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

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

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