Short newsy takes: Amazon Connect Health AI, UHS buys Talkspace for $835M, Oura buys Doublepoint, Science Corp.’s $230M raise, VSee’s debuts first autonomous telehealth robot

March 12, 2026 | by

Our roundup is up!

Amazon adds Amazon Connect Health agentic AI for provider workflows to their roster. Amazon’s multiplicity of niches in healthcare adds a new solution, this time targeting providers. This is part of AWS’ health suite for EHRs, designed to handle high-volume administrative tasks such as appointment scheduling, clinical documentation, and medical coding. It also targets builders in EHR companies, healthcare ISVs (independent software vendors), and tech-enabled providers through a unified software development kit (SDK)  to directly integrate Amazon Connect Health’s point of care capabilities into their existing workflows. It is based on the company’s Amazon Connect cloud contact center platform. Netsmart, Veradigm, and Greenway Health all use it, with Netsmart claiming an increase in ambient documentation adoption by 275% in its 1,300+ client network. Amazon release, HIStalk 3/6/26, Mobihealthnews

UHS beefs up its behavioral health capabilities with Talkspace. Universal Health Services (UHS) is a national for-profit provider of health services that include acute care hospitals, behavioral health, healthcare management, and even a health plan. For UHS, expanding their behavioral health services faced staffing shortages that has stymied patient utilization and growth, plus creates a continuum of in-person and virtual telemental health.

Talkspace was a fairly early entrant in virtual behavioral health services. It has grown to national coverage with over 6,000 therapists despite being a cracked SPAC from June 2021. Back then, it went public at $8.90 on Nasdaq with approximately 152 million shares outstanding for a valuation of $1.4 billion. Six months later, shareholders sued for securities fraud, and by June 2022 shares had plunged to the dollar level, becoming a Cracked SPAC Poster Child. But they patched the cracks (unlike others) and closed 2025 with $229 million in revenue, profitable with an adjusted EBIDTA of nearly $16 million, and 1.6 million patient sessions. They rebuffed buyers until this week. UHS is acquiring for $835 million or $5.25 per share, a 10% boost on their closing 8 March, subject to the usual Talkspace shareholder and regulatory approvals. There is no mention of management or employee transitions. Closing is expected during Q3 this year. Talkspace release, Healthcare Dive, Becker’s

Really Short Takes!

  • Biometric ring Oura is buying Helsinki-based Doublepoint, a private company that enables gesture recognition in wearables. Doublepoint staff including the founders will join Oura and remain in Helsinki. Acquisition cost is not dislosed, but Oura seems to have enough cash on hand with last year’s $900 million Series E leading to an $11 billion valuation. Mobihealthnews
  • BCI implant developer Science Corporation raised $230 million in Series C funding. Lightspeed Venture Partners, Khosla Ventures, Y Combinator, IQT and Quiet Capital were the main funders for a total funding of $490 million. Science is a competitor of Elon Musk’s Neuralink, but is concentrating on a BCI retinal implant aimed at restoring form vision to patients blinded by macular degeneration. PRIMA in a clinical trial restored vision to those blinded by geographic atrophy due to age-related macular degeneration. Mobihealthnews
  • And veteran telehealth robotics company VSee debuted the VSee AI Robot at HIMSS. According to their release, it is the first fully autonomous telehealth robot. It uses LiDAR (Light Detection and Ranging) for navigation. VSee’s market is hospitals, ICUs, and health systems. Remote clinicians can independently navigate the robot directly to a patient’s bedside without engagement by onsite staff for rounding, telestroke response, and specialist coverage. Pretty neat! VSee release

Short takes: Owlet’s baby sleep survey, MediBioSense’s Infinity Watch, telehealth extensions move to Senate, EBG’s telemental laws app ’26 update, Done Global indicted with principals convicted

January 24, 2026 | by | 1 Comment

Rounding up some current–and back–stories:

The January season for reports continues with Owlet’s newly released ‘Baby Sleep Report’. This surveyed data was generated via Owlet devices (Dream Sock, Dream Duo, and Dream Sight) from 1.2 million babies over 900 million hours of monitoring in 200 different geographic regions during 2025. The survey purpose was to research sleep patterns, trends, and developments affecting babies monitored from one to 18 months. One major finding was that baby night awakenings, that bane of life for nearly all parents, drop by 55% by about 9 months, and sleep patterns stabilize in the first six months. Other findings summarized in the release:

  • 80% of bedtime changes happen in the first six months
  • By 6–8 months, babies on average sleep nearly nine hours at a time
  • Biggest sleep and pulse rate changes happen in the first two months
  • Early high pulse rates are common and usually reflect age-typical patterns
  • Pulse rate remains higher during light sleep than deep sleep

The full report is available here.  

Doncaster, UK’s MediBioSense will be introducing in March the MBS Infinity Watch, which combines an Android-based smartwatch, smartphone, and medical wearable. We covered MBS and the CEO/founder Simon Beniston back in 2018 (!) when your Editor was doing consulting for an app security company partnering with MBS’ on their first product, VitalPatch. MBS products such as the VitalPatch are distributed in the UK, Europe, Saudi Arabia, South America, and Australia. Mr. Beniston’s latest update is on his LinkedIn post. An earlier update from Business Doncaster, a local publication, was published in October. They also achieved medical certification from the Saudi FDA (SFDA) for VitalPatch after a rigorous two-year (and nine month!) process.

The US House voted on Thursday’s (22 Jan) to send a ‘minibus’ bill containing several long-fought for telehealth extension/expansion provisions to the Senate. A ‘minibus’ combines several funding bills (versus a massive ‘omnibus’) in a multi-bill FY26 funding package released by the House Appropriations Committee earlier this week. With legislation related to the Departments of Labor, the Departments of Health and Human Services (HHS), Education, Defense, and Transportation, it contains key provisions preserving telehealth including those not included in last year’s One Big Beautiful Bill Act. They are:

  • Extension of Medicare telehealth flexibilities through December 31, 2027.
  • Five-year extension of the Acute Hospital Care at Home Program through September 30, 2030.
  • Extension of in-home cardiopulmonary rehabilitation flexibilities through January 1, 2028.
  • Enhancements to certain durable medical equipment (DME) requirements under Medicare.
  • Requirement that HHS issue guidance within one year on furnishing telehealth services to individuals with limited English proficiency.
  • Inclusion of virtual diabetes suppliers in the Medicare Diabetes Prevention Program through December 31, 2029.

The American Telemedicine Association and ATA Action continue to track and lobby for the extensions. Release 20 Jan, 22 Jan.

Digital health law firm Epstein Becker Green (EBG) announced an update to their free Telemental Health Laws app. The app, available on the Apple App Store and Google Play, is a reference for state-specific laws and policies governing telehealth. This year’s issues include shifting Medicare rules, the gray areas of remote prescribing, and escalating compliance requirements. There’s also the continuing drama of the DEA’s kicking the can down the road, extending pandemic-era prescribing flexibilities to the end of the year versus finalizing a permanent framework for remote prescribing of controlled substances. EBG’s page with link to the app

Last, but not least, are the substantial Federal prison terms that teleprescriber Done Global’s two principals will be facing come 25 February–followed by the indictment of the company. Both founder/CEO Ruthia He and clinical president David Brody were convicted of six counts of illegal distribution of Adderall, a controlled substance, via Done’s telehealth operation, and the submission of false and fraudulent claims for reimbursement for Adderall and other stimulants. The cost? $100 million, as well as “clients’ substance abuse, addiction and, in some cases, overdose”. The fraud included deceptive social media, paying nurse practitioners to refill prescriptions without interaction, and auto-refilling. Both He and Brody were convicted by jury in November. The indictments date back to June 2024 [TTA 24 June, 3 July] and was the first Federal prosecution of criminal drug distribution related to telemedicine prescribing by a digital health company. In December, a Federal grand jury also returned an indictment against Done Global and Mindful Mental Wellness P.A. (MMW), a Florida company, for conspiracy to provide Done members with prescriptions for Adderall and other stimulants that were not issued for a legitimate medical purpose, in return for a subscription fee. Done Global is charged with prescribing over 40 million pills of Adderall and other stimulants, and fraud of $100 million in revenue. Both trials and indictments are in San Francisco, Federal Northern District of California. Department of Justice releases 19 Nov, 17 Dec 2025.

