TTA’s Holiday Runup 2: 6.9M users hacked at 23andMe, Cigna & Humana talk M&A, Feds try ‘nutrition labeling’ for AI, health checks on Bright, Cano, and Clover Health, what’s up with HIMSS24, more!

 

 

More data grabs, this time at 23andMe–now revealing that nearly half of customers affected. Cigna and Humana talk M&A, but their PBM won’t make it easy with FTC and DOJ. Feds try ‘nutrition labeling’ (!!!) to regulate AI, but Google (and others) keep on gobblin’. We check on the health of Bright Health and Cano Health, while Clover repots and adds some MiracleGro. And whither HIMSS24–is anyone exhibiting?

23andMe hacking may have affected 6.9 million+ users–not 14,000–in massive PII breach (It’s hard to hide)
News roundup: ONC recommends ‘nutrition labeling’ for healthcare AI apps but Google moves forward; CVS’ health services rebranding as Healthspire (updated); Clover Health repots out of ACO REACH (ONC proposes, Google disposes)
Stayin’ alive–or trying. Bright Health Texas plan seized for liquidation; Cano Health reverse splits, up for sale (A dim future for both)
Short takes: a rumor of merger/buy with Cigna and Humana–what are the odds? (updated) And what’s up with the low number of HIMSS 24 exhibitors? (We spin the wheel, place your bets on both)

A cyber-week starting with a real turkey–multiple reports of millions of compromised records in hospitals–one originating (again) with a vendor. The near-inventor of Cyber Monday, Amazon, not quite the threat industry pundits envisioned. A major in-person healthcare conference in NYC, TASK enters the NI/UK market, and Theranos gets ‘The Simpsons’ treatment.

Has Amazon lost its ‘edge’ in healthcare? Or finally seeing reality? (Perception versus….)
NODE.Health’s 7th Annual Digital Medicine Conference 6-8 December (If you’re in NYC)
Another turkey: potential 9M patients affected by medical transcription vendor data breach (Hackers loooove vendors)
Ireland’s TASK Community Care launches TASK Connect in Northern Ireland for the UK market (A new UK competitor)
A Thanksgiving turkey for hospitals: multiple cyber and ransomware attacks (Inedible)
‘The Simpsons’ takes on Theranos (by another name, glub glub) (Parody becomes Theranos)

NY State to dictate cybersecurity regulations–with one year to implement in challenged hospitals. AstraZeneca’s new clinical trial business, UpHealth sells translation tech business, Tunstall partners with University of Edinburgh, VR focuses on pain management. And what can startups learn from Olive AI’s fatal errors?

New York State drafting proposed cybersecurity regulations for hospitals, allocates $500M for upgrades (Is top down the best way?)
News roundup: AstraZeneca’s Evinova to market clinical trial health tech; BehaVR-Fern merge; UpHealth sells Cloudbreak telehealth translation; MedwebX launches; Tunstall-UEdinburgh research partnership; NextGen loses 84 after going private
Some final words on Olive AI–what can we learn from its failure? (updated) (There’s a lot)

A newsy week before Thanksgiving is ‘back to the future’ with health kiosks or ‘pods’, VA grilled on Oracle Cerner progress, and NHS tracking behavioral changes as indicators of health changes (!!) Our Spotlight this week in both news and Perspectives is virtual nursing. One Medical builds up specialist networks and employer benefits. Indian Health Service awards $2.5 billion EHR to a partner with Oracle Cerner. Plus fundings, buy closings, and layoffs. 

Primary care provider Forward introduces CarePod kiosks, raises $100 million for deployment–but will it work this time? (We compare previous and present efforts)
Short takes: Oracle Cerner still has major hurdles, says VA, Congress; One Medical adds Hackensack Meridian to specialist network, HTA to employer benefits; NHS trialing AI tracking of home behavioral patterns for at-risk patients (NHS gets tried and true)
Virtual nursing comes to the forefront: Avera Health (SD) launches at two hospitals, Doccla launches ‘virtual wards’ at home with Up Care Derbyshire (UK) (News around our Spotlight)
Perspectives: The Impact of Virtual Nursing on Telehealth (In the Spotlight)
Roundup: Virgin Pulse, NextGen close fast; Elucid, Eleos, Vida, Neteera funding; One Medical-CommonSpirit; Indian Health $2.5B EHR to General Dynamics+Oracle; losses, layoffs at Cano Health, 15% digital cuts at Mass General Brigham

This week’s story is about more corporate shakeups at Walgreens, starting in the suites. There’s better news at Owlet, Best Buy, Envision, Walmart, and Philips. VR looks like its day in healthcare may finally come. And Amazon bites a bullet and deep discounts One Medical virtual services for Prime members. (But what if they actually use it?)

Breaking: Walgreens lays off 5% of corporate staff; chief medical officer, chief of staff for CEO to depart (The quake shakes the suites)
Short takes: Owlet Dream Sock FDA clearance; Best Buy-Mass General partner for at-home care; Amazon offers Prime members deeper One Medical discount (Need to pay off that $3.9 billion!)
Get your goggles on! Augmented and virtual reality finally taking off, from alleviating child pain to astronaut mental health (‘Bout time)
Early news roundup: Envision exits Ch. 11, splits; Walgreens’ new CIO; Philips’ $60M from Gates Foundation; more on Walmart-Orlando Health partnership; Cigna may sell MA business

A jam-packed week kicks off November with major payer and Amwell Q3 earnings. We catch up on Oracle Cerner and VA news, including a dubious AI effort. Some end-of-year signs of life with sales, financings, and partnerships. But sadly more layoffs (Centene, Carbon Health) and foldings (OliveAI). And once again, DOJ says it’s out to make M&A difficult.

Week-end short takes: payer earnings for Centene, Cigna, Humana; Centene and Walmart partner in FL; Dispatch Health and US Acute Care partner; Amwell widens loss; ProMedica $710M home health sale; AQuity’s $200M sale to IKS Health (Not beer and skittles for payers)
This ‘n’ that: HHS settles *2017* ransomware breach, Carbon Health lays off 114 in restructuring, why oh why VC General Catalyst wants a $3B health system, when Larry Met Billy, a lexicon of workplace terms
Catching up on Oracle Cerner and the VA, plus the AI ‘tech sprint’ (More distractions for the VA)
Olive AI selling rest of business to Waystar Health and Humata Health, winding down: reports (Another unicorn minus a horn)
News roundup: Walgreens & CVS pharmacy staff 3 day walkout, DOJ ramping up healthcare acquisition scrutiny, Cantata Health sold to TT Capital, Lancashire County Council chooses Progress Lifeline for TECS (UK) (On DOJ and M&A, we told you so!)
UHG’s Optum UK closes £1.24B buy of EMIS Group (One year later)

A busy week with some signs of life–and the first IPO in a year–in healthcare/tech funding. But others run out of money runway as year’s end approaches. Teladoc’s 2023 far better than their disastrous 2022–why stock doesn’t reflect it. Apple Watch violates patents again according to ITC. And can prescribed apps win in the UK?

Weekend reading: new study finds lack of GP and healthcare access driving 55% of UK patients to online/apps, desire for prescribed apps (Maybe now’s the time in the UK)
Breaking: ITC bans Apple Watch imports on violating Masimo blood oxygen measuring patents (updated) (David v. Goliath Redux)
Teladoc narrows loss in Q3 and YTD, grows revenue, adjusted profits…but stock sinks (Time to change direction again)
News roundup: Waystar’s $8B IPO plan, Perficient to buy SMEDIX, PicnicHealth buys AllStripes, MDLIVE buys Bright.md, Sage garners $15M, Cureatr shuts suddenly, Calibrate reorganizes, BetterUp lays off 16% (updated)

Big changes and losses roil the retail healthcare side through to primary care. Big reorganizations, closings, layoffs at Walgreens, VillageMD, and CVS Health. Rite Aid goes Chapter 11 to deal with litigation and losses. One Medical’s Iora Health finally rebrands in moving under Amazon.

Turmoil smacks retail healthcare (updated): Walgreens to shut 60 VillageMDs, as Village names 3 new presidents; CVS shakeup continues; Rite Aid bankrupt; Amazon’s One Medical rebrands Iora (Seems like the projections were more than a little off)

A busy HLTH brings news and a lot of resetting, notably Walgreens’. Big Investor General Catalyst gets into the ‘health assurance’ business (sigh) and merges two portfolio companies. Big Funding for rural health. Cano Health scrambles to survive, Babylon UK transitions but Rwanda shuts. And DEA kicks the controlled substances telehealth prescribing can down the 2024 road.

Short takes: follow up on Cano Health’s survival moves, eMed transitioning Babylon Health UK but Babyl Rwanda shuts, DEA extends telehealth prescribing for controlled substances thru 2024 (Closing chapters)
Walgreens’ transformation continues: new CEO enters, CIO exits, launches Virtual Healthcare in 9 states (The tap dance accelerates)
Two studies: telehealth’s ‘generation gap’ and $22B target for healthcare generative AI–by 2032
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 (Back to ‘transforming healthcare’)

The EMIS acquisition cleared the CMA in the UK. Rock Health tries to put the best face on Q3’s US digital health funding doldrums.

Rock Health Q3 funding roundup: shrinking to fit ‘the new normal’ = the doldrums (Nothing mighty about being stuck in the horse latitudes)
CMA clears £1.2B EMIS acquisition by UnitedHealth Group’s Optum (UK) (It took a year, but UHG nabs the UK GP EHR leader)

It’s feeling like autumn in endings and change. Cano Health is being parted out like an old unrestorable car. Veradigm’s Nasdaq troubles accelerate with delisting and UpHealth is another cracked SPAC. Yet there is encouraging fresh growth with one big merger in employer wellness benefits and two fundings in women’s midlife health and home-based acute care.

