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ChatGPT Vs. Magic 8 Ball: Who Can Solve “The HealthCare Crisis”?

By MICHAEL L. MILLENSON

Long before ChatGPT, whose question-answering choices still remain somewhat of a black box, there was an equally mysterious, question-answering black ball. I decided to ask them each of them how to solve the cost, quality and access issues labeled for more than half a century as “the healthcare crisis.”

The hard, plastic Magic 8 Ball was invented in 1946, two years before a landmark Supreme Court decision spurred a boom in employer-sponsored health insurance. It catapulted into kid-driven popularity in the 1970s, the same decade that rising healthcare costs propelled “healthcare crisis” into the public vocabulary.

Magic 8 Ball and ChatGPT
ChatGPT is a “black box,” Magic 8 ball a black ball.

The healthcare crisis is still with us, as is Magic 8 Ball, which, thanks to current owner Mattel, can now be consulted either in person (i.e., by holding and shaking it) or online. With a fiercely fought presidential election campaign underway, I decided that pitting the black box vs. the black ball to answer crucial health policy questions would likely provide just as much clarity as wading through weasel-worded white papers.

Both ChatGPT (Cost to OpenAI: $400,000 per day to operate) and Magic 8 Ball (One-time cost: $14.99) were up for the challenge, though they acknowledged it wouldn’t be easy.

“Can you help me solve the healthcare crisis?” I asked. “Signs point to yes,” Magic 8 ball replied, in its typically pithy, understated manner. ChatGPT, on the other hand, took my question as an invitation to show off its artificial intelligence.

“Addressing the healthcare crisis is a complex and multifaceted challenge that requires a holistic approach,” ChatGPT began. Then, as if a Washington think tank had been crossed with an academic policy conference, the Large Language Model offered a very large helping of language. There were 8 “key strategies,” each of which contained three bullet points, and each of which, I was advised, “involves detailed planning, resource allocation, and collaboration among various stakeholders, including government, healthcare providers, insurers, and the public.”

Then there was this diss when I asked about its competitor. “It’s a fun toy,” sneered the chatbot (if chatbots could sneer), “but it doesn’t provide reliable or informed answers.”

I decided to home in on specifics.

“Is a government-run single payer system the right answer?” I asked. “My sources say ‘no,’” Magic 8 ball told me. ChatGPT was more positive, with caveats.

“A government-run single-payer healthcare system is one potential solution to the healthcare crisis, and it comes with its own set of advantages and challenges,” the chatbot replied. It added, “Whether it is the ‘right’ answer depends on various factors” – and then, once more, went on to provide a long list of relevant ones.

I decided to inquire about an approach with bipartisan support. “Is value-based healthcare the best way to control costs?”

“It is decidedly so,” said the Magic 8 Ball immediately. But ChatGPT, usually lightning quick, waited perhaps 20 seconds before not only responding positively, but presenting an overview and specific suggestions. There were 5 advantages and 5 challenges, plus 3 examples of possible strategies (accountable care organizations, bundled payments and patient-centered medical homes), all tied together with 5 considerations for implementation.

“Ultimately, VBHC can be a key component of a broader strategy to reform healthcare systems and achieve sustainable cost control,” ChatGPT concluded.

That pattern continued as I probed about the need for more effective financial incentives to reward high-quality, cost-effective care, a central component of VBHC. “It is certain,” Magic 8 Ball quickly agreed. ChatGPT, meanwhile, again paused for a lengthy period (by its standards) before responding “thoughtfully” (by human standards).

“Yes,” it said, “effective financial incentives are crucial for promoting high-quality, cost-effective care. Properly designed incentives can align the interests of healthcare providers, payers and patients, leading to better health outcomes and more efficient use of resources.”

The chatbot then listed 5 types of financial incentives, 5 key elements of effective incentive programs and three specific examples incorporating them.

Continuing the financial incentives theme, I asked whether health savings accounts could help. Magic 8 Ball simply replied, “Yes,” while ChatGPT carefully pointed out that while HSAs “offer some benefits, they are not a comprehensive solution to the broader health care crisis.”

Like politicians, both ChatGPT and Magic 8 Ball sometimes hedged. “Are hospital mergers good or bad for patients?” I asked. “Ask again later,” said Magic 8 Ball. “Hospital mergers can have both positive and negative impacts on patients,” responded ChatGPT, before presenting a long list of why either might be the case.

