News roundup: AliveCor’s latest FDA clearance plus antitrust vs. Apple, VRI on the market, Walgreens’ ‘tech-enabled future’ indefinite plus VillageMD status, monthly telehealth usage drops 12.5%

AliveCor disclosed its latest FDA 510(k) clearance for the KardiaMobile 6L, for calculation of patients’ QTc interval by the patient remotely or in the office with a physician or other clinician. QTc interval is, for those of us who aren’t cardiologists, is the total time from ventricular depolarization to complete repolarization. If too long (prolongation) or too short (congenital short) for the heart rate, it can indicate a dangerous ventricular arrhythmia or atrial or ventricular fibrillation. The manual measurement takes 30 seconds. AliveCor also has clearance on software (InstantQT) that measures QT intervals quickly and accurately to detect potentially dangerous QT prolongations in patients. Prolongations can be triggered by medications including anti-arrythmia drugs, anti-fungals, antibiotics, and some psychiatric drugs. AliveCor release. In other recent news, in June they acquired CardioLabs, a monitoring and cardiac diagnostic service provider based in Tennessee, to expand their clinical servies. Release.  

And in David Sues Goliath–Again–News, AliveCor also filed, in that quiet week right before Memorial Day, a Federal antitrust suit in the Northern District of California. This lawsuit is over Apple’s exclusion of other heartrate analysis providers from the Apple Watch, harming AliveCor and consumers, and seeks damages plus an injunction to cease the exclusion. Release  This is in addition to their US International Trade Commission (ITC) complaint on infringement of AliveCor patents held for heart monitoring on the Apple Watch 4, 5, and 6. That seeks to bar importation of Apple Watches [TTA 29 Apr]. No update on that so far. 

‘Insider’ report: VRI on the market. PERS Insider, our newly discovered source for news about the emergency response device market, reported on 22 June that VRI, a PERS and remote patient monitoring provider, is up for sale. It has been majority-owned by Pamlico Capital, a private equity company, since 2014. VRI does not sell direct to consumer but concentrates on health insurance, government programs, and other B2B through its dealer network. No reasons for sale given, but with all things telehealth and most things remote healthtech fetching hefty sums post-pandemic, perhaps Pamlico senses a fortuitous time to test the waters for an exit. Article. (Subscribe here to their weekly free letter)

Walgreens Boots Alliance’s new CEO promises a ‘tech-enabled’ future for the chain, sans details. The incoming CEO, Rosalind Brewer, fresh from her COO position at Starbucks, on WBA’s Q3 earnings call mentioned a buildout of a “previously communicated tech-enabled healthcare initiative” but no further information, as still reviewing the company. Stefano Pessina has retired from the long-held CEO position, but retains the executive chair title in addition to being WBA’s largest individual shareholder. Forbes’ breathless report. More to the profit point, the latest on Walgreens and VillageMD’s full-service Village Medical practices at Walgreens locations: 29 new locations in Houston, Austin and El Paso, Texas this year, staying on track for 600 primary care practices in more than 30 markets over next four years. Business Wire

National telehealth usage dips to 4.9% of US claims in April, a 12.5% drop from March. Analyzing regional and national insurance claims data, non-profit health analytics company FAIR Health in its monthly report tracks telehealth receding as patients return to in-person care. Telehealth is now dominated by mental health procedure codes, accounting for 58.65% of diagnoses, with all other conditions at 3% or lower. Regionally, the Northeast is even higher at 64.2% and the Midwest above 69%. Monthly National report, Monthly Regional Tracker page

Telehealth usage going flat, off by 1/3 and declining: Trilliant Health study

Trilliant Health, a healthcare data analytics and advisory shop based in Tennessee, has run some projections on the US healthcare market and telehealth, and they’re not as bright as many of us–and a lot of investors plus Mr. Market–have believed. It opens up on page 4 of the electronic document (also available in PDF) with this ‘downer’–that the largest sector of the largest global economy is overbuilt and unsustainable. Hospitals and health systems have operated for decades that basic economic factors–demand, supply, and yield–don’t apply, and there are more companies competing with them for the consumer healthcare dollar than they realize–with more proliferating every day. 

Sledding through their 160-page report, we turn to our sweet spot, telehealth, and Trilliant is not delivering cheerful news (pages 32-43). 

  • Unsurprisingly, demand for telehealth is tapering off. Based on claims data for face-to-face video visits, excluding Medicare fee-for-service (Original Medicare) and self-pay visits, they peaked above 12 million in April 2020 and, save for a bump up in December 2020-January 2021, steadily declined to about 9 million by March 2021.
  • Teladoc, the leading provider, is projecting that 2021 volume will only represent 4 percent of the US population–a lot more than before, but not growing as it did in 2020.
  • Telehealth’s growth was astronomical on both coasts–California, Massachusetts, Vermont, Oregon–and Hawaii–but relatively lower in middle and Southern America in places like Wyoming, North Dakota, Mississippi, and Iowa. Telehealth usage is declining sharply in that region as well but across the board in all states including California. In fact, Phoenix and Dallas had higher telehealth utilization pre-pandemic than during it.
  • Mental health drove telehealth growth during the pandemic, representing 35 percent of claims, almost four times the next group of categories at 8 percent. The largest group of diagnoses were for anxiety and depression among women 20-49. With the reopening of the US economy and children heading back to school, will this sustain or decline?
  • Women 30-39 are the largest users of telehealth–pre, during, and post-pandemic

Telehealth is not only proliferating, it is going up against now-open urgent care, retail clinics from Walgreens, Walmart, and CVS, plus tech-enabled providers that blend virtual care with home care, such as Amazon with a full rollout of Amazon Care and other employers. The cost of care is also a negative driver. FierceHealthcare analyzes other parts of the report impacting practices, health systems, and hospitals.

