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

News and funding roundup: Vida Health’s $100M Series D, Kry’s $316M raise, CVS and Advocate Aurora’s fresh funds, Boost Mobile offers K Health symptom checker

Vida Health, a virtual platform for chronic condition and mental health management, raised $110 million in a Series D financing led by General Atlantic, joined by Centene, AXA Venture Partners (AVP), and Ardea Capital Partners along with a number of earlier investors. Vida has a network of clinicians, mental health coaches, dietitians, and licensed therapists to provide virtual care programs to payers like Centene and Humana, plus employers such as Boeing, Visa, Cisco, and eBay. The company reports that it tripled its revenue since January 2020 and expanded its existing nationwide network of therapists, coaches, dietitians, and diabetes educators by more than 400 percent. Vida’s involvement with Centene started with a 20-state rollout in the Ambetter plans, the Centene health insurance marketplace product, Ambetter, for members with chronic conditions such as diabetes, high blood pressure, obesity, and treatment/coaching for mental health conditions like stress and depression. Vida’s total financing since 2014 totals $188 million. Release, Crunchbase, Mobihealthnews

Sweden’s Kry (Livi in the UK, US, and France) raised a Series D of €262 million, or about $316 million to finance expansion into additional countries and to scale their telemedicine platform. The Ontario Teachers’ Pension Plan Teachers’ Innovation Platform, along with existing investors Index Ventures, Creandum, and Accel, led the round. Valuation is now estimated at about $2B (nearly €1.66 bn). Silicon Canals, FierceBiotech

If you’re looking for funding, CVS Health has launched a $100 million venture capital fund to capitalize projects and innovations from digital healthcare and tech companies to make healthcare more accessible, affordable, and…better. CVS and Aetna have already been an investor in digital health, with about 20 such findings. More information on CVS Health Ventures is hereRelease

Want more funding? Advocate Aurora Enterprises (AAE), part of Advocate Aurora Health System in Illinois and Wisconsin, also is funding consumer health and wellness, with recent buys of home care company Senior Helpers in a $180 million deal following on $25 million for a telenutrition (!) company, Foodsmart. Some have questioned how nonprofit health systems like Advocate Aurora and Ascension have deep enough pockets to get into the risky funding business. FierceHealthcare, Healthcare Dive.

Finally, in the Everybody’s Getting Into The Telehealth Act Department, Boost Mobile is offering the K Health symptom checker to its customers and immediate families. The catch: you have to subscribe to their Unlimited Plus plan. But clever, though. HITConsultant 

NHS digital triaging app eConsult closes £7 million funding round

Closing out last week was eConsult’s announcement of a new £7 million round of financing. The triage app is currently used by about 40 percent of NHS practices–3,200 NHS GP practices across the UK. The funding, on top of a £5 million Series A raise last October (Crunchbase, AngelNews) was via Gresham House Ventures (this raise and the Series A lead) and Calculus Capital, plus existing investors.

The fresh funding will boost eConsult capabilities for primary and secondary care, plus expansion into urgent care with an Urgent and Emergency Care tool, eTriage, and outpatient triage tool, eSpecialist. They are also developing a triaging service for Emergency Departments (EDs). 

eConsult was formed in 2013 by four NHS GPs. It uses a bank of over 10,000 questions from a number of clinical sources to direct patients to the most appropriate care, assign priority, and direct to a GP surgery. Their research indicates that 70 percent of GP enquiries can be closed without a F2F consult. 

Last August, eConsult, Q doctor, and Cognitant Group jointly created a toolbar that combined eConsult with Q doctor’s video consult technology and Cognitant Group’s ‘Healthinote’ verified patient information service. They later added HCI’s medical video library service. In June, eConsult added the Ministry of Defence; 183,500 service members and dependents in 124 international locations are able to access online consultations with Defence Primary Healthcare (release).

eConsult’s service volume exploded during the early pandemic and has held its leading share versus competitive services such as Babylon Health, Push Doctor, Infermedica, and Livi (Kry). Babylon has had its challenges in the UK market but is aggressively moving into enterprise accounts in the US and Canada, quietly raising just before Christmas $100 million (£74.5m) in a convertible loan led by VNV Global. Mobihealthnews. UKTechNews

News roundup: LabCorp CRO boosts Medable, Propeller Health gains 510(k), EU’s 34 medtech startups, Amazon’s healthcare moves, Google’s Arizona privacy lawsuit

It does seem ages since our last one! One major winning category for digital health is clinical trials. LabCorp has one of the largest CROs (contract research organization), Covance. LabCorp has partnered with startup Medable, a Palo Alto-based company that decentralizes the gathering and analysis of clinical trial data from recruited participants through apps and telemedicine. Mobihealthnews  Confirming this trend: earlier this month, Medable cleared a $25 million venture round from GSR Ventures. Crunchbase  This does make rival CRO PRA Health Science’s pickup of Care Innovations from Intel late last year, for an undisclosed amount, look like a prescient (and likely a bargain) purchase.

