at the end which this Editor will leave Readers to puzzle through:  

“And Amazon and others could bring a lot of value to those coalitions, they should not be seen as necessarily competing unless you’re trying to do exactly what they do. And there are some companies, including some telehealth companies, that that’s what they do. They focus on services. They try to sell you a very affordable visit with a short wait time and a good experience. They should be incredibly concerned when someone so sophisticated as Amazon is trying to compete in that turf.”

The last time this Editor looked, none of these companies were non-profit, though nearly all are not profitable.

Gimlet EyeLooking through her Gimlet Eye, Amazon Care is a win-win, even if the whole enterprise loses money. In this view, Amazon accumulates and owns national healthcare data far more valuable than the consumer service, then can do what they want with it, such as cross-analysis against PillPack and OTC medical shopping habits, even books, toys, home supplies, and clothing. Ka-ching!

A ‘bucket of cold water’ article, published in Becker’s Health IT last month, takes a Gimlety view of the shotgun marriage of healthcare and technology. Those of us laboring in those vineyards for the better part of two decades might disagree with the author in part, but we all remember how every new company was going to ‘revolutionize healthcare’. (The over-the-top blatherings of ZocDoc‘s former leadership provide a perfect example.) The post-Theranos/Outcome Health/uBiome world has demonstrated that the Silicon Valley modus operandi of ‘fake it till you make it’ and ‘failing fast and breaking things’, barely ethical in consumer businesses, are totally unethical in healthcare which deals in people’s lives. Then again, healthcare focused on ‘people as patients’ cannot stand either. Stephen K. Klasko, MD, President and CEO, Thomas Jefferson University and Jefferson Health in Pennsylvania, advocates for a change–far more concisely than Dr. Schoenburg. You may want to pass this along.

Two major moves and what they mean: Doctor on Demand, Grand Rounds to merge; Amazon Care will go national by summer (updated)

This week’s Digital Health Big Deal (as of Wednesday!) is the merger agreement between telehealth/virtual visit provider Doctor on Demand and employer health navigator Grand Rounds. Terms were not disclosed. It’s important because it extends Grand Rounds’ care coordination capabilities beyond provider network navigation and employee clinical/financial tools for six million employees into an extensive telehealth network with 98 million patients in commercial, Federal, and state health plans.

Both companies had big recent raises–$175 million for Grand Rounds in a September 2020 Series E (Crunchbase) and Doctor on Demand with a $75 million Series D last July (Crunchbase). The transaction is a stock swap with no cash involved (FierceHealthcare, CNBC), and the announcement states that the two companies will operate under their own brands for the time being. Owen Tripp, co-founder and CEO of Grand Rounds, will run the combined company, while Doctor on Demand CEO Hill Ferguson runs DOD and joins the board. The combined company is well into Double Unicorn status with over $2 bn in valuation. Also Mobihealthnews.

What it means. Smaller (than Teladoc and Amwell) telehealth companies have been running towards M&A, with the most recent MDLive joining Optum’s Evernorth [TTA 27 Feb] creating interstate juggernauts with major leverage. Doctor on Demand was looking at their options for expansion or acquisition and decided 1) the time and the $ were right and 2) with Grand Rounds, they could keep a modicum of independence as a separate line while enjoying integration with a larger company. The trend is profound enough to raise alarms in the august pages of Kaiser Health News, which decries interstate telehealth providers competing with small and often specialized in-state providers, and in general the loosening of telehealth requirements, including some providers still only taking virtual visits. Contra this, but not in the KHN article, this Editor has previously noted that white-labeled telehealth providers such as Zipnosis and Bluestream Health have found a niche in supplying large health systems and provider groups with customized telehealth and triage systems.

UPDATED. In the Shoe Dropping department, Amazon Care goes national with virtual primary care (VPC). To no one’s surprise after Haven’s demise, Amazon’s pilot among their employees providing telehealth plus in-person for those in the Seattle area [TTA 17 Dec 20] is rolling out nationally in stages. First, the website is now live and positions the company as a total care management service for both urgent and primary care. Starting Wednesday, Amazon opened the full service (Video and Mobile Care) to other Washington state companies. The in-person service will expand to Washington, DC, Baltimore, and other cities in the next few months. Video Care will be available nationally to companies and all Amazon employees by the summer.