 

Disruption or giveaway: Amazon Care signs on employers, but who? Amazon Pharmacy’s 6 months of meds for $6. (updated)

Is this disruption, a giveaway, or blue smoke requiring IFR? An Amazon Care VP, Babak Parviz, said at the Wall Street Journal’s Tech Health virtual event that all is well with their rollout of virtual primary care (VPC). Washington state is first, with VPC now available nationally to all Amazon employees as well as companies. However, Mr. Parviz did not disclose the signed-up companies, nor a timetable for when in-person Amazon Care practices will be expanding to Washington, DC, Baltimore, and other cities in the coming months.

Mr. Parviz also provided some details of what Amazon Care would ultimately look like:

  • Clinician chat/video connected within 60 seconds
  • If an in-person visit is required, a mobile clinician arrives within 60 minutes, who can perform some diagnostic tests, such as for strep throat, provide vaccinations and draw blood for lab work. For other diagnoses, that clinician is equipped with a kit with devices to monitor vital signs which are live-streamed to remote clinicians.
  • Medication delivery within 120 minutes

FierceHealthcare

The timing of the Amazon Care rollout has not changed since our coverage of their announcement in March. This Editor noted in that article that Credit Suisse in their overview was underwhelmed by Amazon Care as well as other efforts in the complex and crowded healthcare space. Amazon Care also doesn’t integrate with payers. It’s payment upfront, then the patient files a claim with their insurer.

Existing players are already established in large chunks of what Amazon wants to own.

  • Both Amwell’s Ido Schoenberg [TTA 2 April] and Teladoc’s Jason Gorevic (FierceHealthcare 12 May) have opined that they are way ahead of Amazon both in corporate affiliations and comprehensive solutions. Examples: Amwell’s recently announced upgrade of their clinician platform and adding platforms for in-home hospital-grade care [TTA 29 Apr], Teladoc’s moves into mental health with myStrength [TTA 14 May].
  • Even Walmart is getting into telehealth with their purchase of a small player, MeMD [TTA 8 May].
  • CVS has their MinuteClinics affiliated with leading local health systems, and Walgreens is building out 500 free-standing VillageMD locations [TTA 4 Dec 20]. CVS and Walgreens are also fully integrated with payers and pharmacy benefit management plans (PBM).

Another loss leader is pharmacy. Amazon is also offering to Prime members a pharmacy prescription savings benefit: six-month supplies of select medications for $6. The conditions are that members must pay out-of-pocket (no insurance), they must have the six-month prescription from their provider, and the medication must be both available and eligible on Amazon Pharmacy. Medications included are for high blood pressure, diabetes, and more. The timing is interesting as Walmart also announced a few days earlier a similar program for Walmart+ members. Mobihealthnews.

crystal-ballThis Editor’s opinion is that Amazon’s business plans for both entities and in healthcare are really about accumulating data, not user revenue, and are certainly not altruistic no matter what they say. Amazon will accumulate and own national healthcare data on Amazon Care and Pharmacy users far more valuable than whatever is spent on providing care and services. Amazon will not only use it internally for cross-selling, but can monetize the data to pharmaceutical companies, payers, developers, and other commercial third parties in and ex-US. Shouldn’t privacy advocates be concerned, as this isn’t being disclosed? 

Walmart Health moves into the hot telehealth area with MeMD buy

Retail giant Walmart’s health arm, Walmart Health, has agreed to purchase privately held telehealth provider MeMD. MeMD provides telehealth services in primary care, urgent care, women’s/men’s health, and mental health services to both individuals and organizations for their employees. Neither purchase price nor executive leadership transitions were disclosed. The transaction, which requires regulatory approval, is expected to close in the next few months.

The relatively low profile MeMD was founded in 2010 by ER physician and entrepreneur John Shufeldt, MD. The company is headquartered in Scottsdale, Arizona, and offers national coverage for its five million members.

A big move that indicates a strategic wobbliness? Walmart Health’s strategy has been a roller coaster over the past few years. Aggressively starting out of the gate in 2018 with high-profile exec Sean Slovenski leading and plans to open up 1,000 clinics, they retrenched in 2020 with his departure and slowed down the opening of Walmart Health locations. Virtual visits, which are merchandisable in-store and online, signal a different direction that may be easier to scale than brick-and-mortar locations, and have proven their market. Meanwhile, back at the stores, last month Walmart announced a partnership with Ro to put its trendy Roman men’s sexual health and vitamin product lines into 4,600+ Walmart stores starting 1 May. RetailBrew 

Looming in the background, of course, is CVS with their MinuteClinics, Walgreens with 500 free-standing VillageMD locations [TTA 4 Dec 20], and Amazon rolling out Amazon Care nationally. Walmart’s employees have used Doctor on Demand’s services, with the company dropping the visit cost to $4 during the pandemic. With the Grand Rounds merger [TTA 18 Mar], this may have been another reason for Walmart to bring in-house a telehealth provider. Who may be feeling the most heat from Walmart’s and Amazon’s moves? Teladoc and Amwell. Walmart release, Becker’s Hospital Review, Engadget

The Theranos Story, ch. 66: Walgreens and Safeway aren’t investors, they’re business partners!

