Weekly Health Tech Reads | 11/22/20

News:

• This weeks SPAC: Butterfly Network, the handheld ultrasound startup, is being acquired at a $1.5 billion valuation. The mission here is super cool, and has attracted investors like the Bill and Melinda Gates Foundation to support it given the potential that a handheld ultrasound device has to improve the quality of healthcare around the world. The financials will be interesting to watch from an investment perspective. Butterfly is doing an estimated $44 million of revenue in 2020, projected to increase to $334 million in 2024. But it currently has negative gross margins selling the ultrasound device for $1,999, although it expects gross margins to improve to 43% in 2021. Interestingly, Butterfly sees a wearable as its next step of growth after the portable ultrasound. The investor call describes the SPAC opportunity as such: “Importantly, Butterfly does not project wearables revenue until 2023, […] an investor is paying a discount for the handheld opportunity and getting wearables, a larger long-term market, for free.” And there ya have it… SPACs: the investing equivalent of a free lunch! Link (Investor Presentation). Link (Transcript).

• Big news of the week this week was Amazon getting further into the pharmacy game, but while the Amazon name certainly strikes fear in the heart of every healthcare exec, it seems this move represents Amazon playing the pharmacy game rather than disrupting it. This quote from Adam Fein seems to sum it up well: “Perhaps one day they'll become a true disrupter… at this moment they're choosing to join the drug channel, not fundamentally change it.” I’ve also linked here to some good reactions on Twitter from Adam Fein and Bob Herman on the news. Link.

• Nuance sold its transcription services business to a new entity called DeliverHealth, with Nuance retaining a minority stake in the entity. Link.

• Pear Therapeutics launched a digital therapeutic for chronic insomnia. The really interesting thing about this launch is that Pear is creating an ‘end-to-end virtual care experience’. According to this Andrew Matzkin tweet, Pear is leveraging UpScript for the telemedicine prescription and Truepill for the prescription fulfillment. Link.

• Medable raised $91 million for its digital platform for clinical trials. Link.

• Spring Health, a mental health startup for employers, raised $76 million. Spring raised $22 million in January of this year, which might as well have been a decade ago. Link.

• Alivecor, the ECG-on-your-smartphone startup, raised $65 million from Omron and others. Alivecor also announced a partnership with Omron for at-home blood pressure monitoring. Link.

• K Health, a chatbot driven telemedicine platform, raised $42 million and announced a partnership to integrate with Mayo Clinic’s Clinic Data Analytics Platform. Mayo is stitching together some interesting partners via its Platform initiative - will be curious to watch how the strategy unfolds over time. Link.

• Headway raised $26 million to build a marketplace for booking mental health appointments with therapists who will accept insurance. The interesting twist to this company is that they’re apparently widening the pool of therapists who accept insurance by streamlining the process for therapists to bill insurers - they handle all of the billing for therapists on the marketplace. As the article notes here, Headway’s business model is also worth noting - Headway isn’t charging patients or therapists, it’s charging insurers. It’s an interesting approach to a huge problem in terms of being able to access therapists. Link.

• Everytable, a startup working to provide everyone access to fresh, nutritious food, raised $16 million. This is a really interesting backstory to read - pre-COVID-19 they were opening stores to provide fresh, nutritious food to underserved communities at fast food prices (while still generating a profit). During COVID-19, Everytable shut down its stores and instead started delivering meals to low-income seniors. The company went from cooking 30k meals a week to cooking 180k meals per week. Also worth noting that Kaiser Permanente co-led the round as a ‘food-as-medicine’ investment. Very cool. Link.

• Levels raised $12 million to bring Continuous Glucose Monitoring tech to the masses. The application of a traditionally clinical technology to a consumer population will be really interesting to watch. Link.

• Upfront, a patient engagement platform for health systems, raised $11.5 million. Link.

• Closedloop.ai, a data analytics platform helping healthcare organizations manage cost & quality outcomes, raised $11 million. Link.

• Outcomes4Me, a startup building a tech platform that helps patients navigate cancer care, raised $4.7 million. Link.

• JoonCare, formerly UpLift, raised $3.5 million for its digital mental health platform for teens / young adults. Link.

• UniteUs, a social determinants of health platform, expands partnerships in Louisana and West Virginia with Humana, Aetna, and Oschner Health. Link.

• Cityblock is expanding to Washington D.C. via a partnership with CareFirst BlueCross BlueShield Community Health Plan District of Columbia, an insurer that entered a ‘who can come up with the longest name’ competition… and won handily. Link.

Opinions:

• This is a rather interesting read on real world evidence platforms from the investor perspective, looking at the various commercial applications of real world evidence and providing some samples of companies working in the space. A helpful explainer of the space. Link.

• ZocDoc’s CEO published a piece pushing back on the current state of telehealth and how they are treating healthcare delivery like the gig economy. He cites a ZocDoc survey data showing that 9 out of 10 telehealth patients would prefer to schedule an appointment with a provider that they know rather than a randomly assigned doctor, suggesting that this is the route forward for telehealth. Link.

• The a16z team released a podcast on the new price transparency ruling coming out. It does a nice job delving into some of the complexity with the concept of price transparency in healthcare and why pricing has been so opaque. Still lots of work to do here of course, but ten years from now it feels like we could look back on this ruling as a major driver of change in the space. Link.

• A couple of interesting interviews this week:

  • The CEO of Jefferson Health, the Philadelphia-based health system, was interviewed about the organizations digital health journey. An interesting perspective on what’s important to succeed in digitizing traditional care delivery - strategically aligned payers and providers as well as the right digital health partners. Link.

  • Nikhil Krishnan shared an interview with an early employee at Pillpack on the nuances of the pharmacy world. This does a nice job getting into some of the complexity of operating a pharmacy business and the differences between mail order vs retail pharmacy, etc. Link.

  • The CEO of SCAN, a Southern California Medicare Advantage plan, was interviewed about providing a human touch in healthcare. It’s interesting to see him mention that we have to get away from the trend of seeing patients as consumers. Link.

Data:

• Here’s some interesting data on ICHRA from a Willis Towers Watson, suggesting that 15% of employers are planning to offer an individual coverage HRA (ICHRA) in 2022. ICHRA is a rather interesting new insurance coverage option that allows employers to reimburse their employees who purchase coverage on the individual exchanges. The survey found that COVID-19 slowed growth of ICHRA in 2021, but that it may pick up heading into 2022. Link.

• Check out this chart below on infant mortality rates in a number of developed countries - look how far in front USA is of any other country!!! Oh wait, my bad, this chart shows we have more than double the rate of deaths per 1,000 births than any other country listed. Woof. Link.

• Speaking of maternal health outcomes, this Commonwealth Fund report does a nice job summarizing Medicaid state policies trying to improve maternal health outcomes. Interesting to note that doula models, which as the article notes are generally shown to improve outcomes and experience in low-income communities of color, are only covered in five states currently. Given the chart above it would seem there are some opportunities here. Link.

• iRhythm, a startup making a wearable patch that identifies atrial fibrillation, released a study with Aetna suggesting use of the patch on asymptomatic individuals can identify more people with arrhythmia and improve clinical outcomes. Link.

• A new Brookings Institute paper looks at a four options to reduce the cost of healthcare by expanding the public role in setting healthcare prices - capping out-of-network prices, capping both in and out-of-network prices, a default contract approach, and a public option. Link.