News roundup: Veradigm facing Nasdaq delisting, UpHealth files Chapter 11, Virgin Pulse-HealthComp $3B merger, MidiHealth’s $25M Series A, Inbound Health’s $30M Series B (Veradigm still hasn’t figured out a financial software problem after 6 months?)
Cano Health’s dismemberment: Texas, Nevada primary care centers sold to Humana’s CenterWell for $66.7M, more to come (Parting out the old car)

Catching up on industry fundings and pivots, ATA, Walgreens at a crossroads, and the controversies surrounding DocGo in New York.

Short takes: Intuition Robotics gains $25M funding, Akili Interactive abandons digital Rx therapeutics, NextGen goes private for $1.8B, ATA’s DC advocacy ‘fly in’ + launches new tools on disparities
Walgreens trying to reboot “healthcare transformation” momentum, looking for new CEO, settling with Theranos litigants
 (The high cost of an industry race)
Could DocGo be another Babylon Health or Theranos? CEO resignation may be only the start of their troubles. (NYC/NYS controversy that may forecast further problems)

Following up on Babylon’s bankruptcy and administration, was it simply another Theranos? The fate of the GP at Hand (UK) service seems to be separate from Babylon. 

Echoes of Theranos in Babylon Health? And additional information on GP at Hand.
Babylon Health UK in administration, assets sold to eMed Healthcare Ltd.

 


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Telehealth & Telecare Aware: covering the news on latest developments in telecare, telehealth, telemedicine, and health tech, worldwide–thoughtfully and from the view of fellow professionals

Thanks for asking for update emails. Please tell your colleagues about this news service and, if you have relevant information to share with the rest of the world, please let me know.

Donna Cusano, Editor In Chief
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Short takes: a rumor of merger/buy with Cigna and Humana–what are the odds? (updated) And what’s up with the low number of HIMSS 24 exhibitors?

crystal-ballCigna and Humana, perfect together? Only if they can get the deal through the Feds and the states. Late this week, the Wall Street Journal revealed that Cigna and Humana were exploring either a merger or, as some theorize, a buy of Humana ($93 billion in revenue, $60 billion valuation) by much-larger Cigna ($181 billion in revenue, $78 billion valuation). Between them, it is estimated that they would have 35 million members. No transaction cost has been estimated, but the WSJ sources indicate it will be a stock-and-cash deal that could be finalized by the end of the year if all goes well.

On paper, industry observers like it but point out the overlap in one significant area.

  • Cigna earlier announced that it wants to sell its relatively small Medicare Advantage business, concentrating on its leadership in the commercial business and with its service businesses under the Evernorth umbrella.
  • Humana is exiting its commercial health plans to focus on MA and Medicaid, as well as its large footprint in the home health business with CenterWell.
  • Humana’s CEO Bruce Broussard is retiring next year, with newcomer to Humana Jim Rechtin joining as COO in January 2024 as his replacement. Cigna’s CEO David Cordani is a sprightly 57 and likely not to go anywhere.
  • The overlap area that could be problematic is pharmacy benefit management (PBM) with each having about 17-18 million in Express Scripts (Cigna), the second largest in the US, and Humana Pharmacy Solutions. 

Liking it on paper is one thing–FTC, DOJ, and 50 states may not feel so enthusiastic. It’s established through their actions that both Federal agencies are reining in M&A with new and restrictive merger guidelines scheduled to go into effect next year [TTA 20 July]. Healthcare is a major political hot button for this administration for cost–especially drug costs. That is where the reportedly equally sized in revenue PBM operations present the most major conflict to a merger or a buy, both in service and valuation. Both serve their own plan members as well as others, notably Express Scripts with 24% of claims, whereas Humana’s serves primarily its own plan members with 8% of claims. Neither are easy to divest without creating antitrust questions for acquirers and a major dent in Humana’s services. The final factor: Lina Khan, chair of the FTC, has never seen a merger that she’s liked based on her own statements [TTA 24 Aug].

Doomed to repeat history? In 2015, two payer mega-mergers involving these same companies were concocted: Cigna with Anthem and Humana with Aetna. They hit the buzzsaws of DOJ and before that, state approvals. The DOJ pursued them on antitrust in the Federal courts which derailed both by January 2017. Running up to that, every state got an approval vote through review by each state’s Department of Banking and Insurance or equivalent. Many did not approve or with conditions. The other factor is corporate. In the runup to the merger, Anthem-Cigna was marked by escalating animosity from the management suites to the worker cubes. After the deals were scuppered in the Federal District Court, Anthem and Cigna bitterly fought over damages and cancellation fees in Delaware Chancery Court. Aetna and Humana took their lumps and breakup fees, and went on. Aetna went on to merge with CVS, a deal that avoided most of the antitrust flak. Humana went on to acquisitions in other areas.

Our betting line. Both insurers will look at the financials in this hard-to-get-arrested year. Both will feel out the Feds before going forward. Both will calculate whether it’s best to start now or wait till next year and a possible change in administration. Neither company wants to be a political target in an election year. Defensively, Cigna may make noises about other combinations–Centene and Molina have been mentioned–which present their own difficulties and troubles, to strategically try to force the issue. Stay tuned! MedCityNews, Axios

Update: Other analysts suddenly are on board with this Editor’s gimlety view of the matchup, citing antitrust and how Federal regulators are primed to challenge major deals. The FTC is specifically probing the PBM business. The fact that the deal, according to JP Morgan, could take 12 to 24 months is no surprise as par for the course, but Mr. Market didn’t like it, dragging down both companies’ share prices every day since the rumor broke. (Hmmmm….do they read TTA?)  But a small lamp was lit by one analyst: a Cigna-Humana combo could present real competition to the 9,000 lb. elephant of healthcare, UnitedHealth Group, and that might help to put it over. FierceHealthcare

Another concern that occurred to your Editor: Cigna’s international footprint could mean additional approvals by UK and EU regulators.

According to Healthcare Dive’s analysis, the combined entity would have a PBM market share of 32%, right up against CVS Health-Caremark at 33% and UHG’s OptumRx way behind at 22%. It’s a small group with big barriers to entry which makes it a slam-dunk to antitrust regulators.  A whistle in the dark might be UHG’s long-drawn-out buy of Change Healthcare, but there were divestitures of business before closing and both parties managed to prove to the satisfaction of a US District Court that the separation to Optum Insight would not affect business relationships with other health plans. But here, both are health plans, and both have PBMs.

HIMSS 24 exhibitors, where are you? An item in today’s HIStalk on the ‘interesting’ choice as closing keynoter of football coach Nick Saban (U of Alabama Crimson Tide) at a healthcare IT conference went on to compare the number of booked HIMSS exhibitors to date with HIMSS 23’s floor total. This Editor, who for a few years booked the least expensive HIMSS space for the company she worked for back then well in advance, could not believe the low number of exhibitors three months from show time in March. Checking the HIMSS show website, there are 501 exhibitors listed. In 2023, according to HIStalk, there were 1,216. Many of these exhibitors have multiple booths in the Orange County (Orlando) Convention Center, but it still indicates the uncertain state of healthcare, pullbacks in marketing budgets, the rise of real competition in HLTH and ViVE, and perhaps some concerns about the show management transition from HIMSS itself to Informa. Are industry and IT influentials skipping HIMSS next year? Stay tuned or comment below!

TTA’s Hello to Fall 8: Walgreens’ 2nd corporate quake, Amazon Prime deep discounts One Medical, Owlet’s Dream Sock clears FDA, Best Buy-Mass General partner, healthcare VR revives, more!

 

 

Our lead and breaking story is about more corporate shakeups at Walgreens, starting in the suites. There’s better news at Owlet, Best Buy, Envision, Walmart, and Philips. VR looks like its day in healthcare may finally come. And Amazon bites a bullet and deep discounts One Medical virtual services for Prime members. (But what if they actually use it?)

Breaking: Walgreens lays off 5% of corporate staff; chief medical officer, chief of staff for CEO to depart (The quake shakes the suites)
Short takes: Owlet Dream Sock FDA clearance; Best Buy-Mass General partner for at-home care; Amazon offers Prime members deeper One Medical discount (Need to pay off that $3.9 billion!)
Get your goggles on! Augmented and virtual reality finally taking off, from alleviating child pain to astronaut mental health (‘Bout time)
Early news roundup: Envision exits Ch. 11, splits; Walgreens’ new CIO; Philips’ $60M from Gates Foundation; more on Walmart-Orlando Health partnership; Cigna may sell MA business

A jam-packed week kicks off November with major payer and Amwell Q3 earnings. We catch up on Oracle Cerner and VA news, including a dubious AI effort. Some end-of-year signs of life with sales, financings, and partnerships. But sadly more layoffs (Centene, Carbon Health) and foldings (OliveAI). And once again, DOJ says it’s out to make M&A difficult.

Week-end short takes: payer earnings for Centene, Cigna, Humana; Centene and Walmart partner in FL; Dispatch Health and US Acute Care partner; Amwell widens loss; ProMedica $710M home health sale; AQuity’s $200M sale to IKS Health (Not beer and skittles for payers)
This ‘n’ that: HHS settles *2017* ransomware breach, Carbon Health lays off 114 in restructuring, why oh why VC General Catalyst wants a $3B health system, when Larry Met Billy, a lexicon of workplace terms
Catching up on Oracle Cerner and the VA, plus the AI ‘tech sprint’ (More distractions for the VA)
Olive AI selling rest of business to Waystar Health and Humata Health, winding down: reports (Another unicorn minus a horn)
News roundup: Walgreens & CVS pharmacy staff 3 day walkout, DOJ ramping up healthcare acquisition scrutiny, Cantata Health sold to TT Capital, Lancashire County Council chooses Progress Lifeline for TECS (UK) (On DOJ and M&A, we told you so!)
UHG’s Optum UK closes £1.24B buy of EMIS Group (One year later)

A busy week with some signs of life–and the first IPO in a year–in healthcare/tech funding. But others run out of money runway as year’s end approaches. Teladoc’s 2023 far better than their disastrous 2022–why stock doesn’t reflect it. Apple Watch violates patents again according to ITC. And can prescribed apps win in the UK?