The difference is not hair-splitting in the defense effort to have charges tossed. In Federal District Court on Tuesday (6 October) in San Jose, Elizabeth Holmes’ defense made the case to Judge Edward Davila on dismissing some of the prosecution’s charges against her. As petitioned in late August, the defense maintains that two of the entities, Walgreens Boots and Safeway (a Western regional supermarket chain), were unfairly classified as investors versus ‘business partners’. As investors, the prosecution could charge Holmes with fraud crimes with a longer statute of limitations. If they were to be classified as business partners and ‘transactions’, while there were crimes committed, the statute of limitations has expired.

The prosecution’s rebuttal is that Walgreens and Safeway could be considered as both investors and partners. The defense response was that the government took too much time to file the charges and failed to get the proper consent, which may be the hair that splits the ability of the prosecution to use these charges.

Let’s look back at both companies’ involvement with Theranos

  • Walgreens reportedly invested over $140 million in Theranos. This consisted of direct funding (a $40 million loan convertible into equity), and an “innovation fund’ designed to fund the rollout of Theranos Wellness Centers in Walgreens US locations starting in 2013. Walgreens filed suit against Theranos in November 2016 to recoup that investment based on breach of contract, after civil lawsuits were filed against them jointly, halted development, and settled for $25 to 30 million in late July 2017 when Theranos assets were dwindling to barely breathing status [TTA 3 Aug 17]. More details on their Partnership from Hell are recapped here from the 2016 lawsuit.
  • Safeway’s involvement as the exclusive supermarket partner was planned to be even more extensive. Their 2012 deal was $350 million for building 800 clinic locations in Safeway stores. This was dropped in November 2015 [TTA 20 Nov 15], around the same time as Walgreens halted the expansion of the Theranos Centers. According to reports at the time, Safeway had already built out the 800 locations, later repurposing them for flu shots and similar. Direct investment was estimated at $10 million (WSJ). Safeway settled with Theranos for $30 million in June 2017. 

The publicly available history shows that both funded Theranos directly in addition to being business partners. Both took substantial additional risk investments from building out facilities to showcase Theranos’ services for their customers. Both settled civilly for amounts far below the fair recoupment of their investment.

While this sounds like legal nitpicking, the defense strategy, in this Editor’s layperson’s calculation, is to erode the number of charges against Holmes and their seriousness so that her inevitable sentence becomes lighter. Another move in this vein is the mental defect defense [TTA 18 Sept] alleging Holmes’ psychic inability to discern right from wrong in her business dealings. Start with something over the top like ‘insanity defense lite’, and then chip away at the rest of the charges. Fox Business, Mercury News

News roundup: Amwell’s socko IPO raises $742M, Walmart and the Clinic Wars, Taskforce on Telehealth Policy report released, Israel’s Essence releases fall detection sensor system

Telehealth bullishness shows no sign of diminishing. On Wednesday, Amwell‘s (the former American Well) IPO stunned markets by not only debuting at $18 per share (a price only large investors received) but also opening at $25.51 on the NYSE (AMWL) and floating more than 41 million shares for a raise of $742 million. If underwriters exercise all their options, the raise could exceed $850 million. Only last week, the SEC filing projected a sale of 35 million shares at $14 to $16 a share. Back in August, the raise was estimated to be only about $100 million. (One could consider this a prime example of ‘sandbagging’.) Friday closed at $23.02 in a week where Mr. Market had a lot of IPOs and hammered traditional tech stocks. As reported earlier, Amwell is backed by Google via a private placement and also Teva Pharmaceutical.

Smaller and lower profile than Teladoc, Amwell provides services for 55 health plans, 36,000 employers, and in 150 of the nation’s largest health systems, with an estimated 80 million covered lives. Like Teladoc, Amwell has yet to be profitable, with 2019 losses of $88 million and $52 million in 2018. FierceHealthcare, Marketwatch. Meanwhile, the Teladoc acquisition of Livongo has gone quiet, as is usual.

