HTN Weekly Health Tech Reads 9/19

Lots of massive funding rounds (Commure raised $500m, Spring Health raised $190m, Tia raised $100m) & lots more

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News:

  • IncludeHealth is launching a virtual MSK platform for providers in partnership with Google and ProMedica, an Ohio-based health system. This is an interesting combination of parties for a partnership like this that seems well-suited to succeed - leverage Google's machine learning capabilities to create a platform for providers, and have ProMedica serve as the first customer. Of course execution is always a challenge in these sorts of partnerships, but it seems to have all the components you'd need. Link.
  • Ginger announced this week that it launched a Spanish language version of its product, which sparked an interesting dialogue over on the Slack channel. There were a few comments about how hard it is operationally for a digital health startup to implement an end-to-end Spanish language solution, and good on Ginger that they made the investment to do so. On the other hand, what does it say about the digital health space that one of the leading companies in the space, which has been around for a decade, sells to Medicaid plans, and has raised hundreds of millions in capital, is just getting to launching a Spanish language product now? You can see why we're hearing more alarm bells about the impact that all this industry transformation might have on health equity moving forward. Link.
  • Intermountain signed an LOI to merge with Colorado-based health system SCL that would create an $11 billion health system with 33 hospitals. This comes on the heels of Intermountain's deal to merge with Sanford falling apart last year. Link.
  • A Humana private jet was apparently spotted near Centene's headquarters, prompting speculation that Humana is once again considering an acquisition of Centene. Link.
  • Hinge Health acquired wrnch, a computer vision platform that tracks human motion. Makes sense for an MSK startup to continue differentiating in this manner. Link.
  • Walmart has shaken up its leadership team responsible for rolling out its health clinics. Another friendly reminder of how hard it is for retailers / disruptors to commit to healthcare strategies long term. Link.
  • Northwell Health and Walgreens struck a deal on a retail clinic collaboration. Link.
  • PE-backed symplr is acquiring Halo Health, a clinical communications platform. Link.

Funding:

  • Commure, an API developer platform for healthcare, raised $500 million on a $3.5 billion valuation, as Livongo continues to be the golden ticket for those who were involved at the early stages. Commure has shown a strong appetite for growth via acquisition, calling it the primary driver of growth for the company, and backing that up over the last year with at least three acquisitions (PatientKeeper from HCA, Merlin, and Karuna). Presumably this capital will be used to roll-up more assets into the Commure platform to drive growth for the organization. Commure presents an interesting foil to Zus in the "developer platform for healthcare" space, with Zus seemingly taking a more homegrown approach, targeting digital health startups. Commure appears to be acquiring everything, focused on legacy customers (i.e. HCA). It appears Commure's strategy is working from a business perspective if somebody is valuing it at $3.5 billion, but I'm not sure I see how frankensteining together a bunch of disparate assets is going to create a developer platform that solves anything meaningful in healthcare. Link.
  • Mental health startup Spring Health raised $190 million, putting it at a $2 billion valuation. Of the three $100+ million rounds this week, this one is the most understandable to me. Spring is going after the now well-worn path of selling its mental health solution to employers, hitting 6x revenue growth last year as its now available to 2 million employees across 150 companies. Of course, there's a lot of competition in this space and it makes it hard to tell these companies apart, but the traction is impressive. Will be curious to watch how/if they expand their product offering over time beyond the mental health market - lots of interesting discuss on the Slack channel about how Spring might continue to grow. Link.
  • Tia, a women's health startup, announced that it raised $100 million this week from one of the Tiger Cub hedge funds, Lone Pine Capital. I've been a fan of Tia's approach for a while - starting as a digital only service, then pivoting to build bricks-and-mortar clinics, and then partnering with a health system has struck me as a really intelligent approach to building a business in the space. But I am not sure what to think of this funding for a company that still seems to be figuring out the specifics of its model. Tia currently operates three primary care clinics and has one health system partnership with CommonSpirit, which is oddly absent from the funding announcement given the recent press about the relationship. The funding press release and the pitch deck used (behind the Business Insider paywall) are light on specifics of how it intends to grow. On the one hand, this funding clearly is a bet that Tia can own the "front door" healthcare for women, which given the current market seems like a reasonable concept to be very bullish on as an investor. On the other hand, this is a crazy amount of money for a company that has built three primary care clinics (+ a virtual clinic infrastructure) and is likely providing healthcare services for a few thousand women in this country. Lone Pine Capital appears to be leaning into the Tiger approach to investing: if you think the winner in the women's health space is going to be a multi-billion dollar company in the next 5 - 10 years, and you think Tia has the opportunity to be that, you don't really care about how silly the specifics of the investment are today - you just plow enough money in for them to scale and be the winner. I suppose that makes certain amount of sense in a YOLO kind of way, but I scratch my head wondering how this is going to play out over the coming decades in this country. When you've got for-profit investors subsidizing the build out of a new care delivery infrastructure like this, what does the world look like when they decide they want to start reaping a return on that investment? These are sophisticated investors we're talking about here who are going to want to see growth / returns. Link.
  • RecoveryOne raised $33 million for its MSK platform for payors. Link.
  • Rune Labs raised $22.8 million for a precision medicine platform for neurology. Link.
  • Flywheel, a data management platform, raised $22 million and acquired Radiologics. Link.
  • Babyscripts, a virtual maternity care platform, raised $12 million. Link.
  • Cured raised $10 million for its CRM platform for healthcare. Link.
  • Eleos Health, a voice tech platform for the behavioral health space, raised $6 million. Link.

Opinions:

  • This is a interesting read about how the DOJ is accusing a data analytics firm and a NY-based health insurance plan, Independent Health, of committing fraud by faking patient diagnoses to game Medicare Advantage risk adjustment and get tens of millions in overpayments from CMS. Yet another sign of how much money there is being made in Medicare Advantage risk adjustment these days. Link.
  • Here's a perspective in HBR on how employers should continue investing in playing a more active role in their employees' healthcare. It covers off on a number of the topics that you'd expect - virtual care, in home services, mental health, risk-based contracts, etc. Feels like we've said this a few of times recently, but reading this makes me continue to wonder both how much responsibility we want to cede to employers for healthcare in this country and whether employers actually want to be dedicating even more time and resource to take on more responsibility.  Link.
  • Adam Fein of Drug Channels shares a story about how he was charged more for lab tests through his insurance plan than he would have been if he had paid cash, highlighting many of the challenges of price transparency in healthcare. If someone like Fein has to go through this much trouble to make sense of healthcare pricing, its hard to imagine the average consumer is going to have any success. Link.

Data:

NEJM Catalyst featured two papers covering the work of HTN Community Members and their teams:

  • Neil Sanghavi's team at Atropos Health published a paper about how it leverages clinical data to create provider consults that inform patient care pathways. Link.
  • Kevin Wang's team at HSS published a paper sharing the clinical, operational, and financial framework that HSS implemented in order to succeed in taking bundled payments via BPCI. Link.

Featured Jobs:

  • Calibrate, a digital metabolic health startup, is hiring a Director of Coaching Operations. Link.
  • Cityblock Health, a primary care startup for Duals populations, is hiring a Manager, Market Strategic Finance. Link.
  • Ro, a virtual care startup that operates digital health clinics for men's and women's health, is hiring a Director of Product Design (Patient Journey). Link.
  • Tend, a technology-driven dental startup with modernized clinics and transparent pricing, is hiring a Licensing and Credentialing Manager. Link.