Weekend reading: new study finds lack of GP and healthcare access driving 55% of UK patients to online/apps, desire for prescribed apps (Maybe now’s the time in the UK)
Breaking: ITC bans Apple Watch imports on violating Masimo blood oxygen measuring patents (updated) (David v. Goliath Redux)
Teladoc narrows loss in Q3 and YTD, grows revenue, adjusted profits…but stock sinks (Time to change direction again)
News roundup: Waystar’s $8B IPO plan, Perficient to buy SMEDIX, PicnicHealth buys AllStripes, MDLIVE buys Bright.md, Sage garners $15M, Cureatr shuts suddenly, Calibrate reorganizes, BetterUp lays off 16% (updated)

Big changes and losses roil the retail healthcare side through to primary care. Big reorganizations, closings, layoffs at Walgreens, VillageMD, and CVS Health. Rite Aid goes Chapter 11 to deal with litigation and losses. One Medical’s Iora Health finally rebrands in moving under Amazon.

Turmoil smacks retail healthcare (updated): Walgreens to shut 60 VillageMDs, as Village names 3 new presidents; CVS shakeup continues; Rite Aid bankrupt; Amazon’s One Medical rebrands Iora (Seems like the projections were more than a little off)

A busy HLTH brings news and a lot of resetting, notably Walgreens’. Big Investor General Catalyst gets into the ‘health assurance’ business (sigh) and merges two portfolio companies. Big Funding for rural health. Cano Health scrambles to survive, Babylon UK transitions but Rwanda shuts. And DEA kicks the controlled substances telehealth prescribing can down the 2024 road.

Short takes: follow up on Cano Health’s survival moves, eMed transitioning Babylon Health UK but Babyl Rwanda shuts, DEA extends telehealth prescribing for controlled substances thru 2024 (Closing chapters)
Walgreens’ transformation continues: new CEO enters, CIO exits, launches Virtual Healthcare in 9 states (The tap dance accelerates)
Two studies: telehealth’s ‘generation gap’ and $22B target for healthcare generative AI–by 2032
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 (Back to ‘transforming healthcare’)

The EMIS acquisition cleared the CMA in the UK. Rock Health tries to put the best face on Q3’s US digital health funding doldrums.

Rock Health Q3 funding roundup: shrinking to fit ‘the new normal’ = the doldrums (Nothing mighty about being stuck in the horse latitudes)
CMA clears £1.2B EMIS acquisition by UnitedHealth Group’s Optum (UK) (It took a year, but UHG nabs the UK GP EHR leader)

It’s feeling like autumn in endings and change. Cano Health is being parted out like an old unrestorable car. Veradigm’s Nasdaq troubles accelerate with delisting and UpHealth is another cracked SPAC. Yet there is encouraging fresh growth with one big merger in employer wellness benefits and two fundings in women’s midlife health and home-based acute care.

News roundup: Veradigm facing Nasdaq delisting, UpHealth files Chapter 11, Virgin Pulse-HealthComp $3B merger, MidiHealth’s $25M Series A, Inbound Health’s $30M Series B (Veradigm still hasn’t figured out a financial software problem after 6 months?)
Cano Health’s dismemberment: Texas, Nevada primary care centers sold to Humana’s CenterWell for $66.7M, more to come (Parting out the old car)

Catching up on industry fundings and pivots, ATA, Walgreens at a crossroads, and the controversies surrounding DocGo in New York.

Short takes: Intuition Robotics gains $25M funding, Akili Interactive abandons digital Rx therapeutics, NextGen goes private for $1.8B, ATA’s DC advocacy ‘fly in’ + launches new tools on disparities
Walgreens trying to reboot “healthcare transformation” momentum, looking for new CEO, settling with Theranos litigants
 (The high cost of an industry race)
Could DocGo be another Babylon Health or Theranos? CEO resignation may be only the start of their troubles. (NYC/NYS controversy that may forecast further problems)

Following up on Babylon’s bankruptcy and administration, was it simply another Theranos? The fate of the GP at Hand (UK) service seems to be separate from Babylon. 

Echoes of Theranos in Babylon Health? And additional information on GP at Hand.
Babylon Health UK in administration, assets sold to eMed Healthcare Ltd.

Best of back posts!

Short takes: FTC’s Lina Khan’s vendetta on tech, employers disillusioned with virtual care, telepsychiatry cuts LOS and inpatient ED, Lotte’s AI-assisted telepsych diagnostics, ThymeCare’s $60M Series B (Why Cassandra is warning you!)

Weekend reading: Forbes picks the next $1B startups, is TV streaming analogous to the future of healthcare? (Yes, there may be unicorns, and the fracturing of TV and healthcare)

Babylon Health files for US Chapter 7 bankruptcy, winding down Babyl Rwanda and ending care for 2.8 million users (Hull loss for Babylon. Parting out starts 12 Sept)
 

M&A and FTC/DOJ antitrust changes

Healthcare M&A hit a 3 year low in Q2 2023, to the surprise of none: KPMG (Many reasons why-and we add a few observations)

FTC, HHS OCR scrutiny tightens on third-party ad trackers, sends letter to 130 hospitals and telehealth providers

Another antitrust shoe drops: FTC, DOJ publish Draft Merger Guidelines for comment–what are the effects? (New restrictions not good for founders, managers, VCs)

FTC, DOJ float enhanced information requirements for HSR premerger notification filing process–what will be M&A effects? (More dampers on a down market?)

Insurtechs and their pivots

Living to fight another day: insurtechs Bright Health, Clover Health, and Oscar Health report improved Q2s, H1s (updated) (Bright still at brink, but Clover and Oscar pivoting)

Legal roundup: Dorsata sues athenahealth, provider group on trade secret theft, Nevada terms Friday Health Plans (Dorsata as another ‘David’)

Why the ‘insurtechs’ didn’t revolutionize health insurance–and the damage they may have done (Back to the legacy payers)
Bright Health to exit insurance business, selling California plans to Molina for up to $600 million–contingent on surviving to 2024 (A dicey proposition all round)

Funding for telehealth and digital health
Rock Health’s first half funding roundup adjusts the bath temperature to tepid, the bubbles to flat (2020-22 an aberration)

“Hope is not a business model”–advice from two VCs, with a bit more advice on basic banking (We unpack good advice for early-stage companies)

‘Warning flare’ study: will pandemic-induced digital health solutions get renewed by hospitals in 2023-4, or will they churn? (Get cracking with your account relationships)

Watch your cash burn! Now 31 months average for startups between Series A and B. Now what do you do? (Cautionary advice for startups)


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We thank our advertisers and supporters: Legrand, UK Telehealthcare, ATA, The King’s Fund, DHACA, HIMSS, MedStartr, and Parks Associates.

Reach international leaders in health tech by advertising your company or event/conference in TTA–contact Donna for more information on how we help and who we reach. 


Telehealth & Telecare Aware: covering the news on latest developments in telecare, telehealth, telemedicine, and health tech, worldwide–thoughtfully and from the view of fellow professionals

Thanks for asking for update emails. Please tell your colleagues about this news service and, if you have relevant information to share with the rest of the world, please let me know.

Donna Cusano, Editor In Chief
donna.cusano@telecareaware.com

– – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –

Early news roundup: Envision exits Ch. 11, splits; Walgreens’ new CIO; Philips’ $60M from Gates Foundation; more on Walmart-Orlando Health partnership; Cigna may sell MA business

Staffing firm Envision Healthcare exits Chapter 11 bankruptcy, splits off AmSurg clinics. One of the Big Bankruptcies earlier this year has been reorganized, cutting $8 billion in debt by 70% and spinning off its AmSurg surgical clinics to new ownership. The hospital and physician staffing company was hurt as early as 2020 with shortages of available staff, then the pandemic which cut patient volumes, and conflicts with payers around out-of-network billing charges. The last put the company in conflict with the ‘no surprises’ patient protection billing law that took effect this year. One particular legal spat with UnitedHealthcare tied up both companies for years, but was won by Envision after an independent arbitration panel this past spring awarded Envision $91 million, finding that UHC breached its in-network contract. KKR, which had taken Envision private in 2018, lost $3.5 billion in equity, one of their largest corporate investment losses. Henry Howe, the company’s chief financial officer, takes over as interim CEO on 1 December as current CEO Jim Rechtin leaves to join Humana. Healthcare Dive  Background: TTA 12 May, 16 May   

Walgreens fills its chief information officer vacancy with the interim CIO. Neal Sample was appointed last Wednesday (1 Nov) as CIO and EVP, reporting to new CEO Tim Wentworth and joining the executive and IT governance committees. Sample was appointed last month as an IT advisor after CIO Hsiao Wang left suddenly on 2 October. Both Wentworth and Sample worked with each other at Express Scripts, with Sample holding both COO and CIO positions there, then departing for the CIO position at Northwestern Mutual. Walgreens release, Retail Dive

Philips receives an additional $44 million from the Gates Foundation for further Lumify Ultrasound System development. The total of $60 million in grants starting in 2021 was for the development of AI-enabled applications to improve obstetric care in low- and middle-income countries. The Lumify handheld ultrasound system assists frontline health workers, such as midwives, in interpreting obstetric images and identifying possible complications during pregnancy in hours versus weeks of training. The system’s Kenya trial was successful. The additional funding will be used to expand global adoption in underserved rural communities. Philips release  This follows Gates Foundation grants to GE Healthcare ($44 million) and Butterfly Network ($5 million) for easily deployed ultrasound and imaging systems to support low-income countries’ rural maternal health and respiratory scanning. Mobihealthnews