Notably, and buried way down in the glowing articles, Amazon is not engaging with payers on filing reimbursements for patient care. Video Care and Care Medical services will be billed directly to the individual who must then send for reimbursement to their insurance provider. The convenience is compromised by additional work on the patient’s part, something that those of us on the rare PPO plans were accustomed to doing back in the Paper Age but not common now. It also tends to shut out over 65’s on Medicare and those on low-income plans through Medicaid. It is doubtful that Amazon really wants this group anyway. Not exactly inclusive healthcare.

TechCrunch, FierceHealthcare. Jailendra Singh’s Credit Suisse team has a POV here which opines that Amazon continues to have a weak case for disruption in VPC, along with their other healthcare efforts, and an uphill battle against the current telehealth players who have already allied themselves with employers and integrating with payers.

An admittedly skeptical take on the $18.5 billion Teladoc acquisition of Livongo (updated for additional analysis)

Gimlet EyeIs it time to call back The Gimlet Eye from her peaceful Remote Pacific Island? Shock acquisitions like Wednesday’s news that Teladoc is buying ‘applied health signals’ platform developer Livongo may compel this Editor to Send a Message by Carrier Seagull. 

Most of the articles (listed at the bottom) list the facts as Teladoc listed them in their announcement. We’ll recap ‘just the facts’ here, like Joe Friday of ‘Dragnet’ fame:  

  • The merged company will be called Teladoc and be headquartered in Purchase, NY. There is no mention of what will happen to operations and staff currently at Livongo’s Mountain View California HQ. 
  • The value of the acquisition is estimated at $18.5 bn, based on the value of Teladoc’s shares on 4 August. As both are public companies (Livongo IPO’d 25 July 2019, barely a year ago), each share of Livongo will be exchanged for 0.5920x shares of Teladoc plus cash consideration of $11.33 for each Livongo share. When completed, existing Teladoc shareholders will own 58 percent of the company and Livongo shareholders 42 percent. 
  • Closing is stated as expected to be in 4th Quarter 2020
  • Expected 2020 pro forma revenue is expected to be approximately $1.3 billion, representing year over year pro forma growth of 85 percent.

The combination of the two is, this Editor admits, a powerhouse and quite advantageous for both. It is also another sign that digital health is both contracting and recombining. Teladoc has over 70 million users in the US alone for telemedicine services and operates in 175 countries. Livongo is much smaller, with 410,000 diabetes users (up over 113 percent) and over 1,300 clients. They reported 2nd Q results on Tuesday with a revenue lift of 119 percent to $91.9 million but with a net loss of $1.6 million. 

What makes Livongo worth $18.5 bn for Teladoc? Livongo has made a major name (to be discarded, apparently) in first, diabetes management, but has broadened it into a category it calls ‘Applied Health Signals’. Most of us would call it chronic condition management using a combination of vital signs monitoring, patient data sets, and information from its health coaches to make recommendations and effect behavior change. Perhaps we should call it their ‘secret sauce’. For Teladoc, Livongo extends their virtual care services and provider network with a data-driven health management company not dependent on virtual visits, and integrates the virtual visit with Livongo’s coaching. It also puts Teladoc miles ahead of competition: soon-to-IPO Amwell, Doctor on Demand ($75 million Series D, partnerships with Walmart and Humana), MDLive, and ‘blank check’ SOC Telehealth. For Livongo’s main competitor in the diabetes area, Omada Health, it puts Omada certainly in a less competitive spot, or makes it attractive as an acquisition target.

It is also a huge bet that given the huge boost given by the COVID pandemic, the trend towards remote, consumer healthcare and management is unstoppable. Their projection is (from the release): expected 2020 pro forma revenue of approximately $1.3 billion, representing year over year pro forma growth of 85 percent; in year 2, revenue synergies of $100 million, reaching $500 million on a run rate basis by 2025. 