The Clinic Wars continue. Another front in the consumer health wars (and repurposing retail) is more, bigger, better clinics onsite. CVS drew first blood early this year with the expansion of MinuteClinics into fuller-service HealthHUBs, with a goal of 1,500 by end of 2021. Walgreens flanked them with 500 to 700 Village Medical full-service offices [TTA 9 July]. In this context, the expansion of Walmart Health locations looks limp, with their goal of 22 locations in Georgia, Florida, Arkansas, and Chicago metro by end of 2021. Another concern is with scale and modularizing the Walmart Health locations’ construction via constructor BLOX,  One wonders with recently reported layoffs of 1,000 at corporate and the replacement of industry innovation veteran Sean Slovenski with Lori Flees, whether there’s some radical rethinking of their clinic business investment as not mass but targeted to underserved areas that avoid CVS and Walgreens. FierceHealthcare, Walmart blog  CVS also announced the doubling of their drive-thru COVID-19 testing sites to 4,000 by mid-October. FierceHealthcare

More Weekend Reading. Here in the US, the Taskforce on Telehealth Policy, a joint effort between the National Committee for Quality Assurance (NCQA), the Alliance for Connected Careand the American Telemedicine Association, has issued a report that focuses on maintaining quality care, fitting telehealth into value-based care models, enforcing HIPAA for patient privacy, and ensuring widespread and equitable access to broadband and technology. The involvement of the NCQA is a major step forward in advancing policy in this area. Press release/summary, Report page, Powerpoint slides, and webinar recording  Hat tip to Gina Cella for the ATA.

New entrant in passive fall detection. Israel’s Essence SmartCare is launching MDsense, a multi-dimensional fall detection solution for the residential market. It is sensor-based, using wall mounted intelligent sensors rather than wearable devices that statistically are not worn about half of the time and have their own well-documented performance concerns. The release also mentions it can differentiate between multiple persons and pets, which this veteran of QuietCare would like to see. MDSense is part of Essence’s Care@Home system which uses AI and machine learning to continuously collect actionable data to respond to fall events and manage care better towards improved outcomes.

The Theranos Story, ch. 61: Elizabeth Holmes as legal deadbeat

Did her lawyers expect otherwise? This weekend’s news of Elizabeth Holmes’ legal team at Cooley LLP withdrawing their representation services due to non-payment should not have caused much surprise. Cooley’s attorney team petitioned the court to withdraw from the case, stating that “Ms. Holmes has not paid Cooley for any of its work as her counsel of record in this action for more than a year.”

Cooley was representing Ms. Holmes in a class-action civil suit in Phoenix brought against her, former Theranos president Sunny Balwani, and Walgreens, charging fraud and medical battery. (When they withdraw, will she seek public representation based on poverty?)

Perhaps Ms. Holmes is the one who’s setting priorities, as the civil suit would be for monetary damages, and no money means there will be none for the plaintiffs to collect. The DOJ charges are a different story. She is on the hook for nine counts of wire fraud and two counts of conspiracy related to her actions at Theranos. Conviction on these could send her to Club Fed for 20 years plus a fine of $250,000 plus restitution for each charge. [TTA 16 June]

Last Wednesday, both Ms. Holmes and lawyers for her and Mr. Balwani were in Federal court in San Jose on the wire fraud and conspiracy charges, demanding that the government release documents from the Food and Drug Administration (FDA) and the Centers for Medicare and Medicaid Services (CMS) that allegedly would clear them. After an hour, Judge Davila set 4 November as the next hearing date. 

Defending oneself does not come cheap, but after your company’s value crashes to $0 from $9bn, one might be looking for change in your Roche-Bobois couch and wondering if your little black Silicon Valley-entrepreneur formal pantsuit/white shirt ensembles will last through the trial. CNBC 2 Oct, CNBC 4 OctFox Business, Business Insider

DNA-based personalized food choices to prevent Type 2 diabetes onset in test with Imperial College, London and Waitrose (UK)

Can DNA analysis and an app help prevent Type 2 diabetes onset in the pre-diabetic? The problem of preventing Type 2 diabetes in people determined to be pre-diabetic is multi-factorial, but one approach is diet to control 1) obesity and 2) improve glucose regulation. DnaNudge, which has developed a DNA analysis from a cheek swab, is being used in a clinical trial conducted by Imperial College London’s NIHR (National Institute for Health Research) Imperial Clinical Research Facility to determine whether DnaNudge’s scanner and app, used while shopping at Waitrose & Partners stores, can prevent the development of Type 2 diabetes in prone individuals.

To this Editor’s knowledge, this is the first time that personalized DNA testing and an app have been used in conjunction with retail food choices.

[grow_thumb image=”https://telecareaware.com/wp-content/uploads/2018/10/MyDNA-Report-Sample.png” thumb_width=”125″ /][grow_thumb image=”https://telecareaware.com/wp-content/uploads/2018/10/product-feedback-recommended.png” thumb_width=”150″ /]How it works is that the individual’s DNA is analyzed first and then used to match what food choices are best for that person via a simple thumbs up or down indicator on the app. 

  • Using a sterile cotton swab, users sweep the inside of their cheek to capture a sample of saliva.
  • The swab is inserted in a processing cartridge plugged into the DnaNudgeBox, a small instant DNA analyzer
  • The analysis of specific genetic traits related to nutrition is completed in minutes and uploaded to the DnaNudge app on the smartphone via a wearable ‘capsule’, the DnaBand (left #1)
  • The wearer then can scan individual food items as that person shops, receiving the ‘thumbs up’ for good choices and ‘thumbs down’ for ones not so good, with alternatives suggested for the latter (left #2)

The 12-month clinical trial was launched last week, with Waitrose contacting customers in the North London area with information on how to take part. Professor Nick Oliver from Imperial College London, who is leading the clinical study at the NIHR Imperial Clinical Research Facility, stated in the release: “This key trial with DnaNudge allows us – for the very first time – to study in detail the outcomes of DNA-personalised food choices for pre-diabetic individuals, and to explore whether this type of accessible technology can deliver a proactive and sustainable solution to managing nutrition, and preventing the development of Type 2 diabetes in people at highest risk of this long-term condition.” It is not clear from the release whether there’s further information provided on the food choices or other education.