More on Orlando Health’s partnership with Walmart. Briefly noted here last week in Walmart’s release and reporting on Walmart Health’s new partnership with Centene’s Ambetter plan in Florida was the Orlando Health hospital partnership. This will coordinate care for patients admitted to the health system’s hospitals or who need specialty care. It is a first for Walmart as it has not previously partnered with local health systems on specialty and hospital care as an extension of its clinics. Eight of its 48 clinics are in the Orlando area. Becker’s Health IT 1 Nov, 6 Nov

Cigna is exploring a sale of its Medicare Advantage (MA) business. According to the exclusive report by Reuters (may be paywalled), Cigna is in early stages, at this point consulting with an investment bank. Cigna is not much of a player in the difficult state-by-state, county-by-county MA business, with 599,000 members as of 30 September, which is about 3% of their 19 million total insurance members. But it has been problematic, with Cigna recently paying CMS $172 million to settle allegations that it violated the False Claims Act by submitting incorrect data to obtain higher payments. By comparison, UnitedHealthcare and Humana have nearly half (47% or 14.5 million) of the national 30.8 million MA members (KFF). Becker’s

Week-end short takes: payer earnings for Centene, Cigna, Humana; Centene and Walmart partner in FL; Dispatch Health and US Acute Care partner; Amwell widens loss; ProMedica $710M home health sale; AQuity’s $200M sale to IKS Health (updated)

On the payer side, buyers of telehealth are trying maintain course:

Challenged Centene beat Wall Street estimates, but clouds loom. For Q3 they reported $38 billion in revenue, but year-over-year profit of $469 million was down 36%. 2014 forecast earnings were already downgraded. Centene is heavily dependent, as some other payers are, on state Medicaid. New Federal guidelines are ending the automatic eligibility redeterminations that took effect during the Covid pandemic. 2024 redeterminations may take millions more off the rolls, though many requalify. The payer contracts with 31 states to offer Medicaid coverage and has lost 1.1 million Medicaid members over redeterminations to date. Their Medicare Advantage (MA) plans were also hit in 2023 with low Star ratings, which reduce desirability and payment status with CMS, but recovered for 2024 with 87% over 3 stars (the minimum) compared to 53%. Layoffs also have bitten into Centene with a known layoff of 2,000 this summer, plus another unannounced layoff terminating staff in December, according to this Editor’s source. Healthcare Dive  Update: Centene is terminating 2,000, or about 3% of workforce, with an end date of 8 December. Becker’s Payer

Cigna also beat Wall Street estimates in a generally upbeat forecast. For Q3, they reported revenue of $49 billion, up 8% year over year. Net income was down 50% to $1.4 billion but understandably as Cigna sold businesses in six countries. Membership are up 9% year over year to $19.6 billion, mostly due to commercial membership. Cigna has little exposure to ACA business, but that grew as well and margins are improving. Healthcare Dive 

Humana saw increased Q3 utilization in its MA plans plus increased Covid hospitalization. This helped to drive its medical loss ratio (MLR) up for 2023. While beating the Street on revenue of $26.4 billion and profit of $1.1 billion and with projected MA growth MA of 19%, or about 860,000 members plus 2024 of 45,000, shares went a bit wobbly. In Star ratings, they did well and maintained a 4.5 Star (out of 5) in its largest contract with 40% of its MA members while the second largest contract improved from 4.5 to 5 stars. Healthcare Dive

A brighter spot for Centene is a partnership with Walmart in Florida on ACA plans. Ambetter from Sunshine Health in Florida is adding Walmart Health Centers to its preferred provider network. This will cover seven counties and focus on care coordination and referral management. Walmart is also working with Orlando Health, a private, not-for-profit network of community and specialty hospitals across Florida, to improve care coordination in the Orlando area initially. Walmart release, Becker’s

In partnerships, Dispatch Health announced today (2 Nov) that will be working with US Acute Care Solutions (USACS) to offer additional support for patients after a hospital stay or when they need hospital-to-home alternative care. Dispatch Health offers same-day, urgent medical care; hospital alternative care; and recovery care. USACS is owned by its physicians and hospital system partners for integrated acute care, including emergency medicine, hospitalist, and critical care services. Dispatch Health release

Back to Big Telehealth, Amwell didn’t have a good quarter. Their net loss of $137.1 million was up 94% year-over-year. This quarter included $78.9 million in impairment charges linked to sustained decreases in its share price and market capitalization. So far in 2023, these impairments have totaled $436.5 million. Another hit was that revenue declined 11% year over year to $61.9 million. Amwell is working to complete the transition of its customers to Converge. On the positive but very long term side, Amwell is partnering with the Leidos Partnership for Defense Health (LPDH) with the US Defense Health Agency as part of the Digital First initiative for the Military Health System (MHS). This will replace the MHS Video Connect system with Amwell Converge, a “comprehensive hybrid care enablement platform designed to power the full continuum of care using digital, virtual, and automated modalities”, and link to MHS GENESIS, the Oracle Cerner EHR. The contract may be worth up to $180 million over 22 months in a prolonged rollout. Healthcare Dive, Amwell release

In sale news, some big numbers are posting:

Ohio-based 12-hospital system ProMedica is selling its home health, palliative and hospice business to Atlanta-based Gentiva Health Services for a tidy $710 million. Gentiva is the largest hospice care company in the US. 4,000 employees will be transitioning. The hospice operations will go under the Heartland Hospice brand by the end of 2023, with home health also joining Heartland Home Health and the palliative care business under Empatia Palliative Care brand between the end of this year and 2024. Becker’s

AQuity selling to IKS Health for $200 million. The sale will add AQuity’s medical-coding, clinical-documentation and revenue-support capabilities to IKS’ technology-backed care enablement platform. This creates a $330 million company with a 14,000 person workforce that includes 1,500 clinicians, 350 medical coders, technology experts, clinical documentation specialists, and revenue integrity specialists. Another example of a larger trend in companies acquiring specific companies to build out their platforms and become more ‘one-stop shopping’, a more attractive proposition at least for now to VCs. Mobihealthnews. More discussion on why VCs are no longer hot on niche or point solutions in MedCityNews.

Cano Health’s dismemberment: Texas, Nevada primary care centers sold to Humana’s CenterWell for $66.7M, more to come

Are we nearing the final episodes of “Cano Health”, the telenovela? New CEO Mark Kent has gotten busy in the past five weeks since his permanent CEO appointment. The first and most important action he has taken is to generate cash in the nick of time to comply with their debt covenants coming due in September. The sale of their Texas and Nevada operations to CenterWell Senior Primary Care, a unit of Humana, for $66.7 million, includes $35.4 million in cash to be paid at closing. According to their release, this brings their unrestricted cash reserves up to $109 million, which will enable it to remain in compliance with the covenants under its debt instruments due at the end of Q3, including the financial maintenance covenant under the Credit Suisse credit agreement. $80 million will be drawn down to repay a portion of its $120 million revolving credit facility by the end of Q3 2023–September.

Cano’s Texas and Nevada clinics serve approximately 15,000 patients. CenterWell’s acquisition fits their corporate growth strategy in adding 25 to 50 clinics per year. FierceHealthcare

In August, Cano admitted that their liquidity was insufficient to cover the next 12 months, initiating a 17% staff downsizing and exits of their California, New Mexico, and Illinois operations by the fall, reducing their coverage by 5,000 members and 17 medical centers. They also announced a restructuring of their core Florida operations [TTA 15 August].

But…there’s more. Axios reports that Kent and Cano are continuing to work with financial advisers JPMorgan and Oppenheimer on a full-bore breakup of the company. JPM is advising on a whole-company sale, while Oppenheimer is advising on a breakup. Remaining are the Puerto Rico operation and their Medicaid business in Florida. Axios 

Earlier this month, Cano declared that it would work with the NYSE to regain compliance with the Listing Rule that requires stocks to trade above $1.00. Cano was notified on 11 September since it traded below $1.00 for 30 days. The Cano stock closed today (28 Sept) at $0.28. Actions mentioned in their release include their announced business strategy of reorganizing their business and a reverse stock split that has to be approved by shareholders at a meeting to be determined. However, their largest shareholder, InTandem Capital Partners, LLC, which controls ITC Rumba, LLC, is in favor of the reverse stock split. NYSE has a six-month deadline for this. 

Once again, not a peep from the Cano 3 (resigned directors Barry Sternlicht, Elliot Cooperstone, and Lewis Gold). Perhaps they have resigned themselves to writing off their 35% of near-worthless shares in their collective portfolios.

Given the above timelines, Q3 reporting due next month, and end of year looming, CEO Kent will need to be Clark Kent (the Daily Planet disguise of Superman) to pull Cano Health either to survival as a smaller entity, as stated in their press releases, a sale in toto of what remains–or a complete parting-out.

Mid-week roundup: Kaiser Permanente to buy Geisinger, setup separate system; GoodRx co-CEOs step down; strong earnings for Centene, Humana; Clover Health stock woes, settles $22M lawsuit

Today’s big news was that Kaiser Permanente will be acquiring Geisinger Health. Technically, the acquisition is being made by Risant Health, a separate non-profit organization founded by the Kaiser Foundation Hospitals that will acquire other non-profit community health systems. Acquisition costs and a timetable for the transaction were not disclosed and will be subject to the usual state and Federal regulatory review and requirements.

Geisinger will be the founding system of Risant Health, a non-profit that will be headquartered in the Washington, D.C. area. Its current president, Jaewon Ryu, MD, JD, will become CEO when the acquisition closes. Risant’s purpose will be to advance value-based care by acquiring and connecting other multi-payer, multi-provider, community-based health systems in areas such as care model design, pharmacy, consumer digital engagement, health plan product development, and purchasing. 