Taking a look at this acquisition between the press release and press coverage lines:

  • The market same day responded poorly to this acquisition. Teladoc was off nearly 19 percent, Livongo off 11 percent. (Shares typically recover next day in this pattern.) Livongo had, as mentioned, recently IPO’d and was experiencing excellent growth compared to Teladoc which was boosted by the pandemic lockdown. This Editor also recalls Teladoc’s financial difficulties in late 2018 with the resignation of its COO/CFO on insider trading and #MeToo charges.
  • The projected closing is fast for a merger of this size–five months.
    • Teladoc does business in the Medicare (Federal) and Medicaid (state) segments. It would surprise this Editor if the acquisition does not require review on the Federal (CMS, DOJ) and state health insurance levels, in addition to the SEC.
    • Merging the two organizations operationally and experiencing all those synergies is not done quickly, and cannot officially happen until after the closing. A lot is done formally behind the scenes as permitted, which has the effect of hitting the rest of the company like a hammer.
  • Unusually, the release does not advise on what Livongo senior executives, including Livongo founder Glen Tullman and CEO Zane Burke, will be coming over to Teladoc. The only sharing announced will be on the Board of Directors. It’s quite an exit for the senior Livongo staff.
  • Both have grown through acquisition. These typically present small to large organizational problems in merging the operations of these companies yet another time into yet another structure. There’s also always some level of client discomfiture in these mergers as they are also the last ones to know.
    • Livongo bought myStrength in 2019, RetroFit in 2018, and Diabeto in 2017. 
    • Teladoc just closed on 1 August its acquisition of far smaller, specialized hospital/health system telehealth provider InTouch Health. Originally a bargain (in retrospect) at $600 million in $150M cash and 4.6 million shares of TDOC stock, after 1 July’s closing, due to the rise in Teladoc’s stock, the cost ballooned to well over $1bn.
  • Neither company has ever been profitable

Your Editor can speak personally and recently to the wrench in the works that acquisitions/mergers of this size present to both organizations. Livongo is a relatively young and entrepreneurial organization in California with about 700 employees, compared to Teladoc’s approximately 2,000 or more internationally. Their communications and persona stress strong mission-driven qualities. On both sides, but especially on the acquired company side, people have to do their short and long term work amid the uncertainty of what this will mean to them. Senior management is distracted in endless meetings on what the merged organization will look like–departments, where will they be, who stays, who is packaged out, and when. Especially when the press releases make a point of compatible cultures, on the contrary, you may be assured that the cultures are very different. The bottom line: companies do not achieve $60 million in cost synergies without interrupting the careers of more than a few of their employees.

Another delicate area is Livongo’s client base, both individual and enterprise. How they are being communicated with is not necessarily skillful and reassuring. Often this part is delayed because the people who do this in the field aren’t prepared.

One has to admire Teladoc, almost without needing a breath, coming up with $18.5 billion quite that quickly from their financing partners after the InTouch acquisition. The growth claimed for the combined organization is extremely aggressive, on top of already aggressive projections for them separately. It’s 18x 2021 enterprise value to sales (EV/S) targets. The premium paid on the Livongo shares is also stunning: $159 per share including $550 million in convertible debt.  If patients start to return to offices and urgent care, Teladoc may have trouble meeting its aggressive goals factored into both share prices, as Seeking Alpha will explain.

Editor’s final comment: In the early stage of her marketing career, this Editor had a seat on the sidelines to much the same happening in the post-deregulation airline business–debt, buyouts, LBOs, and huge financings. Then there is the morning after when it’s all sorted out.

Wednesday’s coverage: TechCrunch, Investors Business Daily, STATNews, mHealth Intelligence, FierceHealthcare, MotleyFool.com

Joint announcement website    Investor Presentation    Hat tip to an industry observer Reader for assistance with the financial analysis.

For a follow-up analysis (with apologies to Carson McCullers): Reflections in a Gimlet Eye: further skeptical thoughts on the Teladoc acquisition of Livongo

News Roundup: Doctor on Demand’s $75M Series D, Google’s Fitbit buy scrutinized, $5.4 bn digital health funding breaks record

More evidence that telehealth has advanced 10 years in Pandemic Time. Doctor on Demand, estimated to be the #3 telemedicine provider behind Teladoc and Amwell, announced a Series D raise of $75 million, led by VC General Atlantic plus their prior investors. This increases their total funding to $240 million.

