More thoughts on the pending sale of the HIMSS Global Conference

August 2, 2023 | by

In the absence of a real announcement, speculation has been everywhere on the not-yet-done deal between HIMSS and Informa. As reported last week [TTA 27 July], HIMSS will be selling the annual Global Conference to Informa PLC, the largest B2B trade show operator on the Planet Earth. There has been no communication as of this writing from HIMSS to members or chapters, nor any announcements in HIMSS Media. The only corporate confirmation came through Informa PLC’s H1 financial report.

From LinkedIn, Tom Foley, who is the head of GenieMD telehealth and also hosts a podcast called The Virtual Shift via HealthcareNOWRadio and Answers Media Network (headed by Roberta Mullin and Carol Flagg, with whom this Editor worked some years back) had two posts on the pending ‘exclusivity to acquire’. In the later post, he addresses the fact that HIMSS has already been booked by most exhibitors as HIMSS, not as a ‘third-party conference’, and asks for market responses. The earlier post is about the ‘announcement’ and is largely the same as his comment on TTA’s original article. Other than these and spinoff posts from other commenters, Other than we Happy Few, LinkedIn posts have been on the QT and very hush-hush on the subject. Interesting as so many on LinkedIn are HIMSS, HLTH, ViVE and other health conference exhibitors and attendees.

Which leads this Editor to turn to the pointed, yeasty HIStalk where their Editors have dug around HIMSS and turned up some interesting things. This Editor encourages Readers to go to the source articles linked below for their analysis. I will add some points and commentary to each, especially on the Form 990s:

  • Monday Morning Update 7/31/23 speculates on HIMSS’ financials reported in their Form 990 as a 501 (c)(6) non-profit. Their last FY filing is for fiscal 2020. Since HIStalk does not, here is the link to that Form 990 2020 in Candid, a public database on non-profits (the former Guidestar and Foundation Center). On the organization page, click on the Form 990 tab for the first 2020 dropdown, which is for their FY starting 1 July 2019 to 30 June 2020. In 2020, HIMSS had total revenue of $28.7 million, a severe drop from 2019 where revenue was over $111.9 million (line 12). Their expenses were over $82.6 million for an operating loss of over $53.9 million. This represents the effects of the cancellation of the 2020 conference, which in 2019 ‘conferences and meetings’ reported $42.8 million in revenue and in 2020 only $1.9 million. Using this information and from Informa’s track record, HIStalk does some calculations on projected sales prices.
  • This Editor also examined the second 2020 dropdown, which is a six-month first-half report from 1 July to 31 December 2020. Revenues rose to $65.1 million with expenses of $42.6 million for an operating profit of $17.9 million. Conference revenue was a tiny $8.7 million but higher than the full year. HIMSS under a joint Health 2.0 banner had a Middle East-based virtual conference in November and HIMSS Media promoted some ‘HIMSS20’ content as digital sessions.
  • News 8/2/23 has reader comments on a HIMSS initiative for vendors called Accelerate, which has apparently been inactive for some time, executive salaries, and speculation on why the delay on the Form 990s.

What remains problematic is HIMSS’ future involvement, if any, in a conference that has been branded as HIMSS for over 50 years and has already been sold into as HIMSS’. How will Informa handle that? Invite HIMSS to sponsor it? Then again, what will be HIMSS’ future as a member-based society without a conference and with a subsidiary, HIMSS Media, that makes money off sponsorships both pre and post and content during the conference? It seems that both buyer and seller would benefit from a shared relationship.

This is a developing story and will be updated.

ViVE post-script: VC panel opines in midst of digital health’s new reality (depression?), and extra ViVE from an attendee

March 31, 2023 | by

Not everything at ViVE this week was fun and music. The organizers included a timely panel discussion with four VCs exploring the crash of digital health funding, enterprises, and whither the fall of the VCs’ favorite bank, Silicon Valley Bank (SVB). It was moderated by MedCityNews‘ editor-in-chief Arundhati Parmar, who published an interview with Zane Burke, late of Livongo and now CEO of Quantum Health, pointedly asking whether Livongo’s sale to Teladoc was a smart one given the troubling post-script [TTA 3 Feb]. The participants — Lee Shapiro, managing partner at 7wireVentures, Emily Melton, managing partner at Threshold Ventures, Richard Mulry, president and CEO of Northwell Holdings, and Ambar Bhattacharyya, managing partner of Maverick Ventures–evidently weren’t given a diet of softballs, either. 

Parmar started with a quote from a recent article in another publication: “The run on SVB was a textbook result of the myopia and egoism that has swallowed the venture capital industry whole.” This refers to the advice that many VCs gave their invested companies–get your money out now. That was the same invested money that the VCs insisted be in SVB, in accounts such as payables and receivables. At least these VCs seemed to realize that now, somewhat obliquely. Shapiro called it a ‘tragedy of the commons’, B-school terminology that refers to too many people using a common resource ruining it because no one is responsible for it. More to the point, he pointed to some in the VC ‘community’ advising their companies to move their money out of SVB, creating the self-fulfilling prophecy of a run on the bank killing it. Melton pointed to social media and everyone rushing to take care of themselves without reflecting on the consequences of their actions.

