TTA’s Thanksgiving Windup: Steward heads investigated, CVS head departs, Congress’ controls over Oracle VA EHR depart, NeuroNinja needs funding, Teladoc, Cortica, 23andMe, Neuralink, more!

November 27, 2024 | by | No Comments

 

 

It’s a short holiday week in the US and the stories range from Potential Big International Fraud to Neuralink’s Big Brain Implant Potential. Yet another CVS head departs. Congressional VA EHR controls also depart in new bill. And help fund the adventures of NeuroNinja, a comic superhero who just happens to be living with Parkinson’s. 

Happy Thanksgiving! New articles resume Monday 2 December.

Short takes: Teladoc intros hospital bed fall risk detector, Veradigm’s AI scribe, Lucid’s pill-sized esophageal cancer diagnostic, Cortica’s $80M raise for autism treatment, LG NOVA startup winners
News roundup: Oak Street’s Pykosz departs CVS, Musk’s Neuralink gains Canadian clinical trial, VA healthcare improvement bill omits EHR oversight measures, 23andMe’s Mirador precision medicine partnership (Another CVS head departs, stage left)
Help fund the NeuroNinja comic–a superhero with Parkinson’s! (An unusual approach)
Breaking: Federal agents seize Steward Health’s CEO, international head’s mobile phones in widening US investigations (It’s big, it’s developing, it’s international)

An unusual pre-Thanksgiving week focused on significant developments on ongoing Major Stories but little new. CVS Health bends the knee to investor Glenview. Controlled substances telehealth gets a 3rd extension. Revere Medical out of Steward ashes snaps up a broken MSO. Oura partners with Dexcom CGM and gets paid for it! What’s kind of new? HHS comes up short on cybersecurity leadership while accurate EHR notes are short in new VA study.

Government updates: GAO scores HHS on cybersecurity issues; patient issues largely omitted from EHR notes in VA study (Coming up consistently short)
News roundup: CVS Health cedes 4 new board seats to Glenview, Oscar’s strong Q3, telehealth controlled substance prescribing in 3rd extension, new Revere Medical to buy CareMax assets, Oura picks up $75M Dexcom financing and partnership (Further developments on Big Stories)

Cue the music…it’s the good, bad, and a ration of ugly this week. An under-the-radar company makes big buys in primary care and MSO. Veradigm might finally get itself sold. DOJ drags UHG to court over Amedisys–after the election. 23andMe continues to perhaps Destination Oblivion. Forward meets Oblivion after eight years. And Ali Parsa, one year after Babylon’s failure, serves up a new AI venture that gets a Gimlety view.

Bad News Roundup updates: UHG/Optum defends Amedisys buy fast via a website, digging deeper into Forward’s fast demise, former Masimo CEO Kiani booted–and sued (One lesson after another)
Bad News roundup: DOJ drops the hammer on UHG-Amedisys, 23andMe lays off 40% and closes therapeutics, Lyra Health lays off 2% in restructuring, Forward primary care + kiosks shuts down abruptly (We aren’t past it yet)
Babylon Health’s Parsa founds new AI medical assistant venture, Quadrivia, one year after Babylon Health’s failure (Parsa’s new AI-powered deal)
M&A action news: Astrana Health buys up Prospect Health for $745M after Centene MSO unit buy, Veradigm nears $1B+ sale, Sword Health lays off 17% of clinicians prepping for IPO using AI instead, Cigna is not buying Humana–really! truly! (M&A comes alive, with a new player)

The Big Race is over, 45 is now 47 come January, and health tech (plus related) news faces future. HLTH’s future is with UK’s Hyve Group. Cerebral faces an expensive DOJ/DEA Judgment Day for its Bad Behavior during the pandemic. 23andMe, CVS, and Walgreens face future survival. And what if in future healthcare sets a goal of zero failures, like aircraft makers and airlines?

News roundup: Cerebral forfeits $3.7M on federal Rx charges, Aetna president named, Stewardship Health sold to Rural Healthcare, Oura buys data company Sparta Science, Brook Health-Linus Health remote cognitive assessment 
Weekend reading: 23andMe’s up in the air future, including genetic data; Walgreens debates What To Stop and Start; what if healthcare pursued a zero-failure rate? (Some reckonings and a future view)
Surprise! HLTH conference group sold to UK’s Hyve Group Limited (Las Vegas barely a wrap)

A post-HLTH deluge of news–as the US rolls up to a major national election. CVS replaces its CEO and debates breaking up. Amwell takes on a new CFO. Decent-sized raises seem to have returned. Cigna isn’t buying Humana–as of now. And has Teladoc turned a corner?