Unlike the latter two, DOD actively courts individual users in addition to companies and health plans. In May, they announced that they were the first to be covered under Medicare Part B as part of the CMS expansion of telehealth services in response to the pandemic (and for the duration, which is likely to be extended past July), which would reach 33 million beneficiaries. Other recent partnerships include a pilot with Walmart for Virtual Primary Care in three states (Colorado, Minnesota, Wisconsin) in conjunction with Grand Rounds and HEALTHScope Benefits as well as with Humana for On Hand Virtual Primary Care (regrettably only a video clip on the DOD press site with the noisome Jim Cramer). DOD covers urgent, chronic, preventative care, and behavioral health and claims about 98 million users, doubled the number of covered lives in 1st half 2020, and passed 3 million visits. Crunchbase NewsMobihealthnews

Google’s Fitbit acquisition scrutinized by EU and Australia regulators, beaten up by consumer groups in US, EU, Canada, Australia, and Brazil. None too happy about this acquisition is a swath of powerful opponents.

  • EU regulators have sent 60-page questionnaires to both Google and Fitbit competitors asking re the effect the $2.1 bn acquisition will have on the wearables space, whether it will present disadvantages to competitors in Google’s Play store, and how Google will use the data in their advertising and targeting businesses. While #2 and 3 are no-brainers (of course it will present a competitive disadvantage! of course, they’ll use the data!), it signals further investigation. The next waypost is 20 July where EU regulators will present their decision.
  • The Australian Competition and Consumer Commission (ACCC) announced in mid-June their concerns in a preliminary decision, though they don’t have the jurisdiction to block it. “Buying Fitbit will allow Google to build an even more comprehensive set of user data, further cementing its position and raising barriers to entry to potential rivals,” according to ACCC Chairman Rod Sims. This adds to the controversy Down Under on how Google and other internet companies use personal information. Final statement is 13 August. Reuters
  • The US Department of Justice is also evaluating it, as is the Federal Trade Commission. But an acquisition like this doesn’t easily fall under antitrust regulation as Google and Fitbit aren’t direct competitors. Fitbit has only about 5 percent of the fitness wearable market. However, this plays into another related investigation by DOJ — Google’s abuse of advertising data and its dominance of the market in tech tools such as Google Ad Manager in the US. DOJ asked competitors for information at the end of June. There are separate investigations by state attorneys general and also by Congress of Google and Apple. Reuters
  • The consumer group opposition rounds up the usual suspects like Open Markets Institute, Omidyar Network, Center for Digital Democracy, Open Knowledge and Public Citizen in the US, and in the EU Open Society European Policy Institute and Access Now. Their grounds expressed in a letter to regulators in the above countries are the usual dire-sounding collection of “exceptionally valuable health and location datasets, and data collection capabilities.” Sound and fury….

It will keep Google’s attorneys in DC, Brussels, and elsewhere quite busy for a lot longer than perhaps Google anticipated. Meanwhile, Fitbit is in the Twilight Zone. The Verge, Android Authority, FierceHealthcare 

US digital health companies smash funding records in 1st half 2020. Despite–or because of–the pandemic, US digital health investment funding tracked by Rock Health is at a torrid pace of $5.4 bn–$1.2 bn above the record first half posted in 2019.  That is despite a pullback in 1st Q + April.

