TTA Where *Is* Spring? 3: SPACs–why they cracked, Hinge Health and FTC-PBM delays, Transcarent’s tune change, UK’s pivot on NHS research data, why OpenAI is losing its way, more!

April 11, 2025 | by

 

11 April 2025

It’s still a chilly Spring in your Editor’s whereabouts, but we have, fresh out of the hothouse, a bumper crop of news and opinion. The big read for the weekend is Halle Tecco’s quantifying of the Cracked SPAC phenomenon and what’s happened with OpenAI. Transcarent closes its Accolade buy and changes its tune to ‘one place’, Walgreens doing a bit better. In touting, Keir Starmer’s bet on NHS data research and Elon Musk on human trials for Neuralink Blindsight. Hinge Health may postpone its long-awaited IPO and FTC pauses its long-awaited toss of the book at PBMs. Plus a new Perspectives on rural healthcare and telehealth.

The weekend read: why SPACs came, went, and failed in digital health–the Halle Tecco analysis/memorial service; why OpenAI is going to be a bad, bad business (Grab the cuppa and lunch for a good read and podcast) 

Extra, extra!: ATA Action forms Virtual Foodcare Coalition, Ophelia and Spring Health partner on opioid treatment, ISfTeH renews NSA status with WHO (More action from ATA Action and a partnership to watch in telementalhealth)

Midweek roundup: Transcarent closes Accolade; Walgreens beats Street; New Mountain Capital’s Office Ally buy-in; Neuralink Blindsight human trial coming up; PM Keir Starmer touts NHS data research; FTC’s PBM litigation break (Transcarent’s pivot?)

Rock Health’s digital health Q1: more money, fewer deals, more additions and partnerships in ‘leapfrogging’ (Still in a minor key this year)

News roundup: Hinge Health may postpone IPO, Rite Aid may enter 2nd bankruptcy, Veterans Affairs committees want new EHR costs & timeline, fired Texas health plan head hired private eyes to spy on members, providers, lawmakers (The last one is shocking)

Perspectives: Bridging the Gap in Rural Healthcare Through Telehealth (From Yosi Health)

Last week: A relatively light news week in a so-far chilly, stormy Spring. Our top article is not one, but two dives into the Unicorn Known as Hippocratic AI. 23andMe’s sale isn’t attracting a lot of buyers (deliberate?) but presents even more problems for the users who took their surveys. Dr. Oz confirmed for CMS as HHS goes on a GLP-1 diet and then some. VA adds to their Oracle 2026 rollout, ATA Action enlarges, and DOJ seeks execution for Brian Thompson’s assassin.

News roundup: 9 additional VA centers named for Oracle 2026 EHR rollout; ATA Action acquiring, expanding with DTA; Dr. Oz to lead CMS while HHS cuts; DOJ seeks death penalty for Mangione  (VA creeps forward, ATA Action enlarges, HHS chops, justice awaits)
Are Hippocratic AI and AI “nurses” the wave of the future–or just another tide of hype? Two articles question. (A needed discussion on this particular unicorn and whether its AI capabilities are all they’re pitched to be)
23andMe’s slim list of prospective buyers–who must uphold privacy policies, according to the FTC. But what about that survey information? *Updated* (More problems with 23andMe’s sale–and if you took their surveys, they have more data on you)

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Telehealth & Telecare Aware – covering news on latest developments in telecare, telehealth and eHealth, worldwide.

The weekend read: why SPACs came, went, and failed in digital health–the Halle Tecco analysis/memorial service; why OpenAI is going to be a bad, bad business

April 10, 2025 | by

Let us now hold the formal memorial service for the SPAC–the special purpose acquisition company, at least for digital health. Halle Tecco, whom many of us know as the founder and past CEO of Rock Health, plus angel investor, plus adjunct professor in digital health at Columbia, now has an opinion blog on Substack. As our Readers know, this Editor, who is none of the above, has been shoveling dirt on SPACs here on TTA since they became an Easy Way To Avoid the cumbersome, oh-so-tiresome preparation for a public IPO during the Digital Health Boom of 2020-22 (RIP). She has been covering their Trouble Every Day and demise ever since. Having not kept quantitative track of Cracked SPACs, only the news as they floated, declined, and failed, this Editor enjoyed Ms. Tecco’s quantitative analysis of the overall picture. She puts it into a readable business context. 

Shockingly, SPACs across all IPOs are still going on. In 2023 and 2024, total SPACs as a percent of IPOs neared 40%. Their high was reached in 2022 at 73%. The attractiveness of SPACs was obvious: an investor sets up a publicly traded company and goes through the hassle of an IPO. It raises money on public markets and from investors to acquire another company. Then it hunts for a company to acquire. The target is landed, is acquired, symbols change, and the deal is done, all in three to six months. The acquired company doesn’t have to go through the investor pitches, the due diligence, the incessant filing…less fuss and muss, but missing the rigor of a traditional IPO. For the SPACs, especially those focusing on digital health, 2020-22 became FOMO Fever–the fear of missing out.

For digital health companies, the boom became a race to the bottom. 

  • 30.4% went bankrupt, some spectacularly, others with a whimper as they’ve failed, one after the other: 23andMe, Cano Health, Babylon Health, Nuvo, Pear, others
  • 26.1% were acquired well below their SPAC entry price: Sharecare, SOC Telemed, Akili and others. The only exception: Augmedix, with a $40 million SPAC valuation, was bought for $139 million by Commure. (Commure is backed by General Catalyst and Andreessen Horowitz; Commure/Athelas itself is an interesting and complex story.)
  • 39.1% are still in business but trading below their SPAC entry price. A number flirted with the Devil of Demise and are recovering: Clover Health, Owlet (baby monitors), Butterfly (ultrasound POC), Talkspace. DocGo became a Covid play and then got into political trouble and is nearing $2/share from their late 2022 high of just below $11. And others.
  • There is exactly one success story: hims & hers (4.3%)

Enjoy this read on her blog. If you prefer a podcast, here’s Ms. Tecco on her ‘Heart of Healthcare’ with Mohamad Makhzoumi (link is to Spotify), co-CEO of New Enterprise Associates (NEA), a VC in healthcare and technology (33 minutes), discussing healthcare’s evolution, so to speak, from “the trailer park of venture investing” and the hilarious ‘healthcare hokey-pokey’. And here’s a Gimlety View of SPACs from 26 June 2024.

Another Big and Disastrous Fail in the making may be OpenAI, the creator of ChatGPT. It is converting from a non-profit to a for-profit company, losing its founder group, fundraising like crazy, and generally has ditched its Mission. “OpenAI is an AI research and deployment company. Our mission is to ensure that artificial general intelligence benefits all of humanity.”  OpenAI has raised the largest venture-backed fundraise of all time, $6.6 billion, and is now valued at $157 billion. Why overvalued? A tell is that SoftBank has invested $500 million into this megillah–this Editor recalls that SoftBank invested in Theranos and WeWork. Another tell–the NY Times and The Information estimated that Open AI lost $5 billion in 2024, it loses money on every copy of ChatGPT, and its revenue projections are near-absurd at $11.6 billion in 2025 and $100 billion by 2029. It totally ignores that every major player has an AI program, from Microsoft to Google. If you’re a fan of ChatGPT or need your eyes cleared around this type of AI, grab your cuppa and a bottle of your favorite pain reliever for Ed Zitron’s article, OpenAI Is A Bad Business. (Ed is an English tech writer, podcaster, and PR specialist)