TTA’s August-Sept Wrap: how health tech fared in H1 investment, Oracle’s VA EHRM contract $ bump, Verma’s rumors, Cityblock buys Homeward, sensors could save Scots millions, more!

August 28, 2026 | by

28 August-early September 2026

It’s the last of the August Doldrums, so it’s a good time to look back, courtesy of SVB, on What Happened in Healthcare Investing this first half. (For once, health tech didn’t take a beating with its best H1 in years.) Oracle just can’t help being in the headlines, this time with a nice (and expected) budget bump in its extended VA EHRM contract, and with its Oracle Health EVP, the well-known Seema Verma, possibly under consideration by PhRMA. The only notable transaction was another acquisition in the General Catalyst family, Cityblock Health and Homeward Health. DEA may get a controlled substances telehealth rule yet. And the Scots have discovered and tested sensor-based facility monitoring that could save millions. Aye! (Will Harry and Meghan’s Cotswolds lair have it? Save on security!)

Please feel free to comment on the articles and pass along this Alert. Let me know if this is worth it to you! Also check out my personal page on Substack.

For Readers: Your Editor will be on publishing leave to mid-September. ‘Best Of’ Alerts will be out 1x weekly on Fridays after this week till then. I’ll be resting up for what may prove to be an epic September-October!

Silicon Valley Bank’s take on H1 investment: among the “have and have nots”, it was “the best half in years” for health tech

News roundup: Verma’s rumors, DEA’s new (?) telemedicine rule goes to OMB for review, Cityblock Health goes rural with Homeward buy, Scottish housing sensor tech could save millions–study

Revealed: Oracle’s extended VA EHRM contract increased by $17B as original ceiling reached this year; VA Indy EHR goes online

Last week’s headlines 

This Week’s Must Reads: how lack of focus dooms startup financing, Commure’s Sea of Red Flags Flapping, and what happens if OpenAI expires? (Doom…DOOM!)

News roundup: UHS-Talkspace $850M buy final, DocGo to buy Hicuity Health for $52M in stock/debt, R1 to buy Humata Health, PointClickCare EHR to integrate Anthropic’s AI

UK’s Alertacall sold to Constellation Software’s Volaris Group (Happily, remaining independent)

Recent Headlines and Must Reads

Why Readers can be assured that TTA is 100% Written by Humans (A handy guide to detecting AI Copy Slop and why it’s not here)

News potpourri: OpenAI sued for practicing unlicensed medicine”, Cleveland Clinic med drone delivery, Solventum separates out health info systems, Unlimited Technology RCM in 3.8M data breach, Samsung Galaxy Buds FDA cleared for hearing assist

VA moves to secure Oracle for its EHR Modernization through mid-2031 (More reasons beyond Captain Obvious)

Breaking report: Oracle drawing up plans to lay off employees in “double digit percentages” by 1 September (We’re waiting for this shoe to drop next month)

Chutes & Ladders, Oracle Edition: Surprise! Project Jupiter data center build overages, “social costs” multiply. Pentagon inks $7B, 10 year deal for software.

This week’s Must Read: the dangerous financing of AI data center buildouts–and how they resemble the 2020 health tech boom (Remember the SPAC boom that cracked and left nearly all companies and billions in the dust?)

A gloomy view on Oracle going forward: debt, cash flow, and dependence on OpenAI

 

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Silicon Valley Bank’s take on H1 investment: among the “have and have nots”, it was “the best half in years” for health tech

August 27, 2026 | by

Silicon Valley Bank (SVB), now part of First Citizens Bank, is back with a just-published roundup of 2026’s first half (H1) in healthcare investment in the US and EU. Last year was a year of contractions and skewed investments, what they called “barbells, bookends, and have-nots”, with fewer investors hotly chasing profitability and monetization. This year is considerably sunnier for health tech in terms of total investment, but SVB still calls the overall picture across four sectors: Biopharma, Healthtech, Dx (diagnostics)/Tools, and Device….

“Haves and have-nots. Winners and losers. The top of the heap and everyone else. Pick your metaphor….”

For health tech, it was the best H1 since H1 2022, with $7.2 billion versus $9.1 billion in investment, a tidy increase versus 2025 H1’s $6.7 billion. The major difference is that the number of deals is collapsing, with 203 deals this H1. If you look at 2025’s year total of 598 deals, if this deal track maintains, the 2026 full year number may not break 500. Again, the deal value is disproportionately and increasingly skewed to Series C+ deals, far more so than the past two years. Series B deals contracted and there was another uptick in Series A fundings. (Page 12)

SVB attributes the new health tech prosperity to AI-based technologies: clinical workflow automation, administrative efficiency and data infrastructure. Payviders (remember them?) also had their overdue day powered by AI: Devoted Health in the US with Medicare Advantage, and Alan in Paris (EU and Canada only). In SVB’s terms, “The bar for founders has risen toward durable growth, differentiated technology and a credible path to scale, especially those leveraging AI to address meaningful healthcare challenges.”

Exits, though, are hard to suss. There weren’t many this half for health tech. Kaia Health (Sword) in January, and in provider operations Ostro (Veeva) and Diligent (Serve). Kaia was the only one with a positive multiple on its valuation. Zelis and Virta Health might IPO this year or 2027. Or never. (Page 17). 

Looking at all four sectors, while investment dollars are growing, the number of deals continues to trend downward:

  • H1 2026 healthcare investment at $24.7 billion is slightly below H2 2025 at $25.8 billion. The absolute high water mark was $43 billion set at H1 2021, in the midst of the ‘Throw Money At Anything’ period. But the trend is still one of recovery. 
  • The big difference is that the number of deals continues its downward trend, sharply. H1 2026 had only 618 deals versus 2025’s H1 801 and H2 703. H2 is not projected to pick up this slack, again.
  • 75% of investment is in the US, with EU accounting for 25%; EU is slowly but surely increasing its share.
  • The falling investment sector is Dx (diagnostics)/Tools. Device remains steady and constant. (Health tech Readers should look over at device, since here resides WHOOP and its $575 million Series G for Giant) skewing this sector.

Most concerning is that healthcare VC fundraising has hit new lows, and the money is concentrated in a few across the seed, early, and late stages. Only a few years ago, founders had a wide choice of VC funders with fat wallets. Not nowadays. H1 2026 funding for VCs was only $10 billion. Full year 2025 was $16 billion and 2024 $26 billion. Many large “name” funds ($100 billion plus) closed this year, such as Lux, Santé, Frist Cressey Ventures, and Kleiner Perkins. What’s left in health tech? General Catalyst, Andreesen Horowitz, Redesign, Menlo Ventures. It’s a monotonous roster. Occasionally, there’s a crossover. Especially at early stages, founders have lost leverage in finding a simpatico fund. They have to show that they have a credible path to growth and profitability. (Pages 7-8)

Unlike SVB’s last report for 2025, they did not break out a fifth sector cutting across all four, Longevity and Healthspan. 

SVB will also be changing their name during Q4 2026 to First Citizens Innovation Banking. Preview page for SVB’s Healthcare Industry Trends published 25 August.  Hat tip to Megan Scheffel, head of SVB’s healthcare sector.

News roundup: Verma’s rumors, DEA’s new (?) telemedicine rule goes to OMB for review, Cityblock Health goes rural with Homeward buy, Scottish housing sensor tech could save millions–study

August 27, 2026 | by

Oracle’s Seema Verma rumored to be on a list for a new CEO position with a major lobbying group. The EVP and general manager of Oracle Health and Life Sciences is reportedly under consideration for a new job as CEO of PhRMA. A paywalled story in Endpoints News broke that she is among a group of “Republican policy wonks, former lawmakers” in the running, four months in, for this pharmaceutical lobbying organizational chief position. If the Reddit rumor boards are to be believed, she’s already half out the door. If the former Center for Medicare and Medicaid Services (CMS) administrator to 2021 departs Oracle, it will be the sixth Oracle Health senior level departure this year [TTA 3 Mar]. Those departures for various reasons shook Oracle Health. Verma, on the other hand, has had a relatively low profile at Oracle Health, though reporting to COO Mike Sicilia. If she does depart Oracle, enough time has passed since her CMS position to dispel the Federal-private industry ‘revolving door’ tag, though undoubtedly as EHR head she has been working with the VA. Developing

ATA Action was kind enough to flag for this Editor that the Drug Enforcement Administration (DEA) may finally be moving toward a new rule for telemedicine prescribing of controlled substances. Yesterday (25 August) the “Special Registrations for Telemedicine and Limited State Telemedicine Registrations” final rule was submitted to the Office of Management and Budget’s (OMB) Office of Information and Regulatory Affairs (OIRA) for review. While under review, the text is not public, but the OMB pending EO  is here with the limited text under the RIN: 1117-AB40   The text of the RIN includes that “DEA is currently reviewing the over 6,400 public comments submitted on the Special Registration for Telemedicine NPRM (Notice of Proposed Rulemaking) published on January 17, 2025.”meaning that they are still working with a year-old NPRM.  DEA has extended telemedicine prescribing rules several times, most recently at the end of 2025 to cover full year 2026. A final action to determine approval of the rule is due in November, according to the timetable.

