Kevin's Weekly Health Tech Reads 9/6

More on Teladoc / Livongo, Walmart + Oak Street partner, California is close to allowing NPs to practice on their own & more

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  • Teladoc and Livongo filed an S-4 / investor presentation related to the transaction this week. Most of the stuff in here is rehashing info that’s already been shared, but some new interesting nuggets in there:
  • From the investor presentation, this slide below on the total addressable market for the combined entity was interesting to see the various price points and market sizes. The deck also includes some good details on how the two entities view the cross selling opportunities. Link (Investor Presentation).
  • The S-4 includes the fairness opinions from the financial advisors, Lazard (pg. 97) and Morgan Stanley (pg. 105), which is worth checking out if you’re a finance nerd for the gymnastics they had to go through to make the valuations work. For instance, in the precedent transactions analysis section, each advisor came up with an implied Livongo valuation between $30 - $70 per share, just a touch shy of the $159 per share purchase price. In the public comps analysis portion, Morgan Stanley used only a few healthcare stocks to compare Livongo against - instead choosing a bunch of high growth SaaS tech stocks, which gets the valuation multiples significantly higher (compared to, say, Ardan Equity’s healthcare index). But hey, when you’re getting paid $106 million to be Livongo’s financial advisor on the deal, you make the math work am I right? Link (S-4).
  • Brian Dolan had a really good summary read of the S-4 on Twitter, including some good details surrounding Teladoc’s interest in Livongo - Livongo was one of four targets Teladoc was considering earlier this year. Link.
  • Oak Street and Walmart announced they’re partnering to open up clinics at Walmart stores in Texas. Given Oak Street’s emphasis on getting practices to take on Medicare Advantage risk I’d be curious to know how they have worked out the details with Walmart here given Oak Street will need to take on all comers - whether seniors, adults, millennials, or pediatrics. That’s a big clinical deviation from Oak Street’s clinical (and financial) sweet spot. What does the Oak Street care model look like for less lucrative patients not in Medicare Advantage risk arrangements? How do they to profitability? It seems like the decision to partner with Oak Street would signal that Walmart must be interesting in the dynamics of learning about global cap / risk models. Also interesting to note that these clinics are opening up in Dallas, where Walmart is opening an insurance brokerage. Link.
  • The California state legislature sent a bill to the governor for approval this week allowing for nurse practitioners to operate independently of doctors, joining 40 other states with at least some independence of practice for NPs. This article is an interesting read on the politics at play - and in particular how hard doctors have been fighting this legislation in California. The California Medical Association apparently has pushed back hard with the argument that NPs practicing independently will lower the standard of care in California. Cool cool - I’m sure it has had nothing to do with $$$, like the fact that previously nurse practitioners had to pay $5k - $15k to a doctor per year for oversight of their work. Link.
  • Biofourmis, a digital therapeutic startup, raised $100 million from Softbank’s Vision 2 Fund. The paragraph talking about Bofourmis’s business model does not instill a ton of confidence in a company that has now managed to raise $145 million in total. It apparently charges customers on a PMPM basis, with revenue currently coming from seven partnerships with pharma companies and ten with health systems. Seems like a lot of money for a company that sounds like it is still in pilot stage from a commercial perspective. Link.
  • Tyson Foods is launching onsite clinics at seven of its meatpacking facilities in partnership with Marathon Health. As corporate leadership teams start to move past the initial crisis response phase of COVID-19, I imagine we’ll see a lot more employer activity like this - taking it into their own hands to help employees stay healthy so that the employer can remain open. I’m not sure anyone designing a healthcare system would design for that outcome, but it sure seems like its the direction we’re heading. Link.
  • Also in the onsite clinic space, PremiseHealth acquired CareHere, bringing the combined org’s revenue to $1 billion annually. These two orgs will reach 11 million eligible lives at 2,200 customers, operating over 850 onsite / near site wellness centers in 300 markets. Link.
  • In the artificial intelligence space, had a big week as CMS announced it would pay up to $1,040 per use of the algorithm for treatment of stroke patients. And here I was thinking algorithms were supposed to be cheap or something. Link.
  • Humana and Salesforce announced that they’re partnering with Humana leveraging Salesforce’s platform to drive more coordinated care. Marquee customer name for Salesforce in the healthcare space. Link.
  • Aetna is launching new commercial plans in Kansas City attempting to drive members to CVS HealthHUBs via $0 copay visits, free home delivery of prescriptions, and 20% discounts on health items at CVS. Link.
  • Hazel Health raised $33 million for its pediatric telehealth platform that offers virtual clinics inside a nurses office at schools. Link.
  • Picnic Health, a startup that’s creating a personal health record and selling the data to pharmaceutical companies, raised $25 million. Link.
  • umotif, a startup building a platform to collect patient data during clinical trials, raised £5 million. Link.
  • Justpoint raised $1 million to build a platform that helps patients submit medical malpractice claims. Link.


  • For-profit hospitals: friend or foe? This is a good look at the impacts of the rise of for-profit hospitals by Paul Keckley, citing a recent unsolicited bid by a new private equity backed group, StoneBridge Healthcare, to acquire a Chattanooga, TN safety-net hospital for $475 million. The conclusion is what you’d expect - for profit hospitals are good for investors, but are potentially concerning for the community. Either way, as Keckley says, all signs point to more investor involvement here. Link.
  • I don’t think a week goes by these days without a new market map of the mental health landscape being published. This week Union Square Ventures joined the party offering up their views on ‘Mental Health 3.0’, arguing that a new breed of scalable solution will emerge in the space that enables more personalized care at lower costs. Provides for some interesting insight into how optimistic the tech investing world is about solving healthcare’s problems related to scalability and cost. Meanwhile I’m over here all grumpy shouting at my computer screen that nothing will ever reduce costs (cf. aside from a massive black swan event that nobody actually would want. Link.
  • The Rock Health team penned an interesting piece on the emerging ‘back to work’ market. It’s a nice rundown of the early activity in the space. Link.


  • There was some more data out this week showing a rather precipitous decline in telehealth use since its peak earlier this year:
  • Data from Epic (Sidenote: Epic is sharing data?) shows that telehealth encounters are down to 21% of total ambulatory visits, after peaking at almost 70% back in April. Link.
  • Fair Health data also again shows telehealth claims falling in June. They’re also seeing that mental health conditions account for 44% of telehealth claims in June. Link.