Breaking: Amazon Care shutting down after three years–what’s next? (updated)

August 25, 2022 | by

Amazon Care to cease operations after 31 December. Amazon Health Services is throwing in the towel on its primary care service for enterprise customers, after failing to make much headway with its mix of virtual care, in-home, and telehealth services. An internal email from Neil Lindsay, Amazon Health Services senior vice president, sent today (24 Aug) to employees but leaked to the press, stated that “This decision wasn’t made lightly and only became clear after many months of careful consideration. Although our enrolled members have loved many aspects of Amazon Care, it is not a complete enough offering for the large enterprise customers we have been targeting, and wasn’t going to work long-term.”

Employees who have been part of Amazon Care may have the opportunity to transfer to other parts of Health Services, according to the memo, or will be ‘supported’ in finding other roles within or outside the company. The total number of employees was not disclosed, but this Editor expects layoffs to be announced by the fall as Amazon Care winds down.

Amazon has been moving in a different direction with enterprises for some months. Reportedly the decision was made to ditch Amazon Care prior to agreeing to acquire One Medical, which was announced late in July. However, recently revealed negotiations actually started last February, with One Medical pitting Amazon against CVS until CVS dropped its bid effort [TTA 19 August]. 

As this Editor noted last month with the One Medical acquisition, “…for this Editor it is clear that Amazon with One Medical is buying itself into in-person and virtual primary care for the employer market, where it had limited success with its present largely virtual offering, and entreé with commercial plans and MA.” With One Medical, they will be acquiring an operation with 790,000 patients (including 40,000 at-risk, presumably Iora’s), 8,000 company clients, 125 physical offices in 21 US metros (including projected), and an established telehealth/telemedicine protocol. In other words, a ready-made provider and enterprise base to build on and sell into, for instance Amazon products like Pharmacy and PillPack.

Not addressed is what will be done, if anything, to transition current employer agreements for Amazon Care to One Medical.

It’s now a matter of whether HHS, DOJ, and FTC will agree to the buy or ask for additional divestitures. One conflict–Amazon Care–has just been removed. And this may clear the deck for other acquisitions, such as Signify Health [TTA 24 Aug], if Amazon wins the auction against CVS, UnitedHealth Group, and Option Care Health, though for a newcomer to healthcare Signify may very well be A Bridge Too Far.

What’s in play?

  • One Medical’s Iora Health and its high needs/high costs Medicare patient base. This has very much been held in the background, leading this Editor to think it will be sold to another health plan.
  • The status of the previous agreement with Crossover Health for 115,000 Amazon employees and dependents, delivered through their employer-based onsite clinics in 11 states in addition to concierge care [TTA 17 May]
  • Another previous agreement with Ginger for telemental health, only announced last week.

Amazon was touting Amazon Care as recently as earlier this year to shareholders. They had acquired employers outside Amazon such as Hilton, but not quickly enough. Expansion talk and the usual touting within the industry weren’t happening. There was an ‘air of mystery’ about what Amazon Care was doing, going back to the beginning.

Perhaps a major ‘tell’ was that Kristen Helton, general manager in charge of Amazon Care, was reported two weeks ago by Bloomberg News to be taking an “extended break to spend the summer with her family.” She had been in the GM position for three years after joining Amazon in 2015.

Count Amazon Care as one expensive learning course in the insanely costly University of Healthcare Delivery. This won’t be the first lesson, but Amazon can afford the tuition.

Geek Wire, FierceHealthcare, 

Friday short takes: was there a bidding war for One Medical? A concussion risk wearable tested. Get Well’s monkeypox digital care plan

August 19, 2022 | by

Amazon’s scoop-up of One Medical apparently was not all Skittles, Rainbows, and Unicorns. Large companies like Amazon, Walmart, Allscripts, and CVS are on the hunt to fill gaps in their portfolio and technologies, but only “healthy health tech companies at the right (discounted) price that fill in their tech gaps.” Of course, some of these companies have more chips on the table and in the safe than others.

We know from earlier reporting [TTA 7 July] that One Medical and CVS had some talks, but that One Medical spurned the offer. It did establish that One Medical was in play. Some digging by Heather Landi at FierceHealthcare, taking a walk through SEC documents according to a regulatory disclosure with the US Securities and Exchange Commission (SEC) filed 10 August, found that CVS (identified as Party A) and 1Life Healthcare, the parent of One Medical, started their acquisition talks in October 2021. 1Life was short on cash, getting shorter, needing to expand, and was having trouble raising the $300 million they estimated they needed. Starting this past February, 1Life management started to negotiate with Amazon. On 1 June, CVS offered $17 per share, boosting it by $1 the following day, but were informed by 1Life that there was another suitor. By 2 July, Amazon put $18 in an all-cash deal on the table. When news leaked via Bloomberg on 5 July that CVS was in discussions, CVS bowed out. By the end of July, 1Life and Amazon closed on the deal [TTA 27 July].