ATA Action’s statement, per their email, is “ATA Action is actively engaged as the rule moves through OMB review, pressing the priorities we have consistently advanced: protecting patient access while maintaining safeguards against diversion — without unnecessary in-person mandates, duplicative state-by-state registration requirements, excessive reporting burdens, or implementation timelines that make participation impractical for legitimate clinicians and healthcare organizations.” They also cite geographic “red flags” that pharmacies face when a prescription results from a telehealth visit and state laws that are more restrictive than Federal law. 

Brooklyn’s Cityblock Health’s goes country with Homeward Health acquisition in an all-stock transaction. It is on the surface an odd match: an urban-focused value-based care provider that primarily serves complex needs and provides additional support for Medicaid and Medicare/Medicaid dual-eligible patients expanding into underserved rural markets. What it does promise Cityblock is growth from its present claimed 200,000 members in 10 states and annualized revenue of $2.2 billion, up 77% year-over-year. Homeward serves around 50,000 rurally-based Medicare Advantage (only) members and 5,000 providers in Michigan and Minnesota through a Michigan clinic, mobile clinics and telehealth. It partners with Blue Cross Blue Shield of Michigan and Aetna for Medicare Advantage. Further financial arrangements were not disclosed.

Homeward’s CEO Dr. Jenny Schneider will remain connected with Cityblock as a “trusted advisor” according to a Cityblock spokesperson and Homeward’s brand and operation will remain. According to her LinkedIn post announcing the acquisition, she previously served as a Cityblock board member. She and another Livongo alumnus, Amar Kendale, launched Homeward Health in 2022 to close healthcare gaps in rural America, accounting for over 61% of primary care shortage areas and a 23% higher mortality rate.

Both Medicaid and Medicare Advantage face challenges–funding cuts for Medicaid and with Medicare Advantage, payers reducing reimbursement rates based on rising costs and increased Federal scrutiny of higher costs, upcoding, overpayments, and bonus programs. 23% of Medicare Advantage enrollees are in a special needs plan (SNP) KFF

Cityblock touts its CORE—Care Orchestration and Resourcing Engine—as an AI-based operating system underpinning our outcomes-based care platform to use almost 10 years of member data to close care gaps for specific members, as well as AI tools “handling routine engagement and administrative work that have already freed up 44,599 hours of clinician time this year, including 42,148 calls handled by AI agents.” Homeward Health’s platform is also AI-native.

Cityblock simultaneously announced a Series E of $116 million led by General Catalyst for a total of close to $1 billion. General Catalyst is an investor in both companies. (Is this a return to the General Catalyst ‘portfolio condensation’ strategy that created Commure last year?–Ed.)

Interestingly, Homeward Health is organized as a public benefit corporation (PBC) and a B Corp, certified by B Lab as meeting their standards of social and environmental performance, accountability, and transparency. It’s doubtful that will carry over to Cityblock. MedCityNews, FierceHealthcare, Becker’s, Cityblock’s CEO Toyin Ajayi blog post 

Biggar, Scotland senior housing environmental sensor-based technology test saves thousands, but across Scotland could save millions. The test at the retirement home Langvout Court, part of Bield Housing & Care, was of environmental and activity sensors developed and implemented by Glasgow-based technology company Archangel and the Digital Health & Care Innovation Centre, funded by the UK Government’s Department for Science, Innovation and Technology through the Glasgow City Region 5G Smart and Connected Places Programme. The automated alerts were directed and coordinated with Bield staff. The sensors alerted the staff to a potential boiler breakdown during Storm Éowyn, high humidity levels and faulty extractor fans in buildings, and resident temperature and activity changes that could indicate changes in health. Annualized savings in the six-month test were estimated at £7,670 in heating costs and £2,825 in maintenance costs, along with improved tenant safety, reduced manual checks and stronger regulatory compliance, creating positive ROI in year one. FarrPoint, which independently evaluated the project, extrapolated that applying Langvout Court’s system across Scotland’s retirement housing developments could generate annual savings of £18.5 million. Archangel case study published in TechUK, release in Care Sector Hub

TTA’s August Ice Cream Run: General Catalyst’s $ for Function Health, GI health is “IT” for Hinge and Throne, EO for AI, DispatchHealth repositions, Health NZ modernizes, Centene’s profit, more!

August 7, 2026 | by

7-10 August 2026

August weather may be ‘dog days’ but in digital health it was an ice cream run, with more to come next week. There was an unusually large General Catalyst debt financing of Function Health’s DTC lab testing subscription model and a lot of ‘movement’ around gastrointestinal health. A Presidential Executive Order on AI governance/cybersec, ATA on the virtual health case, Centene’s cutbacks to profitability, DispatchHealth’s refresh, and health modernizes in the Land of the Kiwi.

Please feel free to comment on the articles and pass along this Alert. Let me know if this is worth it to you! Also check out my personal page on Substack.

News roundup #2: Function Health’s jumbo $450M raise from General Catalyst, Hinge Health’s $105M Cylinder buy, and Throne Science’s $10M Series A

News roundup #1: AI governance ‘in’ with Feds, ATA; Centene’s shrinking but more profitable future; repositions and partnerships for DispatchHealth, WHOOP; Te Whatu Ora Health New Zealand modernization

Last week’s headlines

The week that was in M&A, financings: Included Health buys Firefly, Candid’s $120M raise, DarioHealth’s $23M RDO, TytoCare’s $25M growth round + new execs, Aurenar’s $5.7M seed for ICU neuromodulation

Chutes & Ladders, Oracle Edition: Surprise! Project Jupiter data center build overages, “social costs” multiply. Pentagon inks $7B, 10 year deal for software.

Catching up to Masimo’s ‘unfinished’ business: Danaher completes $9.9B acquisition of Masimo. $634 million damages from Apple upheld, but Kiani lawsuits continue

Recent Headlines and Must Reads

This week’s Must Read: the dangerous financing of AI data center buildouts–and how they resemble the 2020 health tech boom (Remember the SPAC boom that cracked and left nearly all companies and billions in the dust?)

Chutes & Ladders: Data breach clouts Clover, OpenAI agent escapes sandbox to attack Hugging Face, Precision’s surface BCI achieves thought control, Tempus AI $1.5B Personalis buy, Karoo Health’s $16.2M Series A

News roundup: Withings Medical Group service launches, MPs urge cancellation of NHS/Palantir FDP contract, IKS closes TruBridge buy for $557M, ATA comments on prelim CMS PFS for telehealth, Philips’ AI-powered…toothbrush

A gloomy view on Oracle going forward: debt, cash flow, and dependence on OpenAI

Midjourney Medical audaciously promises a revolution in whole-body scanning, powered by Butterfly Network chips. Can the reality ever match the hype?

Vinegary Must Reads This Week: Silicon Valley’s ‘Cargo Culture’; the clinical query tool explosion between OpenEvidence and general AI

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News roundup #2: Function Health’s jumbo $450M raise from General Catalyst, Hinge Health’s $105M Cylinder buy, and Throne Science’s $10M Series A

August 6, 2026 | by

August is opening with a blood draw and a “flush” in two Financings and one substantial, additive GI Deal.

The much-ballyhooed Function Health raises another $450 million from General Catalyst. This debt financing adds to their war chest, now $804 million. Crunchbase The growth financing from General Catalyst, which makes news with its raises, follows on Function’s November 2025 Series B round of $298 million led by Redpoint.

Function provides direct-to-consumer 160+ lab tests in an annual self-pay subscription model ($365, HSA/FSA eligible). Their pitch is to enable you to “live 100 healthy years” by self-testing for conditions such as thyroid, cardiovascular, hormones, immune disorders, and early signs of fatty liver and cancer, plus two annual full-body scans. The tests are performed via Quest Diagnostics in 48 states (excluding Rhode Island, Hawaii, and the territory of Puerto Rico). Members also receive a physician-reviewed results and insights. Function also offers MRI and CT scans (for an additional cost below $1000). They acquired in the past two years Ezra AI (full-body MRI scans), Getlabs (at-home or office blood draw network), and SuppCo (supplements). Function members have performed over 100 million lab tests in the past three years.

According to their CEO Jonathan Swerdlin, their target is “anyone who wants to be healthy”, but drilling down, it is the worried well, those wanting to centralize their ongoing testing, and those managing chronic conditions. Having gone through (and will be going through) a battery of thyroid and related tests, those of us who don’t have a physician brother to write up testing (and now an endocrinologist) could find this very attractive indeed, especially those with HSA/FSA accounts. For Medicare beneficiaries, it’s strictly out of pocket but if you have a lot of testing to do, perhaps worth it. The next part of this, of course, is getting your labs to a specialist without going through a primary care provider.

Reaching out to sell memberships to a broad consumer audience via traditional and social media is going to be an expensive proposition. $365 is not a trifling sum and getting your labs done via procedures like blood draws isn’t wonderfully pleasant. It requires national marketing and promotion, with a value proposition that takes some of the sting out of that blood draw. We’ll see if this happens as a result of the debt financing this fall. Release, MedCityNews

Hinge Health expands into GI care with Cylinder Health. One-time MSK remote physical therapy specialist Hinge Health continues its specialty expansion with $105 million for gastrointestinal care management company Cylinder Health. The buy is all cash and expected to close during Q3, subject to the usual customary closing considerations.

