CareCentrix files ‘corporate espionage’ on trade secrets lawsuit against Signify Health, former employee

Usually, laundry like this is not aired or dried in public, but it’s on the line nevertheless in a lawsuit. CareCentrix, a post-acute care/transitions of care management company, has sued in US Federal Court for the District of Delaware both Signify Health, a diversified home care company overlapping the same line of business, and CareCentrix’s former general manager, VP post-acute care Marcus Lanznar.  Initial charges were filed on 23 December and motions are piling up fast based on what is listed (paywalled, unfortunately) on PacerMonitor.

The Federal charge is covered under the Defend Trade Secrets Act of 2016 (DTSA), Cause 18:1836(a) Injunction against Misappropriation of Trade Secrets. The basics are that Mr. Lanznar was a senior executive of CareCentrix, had access to proprietary information, and had a restrictive covenant that would not allow him to go to a competitor for nine months. Yet he was engaged in interviews starting in July 2020, by August-September was having regular meetings with his counterpart, chief product officer Peter Boumenot, and passed CareCentrix information not only to his personal email but also to Signify into October, when Mr. Lanznar resigned. He joined Signify Health in November 2020 and is listed on LinkedIn as SVP product, though not on their management page. 

The lawsuit claims that Signify “targeted, recruited, and hired former CareCentrix executive Marcus Lanznar in a covert scheme that succeeded in providing access to CareCentrix’s confidential information and trade secrets” and also was aware of the conflict presented by the restrictive covenant. It seeks to prevent Mr. Lanznar and Signify Health from using its trade secrets and to award it damages and attorneys’ fees. 

This is a David versus Goliath matchup. Signify Health in February had a highly successful IPO gaining over $560 million and is valued with a market cap of over $7 bn. CareCentrix to date is most definitely the David in this scenario in terms of size, having raised all private equity funding via Summit Partners starting in 2011. However, it has made two acquisitions of its own recently: Vesta Healthcare at $30 million and Turnkey Health for an undisclosed amount (Crunchbase). The stakes are piled high in this hot segment of healthcare. 

There are a number of high-powered law firms dueling in this lawsuit, which also includes CareCentrix’s parent, NDES Holdings. Note: this article is based on both reporting in Healthcare IT News, which initially filed the story, and FierceHealthcare’s close on follow-up.

Funding update, 4 March: big Series Ds for new unicorn Dispatch Health and Tyto Care; USDA’s $42M for rural telehealth; UK’s Perfect Ward hospital inspection app secures £4m

Once upon a time for health tech companies, Series D funding and unicorn status were rare, especially when the tech relates to the under-the-radar, formerly unsexy area of home health. 

  • DispatchHealth, an in-home mobile care provider based in Denver, just closed a $200 million Series D led by Tiger Global with additional participation from Alta Partners, Echo Health Ventures, Humana, Oak HC/FT, and Questa Capital. This comes less than a year after a $135.8 million Series C led by Optum Ventures, The new total of $417 million in funding brings its valuation to a unicorn level of $1.7 bn. DispatchHealth is in the desirable, high potential cost-saving areas of care that replaces ER visits or hospital stays. The platform integrates in-home care services booked through a call, their app, or online by patients, care providers, payers, EMS, senior living, and health systems. The objectives of care are to substitute for ER visits, hospital stays, and to coordinate ancillary services. Currently serving 19 markets across 12 states with care to more than 170,000 patients in 2020, the new funding will be used for expansion to 100 national markets. DispatchHealth recently announced partnering with Humana for advanced hospital-level care for their Medicare Advantage members in several cities. Release, FierceHealthcare
  • More on the health tech side is Tyto Care’s remote diagnostic exam platform. Today they are announcing an additional raise of $50 million, doubling the earlier Series D and now totaling $100 million. Leading the extension is Insight Partners, with participation by Tiger Global (see DispatchHealth), Qumra Capital, Qualcomm Ventures LLC, Olive Tree Ventures, and Shenzhen Capital Group Company. Tyto’s funding is now $155 million and claims a doubling of its valuation. Release.