It came down to this–Amazon needed One Medical more than CVS. Watch for CVS and Walmart to make more provider/primary care moves by the time the snow flies this year. We’ve already noted that CVS inked a deal with Amwell a few days ago as their provider for Virtual Primary Care and that Walmart outright owns a telehealth provider, MeMD, though their overall strategy remains a bit murky.. CVS also has resources through Aetna that are integratable, such as provider networks.

And speaking of Amazon, they just inked a deal with Ginger to add telemental health as an option for Amazon Care. Healthcare Dive

In the US, we are very close to football–and concussion–season. Multiple concussions lead to CTE, which took a long time to recognize as a cause of premature dementia. A mHealth wearable has been tested to measure head kinematics–head movement–and detect sudden neck strain, such as whiplash. Current systems are embedded in helmets or the X-Patch, which uses accelerometers.  According to the report in AAAS’ EurekAlert!, Nelson Sepúlveda of Michigan State University and colleagues developed a novel patch sensor using a film layer of thermoplastic material, a ferroelectret nanogenerator or FENG. “This produces electrical energy when physically touched or pressure is applied. The electrical signal produced is proportional to the physical strain on the neck and can be used to estimate the acceleration and velocity of sudden neck movement, two important markers for predicting concussion.” For this test, a dummy was used. Nature Scientific Reports, mHealth Intelligence

Monkeypox, its transmissibility, and treatment have also percolated this summer.  Get Well Network, which we noted last month in a JAMA study used its GetWellLoop RPM and monitoring in a Covid-19 home treatment study, released a new monkeypox digital care management plan. It will permit monitoring of symptoms from home using RPM, help direct patients to higher levels of care if and when needed, and aids hospitals in managing mandatory regulatory requirements for reporting and tracking infectious diseases. LifeBridge Health in the Baltimore area began offering Get Well’s monkeypox symptom monitoring tool last month. Release

Short takes: rounding up revenue and acquisition action during JPM

January 14, 2022 | by

The  JP Morgan conference (JPM), which wrapped on Thursday, is traditionally a major venue for healthcare announcements, from revenue to staff to investments. Having never attended but harboring a secret desire to observe (as a poor churchmouse on the wall–no fly am I) the 1% doing their thing, this Editor cannot imagine how boring it must be in virtual format. 

Here are a few highlights: the important, kind of interesting, and not too tedious.

  • Teladoc projects full-year 2021 revenue to hit $2.03 billion, nearly doubling its 2020 revenue. 2022’s projection is about $2.6 billion. It’s revenue without profitability, however. Teladoc lost $84.3 million Q3 2021, which more than doubled its PY $36 million loss. As we noted in our earlier article, Teladoc, like every other telehealth company, saw its shares plummet in 2021 as patients returned to offices and telehealth claims plunged to 4%, mostly for behavioral health. FierceHealthcare
  • Transcarent, Glen Tullman of Livongo’s ‘encore’ company, has landed a $200 million Series C and is now valued at $1.62 billion. Transcarent’s market is self-insured employers and provides a care management model focusing on personalized health and care support for employees. Kinnevik and Human Capital led investors and were joined by Ally Bridge Group, General Catalyst, 7wireVentures, and health systems Northwell Health, Intermountain Healthcare, and Rush University Medical Center. Release
  • Boston-based Medically Home, which supplies hospital-to-home support and integrates technology services, nabbed a $110 million venture round from investors Baxter International Inc., Global Medical Response, Cardinal Health, Mayo Clinic, and Kaiser Permanente. To date, they have worked with 7,000 patients. Release 
  • DexCare, a platform-as-a-service (PaaS) that ‘orchestrates’ digital demand and health system capacity, closed a $50 million Series B funding led by Transformation Capital, with participation from Kaiser Permanente, Providence Ventures, Mass General Brigham, Define Ventures, Frist Cressey Ventures, and SpringRock Ventures. Release
  • Mental health/meditation app provider Headspace Health acquired startup Sayana to build out AI capabilities in mental health and wellness. Its self-care app leverages chat-based sessions with an AI persona. Terms were not disclosed, but Sayana CEO/founder Sergey Fayfer will join Headspace in a product leader role. Headspace acquired rival Ginger back in August [TTA 27 Aug]. FierceHealthcare, release
  • Rival Talkspace is also facing a shareholder lawsuit on securities fraud after going public in a $1.4 billion SPAC deal. According to FierceHealthcare, the charges filed 7 January center on non-disclosure in their financials of critical growth headwinds, including increased advertising and customer acquisition costs and worsening growth and gross margin trends. They also overvalued its accounts receivable from certain health plan clients. Coupled with management turmoil–their president/COO resigned after a ‘conduct’ problem at an offsite event–their share price has plummeted over 80%. Their projection of full-year 2021 revenue was cut to $112 million from $125 million. Talkspace, of course, has said the suit is meritless.
  • Aledade, well known to this Editor as an organizer of accountable care organizations (ACOs) and a management services organization (MSO) for physician groups in value-based care, bought Iris Healthcare. Iris provides advance care and palliative care planning for health plans and providers for seriously ill and high-risk patients via its network of 1,000 independent primary care practices and health centers. It will be folded into their new Aledade Care Solutions unit. FierceHealthcare, release