Cylinder has already treated 150,000 people for gastrointestinal (GI) conditions and has a clinically validated ROI. From the release: “The acquisition will combine Cylinder’s clinical expertise and existing market footprint with Hinge Health’s AI-powered care model and technology platform to deliver support in a single app expected to launch in 2027. There is no mention of how the companies will go forward in management and workforce locations.

Hinge expanded from MSK therapy into pain relief via the Enso pulse wireless device, pelvic health, migraine care (Enso), and fall prevention. Interestingly, in the release the CEO quote from Daniel Perez, alludes to GI care being an unmet need.  “Many people we already serve for back, joint, pelvic, and migraine care also have chronic digestive conditions. After spending time with Terry Boch and the Cylinder team, it’s clear that Cylinder gives us a running start in a category with significant unmet need.” (If you, like this Editor, spend any time on YouTube, one is assailed with digestive health ads, often, as we said as teens but perfect here, ‘gross’.)

Hinge went public last year at $32/share [TTA 22 May 2025] and is currently trading at around $80/share, a gain of over 100%, so they are doing something right in a very competitive space against Omada Health and Sword Health. Mobihealthnews, Healthcare Dive

And while we are discussing things gastrointestinal, Throne Science raised a Series A of $10 million. It was led by Will Ventures with participation from Emerson Collective, Workshop, LEAD VC, Salt VC, Accomplice, Moxxie, Ventures Together, Symphony, Felix Capital, Cosmic Venture Partners, Offscript, V1.VC, and Morrison Seger. Throne Science has developed an AI-assisted toilet sensor for $399 (plus $5.99/month membership) that monitors for bathroom habits, specifically monitoring patterns around hydration and gut health. Last month, they launched the beta version of their Gut Health AI coach which allows users to query the app about their data. The fresh funds will be used for further R&D for the next generation of the device targeting early detection of colon and urinary tract cancers. Interestingly, one of the founders is John Capodilupo, formerly CTO at the previously mentioned WHOOP. Release, Mobihealthnews

Disclaimer: Throne Science has nothing to do with the British, or any other, Kings or Queens. 

Holiday weekend roundup: VA asks for ‘cyberspeed’ 25% EHR budget bump, update on EHRM fraud indictment; Commure raises $70M; Innovaccer buys Caduceus, lays off staff; Doximity, OpenEvidence slugfest gets hot

May 22, 2026 | by | 2 Comments

A slower news week preceding the Memorial Day holiday in the US and the UK late May bank holiday.

Federal budgets for 2027 are in the Congressional washing machine, and the cycle is on ‘agitate’. VA Secretary Doug Collins has tagged a 25% increase in the EHR Modernization budget for FY 2027 over what is currently in the 2027 Military Construction and Veterans Affairs Appropriations bill –$4.2 billion versus $3.4 billion, an increase of $840 million. He testified on Wednesday 20 May to the Senate Veterans’ Affairs Committee and Thursday 21 May to the House Appropriations Subcommittee on Military Construction, Veterans Affairs and Related. Apparently, the biggest problem VA has with the much-repaired and now standardized Oracle EHR is that every VA executive director wants it now, not later. An additionally funded EHRM would speed up the cutover for VA facilities to go from ‘dial-up’ to ‘cyberspeed’ internally, in communicating with other VA hospitals, community care, and in record sharing with the military system and civilian health facilities.

Difficulties reported to date (April for four sites in Michigan, VISN 10) are around transferring health records between VA and Department of War facilities. DoW healthcare also uses Oracle, but a different version suited for their needs that has been fully implemented. 

While the House has already passed the bill at the lower budget number and sent it to the Senate, the subcommittee chair John Carter (R-Texas) during the hearing said they’re “not through with the possibility of getting you some more money”. 

VA’s implementation timeline is 19 before the end of this year (13 new and the 2020-24 six), 26 new sites in 2027 and 28 VA Medical Centers in 2028. Even sped up, there are still 90 more to go and the deployment is not expected to be complete till 2031. FedScoop 21 May, 30 April

Update on the fraud indictment of the former EHRM director, John Windom. Surprisingly, there has been little to no mainstream media coverage of the Federal charges against John Windom, who was indicted on 25 March in the Federal District Court for the District of Columbia. The three counts related to accepting cash and gifts from vendors plus failure to report them could bring a maximum of 35 years. This article on conservative news website PJ Media is the most recent (re)telling of the tale and links to nearly all the same sources this Editor included in our 3 April article. It is more colorful than our reporting but brings up an important point I overlooked: where, oh where, are the indictments of some of the vendors who doled out cash, gifts, and maybe more, and in return got prime and sub-contracts. He knew, they knew to keep quiet–‘loose lips sink ships’. Because any Federal contractor–I worked for two, Viterion Digital Health and Collaborative Health Systems, then part of WellCare Health Plans–receives compliance training on working with their Federal agency counterparts. 

Perhaps there are investigations and indictments to come, as I’ve seen in Federal Medicare fraud cases that peel like an endless onion over years. According to the VA inspector general, Mike Missal, who served from 2016 until January 2025, evidence was being gathered internally back during the Biden administration. This fits the timeline of the US Attorney requesting a grand jury be summoned then sworn in on 30 October 2025. Mr. Missal was fired along with 16 other inspectors general by the incoming Trump administration.

Since Mr. Windom was deeply engaged in the choice of Cerner for the VA EHR in 2017-2018, and in the disastrous implementation of VA Mann-Grandstaff (VISN 20) in October 2020 and four more in 2022, resulting in the rollout’s termination in 2023, Oracle would be unwise to not prepare for a few questions about Cerner’s relationship with Mr. Windom, as I wrote at the time. 

The PJ Media article also references the comprehensive article in the 27 March Spokane Spokesman-Review, which has been on the Cerner/Oracle implementation story since the implementation failure in the region’s Mann-Grandstaff VA facility. Their check of the OEHRM website as of that date confirmed that Mr. Windom was still listed as the deputy director of the Federal Electronic Health Management Office, the joint VA-DOD initiative in the role he assumed in January 2022 after the Mann-Grandstaff problems detonated and the then-Secretary reorganized the department. (Heads did not roll, but they rarely do with SES members). FTA: “The Federal Electronic Health Record Modernization Office did not respond on Thursday (26 March) when asked if Windom remains employed there.” The article by Orion Donovan Smith is a recommended read.

In the funding/M&A department

Healthcare software integrator Commure received a $70 million funding from current investors. Commure’s lead investor is General Catalyst. Commure now has $750 million raised and a $7 billion post-money valuation for its AI infrastructure development. Its subsidiary, Athelas, provides AI-based revenue cycle management and clinical workflow tools. The General Catalyst funding of $200 million plus is an interesting scheme, in that GC fronts the cost of sales and marketing and, in return, receives a share of the revenue from new customers generated by that investment, up to a fixed cap. The new funding will be used for scaling its RCM and practice management platforms, advancing the ‘shared intelligence layer’ beneath Commure’s workflows, and expanding their AI infrastructure into global healthcare markets. Release, Mobihealthnews

Innovaccer acquires CaduceusHealth, a revenue cycle management (RCM) and management services (MSO) provider. Neither transaction cost nor management transitions were disclosed. Well-funded Innovaccer ($675 million through a Series F) has been growing in AI-centric healthcare IT services mainly through acquisition. CaduceusHealth is the fifth in their creating a “comprehensive agentic stack” for health systems and provider groups in their Flow suite. Innovaccer claims to serve over 200 health systems and payers, 95% of community pharmacies, and 80 million patient lives across the US. Release Unfortunately, their growth has been matched by a reduction in staff, with 340 layoffs in the US and India. It is their third layoff in four years as it applies its own AI to automate its own processes. (We are seeing a lot of this across the board, allegedly.) FierceHealthcare

We close with a major Must Read with the OpenEvidence-Doximity battle.

OpenEvidence and Doximity are slugging it out for the same market funding–and a third competitor has just sneaked into the ring. OpenEvidence is the upstart, founded four years ago, and the best valued ($12 billion) yet private healthcare AI company on the planet Earth and is generally thought of as the up-and-coming platform for physician information. Doximity is the mature company, public with a $3.6 billion market cap, proven revenue of $645 million, and (be still my heart) profitable with an EBIDTA margin of 55% and a stunning 49% free cash flow margin. It’s been dubbed ‘LinkedIn for doctors’ but is actually much more with tools for secure telehealth, news, reputation management, and free CME.

They are mutually litigious. Both OpenEvidence (OE) and Doximity tag-team each other in product offerings, use defamation tactics and key staff poaching, and in product development, copycat each other, with Doximity generally leading development and OE following shortly thereafter. Coming up is Doximity’s new product, an in-workflow e-prescribing, prosaically called Doximity Prescribe. Based on the pattern, how long will it be before OE develops a similar product?

Where they make their money is only indirectly from users. Both are supported by a fixed source–pharmaceutical advertising. They both slug it out for physician attention. While doctors love (or hate) both, if they become too similar, the balance will tip. Into this bout steps OpenAI with a new professional product, ChatGPT for Clinicians [TTA 30 April]. Lurking near the ropes is the AI-powered iteration of Wolters Kluwer’s UpToDate peer-reviewed medical content, integrated with Microsoft and Abridge, already in 70% of the largest enterprise health systems because it’s been around forever. OE’s vulnerability may be overpromising in claiming ‘no hallucinations’ of their AI-generated medical content–a claim that is structurally impossible, and results in deficits in completeness, communication quality, and systems-based safety reasoning.