This just in: Teladoc acquires UpLift for $30M, bolstering struggling BetterHelp telemental health; Q1 revenue down 3%

May 1, 2025 | by

Teladoc closed out a down Q1 with buying UpLift. The $30 million acquisition is clearly strategic in bolstering BetterHelp, their floundering direct-to-consumer mental health provider. It closed on 30 April, the same day as Teladoc’s Q1 results call. UpLift was bought in an all-cash transaction, with up to $15 million in additional contingent earnout consideration. UpLift’s 2024 revenue was approximately $15 million. It is small compared to BetterHelp’s Q1 revenue of $239.9 million, which fell 11% versus Q1 2024 and continuing a decrease from Q4 2024, when its revenue was $250 million, after sinking through the entire fiscal year. 

What UpLift adds is insurance-reimbursable mental health coverage with all major commercial insurers, including Medicare and Medicaid, something that the cash-pay-only BetterHelp lacked. It also adds coverage of 100 million lives and a network of over 1,500 mental health providers. According to the release, BetterHelp will work with its customers to help them access insurance coverage. Their network providers will “have an opportunity to be considered for inclusion in the benefits coverage network, based on the respective requirements, needs and interests”, which is an interesting way to present it.

Teladoc said in the release  and on the earnings call that UpLift will be reported under BetterHelp’s results, although it will be run separately under its current CEO Kyle Talcott. There is no further indication as to management transitions. The impression given from the release at least in the short term is that it will be run separately for management of their provider network, quality and patient outcome oversight and the acceptance and administration of insurance coverage. 

What does this mean? How much of a lift UpLift will give this year to BetterHelp is anyone’s guess, but adding insurance coverage is a much needed move by Teladoc, given BetterHelp’s expensive DTC cash model.

  • Teladoc has known for some time that lack of insurance coverage was a key part of BetterHelp’s performance problems. UpLift will help in that regard.
  • In the past 18 months, it moved from Teladoc’s great hope, one which former CEO Jason Gorevic bet ‘large’ on only for him to depart in a haze of red ink [TTA 5 Apr 2024], to a slowly eroding asset or worse, a rolling failure. It is particularly inexplicable given the growth of virtual mental health.
  • In the past year, BetterHelp operations were responsible for a $790 million impairment that hit Teladoc’s Q2 and a nasty, embarrassing rap by short seller Blue Orca Capital on ChatGPT being used in therapeutic responses [TTA 25 Feb], vigorously denied by Teladoc [TTA 25 Feb]. 
  • BetterHelp’s revenue for the remainder of 2025 is expected to shrink by up to 9.75%.

The main Teladoc operation, segmented as Integrated Care, also performs virtual mental health care within its services. This is noted in the release: “Teladoc Health’s Integrated Care segment offers a range of digital tools, coaching, therapy, and psychiatry services for employers and health plans (Editor’s emphasis), and completed nearly a million mental health visits in 2024.” Since those virtual mental health services are within Integrated Care, its performance is not public. 

Is a real solution a rebranding of BetterHelp when it is integrated (as it eventually will be) with UpLift?

HIT Consultant, FierceHealthcare, Mobihealthnews

Teladoc Q1 financial highlights:

There wasn’t much encouragement across the board in Teladoc’s Q1 report.

  • Total Q1 revenue decreased 3% to $629.4 million from prior year’s $646.1 million in First Quarter 2024
  • The bright spot was that their main business under Integrated Care had a revenue increase of 3% to $389.5 million 
  • As mentioned, BetterHelp’s revenue decreased by 11% to $239.9 million
  • By domestic versus international, US revenue decreased 4% to $525.0 million. International revenue grew 6% to $104.4 million.
  • Net loss also increased to $93.0 million, or $0.53 per share, versus prior year’s Q1 $81.9 million, or $0.49 per share.
  • Adjusted EBITDA for Q1  decreased 8% to $58.1 million, versus $63.1 million in the prior year. \
    • Integrated Care’s adjusted EBITDA increased 6% to $50.4 million.
    • BetterHelp’s adjusted EBITDA decreased 50% to $7.7 million.

The release also confirms full year 2025 revenue projections of $2,468 – $2,576 million. BetterHelp’s revenue is projected to continue to shrink by 3.75 to 9.75%.

Breaking: Teladoc’s Q2 sinks on $790M BetterHelp impairment; Wojcicki files to take 23andMe private

August 1, 2024 | by

Teladoc posts Q2 loss of $838 million, takes $790 million impairment on BetterHelp’s sinking performance. New CEO Chuck Divita had nothing but bad news to deliver to Mr. Market (right below). It was so bad that they withdrew their FY2024 outlook for both consolidated operations and BetterHelp stated in April and all three-year outlooks. TTA Q1 Teladoc results and outlook  

  • Q2 revenue declined 2% versus prior year to $642.4 million. Integrated Care (main business) segment revenue increased 5% to $377.4 million while BetterHelp declined 9% to $265 million. Readers will recall that previous CEO Jason Gorevic assured investors that BetterHelp would carry Teladoc to profitability. Au contraire, along with his job.
  • The bright spot was that adjusted EBITDA increased to $89.5 million, up 24% versus prior year, but adjustments reflect all sorts of financial legerdemain, including impairments.
  • First half results were essentially flat versus prior year, with revenue up 1% to $1,288 million with Integrated Care up 7% to $754.5 million–but BetterHelp again sinking results with a decrease of 7% to $534.0 million.

BetterHelp’s rolling failure is almost inexplicable, with telemental health being the ‘IT’ clinical category in digital health funding. Spring Health just scored a $100 million Series E [TTA 31 July]. Younger companies such as Talkiatry and Brightside Health seem to have no problem raising funds or gaining partners/customers. One would think that with established customers in the enterprise space, Teladoc would have no problem adding on telemental services. This Editor has previously analyzed the problems that have led to the decline of both Teladoc and Amwell, but Teladoc stands apart in one factor. It is still recovering in its huge failure in buying and failing to integrate Livongo. But in the telemental health space, the profitable companies are largely in the enterprise and payer space. Even DTC, they have slicker solutions and extensive networks. It’s a cost-sensitive market, both to benefit admins and to prospective members. 

Here’s the pivot. On the earnings call, CEO Divita and CFO (former acting CEO) Mala Murthy announced a pivot for BetterHelp to international, non-English-speaking markets, where customer acquisition costs are lower. (This Editor would add that competition is also less.) They also blamed advertising cost inflation and jacked-up acquisition costs during a US election year–something that is completely predictable and should be baked in the 2024 marketing expenses. Unbelievably, if advertising costs remain high, Murthy stated that they expect a low double-digit revenue decline, whatever that means.

The shocker here is that it finally dawned on them that the big problem with BetterHelp is that it does not accept insurance and has a high DTC cost. Their leavers in research cite both as reasons why. Hellooooo? What took so long?  So their fix is to negotiate insurance coverage–but that won’t take effect till 2025. 