Investors came roaring back in May and June, spurred by telehealth success and a rallying market, closing 2nd Q with $2.4 bn in investment. That was 33 percent higher than the $1.8 bn quarterly average for the prior three years. And the deals were big: on average $25.1 million, with the big boosts in Series C and bridge financing. M&A is still cloudy, but what isn’t? Notably, Rock Health is not projecting a final year number, a good move after they stubbed their collective toe on last year’s final investment total, down from both forecast and 2018. [TTA 7 Feb]

The big moves of 1st half in real digital health (not fitness) were Teladoc-InTouch Health (just closed at $600 million stock and cash) and Optum-AbleTo (at a staggering $470 million, which has apparently not moved past the ‘advanced talks’ state). Two of last year’s Big IPOs–Phreesia and Livongo— are doing just fine; Health Catalyst not so much. The bubble bath we predicted turned out to be a cleansing one–but there’s six months more to go. Also Mobihealthnews

Optum rumored on the digital health acquisition hunt again with AbleTo virtual behavioral health

Optum, the part of UnitedHealthGroup that runs engagement, technology, and financial services for UHG, is in advanced negotiations to acquire AbleTo, a New York City-based behavioral health and virtual therapy provider, according to CNBC. Unusually, there is also a number attached: $470 million, about 10 times their forward revenue.

AbleTo is already well acquainted with Optum, as their Ventures arm provided financing in January 2019 in a corporate round. Over the past 12 years, the company has raised close to $47 million through a Series D. Interestingly, one of the early investors was Aetna, pre-CVS. Crunchbase

Optum of late has been on an acquisition tear, with first dialysis provider DaVita for $5 billion and then telehealth/remote patient monitoring company Vivify Health for an undisclosed but certainly far less amount. AbleTo is attractive not only in the context of telehealth (at last the belle of the ball!) but also for the underserved behavioral health market. Confirmation of its attractiveness? A fresh crop of competitors such as Quartet Health, Lyra, and ‘traditional’ telemedicine providers such as Doctor on Demand.

AbleTo was founded by Michael Laskoff, at one time quite the ‘face’ in the NYC digital health scene, who went on some years back to found another behavioral health company, Annum Health, focusing on alcohol addiction. AbleTo is one of the pioneers of virtual therapy, both telephonic and audio/video, using care teams of coaches and LCSWs to provide short-term cognitive therapy sessions. It is certainly an underserved market with over 50 percent of those researched citing cost and stigma to not obtain treatments, with about 2/3rds surprisingly under age 50, but not surprisingly about half with one or more chronic conditions. Most of its business is with payers and self-funded companies, although it still offers individual therapy plans.   Mobihealthnews

News and event roundup: Amazon PillPack, Humana joins CTA, NH’s telemedicine go, Fitbit Lives Healthy in Singapore, supporting Helsinki’s older adults, events

Now that we are past the unofficial end of summer, it’s time to spin that lasso and rope us some news.

Amazon’s PillPack loses a critical data partner. Electronic prescriptions clearinghouse Surescripts terminated their data contract with ReMy Health, which supplied PillPack with information on patients’ prescriptions. Surescripts found fraud in several areas of their relationship with ReMy Health including medication history, drug pricing, and insurance billing. Now PillPack has to obtain it the old-fashioned way–by asking the patient. This can lead to errors and inaccuracies in things like dosages and whether a drug is brand-name or generic. Now PillPack, in the lurch, is seeking a direct relationship with Surescripts. Seeking Alpha, CNBC

Health plan Humana is the first payer to join the Consumer Technology Association (CTA). Humana has been building up his data analytics and digital health capabilities with new ‘studios’ in Boston and hiring USAA’s CTO.  It’s piloting an app for Medicare Advantage patients to connect them with pharmacists and medication management via Aspen RxHealth plus working on a virtual digital primary model with telemedicine provider Doctor on Demand. Fierce Healthcare

New Hampshire is joining the telemedicine reimbursement bandwagon, with its legislature and Gov. Sununu approving primary care providers and pediatricians to bill Medicaid and private insurance for telemedicine visits starting in January 2020. This also ties into rural telehealth. AP, Mobihealthnews

Internationally….Fitbit is partnering with Singapore’s Health Promotion Board (HPB) for the Live Healthy SG behavioral change program, based on the Fitbit Premium program, starting in late October. Mobihealthnews A-P   In Finland, Digital Service Center Helsinki is creating digital tools and virtual care systems to enable older adults to safely and independently live at home, including socialization to prevent loneliness. It’s a significant challenge as over 22 percent of Finland’s population is over 65. Mobihealthnews Europe-UK

Events:

The 9th International Digital Public Health Conference series (#DPH2019), 20-23 November, Marseille, France. This conference is billed as the digital health partner of the 12th European Public Health Conference and brings together the areas of public health, computer and data science, medtech, and NGOs. Conference information here.

