Weekly Health Tech Reads | 2/27/22

This newsletter is sponsored by Ribbon.

Ribbon, an API data platform that provides real-time information on providers and insurance, created an overview of considerations for companies evaluating whether to build versus buy their provider data platform. As any product person who has built experiences reliant on provider data can attest, avoiding the massive headaches that come with inaccurate provider data is a huge win. Link. 

News:

• CMMI has officially rebranded the Direct Contracting program as ACO REACH, with some relatively minor tweaks to the program. There's a good discussion in Slack about the changes to the program - in general it looks like positive changes, particularly those related to health equity. CMS also made adjustments to risk adjustment as well as increasing provider oversight of the model. In general seems like positive changes for the program, albeit with a quick turnaround for 2023. Will be interesting to see how/if this impacts the list of participants for 2023 - presumably these changes will mean more provider orgs participate, but what will it mean for venture-backed company participation? Link / Slack (h/t Jan-Felix Schneider)

• Clover's earnings transcript was interesting per usual, with Clover leaning heavily into its non-insurance business, at one point referring to the Clover Assistant as the "digital on ramp onto value based care" for providers. Clover finished the year with 68k Medicare Advantage members and 62k Direct Contracting lives under management, which is some impressive growth, even if it missed its SPAC forecasts significantly (in its SPAC presentation, Clover claimed to have 200k Direct Contracting lives already contracted in 2021, growing to 450k lives by 2023). Clover does expect Direct Contracting to grow significantly to ~165k lives next year, with ~83k MA lives. Clover shared a bit about how its driving growth in Direct Contracting. It's almost entirely via claims aligned growth, as it pitches providers to use (and get paid for using) the Clover Assistant platform. It'd be really interesting to hear from some of the 3,000 providers who are using the Clover Assistant platform how much of it is because they like the software and how much of it is because Clover pays them for opening it. I have a strong hunch that it's the latter, but it'd be impressive if it were the former. Clover also gets in on the startup insurer trend of throwing out a profitability target, raising the possibility of hitting non-GAAP profitability in 2023.Link.

• One Medical's earnings included a new partnership announcement with Hartford Healthcare in Connecticut. One Medical also spent some time breaking out Iora's Medical Claims Expense Ratio, which is an interesting chart to see (below). A relatively large 2021 cohort is starting off on the high end at a 109% Medical Claims Expense Ratio, which drove up medical expense this year, but you'd assume they'll get that down similar to previous cohorts. Iora had 10k Direct Contracting members in 2021, growing to 13k in January 2022.  Link.

• Teladoc hosted its earnings call as well, with lots of discussion on BetterHelp and the mental health space. BetterHelp generated $700 million of revenue in 2021, with customer acquisition costs declining. Teladoc notes it sees 20% - 60% higher revenue for patients who use mental health services + another Teladoc service versus just mental health alone. Apparently Teladoc onboarded over 10,000 therapists last year, and another 1,200 therapists in January 2022 alone. That is a much larger number than I'd have expected, but it makes you wonder what exactly onboarding means and how many Teladoc patients those providers are seeing.Link. 

• SCAN and Commonwealth Care Alliance have teamed up to launch a new PACE primary care model, myPlace Health. This is a rather cool endeavor to see launched, and is one that I hope many other legacy healthcare organizations are taking note of. It should serve as a reminder that with the right organizational commitment and leadership, there is a role incumbent organizations can play in building new businesses in the space. Link / Slack 

• Provider data analytics platform Health Catalyst is acquiring another provider analytics platform, KPI Ninja. Link.

• The DOJ formally sued to block UHG's acquisition of Change Healthcare.Link / Slack (h/t Martin Cech)

Funding:

• Value-based kidney care company Somatus raised $325 million at a $2.5+ billion valuation (in this week’s private / public market valuation comparison - that puts it between One Medical ($2.0 billion) and Oak Street ($3.8 billion)). Somatus has grown substantially, serving 150k members across 34 states with 1,350 employees.  Link / Slack.

• Omada Health raised $192 million this week. It's grown its employer and health plan customer base from 1,000 in 2019 to 1,700 currently, serving 550,000 members. Lots of interesting discussion in Slack around valuations / scale of digital health models serving employers.  Link / Slack.

• Minded, a virtual platform for mental health medications, raised $25 million. Link

• Story Health raised $22.6 million for a virtual cardiology platform, and announced a partnership with ChristianaCare. Link.

• OhMD, a text-based patient engagement platform, raised an undisclosed amount. Link.

Opinions:

• The New Yorker dove into the American Medical Association's history and opposition to single payor healthcare. It provides some interesting insight into how the AMA has grown and how changing demographics of providers are causing the AMA to change. Link.

• McKinsey released an interesting report on the behavioral health landscape in New York. New York has a similar prevalence of behavioral health issues as elsewhere in the country, but has higher costs and worse outcomes. It looks at the challenges faced by racial and ethnic minorities, the LGBTQ+ population, and Gen-Z.  Link / Slack (h/t Jonathan Solomon)

• McKinsey also finds that while patients love telehealth, providers are a bit more skeptical. It's pretty wild to still see the difference in opinion between providers and patients, and how 'meh' the providers who responded to this survey are about telehealth. Only 32% of providers agree telehealth can improve patient experience? What do the other 68% think? Link / Slack (h/t Matt Sakumoto)

• This Axios article provides a good overview of the absurdity of employer healthcare coverage in this country. It does a nice job quickly describing many of the dynamics at play in the commercial health insurance market. Link / Slack

Data:

• Trilliant Health released a report on telehealth utilization trends, going deep into trends on both the supply and demand side. It includes a number of interesting insights about how people are using telehealth, including this chart showing that almost 50% of people only used telehealth once over the year+ studied. When I compare the Trilliant (claims based) and McKinsey (perception based) insights, it becomes hard to square what telehealth is really doing and for who. It would be nice to start seeing more on the demographics / participant data of these studies and the differences among clusters to actually make sense of why the data might be similar or different. And maybe more importantly, who is being excluded from these studies. Link

• Chartis provided an overview of Medicare Advantage enrollment, including the nice data viz below on enrollment by state, highlighting which states have the most enrollment and growth. Link 

• Peterson-KFF Health System Tracker data provides a good look at healthcare spending in the country.  Link / Slack (h/t Geoff Matous)

• This is a good chart from the Gist newsletter highlighting the various revenue streams of the largest payors. Interesting to note the differences of revenue composition for each. Link.