UnitedHealth Group hosted its analyst day this week, sharing with the Wall St analyst community how they’re building the next generation health system. I gotta say, the sheer breadth of this two and a half hour presentation is equally impressive and overwhelming. If you listen to Wichmann’s preamble linked below and ignore for a second what company you’re listening to, I think you’d find it sounds a bit like you’re listening to one of the more interesting startups in healthcare today. They have a very cool vision for what they want to execute on over the next decade.
Wichmann listed out five key growth priorities for the organization - the first of which is reinventing health care delivery (the other four focus areas: pharmacy, digital technologies, innovative / value based plan designs, and healthcare financial services). It was interesting to see UHC highlighting virtual primary care plans in the presentation, which they’ve rolled out to 600k members this year, noting that 30% of their commercial members don’t have PCPs and those members cost 10% more. There was also lots of discussion of COVID-19 impacts in 2021 (UHG expects some negative impacts from deferred care, risk adjustment, and enrollment shifts), as well as continued growth in Optum Health.
Check out the chart below visualizing Optum’s care delivery presence across the US. I mean… if you’re a leader at a health system and you see this behemoth creeping into your local market, what in the world are you supposed to do? I mean aside from obviously you pick up the phone to ask the health system in the next market over to chat about merging. Oh wait but what if the physicians revolt? Shoot maybe you don’t do that. Oh oh I know I know… you should launch your own insurance plan so you can capture some of those profits - Ha! two can play that game, Optum! Oh, wait that generally hasn’t worked out so great? Dang. Hm. Ok fine, I suppose you could call Optum to see if they want to partner - but only if you tell them it has to be for the non-inpatient stuff only. That’s where you lose all the money anyways… just give that stuff to them so that you can focus on inpatient! OMG thats brilliant! Just… kindly ignore the part of the presentation about how much money Optum knows it can save UHG - over $2 billion - by shifting site of service for cardiac and ortho procedures from Hospital Outpatient to ASCs.
All of this feels a little bit like that scene in the Queen’s Gambit where Beth Harmon is playing chess against the high school team all at once and she destroys every single one of them at the same time. UHG is playing the role of Beth in this analogy, of course, and it would appear she is about to checkmate health system exec teams across the country. Link.
Oh also btw, that health care behemoth depicted in the image above is headquartered in Minneapolis y’all. Just sayin’. But seriously don’t come here the cold weather sucks.
CMS continues to make headlines for a second straight week with a couple different moves:
CMS unveiled its new Geographic Direct Contracting Model. This will be an option within the Direct Contracting umbrella for organizations to receive full financial risk for a minimum of 30k lives in a geography. The article linked here does a nice job highlighting the current state of the model. Will be quite interesting to see who applies to this model - and in particular how many health systems are willing to jump in. Link.
CMS is eliminating an inpatient only list which required 1,700 procedures to be done inpatient for Medicare patients. The list will be phased out by 2024 much to the chagrin of the hospital lobby. Link.
Olive, the startup building robotic process automation tools for health systems, was in the news twice this week:
It raised $225.5 million at a $1.5 billion valuation, making that $385 million raised over 3 separately announced rounds of funding in the last 9 months. Link.
It also acquired Minneapolis-based (!!!!) prior auth automation startup Verata for $120 million. Verata and Olive announced a partnership earlier this summer, which seems to have gone quite well. The combination makes a ton of sense for both parties, with Verata being tech that Olive can plug into its customer base and scale together. Verata raised $10 million a little over a year ago at a $35 million valuation, so it appears to be a very nice exit for all involved. Verata’s CEO will move into a role as Olive’s President of payer market division, seemingly indicating Olive’s interest in expanding beyond the health system customer base. Link.
Everlywell raised $175 million as the land grab for in-home lab testing heads up. Everlywell’s sales have grown 4x in 2020. The press release is light on specifics but mentions that Everlywell will be moving more into the virtual care space. Note that one of the early comments Wichmann made in his UHG talk linked above is about a patient having Tamiflu in a lockbox ready to go in the event they’re diagnosed with the flu. It provides an interesting example of where the in-home testing companies may be heading in the near future beyond just the D2C market. Link.
Virta Health, the diabetes management startup centered around a ketogenic diet, raised $65 million. Virta sure seems like it has some really strong clinical outcomes for individuals who are able to sustain the ketogenic diet approach. It will be interesting to see how Virta chooses to compete for employer attention going forward - will it follow the Livongo / Omada route and seek to provide more offerings across chronic conditions to employers? Some interesting strategic questions for them to grapple with. Link.
Andor Health, a virtual care collaboration platform, raised funding from M12, Microsoft’s venture fund. Link.
Paceline raised $5 million to build a platform that rewards physical activity with financial incentives. Link.