Google joins the behavioral health wars, adds new senior executive from Headspace

October 28, 2021 | by

Google, having disbanded Google Health as a unit and scattered their products and teams internally, has decided that behavioral health is worth spending on across business lines. Megan Jones Bell, Psy.D., formerly chief strategy and science officer of Headspace, recently purchased by Ginger, rejoins Google this week as their first clinical director of consumer and mental health. 

She will be overseeing Google’s approach to mental health, supervising a team of clinicians, as well as coordinating primarily consumer-facing products such as the controversial verification of health information on Google-owned YouTube, across Google Search, Maps, Fitbit, and Cloud, medical products like the Care Studio EHR search app, depression screeners, and for employee health and safety. FierceHealthcare, Becker’s HealthIT

At least initially, Google does nothing in a small way. At HLTH21, Google’s chief health officer Karen DeSalvo, MD boasted that “Our get up every morning, raison d’être, is impact. It’s helping billions around the world be healthier.” Then followed broad and ambitious statements about social determinants of health (SDOH) and advancing health equity. Both have become a standard script for executive speeches at these conferences, virtual and in-person.

When scattered across multiple lines of business, it’s a little difficult to track ROI. And perhaps, that is the real Googly Goal. This Editor is of the opinion [TTA 24 Aug] that health is only a part-time pursuit for Big Tech, and that the real game is monetizing data–on people and what can be sold to healthcare organizations. When Big Tech tries to solve the problem of health by itself–which surely sounds what Dr. DeSalvo is about–it stumbles. Just ask David Feinberg, who decamped for Cerner after many frustrations at Google.  

Mental health apps Headspace, Ginger to merge into $3B Headspace Health

August 27, 2021 | by

Two acquisition prospects, Headspace and Ginger, decided to beat the heat and merge. The two companies, currently headquartered in Santa Monica and San Francisco, will combine into Headspace Health. From the context of the release, the Ginger brand will be sunsetting. The merger is expected to close in Q4 subject to the usual regulatory and financial approvals. Financial terms were not disclosed. The combined company claims a valuation of $3 billion.

Leadership will combine from both companies. Russell Glass, Ginger’s present CEO, will be CEO of Headspace Health. CeCe Morken will remain CEO of Headspace and take on the additional role of President for the combined entity. 

Digital mental health continues to be hot in a hot August. Headspace, which started as a mindfulness and meditation app in 2010, then sidled into behavioral coaching to mitigate stress and aid in sleep, to date raised $216 million through a Series C (Crunchbase). Ginger, a cognitive therapy service with both self-guided coaching and psychiatric video consults, was founded in 2011 and raised $220 million through a Series E. Headspace has a direct to consumer focus with business partnerships with Google, Roche, and employers, while Ginger has developed into a benefit for payers like Cigna and Amerihealth Caritas. The combined company claims it will cover 100 million lives direct-to-consumer and through its more than 2,700 employers and health plan partners.

It is obvious from the management setup and the overpadded release (sorry, but it’s true!) that the lead company in this is Headspace. Can an IPO be far away? Release, Healthcare Dive

Funding roundup: new unicorn Capsule’s $300M, $100M for Caresyntax, Sesame Care’s $24M, UCM Digital Care’s $5M; MD Ally brings telehealth to 911

April 29, 2021 | by

This week’s (so far) Big Raise is virtual pharmacy Capsule. Their new funding of $300 million, added to a previous $270 million in five rounds through a 2019 Series C (Crunchbase), now, according to CEO Eric Kinariwala, puts his company into $1 bn unicorn territory. Founded in New York City in 2015, Capsule now covers the NY metro plus a dozen markets in same-day delivery plus the option for pharmacist chat/text via mobile phone. Their goal is to reach 100 million people nationally by the end of this year. The fresh funding will be used for expansion and to upgrade technology. Durable Capital Partners led the funding round and was joined by new investors Baillie Gifford, T Rowe Price, and Whale Rock.

