Weekly Health Tech Reads | 4/17/22

News:

• Bright Health continues its stream of negative news this week, as it announced that it is exiting a number of markets while also being fined by the state regulator in one of the markets it isn't exiting. Let's start with the fine first - the Colorado Department of Insurance is fining Bright at least $500k, potentially $1 million because of the number of complaints it received from providers and consumers related to the most basic of insurance tasks. Those tasks? Bright was called out for failure to pay claims, failure to communicate with members, failure to process consumer payments, and lack of timely claims processing. This feels a lot like the Colorado Department of Insurance's version of sending the "you had one job!!!" meme to Bright. It continues to signal a complete mismanagement of basic tasks inside Bright and the magnitude of the turnaround that will be required to right the ship. Keep in mind that Colorado is the market Bright has been in the longest (Bright got its start in 2017 with Centura Health in Colorado). If you haven't figured out how to process claims in that market, I'm not sure what it says about the rest of your book of business. Thus, it makes sense to see Bright also announcing this week it is exiting the individual market in six states. These states represent <5% of Brights revenue in 2022, but are 6 of 17 states Bright has entered in the exchanges. Bright hinted at investor day we should expect to see market exits in underperforming markets. It's hard to envision this is the last major move we'll see in Bright's re-entrenchment this year. The strategy has to be something along the lines of: take a hit this year while refocusing on growth in Florida, Texas, and California. Demonstrate the model works regionally there, and hope one of the insurers will acquire you at that point. While those are three of the largest markets for growth potential, that will not be an easy task given the volatile dynamics of each market. Link (market exit) / Link (Colorado fine) / Slack 

• UHG posted another excellent quarterly earnings and per usual its discussion made for interesting conversation. We shared our perspective on topics covered during the call for HTN members, including thoughts on the VBC flywheel, UHC's success launching virtual-first plans, and a decline in its core commercial business.  Link (HTN - paywalled) / Link (transcript) / Slack (h/t/ Inderpreet Singh) 

• Carbon Health and Froedtert, a health system in Milwaukee, announced a partnership. It appears Carbon will be entering the Wisconsin market with its clinics while Froedtert is joining Carbon Health Connect to provide integrated care. Beyond that, the press release is very light on details. Of particular interest with this deal is whether it is signaling a new growth strategy for Carbon as it looks to enter new markets. There's an obvious benefit to both parties in such a relationship at a surface level - Carbon is new to market and provides a better, integrated experience; Froedtert gets downstream referrals. But when you peel back a few layers there are a whole bunch of competing incentives at play that are challenging to manage well politically. Aligning oneself to a local health system in a market has a lot of implications, good and bad. Link / Slack (h/t Josh Heurung)

• Carbon also announced this week it is launching an integrated diabetes offering, leveraging its acquisition of Steady Health. It seems like a cool new product feature for Carbon, with the big unaddressed question inevitably being: who pays for this? Carbon has been saying it is building its primary care model off of Medicare rates, but its hard to imagine how that supports a profitable business integrating offerings like this. It makes you wonder what future strategic moves they're setting themselves up for - i.e. taking risk - which then gets all the more interesting when you think about the health system partnership above.Link / Slack (h/t Olivia Webb)

• The US Public Health Emergency was renewed this week. This KFF article linked does a good job explaining the various impacts it will have on the healthcare system when the PHE expires, with the biggest potential impact being that millions of people on Medicaid will potentially need to find insurance coverage elsewhere as states restart Medicaid redeterminations.  Link / Slack (h/t Kevin Wang)

• Truepill shared this week that it is shutting down Ahead, the D2C mental health startup it was a majority owner of. In a moment where we're seeing Ahead's competition, notably Cerebral but also Real, seemingly do quite well financially while taking major hits from a brand perspective, you wonder if Truepill made this move because Ahead wasn't working financially or it wasn't worth the brand risk given their broader aspirations. I'd wager it's more the latter.   Link / Slack (h/t Arpan Parikh)

• Halycon Health, a substance use disorder treatment startup, announced it is shutting down this week, apparently running out of funding.  Link (paywalled) / Slack (h/t John Prendergrass)

• Pfizer has made a $100 million bid to buy RezApp, an Australian startup with an app that can detect respiratory issues, including COVID-19, by listening to a cough. Link / Slack (h/t He Wang)