Propeller Health, which specializes in digital respiratory health with sensors connected to inhalers and apps, gained 510(k) FDA clearance for a sensor/app for use with AstraZeneca’s Symbicort inhaler. This medication is used for asthma and COPD. It does not seem that long ago (2014) that the startup was at trade shows like NYeC and mHealth Summit with an exceedingly modest display of popups and brochures. Their 2019 acquisition by ResMed for the stunningly premium price of $225 million made news in late 2018. Mobihealthnews

In Europe, COVID-19 has boosted at least 34 medtech startups, including 11 in UK alone, followed by Switzerland and Sweden. This is based on a study by Oxford University data visualization spin-out Zegami. One of them happens to be Zegami on a project in using a limited dataset to distinguish between x-rays of COVID-19 infections and infections caused by viral or bacterial pneumonia, as well as images of healthy lungs. On the list are (naturally) Babylon Health and the slightly mysterious Medopad. Sweden’s Kry (LIVI in the UK) is also on the list. Kry/LIVI last made some news when Juliet Bauer of NHS Digital ankled to Kry in early 2019, Med-techInnovationNews, Mobihealthnews

Amazon’s latest stretches into healthcare are noted in a brief Becker’s Health IT article which notes AWS’ deals with Cerner and addition of healthcare-specific features with hospitals using AWS. Mayo Clinic has partnered with Alexa for voice responsive ‘Mayo Answers’. Some Amazon employees now have access to telehealth benefits (this Editor wonders why not all, beyond those Seattle warehouse workers). Industry research company CB Insights is projecting that Amazon’s next move will be a benefits marketplace for employers and payers. Meanwhile, their partnership with JP Morgan Chase and Berkshire Hathaway, Haven, has stumbled with its CEO Atul Gawande, MD, leaving the post to return to practice after less than two years. Executive turnover has been high, and the company has yet to announce a major initiative. FierceHealthcare 

Meanwhile, Arizona’s attorney general has sued Google for violating state privacy laws. Seems like Android users are trackable, even if they turn off location on their phones, through Google apps like Maps and Weather. The lawsuit also charges that Google changed its default tracking settings without informing users, using data for targeted ads. Becker’s Health IT 

News, moves and M&A roundup: Appello acquires RedAssure, Shaw departs NHS Digital, NHS App goes biometric, GP at Hand in Manchester, Verita Singapore’s three startup buys, Novant Health and Tyto Care partner

Appello telecare acquires RedAssure Independent Living from Worthing Homes. A 20-year provider of telecare services to about 700 homes in the Worthing area in West Sussex, the acquisition by Appello closed on 1 October. Previously, Appello provided monitoring services for RedAssure since 2010. Terms were not disclosed. Release.

Another NHS Digital departure is Rob Shaw, deputy CEO. He will be leaving to pursue a consulting career advising foreign governments on national health and care infrastructure. He is credited with moving the NHS Spine in-house and establishing NHS Digital’s cybersecurity function. The Digital Health article times it for around Christmas. Mr. Shaw’s departure follows other high-profile executives this year such as former chief digital officer Juliet Bauer who controversially moved to Kry/LIVI after penning a glowing article about them [TTA 24 Jan], Will Smart, Matthew Swindells, and Richard Corbridge.

One initiative that NHS Digital has lately implemented is passwordless, biometric facial or fingerprint-based log in for the NHS App, based on the FIDO (Fast-Identity Online) UAF (Universal Authentication Framework) protocol (whew!). NHS Digital’s most recent related announcement is the release of two pieces of code under open-source that will allow developers to include biometric verification for log in into their products.