Kaiser Permanente is a giant integrated care system with 12.6 million members based in California. It operates in eight states (California, Colorado, Georgia, Hawaii, Maryland, Oregon, Virginia, and Washington) and the District of Columbia. Geisinger Health is Pennsylvania-based, has 10 hospital campuses, its own health plan that covers more than 500,000 members, and the Geisinger College of Health Sciences with schools of medicine, nursing, and graduate education. Geisinger was also a pioneer in incorporating telehealth and remote patient monitoring into its healthcare system. The benefit to Geisinger joining Risant is that as the lead system, it will help to shape their operational model. Reportedly, Kaiser will spend $5 billion and acquire five to six health systems over the next five years. The health systems will retain their names and operational areas.

On the face of it, this seems to be a novel solution to both health systems’ challenges. Both have had operating losses and net losses in recent years and difficulty expanding out of their geographic areas. Kaiser has a tightly integrated health plan and service model that is location-dependent. Geisinger has been squeezed in Pennsylvania by UPMC and Penn Medicine along with other community systems. In 2020, it ended its effort to expand into southern New Jersey via a merger with AtlantiCare. However, this current administration and state regulators have not favored health system mergers, which has seemingly been anticipated by Kaiser in forming the Risant Health organization. Healthcare Dive, FierceHealthcare, Kaiser/Geisinger/Risant release

GoodRx names Scott Wagner as interim chief executive officer. Current co-CEOs and founders Doug Hirsch and Trevor Bezdek will be stepping down but staying with the company as chief mission officer and chairman respectively. Wagner was formerly CEO of GoDaddy and is a board member of other digital and advertising businesses. In February, GoodRx was the first ‘victim’ of the newly aggressive Federal Trade Commission policies on Meta Pixel and other ad trackers collecting user health-related data and sharing for revenue with Facebook, Google, Criteo, and other advertising sites. The FTC used the Health Breach Notification Rule, created in 2009, to GoodRx in a Federal court with misuse of consumer health information. Even though GoodRx is not a HIPAA-covered entity and they ended the practice in 2019, they settled with the FTC for $1.5 million. But the likely reason for the CEO change is that the company is still unprofitable. It ended 2022 with a net loss of $32.81 million and laid off 16% of staff last September. Mobihealthnews, FierceHealthcare

It’s earnings report season for payers. The news has been good for some, not for others. 

  • Centene reported year-over-year gains, with Q1 revenue of $38.9 billion versus prior year $37.2 billion. Q1 profitability also gained at $1.1 billion versus prior year $849 million, which missed Wall Street projections. Their outlook was scaled back due to Medicaid redeterminations, 2024 Medicare bids and investments. They also attributed the increased profitability through the strategic sale of Magellan Rx and internal reorganizations. Fierce Healthcare
  • Humana’s Q1 was also profitable and met Wall Street analyst expectations with earnings of $1.24 billion, or $9.87 a share (adjusted to $9.38/share), up from prior year $930 million, or $7.29 a share. This reflects investments in their Medicare Advantage business. Humana is projecting an aggressive target of a 17% membership increase, reversing from last year’s losses.  Fierce Healthcare
  • Clover Health’s Nasdaq notice, settles $22 million in SPAC class action lawsuit. Nasdaq notified Clover on 20 April that since their stock traded below $1.00 for 30 days, they have 180 days to 17 October to regain compliance with the Minimum Bid Price Requirement. This was disclosed in Clover’s SEC 8-K filing last week. There are other ways to maintain a listing (e.g. transferring to Nasdaq Capital Markets) but the anemic share price (closing today at $0.73, a drop of over 90% from the SPAC high) shows no signs of reviving. On Monday, Clover announced a $22 million settlement in a class action lawsuit filed in Tennessee around the company’s January 2021 SPAC. The following month, Hindenburg Research published that Clover did not disclose a Department of Justice (DOJ) investigation in 2020, claiming it was ‘non-material’ [TTA 9 Feb 2021]. The share price fell off the roof and kicked off multiple similar class action suits which are proceeding in New York and Delaware. Release

When ‘the centre cannot hold’: three board members exit at Cano Health, failure looms at Bright Health Group

Surely some revelation is at hand? The first: the high-profile board troubles at primary care provider Cano Health. Last Friday, three directors resigned loudly from the board: Barry Sternlicht, Elliot Cooperstone, and Lewis Gold. Sternlicht, the chairman of Starwood Capital Group and for some years the CEO of Starwood Hotels in the 1990s, is a ‘name’ real estate and private investor. The other two are hardly slouches: Cooperstone is founder and managing partner of private equity firm InTandem Capital Partners; Gold is co-founder and board chairman of behavioral health company Advanced Recovery Systems. They resigned as a group due to differences with the CEO and management. 

The trio filed a 13-D with the Securities and Exchange Commission as a partnership to change things, “including, but not limited to, the replacement of the CEO, sale of non-core assets and enhancement of shareholder value.” Sternlicht’s release detailed their grievances with CEO Marlow Hernandez, including dubious transactions with a Miami medical claims recovery company, MSP Recovery (also known as LifeWallet), but mainly around the burn-through of the $800 million PIPE raised along with the June 2021 SPAC via Sternlicht’s JAWS Acquisition Corp.–an eye-watering total of $1.4 billion for a valuation at that time of $4.4 billion. From his release, Sternlicht apparently could not get the time of day from Hernandez. “I have never witnessed such poor corporate governance at any company, let alone a public company, and I have been involved in at least nine and served as chairman or CEO of six.”

Certainly, there is a case around shareholder value. The stock has cracked by over 90% from the initial price of $15. Sternlicht also had $50 million reasons to be mad as an investor of that amount in the PIPE. Cano Health called his “method of resignation particularly reckless.” But one wonders what Cano’s physicians are thinking, as well as the health plans with which they work, when three high-profile board members bolt the company, one of them with a stellar track record and some fame, with prejudice. Yet the majority of the board members were seemingly fine with how the company was run.

Last October, Cano, a 4,000 employee value-based primary care provider to mainly underserved markets, had its tires kicked by CVS Health [TTA 21 Oct 22] but the deal never got beyond discussions, and Humana, which has a right-of-first-refusal, made no moves. Share price fell from that time from just above $8 to today’s close of $1.25 on the NYSE. The time may be right for a payer or a provider group to make a cheap pickup, but not if the company has intractable troubles–and now there is a deep-pocketed rival. MedCityNews, New Times (Miami)  The New Times article digs deeper into the MSP Recovery relationship and CEO John Ruiz. MSP Recovery specializes in collecting from primary insurers that don’t pay and put the burden on commercial or public plans like Medicare or Medicaid. As of December 2022, the company owed Cano roughly $60 million in receivables, not a drop in their bucket.

Now to Bright Health Group, an insurtech which may well be on the brink of utter failure and the dubious distinction of being one of the largest failures of a Minnesota business, if their local media (Star-Tribune, unfortunately tightly paywalled) is accurate. Reports one month ago were dire: investors were told that Bright was facing credit insolvency, having run through $350 million in revolving credit. It also violated a liquidity covenant and desperately needed $300 million to cover it by end of April.  This did not stop the company from paying out about $4 million in bonuses to its management team–outrageously at 100%. Two of the bonuses are to ex-company members. Meanwhile, hundreds of their once 2,800+ employee group are being discharged.

18 months ago, Bright Health seemed to be the most promising insurtech out there, with a healthy Medicare Advantage (MA) plan base, family and individual plans, substantial growth, acquisitions of Zipnosis (‘white label’ telehealth triage for health systems), development of the NeueHealth value-based care provider management network, and a blue-chip management group. But it also lost $1.5 billion in 2022 on top of $1.2 billion in 2021 and has $1.2 billion in debt. Bright exited individual and family plans in six states plus cut back MA expansion plans and will no longer offer individual, family, or Medicare Advantage plans outside of California.

With Bright Health shares down to $0.20 and delisting looming, Bright asked shareholders to attend a 4 May meeting to approve a reverse stock switch “at a ratio of not less than 1-for-15 and not greater than 1-for-80.” It’s just a small problem of the share price….

Far more disastrously for Bright, state departments of banking and insurance are taking action. Tennessee and Florida placed the company under supervision; reportedly Illinois is considering the same. Texas may precipitate matters. According to strategic analyst Ari Gottlieb, the Texas Department of Insurance is preparing to place Bright Health’s Texas subsidiary into receivership. Such an action will constitute an immediate Event of Default under Bright’s Credit Agreement. Bright can then choose default–or seek bankruptcy protection.

Shockingly, over a million Americans have had to find a new health plan due to what is happening at Bright. Now, where’s the Barry Sternlicht they need on the board to take action? Are the directors from investors like Bessemer and New Enterprise Associates in cloud-cuckoo land with management?

FierceHealthcare. Both Fierce’s and this article quote liberally from Ari Gottlieb’s posts on LinkedIn, the most incisive coverage this Editor has seen so far: Since Bright Health’s executive compensation approach is best described as pay-for-failure from one month ago, Bright Health’s $4 million pay-for-failure cash bonuses… from two weeks ago, and from earlier this week, The Texas Department of Insurance is preparing for anticipated litigation…  Others are listed in his feed here

More gimlety views on CVS-Oak Street Health, Amazon-One Medical acquisitions

Perhaps this Editor is not that much of an Outlier in thinking that these deals don’t beat, say, sliced bread. Oak Street Health (OSH) disclosed its financials in an SEC 10-K filed on Tuesday. One must wonder what CVS is seeing in the company other than bulking up its primary care profile. Their loss grew to $510 million from 2021’s $415 million. While OSH grew impressively in 2022 with a 51% increase in revenue to $2.2 billion, driven by 40 new centers ending with a total of 169 facilities in 21 states, expenses grew exponentially for the new patients: medical claims expenses grew 48%, cost of care went up 49%, and sales and marketing up 38%. Scalable, so they claim; profitable, not till 2025 at earliest.

