Public Company Earnings

• Evolent stock was up a few percent this week after reporting Q4 earnings and sharing that it has successfully renegotiated three key contracts for its Performance Suite product, which should result in a $115 million improvement in Adjusted EBITDA in 2025. The earnings call provided a number of interesting strategic updates on the oncology market in particular and how Evolent is responding to quickly increasing medical spend there. Evolent noted that it is projecting oncology costs will be up 12% in 2025 versus historical averages of 8%. They gave a good example of how Evolent helps health plans manage spending, discussing how 56% of cancer patients are now eligible for checkpoint inhibitor treatment, but only 20% of patients respond to the treatment. Evolent works with the treating oncologists to identify nonresponsive patients early and move them to other medications, and was able to save a Medicaid plan 10% on its checkpoint inhibitor costs in this manner.

Other Noteworthy News

• Teladoc was the subject of a short sellers report suggesting that BetterHelp therapists use AI to communicate with patients who think they’re paying to communicate with an actual therapist. The report includes some sample messages between patients and therapists that make it pretty clear this is indeed happening, although it’s not clear how commonplace it is. It’s interesting to think about the responsibility of BetterHelp in a scenario like this — I have to imagine they would acknowledge this sort of behavior is bad and they don’t condone it. But it appears they don’t have any policies in place against it, and the way they compensate providers seems to incentivize cutting corners in ways like this. The report also calls out Teladoc’s decision to capitalize some of its R&D spend as an attempt to artificially inflate cash flow. Teladoc’s stock price fell almost 20% over the week.

• MultiPlan announced it is rebranding as Claritev, aiming to be viewed by the market as a health tech company enabling transparency and affordability. MultiPlan has faced a steady stream of negative PR over the last several years, including this New York Times article on MultiPlan’s fees, an antitrust lawsuit from the American Medical Association, and a short report, among other things.

• UnitedHealth Group stock fell 7% on Friday after the Wall Street Journal reported that the DOJ is investigating United’s Medicare Advantage risk adjustment practices.

• Hims & Hers announced it is acquiring an at-home blood draw and lab testing startup, Trybe Health.

• Walgreens’ potential sale to private equity group Sycamore Partners may not be entirely dead, according to CNBC reporting. Walgreens’ stock price jumped 15%+ on the news.

• In an escalating PR battle between UnitedHealth Group, billionaire investor Bill Ackman, and an HCA provider in Texas, this Bloomberg report shared some helpful details on the specifics of the case. It appears that HCA sent UnitedHealthcare an inpatient authorization in error after UHC had already approved this patient for an observation stay, prompting UHC to reach out to the provider, which set a confusing series of events in motion.

• On Wednesday, Humana announced it will expand its primary care footprint in eleven states and four new markets. Between Centerwell, Conviva, and its Walmart partnership, Humana will add 20 - 30 de novo and acquired clinics in 2025. Eleven Walmart locations are scheduled to open yet this year.

Chart of the Week

Chances you’ve already seen the big headline that ambient AI platform Abridge announced that it raised $250 million at a $2.5 billion valuation, while it also appears to have launched a new billing product via Abridge’s Contextual Reasoning Engine. In the funding announcement this week, billing was referenced seven times as a key part of the use case and ROI for health systems. Compare that to the Series C funding announcement from a year ago, where billing was mentioned zero times.

It’s a huge step up in valuation for Abridge, which has built a ton of momentum in the AI Scribe market. You can see the valuation growth in the chart below, which has largely come after Abridge pivoted away from a consumer product offering and toward the enterprise AI Scribe market in August 2022.

I think Abridge’s rapid ascent over the last few years makes for a fascinating case study as folks think about the disruptive impact that AI innovation may have on healthcare. It is worth reading this blog post from Union Square Ventures in 2019 when they announced a seed investment in Abridge. Check out this product demo from the post:

As I look at that post and demo, I see a very cool idea about supporting patients in owning their individual healthcare stories by recording conversations with providers. Yet, it also appears Abridge has found commercial success as it’s moved away from that original vision and moved more towards meeting the needs of incumbent healthcare provider organizations. Less disruptive perhaps, but more commercially viable.

As Abridge scales in the AI Scribe market and expands its product offering to other use cases, it certainly seems well-positioned in the venture-funded arms race to be the enterprise AI partner of choice for health systems.

Funding Announcements

• Abridge, an ambient AI solution for health systems, raised $250 million.

• Frontera, an autism care model, raised $32 million.

• Posterity, a male fertility startup, raised $13 million.

• Millie, a maternity care model, raised $12 million.

• Keebler Health, an AI-powered risk adjustment platform for providers, raised $6 million.

• Proximity, a platform helping providers maximize 340B revenue, raised $3 million.

Other Good Reads

Georgia Touts Its Medicaid Experiment as a Success. The Numbers Tell a Different Story. by Margaret Coker, The Current
A fascinating look at Georgia’s Pathways to Coverage program, an experiment in Medicaid reform designed to help people return to work. Despite trumpeting the program as a success, it appears that the program has failed to hit key targets. It has enrolled 75% fewer members than expected, with only 6,800 people enrolled in the first 18 months. The rollout has also cost taxpayers $86.9 million more than expected, with 3/4s of that going to consultants implementing the program. Deloitte has been paid more than $50 million for implementation, which at $7,353 per enrolled member is probably close to enough to cover the entire medical expense for the population enrolled in the program for a year. Read more.

To future entrepreneurs in health tech by Mark Cavage
A review of learnings from Nuna’s former CTO during his two-year stint in the role. It’s a fascinating perspective from someone new to healthcare sharing their learnings from attempting to change the system over a handful of years. I might quibble with some of the more nuanced specifics on various healthcare programs in the article, but the general narrative and takeaways are well worth checking out. Read more.

The Health of US Primary Care: 2025 Scorecard Report — The Cost of Neglect by the Milbank Memorial Fund
This report includes a lot of helpful data on the variety of challenges facing the primary care market. Read more

Featured Jobs