Kevin's Weekly Health Tech Reads 12/20

Another SPAC, some direct contracting news, lots of funding announcements, some good reads on the future of value-based care, Sutter getting slammed on 60 minutes, & lots more!

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  • Hot diggity dog another SPAC deal this week as Deerfield acquired CareMax and IMC Medical Group Holdings to create “a Technology-Enabled Provider of Value Based Primary Healthcare to Seniors.” CareMax operates 13 Medicare Advantage clinics in South Florida, an MSO for 32 IPAs stitching together senior medical clinics, and a software platform. IMC Health also operates 13 clinics in South Florida. In a plot twist, it is Anthem and not Humana that is the primary customer of this MA primary care play. Anthem accounts for 50% of their MA revenue (which is 77% of total revenue; 20% of revenue is tied to Medicaid). It’s interesting to peruse the investor presentation as it feels like this is basically a run-of-the-mill PE roll-up opportunity - they intend to achieve 40% YoY growth largely via practice acquisition. The growth story is basically this: we’re gonna go out and acquire other practices that are already using us as an MSO (and we have an inside track on those practices since they’re already using our tech). Here’s the list of targets we’re already looking at (see below)! Of course, when you look at it this way you can see why PE folks are drooling over the opportunity - you acquire 10,000 patients, generate $141 million a year of revenue from those patients, all at a 20% EBITDA margin?
  • Of course, that 20% EBITDA margin is largely driven by an MLR ratio of 64% (slide 22). I would think that at some point this space has to be subject to a bit more regulatory scrutiny around their MLRs, no? The investor presentation linked below is worth checking out; it includes some nice details on their clinic buildout costs on slide 22: a 12k - 15k sq ft MA clinic breaks even at 250 patients(!!) for them, which they expect to hit in 6 months after opening. Link.
  • Direct contracting was again in the news this week:
  • The National Association of ACOs does not seem very pleased with the current state of the Direct Contracting program. It wrote a letter to CMMI Director Brad Smith this week asking him to halt the rollout of the Geographic Option. The ACO community seems to think the Direct Contracting model favors VC-backed startups at the expense of ACOs that have been working with CMS on value-based models for years, with a few choicely worded statements such as this one: “It is also unclear if some organizations who look to enter FFS Medicare for the first time are doing so with the goal of gaining exposure to beneficiaries to then recruit them to Medicare Advantage. While an understandable business tactic, the Direct Contracting Model should remain focused on the Innovation Center‘s overall goals — to improve quality of care and provide savings to the Medicare Trust Fund, not to create an arbitrage opportunity for certain businesses to enhance their portfolios or stocks.” Will be interesting to see how this plays out. Link.
  • CMS is rolling out the Direct Contracting for Medicaid MCOs covering dual-eligibles to participate starting in 2022. Link.
  • Papa, the on-demand grandkid rental platform that addresses loneliness in seniors, is launching a new telehealth / virtual primary care care service, featuring rather poorly-named “Papa Docs”. Leaving aside the whole calling your doctors the same nickname as a despot thing, it seems like we will see a lot of this sort of product expansion over the coming months. If you’re a startup that has built a relationship with seniors, why not cash in on those relationships by expanding the suite of care delivery services you can offer those seniors? It’ll be interesting to see whether orgs like Papa can execute on this transition successfully. Link.
  • Kyruus acquired HealthSparq from Cambia Health Solutions, expanding Kyruus’s capabilities in the insurer market. Link.
  • Cerner is acquiring real world analytics platform Kantar for $375 million. Link.
  • Verily - one of Google’s healthcare things - raised $700 million, a little less than two years after raising $1 billion dollars. They’ll use it to expand Baseline, their research platform, and Health Platforms, which houses Coefficient, Onduo, and Healthy at Work. I mean… what does one do when they are given that much money? It honestly seems a bit overwhelming. Link.
  • Lyra Health, a mental health startup for employers, has filed paperwork for a $175 million raise at a $2.25 billion valuation. Lyra, mind you, just raised $110 million in August and $75 million in March, for $360 million raised in total across three separate rounds this year. Link.
  • Oscar raised $140 million at a reported $6 billion+ valuation. As the TechCrunch article notes, this puts them at $365 million raised for the year, aka $1 million dollars a day in funding. Sounds like this is a pre-IPO round for them - excited to see the S-1 in the near future here. Link.
  • H1 raised $58 million for its LinkedIn-ish platform connecting the health care industry with providers. Link.
  • Modern Health raised $51 million for its mental healthcare platform for employers. Link.
  • Well raised $40 million for its AI-driven digital health guide for employers. Link.
  • Curai raised $27.5 million for its text-based virtual primary care offering. Its founder intends to reduce care delivery costs by 10x to 100x via the platform - I’d be quite curious to see the math supporting that. Link.
  • Diameter Health raised $18 million for its clinical data analytics platform. The round was led by Centene; Optum is also an investor here. Link.
  • ConsejoSano, a rather cool multicultural patient engagement platform, raised $17 million. Link.
  • Workit Health raised $12 million for its telemedicine substance use disorder platform. Link.
  • Omcare, a Minneapolis(!!!!) startup in the medication adherence space, raised $2.5 million. Link.
  • Turquoise Health raised an undisclosed pre-seed round to focus on price transparency. Looks like they’re going to piggy-back on the upcoming price transparency requirements to publish rates. Cool. Link.
  • Philips acquired BioTelemetry, a cardiology remote monitoring company, for $2.8 billion. BioTelemetry monitors over 1 million cardiology patients per year. Link.
  • Aledade partners with Regence, a Blues plan in the Pacific Northwest, to support rural primary care providers. Link.
  • ChenMed partnered with BCBS Michigan to launch six primary care clinics around Detroit. ChenMed is investing $20 - $25 million in building out the six clinics and hiring ~200 employees over the next few years in Detroit. Link.
  • Tenet is selling 87 urgent care locations for $80 million. Link.