Other problems were revealed in the 10-K. OSH has substantial business from other payers, which may not be pleased that CVS owns a small payer called Aetna, though has pledged to keep OSH payer-neutral. OSH leases or licenses most of its care centers from Humana. That payer also accounted for 32% of its 2022 capitated revenue. Centene’s plans and HealthSpring made up an additional 23%. Other, more routine concerns are regulatory review, attrition of physicians and clinician staff, and last but not least, breakup fees ($500 million if CVS walks away, $300 million if it’s OSH). When you add these to other factors as outlined in our earlier article, such as the Medicare Advantage and high-need populations, CVS is cutting off a hefty slice of loaf, especially considering that the more complex Signify Health buy is due to close this quarter. Earlier opinions on the buy [TTA 16 Feb], Healthcare Dive

Now to Amazon and One Medical. This Editor received her invitation to buy a One Medical membership earlier this week (left). Countering this Editor’s analysis from last week, which maintains that Amazon is already under a broad antitrust microscope viewed by the Federal Trade Commission (FTC) and the Department of Justice (DOJ), Healthcare Dive counters, quite logically and in the view of their experts, that if either agency was going to object, they would have done so before the closing, and the grounds were likely too novel. The article concedes that the FTC could take action further down the road, for instance if Amazon violates HIPAA or consumer privacy with ad trackers. Instead, the focus is on objections by consumer groups, Amazon leveraging health data, privacy violations, and a general consumer unease around Amazon dealing with their health issues.

  • Consumer protection group Public Citizen urged regulators to block the deal in a letter to regulatory groups after it was announced last summer. For instance, it could bundle One Medical and Prime membership (a no-brainer). By tying the two together, Amazon could gain consent for using patient data from health records. Amazon could also serve ads for products related to medical conditions without that access (that old Pixel/ad tracker business again). These concerns are publicly shared by two FTC commissioners.
  • Analysts said that data acquisition was likely a big driving factor for the deal. After linking One Medical’s data with that from its other products and services, Amazon can analyze petabytes of healthcare data in the cloud and use the findings to better manage the health of One Medical’s Medicare population, build new products and pinpoint people with rare diseases to solicit participation in clinical trials, according to (market research firm) Forrester’s (Natalie) Schibell.” [Editor] That would, of course, require patient consent. 
  • Forrester noted that the consumer unease around Amazon in healthcare is substantial. 34% of surveyed adults weren’t at all comfortable with Amazon for healthcare needs with an additional 17% only somewhat more comfortable (tier 2). Trust levels are low, and it would take only one or two incidents, such as a security breach or HIPAA violations, to destroy it. This Editor would add that if One Medical practices were not managed impeccably, that would go viral among individual and corporate members, in a way that Amazon Care did not.

News roundup: CVS abandons (?) Cano Health buy; Signify adds home RPM; BioIntelliSense RPM acquires AlertWatch; GE Healthcare, AMC Health partner; Viome raises $67M, other fundings

CVS Health apparently backs away from a strategic primary care buy. Earlier this week, both Barron’s and DealReporter (via FactSet) reported that CVS Health is no longer pursuing an acquisition of Cano Health, a primary care provider group in Florida, Texas, Nevada, California, Illinois, New Mexico, and Puerto Rico that concentrates on senior health, Medicare Advantage patients, and value-based care. Cano has 4,000 employees and 280,000 members. Reasons why were not disclosed by either CVS or Cano. Cano shares listed on the NYSE fell on the news from Monday’s open of $8.22 to $4.50 today (20 Oct). An alternative buyer may be Humana, which has a right of first refusal on a sale dating back to 2019, but Humana has been quiet on the acquisition front of late.

Walking away seems contrary to CVS’ stated strategy of pursuing deals in primary care, provider enablement, and home health, but CVS can afford to be choosy. There’s speculation that CVS has a different provider/VBC enablement target in mind.  Jailendra Singh of Truist Securities identified ACO management services organization Privia Health as a potential buy that would fit well with CVS’ pending buy of Signify Health, which includes competitor Caravan Health (more on this here). But who knows if this ‘walk away’ is final? Healthcare Finance, FierceHealthcare

CVS’ pending deal, Signify Health, announced the addition of spirometry testing to evaluate patients for COPD. This will be added to their existing suite of in-home diagnostic testing and tracking, In-Home Health Evaluation, targeted to Medicaid and Medicare Advantage members. Mobihealthnews

If there’s a Cinderella this inflationary, recessionary year, it’s remote patient monitoring (RPM). BioIntelliSense has been in RPM since 2020 with on-body/stick-on sensors such as the BioButton and the BioSense 30-day monitor. Their latest addition through acquisition is the AlertWatch clinical intelligence and triage system. AlertWatch will join BioIntelliSense’s product group within Medtronic’s HealthCast portfolio in US hospital patient monitoring as part of their existing partnership. In the past ten years, AlertWatch achieved four FDA 510(k) clearances for its specialized product offerings for the operating room, intensive care unit, and labor and delivery unit.  BioIntelliSense release

Veteran RPM company AMC Health will be partnering with GE Healthcare (GEHC) for post-discharge in-home care monitoring. This will extend GEHC’s hospital-based monitoring into post-acute patient needs and anticipate future care needs, potentially reducing unnecessary readmissions. It’s also planned that eventually both hospital and home data will be integrated into GE’s Edison Health database. GEHC also announced additional details about its spinoff, due to happen in early 2023. [Also TTA 12 Nov 21 and 20 July] Mobihealthnews

Healthcare/health tech raises haven’t entirely disappeared. Viome, which uses AI to test the oral and gut microbiome to prevent, diagnose, and treat chronic diseases and cancer, just raised a $67 million Series C led by Bold Capital Group with participation from Khosla Ventures, West River Group, Glico, Ocgrow Ventures, and Physician Partners, for a total raise since 2017 of over $169 million (Crunchbase). Viome recently launched the CancerDetect test for oral and throat cancers under the FDA Breakthrough Device Designation. Last year, they expanded their partnership with GlaxoSmithKline to research and potentially develop interventions for some cancers and autoimmune diseases. Viome release  

Mobihealthnews rounds up several other financings from genomic tester Variantyx’s $20 million in debt financing to mental health app Mindful Care’s modest $7 million Series B and dataset research collaboration platform Rhino Health‘s $6.7 million seed round extension for an $11 million total.

Week-end roundup of not-good news: Teladoc’s Q2 $3B net loss, shares down 24%; Humana, Centene, Molina reorg and downscale; layoffs at Included Health, Capsule, Noom, Kry/Livi, Babylon Health, more (updated)

Teladoc continues to be buffeted by wake turbulence from the Livongo acquisition. The company took a $3 billion goodwill impairment charge in Q2, adding to the $6.3 billion impairment charge in Q1. The total impairment of $9.3 billion was the bulk of the first half loss of nearly $10 billion. While their revenue of $592.4 million exceeded analyst projections of $588 million, adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $46.7 million were barely up from projections and were down from $66.8 million year prior. Losses per share mounted to $19.22, versus $0.86 in Q2 2021.

Another weak spot is their online therapy service, BetterHelp, which in the US is pursuing a substantial TV campaign. CEO Jason Gorevic in the earnings release pointed out competitors buying the business at low margins and consumer spending pullbacks. Teladoc’s forward projections are bolstered by Primary360 and Chronic Care Complete. Projected revenue for Q3 is $600 million to $620 million. Shares on Thursday took a 24% hit, adding to the over 50% YTD drop misery. At best, Teladoc will muddle through the remainder of the year, if they are lucky. MarketWatch, Mobihealthnews, FierceHealthcare

Health plans are also presenting a mixed picture. 

  • Humana announced a healthy earnings picture for the quarter and YTD. It earned $696 million in profit for Q2, up nearly 20% year over year. For first half, Humana earned $1.6 billion, an increase of 14.8% from 2021’s $1.4 billion. Cited were growth in their primary care clinics, Medicaid membership, and investment in Medicare Advantage. Earnings surpassed Wall Street projections and Humana increased its guidance to $24.75 in earnings per share. At the same time, they announced a reorganization of its operating units that separates their insurance services (retail health plans and related) and CenterWell for healthcare services including home health. Some key executives will be departing, including the current head of retail health plans who will stay until early 2023, ending a 30 year Humana career. FierceHealthcare, Healthcare Dive
  • Under new leadership, Centene posted a Q2 loss of $172 million which in reality was a significant improvement over Q2 2021’s $535 million and looked on favorably by analysts.
    • Their ‘value creation plan’ has sold off its two specialty pharmacy operations to multiple investors, using third-party vendors in future, and agreed this week to sell its international holdings in Spain and Central Europe — Ribera Salud, Torrejón Salud, and Pro Diagnostics Group — to Vivalto Santé, France’s third-largest private hospital company.
    • Medicaid, their largest business line, has been growing by 7%.
    • Centene is continuing to divest much of its considerable owned and leased real estate holdings, which marks a radical change from the former and now late CEO’s* ‘edifice complex’ to house his ‘cubie culture’. As a result, it is taking a $1.45 billion impairment charge.  Healthcare Dive. [* Michael Neidorff passed away on 7 April, after 25 years as CEO, a record which undoubtedly will never be matched at a health plan.)
    • A cloud in this picture: Centene’s important Medicare Advantage CMS Star quality ratings for 2023 will be “disappointing” which was attributed to the WellCare acquisition (accounting for most of the MA plans), two different operating models between the companies, and the sudden transition to a remote workforce. For plans, WellCare operated on a centralized model, Centene on a decentralized one, and the new management now seems to prefer the former. (Disclosure: your Editor worked over two years for WellCare in marketing, but not in MA.) Healthcare Dive
  • One of the few ‘pure’ health plans without a services division, Molina Healthcare, is also going the real estate divestment route and going full virtual for its workforce. Their real estate holdings will be scaled down by about two-thirds for both owned and leased buildings. Molina does business in 19 states and owns or leases space across the US. Net income for the second quarter increased 34% to $248 million on higher revenue of $8 billion. Healthcare Dive

Many of last year’s fast-growing health tech companies are scaling back in the past two months as fast as they grew in last year’s hothouse–and sharing the trajectory of other tech companies as well as telehealth as VCs, PEs, and shareholders are saying ‘where’s the money?’. 

