A flurry of JPMorgan activity - Aledade makes an acquisition, Transcarent raises $200 million, more VC 2022 predictions, & more!
HBS is hosting its annual healthcare conference (virtually for non-students) on February 13th, focused on healthcare in the home. They’ve got an interesting list of keynotes including Melynda Barnes (Ro CMO), Bruce Broussard (Humana CEO), and Andy Slavitt (GP Town Hall Ventures). Seems like a very timely set of panels that you can enjoy from the comfort of your own home. See more details on the conference here.
Sign up for early bird tickets here by tonight (1/16)! Link.
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JPMorgan's conference came and went this week, featuring a number of presentations from leading health tech companies. FierceHealthcare and Modern Healthcare both had good notebooks and coverage of all the public co presentations (Fierce, Modern), here are some takeaways we found interesting:
Brian Dolan shared a list of private companies presenting at JPMorgan, which is a good indicator of which health tech companies may have an IPO on the horizon. Of course it is hard to get access to the private co presentations, which is a major bummer (more on this below). Link.
Farzad shared Aledade's presentation with some commentary on Twitter - super cool to see him do this, it'd be great to see other private co CEOs make this the norm. In particular, this chart on how 100 PCPs can have a $1 billion business if they manage total cost of care for their patients, is worth reflecting on. It is the economic engine behind a lot of investor interest in the space these days. Link.
Oak Street always impresses me with its investor presentation. I find it explains their model in a very helpful way, particularly this slide highlighted below showing Oak's unit economics. Among other things, it shows a lot of confidence in their approach over time that they're willing to share this detail with analysts. Link.
One Medical's deck highlights just how blurry distinctions are between different types of health tech startups, as it has a slide (slide 14) showing how its diabetes management program has better HbA1c outcomes than Virta, Livongo, Lark, and Omada. It's a good example of why everyone wants to own primary care - provides a really good strategic platform to add on other offerings like this. Link.
Alignment's 2022 Medicare Advantage membership missed expectations, similar to recent news from Humana and Cigna. Getting to be a very crowded market. Kao's commentary about insurers underpricing products to gain members while dumping global cap contracts on providers is particularly interesting to keep an eye on. Link
Note: If you have access to the private company presentations, we would love to see them! It'd be great to see every private company CEO take a page out of Farzad's playbook and share their presentation / commentary publicly. And if you're the CEO of a private company that presented at JPMorgan send us your deck and we'll review it in a future post.
Independent primary care platform Aledade is acquiring Advanced Care Planning startup Iris Healthcare. It's a rather big strategic move for Aledade as it moves from just supporting practices in managing MSSP to helping augment its partner practices' care delivery capabilities. It's a move that makes good strategic sense - take a piece of care delivery that independent practices aren't able to support themselves but moves the needle in a meaningful way when taking on risk. If you can help those practices integrate that element of care, its a win-win for Aledade and the practices, without encroaching on the core competencies of the practice. Given Aledade is rolling this into a new unit called Aledade Care Solutions, presumably we'll see them continue to move down this path moving forward. Will be quite interesting to watch what capabilities Aledade chooses to add next - it's not hard to envision them going a VillageMD-esqe route and owning its own practices down the line. Link.
Revenue cycle management company R1 RCM is acquiring CloudMed for $4.1 billion. CloudMed is a rev cycle platform that helped health systems collect on $1.5 billion in underpaid / unidentified revenue opportunities in 2021. CloudMed works with 47 of the top 50 health systems in the country - it doesn't take much imagination to see why given the revenue they're helping those health systems capture. Link.
Digital engagement platform mPulse Mobile acquired HealthCrowd, a communications platform for Medicaid populations. mPulse Mobile also received an investment from private equity firm PSG, giving PSG a majority stake in mPulse. Link.
Private equity firm GTCR is close to acquiring urgent care EMR Experity for $1.3 billion. Link.
e-consult platform AristaMD acquired Preferral, a referral management platform. Link.
Two virtual mental health companies joined forces, as Headspace acquired Sayana. Link.
TigerConnect, a provider communication platform that compares itself to Slack for providers, raised $300 million. Link.
Transcarent raised $200 million at a $1.6 billion. Even in this frothy market pretty wild to see the valuation growth of Transcarent over the last year - I'm not sure there's more of a sure thing for investors in healthcare at the moment than Glen Tullman selling basically anything to employer HR teams. Of course, it helps that Transcarent fits squarely in the trend of employers looking for trusted partners to navigate and manage health spending for employees. It's hard not to see Transcarent continuing to win there given the momentum it has. Interesting to see the comment in this article that Transcarent is going to start looking at new markets, including Medicare Advantage. As Transcarent gains traction with employers, it is presumably deepening ties with those employers’ insurers/TPA’s, who see an opportunity to provide navigation to other populations (i.e. MA or individual). But given the opportunity in the employer market and the fact that Transcarent is still only a year old, it feels early to talk publicly about expansion into MA. Link.
Real world data platform Verana Health raised $150 million to help pharma companies. Link.
