Short takes: Virtual Therapeutics, Akili in $34M merger; why health clinics are struggling; Dollar General, DocGo call it quits; Clover Assistant AI debuts; fundings for Wanda Health (UK), Updoc (AU); Telstra buys out Fred IT (AU)

May 31, 2024 | by

Two mental health companies with complementary digital therapeutics plan to merge. Virtual Therapeutics, which approaches mental health through VR-enabled games, and Akili Interactive, with online prescription games designed for ADHD and other cognitive impairments, yesterday announced plans to merge. The new company will retain the Virtual Therapeutics name and go private, with Akili operating as a subsidiary. The cash buyout to Akili shareholders will be based on $0.4340 per share of common stock (Nasdaq) or $34 million, a premium around 4%. Akili had announced on 29 April that it was seeking “strategic alternatives”. Shares were trading then at $0.235 so the offering is over an 80% premium to that time. In May, Akili announced a reduced Q1 2024 net loss compared to Q4 2023. The transaction is expected to close in Q3, subject to Akili retaining a specified cash position and a tender conversion. Management transitions have not been disclosed. Release, MedTechDive

Why are all the health tech clinics struggling–at once? CNBC polls a group of experts and deduces that what it calls the “2.0 version of primary care” in Walmart Health, CVS Minute Clinics (closing dozens of Minute Clinics in Southern California and New England), and  Walgreens’ VillageMD, is foundering under:

  • Thin to non-existent margins–reimbursements are low, but the expenses of running them are high
  • Lack of ‘volume selling’
  • Lack of workforce–doctors don’t want to go to rural areas, which was Walmart’s bet. Nurse-practitioners can’t care for patients (and bill) if they also are detailed to do cleanup 
  • Cross-selling a flop–if you’re in for a pint of milk, Advil, or shampoo, you’re not going into the clinic, and vice versa

A 3.0 model may have a lot of variants, such as One Medical’s subscription model ($9/month for Amazon Prime members). Walgreens is opening a few in-store health clinics in the Hartford, Connecticut area to be run by Hartford HealthCare. In Arizona, a local Be Well Health Clinic near Arizona State University operates in a Walgreens and treats only sexual health issues. Kroger’s Atlanta-area Little Clinics will focus only on senior care.

One 3.0 experiment, DocGo’s vans in Dollar General parking lots, is over. Last year’s headscratching move to place DocGo’s urgent, preventative, and chronic care vans at specified hours in rural Dollar General parking lots [TTA 24 Jan 2023] was canceled some weeks ago. It never expanded beyond the three Tennessee locations, two in Clarksville and one in Cumberland Furnace that started last year. Endpoints

Health plan Clover to separately market their Assistant AI tool for clinical decision-making. Counterpart Assistant will be offered to other payers outside Clover Medicare Advantage along with providers in ACOs and value-based care enablers (sic) as an AI-assisted service, in a hybrid SaaS and per member per month (PMPM) shared-savings model. The pitch is to lower per-life customer acquisition cost and allow physicians to use one tool for all MA patients. FierceHealthcare

Fundings in UK and Australia:

UK’s Wanda Health adding a 30% investment from VC investment group NetScientific plc. Wanda Connected Health Systems Ltd. has operations in Bristol and Seattle.  It’s a second-time-around for NetScientfic, as it was an early Wanda investor but sold its 90% interest in Wanda US to Deeptech Disruptive Growth Investments Ltd in 2019. Wanda Health provides remote patient monitoring feeding into a virtual care platform. Insider Media

Australia’s Updoc telehealth raised A$20 million ($13.2 million) in investment from ASX-listed capital investor Bailador. It offers virtual consultations, online prescriptions, specialist referrals, pathology referrals, and medical letters for a single payment or on subscription. The funding will be used for international expansion and technology development. To date, it has served 200,000 Australians.  Mobihealthnews

In more news from Down Under, Telstra Health buys out the remainder of Fred IT Group. Telstra already owned 50% of the pharmacy IT solutions provider and is buying out the Victoria branch of the Pharmacy Guild of Australia and Paul Naismith, Fred IT co-founder and CEO. The CEO, management, and employees will remain in place. Fred IT, through eRx, is the only national electronic prescription delivery service in Australia since last year. Right Said Fred? Mobihealthnews

CVS, Walgreens, Walmart….Dollar General health clinics?

January 24, 2023 | by

Can Dollar Tree and Family Dollar be far behind? A possible new entrant to the onsite clinic wars may be Dollar General in piloting DocGo clinic vans in three Tennessee stores. DG Wellbeing will be providing urgent, preventative, and chronic care at three locations, two days a week each, with two in Clarksville and one in Cumberland Furnace, from 10am to 8pm based on current FAQs. DocGo vans will be located adjacent to the stores, in the parking lot. Appointments and walk-ins, Medicaid, Medicare, TRICARE, some commercial insurances, and cash are accepted.

Certain lab tests plus blood work are done either onsite or sent out. Medical staff on the van can write prescriptions. Some referrals (e.g. imaging) are done while other referrals are not available.

As to their strategy, you have to hand it to Dollar General. They get some good press from this. They are starting small in working through the details, outsourcing the healthcare part, and seeing if there’s sufficient demand to 1) expand and if promising 2) model the customer demographics–what we marketers call customer personas. If it doesn’t work, no Theranos-sized holes in their budgets–it’ll be GoneGone to DocGo.

Dollar General started to make moves into health about two years ago by noting the scarcity of health products in rural and underserved areas. They started to add more healthcare products (what they know about) on their shelves as part of the initial phase of the DG Wellbeing initiative and appointed a chief medical officer, Dr. Albert Wu. Currently, Wellbeing is in 3,200 stores (of 18,000+) with up to of 400 items per store. This past July, DG created a healthcare advisory panel including Dr. Patrick Carroll, chief medical officer of Vida Health; Dr. Katy Lanz, chief strategy and product officer at Personal Care Medical Associates and former chief clinical officer at Aspire Health; Dr. Von Nguyen, clinical lead of public and population health at Google; and Dr. Yolanda Hill, a board-certified physician in pediatrics and adolescent medicine. On Dollar General’s third quarter earnings call last December, CEO Jeff Owen noted the expansion of stores and the test of the DocGo vans to expand their services into rural health. Watch out Walmart, CVS, and Walgreens! Healthcare Dive, Forbes, Mobihealthnews

Their healthcare provider, DocGo, last week announced a partnership with Redirect Health, a platform offering directed to enterprises that provides on-demand, urgent mobile care to businesses in New Jersey and New York. DocGo SPAC’d on Nasdaq in 2021 and, unlike other SPACs, hasn’t cracked. Other than one wobbly point last year, it’s generally held its share price within a dollar or two of its initial offering range, which in this past year has to be considered good news.

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.