TTA Hops for Spring: SOC Telemed snaps up Access, HIMSS SCANs, DOJ squints over Optum-Change, is Amazon Care a threat? And do health and tech need a pre-nup?

 

 

Weekly Alert

It’s Easter Holiday week. A good break from the M&A action with only an early SPAC, SOC Telemed, buying rival Access Physicians, and one notable raise. DOJ decides that the Optum buy of Change Healthcare needs a closer look. And an interview with Amwell’s CEO touching on Amazon Care and a POV on the uneasy marriage of healthcare and tech needing a pre-nup.

Weekend reading: the strange reasons why Amwell doesn’t consider Amazon a competitor; ground rules for the uneasy marriage of healthcare and technology (Both articles revealing in their own way. Do healthcare and tech need a pre-nup?)
Deals and news roundup, April Fool’s Edition: SOC Telemed’s $196M acute care telehealth buy, HIMSS takes over SCAN Health, Livongo’s Burke joins Owlet board, CirrusMD text app raises $20M (A quieter week than most recently!)
US Department of Justice decides additional scrutiny needed of $13bn Optum acquisition of Change Healthcare (Change won’t come quickly to Optum)

Spring Fever this week, as news, fundings, and M&A deals in the US and UK never ceased. Four hefty raises, three acquisitions–and one big one may be challenged. Amwell’s record revenue–and loss. Tunstall named a new chairman, NHS Digital losing its CEO. Propel@YH’s Demo Day showcasing northern startups is coming up on Wednesday. And more, including a 40 count indictment!

Deals and news roundup: Ginger’s $100M, myNEXUS to Anthem, Everlywell snaps up PWN, Amwell’s banner year, VA reviews Cerner rollout, voice visits for MA, GE’s vScan goes wireless, uBiome founders indicted
UK short news takes: Tunstall names new chair, Alcidion patient safety software partners with East Lancashire NHS Trust
Propel@YH’s Demo Day for participants next Wednesday 31 March
Breaking: Sarah Wilkinson, CEO of NHS Digital, resigns, to depart by summer
News and deals roundup: AHA opposes Optum buy of Change Healthcare; raises by Komodo Health, Evidation Health, Ro’s $500M; Appriss acquires PatientPing

A lot of news packed into only three articles this week, as March has its way with us. We lead with a rare and juicy corporate spy story. Kidney care finally gets attention, as does pain management and a UK mental telehealth startup. And Doctor on Demand’s merger points to virtual visit telehealth being unable to stand alone–and that Amazon may not realize what it’s getting into. 

CareCentrix files ‘corporate espionage’ on trade secrets lawsuit against Signify Health, former employee (David versus Goliath matchup–bring the popcorn)
News and deals roundup: Strive Health’s $140M for kidney care, coalition lobbies for more home telehealth, codes removed from PFS, Hinge Health buys Enso, HelloSelf £5M raise, Tyto Care adds (A lot for one article!)
Two major moves and what they mean: Doctor on Demand, Grand Rounds to merge; Amazon Care will go national by summer (updated) (Telehealth M&A, or else, and Amazon continues virtual care moves in a crowded market)

Finally, this week feels a bit like Spring–yet remarkably we don’t have a single deal of note this week for a change! UKTelehealthcare has a MarketPlace coming up on Tuesday. BETTEReHEALTH formed to support eHealth for population health in Africa. We round up the recent spike in healthcare hacks and ransomware breaches affecting many hundreds of thousands. Withings debuts out-of-the-box mobile connected devices, a point-of-care ad network juggernaut forms, and Bluestream Health adds a new health system.

UKTelehealthcare’s Digital MarketPlace: Tuesday 16th March (11:00 – 13:00) (Zooming again next Tuesday)
News roundup: Hacks, ransomware of medical records, security cameras spike; Withings launches new mobile-direct devices; Bluestream Health adds Leon Medical (FL) to telehealth  
Healthcare ad/patient ed network PatientPoint combining with once-hot Outcome Health (Creating an ad network jumbo)
BETTEReHEALTH project initiated to support eHealth solutions, improved outcomes in low-income African nations (Vital initiative for population health)

Is it Spring yet? Big IPO for Oscar Health, big funding for Dispatch Health and Tyto. Telehealth makes headway in US Congress. Plenty of weekend reading in Rock Health’s digital health report and latest installment of ISfTeH’s Century of Telemedicine series. Age-positive image library launches. And more!

