Weekly Health Tech Reads | 11/7/21

News:

• One Medical shared in its Q3 earnings that Iora will be blended into One Medical, under the One Medical brand moving forward. Strategically this move seems to make sense. The earnings call highlighted this, as they shared they're testing the expansion of legacy One Medical markets into Medicare Advantage and Direct Contracting. It sounds like they are seeing good conversion of One Medical members voluntarily aligning into the direct contracting model. That's a large opportunity to capture incremental revenue for the combined organization. But the practical side of executing this integration still seems to include many more questions than answers. One Medical talked in the call about blending in Iora's tech and capabilities to create a combined approach. But how does that work with a very different tech platform and operational model? It would seem like you need to pick one or the other. Perhaps that is what they're doing piece by piece - I'm just not sure how you mash those pieces together successfully. There was lots more discussion in the Slack channel this week on this one for those interested. Link.

• Humana's Q3 earnings call featured a discussion around how it is now the "largest senior-focused, value based primary care organization in the country, which by year end will include approximately 200 clinics serving 300,000 patients across 24 markets in nine states. We are accelerating organic and inorganic growth nationally and plan to open a total of 30 de novo senior focused centers in 2022." The inorganic growth caught my attention - they've made seven acquisitions of 21 senior clinics through Q3 of this year, and plan to continue that pace of acquisition, focusing on markets where they already have a presence. They currently have 270k Humana members in value-based home health models, and intend to get that number to 50% of its MA members in the next 5 years, which would mean increasing that program by around 10x. It also was interesting to see Humana shut down question about the need for a virtual first plan offering in the Medicare population - apparently not everyone is drinking the kool-aid on virtual first plans. Link.

• CVS's Q3 earnings call touted it being the first to launch a virtual first primary care plan nationally. CVS has over 30 employers signed up and 750,000 eligible members as of 1/1/2022 in the virtual first plan. Of course, it will be worth watching what percent of those eligible members actually sign up for the virtual plan. It's interesting going from reading Humana's earnings transcript to this one, CVS's earnings transcript reads like that of an insurer rather than a retailer. Perhaps that is not surprising given Karen Lynch came from Aetna, but it's been a pretty swift transition post-merger in that way. Assuming this strategy plays out successfully over the next few years I wonder if we'll see another big payor / retailer combination. Hint hint Walgreens will ya just go buy Oscar already. Link.

• National Nurses United, a nurses union, released an aggressively-worded letter against the hospital-at-home concept, and specifically Kaiser Permanente's activities moving the space forward. Color me a little surprised to see a group coming out so vehemently against a concept that seems better for all involved, but such are the incentives of healthcare. They do make some good points that make you think, i.e. that they believe these programs will "shift unpaid care work onto women inside the home, while taking away paid care work from a predominantly female RN workforce at the hospital." They also make the very fair point that it's a bit ridiculous for CMS to reimburse hospital-at-home models at the same rates as inpatient care. Provides a nice microcosm of the argument for why nothing ever ends up reducing healthcare costs. Link.

• Centene is selling a majority stake in U.S. Medical Management (USMM) to Rubicon Founders (Adam Boehler's new thing), Valtruis (Welsh Carson's value-based care investing arm), Oak HC/FT, and HLM Venture Partners. It appears USMM both operates a home health business and has an ACO as well. The deal appears to make a lot of sense on both sides, particularly given the valuation dynamics in the public and private markets at the moment. It seem that the private backers here are likely to value USMM significantly higher than the public markets are valuing it inside of Centene, creating a win-win opportunity for both parties. You have to think we'll see more deals of this nature moving forward - i.e. VC/PE acquiring undervalued assets in public companies. Separately, Rubicon, Oak, and Welsh Carson seem to be forming quite a formidable partnership (Oak and Welsh are the money behind Rubicon). Link.

• Hospital group purchasing organization Vizient is investing in and partnering with Kaufmann Hall, a consulting firm for hospitals. Link.

