Weekly Health Tech Reads | 4/18/21

As many of you have noticed from my cheering in the newsletter, I am a proud Minnesotan when it comes to the awesome health tech happenings around here. Of course, during weeks like this that enthusiasm fades as Minneapolis is again in the national news for our police officers killing black men in our community.

This week, Daunte Wright was shot to death at a traffic stop in Brooklyn Center by an officer who mistook her gun for a taser. It comes less than a year after a Minneapolis police officer killed George Floyd by kneeling on his neck for eight minutes. As a privileged white male in this country, I do not know what it is like to have to worry for my life at a traffic stop. I do know, however, that it shouldn’t be normal in 2021 America that anyone has to fear for their life at a traffic stop. And yet, Daunte Wright is dead at twenty years old. While it is Minneapolis that is in the news again this week, we all have work to do in our respective communities to make them better, more inclusive, and safer places to live.

My heart hurts for the Wright family and the black community in Minneapolis and around the country.

News:

• Privia, another player in the primary care enablement space, filed its S-1 recently. Interesting to see VillageMD, agilon, and Privia all hitting the public markets so close together. Dan O’Neill had a good review of the S-1 on twitter which makes my job easier this week:

• Microsoft makes a big move in the healthcare space as it acquired Nuance for $19.7 billion. Nuance of course is the market leader in the voice recognition space. 77% of US hospitals are currently Nuance customers; and 85% of the Fortune 100 partner with Nuance. Microsoft appears to be paying a premium to access that installed base in the healthcare market - will be interesting to watch whether it can leverage that to sell other products in. The investor presentation is lighter on details than I’d like. Link (press). Link (investor presentation).

• Olive, a robotic process automation platform for health systems, acquired Empiric Health, a startup that uses AI to reduce clinical variation in operating rooms. This is Olive’s second (I think) platform extension via acquisition - the first was Verata. Link.

• Anthem, Blackstone, and K Health launched a new joint venture called Hydrogen Health. I’m not really sure I understand what is going on here - reading between the lines in the press release it seems that the JV is essentially intending to use K Health’s AI chatbot / symptom checker product and selling it to Anthem’s commercial customer base. Adding to my confusion… a quick Google search of “Hydrogen Health” returns a top result of an Australian Shopify site for hydrogen water (which is apparently a thing and somehow different from the normal molecular structure of water). Note to future self: when launching a massive joint venture with a Fortune 100 insurer and a private equity firm, make a landing page and buy google ads for the name of the JV. Link.

• The Direct Contracting saga continues as a number of provider organizations wrote a letter to CMMI this week asking it to reconsider its decision to no longer allow new applicants to the DC program. Interesting to see that the provider orgs behind the letter included a number of VC/PE-backed companies (i.e. agilon, ChenMed, Iora, Privia, VillageMD) as well as incumbent orgs (i.e. Ochsner, John Muir Health Physician Network, Palo Alto Foundation Medical Group). Link.

• Mayo Clinic Platform announced a new offering, Remote Diagnostics and Management Platform, from which it is launching two new ventures - one in the AI for early disease detection and one in the remote monitoring space. Both new ventures also announced they’re raising funding from Mayo and other partners. Link.

• UHG had its first earnings call with its new CEO running the show and things appear to have started with a strong quarter. UHG continues to signal to Wall Street that it’s next phase of Optum growth will come from moving patients to global cap agreements - they’re at two million lives today in global cap arrangements out of 20 million patients served by OptumCare. Lots of analyst questions on that topic. Also worth noting their home visits business is now humming again as they conducted 600,000 home visits in Q1, up 4x from Q2 of last year. Link.

• BCBS MN partnered with DaVita’s VillageHealth to launch a new value-based care program for chronic kidney disease. Link.

Funding

• Benchling, a life sciences R&D platform, raised $200 million. Link.

• Medable, a platform for drug development, raised $78 million. Link.

• Vesta Healthcare, a home health startup, raised $65 million. Link.

• Papa, a startup that addresses loneliness in seniors by connecting them with Papa Pals, raised $60 million from Tiger. Papa is currently at over 1 million eligible seniors, with ~150,000 seniors interacting with them on a monthly basis. Papa says they’re getting over 20,000 applications a month to be a Papa Pal, with an acceptance rate below 10%. 20,000 applicants a month?!?! In a healthcare world where we have a massive shortage of providers, Papa seems to be in a really interesting position to tap into a labor market that has traditionally been ignored by the healthcare system. Link.

• Cohere Health raised $36 million to reduce friction between payors and providers starting with the prior auth process. Link.

• Level announced it raised $27 million late last year as it builds a new vision & dental insurance product. Link.

• Tomorrow Health raised $25 million for its DME platform for home healthcare. Link.

• 1UpHealth, a platform for integrating EHR data, raised $25 million. Link.

• Vericred, an API platform for health insurance, raised $23 million. Link.

• Legacy, a startup offering sperm testing, raised $10 million. Link.

• ExplORer Surgical a startup that originated at Chicago’s top-ranked business school (hint hint: not Northwestern bwahaha), raised $2.5 million. Link.

Opinions:

• Joe Connolly wrote a good piece on the idea of virtual first providers, arguing that virtual first providers and payers will work together to help solve the cost and experience issues that plague healthcare. I think he highlights the promise of virtual-first providers well in the article, and I think we’re going to see a lot of innovation in the virtual-first specialty space in the coming months / years, as he identifies in the article. Although, I do think the changes Connolly describes have less to do with the virtual side of things and more to do with aligning a care delivery model with an economic model that allows for empathetic care delivery that meets the needs of patients (cost, convenience, quality, etc), irrespective of whether that care is done virtually or in-person. Link.

• The Rock Health team released a report on SPAC activity in the healthcare space. It does a nice job of highlighting the current state of the market and impacts on various stakeholders and the digital health community at large. Link.

• This is a good deep dive from the folks at Axios on disparities in healthcare and the better results our healthcare system provides for white people than people of color. The article provides a good summary of various data that highlighting the disparity of outcomes. We’ve got work to do. Link.

• The Biden administration moved this week to remove restrictions on the use of telemedicine to facilitate medication abortions, and this article features how a new company, Abortion on Demand, launched to meet the need. It’s an interesting interview on how they’ve thought about launching a company in this space. Link.

Data:

• Transcarent, via its acquisition Bridge Health, released an interesting report from an actuary attempting to quantify the cost savings Bridge can drive for employers. Not surprisingly, the report finds that savings are massive assuming that employees use the Bridge Health service. The report suggests that employers using Bridge save approximately 6% of the total plan cost. Note this comes with the massive caveat of assuming 100% employee participation in Bridge Health’s Center of Excellence program, which seems like a rather tough bar to hit. Either way, it’s interesting to see how Transcarent is beginning to make its case to employers. Link.

• Aequitas Partners released a digital health compensation survey which does a nice job providing compensation benchmarks across various functional areas in digital health. Somewhat confusingly I didn’t see “free newsletter writer” anywhere in there though. Link.