Marketing alert! Age-positive image library launched by Centre for Ageing Better–and free to use (A boon to companies, organizations, and marketers. Well done!)
Weekend reading: ISfTeH’s ‘A Century of Telemedicine’, featuring the UK (Part 4 of a 5 part so far series)
News and deal roundup, 5 March: Oscar Health’s $1.4 billion IPO, telehealth expansion in Congress, what people *really* do during a telehealth visit (Dizziness persists)
Funding update, 4 March: big Series Ds for new unicorn Dispatch Health and Tyto Care; USDA’s $42M for rural telehealth; UK’s Perfect Ward hospital inspection app secures £4m (It’s dizzy out there…)
Rock Health/Stanford U Digital Health Adoption Report: high gear for telemedicine, digital health, but little broadening of demographics (Encouraging–and cautionary)
Coming up *this* Tuesday: UKTelehealthcare All IP Forum Webinar Tuesday 2 March (Now past, but has dates and links to coming UKTHC activities)

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US Department of Justice decides additional scrutiny needed of $13bn Optum acquisition of Change Healthcare

Change, so to speak, will not be fast for Optum. On Friday, Change Healthcare filed with the Securities and Exchange Commission (SEC) a Form 8-K (PDF link) that confirms that the Department of Justice (DOJ) has asked for additional information pertinent to their proposed acquisition by UnitedHealthcare Group and integration into their Optum unit. On 24 March, both received a request from the DOJ for additional information and documentary materials (called a “Second Request”) as part of DOJ’s review of the merger under the Hart-Scott-Rodino Antitrust Act (HSR). The Second Request extends the waiting period for 30 days after UHG and Change comply with the review, unless either the DOJ shortens it or it is extended by the two companies (para. 3).

The integration of Change Healthcare into Optum already had significant competitive concerns for DOJ to consider. OptumInsight, Optum’s data analytics unit, and Change provide a similar range of services in health IT and revenue cycle management (RCM). However, Change is one of the largest independent companies providing these services to major providers, with access to the data of 1 out of 3 patients. Optum’s parent, UnitedHealthcare, is the largest US payer. These were the factors that made those represented by the American Hospital Association (AHA) very nervous indeed [TTA 25 Mar] regarding pricing of these services–and they expressed their misgivings cogently in a seven-page letter (PDF link) to DOJ on 17 March. In their view, Change integrated into OptumInsight would reduce competition and increase pricing in RCM, claims clearinghouse and payment accuracy services, and clinical decision support services.

Why it’s important. The closing of the $13 bn deal, originally forecast as second half 2021, now has a decent likelihood of being postponed. As CVS and Aetna found between 2017 and 2019, once the objections start in the flashpoint called US Healthcare, they tend to snowball into delays, even if it can be managed to a successful conclusion. (Extreme examples: the doomed to fail Aetna-Humana and Anthem-Cigna mergers) While RCM and data analytics are not as high profile as health plans and retail health, industry groups have a lot of clout in the DC Swamp when the cause is higher cost and DOJ, in this administration, is likely to be more activist. Another reason: if UHG or Change have to divest themselves of too much (UHG set a boundary of $650 million), they may Call The Whole Thing Off. Also Healthcare Dive and FierceHealthcare

News and deals roundup: AHA opposes Optum buy of Change Healthcare; big raises by Komodo Health, Evidation Health, Ro’s $500M; Appriss acquires PatientPing

Sometimes $13bn Mega Deals run into powerful opposition. The nearly 5,000 member American Hospital Association (AHA) is opposing UnitedHealth Group’s Optum‘s acquisition of software/analytics/revenue cycle management (RCM) company Change Healthcare. The AHA is urging that the Antitrust Division of the Department of Justice (DOJ) review it on anti-competitive grounds. Their position is that the OptumInsight integration of Change, planned for Q2, will drastically reduce competition for health care information technology (IT) services to hospitals and other health care providers, driving up costs to hospitals and patients. Optum is already one of the largest in this sector. It would also shift data from a third-party company to a subsidiary of the US’ largest payer. Change is the largest independent provider of health IT services for payments and RCM. Though substantial divestitures are part of the deal, the AHA opposition may kick off the same from other healthcare groups and successfully force DOJ to take action. FierceHealthcare, AHA letter to DOJ (PDF link).

Dizzy Digital Health Deals Continue This Week. Data analytics companies haven’t been as hot as other areas of digital health closer to telehealth and behavioral health, but Komodo Health just completed a big Series E of $220 million. This follows their snack-sized January Series D of $44 million (Crunchbase). Komodo feeds their 325 million patient encounter database drawn from EHR, pharma, lab, and government data into their proprietary software for analytics to drive better health outcomes across therapeutic areas. Their primary markets are life sciences and pharma for R&D, clinical trials, and medical affairs. The Series E was led by Tiger Global Management, which earlier this month invested in Tyto Care and Dispatch Health [TTA 4 March], with Casdin Capital plus existing investors ICONIQ Growth, Andreessen Horowitz, and SVB Capital. Release 

Evidation Health, another data aggregation and analytics company, raised $153 million in a Series E led by OMERS Growth Equity and Kaiser Permanente Group Trust for a total funding since 2012 of $259 million. This will be used for building out their virtual health analytics and research platform, Achievement. Release