• Kareo and PatientPop merged into a new organization called Tebra, creating a fuller product suite to sell practice management software to medical practices across patient acquisition, engagement and billing. They site combined access to over 100,000 providers and 85 million patients, which seems like a quite a nice starting point for building what feels more like a full stack CRM for both physicians and patients. Link.

• EHR platform DrChrono acquired by EverCommerce, a public SAAS company that has a healthcare division which includes. Updox, AlertMD, CollaborateMD, and MDTech. EverCommerce's health platform aims to be the tech solution for independent medical practices. Link.

• Unqork is creating a new no-code healthcare platform / marketplace, featuring partnerships with orgs like Uber Health, Workpath, Ribbon Health and Infermedica. Link.

Funding:

• Papa raised $150 million at a $1.4 billion valuation, led by Softbank. It's wild to see them citing 10k - 15k applications per month to be a Papa Pal with a ~9% acceptance rate. In this labor market, that ability to attract workers seems like a huge advantage for Papa, particularly when working with MA payors who are desperate to be able to get staff into member homes. Link.

• Notable, a startup building a back office automation platform for health systems, raised $100 million. It looks like Notable is more focused on patient engagement functionality than Olive / Cedar, but it appears to be moving into the rev cycle space as well. Link.

• Aver, a tech platform for value based care, raised $58 million and renamed itself Enlace Health. Link.

• Infusion for Health, a network of infusion centers, raised $50 million. Link.

• Medallion, a startup automating provider licensing, raised $30 million at a $200 million valuation. Medallion now has 100 customers, including digital care delivery health startups like Firefly, Carbon, and Ginger. Link. 

• Wellinks, a digital COPD management startup, raised $25 million. Link.

• WhiteSpace Health raised $18 million for an AI platform providing revenue analytics. Link.

• Mental health startup Valera Health raised $15 million as it expands from a tech platform to a full-stack care delivery model. Link.

• Huckleberry raised $12.5 million to build a platform to help parents help their infants sleep better. Link.

• BrainCheck, a startup creating a cognitive assessment for Alzheimer's, raised $10 million. Link

• BeMe Health, a behavioral health platform for teens, raised $7 million. Link.

Opinions:

• Tradeoffs this week featured a podcast on whether Medicaid Managed Care has achieved its promise. The answer appears to be "no", and they provide some good examples of what various states are up to. Link.

• Christina Farr shared some good thoughts on the rise of D2C healthcare models. The comments around how customer acquisition cost is growing significantly is worth watching in this space, as is the potential solution suggested - organic awareness via referrals, community building, or offline channels. Link.

• This is quite an interesting deep dive on the Medicare Diabetes Prevention Program, which has suffered from extremely low uptake - only 3,600 people members have used it over the last three years. CMS projected 110,000 people would enroll over a ten year period, which would drive almost $200 million in savings to Medicare. What's driving the low enrollment? At least in part, CMS's refusal to cover virtual programs (which the CDC does for broader Diabetes Prevention Program). Add in low payment rates, administrative complexity, and challenges building awareness and you've got a recipe for failure. Link.

• Nikhil Krishnan wrote a good overview of the mechanics of value based care, in the blended comedic / informative way that only he can do. Link.

• Winnie Lau at M13 Ventures created a good market map of the women's health space, breaking it down into various life stages with a bunch of startups across those life stages. Link. 

• Commonwealth Fund released a report highlighting the need for a standard set of measures to measure Drivers of Health in order to advance health equity. Link.

Data:

• This study looks at new Medicaid enrollee health care use and cost pre- and post- COVID. Not surprisingly it found that new enrollees during COVID had significantly less utilization across the board. Primary care visits were down 34% for new enrollees during COVID. It also found that new enrollees are more likely to be male, Black, non-Hispanic, live in urban areas, and qualify for Medicaid via low income. Link.

• This is an interesting study looking at effect of public transport on no-show rates, based on Minneapolis(!!!!) Green Line data. The study found that increased public transport decreases patient no-shows, particularly for Medicaid patients. Link.