Week-end roundup: Cano Health’s $60M loss and divesting, Oscar Health exits CA, UCSF Meta Pixel lawsuit narrows, Syneos goes private for $7.1B, Envision nears Ch. 11, Australia’s A$429M EHR modernization funded

Cano Health’s Q1 was not a cheerful one, what with a board fight, the Cano 3 resigning and nailing a long list of grievances to the door, and a new chairman of the board, Sol Trujillo, who specializes in turnarounds. The results bore out the Cano 3’s concerns, with a $60.6 million net loss versus 2022’s barely-there $100,000. Revenue increased 23% to $866.9 million but per member per month (PMPM) revenue fell 13%, driven by a higher proportion of non-Medicare members but partially offset by membership growth: 388,667 including 207,420 Medicare capitated members, an increase of 44% and 29% year-over-year. Adjusted EBITDA was only $5 million, compared to $29.2 million in Q1 2022. What’s being divested to improve cash flow are the proverbial ‘non-core assets’ which are outside of Medicare Advantage–a complaint of the Cano 3 who noted things like family self-dealing and a murky relationship with a Miami claims recovery outfit. Cano also raised 2023 forecasts for membership and total revenue, but no mention of growth in medical centers. Cano earnings release, Healthcare Dive, Digital Health Business

In other slimming-down news, Oscar Health will exit its exchange plans within Covered California at the end of the year. While they have 35,000 members, their medical loss ratios (MLR) are over 100% versus the desired 80%. (MLR, a key metric in exchange plans, is defined as the proportion of total paid medical service claims and all quality improvement activities together, then dividing that number by the total premium revenue minus all allowable deductions. New CEO Mark Bertolini says they will return when Oscar reshapes their product offerings and strategy. This Editor hears a heavy boot drop. Healthcare Dive

Lawsuits of health systems on Meta Pixel being used to send private patient information to Facebook and other third-party advertisers are now rolling through the courts. The class action against University of California San Francisco (UCSF) Health just got a little narrower. Judge William Horrick of the US District Court for the Northern District of California granted defendant UCSF Health’s motion to dismiss several plaintiff claims. As a public entity, UCSF argued that the “unjust enrichment” claims were invalid. ‘Jane Doe’s’ lawyers representing the class of patients have a deadline of 30 May to amend the breach-of-contract claim. Health systems caught up in the ad pixel mess should follow this closely, though Becker’s seems to be the only news coverage. Our coverage of Meta Pixel

And in other healthcare news from two ends of the spectrum:

  • Biopharma contract research organization (CRO) Syneos Health will be going private in a $7.1 billion deal.  Elliott Investment Management, Patient Square Capital, and Veritas Capital are leading the cash buyout for $43.00 per share, a tidy 24% premium to the 13 February closing price, which is a somewhat unusual delay but apparently due to heavy media speculation around it. Syneos was formed in the merger of two large CROs, InVentiv Health and INC Research, and as a public company has been on the share price roller coaster, though the category is considered to be highly attractive for investment to improve the odds of biopharma success.  The deal is expected to close in the second half of the year. Syneos release, Healthcare Dive
  • Healthcare staffing company Envision Healthcare envisions filing a Chapter 11 bankruptcy soon, according to a Wall Street Journal report. They are carrying about $7 billion in outstanding debt, ongoing and costly legal spats with UnitedHealthcare, and has had difficulty finding physicians and nurses that are contracted to augment hospital staff. Conflicts with payers center around out-of-network billing charges which are far above the customary and the ‘no surprises’ patient protection billing law that took effect this year. Investor KKR owns the company and reportedly has already written it down. Their EBITDA cracked from $1 billion in 2020 to about $250 million in 2022. FierceHealthcare, Healthcare Dive

And Down Under, the modernization of Australia’s health system EHR, estimated to cost A$429 million over two years, is now funded in the 2023-4 budget. The My Health Record (MHR) modernization will improve data sharing across service settings, sharing of pathology and diagnostic imaging information, and increase usage of MHR by allied health professionals. The budget also includes substantial fresh funding to the Australian Digital Health Agency (ADHA)–over A$325 million over four years and an ongoing A$80 million–and A$5.7 billion to Australia’s national Medicare program including strengthening primary care and urgent care. IT News (Australia)

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