From FierceHealthcare in an on-point close of their article: “Divita was adamant that Teladoc runs BetterHelp well and that it’s an important part of the company.”  Morningstar (Teladoc release)  How much more can Mr. Market stomach? This story is developing.

As we predicted, CEO/founder Anne Wojcicki has made an offer to take 23andMe private. She has filed with the Securities and Exchange Commission (SEC) amendments to their Schedule 13D form that confirm that on 29 July, she sent a non-binding proposal to the Special Committee that has been looking at alternatives since late March [TTA 20 April]. The Exploding Plastic Inevitable offer of $0.40 per share is to shareholders of Class A and B common stock. It became public yesterday (31 July). The current price is around $0.40, so there is no premium. 23andMe is also on a six-month delisting deadline with Nasdaq from November, which they have since passed but may have been extended due to the Special Committee formation.

Wojcicki holds supervoting privileges that have always given her effective control of the company. According to analyst TD Cowen, she currently holds 22.5% of the company’s outstanding Class A common stock and 59.2% of outstanding Class B common stock. In going private, she would be right in line to be paid out by outside funders (Other People’s Money). Other alternatives to her buyout, such as Chapter 11 or 7 bankruptcies, are even more bleak and would leave shareholders with effectively 0.

As TTA noted in our April coverage, the company is yet another cracked SPAC (2021) hitting a $4.8 billion valuation, acquiring companies, and falling precipitously. It never found a recurring revenue model, being largely ‘one and done’ on ancestry and genetic reports. Recently, it lost a lucrative contract with GSK for research data. It stumbled badly after a major data breach in Fall 2023 that exposed 6.9 million records. Then, they blamed members for their poor cyberhygiene and lack of security. This once bright light has burnt out; is it even relevant anymore other than giving the CEO a job? Yahoo Finance, CNBC, MedCityNews  Developing. Our recent 23andMe coverage: 29 May (FY24 earnings and the committee’s poor choices), 2 Feb (data breach timeline, financials)

News roundup: VillageMD sued on Meta Pixel trackers; Cerebral pays $7.1M FTC fine on data sharing, cancellation policy; VA may resume Oracle Cerner implementation during FY2025; Epic-Particle Health dispute on PHI sharing

April 16, 2024 | by

It’s all about personal health data–sharing, bad sharing, and bad transfers in this roundup.

VillageMD takes another hit, this time on Meta Pixel ad tracker issues. A class-action lawsuit filed on 10 April charges VillageMD (formally Village Practice Management Company), via its Village Medical website, of using the Meta Pixel ad tracker for disclosing user-protected health information (PHI) and other identifiable information generally classified as PII. This included visitors to their website villagemedical.com seeking information and patient users of Village Medical’s web-based tools for scheduling and the patient portal. The lawsuit by a “John Doe”, a patient since January 2023 resident in Quincy, Massachusetts but brought by three Midwest law firms in the US District Court for the Northern District of Illinois, states that VillageMD used trackers that transferred this personal information to Meta Networks’ Facebook and Instagram, as well as other third parties like Google, for use in targeted advertising, in violation of HIPAA and other regulations. The lawsuit seeks 1) an injunction stopping Village Medical from using ad trackers and 2) monetary redress via damages–actual, compensatory, statutory, and punitive for the entire affected class. The suit also alleges that VillageMD violated its own internal procedures. Crain’s Health Pulse, Healthcare Dive

Readers will recall that in June 2022, STAT and The Markup published a study and follow-ups on Meta Pixel and ad tracker use by healthcare organizations. Ostensibly, the ad trackers were there to better track website performance and to tailor information for the patient [TTA 17 June, 21 June 2022], but they sent information to third parties that violated HIPAA and privacy guidelines. Ad trackers were also monetized. Meta blamed the health systems [TTA 16 May 2023] for misuse though they used the data for ad serving.  Congressional hearings, FTC, and DOJ followed later in 2022 and 2023. Multiple class action lawsuits against providers large and small have ensued. Providers have pushed back on FTC and HHS rules on ad trackers, stating the restrictions hamper their ability to build better websites based on customer usage and to serve individuals with useful information. 

Another ‘oversharing’ company, troubled telemental Cerebral, whacked with $7.1 million FTC fine on disclosing consumer information via ad trackers plus ‘negative option’ cancellation policy. The proposed order for a permanent injunction filed by the Department of Justice (DOJ) and docketed on 15 April has to be approved by the Federal District Court for the Southern District of Florida. The fine for the company only penalized the following:

  • Cerebral released 3.2 million consumers’ information to third parties such as practices, LinkedIn, and TikTok. This included PHI and PII such as names, medical histories, addresses, IP addresses, payment methods including insurance, sexual orientation, and more. Even more outrageously, they also used the mail for postcards that had sensitive information such as diagnosis printed on them. The insult on injury was that Cerebral failed to disclose or buried information on data sharing to consumers signing up for their ‘safe, secure, and discreet’ services. Cerebral now has to restrict nearly all information to third parties.
  • Cerebral also set up their service cancellation as a ‘negative option’ cancellation policy, which in reality meant that it was renewed indefinitely unless the customer took action to cancel. It was not adequately disclosed in violation of the federal Restore Online Shoppers’ Confidence Act (ROSCA). Then Cerebral made it extremely difficult to cancel by instituting a complex procedure that required multiple steps and often took several days to execute. They even eliminated a one-step cancel button at their then-CEO Kyle Robertson’s direction. The order requires this to be corrected including deleting the negative option.
  • Former employees were not blocked from accessing patient medical records from May to December 2021. It also failed to ensure that providers were only able to access their patients’ records.

Cerebral’s settlement with the FTC and DOJ breaks down to $5.1 million to provide partial refunds to consumers impacted by their deceptive cancellation practices. They also levied a civil penalty of $10 million, reduced to $2 million as Cerebral was unable to pay the full amount. The decision and fine do not cover charges to be decided by the court against the former Cerebral CEO Robertson due to his extensive personal involvement in these practices. Those have not been settled and apparently were severed from the company as a separate action (FTC case information). Since 2022, Mr. Robertson has consistently blamed company management and investors for pushing for bad practices such as prescribing restricted stimulant drugs. Cerebral countersued him for defaulting on a $49.8 million loan taken in January 2022 to buy 1.06 million shares of Cerebral common stock. More to come, as the order also does not address other Federal violations under investigation, such as those under the Controlled Substances Act.  FTC release, FierceHealthcare  

VA to possibly resume Oracle Cerner EHR implementation at VA sites before the end of FY 2025, even if not in budget. During House Veterans’ Affairs Committee hearings on FY 2025 and 2026 budgets, VA Secretary Denis McDonough last Thursday (11 April) said that the VA intends to resume deploying the Oracle Cerner EHR as part of VA’s Electronic Health Records Modernization (EHRM) before the end of FY 2025. As Federal years go from October to September, FY 2025 starts October 2024 and ends September 2025. When asked if VA plans to maintain the “program reset” as they termed it in April 2023 for all of FY25, Secy. McDonough said that “we do not.”However, there is no budget allocated for additional implementations in either FY. The plan is to use carryover funding.

