Weekly Health Tech Reads | 7/17/22

This week's newsletter is sponsored by Pearl Health.

Pearl Health is a technology company enabling primary care practices to participate and succeed in value-based care, focusing initially on ACO REACH. Pearl provides PCPs with transparent data and analytics around payments, attribution, and panel growth in value-based care. If you’re a primary care organization looking for a partner to get involved in ACO REACH, check out this blog post highlighting Pearl’s new Value-Based Care Advisor tool to help understand the opportunity. Link.

News:

• UHG posted another solid quarter, and per usual the earnings transcript  provides a number of interesting insights across the business. We'll dive a bit more into this for HTN members next week, but there are some interesting insights in the earnings call including how UHC is going to be active in moving the center of care for seniors out of the primary care office into the home and the timeline for getting deals like Atrius and Kelsey-Seybold done (which UHG's CFO pegged at roughly five years). Link (Transcript) / Slack (h/t Michael Ceballos)

• A new phone number, 988, rolled out this week for the National Suicide Prevention Hotline. This article does a nice job highlighting the complicated rollout of the new hotline as Congress signed this into law a few years ago, but funding sources for the program are unclear. The lack of funding also invites questions about how these hotlines are going to be staffed.  Link 

• Nomi Health has acquired Everyone Health and Sano Surgery, two sister organizations that help employers save money by directly contracting with providers, for $26.5 million. It continues an acquisition spree for Nomi, which also acquired analytics vendor Artemis Health earlier this year. Nomi appears to have grown quite quickly during COVID-19 by launching testing capabilities for states, which came with some blowback regarding how it won contracts. It appears that as COVID-19 testing revenue growth is likely no more, it is attempting to stitch together a platform for a new employer healthcare model. Will be interesting to watch how all of these capabilities combine. Link / Slack (h/t Rik Renard)

• Molina acquired My Choice Wisconsin, a Medicaid plan in Wisconsin with 44k members and $1 billion in annual premiums, for $150 million. Link

• R1 RCM announced it is partnering with Sutter Health to be Sutter's rev cycle partner. Sutter's 1,150 revenue cycle management employees will move over to R1 RCM, which will get a 10 year exclusive agreement for revenue cycle services with Sutter. Link / Slack

• Team Health and UHC continue to squabble, with Team Health filing another lawsuit, this time in Nevada. Team Health accuses UHC of denying and underpaying emergency care. Link

• Livongo and Quit Genius both shared this week they're moving to new money-back pricing models for employers announced this week. It seems like a natural maturation within the space as companies get more confident in their ability to consistently achieve performance metrics, though it is probably as much out of necessity as maturation given the proliferation of digital health solutions claiming to drive results that employers either can't quantify or don't actually yield those results. The key in all of these types of arrangements will be the metrics actually being measured and how attributable those results are. Link (Quit Genius) / Link (Livongo) / Slack (h/t Rik Renard)

Funding:

• Particle Health, an interoperability platform with an API layer built on top of FHIR, raised $25 million. Link / Slack (h/t Rik Renard)

• EMR platform Canvas Medical raised $24 million. Link

• Wysa, a mental health app that has an AI chatbot therapist, raised $20 million. Wysa has gained some serious traction internationally - it has had over 400 million chat sessions with 4.5 million users across 65 countries after launching in India.  Link

• Moving Analytics, a virtual cardiac rehab platform, raised $20 million. Link / Slack

• Fold Health, a primary care enablement platform, raised $6 million. Link / Slack (h/t Paulius Mui)

• Arise, a virtual eating disorder clinic, raised $4 million. Link / Slack (h/t Anastasiia Timon)

Opinions:

• This was a fascinating look at Optum's recent acquisition of Atrius Health. It goes through the rationale both for why Atrius decided it was time to sell, and the general process. Apparently Atrius reached out to six bidders - four local players, Optum, and Kaiser. Kaiser was the only one who didn't bid, while Atrius thought Optum was a better option than the four local parties for a variety of reasons. It's particularly interesting to see that Atrius didn't view Mass General Brigham as a viable option because of regulatory hurdles. If this is a more general trend that state regulators are so fed up with the leading local not-for-profit health systems that they view national for-profit players like Optum as a better partner for their locality, it seems like those health systems are in an even more strategically challenged position than I previously imagined. Massachusetts and MGB certainly seems a bit unique, but it seems worth keeping an eye on. Link / Slack (h/t Duncan Reece)

• Greycroft shared a perspective on whether care delivery models should be "venture back-able". If you're looking for a representative VC perspective on the topic, it's worth checking out to as a framework for how VCs evaluate opportunities in the space. Essentially it suggests that if a company has a good CAC/LTV, can demonstrate a clear ROI, and improves experience / outcomes, that it should be venture back-able. There's an interesting debate on Slack on this topic and the challenges that arise with venture-backed care delivery. I personally would also be very curious to see the Private Equity perspective on this topic - obviously PE has found a way to invest profitably in care delivery, even if the impact on outcomes is questionable. But at the end of the day, PE firms are pulling the levers that care delivery companies need to in order to grow profitably, which VC-backed companies will need to figure out sooner or later. As VC-backed companies figure out how to operate profitably, the investments they've made in care model enhancements to drive better outcomes seem like they're the first thing to go, and what you're left with is... a PE-style profitable business. Link / Slack (h/t Tyler Olkowski)

• The Brookings Institute added another piece of reading to the Medicare Advantage overpayment debate, looking at Humana and Kaiser as two examples of organizations that are driving increased profits via Medicare Advantage. The data shared on Kaiser is pretty interesting, although it feels like it requires a PhD in health system / insurer payment flows to fully understand what that section is talking about. Basically it suggests that while Kaiser reports an operating loss on its MA business to NAIC, it is using the insurance business to generate profit in the care delivery business, so on the whole, Kaiser (and other MA insurers employing this strategy) is doing pretty well. Link

• SCAN provided some interesting insight into how it launched an effort to reduce racial and ethnic disparities for members of its health plan. It's worth noting how the answer isn't just "partner with a startup" but rather a pretty complicated organizational transformation that starts with incentivizing senior leadership differently, getting the right data in the hands of leadership, and hiring and training employees differently.  Link

Data:

• sg2 shared some interesting data on how it thinks that care delivery volumes will change over the next decade. It's worth checking out if you're trying to understand what health system leaders are thinking about in terms of volume trends looking forward. Two notable takeaways for us: 1. sg2 sees telehealth stabilizing, becoming "more defined by service line", and eventually will account for ~27% of E&M visits, 2. sg2 expects home health to grow pretty substantially across the board, with visits up 20% in the next decade. Link 

• Rock Health's 1H 2022 digital health funding report is out, and while it highlights how much of an outlier 2021 was, it also shows that it isn't entirely doom and gloom this year - 2022 is actually tracking ahead of any other year in the past decade other than 2021. Link 

• KFF shared data on the costs of childbirth in the US, with C-Sections averaging $26,280 and vaginal deliveries averaging $14,768, while out-of-pocket costs for each are $3,124 and $2,655. Link