“Is private equity buying doctors’ practices good or bad for patients?” I inquired. “Concentrate and ask again,” evaded Magic 8 Ball, followed by an incomprehensible, “Most likely.” ChatGPT allowed that this was “a complex issue, with potential benefits and drawbacks for patients,” before going on to the kind of pro and con balancing act any politician might admire.

I decided it was time to cut to the heart of the matter.

“Will health care costs ever be effectively controlled in America?” I demanded.

Magic 8 Ball tried to spare my feelings – “Better not to tell you now”– while ChatGPT, in its elliptical way, pointed me towards the unpleasant truth. While the challenge was not “insurmountable,” answered ChatGPT, it would require a “multi-faceted approach” involving “strong political will, stakeholder collaboration, and continuous evaluation and adjustment of strategies.”

In other words, “No.”

Michael Millenson is President of Health Quality Advisors and a long time THCB regular, he’s also a Forbes columnist where this piece first appeared.

Why Sam Altman Cares So Much About Voice

By MIKE MAGEE

When OpenAI decided to respond to clamoring customers demanding voice mediated interaction on Chat GPT, CEO Sam Altman went all in. That’s because he knew this was about more than competitive advantage or convenience. It was about relationships – deep, sturdy, loyal and committed relationships.

He likely was aware, as well, that the share of behavioral health in telemedicine mediated care had risen from 1% in 2019 to 33% by 2022. And that the pandemic had triggered an explosion of virtual mental health services. In a single year, between 2020 and 2021, psychologists offering both in-person and virtual sessions grew from 30% to 50%. Why? The American Psychological Association suggests these oral communications are personal, confidential, efficient and effective. Or in one word – useful.

As Forbes reported in 2021, “Celebrity endorsements, like Olympic swimmer Michael Phelps’ campaign with virtual therapy startup Talkspace, started to chip away at the long standing stigma, while mindfulness apps like Calm offered meditation sessions at the click of a button. But it was the Covid-19 pandemic and collective psychological fallout that finally mainstreamed mental health.” As proof, they noted mental health start-up funding has increased more than fivefold over the prior four years.

Altman was also tracking history. The first “mass medium” technology in the U.S. was voice activated – the radio. He also understood its’ growth trajectory a century ago. From a presence in 1% of households in 1923, it became a fixture in 3/4 of all US homes just 14 years later.

Altman also could see the writing on the wall. The up and coming generations, the ones that gently encouraged Biden to exit stage left, were both lonely and connected.

The most recent Nielson and Edison Research told him that the average adult in the U.S. now  spends four hours a day consuming audio and their associated ads. 67% of that listening was on radios, 20% on podcasts, 10% on music streaming and 3% on satellite radio.

Post-pandemic, younger generations use of online audio had skyrocketed.  In 2005, only 15% of young adults listened online. By 2023, it had reached 75%. And as their listening has risen, loneliness rates in young adults have declined from 38% in 2020 to 24% now.

A decade earlier, screenwriter Spike Jonze ventured into this territory when he wrote Her. Brilliantly cast, the film featured Joaquin Phoenix as lonely, introverted Theodore Twombly, reeling from an impending divorce. In desperation, he developed more than a relationship (a friendship really) with an empathetic reassuring female AI, voiced by actress Scarlett Johansson.

Scarlett’s performance was so convincing that it catapulted Her into contention for 5 academy awards winning Best Original Screenplay. It also apparently impressed Sam Altman, who, a decade later, approached Scarlett to be the “voice” of ChatGPT’s virtual lead. She declined, seeing the potential downside of becoming a virtual creature. He subsequently identified a “Scarlett-like” voice actor and chose “Sky” as one of five voice choices to embody ChatGPT. Under threat of a massive intellectual property challenge, Altman recently “killed off” Sky, but the other four virtual companions (out of 400 auditioned) have survived.

As for content so that “what you say” is as well represented as “how you say it,” companies like Google have that covered. Their LLM (Large Language Model) product was trained on content from over 10 million websites, including HealthCommentary.org. Google engineer, Blaise Aguera y Arcas says “Artificial neural networks are making strides toward consciousness.”

Where this all ends up for the human race remains an open question. What is known is that the antidote for loneliness and isolation is relationships. But of what kind? Who knows? Oxford’s Evolutionary Psychologist Robin Dunbar believes he does.

