TTA’s Realignment Autumn 7, Turkey Week Edition: Babylon’s decent Q3, more Oracle misery at VA, DOJ appeals UHG-Change, Walmart loses senior exec to JPM, health tech funding yellow flagged to 2025

November 26, 2022 | by | No Comments

 

Weekly Alert

As usual in the rollup to (US) Thanksgiving, it’s a light news week. Our two roundups include Babylon Health’s encouraging Q3 results, DOJ’s appealing to block the UHG-Change buy–already closed (!)–an senior exec move from Walmart Health to JPM, and digital health/health tech funding yellow flagged to 2025 by Very Important Investors.

Mid-week news briefs: House members’ ‘grave concerns’ on two deaths tied to Oracle Cerner VA rollout; care.ai’s $27M funding; Clear Arch’s new mobile RPM platform; digital health investment in rough times
News roundup: Babylon Health Q3 revenue up 3.9x; surprise–DOJ to appeal UHG-Change buy approval; Walmart loses senior health exec Pegus to JPM

Legal matters led this week, with Friday’s sentencing of Elizabeth Holmes to over 11 years in Federal prison and Cerebral’s ex-CEO fishing for evidence to use in legal actions. Amazon unveiled Clinic, a low-budget messaging platform for common condition diagnosis. Women’s health Maven rounded up $90M but Sema4 exited that testing field, losing 500. 

Breaking–The Theranos denouement: Elizabeth Holmes sentenced to 11.25 years with an investor loss of ~$121 million (Loss to be finalized at later date, sentence to start 27 Apr 2023)
Ousted Cerebral CEO may sue company, accuses management of scapegoating on Schedule 2 prescribing (Set up for legal action–or more settlement to go away)
The Theranos denouement: ‘Humble, hardworking’ Elizabeth Holmes sentencing Friday; prosecution and defense paint different pictures (updated)
News briefs: ResMed-Verily’s Primasun sleep solution; Maven Clinic’s $90M Series E; Mount Sinai genomics spinoff Sema4 lays off additional 500, exits women’s health
Yes, Virginia, there is an Amazon Clinic, after all; non-face-to-face consults for common conditions (Amazon’s Chevrolet–or Yugo–entry?)

VillageMD makes a quick, pricey deal for Summit Health. Many announcements on new products and partnerships. We stop in Singapore for funding while Oracle restructures its kitty. Amazon let a product ‘slip’. A rationale for a Transcarent-Teladoc tie-up. Telecare progress in Wales. Assessing where are we going, what are we doing in health tech funding after all this….realigning.

Short takes: Will there be an Amazon Clinic?, Transcarent and Teladoc, perfect together?, Get Well partners with Palomar Health, expands with Veterans Health Administration (Speculation can be fun)
Figuring out the future for health tech after 2022’s realignments: new SVB study (Solid weekend reading)
Oracle proceeds with $7B bond sale to restructure debt funding Cerner buy (Easier to manage, but bond rating still falls)
News roundup: cybersecurity benchmarking study, Tyto Care’s Home Smart Clinic, Long Island’s $2.6B life sciences hub, Singapore’s Speedoc raises $28M, NantHealth’s sinking feeling, Hims & Hers revenue up 95% 
TEC Cymru launches telecare programme strategy for Wales to complete digital transition by 2025 (Moving from analog to digital expands telecare)
VillageMD opens the Walgreens purse, set to buy Summit Health for $8.9B (This week’s Big Buy)

A mix of good and not-so-good news. Nearing year’s end, a flurry of fundings and promising partnerships. Walgreens’ VillageMD looking at a huge provider merger. JPM puts its venture money down on healthcare. UK GPs struggle with Data Saves Lives, as do health systems with lawsuits about Meta Pixel. And sadly, digital health layoffs continue at Kry/Livi and Brightline.

News roundup: WakeMed sued on Meta Pixel; Hint Health buys AeroDPC; Neurotrack’s $10M raise, 3 min. cognitive tool intro; layoffs dim Kry, Brightline (Good and bad news)
News roundup UK, AU, NZ: BMA England’s concerns on digital medical records; Australia and NZ’s health connectivity initiatives advance (Data Saves Lives agita)
J.P. Morgan forms life sciences/healthcare VC group; virtual care Ovatient formed by MUSC Health, MetroHealth; Oracle’s putting lots of KC office space on market (JPM sees opportunity, one new partnership, and office space to let!)
A spooky ‘good news’ roundup: AtlantiCare rolling out Orbita AI, Health Wildcatters Pitch Day, RapidSOS, HealthJoy fundings and more (Good News. Boo!)
VillageMD considering $5-$10B merger with Summit Health provider group: reports (A BIG provider consolidation, if it happens)

‘Fixing the holes’ this week. Global digital health funding is in a hole even deeper than the US. Telehealth a wobbly panacea, whether for discharged urban patients or care for the disabled. The pothole of layoffs hit Cerebral plus Israeli and German companies. Oracle’s Cerner acquisition requires more funding rearrangement, while VA deployment further delayed. Theranos tries the ‘mental’ defense as it digs out of that hole. But some light for Teladoc in narrowing its quarterly loss, and for smartwatches in accelerating adoption.