Digging through all of this is the intrepid Sergei Polevikov on his Substack AI Health Uncut. Grab a cuppa and sandwich for this one. For most of the article (Part 1 of 2!), a subscription is required. Consider it money well spent for access to some of the best investigative reporting around with plenty of backup. OpenEvidence Prescribe Coming to Your Doctor’s Office This Month?

Rock Health’s sunnier 2025: up 35% due to AI, but a tale of ‘have and have nots’

February 19, 2026 | by

Rock Health’s 2025 digital health roundup, published in January, was upbeat–as usual, and in no way Hemingwayan. Their calculation of US digital health fundings was up 35% versus 2024, rising to $14.2 billion from 2024’s $10.5 billion. This was a higher number and a stark contrast to Silicon Valley Bank’s (SVB) tracking of US and EU healthtech investments as a 1) lower number and 2) flat 5%, growing from 2024’s $13.2 billion to $13.9 billion [TTA 14 Jan].

Let’s do some unpacking:

  • The number of digital health deals went down from 509 to 482, a decline of 5.3%.
  • In terms of current dollars, 2025’s funding of $14.2 billion was, as projected, a snap back to 2020’s $14.4 billion, as 2024 was to 2019. In constant/inflation-adjusted dollars, applying a cumulative inflation of 25%, 2025 is well under 2020 but better than 2019; 2020’s $14.4 billion then is equivalent to $18.3 billion today.
  • Where Rock Health and SVB agree is the ‘barbell’ profile of what gets funded.  
    • Mega funds like General Catalyst and Andreessen Horowitz (a16z) do mega deals: 26 mega deals and 15 newly-minted unicorns (up from six last year), for a funding average by these two in D+ of $266 million, versus Series A of $24.1 million. 
    • The funding also skews towards “AI-enabled” companies and secondarily, wellness
    • Something that made this Editor go ‘hmmm…’:Rock Health’s usual analysis of letter deals across all funders is, unusually, missing in their 2025 report. The only comparison made is from GC and a16z, two mega funders. Inadvertently, Rock Health has drawn a bright line on the contraction of venture and private equity funders not only in available funds, but in sheer numbers. Discussed here intermittently, especially in the context of SVB’s failure and rescue, but at more length here in this 2023 commentary.
  • What they have picked up that SVB didn’t was the continuing significant number of unlabeled, non-letter financings–35% of deals, but down from 44% in 2023. Before 2021, unlabeled financings were fairly rare and in single digits.
  • The other significant pickup was that over 600 companies they track have not raised anything since 2021-2022. That could be a sign of health–that they are profitable and operating successfully on their cash flow–or barely staggering through and cannot get financing. 
  • M&A revived in 2025 with 195 deals in 2025, up 61% from 2024’s crater. Digital health companies were the majority acquirers (66%) with private equity at 10%. Rock Health attributes this to ‘tapestry weaving’ (creating more continuous solutions to flesh out platforms), legacy acquisitions by AI companies (a/k/a smush togethers, something New Mountain Capital excels at), and ‘acqui-hires’ to get top talent and tech.
    • They note of NMC: “Now, they’re weaving the largest “M&A tapestry” in digital health thus far: Matt Holt, NMC’s former managing director and president of private equity, is reportedly leaving to combine five NMC portfolio companies into a $30B holding company called Thoreau.”, a $30 billion deal broken out in a graphic. The five companies are Datavant, Swoop, Machinify, Smarter Technologies (itself a combine of SmarterDx, Thoughtful.ai, and Access Healthcare in RCM), and OfficeAlly. Whether this pending move (December) will actually work or turn into a petite version of Change Healthcare, we can only surmise.
  • IPOs haven’t really revived in digital health. Rock Health counts five IPOs in 2025, but only two are really digital health, Hinge Health and Omada Health, same as 2024. Both were at relatively flat valuations. The other three are more legitimately classified as biotech–Heartflow, Carlsmed, and Profusa. IPOs may improve in 2026, with Doc.com’s filing for a Nasdaq listing earlier this month and Devoted Health now at a post-F financing.
  • There is zero here about bankruptcies and reorganizations. No reference to the utter implosion of 23andMe and its shocking sale back to founder/CEO Anne Wojcicki.

The impact of ACCESS and ELEVATE. There is also a good graphic analysis of two CMS models that may support digital health more comprehensively than previous value-based care models such as ACO shared savings. The first CMMI model, ACCESS, will be debuting in July and is a 10 year voluntary payment model for Original Medicare outcomes in chronic care management. It reduces barriers for digital health to profitably work with CMS because it offers direct patient enrollment and waiving copays. The other from CMS is ELEVATE, launching in September, which funds up to 30 proposals with $100 million over three years to raise health and prevention for Original Medicare beneficiaries.

Rock Health’s 2025 wrapup

2026 remains Anyone’s Guess. It feels better…but….

Editor’s Note: Our Readers know that this Editor considers Rock Health a bit of a cheerleader for Sand Road. They play both sides of the fence as a venture fund/accelerator. There’s nothing wrong in that. SVB, like other financial institutions, funds a broad swath of healthcare and makes no bones about it. That is why their analysis, which also included EU and a bit of Asia, made its broader and tarter take on 2025 even more interesting.

What’s missing is year-to-year consistency in Rock Health’s analyses, notably what digital health sectors were funded and the Series letter breakdown across all funders.

Editor Donna is back. Here’s the catchup.

October 3, 2025 | by

A summer hiatus that’s turning out to be a bit longer than expected. Recuperating from a broken left arm and resuming a mostly “normal life” including some vacation has taken appreciably more time than your Editor thought when last posting in late June. (In fact, where the heck did June go?) Getting back into the issues surrounding healthcare technology and healthcare in general has also taken awhile. So this article will be a mix of ‘this and that’ of tying off some stories that were hot in June. Starting with the current drama…

The US Federal Government shutdown and telehealth. It was uniquely constructed to not affect vital citizen services such as Social Security, Medicare, Medicaid, and even access to our national parks–and to be laid at the feet of one party, not the one in control. Life is going on as the shutdown continues. It may end tomorrow with a congressional resolution (CR) kicking the can down the road for a few weeks, it may end in November with the same.

Most affected from our perspective: Medicare telehealth flexibilities extended from the pandemic now revert to pre-pandemic rules, except for practices under the CMS Medicare Shared Savings Program (MSSP), practices in the end-stage renal disease (ESRD) program, and mental health. Audio-only reimbursement is terminated as is telehealth beyond the rural health program. Health and Human Services (HHS) has furloughed 41% of employees, over 32,000, though the short-term effect is expected to be minimal.

Continuing: programs such as Medicare, Medicaid, OIG’s Health Care Fraud and Abuse-related activities, parts of other agencies such as NIH direct medical, the Indian Health Service (IHS), FDA medical device and drug reviews, emergency preparedness, and other mandatory services. FierceHealthcare, Healthcare Dive   ATA Action is advocating for immediate restoration of Medicare’s telehealth flexibilities, in place since 2020, and the Acute Hospital Care at Home program. One hopes that Senator Schumer and Representative Hakeem Jeffries take note.

Such a deal? Under the shutdown wire, the Administration’s ‘most favored nation’ deal with Pfizer benefits state Medicaid programs and consumers who go on Pfizer’s website and buy drugs direct. In return, Pfizer gets a three-year relief from tariffs on their drugs from the Section 232 probe into the effects of pharmaceutical imports on national security. Details beyond this are scant, but the industry’s lobbying group, PhRMA, has been pressing for allowing drugmakers to sell DTC, bypassing insurers and pharmacy benefit managers (PBM). For commercial and individual insurance, the effect is nil for now. Healthcare Dive unpacks it.

Big deals continue. This week, VC giant General Catalyst, of which this Editor took a very dim view back in February, closed its $515 million acquisition of Summa Health, a non-profit integrated healthcare system based in Akron, Ohio. The acquisition through its HATco subsidiary was announced in January, but had to be boosted by $30 million and meet additional conditions to pass muster with Ohio’s attorney general. How acquiring one regional system advances their goal of “health assurance”, defined as “a more affordable, accessible and proactive system of care”, is To Be Determined. FierceHealthcare

Evolent Health is exiting the ACO business, selling it to competitor Privia Health for $100 million. The sale adds Evolent Care Partners’ more than 120,000 lives in MSSP, as well as commercial programs and Medicare Advantage. Privia now adds more states and their covered lives will total 1.5 million when the sale closes in Q4. The Medicare ACO business continues to contract to a few players; value-based care and Federally subsidized incentives in MSSP and ACO REACH turned not to be all that.  Healthcare Dive

There’s a rundown of other acquisitions and sales rounded up in HISTalk 1 October, indicating a certain liveliness in the market: specialty care coordinator Switchboard acquiring Conduce Health (undisclosed amount), Sunstone Partners taking a majority stake in healthcare cybersecurity/compliance firm Clearwater, AI voice agent developer Assist Health tagging a $76 million Series B round, and others.

