Kevin's Weekly Health Tech Reads 1/17

Talkspace gets its SPAC, Optum is acquiring Atrius Health, Accolade acquired 2nd.MD, a reflection on CMMIs first decade, & more!

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  • Mental health startup Talkspace is officially going public via SPAC. It’s a really interesting investor deck to peruse - it’s the first healthcare company I recall that starts its deck off with a massive headshot of Michael Phelps and ends with a headshot of Demi Lovato with a bunch of content about its growing B2B healthcare business in between… it provides a really interesting lens into what a blended D2C and B2B model looks like in healthcare. The D2C business had grown pretty slowly pre-pandemic - from 15k users in 2017 to 17k in 2018 to 19k in 2019 - with a huge jump to 31k users in 2020. It’s projecting similar high levels of D2C growth moving forward, which will be interesting to watch if it can sustain in a non-pandemic world (which… hopefully we’re not in until 2023). More notably the B2B business has shot up in 2020 as Talkspace went from 2 million covered lives to 39 million covered lives. They estimate they’ll be at 174 million covered lives by 2023. The investor deck also talks about how they’re well positioned for acquisitions so I assume we’ll see them as an active acquirer moving forward. See Slide 23. Link (article). Link (investor presentation).
  • Optum has signed a Memorandum of Understanding to acquire Atrius Health, which at 700+ providers is (well, was) the largest independent provider organization in Massachusetts. An interesting bit of context in this article is that Optum has been looking to acquire Atrius for some time and submitted an offer that was rebuffed in 2019 but reconsidered due to the pandemic. I have a feeling that this won’t be the last time we hear this sort of narrative in 2021. It’s gotta be a pretty interesting gig to be on Optum’s Corp Dev team at the moment - one week you’re acquiring Change Healthcare for $12 billion to own rev cycle and the infrastructure for providers to get paid, the next week you’re acquiring a leading group of docs in Atrius Health. Is there anything in healthcare that isn’t fair game for Optum at the moment? I mean aside from hospitals obvi. Link.
  • The FTC sent an order to six major insurance companies - Aetna, Anthem, Florida Blue, Cigna, HCSC, and UHC - requesting patient level claims data going back to 2015 in order to understand the impacts of physician consolidation across markets in 15 states. Hold on while I go get my popcorn ready for this one. Link.
  • Accolade acquired 2nd.MD, a platform for second opinions from medical experts, for $460 million. 2nd.MD did $35 million of revenue in 2020. This deal appears to make a ton of strategic sense for Accolade as it expands its service offerings for employers. Check out the investor presentation for some of the rationale. 2nd.MD lists some cost savings data for the most common reviews - they claim they’re seeing an average of of $32k savings per musculoskeletal case. Additionally, they have no overlap in customer base with Accolade, making the cross sell opportunity quite appealing. I’d guess we’re going to see a bunch of combinations along those lines consolidating the employer market (remember this cross-sell opportunity was a core premise of the Teladoc / Livongo merger too). Link (press release). Link (investor presentation).
  • Doctor on Demand is launching a virtual primary care HMO product on the exchange in Texas. I am super curious to see how this plays out. Obviously the product design lends itself to being a super cheap bronze plan and that attracts a healthy population just seeking for the lowest cost insurance coverage possible. But is anyone going to realize that they’re signing up for a virtual-only PCP plan, or are they just going to select the plan it because its the cheapest option listed on the exchange? Link.
  • Bright Health continues down the growth via acquisition path, this time acquiring True Health New Mexico from Evolent Health, which continues to divest non-core assets. Evolent will still be providing clinical and administrative services to True Health New Mexico, which is curious as it would seem that is fairly similar to the services Bright offers? I suppose its just part of the integration headache one runs into when pursuing the growth via acquisition strategy. Link.
  • Virtual JPMorgan came and went this week. Modern Healthcare kept a good log of the various takeaways from company presentations here. Interesting to see the note that Ascension is going all in on ASCs, joining Tenet in shifting their focus there. I know two data points doesn’t make a trend and all that but it sure feels like one to me. Link.
  • Paige, the AI diagnostic platform that grew out of a cozy relationship with Memorial Sloan Kettering, raised $100 million. Link.
  • Carrum Health, a startup creating a digital marketplace for employers to connect with Centers of Excellence to reduce costs, raised $40 million. Link.
  • Neuroflow, a tech platform for integrated behavioral health / collaborative care, raised $20 million from Magellan (soon to be Centene). Link.
  • Lumiata raised $14 million to build its predictive analytics platform. Link.
  • Dina, a startup building a home healthcare platform, raised $7 million. Link.
  • Alula launched and raised $2.2 million to help patients navigate their cancer journey. The idea of making a cancer journey less lonely seems like an incredibly worthwhile concept to pursue, one that is sorely needed in the health ecosystem. Big, big fan of this. Link.
  • YouTube is teaming up with healthcare providers, taking a step into the medical content space. Nice to see they’re trying to move away from being a breeding ground for conspiracy theories. Link.
  • Two digital health venture funds raised capital this week:
  • Heritage Group raised a $300 million third fund. Link.
  • Define Ventures raised a $200 million second fund. Link.


  • Brad Smith, the current director of CMMI, shared an article in NEJM looking back at the results of programs that CMMI launched in its first decade of existence. This sentence in the overview isn’t exactly a ringing endorsement:
  • However, the vast majority of the Center’s models have not saved money, with several on pace to lose billions of dollars. Similarly, the majority of models do not show significant improvements in quality, although no models show a significant decrease in quality.
  • BPCI Advanced and Comprehensive Primary Care Plus appear to be the two main culprits, losing billions each. It’s wild to me that CMS lost around $7 billion on those two programs combined. Check out this chart:
  • The article talks about lessons learned from the program: the challenges with voluntary provider participation models, the importance of proper benchmarks, the challenges measuring quality improvements, and the challenges associated with CMS operational infrastructure. Apparently CMS lost $50 million in the Next Gen ACO model after overpaying providers because CMS systems couldn’t correctly categorize claims received. Uhh… that seems less than ideal. Link.


  • This is an interesting article looking at the new price transparency requirements with some data on the wide variation of prices within geographies for common procedures, such as knee / hip replacements (shown below). The article also does a nice job outlining some of the challenges facing price transparency - namely whether it will actually help reduce costs and whether patients can make any sense of prices. Worth checking out. Link.
  • Rock Health released their report on 2020 funding, which came in $14 billion, close to doubling 2019’s previous record funding amount of $8 billion. What a wild year it was for healthcare funding, particularly given all of the uncertainty at the beginning of the year. Note the number of deals didn’t increase by all that much (from 378 to 440) but the average deal size increased from $19.7 million to $31.9 million. Link.
  • This is a very interesting Twitter summary of a paper looking at why Black patients have more pain than White patients with similar knee x-rays, and how if you train AI algorithms based off of listening to patients rather than established medical literature, you can train the algorithm to identify pain more accurately. Certainly makes you think about how algorithms can be trained to overcome some of the biases we humans tend to bake into them. Link.


  • AlleyCorp, a healthcare venture studio, is hiring for a healthcare venture incubation role. Link.
  • Devoted Health, a tech-centric Medicare Advantage insurance startup, is hiring a number of operations roles. Link.
  • Heartbeat Health, a virtual cardiology platform, is hiring a product manager. Link.
  • PatientPing, a care coordination platform, is hiring for a number of roles across tech, product, and customer success. Link.
  • Stellar Health, a value-based care platform for independent primary care, is hiring a handful of ops roles. Link.