Is there a way out of the digital health funding black hole? Can it rebound to…2020? (So much depends on the next few months)
Telehealth-only follow up increased repeat ED visits by 2.8%, return admissions by 1.1%: JAMA Network study (Puts a hole in the savings points)
Smartwatches lead wearables, adoption now at 29%: Parks Associates study (Slow but sure development)
Pre-weekend short takes: Teladoc posts much smaller Q3 loss, 17% revenue boost; is telehealth threatening disability care quality; $2.8M for Australian wearables; more healthtech layoffs at Antidote, OrCam, Ada Health
Oracle talks to banks to increase loans funding Cerner buy; VA delays Cerner deployments to June 2023 (Oracle’s hornet’s nest?)
News updates: Theranos’ Holmes goes ‘mental’ in last ditch defense; troubled Cerebral telemental health fires another 400 (Theranos defense shows desperation, can Cerebral be saved?)

Perhaps it’s because the investment froth is off and it’s downscaling time, but the industry’s current and future status is a bit ‘Back to the Future’. A version that’s muted yet fractious, like the Conservative Party….

Meta Pixel is now considered a PHI breach that’s all Meta’s fault. Both Theranos trials move towards sentencing, despite defenses pulling ever-scrawnier rabbits out of hats. Back to antitrust action with CVS-Signify, while CVS apparently walks away from an expected deal with Cano Health. What’s moving forward? Smaller fundings, partnerships, and reorgs in a world resembling…2017 or 2018?

Meta Pixel ad tracker collects another 3 million data breaches at Advocate Aurora Health; Zuckerberg getting Senate scrutiny (Not going away despite denials and Zuckerbucks)
Breaking: CVS’ Signify Health buy under DOJ scrutiny in ‘second request’ (DOJ and FTC crave an antitrust win)
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
Rosendorff stands pat on Theranos’ Elizabeth Holmes: “She needs to pay her debt to society” (He’s right–and now he needs a job and a relo)

There’s no escaping realignments in health tech. CVS sells an inherited business from Aetna. Babylon Health exits the practice business, financially maneuvers to avoid NYSE delisting. Layoffs continue to hit the formerly hot companies in health tech. Theranos’ Holmes and Balwani try to avoid the inevitable sentencing. And we have a Perspectives contribution from Avaya on NHS England’s ICS. 

Theranos’ Holmes sentencing now 18 November, defense wants to expand hearing scope; Balwani can’t join in
News roundup: CVS sells bswift; Babylon puts Meritage IPA up for sale, financially realigning to prevent delisting; Redesign Health sheds 20%, Noom 10%
Perspectives: How joined-up communications can enable connected patient care across healthcare Trusts

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Mid-week news briefs: House members’ ‘grave concerns’ on two deaths tied to Oracle Cerner VA rollout; care.ai’s $27M funding; Clear Arch’s new mobile RPM platform; digital health investment in rough times

November 23, 2022 | by | No Comments

A pre-Thanksgiving news roundup in this short week.

More miseries for Oracle Cerner’s VA rollout. This week, three House members sent a letter to the Department of Veterans Affairs (VA). After a 2 September visit to the Chalmers P. Wylie VA Ambulatory Care Center in Columbus, Ohio and interviewing the staff, they determined that the Cerner Millenium EHR as currently in use possibly led to the deaths of two veteran patients. The deaths were due to 1) hypoxia after an antibiotic ordered for mail delivery was never tracked nor received, leading to a decline in the patient’s condition; and 2) alcohol withdrawal symptoms after a patient’s missed appointment was lost in the EHR and not rescheduled, leading to his decline and death several months later. The three Representatives are asking Denis McDonough, the Department secretary, for answers on the processes and problems that led to this, and more. They are Mike Bost, R-Ill., Mike Carey, R-Ohio, and Troy Balderson, R-Ohio. Becker’s

care.ai, a system that uses sensor-based AI for care facilities, secured $27 million in venture funding from Crescent Cove Advisors. care.ai’s sensors and their Smart Care Facility Platform are currently used in 1,500 facilities in the US to automate, monitor, and streamline clinical and operational workflows in hospitals, skilled nursing facilities, and assisted living facilities. care.ai plans to use the funding from Crescent Cove Advisors to build on their ongoing operations and deliver ambient intelligence to healthcare. Release, Mobihealthnews

Clear Arch Health is introducing a new RPM mobile app, Clear Arch Mobile, as an alternative to its current tablet-based system. It connects via Bluetooth to devices and is based on the LifeStream Clinical Monitoring Dashboard by enhancing security (with two-factor authentication) and simplifying the collection and transmission of patient data for clinician assessment and intervention, as needed. LifeStream was acquired by Clear Arch earlier this year with their buy of Life Care Solutions. Clear Arch is a division of MobileHelp. Both were acquired by Advocate Aurora Enterprises in April. Release (PDF)

How to cope with the transition from easy funding to showing investors that they are squeezing every dime? That was the topic of a roundtable of investors at HLTH last week. One major problem was that the 2020-21 influx of capital boosted valuations to unrealistic and unsustainable levels, leading to unrealistic expectations for growth and moving into businesses that weren’t core. The advice was bracing from investor luminaries such as Glen Tullman of 7Wire Ventures/Transcarent, Emily Melton of Threshold Ventures, Andrew Adams of Oak HC/FT; and Krishna Yeshwant of Google Ventures.