In amazement….

  • Veradigm still can’t get itself current with its financial filings and submit itself for Nasdaq relisting as of this week. Revenue is still flat, they repurchased $180 million in convertible notes, and got itself a new CEO, Donald Trigg, in what has been a revolving door position. The last interim CEO ankled in April.  Veradigm release   Insult to injury: a data breach in July (announced to customers 22 September). This affected at least 70,000 patients in Texas and South Carolina, plus customers in California. HIPAA Journal
  • 23andMe was sold back for $305 million to its co-founder and CEO, Anne Wojcicki. She set up an entity, TTAM Research Institute, a non-profit public benefit corporation (PBC), to buy the company for $305 million. Unlike Regeneron’s $256 million bid, Wojcicki’s TTAM is acquiring Lemonaid along with the main Personal Genome Services and Research Services businesses. TTAM is a clever acronym of the spelled-out 23andMe. The Bankruptcy Court of Missouri approved the sale on 7 July and it closed on 14 July, after no further bids from Regeneron. Interestingly, none of the articles mention Wojcicki’s backers. 23andMe release, CNBC, HIPAA Journal.

To this Editor, selling a company back to the CEO who had full financial control over the company but augured a $6 billion valued company into Chapter 11–nosediving after bad investments, a major data breach and turmoil around its data and privacy–is beyond absurdity. I’m surprised that the bankruptcy judge even permitted it given the history, but she legitimately bested Regeneron’s offer by $50 million. It also included the nearly-finished Lemonaid. Supposedly all business is now ongoing. It’s her risk, her money, as noted in our last article on 3 June. And now her responsibility to make a go of it.

And a sad goodbye. Longtime Readers will remember John Boden, one of the pioneers (2001) of healthcare tech care management software for supporting older adults and a national expert in eldercare through his ElderIssues firm. He frequently commented on Steve’s and my articles, along with many insightful and funny emails. He was also a former Marine pilot (VMA-6, Vietnam) who wrote about his experiences in ‘Klondike Playboy’. John “Went West” on 4 December last year after a few years of retirement. Editor Steve discovered this during my hiatus. Our sympathies to his wife, children, extended family, and his VMA-6 shipmates. Legacy obituary

Thank you for your patience! My articles will be ramping up slowly as therapy continues. I’ll also be catching some additional vacation after next week. 

News roundup: PSI awarded $156M contract for VA EHR testing; $50M for Fay nutrition; General Catalyst’s wealth management expansion; UniDoc’s HealthCube debuts in Ukraine

February 13, 2025 | by

VA awards Planned Systems International a potential five-year, $156.1 million contract to support the VA’s EHRM (Electronic Health Record Modernization). The Independent Enterprise Testing and Support Services (IETSS) contract supports the EHRM-IO (Integration Office) team that is restarting the transition from VistA to the Oracle Cerner EHR. PSI will test and evaluate software, infrastructure, and environments, plus the operations of the independent verification and validation test center and test center environments hosted in VA Enterprise Cloud. It covers PSI’s project management, test and evaluation support, testing and technology support, test systems engineering and implementation support, and test process and quality management support. The five-year contract, as is typical with Federal contracts, is for an initial year then renewable for four 12-month terms. Another confirmation that EHRM-IO is moving forward on their plan announced before Christmas 2024, when the VA formally stated that they were planning for deployment in four Michigan facilities — Ann Arbor, Battle Creek, Detroit, and Saginaw–for implementation by mid-2016 [TTA 8 Jan]. GovConWire

Food as medicine is catching on. San Francisco-based Fay has scored a $50 million Series B round, led by Goldman Sachs with participation from previous investors General Catalyst and Forerunner, bringing their investment since 2024 to $75 million. The fresh funding will pay for growth and network expansion. They are claiming a valuation of $500 million.

Fay at present has a network covering most states of 2,300 registered dietitians (RDs) that integrate through Fay’s platform with major payers including United Healthcare, Aetna CVS Health, Blue Cross, Anthem, Cigna, Optum, and Humana, plus large employers such as Amazon, Microsoft, and Pepsi. The RDs provide personalized, in-person or virtual nutrition and lifestyle counseling to members or employees at little to no cost, while the platform automates processes such as insurance claims, scheduling, and patient follow-ups for the RDs. In addition, Fay can help RDs build their private practice and get credentialed with insurance. Over half of Americans struggle with diet-related chronic conditions (Frontiers in Public Health). Fay is in an especially sweet spot, as nutrition and quality of food, with the pending confirmation of Robert F. Kennedy, Jr. as HHS Secretary, is front and center. Release, MedCityNews

Speaking of General Catalyst, they are expanding beyond being one of the few dominant venture capital groups in a consolidating investment sector by expanding GC Wealth into a wealth management firm for entrepreneurs and others who have Struck It Rich (or have the potential to) in hot sectors such as AI. Running it out of San Francisco (where else?) is Dave Breslin, a former First Republic Bank executive who headed their private wealth unit. He recently hired several First Republic alums based out of Boston. According to the BBJ, it now has $2.3 billion in assets under management–and clients were invited last year to invest in General Catalyst’s seventh fund.  Founders should think long and hard about having your funder also manage your personal wealth–so it seems to this Editor. Boston Business Journal. Axios previously reported that General Catalyst is quietly exploring selling a share in its holding company. It currently has $32 billion in assets.

The ‘doc-in-a-box’ idea now has a fresh life in very specific uses. Canada’s UniDoc Health’s H3 Health Cubes have some interesting placements with the Italian Government to serve rural areas as a remote virtual clinic in locations such as the Municipality of Aliano’s Territorial Health Center. Also in Italy, the Aiutamoli a Vivere Foundation aid organization will place up to 15 units in Ukraine and the Gaza strip (though one suspects that events have eclipsed the latter placements).

For Ukraine, the H3 Health Cube funded by the Italian Agency for Development Cooperation (AICS), was delivered to a hospital in Yasinya in Ukraine scheduled to reopen on 14 February. It was received in mid-January by the Mayor of the City of Yasinia. along with additional aid such as food and hospital beds. It will connect doctors in that hospital, which treats wounded coming from the war zone as well as the local community, with Prof. Carlo Ventura’s team from I.N.B.B. of Bologna. Another Ukrainian hospital placement scheduled, in partnership with HP Inc., is for Okhmatdyt, Ukraine’s largest children’s hospital. A video of the HealthCube is on the UniDoc website.

2024 another ‘down round’ for US digital health funding, with smaller deals and earlier stages: Rock Health

January 24, 2025 | by

US 2024 digital health funding explored some new lows, yet again. Plainly put, despite some perking up at the end of the year, 2024 was not a righting of 2023’s wobbly year when looking at the key metrics. It was more like a stabilization to 2019 levels with the pandemic period standing out in sharp relief as an aberration. Let’s see what this all means….

2024 by the numbers:

  • Year totals were $10.1 billion across 497 deals, versus 2023’s $10.8 billion across 503 deals
  • 63% of 2024’s funding rounds were labeled–up from 2023’s 57%
  • Average deal size shrank to $20.4 million from $21.5 million
  • 86% were seed, Series A, and Series B rounds
  • Series C and D fundings shrank in the wash to median sizes of $50 million and $55 million respectively—well below 2023’s $62 million and $58 million. Mega deals dwindled to 17 or 21% of overall sector funding from 2023’s 32% in 2023 and 38% in 2022.
  • M&A activity hit a 10-year low at 118 deals.

We’re back to 2019 in absolute dollars. Using the pre-pandemic year of 2019 as a benchmark, Rock Health factors in three years of inflation to calculate that 2024’s funding is back at 2019 levels. While 2024 outperformed in current dollars 2019’s $8.2 billion across 425 deals, knocking off $0.18 on each dollar (worth $0.82 in 2019 value) brings 2024’s total to $8.3 billion in 2019 dollar value–essentially flat.

Why is this happening? Rock Health is attributing this to:

  • More attractive Davids versus the Goliaths: earlier-stage startups are not encumbered by the inflated valuations of later-stage funded ventures. The later-stage Goliaths which are not in something resembling profitability are now faced with down or stalled rounds. They, or their key investors, may seek buyouts or ‘shotgun marriages’–or shut down. In Rock Health’s view, this may restart M&A activity. (From this Editor’s perch, it already has–check General Catalyst’s portfolio condensing.)
  • Fewer investors concentrating the available capital. Of the 391 VC funds, 30 raised 75% of all  US committed capital. Nine of those funds accounted for 50%.(Pitchbook) Editor’s note: it’s not clear if this accounts for private equity funders.
  • If you are tired of seeing Andreessen Horowitz (a16z) and General Catalyst (GC) in funding announcements, that is because they have between them about 20% of committed LP funding. Their dominance means unusual control over the direction of companies and their technologies. For instance, GC has HATco which as earlier reported, just entered a partnership with AWS to develop AI tools for its portfolio companies like Commure and Aidoc. This standardization means more control over ‘transforming healthcare’–and (as Rock Health doesn’t mention), over their investments in terms of costs, IP, and their business practices.