News roundup: Teladoc’s improved Q3, PursueCare resuscitates Pear’s apps, AMA removes 16-day RPM requirement in 2026, PatientPoint intros Innovation Network, PeopleOne’s $32B raise, Cigna-Humana again a no-go (Earnings season and post-HLTH announcements)
Some thoughts on the takeaways from HLTH (Not that many, strangely)
News roundup 23 Oct: views on a CVS breakup and CEO replacement, Amwell’s interesting new CFO, CopilotIQ/Biofourmis merge (updated), raises by HealthEx, Counsel Health, Oshi Health (Will changes at top fix problems?)

As the weather chills, so do prospects for some very well known companies–and investment. Walgreens plans to shrink its retail footprint by 1,200 over the next three years, “monetize” VillageMD. CVS is exiting most of its infusion business. UHG stock, earnings hammered on Change Healthcare hack, Federal payment cuts. Masimo v. Apple patent slugfest continues with wins for both. DEA kicks the can on telehealth waivers into next year–maybe. FTC and DOJ chill M&A with more demanding Premarket Notification rule for M&A. The spot of good news–baby monitoring Owlet has its mojo back.

News roundup 16 Oct: Walgreens shuts 1,200 stores–500 in ’25, CVS exiting core infusion biz, Masimo v. Apple update, DEA recommends 3rd telehealth extension, Change hack costing UHG $705M, Owlet back in NYSE compliance (So many denouements..and only one good)
FTC drops the hammer on premerger notification requirements–what will be M&A and investment effects? (We told..and tell you so, no frills)

It’s unconfirmed, but CVS may be considering a breakup. Teladoc’s latest reorg puts its COO out to pasture. IPOs may revive by next year for ‘overdue for exit’ companies. In CEO Land, one former CEO strikes back at the Senate holding him in contempt, while another one, having lost her board, now can easily take 23andMe private. ATA announces 2025 Nexus and call for papers. And some new fundings and products…and why can’t VA stop stubbing its toe on Oracle EHR issues, or staff diving into politicians’ health records?

News roundup: Omada Health files S-1 for IPO in 2025–and a look at 2024 healthcare IPOs, Philips debuts new smart baby monitor, ActiveAlert launches in UK, ATA Nexus 2025 calls for speakers, abstracts (An small IPO revival?)
Breaking: another exit at Teladoc, with COO resigning effective 31 December (Something about ships? Spirals? Musical chairs?)
Industry news short takes: fundings for Qure.AI, Centivo, Rippl, Surescripts; M&A closings for GE Healthcare-Intelligent Ultrasound, LetsGetChecked-Truepill. And is Hinge Health going public soon?
Two ‘oops’ at VA: OIG finds VA, Oracle performance misalignments, makes 9 recommendations; VP candidates’ EHR records improperly accessed by VA employees (Enough already!)
Two follow ups: Steward Health CEO resigns–and sues the Senate HELP committee, Wojcicki will take 23andMe private (Time to take the yachts for a long trip?)
Now CVS Health may be reviewing ‘options’–including a possible breakup–report (PBM and health plan troubles)

Steward’s CEO will likely face prosecution on criminal contempt of Congress for not showing up at a hearing, Stefano Pessina’s net worth down by 97% as Walgreens tanks, and Joe Kiani, after founding Masimo 35 years ago, is booted from the board and ankles–now it’s up to Politan.  

What’s next for: Steward CEO now in criminal contempt of Congress; Walgreens’ Pessina’s fortune vanishes by 97%; Masimo’s Kiani now a man without a company

It’s the last week of summer and this Editor has been catching up all over. While away, there have been buys, M&A, and yet another PE ‘smush’ merger. In developing stories, the Masimo-Politan proxy war ends and Steward’s CEO no-show may result in charges–both on Thursday. Congress and the industry argue over continuing telehealth prescribing waivers. And it’s hard to see a future for a broke 23andMe controlled by its founder/CEO–and with a board that just exited today. 