Aging 2.0 New York Global Innovation Showcase 4 December, NYC. One of a series of global Aging 2.o events, startups will present aging-focused innovations. Want to pitch? It’s still open–apply here. Register to attend here. Additional information on this and on CREATE’s Design for Older Adults Workshop on 21-22 October at Weill Cornell is here.

 

Breaking News–Teladoc: while accredited by NCQA, placed on ‘under corrective action’ status (updated)

Breaking News. Teladoc–one of the two giants in telemedicine–has been placed on ‘under corrective action’ status in its latest (15 May) two-year accreditation with the National Committee for Quality Assurance, better known by its initials, NCQA. Their next review is slated for six months (18 Nov).

According to the earliest breaking report on Seeking Alpha, a business and stock market website, the move to ‘corrective action’ status has been brewing for some time. Teladoc was the first telemedicine company to win this coveted status in 2013. Now, of course, all major telemedicine players have this accreditation.

This is the latest mark against the company, which has gone through some recent ‘interesting times’ financially with accounting problems based on booking stock awards (2018), the CFO’s resignation, and lack of replacement. The report by a ‘bear’ on the stock indicates that its large contract with Aetna, among others, is up for renewal.

Exactly what this ‘corrective action’ is related to has not been made public by either NCQA or Teladoc. Comments under the article sourced from a Wells Fargo analyst that the action is arising from a workflow that Teladoc uses for credentialing providers.

A good portion of this article discusses revisions on the Teladoc website and marketing materials which ensues when something like this happens and it is the basis for a superiority or credentialing claim.

NCQA is a non-profit that advocates quality standards and measures for healthcare organizations, health plans, and organizations that provide services to the former. Their standards are widespread in the industry as a means of review and accreditation for providers and hospitals, as well as incorporated into quality metrics used by HHS and CMS. For those who may not be able to access the full article–requires free membership (but you’ll get emails) registration with the Seeking Alpha site–attached is a PDF of the article.

Update: While to the ‘bear’ Teladoc is a glass half empty and cracked, to another Seeking Alpha writer, the glass is more than half full even though the company continues to run substantial losses. Here’s an analysis that is mostly positive, though acknowledging the issues above.

Suddenly hot: chronic condition management in telehealth initiatives at University of Virginia and Doctor on Demand

Chronic condition monitoring is suddenly hot. UVA has been a telehealth pioneer going back to the early oughts, with smart homes, sensor based monitoring, and remote patient monitoring. Their latest initiatives through the UVA Health System focus on preventing or managing chronic conditions. It will include remote monitoring for patients with diabetes, screenings for patients with diabetic retinopathy, home-based cardiac rehabilitation programs for heart failure patients and streamlined access by primary care physicians to specialists through electronic based consults. The program will also include specialized trainings for health care providers.

The programs are being funded by a $750,000 grant from the federal Centers for Disease Control and Prevention (CDC) and the Virginia Department of Health. UVA press release, Mobihealthnews

Mobihealthnews earlier noted that Doctor on Demand, a smaller commercial telehealth company, is also expanding in the management of chronic conditions through a new service, Synapse, that creates a digital medical home for personal data. This data can include everything from what is generated by fitness trackers to blood pressure monitors. The data can be directly shared with a provider or across health information exchanges and EMRs. Doctor on Demand plans to use this longitudinal data to identify gaps in care and increase access to healthcare services–and also integrate it into existing payer and employer networks.

This Editor recalls that this was a starting point for telehealth and remote patient monitoring as far back as 2003, but somehow got lost in the whiz-bang gadget, Quantified Self, and tablets for everything fog. Back to where we started, but with many more tools and a larger framework.

$6.8 bn in digital health funding through Q3 blows the doors off 2017: Rock Health

And the money rolls in. All Rock Health had to do was wait a quarter to get breathless [TTA 4 July], because digital health funding through Q3 is now exceeding the full year 2017 by $1.1 bn. The average deal size has accelerated substantially–$23.6 million versus last year’s $16.4 million. The deals are bigger but fewer–290 so far versus 357 last year–and the length of time between funding rounds has consistently grown shorter. 