AI enablement was 2024’s hot button. It accounted for $3.7 billion, or 37% of the year’s sector funding, in 191 deals. There’s a discussion in the article about how foundational AI models for healthcare are gigantic large language models (LLMs) trained on vast data sets, which is why the seemingly low barrier to AI entry is in reality very high and can be dominated by a few Goliath players. The Davids need to work some niches and carefully consider their positioning.

2024’s leading value propositions and clinical indications. Still top in value props is disease treatment; moving up dramatically, disease monitoring. Funding is increasingly concentrated among the six top value propositions, now at 85%, 10 points higher than previously. In clinical indications, mental health takes home the prize as the five-year champ at #1, with cardiovascular and oncology following. Weight management and obesity was the comer, moving in one year from #8 to #4. Expect to see this move up even more in 2025. Clinical indication funding was less concentrated but nearly doubled, with the top six taking 48% of sector funding versus 28% in 2023.

Rock Health 2024 Report. Also Healthcare Dive

Short takes: UK’s Cera raises $150M, $105M for Qventus, Solera Health’s $40M; General Catalyst’s AWS deal, Virta Health hits $100M in revenue, powered by GLP-1 maintenance; VirtuAlly’s JC telehealth accreditation

January 16, 2025 | by

A ‘this-n-that’ roundup, with a flurry of fundings and more.

Larger fundings are really swinging it this month, making it feel a little bit like old times:

Cera raises $150 million for UK/NHS expansion, platform AI development, and upscaling. The $150 million funding is split between equity and debt, via lead investors BDT & MSD Partners and Schroders Capitals, plus Earlymarket, Guinness Ventures, DigitalHealth, and Robin Klein, a private UK investors. Cera has raised a total of $407 million, with their last raise of $302 million in 2022. 

Cera supports a spectrum of in-home health through its proprietary AI-assisted carer platform. Their nurses and other staff carers use the app on phones (primarily) to direct care and monitor patients. AI and ML assists enable caregivers to view and react to changes in condition. Families can also view reporting on the app. The company claims results of daily savings of £1 million for the UK healthcare system, hospitalization reductions of up to 70%, a 20% reduction in patient falls, and hospital discharges that are up to five times faster. It supports an estimated 60,000 daily in-person healthcare visits across UK homes, partners with over 150 local governments, and two-thirds of NHS Integrated Care Systems. They also claim to be EBITDA positive (as of 2022) and free-cash-flow positive from last year. TechFundingNews, TechCrunch

Qventus raises $105 million in a Series D. The investment in the care operations and automation platform for over 115 health systems was led by KKR’s Next Generation Technology III Fund with Bessemer Venture Partners plus new strategic investors Northwestern Medicine, HonorHealth, and Allina Health. Qventus claims to be ‘AI-first’ for automating routine care and record tasks, increasing team productivity up to 50%. The new funding will be used to accelerate the development and commercialization of solutions powered by its AI Operational Assistants into new care settings beyond its Surgical Growth and Inpatient Capacity solutions. Total funding to date is $203 million over 10 rounds. Release, MedCityNews

A $40 million round for Solera Health gets them to a Series E. The insider round was co-led by payer group Health Care Service Corporation (HCSC). It also includes investors Adams Street, Cobalt Ventures, and Horizon Mutual Holdings, Inc. Funding to date totals $112 million. Solera’s HALO platform provides access to hundreds of digital health applications for payers and employers, including apps for virtual specialty care in areas such as hypertension, high cholesterol, diabetes prevention, and weight management, to drive down the cost of care. Also announced was the confirmation of interim CEO John Santelli to the position. He joined Solera after nearly 30 years with UnitedHealth Group, departing as CIO. Release, MedCityNews

When giants meet…new AI models follow, with General Catalyst allying with Amazon Web Services (AWS) to develop AI tools for its portfolio companies. The focus will be on cloud services and generative AI using Amazon Bedrock, the ML application for building generative AI on AWS. This will be used for improving predictive analytics around patient treatment outcomes and insights into factors such as disease progression. Also mentioned are tools based on Anthropic and Mistral AI, along with securely trained health care-specific models. 

First up are the expanding Commure and Aidoc. Their specialized technology solutions like Copilot Suite and aiOS will be integrated with AWS’s AI and data capabilities. General Catalyst, besides investing in many healthcare and digital health companies, will be using this for their separate HATco, The Health Assurance Transformation Corporation. HATco was founded in October 2023 to develop an interoperability model for technology solutions, targeting health systems and payers. Mobihealthnews, Yahoo Finance/Global Data, FierceHealthcare

In the hot nexus of diabetes management and weight loss, Virta Health passed the $100 million in revenue threshold and growth of 60%. It’s remarkable given that Virta specializes in reversing Type 2 diabetes and obesity via nutrition modification and lifestyle changes. They’ve tweaked their approach into what happens after GLP-1 patients go off the drug, though they now manage GLP-1 prescribing for health plans, employers, and pharmacy benefit managers (PBMs). Their off-ramp is modeled after their Sustainable Weight Loss solution, Responsible Prescribing is designed as an alternative to GLP-1 drugs or as an off-ramp for patients moving off them to maintain their weight loss. Release

Virtual nursing provider VirtuAlly has received accreditation from The Joint Commission (JC). This relatively rare status for telehealth is based on continuous compliance with performance standards and commitment to providing safe and quality patient care. VirtuAlly provides 24/7 turnkey virtual nurse-patient monitoring, temporary virtual support, and consulting services. They also have added a new term to our lexicon, “tele-sitting”. Release 

News roundup: SleepioRx clears FDA 510(k), Caregility adds AI fall detection, Otsuka releases Rejoyn depression app, MD Ally’s $14M Series A, Alcove launches CallConnect247 (UK), Health Catalyst buys Lumeon for $40M

August 15, 2024 | by

Big Health’s SleepioRx digital insomnia therapeutic gains 510(k) FDA clearance. The 90-day treatment is based on a prescription device delivering Cognitive Behavioral Therapy for Insomnia (CBT-I). The treatment adjunct is tailored to symptoms and provides daily sleep tracking, enables goal setting, and content for help falling asleep. Sleepio was originally developed in the UK (we covered in 2013!) but moved to San Francisco in 2015.  Their original Sleepio is marketed to employers and health plans to support treatment for sleep disorders and insomnia, along with other products for digital support for anxiety and depression. Their last funding was a Series C of $75 million raised in the palmy days of January 2022 and a year later acquired Limbix, provider of SparkRx, a depression management app targeted to adolescents. Release, Mobihealthnews

In my home state of NJ, Caregility announced an AI-powered fall detection upgrade to their acute care clinical observation platform. iObserver is used by hospital care teams for observation of patients at risk for falls or self-harm. Interestingly, the fall detection system is run on computer vision, which means it runs entirely on telehealth edge devices in the patient room with the AI capable of identifying and deriving information from objects and people in images and videos. Edge device use means that processing is done within the devices themselves, which eliminates bandwidth issues and upstreaming to the cloud, a failure point for privacy and as we now see, hacking risk. According to the release, the computer vision capability is available for use on every one of the more than 15,000 Caregility edge devices currently installed in hospitals around the globe. 

Otsuka Precision Health (OPH) launches Rejoyn digital therapeutic for depression.  As previewed earlier this summer [TTA 29 May], OPH launched Rejoyn, the first and sole prescription digital therapeutic cleared by the FDA for the adjunctive treatment of major depressive disorder (MDD) symptoms. Rejoyn was developed in conjunction with Click Therapeutics. It is for use by those aged 22+ on antidepressive medication. After being prescribed from the patient’s provider or Wheel Health, the Rejoyn app can be downloaded from major app stores after keying in an access code that is furnished to the provider by BlinkRx. It is currently being priced on a cash-pay basis at $50 for the six-week course, which will increase later to $200 for insurer coverage, though it is not yet covered. In a six-week trial, the use of Rejoyn reduced depression symptoms and improvement across multiple scales typically used by patients and clinicians to track depression improvement. The Otsuka release and commitment are significant as it’s also the first true involvement of a major pharmaceutical company in telemental health with a highly targeted clinical app that isn’t tied to one of their medications. It’s a long road with a lot of bumps, as Otsuka experienced with Proteus Digital Health’s smart pill tech for its Abilify MyCite, as well as failed companies like Pear and Babylon Health.  Release, Healthcare Dive

In funding news, emergency services telehealth company MD Ally now has $14 million in a Series A to add to its previous $11 million.  The raise was led by Frist Cressey Ventures, founded by Senator Bill Frist and Bryan Cressey, and anchored by General Catalyst, with participation from Techstars, Seae Ventures, Red & Blue Ventures, and Alumni Ventures. MD Ally’s value proposition centers on the non-emergency 911 call. Dispatchers and first responders, after determining the non-emergency status, can divert the call to other telehealth and community-based resources to assist the person plus a ‘care assistant’ for treatment plans and long term outcome management. MD Ally is currently in test in Phoenix and locations in Florida, Arizona, and California serving about 5 million patients. Release, Mobihealthnews

In UK related news:

Alcove expands TEC services with CallConnect247. It is a state-of-the-art 24/7 Alarm Receiving Centre (ARC) designed for communities and local authorities who are modernizing their call services for alarm management to incorporate virtual care and video welfare calls. It includes AI-powered and automated services to reduce false alarms and minimize the ‘white noise’ calls that often inundate traditional ARCs. It’s expected to grow coverage up to 8,000 users by October. Alcove release, Thiis.co.uk

Health Catalyst buys US/UK care management company Lumeon Ltd for $40 million. The $40 million purchase price was funded with a mix of $2.5 million in stock and $37.5 million in cash plus a potential recurring revenue-based earn-out of up to $25 million that, if achieved, would be paid solely in cash. (page 42 of SEC Form 10-Q). No information was provided concerning staff transitioning at Lumeon’s current HQs in Boston and London, where it adds a UK/EU footprint to Health Catalyst’s current data analytics and software businesses. Lumeon’s Care Orchestration automates care coordination processes for providers in outpatient, acute care, and post-acute settings.