  • Included Health, the virtual health company created from the merger of Grand Rounds and Doctor on Demand plus the later acquisition of care concierge Included Health, rebranding under that name, has cut staff by 6%. The two main companies continued to operate separately as their markets and accounts were very different: Grand Rounds for second opinion services for employees, and Doctor on Demand for about 3 million telehealth consults in first half 2020. As Readers know, the entire telehealth area is now settling down to a steady but not inflated level–and competition is incredibly fierce. FierceHealthcare
  • Unicorns backed by big sports figures aren’t immune either. Whoop, a Boston-based wearable fitness tech startup with a valuation of $3.6 billion, is laying off 15% of its staff. (Link above)
  • Digital pharmacy/telemedicine Capsule is releasing 13% of its over 900 member staff, putting a distinct damper on the already depressed NYC Silicon Alley.  FierceHealthcare also notes layoffs at weight loss program Calibrate (24%), the $7 billion valued Ro for telehealth for everything from hair loss to fertility (18%), Cedar in healthcare payments (24%), and constantly advertising Noom weight loss (495 people). Updated: Calibrate’s 150-person layoff was reported as particularly brutally handled with employees. Many were newly hired the previous week, given 30 minutes notice of a two-minute webinar notice, then their laptops were wiped. Given that the company makes much of its empathy in weight loss, facilitating prescription of GLP-1 along with virtual coaching, for a hefty price of course. HISTalk 8/3/22
  • Buried in their list are layoffs at Stockholm-based Kry, better known as Livi in the UK, US, and France, with 100 employees (10%).
  • Layoffs.fyi, a tracker, also lists Babylon Health as this month planning redundancies of 100 people of its current 2,500 in their bid to save $100 million in Q3. Bloomberg

Thursday news roundup: Teladoc’s cheery 2021, uncertain 2022; DOJ deadline UnitedHealth-Change Sunday, Cerner’s earnings swan song, Humana feels the activist lash; funding/M&A for WellSky, Health Catalyst, Minded, Automata, MediBuddy

Teladoc closed 2021 on Tuesday with record revenue of $2,032.7 billion, 86% over 2020. Visits were up 38% to 15.4 million with 53.4 million paid members. Q4 revenue was $554.2 million, 45% over Q4 2020, all of which exceeded investors’ expectations. Despite moving to a positive cash flow of $194 million, Teladoc is still not profitable, with full-year losses of almost $429 million and net loss per share of $2.73, somewhat lower than 2020.

The outlook for 2022 is less certain. For the full year, they anticipate a nice rise in revenues to $2.55 to $2.65 billion but a net loss of $1.40-1.60 per share, a little more than half 2021. Paid membership they project will grow to 54 to 56 million. The stock did take a bit of a bath due to market uncertainty with Ukraine-Russia and also a lowered forecast for first quarter. Teladoc earnings release, Healthcare Dive

DOJ has till Sunday 27 February to sue to stop the UnitedHealth acquisition of Change Healthcare. The acquirer and acquiree popped their 10-day notice on 17 February through their 8-K filing with the SEC. They had previously agreed to hold their closing until after 22 February. So if the DOJ is going to block the deal, as has been reported [TTA 17 Feb], they have from today to Sunday to do it–and courts aren’t open Saturday and Sunday. Healthcare Dive, Becker’s Health IT

Cerner’s 2021 swan song kind of… honked. Their net loss for the year was $8.8 million in 2021, compared with a net income of $76.9 million in 2020. Total net earnings topped $555 million in net earnings in 2021, down 29% from $780.1 million in 2020. Cerner release, Becker’s. Meanwhile, Oracle’s acquisition high hurdles continue [TTA 11 Feb] with the Feds, passing the first mark of the Hart-Scott-Rodino Act waiting period as of 11.59pm on 22 February. Still to go is the SEC review of Oracle’s tender offer for Cerner shares.  Becker’s Health IT

Humana joins Centene in insurers forced to change by activist shareholders. Starboard Value, a hedge fund, reached an agreement with Humana that Humana would add two independent board directors backed by Starboard. The first will be named on 21 April with the second to follow. They replace incumbents who will not stand for re-election. Starboard owns 1 million Humana or 0.79% of shares, but is well known for wielding them effectively to leverage change when the business hits a pothole–Humana’s $14 million Q4 loss and Medicare Advantage losses to both traditional rivals and insurtechs.

Humana is standing by its 2022 projection of 11-15%  growth but slowing performance in large areas such as Medicare Advantage. The company has stated that they will funnel funds back into Medicare Advantage through its “value creation plan”, which sounds very much like Centene’s “value creation office”. You’d think they’d come up with cleverer names and less anodyne ‘strategies’ for extracting savings from these lemons wherever possible, including selling off assets and “optimizing its workforce”. Reuters, Healthcare Dive

And quick takes from the US, UK, and India…

WellSky is acquiring TapCloud for an undisclosed amount. WellSky is a data analytics and care coordination automation company in the acute care and home care markets, with TapCloud a patient-facing engagement and communication platform. Release

Another data analytics company, Health Catalyst, is bolstering capabilities with its agreement to buy KPI Ninja, a provider of interoperability solutions and population health analytics. Purchase price and management transitions undisclosed, though from the release it appears that all KPI Ninjas will be onboarded.

Minded, a NYC-based mental health med management company, scored $25 million in seed funding from Streamlined Ventures, Link Ventures, The Tiger Fund, Unicorn Ventures, and private individuals. They provide direct-to-patient behavioral health medications through virtual evaluations with treatment plans without in-person visits, which are still unusual in psychiatry. At the present time, it is available only in New York, New Jersey, Pennsylvania, Florida, Texas, Illinois, and California.

The founders are an interesting mix: David Ronick, who previously co-founded fintech unicorn Stash, Gaspard de Dreuzy, the co-founder of telehealth company Pager, and Dr. Chris Dennis, a multi-state licensed psychiatrist. Their rationale for founding the company does resonate with this Editor, whose brother is a board-certified MD psychiatrist, and who knows well 1) the challenges of remote therapy and 2) the scarcity of psychiatrists in most of the US beyond urban and academic areas. Release, TechCrunch, Mobihealthnews

In the UK, London-based Automata, which automates lab technology to shorten turnaround time and scale up lab capacity, along with deploying automation with contract research organizations, research labs, and blue-chip healthcare institutions, announced a $50 million (£36.8M) Series B raise. The round was led by Octopus Ventures with participation from returning investors Hummingbird, Latitude Ventures, ABB Technology Ventures, Isomer Capital as well as strategic investors including In-Q-Tel. Mobihealthnews

From Bangalore, India, virtual health company MediBuddy $125 million Series C funding was led by Quadria Capital and Lightrock India, bringing their total funding to over $191.1 million, a hallmark of a largely bootstrapped company. MediBuddy uses a smartphone app for 24/7 real-time video doctor consults and at-home lab testing covering the family and in more than eight languages, important in India which has hundreds of languages and local dialects. Great smiles on the founders too! Mobihealthnews

Deal and news roundup: Humana closes $5.7B Kindred at Home buy, Unite Us SDOH buys Carrot Health for data, Carrot Fertility raises $75M, Maven Clinic at $1B value, Privia partners with Babyscripts for moms, Tyto Care and Prisma Health

Home care continues to rock with the third move in two weeks. Payer giant Humana closed its acquisition of home care giant Kindred at Home, completing the acquisition of the approximately 60% Humana did not already own for $5.7 billion. Kindred provides home health, hospice, and personal care services to over 550,000 patients annually, making it the largest US home health company. Humana will integrate Kindred into their Home Solutions business, sunsetting the Kindred name for CenterWell Home Health starting in 2022. CenterWell is payer-agnostic, which is a fancy way of saying that they sell to other payers. An interesting nugget in the release is that Home Solutions has an interim president, Greg Sheff. FierceHealthcare

While planned since earlier this year, the shakeup in the sleepy home health segment in usually dozy August has been substantial, and at premium prices. Honor’s acquired Home Instead [TTA 14 Aug] with a valuation of $2.1 billion and the Sharecare conglomerate bought CareLinx for $65 million [TTA 19 Aug].  