Another proportional shift is the growth of Series B and C startups, at long last, and a more than doubling of D+ deals.

A big shift in this quarter were that the stars lined up, perhaps for the first time, with at-home and on demand health. American Well of course at $291 M loaded these dice, but also benefiting from the throw were the similar Doctor on Demand, Honor (home care), and NowRx med delivery service. Faster meds at lower cost have become a major area of action (Amazon with PillPack, TelePharm, others). Digital therapeutics that help to monitor health at home followed from Pear Therapeutics, Click Therapeutics, Akili Interactive, Virta Health, Propeller Health, and Hinge Health. 

And where the money comes from? Independent venture funds still account for 63 percent, and corporate VCs for 15 percent.  Some of those CVCs are major names such as GSK, Abbott, and Cigna. Big tech is also moving into healthcare, with Amazon’s $1bn acquisition of PillPack, the Apple Watch 4, Google’s Nest.

Rock Health’s trend prediction is continued consolidation in digital health, with companies continuing to acquire each other. “With available capital and a desire to build out product lines, talent, and client bases, it’s not surprising to see a great deal of M&A activity within digital health.” One example given is Welltok, which plays in the consumer health ‘activation’ area, and their acquisitions from corporate health management programs to Wellpass, which has created such as Text4Baby, Text2Quit and Care4Life and whose largest customer is state Medicaid plans.

Keep in mind that Rock Health tracks deals over $2 million in value from venture capital, excluding government and grant funding. They omit non-US deals, even if heavily US funded.

Rock Health’s report. Healthcare Dive.  Mobilhealthnews‘ own top 17 M&As, which include Best Buy-GreatCall and Logisticare-Circulation in the burgeoning area of non-emergency medical transport (NEMT).

A mHealth refutation of ‘Why Telemedicine is a Bust’

Worth your time over a long coffee is David Doherty’s lengthy analysis of a recent article published on the CNBC website on the ‘failure’ to date of what was supposed to revolutionize healthcare, the telemedicine ‘video visit’. Mr. Doherty counters point-by-point that the concept of telemedicine is already out of date–that the future of healthcare is with mobile devices, such as the EKG-taking KardiaMobile. He points to the distrust of large telemedicine companies such as Doctor on Demand and American Well as being heavily wedded to health insurers (the prevalent business model), selling/trading patient information, and breaking the individual doctor-patient relationship.

Mr. Doherty sees the future of telemedicine enabling individual doctors to better serve their patients on several levels–video consults, monitoring, and via high-quality apps–seamlessly.  But the insurer-employer-practice model is hard to break indeed, as American Well, Teladoc, and Doctor on Demand–all of which started with a DTC model–found out. And reimbursement is improved, but discouraging. mHealth Insight

Is telemedicine attractive to hypochondriacs?

An article in MIT Technology Review takes a sideways look at telemedicine and asks if telemedicine is providing an easy route for people suffering from excessive anxiety about their health. The author, Christina Farr, suggests that the ease of contacting a doctor using telemedicine services in comparison to having to visit a doctor’s office and the ability use either insurance or direct payments makes these services more attractive to hypochondriacs (lately called those with somatic symptom disorder).
Views on the subject are quoted from the chief medical affairs officer at MDLive, Deborah Mulligan, and a board member of Doctor on Demand, Bob Kocher. While the first is able to relate an anecdote where a case of excessive anxiety disorder was identified and successfully referred to cognitive behavioral therapy, the latter says he isn’t aware of any patients with health anxiety regularly using the Doctor on Demand app.

Read the full article here.

