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Matthew’s health care tidbits, week ending Jun 5

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Each week I’ve been adding a brief tidbits section to the THCB Reader, our weekly newsletter that summarizes the best of THCB that week (Sign up here!). Then I had the brainwave to add them to the blog. They’re short and usually not too sweet!–Matthew Holt

In this week’s health care tidbits, I can’t quite leave the $3.5bn Babylon Health SPAC investor document alone. Yes, it’s crazy but not as crazy as you might think. Essentially it’s saying that it’s going to be a better tech enabled version of Oak Street or Agilon. Babylon has put less effort into the medical group management side of the puzzle than Oak Street or Agilon but it hasn’t done nothing. It’s been running GP clinics in the UK for years and now has two Medicare Advantage networks in California w 52k lives. It only did $79m in rev in 2020 but that was presumably mostly in software. They’re aiming for $320m in rev in 2021 (presumably mostly from the medical groups) & $710m in 2022.

In comparison Oak Street’s forecast is $1.3bn in 2021 and $2bn in 2022. So Babylon is shooting to be 25% of its size. Today’s Oak Street market cap is ~$14,5bn, so 25% of that is close to the $3.5bn Babylon is trying to get investors to pay.

Then there’s the story, which is that the bot tech can reduce all types of patient health spend which will increase the margin. Of course their actual mileage may vary. I do love the chart from their investor prez, which not only assumes that they can reduce medical spend abut also that they get to keep those savings long term. I’m not sure the “Partner” in the chart below will be as convinced.

This was the cause of much hilarity on this week’s #THCBGang.

As I said crazy but not completely crazy. And you never know, maybe better care?

THCB Gang Episode 56 – Thurs June 3

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Episode 56 of “The THCB Gang” was recorded live on Thursday, June 3. Matthew Holt (@boltyboy) was joined by regulars: medical historian Mike Magee (@drmikemagee), THCB regular writer Kim Bellard (@kimbbellard) and health futurist Jeff Goldsmith; WTF Health host & Health IT girl Jessica DaMassa (@jessdamassa) snuck in later after she finished up at the Going Digital: Behavioral Health Conference across the virtual street.

We really got into it on two issues — the Wuhan lab “leak” issue and Babylon Health’s IPO — lots of fun and no little disagreement!

Then video is below. If you’d rather listen, the audio is preserved as a weekly podcast available on Fridays on our iTunes  & Spotify channels.

Matthew’s health care tidbits

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Each week I’ve been adding a brief tidbits section to the THCB Reader, our weekly newsletter that summarizes the best of THCB that week (Sign up here!). Then I had the brainwave to add them to the blog. They’re short and usually not too sweet!–Matthew Holt

In this week’s health care tidbits, we’re discussing hedge funds. Not those small private equity funds that are defunding small safety net hospitals and being exposed by Propublica & PBS Frontline. (Did you catch #TCHBGangster Jeff Goldsmith on the latter?). No, I’m talking about big non-profit hedge funds that also provide some health care services. This week two of them reported results.

Famed regional hedge fund Mayo Clinic’s health services business reported $243m profit on $3.7bn revenue for Q1 2021. Not exactly Apple margins, but a respectable 6.5%. While catholic national hedge fund Ascension eeked a $700m profit on $20bn of revenue in the nine months June 2020 to March 2021. The good news is that Mayo has $15bn in its main trading account while in those nine months Ascension made $4.3 Billion on Wall Street bringing its balance to a healthy $25.6 Bn.

And if you were concerned that these hedge funds were in trouble because of the pandemic, well not only do they avoid property, income tax and more they also got plenty of help from the taxpayer. CMS prepaid $2billion of Medicare payments to Ascension; presumably they made a tad more playing the markets with that. Then there’s the non-refundable CARES Act grants. Yes Ascension has been paid $900m since June 2020 ($1.1billion in all) and Mayo received $356m, although they were nice enough to pay $138m back.

I’m sure those Americans who lost their jobs, their houses and waited for months for government help are glad that–despite the pandemic–these hedge funds weren’t having to dip into their main reserves to keep their health services subsidiaries going…..

What’s the Latest with Evidation Health?

