Weekly Health Tech Reads | 10/30

Teladoc earnings, hospitals creating NewCos, and more!

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News of the Week:

  • Teladoc reported earnings this week, and Wall St reacted favorably to Teladoc's earnings beat, which was largely driven by cost management efforts. Teladoc highlighted the primary drivers of margin improvement as 1. reduced technology spend and 2. spreading more members across providers to improve BetterHelp's gross margins. We highlighted some of the more interesting sections of the earnings call in the Slack thread linked below, including updates on the Primary360 product, value-based care, and Teladoc's bullishness on cross-selling the platform. Perhaps most interesting for us was that the data Teladoc shared that appears show Primary360 is only being used by a few thousand people at most, which we backed into based on the data shared about utilization. While Teladoc highlighted the progress in VBC and Primary360 initiatives, it still seems like they're both quite early. Dependent on your long term view on Teladoc, it either highlights how far they have to go, or how much opportunity they have, in moving towards the whole-person virtual care model they talk about.
    Link (transcript) / Link (Slack thread)
  • The trend of health systems launching NewCos continued this week we have hospitals launching two new companies. First, the Hospital for Special Surgery and Flare are launching a new MSK platform called RightMove with $21 million in funding. It's a virtual physical therapy model that'll seek to partner with payors and employers to offer the platform. Seems like a positive signal for the virtual MSK space that we're seeing an incumbents move to offer a platform like this. Although if you're a startup, news like this should make you think hard about what your competitive advantage is versus an org like HSS. If you're an employer evaluating solutions, and RightMove has feature parity with your startup, why would an employer not choose the clinical credibility of HSS? Also notable, this marks two weeks in a row where Flare has launched a NewCo with an incumbent provider organization. We'd expect to see more VCs going down this path of attempting to incubate ideas with partners that have built in supply / demand for services.
    Link / Slack (h/t Kevin Wang)
  • The second startup launched this week by health systems is called Ovatient, a virtual and in-home care delivery company launched by MUSC and MetroHealth. The press release articulates the play nicely here: "As nontraditional health care providers continue to enter the health care ecosystem and seek to capitalize on digital technologies and the convenience they provide, MUSC Health and MetroHealth are creating Ovatient to offer the same convenience and a better experience all while preserving the connectivity to acute and procedural care sites so that patients do not endure fragmented care experiences." Between Ovatient and RightMove this week, along with Inbound Health last week, it shows health systems are getting more active in this arena.
    Link / Slack (h/t Brett Jansen)
  • Montana's state health plan, which has been one of the leading examples of an employer moving to reference-based pricing in an attempt to control healthcare costs, is taking a step back as it announced it will be working with BCBS Montana moving forward and giving them flexibility in how they set rates. Apparently BCBS Montana submitted an RFP that will save the state health plan $28 million over the next three years. I'd sure love to see how giving BCBS Montana flexibility to move off of reference-based pricing will generate **more** savings for Montana.
    Link / Slack
  • Continuing on the theme of state activism as it relates to managing healthcare costs, North Carolina's state treasurer released a new report this week suggesting that while hospitals claim to lose money on Medicare patients, most hospitals in the state are consistently making money on Medicare, according to their Medicare Cost Report data. Not surprisingly, the hospitals in North Carolina don't seem to agree with this assessment.
    Link / Slack (h/t Martin Cech)

Other News:

  • Walmart launched another 16 clinics. Lots of interesting tidbits in this one. First, the article states nearly half of all appointments were for primary and chronic condition care. It would be really interesting to see how they are defining those two care types within the visit, particularly given the UHG relationship mentioned focused on MA value based care. Given the momentum of that relationship and the 50% increase from its current clinic presence, perhaps this is the time that Walmart might finally be making some strides in health care.
    Link / Slack
  • CVS Health and ixlayer are partnering on branded home diagnostic tests. This always strikes us as a large and under-discussed opportunity. As more care moves into the home, who is going to be the brand that owns the future medicine cabinet? It seems like there is a rather large opportunity for a brand to create an Apple-like consumer experience for home health devices and diagnostics and own the future "medicine cabinet".
    Link
  • HealthJoy, an employee benefits manager raised $60 million. HealthJoy has doubled its client base to 1,000 employers and 500,000 employees.
    Link / Slack (h/t Casey Langwith)
  • Hazel Health, a telehealth model for schools, raised $51.5 million. It has now expanded to 3,000 schools across 14 states.
    Link / Slack
  • Electronic Caregiver, a remote patient monitoring / virtual caregiver company, raised $30 million. It's apparently quietly raised $110 million to date, intends to raise another $100 million at a $560 million pre-money valuation, and then IPO within two years. It's a bit odd to see so much data shared on funding plans but so little shared on how they're helping people.
    Link
  • Midi Health raised $14 million for a virtual menopause clinic.
    Link / Slack (h/t Rik Renard)
  • Gabbi raised $4.4 million to help increase the early detection of breast cancer.
    Link / Slack (h/t Stephanie Rich)

Opinions:

  • Zach Miller continued his good series on the dialysis market, in this article walking through the financial performance of an outpatient dialysis clinic, highlighting how a single clinic can bring in almost $3 million of revenue and generate ~$300,000 in operating profit.
    Link
  • Duncan Reece highlighted how plans are starting to be more thoughtful about how they're tailoring benefits to specific segments of the Medicare Advantage market. It highlights some helpful data on various consumer personas and how they evaluate purchasing MA plans.
    Link / Slack (h/t Duncan Reece)
  • Jan Felix Schneider took a look at the Medicare Advantage brokerage market, which has seen a lot of VC attention recently as the Medicare Advantage market has heated up. It does a nice job highlighting various strategies in the space and some of the companies that have raised VC funding.
    Link / Slack (h/t Jan-Felix Schneider)

Data:

  • Here's a fact sheet outlining telehealth reimbursement policies for FQHCs across various states, highlighting the variability between different states.
    Link / Slack (h/t Jonathan Solomon)
  • A study suggests that hospitals participating in BPCI-A were associated with increased spending for CMS.
    Link / Slack

Featured Jobs:

  • agilon health, a VBC platform for independent primary care practices, is hiring a Regional Manger, Operations. Link.
  • Charlie Health, a virtual mental health provider for teen, is hiring a Director of Care Delivery. Link.
  • CVS Health is hiring an Executive Director, Enterprise Strategy. Link.
  • FOLX Health, a virtual LQBTQ+ care provider, is hiring a Head of Payer Strategy & Partnerships. Link.
  • RapidSOS, a technology platform for emergency services, is hiring a VP, Marketing. Link.

You can post to, or view roles on, the HTN Jobs Board here.

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