Kevin's Weekly Health Tech Reads 6/28

Oscar, Dispatch, Cedar, and Somatus all announced big funding rounds; AHA is dealt a blow regarding price transparency; Mayo gets into hospital-at-home; and more

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  • A week of startup megaround announcements:
  • Oscar raised another $225 million. This brings their total capital raised to date to $1.5 billion. The press release doesn’t make it clear what specifically the funding is for beyond general growth. I’m curious to see if there’s an IPO coming here at some point in the relatively near future - they seem to have reached a scale to do so with $2 billion of annual revenue and 400k+ members across 15 states. I do wonder what their profitability looks like at this point given the amount of capital they’ve now raised. Regardless, I may need to host a reading party over Zoom when their S-1 comes out whenever they finally do file (hopefully soon). Link.
  • DispatchHealth, an at-home urgent care startup, raised $136 million. It’s hard not to like the general concept here - although as noted in Slack this week I do wonder about the financials / unit economics of home health models (a question I’ve had since this excellent post-mortem on HomeHero). My understanding is that in some markets they’re operating under Fee for Service contracts, but in some they’re in value based care arrangements, which I’m sure helps with the unit economics at play. Link.
  • Cedar, a startup that helps hospitals collect more of its bills from patients, raised $102 million in a round led by Andreessen. As I’ve mentioned before, it seems like Cedar has a pretty straightforward path to signing up a bunch of health systems as clients. Given the financial stresses health system leadership teams are under, they’re looking for opportunities to capture additional revenue - particularly ones like Cedar where the health system doesn’t pay anything unless it sees more revenue. And, instead of just talking about how Cedar increases revenue for the hospital, it brilliantly makes the talk track about making medical bills more understandable for patients. Makes winning over health system exec hearts and minds pretty easy. I mean who doesn’t like the idea of helping health systems collect more revenue from patients in a way that feels better for the patient?!? Link.
  • Somatus, one of the startups building a new care model for dialysis / chronic kidney disease, raised $64 million. A lot of activity going on in this space at the moment given some of the regulatory tailwinds - will be fun to watch who emerges as the leader from the Somatus / Strive / Cricket / Monogram group. Link.
  • Oscar and Cigna shared more details on their partnership, announcing the launch of a co-branded insurance plan for small businesses in Atlanta, San Francisco, and Tennessee later this year. Interesting to see a bit more detail on the nature of the plan, which looks like it is playing to the strengths you’d expect each party to bring to the table - the product is leveraging Cigna’s network and Oscar’s general member platform. Seems to makes sense for both parties, particularly if Oscar is having challenges building a network that meets the needs of small businesses. Link.
  • Oak Street announced they’re opening three new clinics this year across NYC and Mississippi. They’re up to 50 clinics now with 85,000 members. It’s telling that their one data point on outcomes here is that they’re seeing a 51% reduction in hospital admissions. That’s great and all - but where’s the corresponding data point for overall cost reduction these models are supposed to drive? This Health Affairs post from the BCBS NC team a few months ago I think has some clues (particularly Challenge #2). Link.
  • Speaking of BCBS NC, they’ve announced a program to help independent primary care docs weather the financial storm at hand by guaranteeing payments based on 2019 revenue. In exchange, BCBS is looking for commitments from the independent primary care docs to join their value-based care program by the end of 2020 and move to capitated payments by 2022. Given BCBS has already launched the program, I assume this means there’s a meaningful chunk of the independent PCP community in NC that chose not to sign up for the value based programs pre COVID-19. It’d be really interesting to hear from the BCBS team on the dynamics of the independent PCP market in NC and how that landscape has been shifting (hint hint: please write one of your next posts on that BCBS NC folks!). Link.
  • Mayo Clinic is partnering with Medically Home to launch a hospital-at-home care delivery model using Medically Home’s platform. It appears to be the first big move coming out of their new-ish Mayo Clinic Platform initiative helmed by John Halamka. Link.
  • Commonspirit Health announced a partnership with Paladina to create a new direct primary care offering for employers. Link.
  • BrightInsight raised $40 million for its medical IoT ecosystem. Link.
  • Calibrate raised $5 million for a telehealth weight loss program. Link.
  • Optimize Health raised $3.5 million for its remote patient monitoring platform. Link.


  • As many of you may have seen this week, a District Court judge threw out the AHA’s case against HHS regarding price transparency regulation. If you didn’t check out the memorandum written on the case, you should as long as you’re willing to deal with a bit of legalese. The memo does a great job wading into the complexity of how hospitals bill for charges and shining some light on the madness of it all. I particularly enjoyed page 22, which summarizes an AHA argument that hospitals actually do price their services similar to other industries such as restaurants, and then completely eviscerates it. Like… who at the AHA thought it would be a good idea to compare hospital pricing to restaurant pricing? Link.
  • Bessemer published its ten laws for healthcare startups. It’s a very good read for healthcare startup folks, with lots of interesting points and examples on how to think about sales cycles, understanding customer needs, and how to think about go-to-market strategies. Link.
  • I do have to say, using Bright Health as example 1A of Bessemer’s rule that ‘diverse, multilingual teams win’ highlights, I think, just how far the industry has to go in supporting diverse, multilingual teams. Obviously there is a lot to like about Bright and what they’ve executed on over the last few years (and as a Minneapolis!!! startup). And I’m sure it’ll generate nice returns for the VCs behind it. But, to say that a team consisting of “12 CEOs, including the former CEOs of UHC, Optum, and Magellan”, with a leadership team of white males, is the leading example of the value of having diverse perspectives at the table seems a bit… out of touch. We collectively have some work to do here bringing diverse, multilingual voices to the table.
  • This is a good read from Kevin Wang’s blog on how we measure health equity as a country and some of the limitations with how we do it today. Link.
  • Two recent solid white papers from consulting groups on how care delivery is changing:
  • Oliver Wyman shared their thoughts on the opportunity for a digital first health system to emerge. Link.
  • McKinsey on what health ecosystems might look like in the future. Link.
  • The New Yorker featured a long piece on virtual care. It does a nice job walking through the current state of telehealth generally. It bounces back and forth between a tele-ICU use case with Dartmouth-Hitchcock’s program as an example and the more consumer-oriented telehealth use cases. Link.
  • I can’t keep up with all the content Andreessen Horowitz is putting out at this point - they released two podcasts that I still need to get around to listen to but I’m guessing are good:
  • One on healthcare at home. Link.
  • One on digital therapeutics and the recent Akili approval. Link.
  • It seems like there is going to be a looooot of money made by folks helping employers get back to work in a virus free environment. This NYTimes piece explores how it’s likely to be a multi-billion dollar opportunity soon. Link.
  • This is an interesting on Ro, the DTC telehealth startup focused primarily on mens health, which is now on an annual revenue run rate of $250 million. Link.


  • PWC released a report analyzing where medical cost trend could come in for 2021, suggesting a range from a 4% increase to a 10% increase in costs. They do a nice job highlighting some of the items increasing costs (COVID-19 mental health impacts, specialty drugs) as well as those decreasing costs (telehealth, narrowing networks). Link.
  • COVID-19 is highlighting racial disparities in this country as Medicare data shows that for Medicare enrollees, black people are 4x as likely as white people to end up in the hospital with COVID. Link.
  • This paper looks at the results of various alternative payment models put in place by CMMI, trying to explain a ‘paradox’ of why the individual programs generally haven’t seen success, but on the whole the growth of healthcare spend in the country appears to have slowed. Link.
  • Interesting survey results from the Business Group on Health of 152 large employers looking at how they’re investing in emotional and mental health wellness programs for employees. Link.