Weekly Health Tech Reads | 3/28/21

News:

• Ro, the DTC pharmacy startup that is morphing into a “vertically integrated primary care platform”, raised $500 million at a $5 billion valuation, putting it at roughly twice the valuation of its closest competitor Hims. It certainly seems like Ro has demonstrated the power of a DTC brand in healthcare at this point. The press release is light on data, but it certainly will be interesting to watch how well they can make the transition from DTC telehealth brand to vertically integrated primary care platform, and how they handle that transition from a business model perspective (i.e. do they remain focused on cash pay only). Presumably they’ll be a public company in relatively short order and we’ll start to see some more data which will be fun. Link.

• Real-time notification startup PatientPing was acquired by Appriss Health for $500 million. Appriss is a care coordination platform for substance abuse and behavioral health. Given this acquisition was announced only three months after its closest comp, Collective Medical, was acquired by PointClickCare for $650 million, you have to imagine that acquisition triggered a process here. Link.

• Redesign Health, a digital health venture studio, announced a $100 million raise, bringing it to $250 million in total capital raised with a plan to create 50 healthcare startups over the next five years. The venture studio model seems to make a lot of sense in healthcare… so it will be curious to watch how the model plays out over the next several years. It seems like trying to push 50 startups through this model may stress the concept of a venture studio, almost making it more of an accelerator / incubator model with one “class” of ten companies a year. Then again, Redesign has launched 16 startups recently and has hired a number of high quality execs / operators from other orgs, so perhaps they’re able to scale this more efficiently than I imagine. Will be a fun experiment to watch. Link.

• Komodo Health, a data analytics platform, raised $220 million from Tiger Global which continues its streak of pumping massive amounts of capital into the digital health ecosystem. Link.

• Evidation Health raised $153 million. It appears the funding is focused around scaling Evidation’s digital therapeutic arm, Achievement, helping it build digital programs for individuals with chronic conditions such as heart failure. Link.

• Mental health startup Ginger raised $100 million. Ginger currently has over 500 employer clients. Interestingly, they launched a new revenue model last year - charging a flat fee for employers to have all employees access a suite of Ginger services. Apparently that’s been well received by employers as 60% of new clients have been signing up for that model. Link.

• AKASA, a rev cycle automation platform for health systems formerly known as Alpha Health, raised $60 million. Link.

• AppliedVR raised $29 million for its virtual reality platform for chronic pain. Link.

• Foodsmart, a tele-nutrition platform, raised $25 million from Advocate Aurora, which also announced it is launching an investment arm to back startups. Link.

• DexCare, a startup spun out of Providence St. Joseph to create a digital health OS for health systems, raised $20 million. Providence has been using DexCare on itself since 2016 and launched with six health system clients - will be curious to watch how quickly it scales to other systems from here. Link.

• Riva Health, a digital cardiology platform, raised $15.5 million. Link.

• Anthem acquired home health provider myNEXUS. Link.

• At-home testing startup Everlywell acquired telehealth business PWNHealth. Link.

Opinions:

• The Substack Healthcare Writers Guild didn’t disappoint this week with a number of good reads:

  • Olivia Webb wrote an interesting piece on what will happen to in-person therapy models after COVID-19. Does a nice job summarizing the mental health landscape at the moment and diving into two companies, Ginger and Real. Link.

  • Christina Farr wrote an excellent piece on the maternity space centered around her personal experience having a baby during the pandemic. The article does a good job looking at different aspects of the maternity experience such as how much care can really go virtual and what role do care teams play? For me one of the overarching takeaways is that the maternity space provides a really good example of how we need to redesign healthcare in this country to provide more empathic experiences for the individuals going through them. Link.

• Also on the maternity front, Todd Park’s recollection of the beginnings of athenahealth in this podcast are quite fascinating. As he describes in the first 20 minutes of this podcast, athena was originally focused on being a collaborative care platform for maternity care. athena got started by purchasing a practice from a health system, thinking it would build a scalable tech platform for that practice. They realized that the practice was losing money, so tried to negotiate global cap agreements with payers under the premise that their maternity care model would reduce total cost of care by 10%. What happened? The payers balked, which led athena to eventually scale via software it developed to manage the practice. Mind you, this was all happening twenty plus years ago, back in 1997 - 1998. A good reminder that many of the ideas for new care models we’re talking about today aren’t all that new. Link.

• Jane Sagui wrote a good read on the women’s health space broadly looking at how its a massive market while raising some really good points about how investors are oversimplifying the space by calling ‘women’s health’ a single market when in reality models like Tia and Maven are as different as One Medical and Teladoc. Link.

• Here’s an interesting interview on retail health with a former Walgreens’s healthcare exec and the Wharton Pulse crew. It touches on a number of interesting topics, including the different go-to-market strategies of retailers, how retailers think about partnering with providers, and the challenges of shifting consumer expectations around the services retailers offer. Link.

Data:

• This is an excellent tweet storm from Dan O’Neill on the recent MedPAC report provided to Congress. The chart he references with Medicare Advantage risk scores versus Medicare FFS risk scores is eye-popping. Provides a lot of insight into where Medicare Advantage organizations are making money.

• The OIG released a survey with the headline “Hospitals Reported That the COVID-19 Pandemic Has Significantly Strained Health Care Delivery”. Excuse me while I scroll back up to the news of Advocate Aurora launching its own venture fund and try to reconcile how hospitals both have the financial resources to launch new venture funds and are also significantly strained. Link.