In direct-to-consumer healthcare, integration gets tighter. For those who can stand their tacky commercials for Roman, you’ll be seeing many more of them because parent DTC/telehealth company Ro just raised $500 million in a Series D round, led by General Catalyst, FirstMark Capital, and TQ Ventures. The intent of co-founder Zachariah Reitano is to combine a nationwide telemedicine, pharmacy distribution, and in-home care network. Their total funding since 2017 is $876 million. According to the TechCrunch article, Ro is building out a patient-centric ‘vertical optimization’ model with 10 pharmacies scheduled for 2021 and the ability to provide 500 common drugs at $5 per month. Earlier this year, Ro acquired Workpath, a software platform that enables healthcare companies to offer on-demand, in-home care, and diagnostic services. Look for Ro to make another acquisition or two this year to bolster their telehealth capabilities. Release

PatientPing, a care coordination software that connects providers to create continuity of patient care to notify them of patient events, is in an agreement to be acquired by Appriss Health, a 25-year-old SaaS software company primarily known for behavioral health care coordination and data analytics solutions to identify and mitigate substance use disorders. The combined company will cover 1 million professionals, 2,500 hospitals, 7,500 post-acute facilities, 25,000 pharmacies including every national pharmacy chain, and 43 state governments. Terms of the transaction were not disclosed, nor valuation or management transition, but closing is expected in Q2. Release

Two major moves and what they mean: Doctor on Demand, Grand Rounds to merge; Amazon Care will go national by summer (updated)

This week’s Digital Health Big Deal (as of Wednesday!) is the merger agreement between telehealth/virtual visit provider Doctor on Demand and employer health navigator Grand Rounds. Terms were not disclosed. It’s important because it extends Grand Rounds’ care coordination capabilities beyond provider network navigation and employee clinical/financial tools for six million employees into an extensive telehealth network with 98 million patients in commercial, Federal, and state health plans.

Both companies had big recent raises–$175 million for Grand Rounds in a September 2020 Series E (Crunchbase) and Doctor on Demand with a $75 million Series D last July (Crunchbase). The transaction is a stock swap with no cash involved (FierceHealthcare, CNBC), and the announcement states that the two companies will operate under their own brands for the time being. Owen Tripp, co-founder and CEO of Grand Rounds, will run the combined company, while Doctor on Demand CEO Hill Ferguson runs DOD and joins the board. The combined company is well into Double Unicorn status with over $2 bn in valuation. Also Mobihealthnews.

What it means. Smaller (than Teladoc and Amwell) telehealth companies have been running towards M&A, with the most recent MDLive joining Optum’s Evernorth [TTA 27 Feb] creating interstate juggernauts with major leverage. Doctor on Demand was looking at their options for expansion or acquisition and decided 1) the time and the $ were right and 2) with Grand Rounds, they could keep a modicum of independence as a separate line while enjoying integration with a larger company. The trend is profound enough to raise alarms in the august pages of Kaiser Health News, which decries interstate telehealth providers competing with small and often specialized in-state providers, and in general the loosening of telehealth requirements, including some providers still only taking virtual visits. Contra this, but not in the KHN article, this Editor has previously noted that white-labeled telehealth providers such as Zipnosis and Bluestream Health have found a niche in supplying large health systems and provider groups with customized telehealth and triage systems.

UPDATED. In the Shoe Dropping department, Amazon Care goes national with virtual primary care (VPC). To no one’s surprise after Haven’s demise, Amazon’s pilot among their employees providing telehealth plus in-person for those in the Seattle area [TTA 17 Dec 20] is rolling out nationally in stages. First, the website is now live and positions the company as a total care management service for both urgent and primary care. Starting Wednesday, Amazon opened the full service (Video and Mobile Care) to other Washington state companies. The in-person service will expand to Washington, DC, Baltimore, and other cities in the next few months. Video Care will be available nationally to companies and all Amazon employees by the summer.

Notably, and buried way down in the glowing articles, Amazon is not engaging with payers on filing reimbursements for patient care. Video Care and Care Medical services will be billed directly to the individual who must then send for reimbursement to their insurance provider. The convenience is compromised by additional work on the patient’s part, something that those of us on the rare PPO plans were accustomed to doing back in the Paper Age but not common now. It also tends to shut out over 65’s on Medicare and those on low-income plans through Medicaid. It is doubtful that Amazon really wants this group anyway. Not exactly inclusive healthcare.

TechCrunch, FierceHealthcare. Jailendra Singh’s Credit Suisse team has a POV here which opines that Amazon continues to have a weak case for disruption in VPC, along with their other healthcare efforts, and an uphill battle against the current telehealth players who have already allied themselves with employers and integrating with payers.