Altman likely paid close attention to this review by Atlantic writer Sheon Han in 2021: “Robin Dunbar is best known for his namesake ‘Dunbar’s number,’ which he defines as the number of stable relationships people are cognitively able to maintain at once. (The proposed number is 150.) But after spending his decades-long career studying the complexities of friendship, he’s discovered many more numbers that shape our close relationships. For instance, Dunbar’s number turns out to be less like an absolute numerical threshold than a series of concentric circles, each standing for qualitatively different kinds of relationships.… All of these numbers (and many non-numeric insights about friendship) appear in his new book, Friends: Understanding the Power of Our Most Important Relationships.”

But what many experts now agree is that voice seems to unlock the key. Shorthand for Altman: Pick the right voice and you might just trigger the addition of 149 “friends” for each ChatGPT “buyer.”

Mike Magee MD is a Medical Historian and regular contributor to THCB. He is the author of CODE BLUE: Inside America’s Medical Industrial Complex.(Grove/2020)

It’s in the Blood

By KIM BELLARD

People are fascinated by blood. Well, it would seem so, given our fondness for vampires, gory movies, and true crime stories. I’m not so keen on any of those, but I was struck by several recent developments about how blood tests can help diagnose medical problems faster, more definitively, and less invasively.

Because, really, shouldn’t that be what our healthcare system always should strive for?

Take concussions. If you are a football fan, you’re very familiar with the problem that it seems very subjective about whether a player has suffered a concussion. They’re not the only ones. Millions of people suffer concussions each year – the vast majority of whom are not athletes – and more than half never get it evaluated.

In April Abbott received FDA approval for a rapid blood test, producing results in 15 minutes. It can be done at a patient’s beside, and not require a lab. “Clinicians have needed an objective way to assess patients with concussions,” said Beth McQuiston, M.D., medical director in Abbott’s diagnostics business. “When you look at all the other diseases, or other organs in the body, they all have blood tests to help assess what’s happening. Now, we have a whole blood test that can help assess the brain right at the patient’s bedside – expanding access to more health providers and therefore patients.”

Expect to see the Abbott’s i-STAT TBI cartridge and portable i-STAT® Alinity® instrument in emergency rooms, not to mention on NFL sidelines.

Or Alzheimer’s disease. Many realize that it has historically been very difficult to diagnose, often not definitively until after death. Now a new study suggests a blood test can accurately diagnose it 90% of the time, which is much higher than even neurologists can do. The test is more accurate the later the stage of Alzheimer’s a person has.

Specifically, it measures “the ratio of plasma phosphorylated tau 217 (p-tau217) relative to non–p-tau217 (expressed as percentage of p-tau217) combined with the amyloid-β 42 and amyloid-β 40 plasma ratio (the amyloid probability score 2 [APS2]).” Got that?

“We’d love to have a blood test that can beused in a primary care physician’s office, functioning like a cholesterol test but for Alzheimer’s,” Dr. Maria Carrillo, chief science officer of the Alzheimer’s Association, told CNN. “The p-tau217 blood test is turning out to be the most specific for Alzheimer’s and the one with the most validity. It seems to be the front-runner.”

It’s not quite ready for use in your doctor’s office, though. “Right now, we don’t have guidelines for the use of these tests,” Dr. Eliezer Masliah, director of the division of neuroscience at the National Institute on Aging, warned NPR. Dr. Suzanne Schindler, an associate professor of neurology at Washington University School of Medicine in St. Louis, added: “Blood tests have developed incredibly fast for Alzheimer disease and I think [doctors] aren’t used to that rate of change.”

“The field is moving at a pace I never imagined 10 years ago,” Dr. Heather Whitson, a professor of medicine at Duke University, marveled to NPR.

We’re increasingly seeing FDA approved drug treatments for Alzheimer’s, so it’d be nice if we had FDA approved blood tests to more accurately use them. 

Last but not least, there’s colorectal cancer (CRC). The FDA recently approved Guardant Health’s Shield™ blood test for colorectal cancer screening, and is the first such blood test approved by the FDA as a primary screening option. A Guardant study found that it identified 87% of cancers that were at an early and curable stage, although it does less well at finding precancerous growths. The test is aimed at adults 45 and older who are at average risk.

It’s not so much that it is better than colonoscopies – it’s not — as it is that it should be easier to convince people to use. Despite the fact that CRC kills over 50,000 Americans annually, more than a third of older Americans are not getting screened. Even worse, more than three-fourths of those who die from CRC are not up-to-date with their screening.