Oracle Cerner’s Millenium EHR was implemented at five VA locations before suspending in April 2023 for a massive re-evaluation which involved reworking systems such as the Health Data Repository which created critical scheduling and pharmacy problems detailed by the Office of Inspector General (OIG)  [TTA 28 Mar]. The joint VA and MHS/Genesis Lovell FHCC implementation, which went live in March, is not included.  NextGov/FCW, Healthcare Dive

And in another dispute about data sharing, leading EHR Epic cut off requests made by some Particle Health customers, expressing concern about privacy risks. Particle Health is a health data exchange API platform for developers. Both Epic and Particle are part of Carequality, a large scale data exchange group that connects 600,000 care providers, 50,000 clinics, and 4,200 hospitals to facilitate the exchange of patient medical records On 21 March, Epic filed a dispute with Carequality that some of Particle’s users “might be inaccurately representing the purpose associated with their record retrievals.” and stopped responding to some Particle Health customer queries. This has now degenerated into a ‘who said what‘ dispute, with Particle and their CEO alleging that Epic implied that it completely disconnected Particle Health and its customers from Epic’s data, while Epic has said that after a review by its 15-member Care Everywhere Governing Council, they flagged three companies who were using Particle’s Carequality connection to access data not related to patient care or treatment. There’s also a larger concern being brought up by providers on the use of these mass data exchanges for fraudulent extraction of data or use that would violate HIPAA guidelines. FierceHealthcare, CNBC, Becker’s, Morningstar

Short takes on a springlike ‘defrosting’: Redi Health’s $14M Series B, Dario Health buys Twill for ~$30M

February 29, 2024 | by

Announced during ViVE, Redi Health gained a $14 million Series B. Funding came from not the VC or PE Usual Suspects so in evidence two short years ago, but from Blue Heron Capital with participation from inside investors Refinery Ventures, Mutual Capital Partners, Rev1 Ventures, and M25. This brings Redi’s total funding to about $19 million, after early-stage rounds totaling $5 million.

Based in Columbus, Ohio, Redi integrates program enrollment, a patient assistance program on a mobile app and website, and co-pay strategies into a single platform targeting patients with multiple chronic conditions. The app includes medication and symptom tracking, a pharma assistance program, and a navigator that connects providers, field teams, and patient support managers. Redi’s most convincing stats are that Traditional Patient Support Programs (PSPs) contribute to a non-adherence rate of approximately 70%, leading to estimated losses of over $600 billion annually for the pharmaceutical industry, but don’t get into the cost of non-adherence in patient outcomes: morbidity and mortality associated with poor medication adherence costs $528.4 billion annually (PAN Foundation). Yahoo!Finance, Mobihealthnews  Hat tip to Steven Wardell of Wardell Advisors

Another sign of the times? Complicated Deals. DarioHealth is buying Twill, formerly known as Happify (and with a behavioral health app still known as Happify). Dario is putting up $10 million in cash. The rest is in 10 million shares of common stock (Nasdaq,  DRIO) in the form of pre-funded warrants for the benefit of Twill’s debt holders and equity holders. These warrants will not vest all at once but in four phases after closing: 270 days, 360 days, 540 days, and 720 days. As Dario stock is at about $2.50, this is approximately $20 million for a total transaction cost of $30 million. 

Dario has a combined app and in-person approach to musculoskeletal (MSK) therapy, diabetes, hypertension, weight management, and behavioral health. Twill concentrates on telementalhealth, initially on reducing stress and increasing wellness, but now has expanded to the mental issues around chronic conditions, pregnancy and maternal health, with tailored and culturally adapted tracks and activities. It is not stated if the Twill products will continue under their present names.

The combination of both companies is expected to double Dario’s pro forma 2023 revenues to $30.5 million, based on extrapolating Q1-3 2023 revenues: $16.7 million in Dario revenues and $13.8 million in Twill revenues.

The rest of the Dario release is a dizzying chronicle of funding legerdemain that this Editor hasn’t seen since her airline days when she sat in on finance meetings that would ultimately decide 1) how many cities the airline could open and 2) how much she could spend on advertising media to support them. There’s a $22.4 million private placement of convertible preferred stock, inducement grants of stock options to employees of Twill to purchase up to 2,963,459 shares of Dario’s common stock at a strike price of $2.55, and 1,766,508 shares, 733,562 in the form of restricted stock units and 1,032,946 in the form of warrants mainly to keep key employees of Twill on board, such as co-founder/CEO Tomer Ben-Kiki, as well as to other employees, board members, and consultants. Investment firm Stifel is listed, but again none of the VC or PE Usual Suspects. 

Twill reported only a single non-equity assistance funding through the PharmStars accelerator in Spring 2023, so Dario likely did not have a lot of investors to buy out.

Telemental news roundup: Brightside Health expands Medicaid/Medicare partners; Blackbird Health gains $17M Series A; Nema Health’s PTSD partnership with Horizon BCBSNJ

February 21, 2024 | by

Mental health, whether pure ‘telemental’ or an integrated in-person/virtual model, remains one of the healthier (so to speak) sectors of digital health.

Brightside Health announced today a series of new and expanded health plan partnerships as well as expanded state coverage for Medicare and Medicaid plans.

  • CareOregon with a new contract to serve Medicaid beneficiaries.
  • Blue Shield of California with a new contract to serve Medicare Advantage enrollees.

These add to Brightside’s partnerships announced last October:

  • Blue Cross and Blue Shield of Texas–expanded contract to include Medicare Advantage coverage.
  • Centene’s expansion of coverage state-by-state, including Nebraska Total Care Medicaid and Wellcare Medicare Advantage.
  • Optum for UnitedHealthcare Medicare Advantage members
  • Lucet for Florida Blue members

Under traditional Medicare, coverage now includes Texas, California, Delaware, Arizona, New York, Washington, Florida, North Carolina, Michigan, and Illinois.

Beneficiaries and members can access Brightside’s virtual psychiatric therapy including medication, plus cognitive and behavioral therapy with independent skill practice, and Crisis Care, Brightside’s program for those with elevated suicide risk. With the new partnerships, Brightside is now estimating that they cover approximately 100 million lives–one in three US covered lives–and is seeking to further expand these partnerships as well as to traditional (original) Medicare Part B beneficiaries. Brightside Health was founded well before the gold rush in telemental health–2017–and has raised over $81 million over five rounds up to a Series B in March 2022, mainly led by Acme Capital (Crunchbase). Brightside release, Yahoo! Finance, Psychiatric Times

Blackbird Health raised $17 million in a Series A funding. This was led by Define Ventures with participation from Frist Cressey Ventures and GreyMatter, for a total raise of $23 million to date. Blackbird addresses the other side of the spectrum from Medicare–pediatric mental health in an integrated in-person and telemental health model–and serves patients aged 2-26. Blackbird’s care model considers in an ‘understand-first’ approach how children’s brains develop over time and the impact that growth has on mental health. Another unique aspect is that they developed a series of ‘Blackbird Biotypes’ based on 50 million data points drawn over a decade that identify patterns of behavior in clusters of individuals with similar symptoms-linked brain features. These assist in assessment, accurately identifying the underlying root cause of symptoms, and proposing integrated and personalized treatment plans. Blackbird claims this approach results in substantially lower use of medications and ED utilization. Last year, Evolent Health co-founder and COO Tom Peterson joined the company after his own family’s experience with Blackbird’s therapeutic model to help it scale from its three clinics and 40 providers in the Mid-Atlantic region. Blackbird release, Forbes

Startup Nema Health, a virtual clinic targeting a single condition–post-traumatic stress disorder (PTSD)–is now in-network in Horizon Blue Cross Blue Shield of NJ (Horizon BCBSNJ) commercial plans. Nema’s model is virtual care for PTSD from evaluation and virtual therapy sessions, starting with intensive sessions 3-5 times per week for 2-4 weeks, through support from a designated peer mentor plus messaging and interactive exercises. Based in NYC, Nema is in-network with UnitedHealthcare/Optum, Oxford, Oscar, and Connecticare in the states of New York, New Jersey, and Connecticut. Horizon is New Jersey’s largest insurer. Nema claims that 76% of their patients no longer meet PTSD criteria after completing Nema therapy. Nema is at seed stage funding of $4.1 million from .406 Ventures and Optum Ventures, raised last November. FierceHealthcare, Nema release

Why this matters:

Since 2020, telemental health got a black eye (and then some) from ADHD and opioid medication-assisted treatment (MAT) providers such as Cerebral, Done Health, Truepill, and others. Thriving during the pandemic, many of them are now facing various Federal charges. Others, like Calm, are basically meditation and sleep apps. The real need, and provider shortage, remains.