DnaNudge was co-founded by Regius Professor Professor of Engineering at Imperial College London Chris Toumazou and published geneticist and leukemia researcher Dr. Maria Karvela. Waitrose has staked out a healthy food position with the introduction of 100 Healthy Eating Specialists, shop floor specialists who direct customers who ask towards healthier choices. This tie-in is interesting, and if it works, this Editor can see it in use in a CVS-Aetna test or Walgreens, as both have edged into food retailing in many locations, albeit with not many apparent healthy choices, unless one considers Milky Ways fine food.

The Theranos Story, ch. 55: ‘Bad Blood’s’ altered reality on ‘Mad Money’; it was all Bad Blitzscaling

[grow_thumb image=”https://telecareaware.com/wp-content/uploads/2018/07/Rock-1-crop-2.jpg” thumb_width=”150″ /]

She lied and the lies got bigger and bigger and eventually the lies got so big relative to reality that it became a pretty massive fraud. 

The hyperbolic Jim Cramer of CNBC’s ‘Mad Money’ settled down for a chat with John Carreyrou, the author of ‘Bad Blood’, to dissect what Mr. Cramer touted as ‘the best business book since Phil Knight’s book about starting Nike, ‘Shoe Dog”. Mr. Carreyrou outlines Elizabeth Holmes and Sunny Balwani went ‘live’ with fingerstick tests far too prematurely, burned through money, lied to the board, and (schadenfreude alert!) lied to attack dog David Boies, her attorney. There was also a real lack of ‘due diligence’–real diligence–on the part of companies like Safeway and Walgreens. A reveal coming out of this interview is that Walgreens hired a lab consultant, Kevin Hunter, as early as 2010, who ‘smelled a rat’ even then–and Walgreens executives ignored him, frightened that Ms. Holmes would go to CVS. Wrapping Ms. Inexplicable Me up, Mr. Carreyrou attributes her mindset to ‘noble cause corruption’; she really did believe that her blood testing machine would do good because the outcome would be good for society. Thus every corner cut was justified….which explains a lot, but really excuses nothing. The ten-minute video is over at ValueWalk (the transcript is only partial).

LinkedIn’s hyperbolic co-founder Reid Hoffman, like him or not, does have a way with words, and this article in Fast Company is a decent discussion of a new term that he actually coined, ‘blitzscaling’ which is pursuing rapid growth by prioritizing speed over efficiency in the face of uncertainty. It’s quite a lure he sets out to his classes at Stanford, that the only way to have a successful business in winner-take-all (or most) markets is to do this, and if you do it right you’ll have the next Google, completely ignoring the fact that 99.99 percent of businesses don’t need to change the world, just to get to breakeven, get to profitability, and endure (or get bought out). He springboards off this to where Ms. Holmes and Mr. Balwani Went All Wrong. The answer? Product failure=Mortal Risk–to the patient. They needed to meet a Walgreens deadline thus went out prematurely with their nanotainer testing knowing it did not work. The best quote in the article?

There’s a big difference between being embarrassed and being indicted.

The Theranos Story, ch. 50: DOJ indicts Holmes, Balwani for fraud (updated)

[grow_thumb image=”https://telecareaware.com/wp-content/uploads/2016/11/jacobs-well-texas-woe1.jpg” thumb_width=”150″ /]The other shoe drops into this bottomless well. If Elizabeth Holmes and Sunny Balwani thought that the March SEC action [TTA 15 Mar] would be it, they were misinformed. Today, the Department of Justice, US Attorney’s Office for the Northern District of California, charged them with two counts of conspiracy to commit wire fraud and nine counts of wire fraud. According to CNBC, they were arraigned in US District Court in San Jose Friday morning. Both were released on $500,000 bond each and ordered to surrender their passports. Holmes’ parents appeared with her in court.

If found guilty, both Ms. Holmes and Mr. Balwani face up to 20 years in prison, plus $250,000 in fines and clawing back of investor funds. 

“Wire fraud” in US law is fraud that is enabled and takes place over phone lines or involves electronic communications. By appearing online, making phone calls, emailing materials such as marketing materials, statements to the media, financial statements, models, and other information, Ms. Holmes and Mr. Balwani defrauded potential investors. Patients and doctors were defrauded by ads and other types of solicitations to use Theranos’ blood testing services at Walgreens, despite the fact that they knew the test results were unreliable.

Both Ms. Holmes and Mr. Balwani will have plenty of time to explain their sincere belief that their test devices and methods would be validated with time…but they had to, in Silicon Valley parlance, fake it till they made it. Indictments of this type take about two years to conclude, especially if they are big (as a formerly $9 bn valued company is) and tangled. Ms. Holmes will undoubtedly release statements on how she is being martyred like Saint Joan, how this doesn’t happen to men in Silicon Valley, and that they are allowed to fail but she can’t. Perhaps she was under the spell of the 19 years-her-senior Svengali Balwani. (Minus the Jobsian black turtlenecks, one anticipates her next choice of wardrobe. Sackcloth tied with a rope? Chain mail?)

