Kevin's Weekly Health Tech Reads - 9/13

A look under the hood at hospital finances; GRAIL files its S-1; a bunch of fundraising: Grand Rounds, Truepill, Ready, Sana, Decent, etc: a guide for providers implementing telehealth; & more

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  • A West Virginia hospital has settled a case with the DOJ related to Stark Law violations for $50 million. While this may sound like a bit of a yawner, the case provides some really interesting insights into the financials of hospitals, and how it’s relatively easy to flip the financial situation of a hospital (if you’re willing to break the law). This hospital, which was losing a few million dollars a year, brought in a group to do just that. It was able to turn around its financials overnight by overpaying leading local OB/GYNs and cardiologists to work for the hospital and control their downstream referrals. The result? The hospital was happy to pay some of the docs a salary of $1+ million (versus an average market salary of closer $300k - $400k) and lose a couple hundred grand a year on the individual practices, in order to make the $2+ million downstream contribution margin from the referrals each of these docs made to the hospital. Do this a with a few docs and ta da! You’ve (illegally) turned a money losing hospital into a money making hospital, as these folks were able to do. Provides for a great illustration of the financial incentives for big hospitals to control referrals in a market. The original complaint linked here is worth diving into if you’re interested in this kinda stuff. Link (summary). Link (original complaint).
  • GRAIL, a company developing a better cancer screening test, filed its S-1 this week after having raised over $1.9 billion in capital since it spun out of Illumina back in 2016. It is launching it’s first commercial product in 2021, which GRAIL claims could avoid up to 39% of cancer deaths through earlier detection. Page 4 on GRAIL’s commercial strategy provides for an interesting read - it thinks it’ll be several more years before GRAIL gets Medicare reimbursement, so in the interim it views the target market as employers, “progressive” health systems, and concierge practices. Sounds like a recipe for slow commercial growth, which seems problematic for a company burning through $250+ million a year. Link.
  • Grand Rounds, one of the leading startups in the second opinion space, raised $175 million from Carlyle Group and others. I would think Grand Rounds would be well positioned for huge growth in this COVID-19 world by supporting employers keeping employees healthy virtually - so I’m a little surprised to see no mention of growth in the press release. Seems like everyone is happy to cite their astronomical growth in 2020. Given the focus on virtual primary care in the press release, I’d be curious to know whether Grand Rounds was one of the other companies Teladoc was looking at acquiring before it pulled the trigger on Livongo. Would make a lot of sense if so. Link.
  • Truepill, the startup creating a backend API infrastructure to power the DTC pharmacy market, raised $75 million. It is interesting to see how quickly they are expanding from the pharmacy APIs to also include telehealth and now diagnostics, seeking to get into a wider mix of disease states and chronic diseases. The article also notes that they’re looking at health plans as a key driver of future growth, leveraging their investment from Optum. I’m not sure I see the expanded vision Truepill is going after quite as clearly as I did the ‘backend for digital pharmacy’ play. Link.
  • Ready (formerly Ready Responders), the startup sending EMTs / paramedics for in-home visits with Medicaid patients, raised another $54 million at a $354 million valuation after launching in 2018. Not surprisingly their model has done really well during COVID-19 - they’re now doing 15,000 visits and 10,000 COVID-19 tests per month. The article is a good read on their work in NYC and with Ochsner in New Orleans, and provides an interesting hint at where Ready might be going - they’re launching a pilot in 2021 allowing 100 providers to dispatch Responders directly to patients homes. They seem to have found a really interesting go-to-market strategy that can appeal to both payors and providers. Really exciting what these folks are up to. Link.
  • Sana Benefits, a startup building self-insured plans for small employers, raised $20.8 million. This seems like a cool model for small groups seeking to self insure. It offers the services of a number of well known startups as part of its plan designs, including Maven Clinic, PlushCare, and more. Link.
  • Decent, another startup building self-insured plans for small employers and entrepreneurs, announced a $10 million raise with a meme-filled version of a press release. The announcement does a really nice job of explaining the Decent model and the benefits of self-insurance. Definitely worth checking out if you’re interested in the space. Link.
  • Owl Insights, a startup building a “precision-guided” (huh??) behavioral health care management tool, raised an undisclosed amount of funding from Ascension and Blue Venture Fund. Link.
  • It would appear that every insurer has decided that now is the time to re-enter the exchanges in a big way:
  • Cigna is expanding its exchange offering to 80 new counties in 2021, bringing it to 200+ counties across ten states, with some new plan designs including $0 virtual care and a diabetes specific plan. Link.
  • Centene is adding 400 new counties across thirteen states where it already provides coverage. Link.
  • Kaiser Permanente has launched its first virtual care plan to members in Washington. Link.
  • Radiology Partners acquired MEDNAX Radiology Solutions for $865 million, adding 800 radiologists to Radiology Partners existing 1,400 radiologists. Link.
  •, a remote patient monitoring platform, raised $15.6 million. Link.


  • The AAFP and Manatt released a rather cool toolkit for primary care practices looking to adopt telehealth tools. It’s a great read for folks looking to understand what providers generally are/should be thinking about in adopting new tech solutions. It also provides an excellent summary of the current state of telehealth reimbursement. Note how little of the process outlined here is actually about selecting the right technology solution - it’s much more about A. making sure you get paid for it and B. implementing it into existing workflows. Link.
  • Nikhil Krishnan wrote a really good piece - although I might suggest a bit more nuanced than the title would indicate - on how some parts of healthcare delivery infrastructure would be better off scaling nationally, while other parts are best off being local. His thoughts around virtual primary care, virtual provider networks, centers of excellence, and medical tourism provide for some interesting conversation starters on what aspects of care delivery are better off as scaled national offerings. Link.
  • This chart below from the Gist Healthcare team from a few years ago I think still provides the clearest description of this question around what parts of the health care delivery infrastructure should be provided at the local level vs at the national level. Really interesting to read the two articles together here. Link.
  • This is a good read from Scott Shreeve, CEO of Crossover Health, on the central role that primary care plays in the cost / quality success of Medicare Advantage models (i.e. Oak Street / Iora). He ponders when these approaches might make their way into more of the mainstream with commercial health insurance models. While I do agree with the general premise that these primary care models help improve outcomes, etc in the Medicare Advantage population - I’m not sure I buy they reduce aggregate spend (see this excellent piece from the BCBS NC team which presents some interesting questions about cost impacts). Of course, I also have my questions about the commercial space cost impacts as well. Regardless of the cost impact, though, it seems like the right thing to do for patients. Link.
  • Rock Health released a report on trends in the aging in place market. Provides for a nice summary of the key factors driving investor interest in the space at the moment as well as opportunities for digital health tools. Link.
  • Here’s an interesting interview with VillageMD and Walgreens on their partnership and VillageMD’s model. I didn’t realize the emphasis that VillageMD is placing on pharmacists in their model. Link.


  • Medicaid enrollment has jumped 8% from February to July, meaning that there likely were 6 million new people on Medicaid in the country in that time. Link.
  • Meanwhile, this Health Affairs article provides for a really damning look at Medicaid work requirements in Arkansas, which was the first state to implement work requirements back in 2018. While the article is behind a paywall, the abstract covers the key points - i.e. of the people who lost Medicaid coverage, 50% reported having serious problems paying off medical debt. Woof. Link.
  • This is a good look on the state of digital health in NYC, looking at the funding raised over time and the key companies that are out there. A good read if you’re trying to get a sense of the landscape out in NYC. Link.