  • There were a couple of interesting perspectives on CMS policies for implementing value-based care moving forward:
  • Some big names in the health policy world wrote an article in Health Affairs proposing a strategic plan for the next 10 years of CMMI, focused on two ends: testing fewer models that scale nationally to drive lasting change and focusing on health care equity in value based models. They suggest a cohesive strategy for alternative payment models that create a marketplace for value based care programs. Interesting to see how high of a priority they place on reducing health care inequities, calling for it to be a twin goal along with improving value. Feels like we’re going to be talking about this a lot more in the next few years. Link.
  • A JAMA article took a look at Medicare’s Quality Payment Program for providers, focused on making some suggestions for how to improve the Merit-Based Incentive Payment System (MIPS). It highlights four key challenges facing the program, the most interesting of which is its inability to address social disparities in care, resulting in penalizing providers who take care of the most most vulnerable patients. It argues a more substantial alternative payment model could help remedy some of the ills facing the current model. Link.
  • This is a really good read from Jag Singh on “the digital divide” and the issues that the rise of virtual care may present from a health equity perspective. The article highlights the challenges virtual care presents for the half of the US population that has a slow or unreliable internet connection. It makes you think about what the impact of all these virtual care models might be. It’s also interesting to read this in conjunction with the articles on value-based care models above, both of which highlight some of the issues VBC models have in addressing disparities. Seems like a major issue that two of the megatrends in healthcare today, both are potentially worsening disparities. Link.
  • Lots of interesting Substack posts this week:
  • Here’s a post by Olivia Webb looking at Cityblock and the results of the Camden Coalition “hotspotting” study while questioning whether we should expect any better clinical results from Cityblock’s intervention. The Camden Coalition study from earlier this year of course famously showed that the hotspotting intervention unexpectedly didn’t seem to make a difference on clinical outcomes. Raises lots of good questions for anyone looking at building these sorts of models to think through. Link.
  • Maitreyee Joshi wrote a piece looking at healthcare models in the US versus Germany, Switzerland, and the UK. It does a nice job providing high level overviews of each of the models and various pros / cons of each. Link.
  • Chrissy Farr provided an interesting look at what to expect next in the pharmacy world - limited regulatory changes, more investor interest, a focus on customer experience, potentially increasing the scope of the pharmacist, more focus on the cash-pay market, and more. Link.
  • The Commonwealth Fund posted an interesting read on the Medicare Geographic Contracting model, which as I mentioned in the section above is facing opposition ACOs. It provides a nice overview of the model as well as some questions facing it. Link.
  • Sutter Health was featured on CBS’s 60 Minutes last Sunday, with Biden’s pick for HHS Secretary and current California Attorney General Xavier Becerra referring to Sutter as “the bully on the block. They were able to bully everyone else to conform; it was my way or the highway.” The story does a good job highlighting how Sutter has built a monopoly business in Northern California over the past several decades and jacked up prices in the region. I mean seriously - the cost of inpatient care in Northern California is 70% (!!) higher than Southern California according to the story. Crazy. It’s really tough to watch / read interviews like this and feel sympathetic for financial challenges facing monopolistic health systems. Interesting to ponder what Becerra’s priorities will be as HHS Secretary. Link.
  • Here are more healthcare predictions for 2021, this one from SCAN CEO Sachin Jain. His prediction around telehealth is particularly interesting - that incumbents are going to increasingly embrace it and that patients will migrate to models that offer both virtual and in person care rather than virtual only models. Assuming this hypothesis is true - and it makes a ton of sense to me - it will be very interesting to watch how the virtual only models move into in person care over time. Link.
  • Business Insider shared an update on Amazon Care, noting that it has started pitching other employers on whether they want to use the Amazon Care platform. From the article it sounds like those pitches have been unsuccessful to date, which is a bit odd as you wouldn’t think it’d be that hard for Amazon to convince an employer or two to try its virtual care platform. I hear JPMorgan and Berkshire might be in the market if Amazon is looking for some leads. Link.


  • KFF released data on health insurer margins through September 2020 and not surprisingly they appear to be doing quite well for the year. Check out those Medicare Advantage gross margin PMPMs for 2020!! Link.
  • PWC released a paper / survey looking at how the healthcare industry is changing heading into 2021. It’s quite a long report and I can’t claim to have digested the whole thing yet, but it looks to be pretty interesting with a bunch of different lenses on how digital is changing healthcare. Link.


  • Apixio, a data analytics startup, is hiring a product manager. Link.
  • Cohere Health, a platform helping providers deliver high value care, is hiring a VP of marketing as well as a number of other product, operations, and growth roles. Link.
  • GoodRx is hiring a bunch of roles across its telehealth and subscription teams. Link.
  • ICANNotes, a behavioral health EHR, is hiring a product manager. Link.
  • KidsX, a pediatrics digital health accelerator, is looking for a volunteer with UX / design experience. Link.
  • NSite is looking for a tech consultant / CTO for its 3D bodyscan app for MSK conditions. Link.
  • PatientPing, a care coordination startup, is hiring two product managers. Link.
  • PeerWell, a digital platform for MSK rehab, is hiring for multiple roles. Link.
  • Relevant Healthcare, a software platform for community health centers, is hiring a senior product designer. Link.
  • UnitedHealth Group is hiring a VP of social determinants of health. Link.