Hospital at home startup Medically Home raised $110 million led by Baxter, Cardinal Health, and Global Medical. One of the bigger practical challenges in turning hospital at home into a reality is the supply chain, i.e. how you get the necessary equipment into the home, so it's interesting to see the investment coming from this set of strategic investors. After years of being a good idea that never gained real traction (Contessa & Marshfield Clinic's report to PTAC back in 2017 is an excellent read on the space), it sure seems like hospital at home is starting to enter the mainstream. Link.
Avaneer Health, a platform that uses blockchain and FHIR for stuff, raised $50 million from a number of strategic investors. I have a really hard time deciphering what product Avaneer is actually selling from the press release / website, which makes me feel dumb. Is it too much to ask for someone to explain blockchain use cases practically to me? Like, who is your customer and why are they paying you? I legitimately have no clue in this instance. Link.
DexCare, a platform helping health systems manage their "front door" assets and attract patients, raised $50 million. Seems like a no-brainer as systems evaluate either building or buying these capabilities, and many will decide they don't want to pay a team to build internally. Link.
Chapter raised $42 million to build a new tech-enabled Medicare brokerage to help individuals enroll in Medicare Advantage plans. It's an interesting interview in that it calls out the incentive misalignment between traditional individual Medicare brokers and consumers, while painting Chapter as a better alternative. But at the end of the day, Chapter's financial model still appears to be that of a... broker. They're right that incentives are misaligned in the space, but it's not clear how they're actually solving that. Either way, there seems to be an opportunity to apply better tech and scale a brokerage - that looks to be the problem Chapter is helping to solve. Link.
DeepScribe, a technology that listens to + transcribes doctor / patient interactions, raised $30 million. Link.
Caregility, a startup building a virtual care platform, raised $25 million. Link.
Diana Health, a startup helping health systems improve the experience and outcomes of women's health service lines, raised $11 million. This play makes a ton of sense to me - go to a leading health system in a market, show them Maven's model (or pick another consumer friendly approach), and ask them whether they want to attempt to compete or partner as consumerism comes to care delivery in their market. You'd think most health systems will eventually reach the conclusion they can't build that kind of consumer experience without a partner, which puts Diana in a good spot. Link.
HeyRenee, a virtual healthcare assistant focused on underprivileged, older populations, raised $4.4 million. Link.
Fertilis raised $2 million for better embryo incubation during IVF. Link.
Arnold Ventures shared a very good and practical article on the consumer experience for Dual-Eligibles and how we can improve upon it - making the enrollment process less complex, making sure plans meaningfully align Medicare and Medicaid benefits, having plans and providers build trust with consumers, and more. It's definitely worth reading if you're working with dual eligible populations. Link.
Morgan Health published a paper on employer health, explaining its approach to driving more value for employers. It highlights Morgan Health's three focus areas - investing $250 million, identifying opportunities for JPMorgan employees, and promoting health equity. Link.
Health Affairs featured a piece articulating CMS's Strategic Vision, focusing on a number of topics similar to other articles - health equity, affordability, and high quality care. The paragraph below will be sure to be of interest to the innovation community - it will be interesting to watch how CMS seeks to align Medicare Advantage and Original Medicare care models, and what it means when they say that CMMI tests will be scaled into the MSSP program. Link.
This is an interesting JAMA article suggesting that CMS should move towards a hierarchical approach for alternative payment models that will support coordination across population-based payments and episode-based payments. Link.
The Bessemer team shared their 2022 healthcare predictions. Bessemer does a good job highlighting some interesting companies across each of their predictions, which cover a similar set of topics to other predictions - infrastructure plays, hybrid care models, provider supply issues, etc. Link.
Greycroft shared a similar piece, highlighting a number of interesting companies on a similar list of topics - infrastructure, employer benefits, consumer, etc. Link
Jacob Effron, a VC at Redpoint, also shared his predictions for 2022. Between these last three articles you should have a pretty good sense for what VCs are excited about over the year. This is a nice visual of companies across the various predictions outlined. Link.
Halvorson followed up his Health Affairs article with this one on the merits of Medicare Advantage. It's a good read, with a similar case as his the Health Affairs article - arguing that Medicare Advantage is a superior program. It still feels like the argument doesn't address Gilfillan and Berwick's original case about risk score gaming, will be interesting to see what the second part of the series contains. Link.
Gilfillan and Berwick penned another Health Affairs article, this time looking at how Congress could make some tweaks to Medicare Advantage to support social determinants of health funding in the Build Back Better bill. Link.
Here's a good introductory deep dive into Oscar Health if you're new to the business. If you've been following it a while, I'm guessing you won't find much new, and that it avoids a number a tough questions that have been driving the stock price decline. Link.
Telehealth utilization appears to be settling in around 4% according to Fair Health data. Link.
Startup Health released an end of the year funding report, breaking down the $44 billion of funding in 2021. Among other things, they break down the most active investors in the space - I'm surprised to see General Catalyst so far in front of everyone else. Link.
Bend Health, a startup building a mental health treatment platform for kids and teens, is hiring a Full Stack Engineering Lead. Link.
Crossover Health, an hybrid primary care clinic for employers, is hiring a Director of Consumer Marketing. Link.
Mirror, the home health fitness company, is hiring a Senior Director of Strategy & New Business. Link.
The Leapfrog Group, a non-profit that provides safety and quality data on hospital for consumers, is hiring a Program Analyst. Link.