Expect the doors to shut soon. Fortress Investment Group, which loaned Theranos $65 million (of a reported $100 million) in December 2017, was reportedly coming for the assets (as they are wont to do) by the end of July, according to the Wall Street Journal and other sources. 

Ms. Holmes is–finally–removed as CEO. Theranos announced that David Taylor, the company’s general counsel, has been appointed CEO as well as general counsel, while Ms. Holmes will remain as founder and board chair. None of this is reflected on their website. In fact, Mr. Taylor is nowhere to be found on the website’s leadership page. 

The estimable John Carreyrou, who broke the story in the WSJ and is the author of Bad Blood [TTA 13 June], on The Street’s Technically Speaking podcast at 06:00 shared this insight on how Theranos got away with bad tests. While both FDA and CMS highly regulate lab testing and the machines that perform them, neither actively police “lab-developed tests, which refer to tests fashioned with their own methods and devices” for blood testing. Basically, according to Mr. Carreyrou, Holmes and Balwani, our Bonnie and Clyde, “drove a truck right thru that loophole and took advantage of it.” Far beyond B&C, $1 bn of investors’ money is the Federal Reserve of banks.

On the indictment: WSJ, CNBC. The Northern District release on the indictment is here. Another essay by Mr. Carreyrou published 18 May is available to those who can get past the paywall. Hat tip to Bill Oravecz of WTO Consultants.

Updated: For additional coverage of what’s next in the legal vein for Holmes and Balwani, see the NY Times on potential defense strategies for the duo, including that they truly believed what they were saying to investors was true and they were bamboozled like everyone else, ‘materiality’–that investors didn’t use the statements as a basis for investing, and ‘prove it’. Will they take a plea deal? Stay tuned. 

The Theranos Story, ch. 47: the post-mortem, blaming–and ghost chasing–begin

[grow_thumb image=”https://telecareaware.com/wp-content/uploads/2016/04/Yak_52__G-CBSS_FLAT_SPIN.jpg” thumb_width=”150″ /]Now that Elizabeth Holmes is the former CEO of Theranos, many of the publications who huzzahed their ‘revolutionary’ blood testing system three short years ago are publishing their post-mortem analyses, often of how the wool was pulled over their eyes.

Jenny Gold from Kaiser Health News and NPR has a short ‘alarming’ tale of her press visit in November 2014 to a Theranos testing site at a Palo Alto Walgreens for an NPR feature. At Walgreens, she spoke with patients on the record and was invited to witness their blood draw–not the finger prick Theranos (and Walgreens) promoted, but a standard volume blood draw. After multiple and telling upset reactions from her company press handlers, including demanding Ms. Gold erase her audio recording (!) and accusing her of harassment, alarms went off at the Walgreens store for a non-existent fire. She was baited with an interview with Ms. Holmes–which never happened–and wound up with a corporate attorney instead who made unsupported statements. Ms. Gold canceled her story, which if she tracked the bad smell would have been likely the first press shot across the bow. What this post-mortem tells us is the extent of the coverup and the sheer (and unethical) fawning flackery that appeared in places like the New Yorker, Forbes, Inc., and Fortune.  NPR

The FT further digs into our gullibility, our wanting to believe that someone in a black turtleneck could put the Big Labs out of business,  how we in the press hungered for a new and female Steve Jobs to shake up the status quo. Andrew Hill: “Trouble often hits, though, when leaders stick to their story after it has diverged from reality, swerving into embellishment, mythmaking and, in Ms Holmes’s case, apparently fraud.”

But we were no smarter than those who gave Ms. Holmes and Mr. Ramesh ‘Sunny’ Balwani $700 million in Mad Money. (more…)

Rounding up what’s news: LindaCare, TytoCare funding; Medicare telehealth parity, Norway’s big cyberhack, Virta reversing diabetes, DARPA’s 60th birthday

[grow_thumb image=”https://telecareaware.com/wp-content/uploads/2017/12/Lasso.jpg” thumb_width=”100″ /]Your Editor’s been away and then largely out of pocket over the past two weeks. Here’s our roundup/catchup beyond the bombshells:

In remote patient monitoring for chronic disease, Philips, PMV, and other investors invested €7 million ($8.6 million) in Belgium’s/Hartford CT’s LindaCare. The Series B funding will accelerate its US expansion of OnePulse for remote monitoring of chronic heart failure and cardiac arrhythmia patients with Cardiac Implanted Electronic Devices (CIED). It is in use in major European hospitals and in US trials, though there is no mention in the release or on their website on CE Marking or FDA clearance/clinical trials. Previously from its 2013 founding, it had €1.6 million in funding. Also Mobihealthnews.

TytoCare, a remote monitoring telehealth/video consult platform which integrates peripherals for a virtual physical exam, raised $25 million in a Series C round led by large Chinese insurer Ping An via their Global Voyager Fund plus Walgreens, Fosun Group, OrbiMed, LionBird, and Cambia Health Solutions. Release. Their total raise is $45.6 million since 2012 (Crunchbase). Their most current partnership is with Long Island-based Allied Physicians Group which is featuring at-home telehealth visits at its pediatric practice in Plainview.