New Year’s Deal and Event Roundup: Optum-Change Healthcare, Walgreens-Amerisource Bergen, December’s deal potpourri, CES and JPM

Mutated COVID virii may be spreading, the UK locked down tight, but the deals with big numbers just keep on coming….

Change Healthcare not sold for pocket change. $13bn from the coffers of UnitedHealth Group’s Optum took it, though word was that it wasn’t for sale. Change will be part of OptumInsight to reinforce data analytics, technology-enabled services, and revenue cycle management. The deal pays common stock shareholders $25.75 per share in cash plus assumption of Change’s debt. Closing is slated for second half 2021. Neil de Crescenzo, Change’s CEO, will be CEO of OptumInsight which will integrate Change into its structure.

Change houses a dizzying group of diverse businesses including radiology, imaging, revenue cycle and payment management, consumer experience, clinical decision support, workflow integration, communication and payment solutions, network optimization, value-based care enablement….and that is about half of the list. The release emphasized RCM, provider payment, claims transaction analysis, and clinical decision support. It will be interesting what Optum chooses to retain and discard.  Press release, Fierce Healthcare, Forbes. Credit Suisse has also published a lengthy financial analysis (PDF) of the deal which opines that it’s likely to not run afoul of Federal anti-trust interest or significant conflicts of interest (Optum currently serves many payers other than UHC). There may be Federal concern about a concentration of data and transaction information as Change alone serves 19 of 20 major US payers and is a leader in network services and payments.

Walgreens Boots Alliance sells the majority of their Alliance Healthcare pharmaceutical wholesale businesses to AmerisourceBergen, a leading US drug wholesale company, for about $6.5 billion in cash and stock ($6.275 billion in cash and 2 million shares of AmerisourceBergen common stock). Interestingly, Walgreens is the single largest shareholder of Amerisource Bergen at 30 percent of common shares. Both Walgreens and Amerisource Bergen will continue their US distribution agreement until 2029 and Alliance UK with Boots until 2031. One way of interpreting this is fattening their ‘war chest’ for expansion, including their major bet with Village Medical. Perhaps a payer or a health tech company? Press release

December’s potpourri of Big Deals was rounded up by FierceHealthcare:

  • Alphabet’s Verily closed out 2020 with a massive $700 million funding round primarily from Alphabet to fund its commercial work
  • 23andMe got a lifeline of $82.5 million in Series F funding from an offering of $85 million in total equity shares. TTA analyzed why the bloom had faded from the genetic testing rose, so hot only a few years ago, last August and February. Bloomberg
  • New Agey Calm is meditating on $75 million in Series C funding and visualizing a valuation of $2 bn.
  • Pear Therapeutics, developer of prescription apps to treat addiction and insomnia, counted $80 million in Series D sheep. 
  • Provider CityBlock Health raised $160 million to support care for marginalized populations with complex needs and now has an estimated value of $2 bn.
  • On the payer side, Oscar Health raised $140 million in a venture round as we reported before Christmas.
  • And we reported on Everlywell’s digital home testing/telehealth consult Series D of $179 million in early December.

And the Big January Events Roll On, Virtually.  CES 2021 and the JP Morgan Healthcare conference for their clients will be held next week as usual, along with the usual constellation of independent conferences. These are usually a major venue for deals and deal announcements, and even in the virtual space, will likely be no different. One wonders if Haven’s closure [TTA 5 Jan] will be even whispered.

Optum buys naviHealth for reported $1 billion; Amwell raises $194 million in Series C

In non-COVID-19 news, Optum has confirmed to industry press that they have acquired post-acute management company naviHealth. Becker’s HealthIT cites sources that the purchase price is in the vicinity of $1 billion. Continuing their PAC-MAN path, this pharmacy benefit, population health, and care services wing of UnitedHealth Group in the past six months finalized the purchase of DaVita Medical Group from renal treatment giant DaVita for over $4.3 bn and is reportedly closing on a full acquisition of virtual behavioral health provider AbleTo [TTA 29 Apr] for a less stunning $470 million.

naviHealth provides post-acute care clinical decision-making tools that manage pre and post-acute care as part of value-based care programs such as the Bundled Payments for Care Improvement (BPCI) program with CMS. Their customer base includes health plans (4.5 million members within Medicare Advantage alone), over 140 hospitals, and post-acute care providers such as nursing homes, LTC facilities, rehabilitation, and home health. The company will retain current management and staff, and operate as a stand-alone company within OptumHealth. It’s a well-paid exit for Cardinal Health and Clayton, Dubilier & Rice. Also MedCityNews

Amwell raises $194 million in a second Series C. The former American Well did not need telehealth to receive a gratifying boost from its investors Allianz X and Takeda Pharmaceuticals. This follows on a February $60 million venture round from Chetrit Ventures (BostInno). Amwell has raised $711 million in nine funding rounds (Crunchbase). Their main business has been with payers, health systems, and employers. In April, they added a branded program, Amwell Private Practice, for practices under 100 providers for these mostly shuttered offices to reach their patients at home and to continue care. Release, Mobihealthnews.