The US Department of Agriculture (USDA) is surprisingly now an investor in rural telehealth, in part courtesy of the CARES Act from March 2020. (Yes, there were considerable funds left over from that $2.2 trillion pandemic relief bill and now some of them are being used.) USDA is funding projects with a total of $42.3 million, including $24 million from the CARES Act, to improve infrastructure for telemedicine and distance learning infrastructure. Approved to go are 86 projects through the Distance Learning and Telemedicine grant program, to help rural education and healthcare organizations remotely reach students, patients, and outside expertise. USDA’s study found that due to population health, lack of insurance, and lower access to health facilities, there are higher rates of COVID-19 related deaths in rural areas. Healthcare IT News

A UK company that’s in an unusual area of health tech is Perfect Ward, which is designed to put on a laptop and mobile app the complicated process of health inspections of hospitals, care homes, and other health and social care organizations in the UK and internationally. Their £4 million round comes from Octopus Investments (Octopus Group). Current clients include King’s College, Barts Health, The Royal Free and London Ambulance Service. Release (Business Cloud)

The biggest care gap: the fear of going home after discharge

Roy Lilley’s NHS Managers.net newsletter is always interesting and worth subscribing to, but this week’s issue had a special resonance. Many of us have had to ‘manage’ a situation when you or a family member comes home after an illness, accident, or even minor injury. The actions you took for granted are now difficult, painful, or simply cannot be done. Climbing stairs, making a bed, lifting a full pot, even getting on a coat or jacket or tucking in a shirt are just a few. These have special resonance for those of us who have a few ‘cycles’ on us (as aviation terms a takeoff and landing), even if mentally we’re about 35 (!) Will we ever be quite right again? What happens when the home help goes home, or you’re by yourself?

Of interest to American readers is that the British Red Cross is pivoting to fill the care gap of discharge to home. The BRC has a long history of working with the NHS, which was a surprise to this Editor, as the American Red Cross’ emphasis is on disaster relief (of which we have aplenty). Home to the unknown: Getting hospital discharge right is their umbrella report with briefings for England, Scotland, and Northern Ireland. The BRC provides ambulance support, helps people get home from hospital, carries out home assessments and supports older and vulnerable people to live independently at home. As Mr. Lilley put it, referring to the traditional Red Cross mission:

Refugees? About 900,000 people used to get care and support from local council services. The eligibility criteria have been raised, now they get no help. They are refugees in our care system.

On a different note, this issue’s sidebar contains a link to a short article about the scientific pioneer Marie Curie and a few tidbits about anti-inflammatory drugs being used to treat depression, tick-borne diseases spreading in the UK, and medtech fighting breast cancer 10 ways. 

Deloitte’s consumer view of technology acceptance in home health

The Deloitte Center for Health Solutions (DCHS), the research division of Deloitte LLP’s Life Sciences and Health Care practice, conducted six focus groups late last year to gauge the acceptance of technology in home health. They tested two main home health scenarios among 42 younger (<44) and older (45-64) adults, both drawn from healthy and chronic condition patients and with a mix of demographics.

In this qualitative study, the two scenarios tested were: technology that would help manage chronic conditions and tech to promote healthy living. The first scenario gives a very advanced vision of chronic care management that involves telehealth, telemedicine and residential monitoring in the management of chronic conditions (diabetes and CHF). The second involves lifestyle factors including eating, activity and exercise management and managing travel.

Some findings in the report summarized and linked for download here, including implications for companies:

  • Overall they were open to and optimistic about using technology to enable better home care of older adults who require it–including embedded sensors.
  • ‘Smart home’ has appeal, but there is a preference for the less intrusive (stove burner/cooking range sensors, fall detectors) and resistance to perceived invasions of privacy (sleep, bathroom and activity monitoring).
  • They understood the balance of reward and risk in consideration of broad categories of nutrition, physical activity, prevention, and dealing with an acute episode (see quadrant below, click to enlarge)
[grow_thumb image=”https://telecareaware.com/wp-content/uploads/2016/03/us-lshc-hcc-march1-my-take-p1.png” thumb_width=”200″ /]

Center Director Harry Greenspun, MD’s in his Health Care Current blog notes that TECS has the capability of providing services formerly provided only in a doctor’s office or hospital in the home, but “One question remains, “How quickly will consumers adapt and accept new technologies that bring care into their home?”–then answers his own question.

All of these innovations have given us a level of insight and capability we could not have imagined even a few years ago. At the same time, each raises privacy concerns.

So why do we do it? Because we get something out of it.