Babylon Health’s GP at Hand plans Manchester expansion. The formal notification will likely be this month to commissioners of plans to open a Manchester clinic as a center for GP at Hand’s primarily virtual consults. This follows on their recent expansion into Birmingham via Hammersmith and Fulham CCG which will be notified. How it will work is that patients registering in Manchester would be added initially to a single patient list for GP at Hand located at Hammersmith and Fulham CCG. Babylon is now totalling 60,000 patients through GP at Hand.  GP Online

Singapore’s Verita Healthcare Group has acquired three digital health startups. The two from Singapore are nBuddy and CelliHealth, in addition to Germany’s Hanako. Verita has operations in Singapore, the US, Asia-Pacific and Europe, with 35 alliance partnerships with medical clinics and hospitals across Australia, Southeast Asia and Europe. Mobihealthnews APAC

Novant Health, a 640-location health system in North Carolina, is introducing Tyto Care’s TytoHome integrated telehealth diagnostic and consult device as part of its network service. Webpage, release

LIVI telemedicine app expands availability to 1.85 million patients with GPs in Birmingham, Shropshire, Northamptonshire, Southeast

The LIVI telemedicine app, which made news last year with UK partnerships in Surrey and Northwest England last year, has expanded to GP practices in Birmingham, Shropshire, Northamptonshire, and locations in the Southeast, as well as additional practices in Surrey. The Northampton General Practice Alliance and the Alliance for Better Care are among the federations partnering with LIVI.

LIVI offers NHS and private services for video consults with a GP. Patients can also access medical advice, referrals, and prescriptions. Unlike Babylon Health, the patient can use LIVI without having to register with a new, Babylon Health-linked practice and deregistering from the former GP practice. It is now available to 1.85 million UK patients. Known as Kry in the Nordic countries, LIVI also has a presence in France. 

In January, LIVI also acquired some notoriety when their current VP of product, Juliet Bauer, departed her chief digital officer spot with NHS England after an all-too-glowing article about LIVI’s Surrey pilot in The Times–without disclosing that she was joining the company in April [TTA 24 Jan] leading to charges of the ‘brazenly revolving door’ et al.

NHS England digital head Bauer exits for Swedish medical app Kry, but not without controversy

Juliet Bauer, who is departing NHS England’s chief digital officer post after 2 1/2 years for the sunnier shores of Appdom, has apparently also taken a splash in hot water on her way there. She is joining Sweden’s Kry (Livi in the UK), a GP telemedicine app available in Europe and the UK in an undisclosed product executive role. Livi offers NHS and private services for video consults, including a current contract with GPs in Surrey. 

The event that has sparked the controversy was Ms. Bauer’s article on digital health in the Times (paywalled) on 14 Jan praising Kry/Livi without disclosing publicly that she is joining the company in April. She stated that data provided by Kry/Livi showed “higher levels of patient and GP satisfaction while at the same time delivering higher patient safety and medical quality as well as crucial improvements in lowering prescription of antibiotics.” To add to it, the claim was not backed up with details nor, in reports, did the article cite other medical companies.

‘Brazen,’ ‘jaw-droppingly inappropriate’, and a ‘puff piece’ was how the article was characterized by Meg Hillier, the Labour MP who chairs the Commons public accounts committee. Even Simon Eccles, her soon-to-be-former colleague who is CIO of health and care, chimed in that the article was a mistake by a colleague he called ‘fantastic’ in her advocacy for centering NHS around the individual. Ms. Bauer worked on the recently disclosed 10 year plan, but the key leaders were Dr. Eccles, NHS Digital boss Sarah Wilkinson, West Suffolk Hospitals Foundation Trust head Steve Dunn, and NHS England deputy chief exec Matthew Swindells. Dr. Eccles to the press dismissed any influence by her towards her future imployer.

Ms. Bauer was NHS England’s first chief digital officer, starting in July 2016. She was responsible for patient-focused digital dubbed Empower the Person, including NHS 111, the app library, and the NHS app. According to the internal memo obtained by HSJ revealing her departure, it is with ‘with immediate effect’. Replacing her from 4 February on an interim basis will be Tara Donnelly, the current chief executive of the Health Innovation Network.

The brazenly revolving door of civil servants to companies and vice versa is common on both sides of the Atlantic. Former senators, congressmen, and generals–and those well down the greasy pole–find new employment at lobbyists, companies and industries they used to oversee. Influence and connections, as well as expertise, count for a great deal in the real world. In the private sector, sometimes there are non-solicit or non-compete (the latter unenforceable in many states) agreements, with exceptions for highly regulated and conflict-prone businesses, such as insurers.

Conflict of interest? Too close for comfort to this Editor. In a publicly-funded, contract based healthcare system like the UK’s, the departure of Ms. Bauer for a company contracting with the NHS, without being specifically excluded from dealing with the NHS–in fact, in her departure statement saying quite the opposite–has raised the spectre of conflict of interest. This Editor would also question her judgment in accepting the position without said exclusion–but that was likely the reason she was hired! Will this go away soon? Probably not for at least a week! More in the Financial Times (may be paywalled), The Register 11 Jan and 22 Jan, iNews