10 years in 2 months: prognosticating the longer-term effect of COVID-19 on telehealth, practices, and hospitals

crystal-ballThis Editor recounted last night in the article below on The TeleDentists’ fresh agreements with Cigna and Anthem the observation of a former associate who has been in the thick of the remote patient monitoring wars for some years that telehealth/telemedicine has progressed 10 years in 2 months. Seema Verma, the head of the Centers for Medicare and Medicaid Services (CMS), stated to the Wall Street Journal (paywalled),  “I think the genie’s out of the bottle on this one. I think it’s fair to say that the advent of telehealth has been just completely accelerated, that it’s taken this crisis to push us to a new frontier, but there’s absolutely no going back.” Even in a short period of time, CMS-reported telehealth visits as of 28 March trebled from 100,000 to 300,000. When the April numbers are in, it would not be surprising to see it grow well into seven figures.

The genie may be out of the bottle, but what will the genie do? Genies are, after all, unpredictable, and fly around.  Out of the smoke, some educated guesses:

  • Insecure, non-HIPAA compliant audio/video platforms will be the first which should be struck from CMS approval. Zoom has become a hackfest, with all sorts of alerts from mobile providers like Verizon on how to secure your phone. (An organization of which this Editor is a member had a panel this week completely disrupted by a hacker in five minutes.) Skype’s problems are well known. The winners here will be telehealth platforms that integrate well with EHRs, population health platforms (or may be part of population health platforms), and have robust security.
  • Primary care practices and specialists, who’ve been surviving on non-F2F visits, will be adjusting their practices to patient demand, and integrating telehealth with physical visits in a way that their patients will prefer. This means a search for integration of EMRs/EHRs with secure platforms and reconfiguring areas such as care coordination. If planned correctly, this could create better management of patients with multiple chronic conditions.
  • Actual physical visits will rebound, creating financial pressure on Medicare, hospitals, and private payers. How many people’s health has declined in two-three months is key. Small practices, who may see this first, will see another level of pressure, because they will be held to their Medicare quality metrics in value-based models even if adjusted. Hospitals will also rebound–if they are able. The dark side: private payers may run the numbers and scale back on benefits for the 2021 year especially if COVID is projected to make a return.
  • Behavioral health may benefit, yet drive individual practices and a wave of retirements, or a consolidation into clinic or group settings. There’s a reason why Optum is buying out AbleTo; we may see a wave of competitor acquisitions in this area with the emphasis will be on cognitive health and short courses. Why retirements? Many psychiatric practices are still independent, concentrated geographically, and the average psychiatrist is over 50. Psychiatric EHRs are both costly and not particularly suited to practices. If faced with technological challenges, a lot of MDs and senior clinical psychologists may very well exit–threatening clinics which need MDs to legally operate.
  • Rural health’s failure accelerated. USA Today’s analysis pinpointed at least 100 rural hospitals to close within the year. They already operated on thin margins, but with COVID expenses for additional equipment, the closing down of more profitable elective procedures and dependence on Medicaid, the over 1,100 unprofitable hospitals, over half of which are the only hospital in their county, have received a body blow. HHS allocated $10 billion to rural hospitals and clinics of the $100 billion aid package, but it may be too little and too late. Becker’s Hospital Review continues to track the bankruptcies and closures. Here there are no easy solutions from the digital health area.
  • A culture of cleanliness should accelerate. If the genie pulls this out of the bottle, one major benefit will be that hospital-acquired infections will decline. Effective sanitization methods that reduce human application and scrubbing will be the ones to look at: disinfecting foggers and UV full room or area systems–or combinations of same. Cleanliness and lack of virii and bacteria may become a new metric. Look and bet on companies that can provide this, from rooms to computers/mobile tablets and phones.

Readers can help with these prognostications and especially how they will play out not only in the US, but also in the UK, Europe, and worldwide.

Optum rumored on the digital health acquisition hunt again with AbleTo virtual behavioral health

Optum, the part of UnitedHealthGroup that runs engagement, technology, and financial services for UHG, is in advanced negotiations to acquire AbleTo, a New York City-based behavioral health and virtual therapy provider, according to CNBC. Unusually, there is also a number attached: $470 million, about 10 times their forward revenue.