• The State of New York signed a law giving NPs full practice authority, meaning they can practice without a supervising provider. With that change, half of states now allow NPs to practice without a supervising provider. Something tells me that number is going to continue to increase over the coming years. Link / Slack (h/t Brenda Tsai Meu Chong)

Funding:

• Vytalize Health raised $50 million for its provider enablement platform. This is an interesting undar-the-radar company that appears to have built a pretty sizable book of business with an MSSP ACO supporting independent solo PCP s. Vytalize has 280 partner practices and 500 PCPs (that means they're at an average practice size of ~1.8 PCPs. Collectively those PCPs manage 130,000 Medicare patients through Vytalize (~260 Medicare pts per provider), and about $2 billion of spend under management.  Link / Slack 

• Iris Telehealth, a virtual mental health provider, raised $40 million. Link / Slack (h/t Rik Renard)

• Real raised $37 million for a D2C virtual therapy model with a focus on LGBTQIA+, immigrants, and people of color. Real charges subscriptions starting at only $13 a month and cites it hires only 4.7% of therapists interviewed, which feels like one of those data points that you only share when you know it's meaningfully better than most models like this. Link / Slack

• Glen Tullman is getting an encore in the diabetes space, investing in D2C virtual diabetes clinic 9am.health's $16 million round. 9am.health is going to start selling to employers, and if there's one thing I will never bet against in life it is Glen Tullman selling a diabetes tool to an employer. Link / Slack (h/t G Skalli)

• DUOS raised $15 million for its caregiver for seniors model. Link / Slack

• Virtual mental health provider Forge Health raised $11 million. Forge appears to have a particular focus on veterans through a partnership with the VA. Link / Slack (h/t Erik Milster)

Opinions:

• Sachin Jain penned another article with a critical view on value-based care models, calling into question models that favor financial outcomes over patient interests. It's worth a read, and generated a lot of thoughts for us on the implications for how we collectively evaluate VBC models moving forward, which we posted separately for HTN members. One thing that is clear to us: to really understand what's happening here we're going to need to hear more real world stories of individuals experiences in healthcare, like the one that prompted Jain's article. Link (Forbes) / Link (HTN reaction - paywalled) / Slack

• We hosted Cerebral's CMO, David Mou, for a conversation last week about Cerebral's model and the mental health landscape more broadly. David shared with us his perspective on where Cerebral is headed, some data to help contextualize the recent criticism, and the opportunity we all have to improve the current state of mental healthcare in this country.  Link 

• Here's a good look at the potential positive impact of telehealth from a former Kaiser and Intermountain leader. It does a nice job articulating some of the common use cases of how telehealth can help improve outcomes - avoiding ER visits, increasing access to providers, etc. Given the access to both payor and provider data that Kaiser and Intermountain have, it'd be great to see them leading the way in publishing outcomes data on telehealth that they're seeing in their plans. A lot of this article describes theoretical cost savings, which is a helpful starting point, but stops short of actually sharing Kaiser / Intermountain's results.  Link / Slack (h/t Kevin Wang)

• The WSJ looks at common use cases of how hospitals are using AI, things like predicting likelihood of ICU admission, detecting sepsis, and identifying patients at high risk of readmission. It's interesting to look at that list and see what's on there and what isn't - those three things feel like things health systems have been trying to address for decades, meanwhile many of use cases that startups are raising funding for, i.e. back office automation, are not mentioned. Link / Slack (h/t Carm Huntress)

• This is an interesting view from Wendell Potter on how much insurers' profits have grown over the last decade. If you think insurers are evil, you're going to view this as confirmation. If you think insurers are a scape goat, you're going to view this as a one-sided attack. If you don't know what you think of insurers, you'll be surprised at how much they've grown over the last decade while still managing basically the same number of members.  Link / Slack (h/t Michael Ceballos)

• Morgan Cheatham shared a nice summary of a conversation among virtual first provider organizations and how they're approaching payor contract negotiations. It provides some nice thoughts on how to navigate the process.  Link 

Data:

• ACA premiums continue to fall, with premiums falling 1.8% nationally in 2022, with 32 states having reductions in premiums. It appears the exchanges are benefitting from the increased competition in the space. The chart below highlights how consistently payors have been growing markets since the 2018 pullback of the big players. Of course given the news above we know Bright will be bucking that trend in 2023. Link