The need for psychiatric care and support for Medicare and Medicaid covered populations is high, but clinical supply is low.

  • According to the Center for Medicare and Medicaid Services (CMS) in announcing the state-based Innovation in Behavioral Health (IBH) eight-year, eight-state integrated care model last month, among the 65 million Americans currently enrolled in Medicare, 25% have at least one mental illness, with 40% of Medicaid members experiencing mental illness or substance use disorders (SUDs).
  • Yet provider shortages have worsened over time–as of 2020, The Commonwealth Fund estimated that an additional 7,400 providers (not necessarily psychiatric MDs) were needed to meet demand. Studies cited in Psychiatric Times (2022) estimate that the current shortage of psychiatrists, running at 6%, is expected to be between 14,280 and 31,109 psychiatrists by 2024. Distribution is concentrated in urban areas and their suburbs as well. It doesn’t help that physicians entering psychiatry in 2003-13 decreased by 0.2% and their average age is 55. Even in well-covered geographic areas, retiring doctors with no replacements have created coverage shortages.
  • For child psychiatry, the American Academy of Child and Adolescent Psychiatry (AACAP) reports that there are just 14 psychiatric specialists for every 100,000 children in America. 

Short takes: Humana’s big MA loss (updated); Medicare telemental care bill back in Senate; HHS releases cybersecurity performance goals; Texas Healthcare Challenge hackathon 23-24 February

January 26, 2024 | by

Humana apparently surprised Wall Street with their Q4 losses, driven by escalating Medicare Advantage (MA) costs.  While revenues ($26.5 billion) for MA’s second largest plan provider were up from prior year’s $24 billion, MA expenses drove an adjusted Q4 loss of $361 million under the insurance segment. From Humana’s earnings statement: “The sector is navigating significant regulatory changes while also absorbing unprecedented increases in medical cost trends. We believe the elevated MA medical costs are an industry dynamic, not specific to Humana, and that they may persist for an extended period or, in some cases, permanently reset the baseline.” On the earnings call, their CFO cited increased inpatient costs, especially for short stays, and more spending in outpatient surgeries and supplemental benefits–trends that Humana expects to continue into 2024 and even into 2025. Home health under CenterWell were tidily profitable and growing. Perhaps MA’s sector problems were the reasons why Cigna, selling off their MA plans, backed out of their acquisition/merger? Q4 press release, management remarks, Becker’s, Healthcare Dive

Updated Humana announced the appointment of a President of Enterprise Growth, David Dintenfass, to spearhead customer growth and retention. His background is not healthcare but Fidelity Emerging Growth Markets, with previous stints at Procter & Gamble and Bank of America. This assumes that the cost problem can be grown out of. Expect more departures and arrivals to roil Humana, as their current CEO moves to a planned retirement transition later this year and has already laid off staff in January.  Healthcare Dive

A bipartisan Senate bill proposes to continue coverage of virtual-only telemental health for Medicare beneficiaries. The ‘Telemental Health Care Access Act of 2023″ is sponsored by four Senators: Bill Cassidy, R-La., Tina Smith, D-Minn., John Thune, R-S.D., and Ben Cardin, D-Md. and is designed to make permanent the pandemic waiver of in-person requirements that expires at the end of 2024. The senators cited rural health and overall access to mental healthcare. Mental health remains the leading claim line for telehealth. Healthcare Dive, draft bill

The Department of Health and Human Services (HHS) published voluntary cybersecurity performance goals for healthcare and public health organizations. These fit within the HHS 405(d) Program and Health Sector Coordinating Council Cybersecurity Working Group’s Healthcare Industry Cybersecurity Practices as well as the NIST Cybersecurity Framework and the Cybersecurity and Infrastructure Security Agency’s National Cybersecurity Strategy. (Whew!) The two voluminous sets of goals, Essential and Enhanced, directly address common attack vectors against U.S. domestic hospitals as identified in the 2023 Hospital Cyber Resiliency Landscape Analysis. As noted earlier this week, there were 116 million patient records exposed in 2023 data breaches, doubling that in 2022.

HHS means well, but this is another ‘blood out of a rock’ situation. Health IT departments all over the US, from providers to payers, have had or are facing layoffs in the ongoing clash of business versus technology, which won’t cease because HHS would like it to. HealthcareDive, HealthcareITNews, 

The Texas Healthcare Challenge Hackathon is back! After three years dark, this year’s edition will be held this year 23-24 February in Dallas. Sponsored by the Health Wildcatters, a Dallas-based accelerator in the DFW area, it is open to just about anyone who can apply–you don’t have to code or hack. Friday kicks off with “problem pitching,” where participants form teams around identified issues, with Saturday starting with morning motivation and intensive team hacking, moving to participants developing viable solutions, assessing market potential, creating functional business models, and addressing risks with mentor support from industry experts. The day culminates in team presentations, with judges awarding cash and in-kind prizes to winning solutions. Learn more and apply here (application form is under the numbers, click on “Hackathon Sign-Up”). Sponsorship is the second button.

Funding/new business roundup: General Catalyst’s HATco ‘health assurance’ venture and $6B portfolio merger, Brightside Health expands, Diana Health’s $34M, Headway’s $125M, Main Street Health’s $315M

October 10, 2023 | by

With HLTH 2023 this week in Las Vegas, there’s the usual deluge of investment and ‘big news’ announcements, both before and during the conference.

HLTH’s Biggest and Somewhat Mystifying News (so far) is that Big Investor General Catalyst now is getting directly into the healthcare transformation business with HATco. The Health Assurance Transformation Corporation is a fully-owned company that will be in the business of “health assurance”, defined as “a more affordable, accessible and proactive system of care” which is a very broad brush indeed that sounds like the promise of value-based care and the Triple Aim (remember?). HATco already claims  20+ health system partners plus a large payer that accounts for about 15% of healthcare revenue and is in 43 states and four countries. They will be building an interoperability model with technology solutions that include a subset of their healthcare portfolio companies to drive this transformation. Their next big step will be actually acquiring and operating a health system to show how this health assurance can work. The new venture will be headed by Dr. Marc Harrison, former CEO of Intermountain Health, with a big assist from managing director Hemant Taneja, who previously founded data OS/EHR/workplace asset tracker and staff safety system Commure. Release, Mobihealthnews, FierceHealthcare 

Speaking of Commure, it is merging with another General Catalyst-funded company, Athelas. It seems like a skillful rationalization of two portfolio companies in health data and workflow data systems, including Commure’s PatientKeeper EHR, with Athela’s addition of revenue cycle management and sensor-based software for remote patient monitoring. The combined entity under the Commure name will be led by Athelas’ CEO and founder Tanay Tandon, with Commure’s CEO Ashwini Zenooz, MD moving into a non-executive director role on Commure’s board. Taneja will retain his executive chairman title. General Catalyst is investing additional funds, valuing it at $6 billion, oddly fanciful given the current environment and their revenue; the current Commure expects to finish the year with $100 million in contracted annual recurring revenue with the combined companies achieving a $125-150 million run rate by end of year. The transaction is expected to close at the end of October. Commure release, Athelas release