News roundup: Owlet expands to EU, mPulse buys Zipari, New Mountain PE merges 3 payment integrity firms in $3B smush, Candid Health’s $29M raise, Oura buys Veri, Bloomer Tech’s cardio bra (M&A activity revives, as does Owlet. Oura doing just fine)
23andMe settles 6.9M data breach lawsuit for $30M. Breaking–all seven independent directors quit ($30M the best they could get–and the board throws the towel at Wojcicki)
Rounding up follow ups: Walgreens shareholder suit on pharmacy performance, Steward CEO no-shows Senate committee, Masimo-Politan proxy fight has court win for Politan–vote on for 19 September (Walgreens’ misery never ends. Masimo nears its end.)
US telehealth controlled substances prescribing waiver may expire at year’s end; DEA may further restrict (Controversy on continuing virtual prescribing of Schedule II)

One more jumbo deal announced before Labor Day–Evolent Health’s acquisition bids from payer Elevance Health as well as at least three large private equity firms, in a deal that could top $4 billion. (Sensibly, their CEO is cleaning up his stock option portfolio.)

Evolent Health talking major acquisition by payer Elevance, private equity (Could be over $4B)

Counting down before the Labor Day holiday, one large deal of note sneaks through–LetsGetChecked’s $525M deal for Truepill. SVB’s latest report confirms the ‘valuation trap’ for the overvalued companies of the 2020-22 period but that investment is crawling back. Generative AI is much talked about but no one is comfortable with it. And two surprising survivals–NeueHealth and Stewardship Health.

Truepill to be acquired by LetsGetChecked for $525 million (Throwing in together to survive?)
Signs of life: another view on healthcare investments and exits as of mid-year (SVB’s 14th POV)
Are patients and physicians ready for generative AI? How will it be most acceptable? (Resembles telehealth’s early days on the early curve)
“I will survive” updates: NeueHealth survives Q2 with small net loss, Steward sells off Stewardship Health practices to private equity firm for $245M (Dodging disaster)

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Breaking: Federal agents seize Steward Health’s CEO, international head’s mobile phones in widening US fraud investigations

November 26, 2024 | by | No Comments

This fowl is coming home to roost, and it’s not going to be much of a Thanksgiving at Steward’s former CEO Ralph de la Torre and international CEO Armin Ernst’s tables as a result. Last week, reports emerged that Federal agents served search warrants and seized mobile phones belonging to both Steward executives, though neither has been formally charged with crimes in the US. Since July, rumors have prevailed that the US Attorney’s office based in Boston had opened an investigation, citing fraud and violations of the Foreign Corrupt Practices Act about its business dealings in Malta between 2018 and 2023–and perhaps more [TTA 25 July]. These rumors were confirmed when a former US Senator, John Boehner, a Steward board director, testified on 14 November to a Federal grand jury in Boston. Boehner had access to financial information that could have revealed potential fraud and corruption within the operations of Steward Health, which collapsed into bankruptcy in May. Prosecutors were reportedly zeroing in on financial transactions that could have personally benefited de la Torre and their top executives. The former senator was best known of late for his lobbying and advocacy of marijuana legalization, which makes his board appointment even more interesting. Other former Steward executives have also been questioned by Federal investigators, according to the Boston Globe‘s (paywalled) reports.  Becker’s and Becker’s, both 25 November. Also Times of Malta 26 Nov

In the US, federal search warrants are not issued lightly. Credible evidence must be presented by a federal law enforcement officer or a US attorney to a magistrate judge with authority in any district where the crimes may have occurred. There must be probable cause to search for and seize a person or property. That includes electronic storage media such as servers, computers, and phones.

The Boston Federal investigation is separate from the outgoing Congress’ Health, Education, Labor and Pensions (HELP) Committee’s subpoena and criminal/civil contempt charges referred in September to the Department of Justice [TTA 1 Oct and prior], complete with de la Torre’s immediate countersuit, nor the Malta Government’s ongoing actions against Steward (as Vitals Global) in the privatization of three hospitals in that island nation. Times of Malta 26 Nov  Steward’s business in Malta included a loony, gaudy spy operation against their critics there and elsewhere. That reported cost was $7 million, diverting much-needed funds while Steward defaulted on its bills and payrolls.  [TTA 2 July]  The Malta investigations have also been stymied by the non-appearance of both de la Torre and Ernst, on the grounds of facing US charges and an ill wife, respectively. Former Malta prime minister Joseph Muscat, under investigation, previously had his phone seized but refused to give the password, which may take a year to crack. Times of Malta 21 Nov

An extensive critique of Steward’s board of directors by the Globe’s reporters from October is available here courtesy of the Weinberg Center for Corporate Governance. It is a worthwhile dive into how Steward’s “unusual” business practices were facilitated by its tight-knit and inexpert board, drawing parallels with Theranos. Board members also enjoyed de la Torre’s considerable largesse, unlike Theranos.