More favorable Medicare reimbursement for telehealth is the subject of four US Congressional bills. The one furthest along is the ‘Creating High-Quality Results and Outcomes Necessary to Improve Chronic Care Act of 2017’ (S.870), which aims to improve at-home care, increases Medicare Advantage flexibility, gives ACOs more options and expands telehealth capabilities for stroke and dialysis patients. It passed the Senate in September and now goes to the House Subcommittee on Health of the Committee on Energy and Commerce. The effect of all four is on Medicare payment parity with in-office visits, which does not currently exist and is not affected by the various state parity bills on insurance for those below 65. American Well touts a 10-fold growth in revenue, but the likelihood of any of these four bills being signed into law is small, particularly with a pending report from the Medicare Payment Advisory Commission. Becker’s Hospital Review

Norway released at end of January news on an “advanced and persistent” 8 January cyberattack on Health South East RHF. This has both a health breach and military twist.

(more…)

CVS-Aetna: It’s not integrated healthcare, it’s experiential retail!

[grow_thumb image=”https://telecareaware.com/wp-content/uploads/2017/12/canary-in-the-coal-mine.jpgw595.jpeg” thumb_width=”150″ /]This very interesting take on financial analysis site Seeking Alpha draws another insight from the CVS-Aetna merger–it’s actually part of the rising commercial real estate trend of experiential retail. Here’s the logic. CVS MinuteClinics increase traffic to CVS stores. If they are part of a shopping center, that means those patients might grab a meal, coffee, or shop. Reportedly CVS and Aetna will add nurses and nutritionists, which will further increase attraction, stickiness, and traffic. 

CVS and Walgreens‘ clinics have started, in the new model, to become significant, even anchor, tenants of shopping centers, filling up the empty storefronts left by traditional retail. Doctors’ offices, urgent cares like CityMD, and hospital-run outpatient clinics are filling retail spaces and anchoring new developments. Another part of the experience–fitness clubs, which are also converting vacant office spaces–a line extension increasingly popular with health systems. CVS also bought out department store Target’s drugstores and in-store clinics, which is another model (fill a prescription, buy socks or a TV). Another line extension is partnerships with urgent cares or outpatient clinics, not much of a stretch since CVS already has affiliations with health systems in many areas.

Add telemedicine (Aetna’s partnership with Teladoc) to the above: both MinuteClinics and in-home become 24/7 operations. Not mentioned here is that Aetna can add in-person or kiosk services in CVS stores to file claims, answer questions, or sell coverage.

As this model becomes clearer, big supermarket operators like Ahold (Stop & Shop, Giant), Wegmans, Publix, Shop Rite and others, which have pharmacies in most locations, may ally with or merge with insurers or health systems–or partner with CVS-Aetna. There is also the 9,000 lb. elephant called Walmart, which is 2/3 of the way to an experiential model including nutrition, diet, and fitness (ask any WalMartian). Further insights on how this merger is forcing retailers to adapt are in Drug Store News.

CVS-Aetna could very well be a major mover in experiential retail, which may save all those strip malls. But this article points out, as this Editor has already, that the full shape of what could be experiential healthcare will take years to work and shake out, assuming the merger is approved. Our prior coverage is here.

The ‘health kiosk’ idea is alive and kicking from New York to France

[grow_thumb image=”https://telecareaware.com/wp-content/uploads/2017/12/Kiosk1.jpg” thumb_width=”200″ /][Photo: NYP] The $40 million+ failure of HealthSpot Station last year [TTA 14 June 16] might have signaled the demise of the health kiosk (telemedicine + multiple vital measurement devices) concept. Basic stations with consumer engagement/mobile tie-ins such as Higi have been gaining traction at retail locations [TTA 30 Mar] such as RiteAid (which bought the assets and IP of HealthSpot) and Publix supermarkets. CVS MinuteClinics in northeast Ohio and Florida have allied over the past two years with Cleveland Clinic and American Well to integrate records and telemedicine. But the kiosk model is gaining a second life with these recent iterations.

  • NewYork-Presbyterian, Walgreens (Duane Reade) and American Well: Kiosks located in private rooms at select Duane Reade drugstores (left above) connect to NYP OnDemand using American Well telemedicine and Weill Cornell Medicine emergency medicine physicians. In addition to the live consult, the patient can send select vital signs information to the doctor using a forehead thermometer, a blood pressure cuff, a pulse oximeter, and a dermascope for a high-resolution view of skin conditions. Pediatric emergency physicians are available through NYP OnDemand weekdays between 6 – 9pm. Prescriptions are e-prescribed to the patient’s preferred pharmacy. The first kiosk opened this week at 40 Wall Street with additional locations to open in 2018. NYP OnDemand telemedicine consults are also available to NY area residents through the Walgreens website. American Well release, Healthcare IT News, MedCityNews
  • H4D (Health for Development): French doctor Franck Baudino wanted to reach those who live in what the French term ‘health deserts’ in their rural areas. Over the past nine years, he developed a booth-type kiosk connecting to a live doctor and with vitals instrumentation. The Consult Station is fully equipped with a wide range of vitals instrumentation, including vision, audio, eye, and blood glucose, functioning almost as a remote doctor’s office. In France, to gain access, all users need do is pop in their carte vitale. Reportedly the kiosks can treat 90 percent of common illnesses. Prescriptions are printed out in the booth. Consult Stations are now in France, Italy, Portugal, Philippines, Canada, Belgium, UAE and were recently cleared by FDA as a Class II device. ZDNet  

The Theranos Story, ch. 34: It’s a conspiracy! It’s a vendetta!

