Kevin's Weekly Health Tech Reads 8/2

Oscar's expansion; Ro raises a big round; a bunch of Q2 earnings reports; a read on dual eligibles; & more

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  • Oscar announced it is expanding to nineteen new markets / four new states and it’s also launching a virtual primary care product in 10 markets. As discussed on the Slack channel (join link) this week, this virtual primary care product announcement is a cool iteration of their product. The virtual PCP visits are free, as well as any initial specialist visit by the PCP, which highlights how the integrated care and insurance model can bear some major advantages versus standalone digital primary care models. I’ll be curious to see if this becomes a central part of their product offering over time - you may recall a few years back they started experimenting with a primary care clinic in Brooklyn but it looks like they have moved away from the bricks and mortar approach. Hopefully they’re able to scale up this product. Link.
  • Ro, the DTC telemedicine startup, raised $200 million at a $1.5 billion valuation. Crazy to see how quickly this company has grown over the last few years - they’re now at $250 million of revenue per year. I’m a bit confused by the quotes in this article that suggest Ro’s goal is to be the ‘first call’ from patients, but also that their vision is to become the Shopify of healthcare. It seems like two competing visions in some sense - one where Ro is the trusted health advisor, and one where Ro is enabling the trusted health advisor. Either way, it seems like it’s time for the healthcare establishment to stop overlooking these models. Link.
  • Also in the digital pharmacy space, Hims announced a partnership with Alto Pharmacy for same day medication deliveries. Link.
  • Humana announced a partnership with / $100 million investment in Heal, an in-home / virtual primary care startup. The deal values Heal at $300 million. The article includes a stat that since January Heal’s home visits have grown by 33%, while its telehealth visits have grown by 8,000%. Link.
  • Another week means another Humana kidney care partnership in a new market. This time they’ve partnered with Strive. I think they’ve now covered off on all the well known venture-backed kidney care startups except for Cricket. Link.
  • I’m quite confused by all the SPAC activity these days. This week SOC Telemed, a telehealth company owned by Warburg Pincus, is going public at a $720 million valuation via an acquisition by a SPAC. Link.
  • It was a week of more Q2 earnings releases and COVID-19 updates for public healthcare companies:
  • Anthem saw a huge bump in Q2 income due to COVID-19. There was some interesting dialogue in the earnings call on the PMPM operating profit per member for Anthem in commercial vs Medicaid markets, providing some insight into the business model - a new fully insured commercial member is about $25 - $30 PMPM in operating profit vs an ASO member is only $5 PMPM. Medicaid is around $12 - $18 PMPM, so if ASO lives are shifting to Medicaid it helps out Anthem margins. Anthem highlighted that they lost 290,000 commercial members, and it sounded like they were mostly ASO. Link. Transcript.
  • Teladoc posted another quarter of huge revenue growth. Interesting to see them talking more about their health system business now as the InTouch acquisition gets closer to closing. Health system RFPs for virtual solutions were up 3x from Q1 to Q2. Also interesting to see they’re seeing hypertension, back pain, and anxiety climbing into their top 10 diagnoses list for the first time. Link. Transcript.
  • Molina posted Q2 earnings, with profits up but not as much as expected by analysts. They saw a 5% bump in enrollment (not due to increasing unemployment yet) and a 10% drop in utilization. Medical costs for the quarter dropped by $190 - $240 million due to COVID-19. They’ve seen 4,100 COVID-19 cases among patients, with an average inpatient cost of $9,000. Also some interesting dialogue about state budget pressures here. Link. Transcript.
  • Centene saw a nice bump in enrollment from COVID-19, although is pulling back some of their membership growth forecasts for the remainder of the year. They saw a decline in utilization in April and May, but by June it was back to normal levels. Link. Transcript.
  • Hinge Health, announced it is becoming a ‘digital clinic’ for musculoskeletal conditions and hiring 100+ physical therapists and doctors. It’s interesting to see them evolve their branding in this way, another indication that digital therapeutics companies are increasingly seeing themselves as a digital first provider group. It’s similar to how Omada has started positioning itself as a digital care provider - i.e. ‘a digital Mayo Clinic’. The next really interesting evolution in all of this is going to be when the digital care providers like Hinge or Omada begin building a physical presence. Link.
  • Verata & Olive, two startups working on solutions that help health systems automate back office functions, announced a partnership. Link.
  • Eargo raised $71 million for direct to consumer hearing aids. Link.
  • Withings continues its rise from the ashes post Nokia, raising $60 million to target the B2B market. Link.
  • Lemonaid Health, a DTC telehealth startup, raised $33 million. Link.
  • Mountain Health, a virtual primary care startup that has Minneapolis (!!!!) roots having just completed the UHG / Techstars Accelerator, raised a $1.6 million seed round. Link.


  • This is a really good white paper focused on how to best integrate care across Medicare and Medicaid for dual eligible populations. It provides a really nice overview of the dual eligible market and historical background on the market growth as well. The dual eligible market seems poised for significant investor interest and startup activity over the coming years given the ability to do good with a complex population (and also given it’s a particularly high cost population, which creates more opportunity to make money by managing those costs). Link.
  • Here’s a good article / podcast from Tradeoffs on mental health and the notion of integrating mental health into primary care. Link.
  • Also on the mental health space, here’s an interesting perspective from VC Sree Kolli on various startups in the mental health landscape and which ones stand out. Link.
  • The ACA’s risk adjustment formula for the individual market could apparently use some tweaks according to this article. This sentence below is pretty insane. Link.
  • Oscar Health, in its insurance filing with New York State, proposed an average annual small-group premium of $10,752 for a single person for its 2021 plan. This amount is so high partly because 40% of the rate—or $4,332—is a built-in factor to cover expected risk-adjustment outflows.
  • Here’s a thoughtful piece from Sachin Jain on care delivery in the era of for-profit medicine, and how care delivery entities with for-profit owners can take steps to put safeguards in place that ensure proper patient care. Link.
  • Nikhil Krishnan wrote a solid piece on why building healthcare startups is so dang hard, highlighting the many common pitfalls that make life tough for various healthcare startups. Seems to me that if you want to avoid all these pitfalls… just go copy Ro’s playbook. Link.


  • The Medicare telehealth data over the past few months is absolutely bonkers. Check out this stat from HHS: Nearly half (43.5%) of Medicare primary care visits were provided via telehealth in April, compared with less than one percent before the PHE in February (0.1%). From 0.1% to 43.5% over 90 days?!?! Insanity. Now, it’s worth noting that those rates have been declining back to around 20% at the beginning of June. Super interesting to see the lower rates of telehealth use in rural counties, too. Link.
  • Here’s a really interesting article looking at how we may be setting up primary care to fail with all the changes centered on primary care models. The piece reads a bit to me like a ‘we work too much’ complaint, but it does have some interesting data behind it. Like this chart below on the 20 hours per week of EMR tasks for a primary care doc. Link.