Investigations by the Boston Globe’s reporters also reported that additional Steward funds were diverted to de la Torre’s personal pursuits, such as a private jet for friends, a donation to his children’s school, and a Madrid apartment. The last is interesting to this Editor as Spanish courts do not extradite easily for crimes not committed or charged in Spain, requiring review and approval of all requests by the National Court. de la Torre also has reported residences in Costa Rica where extradition via a bilateral treaty is easier. 

This Editor’s extra-legal advice to de la Torre remains that he should go on his $40 million oceangoing yacht for a trip into international waters and not even try to brazen this through. (And if anyone believes that the corporate phone hasn’t been tossed overboard or any phones seized hadn’t been thoroughly cleansed, I have a bridge over the Hudson River to sell you!)

Midweek news roundup: Steward cancels hospital auction, investigations mount; GE HealthCare’s Intelligent Ultrasound $51M buy; $100M for Headway; $80M for CytoReason AI

July 25, 2024 | by | 1 Comment

Steward Health Care’s bankruptcy hits a wall. They canceled auctions for hospitals located in Ohio, Pennsylvania, Arkansas, and Louisiana according to documents filed last Sunday. They successfully had bids on one hospital each in the latter two states: Glenwood Regional Medical Center in Louisiana for $500,000, and Pafford Health Systems has bid on Arkansas-based Wadley Regional Medical Center for $200,000. The low prices reflect the assumption of the facilities’ existing liabilities. They will also exit rental agreements with Steward’s landlord arm, Medical Properties Trust. Most of the 31 Steward facilities are failing to find any interest, and Optum weeks ago exited its pre-bankruptcy bid for the practice arm, Stewardship Health. According to the filing, Steward will announce an alternate approach to the sales process. The debtors-in-possession, which provided financing to continue to operate the hospitals during the bankruptcy process, are awaiting. Healthcare Dive, FierceHealthcare

Three Senators demand an investigation into Steward’s practices. Bernie Sanders (I-VT), Bill Cassidy MD (R-LA), and Ed Markey (D-MA). They are respectively the chairman, ranking member, and subcommittee on primary health chairman of the Health, Education, Labor and Pensions (HELP) Committee. There will be a vote this busy week on subpoenaing CEO Ralph de la Torre about the financial arrangements leading up to its insolvency. Dr. de la Torre has refused previous requests to appear before the HELP committee. Becker’s, FierceHealthcare

The US Attorney’s office based in Boston has reportedly jumped into the Steward investigation act, citing fraud and violations of the Foreign Corrupt Practices Act about its business dealings in Malta between 2018 and 2023. Steward operated three hospitals for the Maltese government and also engaged in a $7 million spy operation of its critics through its operation there. Malta stripped Steward of their hospital management contracts in 2023 [TTA 2 July]. CBS News 

M&A/funding roundup

GE HealthCare is buying Intelligent Ultrasound’s clinical AI software for a tidy $51 million. Intelligent Ultrasound is already partnering with GEHC with tools available on their Voluson Expert and Voluson Signature ultrasound devices. The buy is scheduled to close in Q4 and GEHC is funding with cash on hand. Intelligent will continue in business with software for ultrasound simulation technology. GEHC release, Healthcare Finance

Mental health remains hot with $100 million heading to Headway–more on this from last week’s sketchy reports. It’s not an unlettered round but a Series D. Also confirmed: their valuation is now $2.3 billion, surely making backers Spark Capital, a16z, Thrive Capital, Accel, and new investor Forerunner Ventures, most happy. The raise will be used for service expansions to all 50 states and to members in Medicare Advantage, commercial, and Medicaid plans. Headway closed a $125 million Series C round in droughty October 2023. Release,  Mobihealthnews

AI is even hotter, with Israeli startup CytoReason scoring $80 million in an unlettered round. CytoReason develops computational disease models for predictive asset insights, increasing the speed and accuracy of R&D decisions for biotech companies. It already has partnerships with Pfizer and three other pharmas, and claims six of the world’s top ten pharma companies use their technology for immunology, inflammation, immuno-oncology, metabolism, and other therapeutic areas. Funders are Pfizer, OurCrowd, NVIDIA and Thermo Fisher Scientific. They plan to open a US headquarters in Cambridge, Massachusetts later this year. Release, Mobihealthnews