The next quote and chart that Parmar presented had to do with that Old Devil Profitability in companies that IPO’d. Only two of 17 are profitable and they’ll be a surprise–Privia Health (VBC models for providers), and Progyny (riding the fertility and benefits bubble). Rather abashedly, the panel admitted to valuation frothiness leading to over-valuation, and a new sobriety and realism leading to (drum roll) an emphasis on profitability. Bhattacharyya noted that VCs were pushing growth up until last year. Now, it’s value, ruled by the “Rule of 40” –combined growth rate and profit margin that exceeds 40%, even better cash flow positive, which are tough bars to achieve for all but the most well-positioned (and fortunate) companies. “That’s now the playbook. So we’ve all transitioned to that.” A defensive playbook, in Shapiro’s view. (A close to impossible one that may stifle innovation, in this Editor’s view, though bootstrapped companies have always earned her admiration.)

To that point, Melton, noted that now more than ever, banking institutions like SVB and similar institutions need to work with founders and VCs to bring innovations to market. “One of the things I’m very fearful of is that we get into an environment where people are risked off and retreat right when we need people to be actually leaning in more now than ever.” Larger banks will be happy to take the money–according to Kruze Consulting, an accounting firm that focuses on startups, about half of its clients that recently changed banks moved to JPMorgan Chase–but will a JPM take up ongoing startup risk? 

Does this begin to feel like Catch-22? (Apologies to Joseph Heller) Or health tech back around 2006-2010?  

One comment towards the end hit home for this Editor, having seen it way up close. Too many founders 1) have an idealistic view of the business they started and can’t separate from it, and 2) there’s a time to exit stage left and do something else with your life. One company that may pull it off in its changeover of CEOs is Oscar Health. I’d add that no CEO should be in that seat for more than 5 years, even in well-established, doing-well companies–much less coming close to dying in place as CEO after 25 years as happened recently at one large, publicly traded payer. Very important: every company should have a succession/coverage plan operative from Day 1, because Stuff Happens. The full article in MedCityNews here. Another shorter take, same panel, in Mobihealthnews.

The next chapter for SVB is that after a Federal bailout (and the realization that the SF Federal Reserve was wearing blinders when it came to watchdogging the bank’s health and solvency), it was mostly sold this past week to First Citizens Bank & Trust Company, a regional bank from Raleigh, North Carolina. SVB’s UK holdings were bought much earlier by HSBC. Also up for sale: Leerink Partners, an investment banker for health care and life sciences companies, that was rebranded as SVB Securities. Jeff Leerink, the founder who still heads it, is trying to get it back through a management buyout. WBUR

A more ViVEcious view of the meeting is over at HISTalk, The most substantive sessions this attendee heard were the opening Tuesday by Micky Tripathi, the National Coordinator for HIT at the Office of the National Coordinator (ONC) for Health Information Technology, and a presentation by Shiv Rao (Abridge) and Joon Lee (UPMC) on generative AI. The downside was that most of the Tuesday presentations came off like walking ads, the CHIME track was separate with some members-only, and that exhibitors got little value by staying over Wednesday as the crowd vanished to 20%. Money quote: “ViVE shoots for a vibe of youth, energy, innovation, and fun in its branding, themes, opening remarks, and evening entertainment. Sounds great until you remember that your ticket cost nearly $3,000.” Ouch! That stings! Well, nobody’s perfect. A successful 2023 means that ViVE will be landing in Los Angeles 25-28 February 2024. For many, it’s on to HIMSS23 in a couple of weeks.

Mid-week corral: CVS closes Signify Health; Bertolini to lead Oscar Health; ViVE highlights from Wellvana, AWS, Everly Health; Better Therapeutics lays off 35%, CoverMyMeds 815

March 30, 2023 | by

CVS closed its acquisition of Signify Health today. This $8 billion transaction ($30.50/share) adds a network of more than 10,000 clinicians nationally, including the 170-provider Medicare ACO group originally organized by Caravan Health. It was beneficial to the major shareholder group, New Mountain Capital and their investors, which owned 60% of Signify and have a tidily profitable exit. The CVS press release stated that Signify would continue to operate as a ‘payer-agnostic’ business within CVS Health. As earlier stated, Kyle Armbrester, Signify’s CEO, will continue to lead the business. Also Healthcare Dive (updated)

The bulldog engineer of the CVS-Aetna merger, Mark Bertolini, now tapped to head Oscar Health. Bertolini, the former chairman/CEO of Aetna (center), in the past three years since his unwilling (according to him) departure from the CVS board of directors [TTA 6 Feb 2020], has not been idle. From 2022, he was co-CEO of asset management firm Bridgewater Associates, and in the last 18 months, he has been a ‘strategic advisor’ to insurtech Oscar. Now he moves to the CEO office effective next Monday (3 April) and joins their board. Co-founder Mario Schlosser (left) steps back from CEO to president of technology, reporting to Bertolini, and joins the board. Joshua Kushner, a co-founder and major investor (Thrive Capital), as well as executive chairman of the board, is on the right in the leadership picture supplied with the Business Wire release.