  • Don’t focus on valuation. Focus on how much capital your enterprise needs to the next phase of inflection, minimize dilution, and set yourself up for the next up round.
  • Refocus and reprioritize, making the most of cash resources on hand
  • Have a plan to get to profitability, not just growth
  • Even more depressing news: the downturn is expected to continue through 2023 into 2024 — make cash last into 2025

Growth areas in healthcare they identified will be familiar: mental health, senior care and primary care –one is not, the Medicaid space. Mobihealthnews

Thursday roundup: UHG/Optum, Change extend merger deadline to 31 Dec, buys Kelsey-Seybold; $2B Tivity Health sale; General Dynamics enters derm AI diagnostics; MobileHelp PERS sold to Advocate Aurora

April 7, 2022 | by

UnitedHealth Group’s Optum unit and Change Healthcare, to no one’s surprise, have cast the die and extended their merger deadline to 31 December. Originally, the acquisition was to be completed at end of 2021 and later pushed to 5 April.

In a joint release, they touted their shared vision for a “simpler, more intelligent and adaptive health system for patients, payers and providers”. Backing this up is a break fee of $650 million from Optum to Change Healthcare in the event the court scuppers the deal.

On 25 February, the US Department of Justice filed a lawsuit in US District Court in Washington, DC to stop the acquisition on anti-competitive grounds [TTA 25 Feb]. UHG/Optum and Change, despite divestitures, could not evade DOJ’s reasoning that Optum was buying its only major competitor in areas such as hospital claims data, claims processing, claims editing, and EDI clearinghouse, which facilitates the transfer of electronic transactions between payers and physicians, health care professionals, or facilities. Less than a month later, Optum and Change responded, contesting the charges in that same District Court, and contending that it would be ‘economic suicide’ for Optum to be anti-competitive, since Optum’s business model is dependent on payers other than UnitedHealth. Fighting rather than switching off the deal, it’ll be heard on 1 August [TTA 23 March]. FierceHealthPayer, 

As noted last week, Optum is writing big checks for LHC Group home care/management services and Refresh Mental Health. This week’s jumbo buy is the Kelsey-Seybold Clinic of Houston. This is a multi-faceted operation with multiple multi-specialty care centers, a cancer center, a women’s health center, two ambulatory surgery center locations, and a 30-location specialized sleep center. It also has a highly regarded ACO and KelseyCare Advantage, a 5 Star Medicare Advantage plan, in addition to partnering with insurers on commercial value-based health plans. If it closes, Optum will be more than likely well over its goal of owning or controlling over 5% of US providers. Terms were not disclosed, but TPG’s private equity arm made a minority investment in Kelsey-Seybold two years ago. At the time, the valuation was rumored to be $1.3 billion.

Tivity Health is being acquired by funds managed by Stone Point Capital for $2 billion. The $32.50 per share is a 20% premium to the 90-day price average, which reflects its 40% financial share growth in the past year. Having sold its original name of Healthways and a sizable chunk of its original business to the digital health conglomerate Sharecare, it rebranded in 2017 as Tivity and concentrated on fitness businesses: senior-targeted SilverSneakers, gym chain Prime Fitness, and alternative/complementary medicine WholeHealth Living. Closing is anticipated to be Q3. CEO Richard Ashworth will remain with the company, and headquarters stay in Franklin, TN. Release, Becker’s

A palate cleanser: a division of defense/aerospace giant General Dynamics, General Dynamics Information Technology (GDIT) has developed an AI diagnostic for remote dermatologic use for the active service/veteran market. It classifies images of skin lesions, determines if they are indicative of skin disease, and will recommend follow-up care. According to the GDIT release, “the GDIT skin lesion classifier tool won third place in the VA National AI Tech Sprint 2020-2021, a competition organized by the Department of Veterans Affairs (VA) National Artificial Intelligence Institute (NAII) to match private sector talent with veterans, VA clinicians and other experts to brainstorm AI-based solutions that can improve veteran health and well-being.” Also Healthcare IT News

MobileHelp, one of the earliest mobile PERS, and sister company Clear Arch Health, a remote patient monitoring provider, have been purchased by Advocate Aurora Enterprises. Terms were not disclosed, but management will remain in place in Boca Raton. MobileHelp was private, so estimates of valuation are difficult, but their private equity backing included ABRY Partners and Topmark Partners (Crunchbase). Their PERS market claimed 300,000 households. Clear Arch had a separate clinical base with provider care management of chronic condition patients connected to EHRs. For AAE, a division of Advocate Aurora Health systems in Illinois and Wisconsin, MobileHelp’s acquisition will complement their recently acquired home health provider Senior Helpers and Xhealth clinical digital solution ordering. The traditional PERS and call center business continues to be of interest, but blending into other businesses. Release, Healthcare IT News