Weekly Health Tech Reads | 4/24/22

An interesting week on the public markets - Anthem & HCA earnings, Babylon's lockup expires, & more


  • Anthem posted Q1 2022 earnings this week. They saw really solid growth during the quarter across lines of business and highlighted their plans to move the business to value based care. We published our reactions for HTN members are the link below. Link (transcript) / Link (HTN review)

  • The Massachusetts Attorney General this week approved of Optum's acquisition of Atrius Health, which means the deal now goes to Massachusetts Supreme Judicial Court. As part of the approval, apparently Optum had to increase the purchase price of Atrius from $73 million to $236 million, an increase of $163 million. I'm a bit confused even writing that sentence given how far apart those numbers are. Atrius really agreed to a deal where Optum was going to purchase it for only $73 million, and the attorney general had to step in to tell Optum it needed to pay an additional $163 million, and Optum said sure? Apparently Atrius was projecting operating losses of $226 million between 2021 and 2024 and needed some financial support, but the valuations here are still a bit surprising. Here you have the largest independent provider group in Massachusetts agreeing to sell itself for $73 million while there have to be at least a few care delivery startups in Boston with higher valuations. Link

  • Kaiser partnered with Cigna's Evernorth division, focused on two separate areas - specialty pharmacy and giving Kaiser members access to Cigna's PPO network for emergency and urgent care outside of Kaiser's service area. Link / Slack (h/t Blake Madden)

  • Humana divests a 60% interest in Kindred at Home's Hospice and Personal Care divisions at a $3.4 billion valuation to PE firm Clayton, Dubilier, & Rice (CDR). Humana is receiving $2.8 billion in cash from the transaction (if any readers here can figure out how selling 60% of a business valued at $3.4 billion nets you $2.8 billion of cash please let us know). CDR has had some interesting plays in healthcare recently between agilon and Vera, so will be worth keeping an eye on what they do with this Kindred asset moving forward. Humana, which had previously said it had planned to divest this business, gets a capital infusion in the door while retaining a minority stake in the business. Link / Slack (h/t Justin Venneri) 

  • Northwell has partnered with Teladoc / Microsoft to deliver virtual care to Northwell patients. Interesting to note how Northwell chose to partner with Teladoc because of its ability to support direct-to-consumer telehealth programs and also provider-to-provider communications within Northwell leveraging Microsoft Teams. Link / Slack (h/t Blake Madden)

  • Babylon Health's stock price dropped almost 53% on Friday, the day after its investors lock up period expired post-SPAC six months ago. Generally it doesn't seem like a good sign for the business when inside investors are all looking to exit their positions so quickly that they tank the stock price by 50%+ in a day because they're looking to sell so many shares. Link / Slack (h/t Matthew Conboy)

  • Babylon certainly wasn't the only healthcare company to have a bad week on the public markets this week. HCA, among others, had a rough week with HCA stock dropping 21% on Friday as it missed earnings and had to revise its 2022 guidance due primarily to increasing labor costs. Link (earnings transcript) / Link (press release)


  • Reify Health raised $225 million at a $4.8 billion valuation to improve clinical trials. Link

  • NexHealth, an API that helps dental practices with digital patient engagement, raised $125 million at a $1 billion valuation. It's pretty wild to see that they're doing around $5 million of revenue currently (per this tweet from a co-founder) and yet somehow is still being valued at $1 billion. We'll see how quickly they can expand beyond the dental market.   Link / Slack (h/t Jake Fishbein)

  • Clipboard raised $80 million for a nurse staffing marketplace. Not sure that the market needs this many nurse staffing marketplace unicorns, but you can see why VCs are excited to place a bet in the space as it seems like a clear "winner take all" space in healthcare. It's not hard to draw a line connecting news like HCA missing earnings because of labor costs (and specifically contract labor costs) and VCs pouring money into staffing marketplaces. Link / Slack

  • Mendel raised $40 million to structure unstructured clinical data in EHRs for oncology clinical trials. Link

  • Consumer CGM startup Levels raised $38 million, including $5 million crowdfunded from 1,500 early customers. As the HTN Slack convo highlights, this is going to be an interesting company to watch. On the one hand, they're making CGM accessible to consumers and clearly have a large base of devoted customers. On the other hand, they're marking up the cost of an Abbott CGM device by 65% and need to figure out how to retain users over time. It feels a lot like the narrative with pedometers in early Quantified Self days, which ended with popular companies like Misfit fizzling out. That said, that was a decade ago and D2C healthcare was in a different place, so will be curious to see how Levels grows from here. Link / Slack

  • Loop raised $25 million to build a "payvidor" in India, tying a health insurance product to primary care. Interesting to see Optum Ventures as one of the investors here. Link

  • Nue Life Health raised $23 million for psychedelics for mental wellness. Link / Slack

  • Source Health raised $3 million to build a tech stack for virtual care companies. Link / Slack

  • Amae Health raised an undisclosed amount for its hybrid in-person + virtual care model for serious mental illness. Link (paywalled) / Slack


  • This is a good interview with the founder of Alma, a practice management platform for independent mental health practitioners. Does a nice job explaining the model and benefits to providers. Link

  • Perhaps not surprisingly with the rising interest in wearable gadgets lately, KHN has an article out this week highlighting the issue with all of the data these devices are generating that doctors don't know what to do with (or at least aren't paid to do so). For as much as we like to talk about how more technology and preventative care can bend the cost curve in this country, it's also pretty easy a scenario where the exact opposite happens. Link


  • PAI released a report on physician employment trends. The chart below is striking with the number of corporate-employed physicians growing by 43% over the last three years.  Link / Slack (h/t Jan-Felix Schneider)

  • CHCF released really interesting data on the state of primary care spending in the California commercially insured population, finding that at the health plan level, increased primary care spending isn't associated with improved cost / quality outcomes. But when looking at the HMO population, and specifically the 180 provider organizations responsible for managing those patients, increased primary care spending is associated with improved cost / quality outcomes. Lots of interesting conversation in the Slack attempting to interpret this data and why there is cost improvement at the provider level but not the plan level. If you're interested in primary care spending this is a good report to bookmark with data on PMPMs and primary care spend as a % of total spend. Link / Slack

  • Georgetown finds that 6 million kids may lose Medicaid coverage when the PHE ends. Interesting to note the tone of studies like this versus the Anthem earnings call as it relates to coverage after PHE ends.  Link

  • This JAMA study finds that hospitals mark up the costs of cancer therapies between 120% and 630% for patients with private insurance. Absurd. Link


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