[grow_thumb image=”https://telecareaware.com/wp-content/uploads/2016/11/jacobs-well-texas-woe1.jpg” thumb_width=”150″ /]Updated Well, that is what one of her major investors says, and he would know! Just when we thought that a week would go by with not a peep about Theranos, we get three. Peeps, that is.

First, the Conspiracy Theory. This is being propounded by early Theranos investor Tim Draper of Silicon Valley VC Draper Fisher Jurvetson. It was all John Carreyrou’s ‘strange vendetta’ against her, to wit: “Elizabeth is the victim of a witch hunt.” The Wall Street Journal reporter set off a cascade of press coverage that compelled, nay, forced Federal regulators (FDA, CMS, SEC, DOJ) and state counterparts to go after Theranos and CEO Elizabeth Holmes. Mr Draper bluntly accused Mr Carreyrou of doing it for money; “the guy is getting $4 million to continue this charade”, referring to the advance on his book proposal “Bad Blood”. The most nauseating part of the Ars Technica interview is this mock-libertarian rejoinder from Mr Draper: “It’s the press creating a series of events that negatively impact technology, progress and our economy.”

So it was all a mistake, an illusion–there was nothing significantly wrong with the Edison Lab, or Theranos’ business practices! (Hat tip to Bill Oravecz of Stone Health Innovations)

Mr Draper perhaps did not consider that Mr Carreyrou’s reporting blew up the $100 million investment of the WSJ‘s owner, Rupert Murdoch (Ch. 27), not just DFJ’s. And SafewayWalgreens, Larry Ellison, Cox Enterprises, Bechtel Group….

Second, the belated reporting of deficiencies at the Scottsdale lab found by CMS (Centers for Medicare and Medicaid Services) on 29 September. According to the Wall Street Journal report (co-authored by Mr Carreyrou), “Theranos responded to the inspection findings in Arizona with a plan to correct its lab deficiencies, but the lab regulator in November rejected the plan and proposed sanctions for the Arizona lab as well.”  This preceded the closing of all labs and the ‘refocusing’ of Theranos on the miniLab. Their general counsel stated, “After months of careful consideration, and prior to CMS’s unannounced inspection in Arizona, Theranos decided to close its laboratories.” Usually, these CMS reports are issued after 90 days. Theranos is appealing the sanctions arising from the California lab inspection with an administrative law judge, which include lab license revocation and a two-year ban on Ms Holmes from blood-testing operations.

Third, Theranos announced an eight-person Technology Advisory Board (TAB) to be led by Dr. Channing Robertson and Howie Rosen. The academics, executives, and entrepreneurs will be charged with “reviewing specific Theranos technology initiatives associated with product development, design and deployment” as well as four other mandates. Analogies concerning horses, roads and the status of barn doors come to mind. Release.

And finally another Theranos Washington connection, besides new SecDef and ‘Warrior Monk’ James Mattis, now an alumnus. It seems that the vetting of Betsy DeVos, nominee for Secretary of the Department of Education, uncovered that she has an investment in Theranos of more than $1 million. However, the Office of Government Ethics also reported her whopping earnings of less than $201. Since others like Rupert Murdoch, Bechtel, Walgreens, Cox, and others ponied up $50 to $100 million, hers is a mere bag of shells by comparison. MedCityNews, who has dubbed it the ‘As Theranos Turns’ soap opera. Hat tip to Bill Oravecz of Stone Health Innovations.

See here for the 33 previous TTA chapters in this Continuing, Consistently Amazing Saga, including Arizona’s lawyering up for a prospective Theranos lawsuit (Ch. 33) the firing of 155 remaining staff (Ch. 32), the resignation of now-DOD Secretary General Mattis from the BOD (Ch. 31), and Theranos’ annus horribilis (Ch. 30).

Walgreens partners with Chicago health tech incubator MATTER (US)

Walgreens, the US retail pharmacy part of Walgreens Boots Alliance, on 20 December announced its own alliance with Chicago healthcare incubator and innovation community, MATTER. This Editor believes it is the first retail partnership with a health tech-focused incubator or accelerator in the US; most of these partnerships are with angel networks, VCs, health system venture arms or large commercial healthcare partners such as Qualcomm, Allscripts or GE Healthcare. Walgreens’ contribution will be to mentor and collaborate with MATTER entrepreneurs. Reportedly they have or have had more than 150 startups in their program. They are also part of Chicago’s push to slice itself some health tech cake versus cities like San Diego, Palo Alto, Dallas, Boston and New York via the recently launched Health Care Council of Chicago (HC3), which was co-created by MATTER and Leavitt Partners. Hopefully, Walgreens will get some of their $140 million back via their Theranos lawsuit ending their blood testing misadventure [TTA 17 Nov, Ch. 24] and spread their bets with legitimately promising startups. Press release, ChicagoInno