AbleTo is already well acquainted with Optum, as their Ventures arm provided financing in January 2019 in a corporate round. Over the past 12 years, the company has raised close to $47 million through a Series D. Interestingly, one of the early investors was Aetna, pre-CVS. Crunchbase

Optum of late has been on an acquisition tear, with first dialysis provider DaVita for $5 billion and then telehealth/remote patient monitoring company Vivify Health for an undisclosed but certainly far less amount. AbleTo is attractive not only in the context of telehealth (at last the belle of the ball!) but also for the underserved behavioral health market. Confirmation of its attractiveness? A fresh crop of competitors such as Quartet Health, Lyra, and ‘traditional’ telemedicine providers such as Doctor on Demand.

AbleTo was founded by Michael Laskoff, at one time quite the ‘face’ in the NYC digital health scene, who went on some years back to found another behavioral health company, Annum Health, focusing on alcohol addiction. AbleTo is one of the pioneers of virtual therapy, both telephonic and audio/video, using care teams of coaches and LCSWs to provide short-term cognitive therapy sessions. It is certainly an underserved market with over 50 percent of those researched citing cost and stigma to not obtain treatments, with about 2/3rds surprisingly under age 50, but not surprisingly about half with one or more chronic conditions. Most of its business is with payers and self-funded companies, although it still offers individual therapy plans.   Mobihealthnews

Considering 2019’s digital health investment picture: leveling off may be a Good Thing

2019 proved to be a leveling-off year for digital health investment. The bath may prove to be more cleansing than bubbly.

We noted that the always-fizzy Rock Health engaged in some revisionist history on its forecasts when the final numbers came in–$7.4bn in total investment and 359 deals, a 10 percent drop versus 2018. When we looked back at our 2019 mid-year article on Rock Health’s forecast [TTA 25 July], they projected that the year would end at $8.4 bn and 360 deals versus 2018’s $8.2 bn and 376 deals. That is a full $1bn under forecast and $0.8 below 2018. Ouch!

In their account, the 10 percent dip versus 2018 is due to average deal size–decreasing to $19.8M in 2019–and a drop in late-stage deals. Their analysts attribute this to wobbliness around some high-profile IPOs, citing Uber, Lyft, and Slack, as well as the near-collapse of WeWork right before its IPO towards the end of 2019.

New investors and repeat investors increased to 627 from 585 in 2018, with no real change in composition.

The headliners of 2019 were:

  • Amazon’s acquisition of Health Navigator adding symptom-checking tools to its health offerings
  • Google’s buy of Fitbit
  • Optum’s purchase of Vivify Health, which gives it a full remote patient monitoring (RPM) suite (right when CMS is setting reimbursement codes for RPM in Medicare)
  • Best Buy’s addition of Critical Signal Technologies for RPM
  • Phreesia, Livongo’s and Health Catalyst’s IPOs. For Livongo and Health Catalyst, current share prices are off from their IPOs and shortly after: past $25 for LVGO and $31 for HCAT. Phreesia closed today at a healthy $33, substantially up from PHR’s debut at $15. (Change Healthcare, on the other hand, is up a little from its IPO at $16, which isn’t bad considering their circumstances on their financing.)

Rock Health only counts US deals in excess of $2 million, which excludes the global picture, but includes some questionable (in this Editor’s estimation) ‘digital health’ players like Peloton, explained in the 25 July article.

Rock Health’s analysts close (and justify their revisions) through discussions with VCs expecting further headwinds in the market–then turn around and positively note the Federal backing of further developments in building the foundation for connected health as tailwinds. No bubbly forecasts for 2020–we’ll have to wait.

Is this necessarily bad? This Editor likes an occasional dose of reason and is not displeased at Rock Health’s absence of kvelling.

Confirming the picture is Mercom Capital’s analysis which also recorded a 6 percent dip 2019/2018: $8.9bn with 615 deals, dropping from the $9.5bn and 698 deals in 2018. Their ‘catchment’ is more global than Rock Health, and encompasses consumer-centric and patient-centric technologies and sub-technologies. Total corporate funding reached $10.1bn.

The CVS-Aetna hearing is on the move–finally

The train that is the CVS-Aetna hearing, in the courtroom presided over by Judge Richard Leon of the US District Court for the District of Columbia, is at long last chugging down the tracks. And Pauline is still tied up. Tuesday 4 June was Day 1 of this hearing. Early reports are just being filed. The issue is whether Judge Leon will authorize the Department of Justice’s approval of the merger or dissolve a closed merger, based on his authority under the Tunney Act and his own repeated intent to search for harm that the merger might do to the public. 

Today’s hearing focused on Aetna’s divestiture of its Medicare Part D business as a prelude to the merger, and whether it was quite enough. Much of the discussion was on the relative strength of the buyer, WellCare (itself in the early stages of being acquired), and whether it could be truly competitive in the Part D market. The other factor is that CVS as a dominant pharmacy benefits manager (PBM) could undermine WellCare in several ways. PBMs operate opaquely and are highly concentrated, with CVS, Optum (UnitedHealthcare), and Cigna-Express Scripts accounting for 70 percent of the market. Modern Healthcare

Other issues for Days 2 and 3 will cover the effects on competition in health insurance, retail pharmacy and specialty pharmacy.

