News roundup: UHG closes $5.4B LHC deal, Teladoc’s record $13.7B ’22 loss, Olive AI divesting UM, Cigna exec can’t join CVS, VA anti-suicide program awards, Equiva-Infiniti ACP initiative, Newel Health’s Parkinson’s device

UnitedHealth Group added more home care to its Optum unit with the close of the LHC Group deal on 22 February. Final cost was $5.4 billion or $170 per share of the now-delisted Nasdaq company. The acquisition was announced in March and survived two reviews: a request from the Federal Trade Commission (FTC) for additional information which held up the close past the original December date and a shareholder suit on ‘material nondisclosure’ in the SEC filing. FTC requested information on worker pay and ‘vertical harm’ on market competition, but did not proceed with further action prior to the closing. LHC Group serves 960 locations in 37 states, with 30,000 employees and revenue of $2.2 billion last year. The original announcement indicated that the Louisiana-based management team will be coming over to Optum Health and co-founders Keith and Ginger Myers will personally invest $10 million in UHG following the acquisition close. Interestingly, as of today (Thursday noon ET), neither company has announced the closing on their websites. Home Health News, FierceHealthcare  For those into value-based care, as previously noted, Optum is acquiring via LHC Imperium Health, a good-sized ACO, population health, and management services company. It’s another fit as Optum is a major physician group owner, many of whom are also in ACOs, and made LHC even more attractive. According to their website, Imperium now manages 16 ACOs and is in partnership with a large ACO group. 

Unsurprisingly, Teladoc notched a record loss for 2022– $13.7 billion on revenue of $2.4 billion. This included the Q1 2022 $6.6 billion write-off of the Livongo acquisition. On the investor call, company executives scaled down 2023 revenue forecasts to $2.55-$2.68 billion, which is about 9% growth. Teladoc remains at about 80 million members. The company’s ‘balanced growth’ plan to move toward profitability has already resulted in January’s announcement of 6% of staff being laid off and a reduced geographic footprint, presumably including real estate and leases. Healthcare Dive, HISTalk 2/24/23 which also cross-references the MedCityNews Livongo ‘lemon’ interview

Olive AI continues to shrink and juggle, with today’s announcement of their putting their utilization management service line up for sale. Earlier, they announced divesting their population health and 340B service lines to a sister company. The UM line buyer would take on the accounts and the 100-person staff. Olive AI is an automator of routine health system administration tasks such as these. Their pivot will be in automating revenue cycle management for health systems. Last week, Olive announced the release of 215 employees, about 35% of its remaining staff, in addition to its July layoff of 450 employees, then about 33% of staff. If this Editor’s calculations are correct, Olive is down to about 900 or less. Becker’s  Original report in Axios is paywalled, but indicates problems with the software’s efficacy, multiple executive departures, and a previous asset sale.

Yes, Virginia–non-competes ARE enforceable. So Amy Bricker, Cigna’s former head of pharmacy benefits unit Express Scripts, found out when she tried to join CVS as a senior executive as chief product officer for its consumer area, not Caremark which is a direct competitor. She had signed a two-year non-compete/non-disclosure barring her from any employment with any direct competitor. Cigna apparently imposes non-competes on only their most senior executives, a total of 16. This is a temporary restraining order from the US District Court for the Eastern District of Missouri to bar her from joining the company, duration unknown. Cigna had to post a $250,000 bond for possible future damages. FTC (again) is attempting to ban non-compete use both in future and retroactively. Restraining order, Healthcare Finance News, Healthcare Dive

Some blue side up news: 

  • Mission Daybreak Grand Challenge awarded by the VA. 10 companies were awarded $20 million to pursue digital health approaches to prevent veteran suicide as part of a 10-year VA initiative. The first-place winners were Stop Soldier Suicide and Televeda, awarded $3 million each. Healthcare IT News has additional details on all the finalists.
  • Digital health is leveraging an existing $14.2 billion FCC initiative called the Affordable Connectivity Program (ACP). Two companies, Equiva Health, a digital patient engagement and health relationship management solution provider, is partnering with internet provider Infiniti Mobile to create Equiva ACP Connect. The product configures tablets and mobile devices for care management and patient education distributed by hospitals, nursing homes, insurers, and other healthcare organizations. Release
  • Newel Health has received a grant from the Michael J. Fox Foundation to further development for Soturi, a digital therapeutic solution for Parkinson’s disease management. Soturi utilizes data collected from a wearable sensor, using an algorithm-based decision-making method, for personalized treatment. The project will be presented at the SINdem conference in Bressanone, Italy on 24th February. Release (PharmaPhorum)

Week-end news roundup: Allscripts on the acquisition hunt, Amwell’s CVS telehealth deal, Cerner’s $1.8M racial discrimination settlement, predicting Parkinson’s progression via smartwatch data

Another company on the hunt for strategic buys. Health IT and EHR company Allscripts is seeking to add to its Veradigm analytics, research, and provider/payer platforms with some strategic acquisitions. Announced on its Q2 earnings call by new CEO Rick Poulton is the intent to expand the company from its current provider base into a more diverse one serving payers and life sciences. Allscripts does have some free cash–about $700 million–having recently sold its hospital and large physician practice EHRs to Constellation Software/N. Harris Group, though there were some settlements around their Practice Fusion EHR now incorporated into Veradigm [TTA 2 Apr]. With a free cash flow from continuing operations around $120 million and about 7% growth, they feel the time is here for some accretive, strategic, and proven acquisitions–at the right price. FierceHealthcare

Amwell’s Q2 earnings call also had good news for shareholders, who of late haven’t had much to cheer. CEO Ido Schoenberg, MD announced that Amwell will provide CVS Health’s Virtual Primary Care, formally launched in late May  Amwell will be providing primary, behavioral health, and chronic care management through the platform. CVS will be providing these services to Aetna fully-insured, self-insured plan sponsors, and CVS Caremark clients effective first half 2023. As this Editor wrote earlier this week, CVS Health is making no secret of its intent to expand into delivering primary care and home health. One way Virtual Primary Care will be leveraged is converting in-store health services to virtual, such as non-emergency treatment and nutrition/wellness programs. CVS is even dabbling into blockchain with downloadable non-fungible tokens (NFTs) for virtual services. HealthcareFinance 

Cerner, on the other hand, is paying out $1.8 million to settle a racial discrimination lawsuit brought by the US Department of Labor. As a Federal contractor, Cerner went under review by the Office of Federal Contract Compliance Programs. That office alleged that Cerner systematically discriminated against qualified Black and Asian applicants who applied for positions at five facilities in Missouri and Kansas between 2015 and 2019. Cerner agreed to pay $1,860,000 in back pay and interest to 1,870 applicants in areas such as medical billing, system engineers and technical solution analysts. Certainly Oracle wanted to get this off the plate before the cutover on 1 October. HealthcareFinance, Department of Labor release

Can enough data collected build a predictive model for the progression of  Parkinson’s? Koneksa, a digital biomarker builder, is working with the Michael J. Fox Foundation for Parkinson’s Research to build a predictive model on how Parkinson’s will progress over time in an individual. The Fox Foundation already has a database to analyze — the Parkinson’s Progression Markers Initiative, launched in 2010, with health information and biosamples from Parkinson’s patients. Added to this will be data from Verily’s smartwatch:  activity tracking, gait analysis, and sleep cycles, which will be analyzed using Koneksa’s algorithms and additional machine learning. The award by the Fox Foundation was not disclosed, but it is the second for Koneksa after another grant awarded in mid-June to analyze vocal abnormalities relating to early progression of the disease, in conjunction with Northwestern University. FierceHealthcare