Telemental health’s Brightside Health doubles covered lives with additional Medicare and Medicaid beneficiaries. These are from Optum–UnitedHealthcare Medicare Advantage members–plus new and expanded partnerships with Centene, Lucet (to serve Florida Blue members), and Blue Cross and Blue Shield of Texas. This drives up in-network covered lives by 50 million to over 100 million (not actual users). Brightside offers personalized psychiatry, clinically proven therapy and Crisis Care (a program for those with elevated suicide risk) through these plans. Fun fact: based on a Brightside study published in Frontiers in Psychiatry, telemental health is effective for people with reported incomes under $30,000 per year. Healthcare Finance

Diana Health’s $34M Series B to nationally expand women’s health/OB-GYN digital health platform and care teams. Diana partners with health systems to offer women their tech-enabled services in maternity care–preconception and family planning, annual well woman visits, wellness coaching, and virtual and in-person classes and events. Their focus is on improvement of outcomes and women’s satisfaction with maternity care. Diana also has an in-person practice in Smyrna, Tennessee as well as arrangements with health system clinics in Springfield and Cookeville. The funding round was led by Norwest Venture Partners with existing investors .406 Ventures, LRVHealth, and AlleyCorp for a total of $46 million to date. Release, Mobihealthnews, MedCityNews

Telemental health is still simmering with Headway’s $125 million Series C and new unicorn status. Headway, which works exclusively with health plans to provide members with therapy and psychiatry, is now officially a $1 billion+ valued unicorn. This round was led by Spark Capital with Andreessen Horowitz, Accel, and Thrive. GV, which had participated earlier in the $70 million Series B round in May 2021 plus the late 2020 Series A of $26 million, was absent. Funds will be used to go national and equip their providers with new technology and tools. FierceHealthcare, Mobihealthnews

Topping it off, rural health service provider Main Street Health scored a jumbo investment of $315M in new capital. Investors include Oak HC/FT as well as five of the largest national Medicare Advantage plans. Main Street equips rural partner clinics with Health Navigators who assist the clinic’s providers with patient care coordination, such as med pickup reminders, scheduling visits post-hospital discharge, scheduling preventative screenings, and assisting with social determinants of health (SDOH) services. They plan to expand to 26 states from the current 18. A typical clinic is located in a town of 3,000 to 5,000 people and has 2.5 providers, making this additional outsourced service valuable indeed. Release, FierceHealthcare

Ousted Cerebral CEO may sue company, accuses management of scapegoating on Schedule 2 prescribing

November 18, 2022 | by

Troubled telemental health provider Cerebral may face a lawsuit from former CEO Kyle Robertson. Ousted in May when the company’s prescriptions for ADHD patients started to be excluded from pharmacies such as Truepill, CVS, and Walmart for Schedule 2 (potential for abuse and misuse) medications such as Adderall, Ritalin, and Vyvanse [TTA 6 May], Robertson has written a letter to Cerebral demanding access to documents. The types of documents requested, according to (paywalled) Insider, include “possible breaches of fiduciary duty, mismanagement and other violations of law.” Usually, these are a setup to determine whether others on the company board and leadership were the real culprits in business mismanagement, and a prelude to a legal filing.

CBS News obtained a copy of the Robertson letter, in which “Robertson says he was pressured by the company’s investors to “sell more stimulants” and believes his ouster was an effort to “scapegoat” him as these investigations arose.  He was urged by one board member  that “the easier you make it for people to get stimulants, the better for the business and its customers.” and also claimed that an investor told Robertson’s partner the company’s “ADHD business is crushing and it’s a cash cow … Kyle’s got to push this thing further.” Other documents obtained by CBS allegedly detail clinical safety issues, staff “practicing with expired (or) suspended license(s),” and duplicate accounts which could set the stage for overprescribing. Other documents allege lack of training, pushing prescriptions to 95% of patients, and disregarding state regulations putting licenses at risk. [TTA 29 June] The current management, led by David Mou, has denied this all.

Multiple investigations are proceeding. From May on, Cerebral came under investigation by the Federal Trade Commission (FTC) on deceptive advertising and marketing practices, the Drug Enforcement Agency (DEA) as part of increased scrutiny of telehealth providers and pharmacies possibly overprescribing telehealth-generated prescriptions, and most significantly, the Department of Justice (DOJ) subpoenas on allegations of overprescribing. A prior wrongful dismissal lawsuit by Matthew Truebe, Cerebral’s former VP of product and engineering, alleged that the company put growth before patient safety, including prescribing ADHD drugs to 100% of diagnosed patients as a retention strategy. The concatenation of evidence from multiple sources makes a lawsuit by Robertson, who also cites other factors, probable–unless this is being used as a tablespoon to sweeten his severance.

Prior to that, Cerebral was one of the leaders in the still-hot digital mental health category. In December 2021, their $300 million Series C raise led by Softbank boosted their valuation past $4.8 billion, employed 4,500, and had 210,000 patients. In October, they released 400 staff but other reports indicate far more. Also FierceHealthcare

Perspectives: Creating consistent standards isn’t a once and done job

September 9, 2022 | by

TTA has an open invitation to industry leaders to contribute to our Perspectives non-promotional opinion area. Today’s contribution is from Rhod Joyce, Deputy Director of Innovation Development at NHS Transformation Directorate and previously Head of Partnerships for NHSX. As Deputy Director of Innovation Development within the NHS Transformation Directorate, Rhod works to support the ecosystem in the development, assurance, and deployment of digital tools and services at scale. Key programs include the Digital Health Partnership Award and the Digital Health Technology Assessment Criteria. He drives support for patients to access digital health apps to support the management of long-term conditions and leads the Transformation Directorate’s Partnerships team.

This is the second Perspectives contributed by Wysa, an AI-enabled therapy coach for mental and emotional wellness. It recently was granted an FDA Breakthrough Device Designation prior to premarket review. 

Interested contributors should contact Editor Donna. (Pictures and graphs are welcome)

Technology is evolving and becoming more and more commonplace in healthcare. As a result of the pandemic, more people are open to the idea of digital treatment tools, and the NHS has pledged to provide ways to ensure that digital inclusion is accelerated. On-demand healthcare, virtual reality, online treatment sessions, big data, and predictive healthcare are all improving access and outcomes. Online and digital health resources can help with prevention, self-care, shared care and shared decision-making, long-term condition management, and appropriate use of urgent and emergency care.

The challenge for commissioners comes when trying to select which tool is best. There are over 350,000 digital health apps in the market, with an average of 250 new health apps being released every day. The question then becomes, how can commissioners and clinical leads uphold safety standards, whilst putting the best tools in the hands of clinicians and patients?

Historically the NHS has worked to a number of different standards, with various contributions to the Apps Library and a digital assessment questionnaire that had evolved. From a patient-facing perspective that was very complex, but it also raised issues for commissioners who had no common standard to work towards.

In most industries such as banking or travel, there is a baseline standard that everyone adheres to and knows is a minimum – an ISO or equivalent. But healthcare has been lacking. That is why we brought together all the standards so that digital health technologies that are being considered by NHS or social care organizations should be assessed against the Digital Technology Assessment Criteria (DTAC), regardless of procurement route, by the NHS or social care organization that is buying the product.

It defines standards for clinical safety, data protection, cybersecurity, and technical assurance and interrupts and also with a view of accessibility and usability and they are set out now as the absolute baseline that digital health technologies need to meet to operate safely within health and social care. While DTAC is intended to be a ‘one size fits all’ baseline criteria in terms of safety and security, it is intended to be part of procurement, it is not intended to be the complete question set for procurements and should be supplemented with additional specifications including any policy and regulatory requirements.