Health Catalyst’s earnings were also reported in the 10-Q. Revenue for Q2 was up slightly from last year to $75.9 million, but burdened with a net loss of $13.5 million which was more than 50% reduced from Q2 2023’s $32.6 million. Q2 adjusted EBITDA improved to $7.5 million versus $3.5 million in prior year. Release, Mobihealthnews

News roundup: Owlet’s Dream Sock, BabySat go to market; General Catalyst’s HATco agrees to buy Summa; Cigna’s contrasting provider strategy; new ElliQ robot assistant debuts at CES

January 18, 2024 | by

JP Morgan’s Healthcare Conference (JPM) and CES are as expected big generators of news around digital health–here’s a selection from then and more:

Owlet launches Dream Sock and BabySat at CES. Both were FDA-cleared in November and June 2023 respectively. The Dream Sock baby monitor received first-of-kind de novo clearance for pulse oximetry and sends real-time Health Notifications for low pulse rate, high pulse rate, and low oxygen to parents’ smartphones. Target market is infants 1-18 months and 6 to 30 pounds with direct sale on the Owlet website at $299.

The BabySat is the prescription-only version (left) targeted to infants 1-18 months and 6-30 pounds, but with acute or chronic medical conditions. It also has the unique capability not only to track vital signs but also for the provider to customize alarms for oxygen saturation and pulse rate. Owlet’s BabySat information page explains in plain English the type of medical conditions where the BabySat would be of assistance and the steps to obtain a prescription that is fulfilled through their partner AdaptHealth. A virtual Rx and insurance reimbursement are in the works. A small drawback is that it is only usable with an iPhone. Happily, their stock is also on the rebound at the highest point in six months. Having followed them since the ‘telehealth for the bassinet set’ days of 2012-2013, their continued independence, their rebound from some dark days, as well as their focus on baby health, this Editor continues to wish them bonne chance. Owlet release (via Yahoo Finance).

Big Investor General Catalyst announced their first acquisition move for the Health Assurance Transformation Corporation (HATCo) not at JPM but today (17 Jan). Summa Health is a $1.8 billion (in revenue) non-profit integrated healthcare system headquartered in Akron, Ohio that encompasses hospitals, community medical centers, a health plan, an accountable care organization, a multi-specialty physician organization, medical education, research and the Summa Health Foundation. HATCo’s objective is to transform healthcare towards a goal of “health assurance”, defined as “a more affordable, accessible and proactive system of care” where presumably their extensive experience in investing in healthcare gives them expertise. [TTA 10 Oct 2023] The letter of intent initially sets up a partnership with immediate investment in Summa while due diligence takes place, then when completed moves to a definitive agreement with details of the acquisition and a transaction price in the next few months. Summa would move from a non-profit to a for-profit in becoming a subsidiary of HATCo. According to their information, current management will remain in place.

Summa’s incentive is to stem losses, reportedly at $37 million through Q3 2023, more than double the prior year. HATCo in November stated its desire to buy a health system in Summa’s $1 to $3 billion range. As usual, the buy is subject to regulatory approvals and a final closing date.  HATCo release, Summa Health statement on “our future”, FierceHealthcare

To the contrary, Cigna prefers to partner, not own, healthcare providers. As a payer closer by many degrees to hospitals and practices than General Catalyst, structured much like UnitedHealth Group with Evernorth its counterpart to Optum, they have avoided the aggressive ownership of physician practices. UHG employs about 10%–90,000–physicians through ownership of practices as of December 2023. MedPageToday  At JPM, Cigna CEO Eric Palmer emphasized ‘strategic relationships’ like a minority share of VillageMD (majority owned by Walgreens) in their acquisition of Summit Health, and creating an ‘ecosystem’ that connects to the best partners. Their investments will be wrap-around services in home health, behavioral and virtual care now that a merger with Humana is once again off the table. Becker’s Payer They’ll have some cash to do so; Cigna’s sale of their Medicare Advantage business will likely be to Health Care Service Corporation (HCSC) and fetch $3 to $4 billion. Becker’s Payer

Intuition Robotics debuts ElliQ 3 at CES. An interactive desktop companion robot designed to improve social connection and alleviate loneliness of older adults and those with assistive needs, the new version updates the robot hardware and software capabilities including generative AI capabilities powered by Large Language Model (LLM). The new design from Yves Behar’s design studio, Fuseproject, is also 1.3 pounds lighter and has a 36% smaller footprint which makes it easier to both place and handle, along with a fully integrated screen. Technical improvements include an octa-core SoC and a built-in AI processing unit (APU); 33% more RAM, twice the amount of computing power and memory, and an inclusion of a dual-core AI processing unit (APU), all of which are needed to power generative AI for greater ‘conversant’ capabilities. The LLM technology integrated into the Relationship Orchestration Engine makes real-time decisions regarding actions, scripted conversation, and generative AI conversations. For instance, the person speaking with ElliQ may talk about activities and beliefs, which are stored and classified. In another conversation, ElliQ may use that information to suggest participation in activities and social interactions, while ensuring that the context and flow of conversation is ‘guardrailed’ and appropriate. The AI can also assist the person in activities such as painting or writing poems together.

Current partners include the New York State Office for the Aging, Inclusa (a Humana company), and the Area Agency on Aging of Broward County, as well as newer partners like The Olympic Area Agency on Aging, Ypsilanti Meals on Wheels, and others. Release

Israel-based Intuition Robotics most recently raised $25 million in August 2023 in an unlettered round with $20 million in venture capital plus $5 million in venture debt. TTA 19 Sept 2023

Olive AI selling rest of business to Waystar Health and Humata Health, winding down: reports (several updates)

October 31, 2023 | by | 3 Comments

The final reorganization is to sell everything. Today’s report in Axios states that Olive AI’s remaining business has been sold to revenue cycle management/payments software Waystar Health and to Humata Health, a startup (see update below). Olive’s Clearinghouse and Patient Access business units went to Waystar and its Prior Authorization business unit to Humata. Sale prices and staff transitions were not disclosed. OliveAI’s business lines centered on automating routine tasks in healthcare so that more time could be spent on patient care and higher value tasks.

Olive’s statement was simple and brief, in part reading “These products represent the heart of Olive’s business and we believe this decision will provide important stability and a bright future for these customers. With the sale of our core business units, Olive will wind down the remainder of its business.” Other than this message, their website was almost totally disabled except for a customer login on a product named Lighthouse. In the message, there is no information on handoffs nor on the fate of remaining staffers.

This follows on our reporting of Olive AI’s slow bleed starting July 2022 when they pink-slipped 450 employees, or one-third of staff, followed by additional layoffs of 35% of staff (215 workers) this past February, then the sale of various businesses to an undisclosed sister company, business intel to BurstIQ, and its utilization management tool to Availity all between February and June. They had a lot to sell in refocusing on core business. Since its founding in 2012, Olive had pivoted its business model 27 times according to its CEO, which sounds to this Editor more like a constant pirouette. The final layoff reported was in July of another 450 staff, another one-third. An Axios report in April 2022 demolished much of their credibility with examples of overpromising on their technology producing savings and efficiencies, then underdelivering, an assessment echoed by KLAS. HISTalk

OliveAI’s demise as it reaches the end of the runway for near-total hull loss is almost in the Theranos class as a Unicorn Fail. They were valued at one point at $4 billion and burned through over $850 million in nine rounds of funding up to a Series H, including from top VCs General Catalyst, Tiger Global, and Vista Equity Partners. General Catalyst is now moving into the transformation business with the awkwardly named HATco,  The Health Assurance Transformation Corporation, announced at HLTH earlier this month and defined as “a more affordable, accessible and proactive system of care”.  As this Editor noted then, HATco’s promise is a song we’re heard before. (The Gimlet Eye would say it should be played on a tinny, out-of-tune piano.)

One of the remaining business buyers, Waystar Health, filed only two weeks ago to be the first IPO in digital health in over a year, for an estimated valuation of $8 billion. Mr. Market’s bad behavior though is delaying its roadshow till December at the earliest due to weakness. The IPO will be 2024. Sometime. [TTA 26 Oct] The cycle begins anew.

Even so, yet another demise of a once-promising company is sad news. This is developing and will be updated.