Once a skeptic of insurtechs like Oscar, Bertolini by his statements is now a true believer. In a call with investors on Tuesday, he cited their technology that included digitization, individualization, and personal care. A major factor is that consumers are more comfortable since the pandemic with telehealth. Oscar was a pioneer in offering free telehealth with their plans.

Investors have pressed Oscar to get over to a profitable state by next year. Oscar has not been profitable since its 2012 founding by Schlosser, Kushner, and the long-departed Kevin Nazemi. In the time since Bertolini joined as an advisor, they have largely shed their Medicare Advantage business and concentrated on their individual market and ACA plans, which have seen huge growth along with overall record enrollment on the exchanges. But Oscar paused on new ACA signups in Florida and hauled back its glitchy and over-featured +Oscar tech platform [TTA 24 April 2021], which is now available unbundled. 2022 financials were substantially in the red with a loss of $610 million on revenue of $4 billion (Oscar release). However, the news of Bertolini moving to Oscar’s helm was met with a round of investor confidence. Share price moved from Monday’s close of $3.41 to $6.70 midday Tuesday and has largely stayed in the $6.00 range. Oscar release on Business Wire, FierceHealthcare, Healthcare Dive, YahooFinance

ViVE, the digital health spinoff of HLTH, concluded its annual meeting in Nashville this year with an announced attendance of 7,500, including 650 startups, 425 investors, and 330 hosted buyers. The energetic start on Sunday was sadly marked on Monday with the shooting at the local Covenant School where six were killed. Impressions from an anonymous attendee to HISTalk today were that most of the sessions were panels (which gets more people up front, but can be sunk by a dull moderator) versus individual speakers (who can either be fabulous or duds). Content could have been more inspiring and, as usual, many speakers are throwing out headlines for those in media to write about. This Editor has read relatively little so far but more will come this week. Highlights so far:

  • Nashville-based Wellvana Health, which provides technology for healthcare providers and health systems to implement value-based care, raised a stunning Series B of $84 million for a total raise of $140 million. Heritage Group and Valtruis co-led the investment with participation from Memorial Hermann Health System. The funding will be used to expand from its present 22 states and over 100,000 lives. Their current agreements are with multiple payers, Medicare Advantage, and three national contracts for the 2023 ACO REACH model. FierceHealthcare, Mobihealthnews
  • Everly Health is moving beyond its current home testing kits to integrate lab testing with telehealth. This will cover certain conditions, such as COVID-19, flu, sexually transmitted infections (STIs), urinary tract infections (UTIs), thyroid, weight management, and men’s and women’s health. Cost is out of pocket $59 and if insurance covers, $10-50. In its weight management program, Everly will offer GLP-1 drugs, a class of drugs that includes Ozempic and Wegovy, to qualified patients. FierceHealthcare
  • Amazon Web Services (AWS) announced 23 startups for their 2023 Healthcare Accelerator: Global Cohort for Workforce. This year’s accelerator cohort is finding solutions for the healthcare industry in three core areas for healthcare employees: retention, deployment, and training. More on the accelerator here and the list here, including 10 from the UK. FierceHealthcare
  • Health systems are demanding a quick ROI on their digital expenditures, according to a panel of CIOs and digital officers from Providence, Allegheny Health Network, Sutter Health, and Adventist Health. It should not be a surprise to anyone that they are looking for returns in the next year or so–yet are pushing forward with investments because of inflation and increased workforce pressures. FierceHealthcare

Another digital cognitive behavioral therapy trims. Better Therapeutics is reportedly releasing 35% of staff, or 15 people, in yet another cutback of another company in the formerly high, wide, and flying sector. Better specializes in prescription digital therapeutics to address cardiometabolic diseases such as diabetes. Better SPAC’d in 2021 [TTA 8 April 2021] hitting the market at $10.25 and currently trading on Nasdaq at about $0.60. According to their SEC filing, they are trying to stretch remaining cash to reach potential FDA marketing authorization and subsequent commercial launch of BT-001 in Type 2 diabetes. Better is in the same jam as competitors Pear Therapeutics and Akili Interactive, both paring back to the bone and looking for buyers, according to Mobihealthnews. Also LayoffsTracker. 

CoverMyMeds, a division of healthcare giant McKesson, is also laying off 815 by mid-April and closing its Scottsdale, Arizona office. The Arizona office has the company’s patient support center; workers there will be given the option to move to Columbus, Ohio. Other offices including Columbus (Franklinton) and Atlanta will be condensed and space leased out. CoverMyMeds automates the prior authorization process for medications for payers. What is unusual is that the company, bought for about $1 billion in 2017, accounted for $1.1 billion of McKesson’s $70.5 billion in 2022 revenue, and $136 million in McKesson profit–the most profitable of their four divisions. Columbus Dispatch, Layoffs.fyi

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?