Capsule is in a hot niche sector of fast prescription delivery that has players large (CVS, Walgreens’ AllianceRx), Amazon (PillPack, Amazon Pharmacy), and smaller or local services like Blink Health, FetchMyRx, Medly, and your local pharmacy. Uber is also partnering with some for delivery. Earlier this year, Capsule partnered with Ginger to fill and deliver medications prescribed by their board-certified psychiatrists in metro New York City, Chicago, Minneapolis, Boston, and Austin. FierceHealthcare, Mobihealthnews, Bloomberg (may be paywalled)

Mobihealthnews also rounded up three additional digital health fundings from the seed to Series C range:

  • Surgery data/AI plus virtual consult platform Caresyntax, closed a $100 million Series C funding round led by PFM Health Sciences LP. Release.
  • NYC-area direct-pay healthcare marketplace Sesame Care added a $24 million Series B, for a total of $47.6 million to date (Crunchbase). Sesame offers in-person and telehealth care to patients, allowing them to compare prices and providers before booking and paying the provider directly. 
  • UCM Digital Health, a provider of emergency telemedicine and virtual health, announced today it closed a $5.5 million Series A funding round. Armory Square Ventures led the round with additional participation from Contour Ventures and River Park Ventures. Based in Troy, NY, UCM has a “digital front door” platform with a 24/7 telehealth treat, triage and navigation service marketed to employers, insurers, and providers. Release
  • Last but certainly not least, MD Ally added a modest $3.5 million in a seed round led by General Catalyst with participation from Seae Ventures. MD Ally triages 911 emergency services calls, rerouting non-emergency calls to telehealth services and expanding their scope of services. It integrates into existing dispatch systems with a unique range of codes that confirm for the dispatcher that the call can be safely routed to a telehealth provider. TechCrunch, release

Deals and news roundup: Ginger’s $100M, myNEXUS to Anthem, Everlywell snaps up PWN, Amwell’s banner year for revenue–and loss, VA reviews Cerner rollout, voice visits for MA, GE’s vScan goes wireless, uBiome founders indicted

March 27, 2021 | by

Deals–and news–are piling up like Easter eggs before the hunt. Mental health and cognitive digital therapy scored another raise with Ginger‘s $100 million Series E to fund expansion into health plan and government partnerships. Blackstone Growth led the round. Total funding to date is $220 million. It’s entered unicorn status with a valuation just north of $1 bn. Ginger to date has concentrated on corporate mental healthcare. From being an ugly duckling only a few years ago, digital mental therapies are this year’s ‘it’. But competition is fierce: the traditional telehealth companies such as Teladoc, Doctor on Demand, and Amwell are closing in on the early entrants such as AbleTo. Direct-to-consumer models like Talkspace; UK/Ireland’s SilverCloud Health; and Lyra, Spring Health, and Happify, which just closed a $73 million Series D, all step out with slightly different ‘differentiators’ but target the same companies, health plans, and health systems. FierceHealthcare, Ginger release. 

Home health is also another former ugly duckling transformed into a swan. Anthem is acquiring home health/nursing management company myNEXUS, which manages home-based nursing services for 1.7 million Medicare Advantage members across 20 states. Their digital authorization and visit management couples with a nationwide network of providers and nursing agencies for local care. Exiting myNEXUS are private equity investors led by New York’s WindRose Health Investors, after four rounds and a conservative $31 million in funding (Crunchbase). Neither terms nor management transitions were disclosed. myNEXUS will join Anthem’s Diversified Business Group. FierceHealthcare, release.

Home testing+telehealth company Everlywell (not connected with the Everly Brothers) has a different take on home health. They are now integrating their self-test kits with fully owned lab testing. New acquisitions PWNHealth and its subsidiary Home Access Health Corporation will join Everlywell in Everly Group. PWN was Everlywell’s main telehealth partner and diagnostic testing partner since 2016. It will become Everly Health Solutions with their testing data kept separate from Everlywell’s. Home Access was PWN’s self-collected lab test company. Everly Health now will support more than 20 million people annually in all 50 U.S. states, Canada, and Puerto Rico. Acquisition terms were not disclosed. PWN’s CEO will take a seat on the Everly Group board to assist integration. Valuation is now estimated at $2.9 bn.  Mobihealthnews, Everly release, Bloomberg News