Update on Humata Health (see comment below). Turns out it is a startup that will be headed by a former Olive president for their payer business, Jeremy Friese, MD. According to his LinkedIn profile, Dr. Friese had that position November 2020 to September 2022 after the sale of Verata Health, where he was co-founder and CEO from 2017 until they sold their prior authorization business to Olive AI. Three former Olive employees contacted the author of Axios’ coverage, Erin Brodwin, after she published the original article on 31 October. So Dr. Friese, who lists a ‘stealth startup’ from April 2023 in his profile, is apparently taking back his prior authorization business. Does this seem reminiscent of Pear Therapeutics’ CEO, Corey McCann, obtaining backing to acquire many of Pear’s assets out of bankruptcy for a paltry $2.03 million [TTA 24 May]?

Was Olive AI a scam? HISTalk has an interesting discussion today on whether it met the definition, as some have claimed. Their POV is that it was not, but investors and customers didn’t do their due diligence despite poor KLAS reviews (except for prior authorization) and especially in the hothouse of 2020-2021 did not see past the hype. For those evaluating companies, whether to take them on as a vendor or to go work for them, there are three cautionary points that stood out in their seven lessons:

  • Companies can be wheezing their last even as they pay big money for impressive exhibits and sponsored events at conferences.
  • Rapid company expansion, acquisitions that look like an attention-diverting shell game, and a product line that is too confusing to summarize in a single “what does your company do” sentence are reasons for skepticism.
  • All companies and investors look smart when the economy is booming.

HISTalk’s Curbside Consult columnist Dr. Jayne takes on Olive AI, which in her health IT world is being much talked about. She and this Editor are on the same page about these running-out-of-funding runway startups which she summarizes so well:

In talking with friends who know the industry well, most are in agreement that it’s time for a lot of companies to pay the proverbial piper since they can’t deliver on the promises they made in exchange for startup funding. They forecast that many more companies will be trying to reinvent themselves over the coming months. Those that are successful may live to fight another day, but others may become the stuff of fire sales or ultimately closures.

Funding/new business roundup: General Catalyst’s HATco ‘health assurance’ venture and $6B portfolio merger, Brightside Health expands, Diana Health’s $34M, Headway’s $125M, Main Street Health’s $315M

October 10, 2023 | by

With HLTH 2023 this week in Las Vegas, there’s the usual deluge of investment and ‘big news’ announcements, both before and during the conference.

HLTH’s Biggest and Somewhat Mystifying News (so far) is that Big Investor General Catalyst now is getting directly into the healthcare transformation business with HATco. The Health Assurance Transformation Corporation is a fully-owned company that will be in the business of “health assurance”, defined as “a more affordable, accessible and proactive system of care” which is a very broad brush indeed that sounds like the promise of value-based care and the Triple Aim (remember?). HATco already claims  20+ health system partners plus a large payer that accounts for about 15% of healthcare revenue and is in 43 states and four countries. They will be building an interoperability model with technology solutions that include a subset of their healthcare portfolio companies to drive this transformation. Their next big step will be actually acquiring and operating a health system to show how this health assurance can work. The new venture will be headed by Dr. Marc Harrison, former CEO of Intermountain Health, with a big assist from managing director Hemant Taneja, who previously founded data OS/EHR/workplace asset tracker and staff safety system Commure. Release, Mobihealthnews, FierceHealthcare 

Speaking of Commure, it is merging with another General Catalyst-funded company, Athelas. It seems like a skillful rationalization of two portfolio companies in health data and workflow data systems, including Commure’s PatientKeeper EHR, with Athela’s addition of revenue cycle management and sensor-based software for remote patient monitoring. The combined entity under the Commure name will be led by Athelas’ CEO and founder Tanay Tandon, with Commure’s CEO Ashwini Zenooz, MD moving into a non-executive director role on Commure’s board. Taneja will retain his executive chairman title. General Catalyst is investing additional funds, valuing it at $6 billion, oddly fanciful given the current environment and their revenue; the current Commure expects to finish the year with $100 million in contracted annual recurring revenue with the combined companies achieving a $125-150 million run rate by end of year. The transaction is expected to close at the end of October. Commure release, Athelas release

Telemental health’s Brightside Health doubles covered lives with additional Medicare and Medicaid beneficiaries. These are from Optum–UnitedHealthcare Medicare Advantage members–plus new and expanded partnerships with Centene, Lucet (to serve Florida Blue members), and Blue Cross and Blue Shield of Texas. This drives up in-network covered lives by 50 million to over 100 million (not actual users). Brightside offers personalized psychiatry, clinically proven therapy and Crisis Care (a program for those with elevated suicide risk) through these plans. Fun fact: based on a Brightside study published in Frontiers in Psychiatry, telemental health is effective for people with reported incomes under $30,000 per year. Healthcare Finance

Diana Health’s $34M Series B to nationally expand women’s health/OB-GYN digital health platform and care teams. Diana partners with health systems to offer women their tech-enabled services in maternity care–preconception and family planning, annual well woman visits, wellness coaching, and virtual and in-person classes and events. Their focus is on improvement of outcomes and women’s satisfaction with maternity care. Diana also has an in-person practice in Smyrna, Tennessee as well as arrangements with health system clinics in Springfield and Cookeville. The funding round was led by Norwest Venture Partners with existing investors .406 Ventures, LRVHealth, and AlleyCorp for a total of $46 million to date. Release, Mobihealthnews, MedCityNews

Telemental health is still simmering with Headway’s $125 million Series C and new unicorn status. Headway, which works exclusively with health plans to provide members with therapy and psychiatry, is now officially a $1 billion+ valued unicorn. This round was led by Spark Capital with Andreessen Horowitz, Accel, and Thrive. GV, which had participated earlier in the $70 million Series B round in May 2021 plus the late 2020 Series A of $26 million, was absent. Funds will be used to go national and equip their providers with new technology and tools. FierceHealthcare, Mobihealthnews

Topping it off, rural health service provider Main Street Health scored a jumbo investment of $315M in new capital. Investors include Oak HC/FT as well as five of the largest national Medicare Advantage plans. Main Street equips rural partner clinics with Health Navigators who assist the clinic’s providers with patient care coordination, such as med pickup reminders, scheduling visits post-hospital discharge, scheduling preventative screenings, and assisting with social determinants of health (SDOH) services. They plan to expand to 26 states from the current 18. A typical clinic is located in a town of 3,000 to 5,000 people and has 2.5 providers, making this additional outsourced service valuable indeed. Release, FierceHealthcare

Wednesday news roundup: PicnicHealth $60M Series C, can a downturn be good for digital health, Cerebral ran wild, a tart take on HIMSS and where it’s going

June 29, 2022 | by

PicnicHealth had a bit of one, even in this down market. This company which uses machine learning to build data sets for life sciences by working directly with patients and giving them single-source access to their data raised a $60 million Series C via new investor B Capital Group, with existing investors Felicis Ventures and Amplify Partners. The new funding will be used to build 30 new patient-centered real-world data cohorts. Adam Seabrook, Partner at B Capital Group, will be joining the PicnicHealth board of directors. Their total raise to date is $97 million since 2014 (Crunchbase). The platform was launched in 2020. FierceBiotech, release

Funding news may be a little light nowadays, and if you’re public, you’re looking at double digit share price losses, but couldn’t you guess–the downturn may be good for digital health founders! That’s the view of Big VC General Catalyst’s Hemant Taneja, said at Collision 2022, a Toronto tech conference. Now before you’ve thought the man has totally gone out of his gourd with $5+ gallon gasoline (US), 10% inflation, and rolling blackouts looming on both coasts and the UK, it is true that businesses founded in downturns tend to be tough–my father’s business was founded at the start of the Great Depression. As Mr. Taneja put it, tighter times make for more mission-driven “better founders, better investors and better executives”. Secular trends are in their favor in tech and digital transformation, but there will be another correction coming as the market is over-capitalized. Is it the dot-com boom/bust all over again? Only time will tell, but the crackups are already piling up. FierceHealthcare

Speaking of crackups, Cerebral. A report in the annoyingly paywalled Business Insider tells a tale of Telemental Health Running Wild. Former employees and ~2,000 leaked documents claim that Cerebral had no more than a nodding acquaintance with clinical standards until the Feds stepped in. For starters, they took on patients they should not have, didn’t train their nurse-practitioners and other employees, pushed prescriptions to 95% of patients, disregarded state regulations putting licenses at risk, and generally had more twists than a barrel of pretzels. And this was a company prescribing Schedule 2 drugs that had at peak 210,000 active patients and 4,500 employees.  HISTalk summarizes the article, with our thanks. But it’s par for the course, according to a new JMIR (Journal of Medical Internet Research) study also mentioned that found that “many digital health companies have a low level of clinical robustness and do not make many claims as measured by regulatory filings, clinical trials, and public data shared online.” 

And returning to HISTalk (29 June news), there’s a group of comments from a “HIMSS insider” about how that organization is being managed that long-time observers of this organization will find interesting. Employees thought that HIMSS22 was “awkward”. New and cool conferences HLTH (which initially faltered) and ViVE (which HIMSS didn’t even bother to scout) have taken much of the ‘must attend’ and buzz away from HIMSS. Now this wasn’t supposed to happen with the buy of hipper Health 2.0, to which your Editor was connected–but H2O was HIMSS-ized and effectively killed off even before the pandemic. Regional conferences have disappeared, along with a fair number of employees. HIMSS Analytics is sold. Now this could be all one person’s opinion–but what do you think?