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An email interview with the Co-CEO’s of Evidation Health

Over the last few weeks I’ve been conducting a back & forth email interview with Christine Lemke (L) & Deb Kilpatrick (R), the co-CEOs of Evidation Health. They raised $153 million in a Series E back in March (almost a small round these days!) but I wanted to understand a bit more about what the “new” Evidation was doing—Matthew Holt

Matthew Holt: Congrats on the latest funding. Clearly Evidation has evolved since its founding, but focusing first on the clinical trial study aspect, can you explain how the Achievement panel is structured? How was it put together? What are the typical ways that your clients use it, and what is the member experience?

Deb Kilpatrick: Our Achievement platform is the largest virtual connected research cohort in the United States, with more than 4 million users across all 50 states and representing nine out of every 10 ZIP codes. Through the platform, accessible via our app or through a browser, individuals have the opportunity to contribute to ground-breaking medical research in a number of ways: they can connect smartphones, wearables, and connected devices—think Apple Watches, Fitbits, CGMs, etc—that generate heart rate, activity, sleep quality, and other health-related data; they can connect health apps like Strava and MapMyFitness; and they can participate in surveys and provide patient-reported outcomes (PROs) of many forms. 

And they do so with strong privacy protections for both data collection and data use, including use-case specific consents that can be sequential over time. This goes for new Achievers and those who have used the platform for years. And Achievers always have the option to remove themselves from any research project, and/or the platform altogether, at any time.

What do we do with that data? Evidation partners with leading health care companies, including nine of the top 10 biopharma companies in the world, to understand health and disease outside the clinic walls while measuring real world product impact. We’ve conducted virtual trials for almost a decade now, totaling more than 100 real-world studies across therapeutic areas. 

Continue reading…

#Healthin2Point00, Episode 208 | Cedar acquires Ooda & funding for Medically Home, Huma

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Today Jess is bored with consistent $100m+ deals and yawns in the face of the Tiger! No matter– I explain what Cedar acquiring Ooda for $425m means, why $100m for Medically Home is a departure for Mayo but not Kaiser, and what the heck Huma is all about (OK, I don’t really know). Does Jess get more interested by the end? You’ll have to watch to find out!–Matthew Holt

The Catalyst @ Health 2.0/Wipfli State of Digital Health Survey

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By MATTHEW HOLT & ELIZABETH BROWN

Last year was a remarkable time for digital health. Obviously it was pretty unusual and tragic for the world in general as the COVID-19 pandemic continued to wreak havoc. We mourn those lost, and we praise our front line health workers and scientists. But for digital health companies, in almost no time 2020 changed from fear of a market collapse to what became a massive funding boom.

But no-one has reported from the ground what this means for digital health companies, of which there are perhaps 10-15,000 worldwide with maybe 6-8,000 based in the United States. Despite the headlines, most are not pulling down $200m funding rounds or SPACing out. So working with professional services firm Wipfli, we at Catalyst @ Health 2.0 decided to find out what digital health companies experienced in this most extraordinary year. 

Between Thanksgiving 2020 and mid-March 2021, we surveyed more than 300 members of the digital health ecosystem, focusing on leaders from more than 180 private (and a few public) digital health companies. We asked them about their market, their experience during COVID-19, and what they thought of the environment. We also asked them about the mechanics of running their businesses. The results are pretty interesting.

The Key Message: COVID-19 was very good for digital health companies–on average. Most are very optimistic but, despite the massive increase in funding since the brief (but real) post-lockdown crash, most digital health companies remain small and struggling for funding, revenue, and customers.

We also heard from investors, and a bigger group we called “users” (mostly payers, providers, pharma, non-healthcare tech companies, e-patients & consultants). While these “users” also saw a big trend towards the use of (and, to a lesser extent, paying for) digital health tools and services, they were not as gung-ho as were digital health companies or investors, who were even more optimistic.

The summary deck containing the key findings is below and there is more analysis and commentary below the jump.