MedArrive, an in-home care delivery startup leveraging EMTs, raised $4.5 million. This EMT-driven approach to in home care delivery is quickly becoming a crowded market with Dispatch and Ready Responders leading the way. Link.
Folx announced a $4.4 million raise to build a digital clinic for the LGBTQIA+ community. Link.
Loop Health, a health insurance + virtual primary care startup targeting employers in India, raised $2.3 million. Link.
Highmark is expanding a partnership with Lark for Highmark members to access Lark’s digital programs across hypertension, diabetes, weight management and stress reduction. Link.
Amazon is opening 4 more clinics with Crossover Health. Link.
Walgreens is planning to open 40 clinics with VillageMD by Q3 2021 as part of their partnership. Link.
Here’s a quite interesting read on Embedded Health, a startup led by Zeke Emanuel that’s working to drive provider behaviors that better manage total cost of care leveraging behavioral economics principles. The approach isn’t rocket science - it appears they’re analyzing what costs are actually ‘impactable’ (versus all costs) in order to give a more realistic target for providers to hit, and then incentivizing providers to change their behavior and reduce costs. Embedded is already piloting this with a ‘large, national insurer’, and the article does a nice job showing how a program like this can show an ROI quickly. Anyone wanna place a friendly wager on how long until its announced that Oak HC/FT is leading a massive round in Embedded? n.b. Emanuel is a venture partner at Oak. Link.
This is a worrying look at how FQHCs in Chicago are bracing for challenges in rolling out the COVID-19 vaccine in the Black community of Chicago, both stemming from distrust in how the vaccine was developed as well as challenges FQHCs expect to have in getting the vaccine. Link.
McKinsey wrote a piece on nine value pools fueling investor interest in digital health and looks at where investor excitement is highest. The nine pools are broken up into five high level categories - pharma R&D, wellness / prevention, care delivery, screening & diagnosis, and finance / back office. Link.
The hospital at home world is still abuzz after last weeks news from CMS, with a few additional articles this week:
Here’s a summary of the hospital at home startup excitement around the CMS regulatory change in the space. Link.
Here’s a good read more on the operational side of hospital at home models, focused on Mount Sinai’s work in the space and what the model looks like. Link.
There was an interesting podcast on Levels this week. To me the most interesting question here is at the end on go-to-market strategy and how they expect to expand from early adopters to the mass market. I have no doubt Levels is a smash hit with its early adopter crowd, but I am skeptical about mass market adoption of a continuous glucose monitor that requires you to stick a (small) needle in your skin and track all of your food intake. Link.
Here’s a look at what OMERS Ventures is investing in from a thematic perspective by Chrissy Farr, who made a big splash by announcing this week she’s leaving the journalism world and joining the investing team there. Her focus areas at OMERS hit on a lot of big themes in the digital health world currently - aging in place, payments, demographic-specific care, & more. Link.
This is an interesting KHN article on the stresses independent primary care practices are facing due to COVID-19. Although its interesting to note that the clinic highlighted throughout the article is a HealthPartners clinic in Minnesota. HealthPartners, for those not from Minneapolis, is a rather large integrated payor / provider org in Minnesota. It’s interesting to see an org such as HealthPartners shutting down primary care practices in the midst of a pandemic while the risk-based primary care orgs seem to be doing quite well. There’s a lot to unpack behind differing incentives across those organizations. Link.
Oscar featured a post on two member stories related to Medicare Advantage members leveraging Oscar’s partnership with a startup called Uno Health to help members identify financial resources that they qualify for but may not be aware of. Uno sure sounds like a very cool (and needed) startup. Link.
This looks to be a cool podcast on the food as medicine topic that I am pinning here for myself to listen to at a future date because I ran out of time this week thanks to the 2.5 hour UHG investor day presentation. Link.
Here’s a good report on primary care spending, showing that it has again declined as a percent of total healthcare spending across most the country between 2017 - 2019. I must admit I am a little surprised to see that given all of the national attention paid to the importance of primary care over the past few years. But then again primary care has always been underfunded so what else is new. Link.
Jane Sarasohn-Kohn highlighted a recent survey around delivering healthcare in the home - not surprisingly it appears both consumers and payers are overwhelmingly aligned that more healthcare should be delivered at home. Link.
KFF looks at Medicaid MCO enrollment growth in the COVID-19 era. Enrollment increased 11.3% between March 2020 through September 2020, with Centene, Molina, Anthem, and UHG all doing well from an enrollment increase perspective. Those four insurers accounted for over 60% of the growth over the period. Link.
Higi, a health kiosk startup, is hiring a product manager. Link.
Rupa Health, a specialty lab portal for integrative medicine, hiring a strategic lab relationship manager. Link.