And in other news…

Amwell reported a Very Good Year in their telehealth services, with visits growing to 5.9 million from 2019’s 1.1 million. Total revenue was up over 65 percent to $245.3 million. However, profitability continues to be elusive, with net loss almost equaling revenue. Release

The Department of Veterans Affairs (VA) finally announced a review of the Cerner-Leidos EHR integration. Back in February, VA was hanging tough on the rollout after the GAO report questioning its wisdom and recommending postponement until high severity issues were corrected. Secretary Denis McDonough, new VA head, has directed the undertaking of a 12 week strategic review without pausing the project. Taking bets on that 12 weeks! Healthcare Dive

Payers and their lobbyists are supporting a newly reintroduced House bill that would permit telephonic-only telehealth visits to be reimbursed for their Medicare Advantage plans after HHS closes the pandemic period. There is considerable information that video/audio virtual visits still have limitations with the 65+ group, clustered around high-speed internet or good data connections, smartphones, and computers with cameras, making video visits difficult or impossible. Which begs the question about continuing coverage for those on Original Medicare. Healthcare Dive

Those readers with long memories will recall GE Healthcare’s heralded introduction of the VScan handheld clinical-grade ultrasound device–back in 2010, complete with Eric Topol rave and demo. Not much has been heard from GEHC since till this month, and other competitors, such as the Butterfly IQ from 4Catalyzer, have made handheld ultrasound common and affordable. GEHC announced Vscan Air, a fully wireless version that connects to iOS or Android. It was FDA cleared in November 2020 and will be shipping its dual-headed probe and accessories starting 1 April for a US-listed target price of $4,495. GEHC page (with the cute domain vscan.rocks), Mobihealthnews

And in our Scandal Sheet section, a Federal grand jury in the Northern District of California has indicted the founders of now-bankrupt uBiome on 40-odd counts encompassing conspiracy to commit securities fraud, conspiracy to commit health care fraud, money laundering, and identity theft. Separately, the Securities and Exchange Commission (SEC) also filed charges. Between 2016 and 2018, uBiome had raised $100 million through a Series C, and was likened to Theranos, after its fall, in the Big Claim (‘inventing the microbiome industry’). Its business was analyzing the DNA of fecal and other biological matter to sequence the bacteria of the body’s microbiome. Starting with low-cost, limited data comparison for at-home tests, the founders progressed to claiming to doctors that their diagnostic tests were clinical-quality and would be reimbursed by payers. Payers did–for awhile–and the investors piled in. By 2019, the wheels fell off their scheme and the FBI came knocking at their Silicon Valley offices after the founders cashed in. Chapter 7 followed in late 2019. The Register reports that the two married founders are on the run, whereabouts unknown. US Attorney’s Office release, SEC filing (PDF)

 

Drug discounter GoodRx plans US IPO; Ginger mental health coaching raises $50 million

August 11, 2020 | by

The bubble bath got soapier with more IPOs and big raises on tap. 

GoodRx, the relentlessly advertised prescription discount scheme with spokespeople Martin Sheen and son Charlie, has filed initial paperwork with the US Securities and Exchange Commission (SEC) for a potential initial public offering (IPO). This has been in the rumor mill for a while. Timing would be about 4th Quarter or early in 2021, according to Reuters.

It may at least a partial exit for Sand Road PE giant Silver Lake Partners, which took a one-third interest in GoodRx in August 2018, creating an estimated value at $2.8bn. CNBC  Both their growth since then and key hires have indicated preparation for going public. According to MedCityNews, their revenue is up by 55 percent since 2018 and they now employ 350 people. As mentioned above, they advertise heavily on TV with celebrity endorsers. In June, two IPO-experienced executives joined the company (release): new president Bansi Nagji, McKesson’s former chief strategy officer who was on Change Healthcare’s board during its IPO; and CFO Karsten Voermann from acquisition company Mercer Advisors and who led Mercury Payment Systems through its 2014 IPO.

Ginger, formally known as Ginger.io, raised $50 million in Series D funding. Lead investors are Advance Venture Partners and Bessemer Venture Partners, with participation from Cigna Ventures, Kaiser Permanente Ventures, and LinkedIn Executive Chairman Jeff Weiner. Ginger provides on-demand mental health coaching as part of employee benefits within the US. Their release claims 200 companies, health plans Optum Behavioral Health, Anthem California, and Aetna Resources for Living, and tripled revenue in the past year. According to Crunchbase, this is their ninth funding round with a raise total of $120 million. Mobihealthnews