In another hot area, social determinants of health (SDOH), NYC-based care coordination platform Unite Us acquired Carrot Health for an undisclosed sum. Carrot Health is a consumer data and health data set that powers over 500 proprietary predictive models. Carrot’s team will be absorbed into the Unite Us current structure. Both products will be sold together and separately as Unite Us positions the company as the only national company to integrate health and social care. Back in March, Unite Us closed a $150 million Series C. This follows on the Wellsky acquisition of SDOH provider Healthify earlier this month to bolster its community care platform [TTA 4 Aug]. Release, FierceHealthcare, Mobihealthnews

Women’s and family health gaining popularity and funding. Another Carrot, Carrot Fertility, raised a $75 million Series C funding, led by the deep-pocketed Tiger Global Management. Their current funding totals $115 million. Carrot Fertility, based in San Francisco, provides fertility benefits for generous companies like Peloton, Box, Slack, and Eventbrite in more than 55 countries. FierceHealthcare

And while we are on women’s health, Maven Clinic, a women and family health-oriented digital health provider, reached unicorn ($1 billion) valuation status with a $110 million Series D fund raise led by a female partner at Lux Capital with backing from Oprah Winfrey. Maven pitches itself to employers and health plans as a virtual clinic for women’s and family health, offering care and support for fertility, pregnancy, and parenting. This Editor looks forward to the day where specialized women’s and family health services are part of routine care, and news about a provider wouldn’t need this type of spin to get noticed. (It’s like US car companies in the 1950s bringing in women designers to make cars that appealed especially to women. Buick and Jordan figured that out in the 1920s.)  FierceHealthcare, TechCrunch, plus a loquacious blog post from founder Kate Ryder

And speaking of babies, Privia Health, one of the larger management services organizations (MSOs) for physician practices, is partnering with virtual maternity care Babyscripts for pregnancy and post-partum care. The Babyscripts services will be integrated into Privia’s Women’s Health provider group. DC-based Babyscripts is small with only about $20 million in funding through Series B (Crunchbase) but addresses the big problems of maternal and post-pregnancy mother and baby care, including maternal deaths. Privia providers will be able to access Babyscripts’ remote patient monitoring for mental health, hypertension, preeclampsia. and gestational diabetes, as well as apps for educational content.  Mobihealthnews

Diagnostic monitor Tyto Care is partnering with Prisma Health, the largest healthcare system in South Carolina, for remote diagnostics and treatment during video consults. Their physician network will be equipped to provide their patients and Prisma employees with convenient, secure, and clinic-quality diagnostics using the Tyto Care kit during telehealth visits. Release, Mobihealthnews

Deal and news roundup, 17-18 Feb: Sharecare goes SPAC for hefty $3.9 bn valuation; Humana Care Support pilots; AliveCor, AstraZeneca partner on renal, cardiac; Current Health RPM in clinical trials

Sharecare, a free/paid app platform that enables users to consolidate all their health and wellness data in one location and use proprietary health management tools, is going the SPAC route with Falcon Capital Acquisition Corp. It will trade on NASDAQ under SHCR. Initial enterprise value is expected to be $3.9 bn with approximately $400 million in growth capital. Closing is expected to be in Q2 of this year.

Founded in 2010 by celebrity doctor Mehmet Oz, MD (now on the board and not in active management) and WebMD founder Jeff Arnold, the current CEO, Sharecare will also have an undisclosed investment by strategic partners Anthem and Digital Alpha. Anthem is looking at the AI value plus consumer engagement and personalized care. Helping to fund both the public equity and cash position is a fully committed private investment in public equity (PIPE) of $425 million at $10.00 per share which is below market value. Falcon Capital will retain about 20 percent of the company. Mr. Arnold will join the board and be retained as CEO. After the closing, Sharecare and Falcon will donate about $4 million in stock to Sharecare’s charitable foundation.

Sharecare sells the platform to enterprises such as providers, employers, health plans, government organizations, and communities, as well as individuals on their free apps. Release, FierceHealthcare, Becker’s

Rival health plan Humana is also adding to its care management tools with a pilot of the Humana Care Support program. The platform creates an integrated, personalized experience for members, including a multi-disciplinary care team and SDOH integration. The pilot targets select groups of Medicare Advantage members in Kentucky, Pennsylvania, and West Virginia with multiple chronic conditions, complex congestive heart failure, and diabetes, with multi-disciplinary care teams. Humana Care Pilot is built on Salesforce’s Health Cloud platform for viewing the patient’s medical history and integrating clinician workflows. Its analytics are powered by Microsoft’s Azure and Power BI. The goal is lowering costs and improving outcomes for this high-cost group of patients. If successful, the program will roll out to other markets this year. Humana release, FierceHealthcare

AliveCor, the developer of the KardiaMobile mobile ECG/EKG, and AstraZeneca are partnering on research for new disease management solutions in cardiovascular, renal, and metabolism (CVRM) therapeutic areas. This will use AliveCor’s monitoring system for blood potassium. The Kardia-K AI platform uses ECG/EKG neural network analysis to measure a patient’s potassium levels without a patient blood draw. Hyperkalemia (elevated blood potassium) is linked to renal issues and kidney disease as well as cardiac issues. Kardia-K received Breakthrough Device Designation status from the FDA to screen for elevated levels of blood potassium in September 2018, and was validated in a study with Mayo Clinic published in 2019. Release, Mobihealthnews

Current Health, a monitoring and care management RPM system for enterprise-level health organizations, announced its “Community” initiative to build diverse longitudinal datasets for decentralized clinical trials. Their platform is FDA-cleared and used at scale in phase III and phase IV drug trials by major pharmaceutical organizations for remote endpoint collection and for virtual trial delivery. Monitoring is performed through wearables and sent to the electronic data capture (EDC) vendor for the clinical research organization (CRO). Current Health is using Community for its own COVID-19 study to predict hospitalizations and inform clinical treatment. The study is recruiting US participants diagnosed with the virus in the last 48 hours. Current has locations in Edinburgh, London, Boston, and San Francisco according to their website. Mobihealthnews

Crime Does Not Pay–especially when defrauding Medicare of nearly $1 billion

Ocean’s 11 (or 13) It Ain’t. Back in October, the Department of Justice (DOJ) and other Federal agencies had what was dubbed the  National Health Care Fraud and Opioid Takedown. Many of the takedownees were ‘telemedicine’ fraudsters. Of the over $6 bn of fraud identified, $4.5 bn was specified as relating to ‘telemedicine’ with more than 86 criminal defendants located in 19 judicial districts [TTA 2 Oct 20].

The sentences are now rolling in for this and earlier actions. Becker’s seems to be the only outlet tallying those who will be fined and having a stay in Club Fed. The three ‘telemedicine’ convictions noted by this Editor to date, totaling $958 million, are:

  • Genetic testing fraud: The owner of Scott Global, an Orlando telemarketing call center, was convicted of eight counts and a $2.8 million fraud. Telemarketers would call Medicare beneficiaries soliciting their information for expensive cancer screening genetic testing, or CGx, telling them that it would be covered by Medicare. Mr. Scott then paid bribes and kickbacks to ‘telemedicine’ companies to get physician’s orders authorizing the tests. Becker’s Healthcare 12 Jan   DOJ release
  • Pharmacy fraud: Larry Smith, a Florida resident owner of two pharmacies and a related company, defrauded pharmacy benefit managers of $931.4 million by submitting bills for fraudulent prescriptions purchased from a telemarketing company. The telemarketers improperly solicited patient information, then got approvals from ‘telemedicine’ prescribers, and finally sold the prescriptions to pharmacies like Mr. Smith’s for a kickback. Mr. Smith faces up to 10 years in prison.

In a 2018 related action, HealthRight, a ‘telemedicine’ company, and its CEO Scott Roix pleaded guilty to conspiracy to commit healthcare fraud for their roles in the scheme, agreed to pay $5 million in restitution. Sentencing is scheduled for 25 October. Mihir Taneja, Arun Kapoor, Maikel Bolos, and Sterling-Knight Pharmaceuticals also pleaded guilty in December 2020, according to the Justice Department. Becker’s Healthcare 26 Jan   DOJ release

  • The absence of telemedicine–prescribing medication without a patient consult–was what landed New Jersey physician Bernard Ogon, MD, to 33 months in prison, pay restitution of $24.3 million, and forfeit an additional $75,000. He signed preprinted prescriptions and then sent them to specific compounding pharmacies involved in the conspiracy. Becker’s Healthcare 28 Jan  DOJ release

Certainly more to come. This Editor has also checked for any further actions in Humana’s suit against telehealth/telemarketing company QuivvyTech as reported last August, and there are none. Our original report here.

Anthem-Cigna merger lawsuit finally wraps with ‘No damages for you! Or you!’

Not with a bang, but a whimper and a large bill. The long, drawn-out (May 2017!) lawsuit and countersuit in Delaware Chancery Court between payers Anthem and Cigna ended with the decision by Vice Chancellor J. Travis Laster to refuse to award damages to either party in the litigation.

Cigna, which was seeking nearly $15 bn from Anthem, seemed to receive the worst of his judgment. In his decision (PDF), VC Laster stated that Cigna was unable to prove that Anthem breached the Efforts Covenants and in fact, Cigna sought to derail the deal by pulling back on integration efforts, thus itself breaching the covenants. Thus, Cigna was not entitled to the $1.85 bn breakup fee or additional damages. Anthem proved that they sought to complete the merger and Cigna did not, thus seeking $20 bn in damages. In counterpoint, Cigna was able to prove that the deal would have been blocked regardless of their actions to demo the deal.

VC Laster’s conclusion, “In this corporate soap opera, the members of executive teams at Anthem and Cigna played themselves. Their battle for power spanned multiple acts….Each party must bear the losses it suffered as a result of their star-crossed venture.” The testimony revealed the deep divisions and battle lines between both companies during the merger preliminaries, until the Federal courts and DOJ put paid to it.

Yet the denouement of this Merger Made In Hell may not be fini. Anthem said in a statement to Fierce Healthcare that it feels “this decision is in the best interests of Anthem and our stakeholders.” But a Cigna spokesperson said they are not finished and considering a potential appeal. “We are pleased that the Court agreed with us that Cigna did not cause the merger to fail. We continue to strongly believe in the merits of our case, and we are evaluating our options with respect to appeal.” Certainly not the peaceful-in-public parting after the Federal denial of their merger by Aetna (acquired by CVS) and Humana (still in play).

The chief beneficiaries of this three-year drama? The law firms listed on page 1 of the opinion. Also Wall Street Journal (paywalled in part).