Healthcare Dive discusses how these hearings are already setting precedent on how Tunney Act hearings are conducted, their scope (Judge Leon has ruled against every attempt by CVS-Aetna to limit it), and the unprecedented live testimony.  There is the good possibility that Judge Leon will decide to dissolve the merger for competitive reasons, which DOJ likely would appeal. Add to this the cost of the delayed integration and the precedent set by the District Court on scrutiny of any healthcare merger, and this tedious hearing along with Judge Leon’s actions leading to it hold major consequences.

Contact lenses as a drug delivery system take home MIT Sloan Healthcare prize

This Editor has been covering contact lenses in health tech since at least 2013–contact lenses that detect glucose for diabetics (Google/Novartis/Alcon), eye pressure (Sensimed), and even detect multiple diseases (Oregon State University). None to date have made it into commercial release.

Here’s another try, this time from this year’s winner of the MIT Sloan Healthcare Innovation Prize competition. Theraoptix won the $25,000 grand prize, sponsored by Optum. The lenses are designed to deliver eye medication on a time release basis using a thin polymer film formed into a tiny circular strip sandwiched into the lens material. They can be worn for up to two weeks to slowly but constantly deliver drugs in the treatment of diseases like glaucoma or after surgery. It can also deliver drugs effectively for back of the eye treatment of macular degeneration, diabetic retinopathy, retinal vein occlusion, and similar diseases that today require in-office injections.

Theraoptix was developed by Lokendra Bengani Ph.D. of the Schepens Eye Research Institute of the Massachusetts Eye and Ear Infirmary. It was based on core technology by ophthalmologist Joseph B. Ciolino MD, who is Dr. Bengani’s mentor. We wrote about Dr. Ciolino’s research previously [TTA 7 Sept 16] including a look back at contact lens research. There were seven other finalists, of which the most interesting to this Editor was Kinematics shoe insole sensors for gait detection analysis (and fall prevention).  MIT News

Optum/UnitedHealth clinches $1.3 bn deal for Advisory Board’s healthcare practice

The Advisory Board consultancy group confirmed its splitup and sale, as originally reported by TTA in mid-July. The Optum data analytics/information/consultancy unit of UnitedHealth Group is acquiring the healthcare practice for $1.3 bn and the education consultancy will be purchased by Vista Equity Partners for $1.55 bn. 

According to Bloomberg, The Advisory Board has 3,800 employees and roughly $807 million in annual revenue. Reports indicate that it has served over 4,400 healthcare clients. According to the Washington Business Journal, regulatory filings show it will operate as a wholly owned subsidiary of Optum headed by Advisory Board Chairman and CEO Robert Musslewhite. As to relocation, Advisory Board spokespersons confirmed that they will still be moving into a new headquarters on New York Avenue NW, indicating that a move to Minnetonka is not imminent and that at least some of the management will stay. There is no word on relocation out of Washington for the education practice. At closing, outstanding shares of Advisory Board will convert at $52.65 per share, plus an additional amount per share based on the after-tax value of Advisory Board’s 7.6 percent stake in publicly traded Evolent Health. The deal is expected to close by early 2018.

This confirms an earlier trend of healthcare consultancies merging and cross-acquiring. In July, Dublin’s UDG Healthcare acquired Philadelphia-based healthcare consultancy Vynamic last week, gaining a US foothold, then added marketing/communications company Cambridge BioMarketing in Boston. Rumors still have publicly-traded Evolent Health as a likely acquirer or acquiree of a healthcare consultancy. WTOP, Reuters

 

Optum’s Utopia of proactive patient care–without telehealth

[grow_thumb image=”https://telecareaware.com/wp-content/uploads/2015/10/question_mark.jpg” thumb_width=”150″ /]And we wonder why telehealth patient monitoring is floundering and telemedicine is only starting to take off? In this Editor’s reading today, up came this rather glossy, beautifully designed advertorial web page in The Atlantic sponsored by healthcare services provider/holding company Optum. It describes a proactive, highly supportive care process that starts with the diagnosis of a chronic condition (in this case developing CHF) through a ‘health scare’ handled at an urgent care versus a hospital ED, then to care at home (from a highly engaged nurse-practitioner no less) and a patient who, suitably engaged, is “responsibly managing her condition through a wellness approach” and has an improved lifestyle.

Other than an EMR (integrated between provider and urgent care–but EHR is the more current term), no other technology other than telephonic is mentioned in this rosy picture. Where’s the telehealth app that touches our patient, letting her chart her weight, breathing and general wellness, sending it to her EHR and alerting that nurse so she can truly be proactive in seeing changes in her patient’s health? Where’s the telemedicine virtual visit capability, especially if our patient’s out of breath outside of normal office hours, or there’s a blizzard and that nurse can’t visit? Here’s all the infrastructure built up for integrated care, but where’s the technology assistance and savings on home health visits and transportation for the patient?