Continue reading…

#Healthin2Point00, Episode 206 | Walmart buys MeMD, Science 37 SPACs out, Vim & Zoe

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Today in #Healthin2Point00, Jessica is not impressed by my stock trading and it’s all Walmart’s fault (well, Amazon’s too)! Part of the reason for that is Walmart buying a no-name telehealth company–well it has a name but not one anyone knows. There’s a SPAC exit on the horizon for fast growing remote clinical trials company Science37, and funds for Vim which does scheduling (we think!), and Zoe which sells a diet so expensive you might actually stick to it!–Matthew Holt

Special Event: The Catalyst @ Health 2.0/Wipfli Survey on the State of Digital Health Results Presentation

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TODAY Tuesday, May 11th at 2pm ET/11am PT — RSVP here

Back in November of last year, Catalyst @ Health 2.0, supported by professional services firm Wipfli, launched the Survey on the State of Digital Health, with the goal of creating a comprehensive analysis of the impact of COVID-19 on digital health companies and the rest of the ecosystem. Between the end of 2020 and thru March 2021 we received detailed responses from 300+ digital health aficionados including 180 digital health companies. We’re sure this is the most detailed assessment of what’s happening on the ground in digital health companies you’ll find anywhere.

Join us at 2pm ET/11am PT on Tuesday, May 11th for The Catalyst @ Health 2.0/Wipfli Survey on the State of Digital Health Results Presentation, you’ll see the full results from me & Catalyst’s Elizabeth Brown, hear from Wipfli’s Paul Johnson & Girish Ramachandra, and get reaction to the results from our guests Ryan Johnson, lawyer at Fredrikson & Byron; Sunny Kumar, investor at GSR Ventures;, and digital health CEOs Helena Plater-Zyberk, Supportiv; and Mudit Garg, Qventus.

I think the zoom is full, but you can see it livestreamed below at 11 am PT – 2pm ET – Matthew Holt

This Mother’s Day, Let’s Get Mothers the Health Care Coverage They Need

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By ROSEMARIE DAY and DEBORAH GORDON

Mothers deserve more than a day of recognition this year—they deserve the whole month, and more. The pandemic has been particularly hard on women, especially poor women and women of color. 

To demonstrate the appreciation mothers deserve this Mother’s Day, we should get them something they really need: health care. To improve maternal health, we should look to the Medicaid program, long a pathway to accessible, quality health care for low-income Americans. Medicaid is especially important for mothers; it covers close to half of all births in the U.S.

Now, states have the opportunity to do even more for moms.

The American Rescue Plan signed into law in March gives every state the option to extend Medicaid maternity coverage for up to 12 months postpartum, a significant increase from the current limit of just 60 days. Illinois has already announced it will extend postpartum coverage; other states should follow. Extending the guaranteed coverage period will increase access to postnatal care during this ‘fourth trimester’ to ensure that women can access treatment for common conditions like postpartum depression as well as preventing organ prolapse or hemorrhage. Not only mothers will benefit. Parental insurance is associated with better health for children, including a lower risk of adverse childhood experiences.

In addition, the American Rescue Plan offers an opening to expand Medicaid with even more federal funding than is currently available through the Affordable Care Act. The 12 states, mostly in the South, that have not expanded their Medicaid programs are  leaving hundreds of thousands of women without the support they deserve. 

Expanding Medicaid programs will provide robust access to health care to more women and reduce maternal morbidity and mortality, which has reached crisis proportions among many women of color. Black and Indigenous women are more likely than other women to die during pregnancy, childbirth, and the postpartum period. According to the CDC, the maternal mortality rate is 2.5 times higher for Black women than white women. Disparate access and uneven quality of care, higher rates of chronic illness, and racism all play a part in that grim statistic.

The disproportionate burden of maternal mortality and adverse outcomes from childbirth has long-lasting effects on mothers and their children. Black newborns have an increased risk for long-term complications resulting from pre-birth complications. They may also face generational poverty and trauma in the long run if they are born to a mother who dies during childbirth.

Continue reading…

#Healthin2Point00, Episode 205 | Groups, Collective Health, Oura Ring & Ciitizen buys Stella

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Today on Health in 2 Point 00, it’s time for the silliness to end, and for Jess DaMassa and I to take digital health deals seriously. Groups gets $60 million from a bunch of famous investors. Oura, they of the tracking ring used by the NBA, gets $100m, and TPA substitute Collective Health gets a whopping $280m from a big Blues plan. And our favorite privacy maven Deven McGraw gets a mention as her company Ciitizen buys interoperability tech company Stella. Did we maintain our serious demeanor? You’ll have to watch to find out but you can probably guess the answer! —Matthew Holt

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