Because clinical safety isn’t a once and done thing. Having a set of standards does not mean that once that box is ticked an application is fine and available to use for everyone. It’s necessary to continuously uphold clinical standards and safety logs that prove efficacy and excellence. Every interaction, assessment, and engagement will result in new information that needs to be tested against the appropriate criteria. A clinical safety risk profile is dependent on a daily update.

When we look at developing standards we need to look at a systems focus, national programs, and patient-facing criteria. These areas are three very different things but in the past have been looked at together, which has muddied the waters. DTAC applies to all types of digital health technologies, from electronic patient records to public-facing health apps.

By ensuring that the patient needs and healthcare system requirements are front and center of every development, every innovation, every interaction, we can be sure that we are delivering the right tools for truly personalized care. That commitment can’t be a one off. If we’re going to do the right thing, let’s do it repeatedly. Only with a common set of standards that are continually being addressed and revisited, can we safely operate and allow for the innovation and progression that the NHS needs to meet an increasingly complex and varied range of needs in a modern healthcare setting.

Perspectives: why digital apps need an in-house clinical safety lead

August 25, 2022 | by

TTA has an open invitation to industry leaders to contribute to our Perspectives non-promotional opinion area. Today’s contribution is from Emma Taylor of Wysa, an AI-enabled therapy coach for mental and emotional wellness. It recently was granted an FDA Breakthrough Device Designation prior to premarket review. Ms. Taylor is Wysa’s UK child and adolescent mental health services (CAMHS) Clinical Lead and Clinical Safety Officer. She is a clinical nurse consultant specializing in children and young adult mental health, including digital mental health.

Interested contributors should contact Editor Donna. (Pictures and graphs are welcome)

One of the reasons that the NHS is so widely loved by patients and revered around the world is its commitment to doing the best thing by patients. Where many patients are is online. With over 350,000 digital health apps on the market, and an average of 250 new health apps released every day, how can we uphold safety standards while putting the best tools into the hands of clinicians, patients, employers, and employees?

Unfortunately, most tech and digital organizations don’t have in-house clinical safety officers to be accountable for clinical safety and ensure that effective clinical risk management is carried out at all stages of development and deployment.

A clinical safety officer’s role is to ensure that conclusions which are drawn are complete, objective, and based on robust evidence. Often that means pushing back and drawing an inference that perhaps a particular intervention or tool is not right for a section of the population.

Having an in-house clinical safety officer at a technology company enables them to be faster moving without compromising on integrity and safety. Having this capability in house allows a tech company to accelerate innovation in a way that is safe and aligned to both system-wide and patient needs, bearing in mind what the NHS needs to deliver the best health outcomes for the population.

As well as in-depth understanding of the rigorous evidence bases for the interventions we are delivering, we have to look at the wider context in which a tool is operating. So within mental health, it’s about seeing social media trends, and the impact that viral videos for example might be having. It’s about seeing the effects of the economy and the cost of living. Or world events and worry. It’s about looking at the language people are using and ensuring any AI language processing picks up on potential nuance and is aware of flags for concern. Most importantly, it is about working with service users to understand the contexts within which they use the technology and how they need it to work for them.

It is also essential to listen to users, and reflect and identify the experiences of people and what they want, need, and what works for them. Young people want more digital tools for mental health. That is what they are telling us. But not every technology company is doing the right thing. If they do not have clinical safety at their core, negative outcomes can occur. A clinical safety officer is constantly asking questions. What happens if this is taken out of context? What happens if something interacts? What if someone hacks? And ultimately what is the clinical risk?

Working as a clinical safety officer is an incredibly collaborative role, where it is necessary to collaborate with service users and staff across organizations such as ORCHA as well as the NHS. This means that we are able to embrace the legislative changes and be part of the conversations around what needs to be in the next round of legislation, to keep safety standards as high as possible.

Risks are always shifting and changing, and an in-house clinical safety officer means that clinical safety documents are kept up to date and implemented so that patients get the best outcomes. It’s important not to get caught up in the capabilities of technology in and of itself, and to ensure that the digital tool is safe and aligned to the real world and the system in which it operates. In the end, having a clinical safety lead is about patient safety and creating an environment that digital health care is an integral and robust part of, innovating for the best patient outcomes.

The clunk continues: Q2 2022 digital health funding fades to $4.1B in Q2, down 50% from 2021

July 13, 2022 | by

Digital health funding continues to take a plunge. Knocked about by the hangover from the pandemic, a grinding war between Russia and Ukraine, gasoline prices jacked up worldwide, and knock-on inflation and looming stagflation, funding continues to slide. The decline in Q2 digital health deals and funding to $4.1 billion more truly reflects the downturn than Q1’s relatively buoyant $6.1 billion, which benefited from the carryover of deals negotiated during 2021’s boom and closing then [TTA 6 April]. Year over year, it was half of 2021’s high of $8.3 billion.

  • 2022’s first half (H1) total of $10.3 billion was down 31% from 2021’s $15 billion. Despite this, it is 63% above the pandemic-stricken 2020’s H1 $6.3 billion. 
  • Average deal size has dropped to $31.2 million from 2021’s full-year $39.5 million and even 2020’s $30.6 million, accounting for inflation in the past two years. Looking at funding size by series year over year, Series A funding is flat but funding for Series B, C, and D+ have dropped substantially.
  • No startups went public but four digital health companies announced plans to go public or were reported to be planning public exits. One SPAC was announced in June to close in Q3, that of VSee and iDoc Telehealth with Digital Health Acquisition Corporation. SPACs, as this Editor has noted, have gone from Funding Hero to Zero under 2022’s economics, causing many SPACs to crack (Owlet, Talkspace) and increased scrutiny by the Feds [TTA 9 June]. SOC Telehealth, an early SPAC, went private after a 90% share price drop [TTA 8 Feb].
  • Average monthly M&A has dropped substantially. 2021’s monthly average of 23 has dropped to 20 in Q1 and 13 in Q2, for a H1 average of 16.
  • Most popular funding areas are mental health (a far ahead #1 at $1.3 billion), oncology, and cardiovascular. Diabetes dropped from #2 to #4, skewed last year by Teladoc’s acquisition of Livongo. Oncology rose to #2 from #6 in 2021. For mental health, given increased Federal scrutiny and legal problems of companies like Cerebral plus the expansion of Teladoc and Amwell into the area, this Editor does not expect telemental health companies to continue to attract this level of funding but may be attractive for M&A.
  • Disease monitoring (a/k/a RPM) as a value proposition moved from #8 to #3 in investment at $1.4 billion. R&D and on-demand healthcare remained in their #1 and #2 positions.

As TTA has noted previously, this was all to be expected. Will 2022 funding perk up like 2020’s did through Q3 and Q4, or fall off like in 2019 as money sits on the sidelines? Rock Health does try to put a rosier shine on the retrenchment in its roundup, as has venture capital–reality can be good for you. Another depressive factor is regulatory uncertainty in multiple areas and Federal involvement, which some companies can work to their advantage. The Rock Health summary discusses this at length. Also Mobihealthnews. 