It can’t be that Optum doesn’t know about what telehealth/telemedicine can do and the role it already plays in care? It can’t be that it doesn’t fit in the integrated care infrastructure? Or does it have to do with reimbursement? (Optum is the parent of giant insurer United HealthcareReaders’ thoughts?

Breaking news confirmed: Bosch exiting healthcare and telehealth in US–UPDATED

Breaking News–UPDATED with Bosch response

Bosch has confirmed they are closing their telehealth business in the US. Please see their statement at the end of this article.

A home care industry newsletter, along with our own reliable industry sources, have confirmed the recent industry discussion that Bosch Healthcare, since January a solely US operation, is winding down its business without a definite turnover to a buyer. This Editor, in calling various departments in their Palo Alto, California offices for confirmation on Thursday, was (when she reached a human being) forwarded to HR where she could leave only voice mail. An email to marketing also received no response. All sources indicate that staff layoffs took place last Monday.

Editor’s Note: Bosch’s official press response follows this article. We have also made certain corrections to this article (see in red).

  1. The Home Care Technology Report, published by industry consultant Tim Rowan, on Wednesday posted two articles stating that Bosch laid off nearly all of its staff on Monday (15 June) save for customer service and some key operating areas. His information indicated that Health Buddy sales–new and existing orders–have been terminated. This includes orders placed through its McKesson partnership. Non-VA service will be terminated in 60 to 90 days.
  2. Home Care Technology also reported that Bosch’s business with the Veterans Health Administration (VA) will be maintained through April 2016, which is near to the contract end in May, but no new units will be delivered. The original contract was with Health Buddy hub developer Health Hero Network, sold to Bosch in 2008With the later acquisition of ViTel Net, Bosch developed into one of the two leading VA Home Telehealth remote monitoring hub suppliers–the other being Cardiocom. VA Home Telehealth is the largest telehealth program in the US with over 156,000 patients (Federal Year 2014) (Ed. Note: VA has a third authorized and active VA supplier, Viterion).

As Mr Rowan did, this Editor will speculate on the reasons why there is this reported exit without a sale or spinoff, despite the substantial VA and other healthcare placements of Health Buddy. Our take is somewhat different than his: (more…)

Do startups truly threaten the ‘healthcare establishment’?

Or are successful startups fitting into their game? Chris Seper in MedCityNews paints the picture of one side of a quandary. The ‘healthcare establishment’ fundamentally and to its detriment does not understand and is threatened by the startup and innovation process. A startup may begin with an idea which is, in his words, ‘almost always flawed, sometimes deeply’. If the founders are smart, they will test their ideas, validate them and change them appropriately. If not, they will fail. But it is easier for the Establishment to point at the most egregious of the bad ideas and use them to rationalize the status quo.

But being congenital contrarians, we paint the house on the other side of the street. Has the Establishment caught up with–or in some cases, co-opted startups, making them and their funders ‘do their diligence’ and be more cautious before emerging? This Editor would argue yes, and largely for the better.

**The ‘Wild West’ days are over. A few years ago, a truly bad or deeply flawed health tech idea or could easily find funding, because it was all blank slate, new and ‘transformative’.The sexiest hooks were Quantified Self, sleep, employer health incentives, interactive coaching, genomics, app prescribing and (last) wearables. A lot of founders imagined themselves as the Steve Jobs of Healthcare, down to the black turtleneck. Now there is a history of success and failure. The railroads reached the dusty frontier towns.

**There’s now a ‘Startup Establishment’. National accelerators (more…)

Looking back over Telehealth & Telecare Aware’s predictions for 2014, part II

[grow_thumb image=”https://telecareaware.com/wp-content/uploads/2015/01/magic-8-ball.jpg” thumb_width=”150″ /]Editor Charles has treated you to a look back on his 2014 predictions, daring Editor Donna to look back on hers. Were they ‘Decidedly so’, ‘Yes’, ‘Reply hazy, try again’ or ‘My sources say no’? Read on…

On New Year’s Day 2014, it looked like “the year of reckoning for the ‘better mousetraps’”? But the reckoning wasn’t quite as dramatic as this Editor thought.

We are whipping past the 2012-13 Peak of Inflated Expectations in health tech, diving into the Trough of Disillusionment in 2014.

There surely were companies which turned up ‘Insolvent with a great idea’ in Joe Hage’s (LinkedIn’s huge Medical Devices Group) terms, but it was more a year of Big Ideas Going Sideways than Crash and Burns.

Some formerly Great Ideas may have a future, just not the one originally envisioned. (more…)