The growth of telehealth, and the confusion of terminology (US)

Becker’s Health IT and CIO Review has written up a US-centric review of recent advances in telehealth and telemedicine but kicks it off with the confusion level between the two terms. Internationally, and in these pages, they are separate terms; telehealth referring primarily to vital signs remote monitoring, and telemedicine the ‘virtual visit’ between doctor and patient, between two clinical sites, or ‘store and forward’ asynchronous exchange (e.g. teleradiology). Somehow, in US usage, they have been conflated or made interchangeable, with the American Telemedicine Association (ATA) admitting to same, and American Well simply ‘just doing it’ in relabeling what they provide. On top of it, the two are incorporating elements of each into the other. Examples: TytoCare vital signs measurement/recording into American Well’s video visit; Care Innovations Health Harmony also providing video capability.

Of particular interest to our international readers would be the high rate of US growth in telemedicine utilization from 7 to 22 percent (Rock Health survey). Teladoc, the largest and publicly traded provider, passed the milestone of 100,000 monthly visits in November and the ATA estimates 1.25 million from all providers for 2016 (Teladoc release). Other US competitors include the aforementioned American Well, MDLive, and Doctor on Demand, the latter two also selling direct to consumer. They also compete against doctor-on-house call services like Pager and Heal. Reimbursement remains an issue both privately and publicly (Medicare and Medicaid) on a state-by-state level, with telehealth experiencing significant difficulties, as well as internet access, speed, and usage by older adults.

A ‘next generation’ house call from the patient’s perspective

Guest editor Sarianne Gruber (@subtleimpact) attended May’s d.health Summit on Aging in NYC. She reflects on moderator Christina Farr’s (immediately prior) direct experience with a virtual visit (convenience, proactive care–and utter frustration with her payer) and what the telemedicine ‘next gen’ provider panelists see as their advantages in fixing a fractured healthcare system.

Christina Farr had a “Next Generation” house call for the first time. The on-demand doctor’s visit provided her care and resolved the possibility of a trip to the emergency room, and best of all she felt great. Ms. Farr, an award-winning health and technology journalist, happen to have had her encounter just days prior to the d.Health Summit. Coincidentally, she was to be the moderator for a panel of prominent telehealth business leaders on this very topic. Curious after having had this experience, she wanted to know whether most cases were like hers wondering if they should go to ER, or were the visits more for routine things like coughs and colds, or did people just want a prescription. The d.Health panelists included Damian Gilbert, Founder & CEO of TouchCare (@touchcarehealth), Oscar Salazar, Chief Product Officer and Co- Founder of Pager (@getpager), Dr. Ian Tong, Chief Medical Officer of Doctor on Demand (@drondemand), and Dr. Roy Schoenberg, Co-Founder, and CEO of American Well (@americanwell).  (more…)

Unintended consequences: American Well loses, loses patent, to Teladoc

On Tuesday, the Federal District Court of Massachusetts not only dismissed the American Well patent infringement lawsuit against Teladoc, but also invalidated American Well‘s patent, held by co-founder Dr. Roy Schoenberg since 2009. It was invalidated on the grounds that the claims in the patent were “too abstract” to be patentable and do not “amount to an inventive concept.” American Well is appealing the court decision.

Teladoc started this call-and-response in March 2015 by petitioning the USPTO (US Patent and Trademark Office) to invalidate several American Well patents. (AW claims to hold 28 patents and 22 pending applications). Shortly before Teladoc’s IPO on the New York Stock Exchange last June, American Well sued Teladoc on patent infringement. Those in the industry saw an effort to scupper the IPO. Our Editor Chrys at the time took a decidedly jaundiced view of American Well’s grounds for infringement:
This author is wondering who thought this was such a novel technology as to warrant a patent? What were they thinking? Having worked on developing unified messaging systems for a mobile phone operator at the turn of the century (now that’s a scary 15 years ago) I am just picking myself off the floor after reading this.
Surely all these functions are no more than what is in every instant messaging program, dating back to 1990s? Replace the words “medical service provider” by “friends” or “contacts” and “consultation” by “chat” or “call” it seems to me you get … Skype and Face Time and more! [TTA 9 June 15]
No matter, the result was yesterday’s double shot of a decision. In addition, three Teladoc complaints against American Well‘s patents to invalidate them are still in progress with the USPTO. A triple, anyone? MedCityNews, Teladoc press release, American Well press release
All this is despite the sobering facts that telemedicine has been unprofitable to date–and that IP wars have unintended consequences. (more…)