Wednesday news roundup: PicnicHealth $60M Series C, can a downturn be good for digital health, Cerebral ran wild, a tart take on HIMSS and where it’s going

June 29, 2022 | by

PicnicHealth had a bit of one, even in this down market. This company which uses machine learning to build data sets for life sciences by working directly with patients and giving them single-source access to their data raised a $60 million Series C via new investor B Capital Group, with existing investors Felicis Ventures and Amplify Partners. The new funding will be used to build 30 new patient-centered real-world data cohorts. Adam Seabrook, Partner at B Capital Group, will be joining the PicnicHealth board of directors. Their total raise to date is $97 million since 2014 (Crunchbase). The platform was launched in 2020. FierceBiotech, release

Funding news may be a little light nowadays, and if you’re public, you’re looking at double digit share price losses, but couldn’t you guess–the downturn may be good for digital health founders! That’s the view of Big VC General Catalyst’s Hemant Taneja, said at Collision 2022, a Toronto tech conference. Now before you’ve thought the man has totally gone out of his gourd with $5+ gallon gasoline (US), 10% inflation, and rolling blackouts looming on both coasts and the UK, it is true that businesses founded in downturns tend to be tough–my father’s business was founded at the start of the Great Depression. As Mr. Taneja put it, tighter times make for more mission-driven “better founders, better investors and better executives”. Secular trends are in their favor in tech and digital transformation, but there will be another correction coming as the market is over-capitalized. Is it the dot-com boom/bust all over again? Only time will tell, but the crackups are already piling up. FierceHealthcare

Speaking of crackups, Cerebral. A report in the annoyingly paywalled Business Insider tells a tale of Telemental Health Running Wild. Former employees and ~2,000 leaked documents claim that Cerebral had no more than a nodding acquaintance with clinical standards until the Feds stepped in. For starters, they took on patients they should not have, didn’t train their nurse-practitioners and other employees, pushed prescriptions to 95% of patients, disregarded state regulations putting licenses at risk, and generally had more twists than a barrel of pretzels. And this was a company prescribing Schedule 2 drugs that had at peak 210,000 active patients and 4,500 employees.  HISTalk summarizes the article, with our thanks. But it’s par for the course, according to a new JMIR (Journal of Medical Internet Research) study also mentioned that found that “many digital health companies have a low level of clinical robustness and do not make many claims as measured by regulatory filings, clinical trials, and public data shared online.” 

And returning to HISTalk (29 June news), there’s a group of comments from a “HIMSS insider” about how that organization is being managed that long-time observers of this organization will find interesting. Employees thought that HIMSS22 was “awkward”. New and cool conferences HLTH (which initially faltered) and ViVE (which HIMSS didn’t even bother to scout) have taken much of the ‘must attend’ and buzz away from HIMSS. Now this wasn’t supposed to happen with the buy of hipper Health 2.0, to which your Editor was connected–but H2O was HIMSS-ized and effectively killed off even before the pandemic. Regional conferences have disappeared, along with a fair number of employees. HIMSS Analytics is sold. Now this could be all one person’s opinion–but what do you think?

CVS, Walmart refuse Cerebral, Done Health controlled substance prescriptions via telehealth; Cerebral CEO replaced

June 1, 2022 | by

More hot water dumped by CVS Health and Walmart on Cerebral, Done Health. The two retail giants announced last week that they would refuse to fill prescriptions of all controlled substances by telemental health providers Cerebral and Done Health. Cerebral was already under investigation by DOJ on over-prescribing of controlled substances by its provider network as a business practice, including advertising [TTA 10 May]. It turns out that seed-stage Done Health, a telemental provider specializing in ADHD diagnosis and support, is also facing the same scrutiny and treatment. 

Cerebral had already restricted prescribing controlled substance prescriptions for new ADHD patients as of 9 May. They initially continued to prescribe controlled substances for new patients diagnosed with other mental health conditions, according to a memo from their chief medical officer to their clinician network, but stopped that on 20 May with an exception for opioid use disorder. Truepill, Cerebral’s recommended mail order pharmacy, had stopped filling all Cerebral Schedule 2 prescriptions prior to that date. The CVS and Walmart refusals close off two more pharmacies for patients. FierceHealthcare

Earlier in the month, Cerebral CEO and co-founder Kyle Robertson was forced out by the Cerebral board. His replacement by medical officer and president Dave Mou, MD is effective immediately. According to reports, Robertson is fighting their action, calling it illegal and accusing the board of making him the scapegoat for the company’s problems. FierceHealthcare

Companies like Cerebral and Done grew quickly in 2020-21 due to the pandemic-driven loosening of psychiatric patient evaluations, eliminating the usual initial in-person initial visit and permitting online treatment. Restrictions were also loosened for diagnoses permitting the prescription of Schedule 2 drugs (those judged to have potential for abuse) with solely a video visit and follow up. With fast growth came more need to maintain that growth, according to current and former employees.  

Upon taking the CEO position, in an email to the prescriber team, Dr. Mou announced that patients on controlled substances would be transitioned as follows: a visit prior to 1 August to establish a treatment plan to transition to a non-controlled medication, titrating off of their controlled substance, or transferring their care to a local provider by 15 October. With the pandemic policies around telehealth ending soon, this is called playing defense, though it well may stop growth. Wall Street Journal, The Verge

DOJ investigates telemental Cerebral on over-prescribing of controlled medications

May 10, 2022 | by

DOJ dropped an anvil on Cerebral’s head Friday night. Last week’s reports on the Drug Enforcement Agency (DEA) investigation of telemental health provider Cerebral were confirmed on Friday with the official notification that the US Attorney’s Office for the Eastern District of New York had subpoenaed the company as part of their investigation into possible violations of the Controlled Substances Act. According to the Wall Street Journal, the subpoena was issued to Cerebral Medical Group, the corporation it uses to contract with clinicians and provide healthcare services. The company is fully cooperating with the investigation by the Department of Justice, which includes turning over records pertaining to their prescribing of controlled substances such as Adderall and Xanax. This has been reported by FierceHealthcare which is citing (paywalled) Insider.

Last week, Cerebral announced that it would stop prescribing controlled substance prescriptions for new ADHD patients as of 9 May. However, they would continue prescribing controlled substances for other mental health conditions, according to a memo from their chief medical officer to their clinician network.

Cerebral’s Saturday statement in response to the subpoena maintains (from FierceHealthcare):

“To be clear, at this time, no regulatory or law enforcement authority has accused Cerebral of violating any law”

and

“Cerebral has dedicated significant time, energy, and resources to ensuring that its policies and procedures regarding the prescription of controlled substances and other medications both are medically appropriate and comply with all applicable state and federal law,” the statement also said. “As a responsible company, Cerebral is continuously improving its systems and practices. The foundation of this company is built on evidence-based, ethical, and compliant practices so that our patients can receive the highest quality of care and achieve the best clinical outcomes.”

The company has done well with the increased demand for mental health services provided via telehealth including remote evaluating and prescribing. In December, their $300 million Series C raise boosted their valuation past $4.8 billion.

Darkening this rosy picture is, as TTA noted last week, that a former VP of product and engineering, Matthew Truebe, has sued Cerebral for wrongful dismissal. According to him, the company put growth before patient safety, including overprescribing medications for ADHD. Other reports indicate that the DEA interviewed other former Cerebral nurse practitioners who felt pressured to prescribe ADHD medication after a short video call. The Verge

Cerebral has also gained notoriety for dodgy advertising claims pertaining to ADHD and other conditions. In January, advertising on TikTok and Instagram was pulled for claims that obesity is “five times more prevalent” among adults with ADHD, and stated that getting treatment for the mental health disorder could help patients “stop overeating.” These followed inquiries by Forbes and NBC News. Also pulled was their Facebook advertising around prescribing Type 2 diabetes medications, GLP-1 agonists, as a “wonder drug” for weight loss. 

Will this put a damper on the burgeoning area of telemental health and remote prescribing? Stay tuned. Also Becker’s.