“The persistent gap in colorectal cancer screening rates shows that the existing screening options do not appeal to millions of people,” said Daniel Chung, MD, gastroenterologist at Massachusetts General Hospital and Professor of Medicine at Harvard Medical School. “The FDA’s approval of the Shield blood test marks a tremendous leap forward, offering a compelling new solution to close this gap.”

Dr. Sapna Syngal, director of strategic planning for prevention and early cancer detection at the Dana-Farber Cancer Center in Boston agrees, telling NBC News: “If this test increases the number of people getting screened, it’s going to have a huge impact.” 

The test is on the market now, and Guardant expects approval for coverage by Medicare and commercial insurance.

Most of us are used to getting routine blood tests for things like blood counts or cholesterol levels, so it’s exciting that blood tests are started to be used for other important health issues.

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Blood tests are all well and good, but they’re not (yet) the kind of test you’d routinely expect to use at home on your own. ARPA-H has even bigger aspirations. It just announced the Platform Optimizing SynBio for Early Intervention and Detection in Oncology (POSEIDON) program, the goal of which is “to develop first-in-class, at-home, synthetic Multi-Cancer-Early Detection (MCED) tests for the most sensitive and specific stage I detection of 30+ solid tumors* using only breath and/or urine samples.”

No blood draw or lab tech needed, just breath or urine samples done yourself at home. That’s something to shoot for.

“Access to a low-cost cancer screening test that does not need a lab test is so critical to preventing late-stage diagnoses, increasing survival rates, and reducing high treatment costs,” said ARPA-H Director Renee Wegrzyn, Ph.D. “With POSEIDON, we could put the power of cancer screening into homes in the U.S. and around the world.” 

“But what if any adult could, at their discretion, take an at-home test that could detect Stage I cancer? POSEIDON aims to create a future in which any adult can take a simple, over-the-counter test to screen for and detect 30+ cancers at Stage I, when they are still localized, to drastically improve the chances of curative treatment and survival,” said Ross Uhrich, DMD, MBA, ARPA-H POSEIDON’s Program Manager.

“But what if…” indeed.  ARPA-H is thinking big — as it should. And as should we all.

Kim is a former emarketing exec at a major Blues plan, editor of the late & lamented Tincture.io, and now regular THCB contributor

No, Health Care Is NOT Brat

By KIM BELLARD

Until last week, I thought “brat” referred to an obnoxious child. I was vaguely aware of Charli XCX, but I wasn’t aware that earlier this summer she’d dropped a new album with that name, or that the cultural zeitgeist subsequently declared this to be Brat Summer. Then last weekend in the space of a day, Joe Biden dropped out of the Presidential race, Vice President Harris became the presumptive Democratic presidential nominee, and Charli XCX tweeted “kamala IS brat.”

V.P. Harris’s campaign exploded. Most of us had kind of been dreading the campaign between two eighty-year-old white guys, and then suddenly we had a mixed heritage woman as a candidate, who even at 59 seemed positively youthful by comparison. And brat to boot!

It’s been hilarious to watch people like Stephen Colbert or Jake Tapper try to explain brat to their viewers. Charli XCX herself described it on TikTok as:

That girl who is a little messy and likes to party, and maybe says dumb things sometimes, who feels herself but then also maybe has a breakdown but parties through it. It’s very honest; it’s very blunt—a little bit volatile, does dumb things, but, like, it’s brat. You’re brat. That’s brat.

It’s been taken much further than that, of course. An article in The Guardian described it: “Because, as we all know by now, brat – inspired by Charli’s most recent album – is more than a name, it’s a lifestyle. It is noughties excess, rave culture. It’s “a pack of cigs, a Bic lighter, a strappy white top with no bra”. It’s quintessentially cool.”  Shirly Li, in The Atlantic, opined: “The essence of “brat”is not defining people as such; it’s being simultaneously provocative and vulnerable.”

But, more to the point, Xochitl Gonzalez, also writing in The Atlantic, made clear how we should think about brat: “If you don’t know what that means, it doesn’t matter.” After all, if you’re not in on the joke, you are the joke.

The Harris campaign is all in on the joke. It fully embraced the appellation, even changing its campaign logo on social media to the easily identifiable lime green of the Brat album cover. The KHive is busy creating memes, posting TikTok clips, and filling the world with coconut emojis (long story). Some have claimed that brat summer is already over, but maybe not so fast.

Whether it is the brat effect or simply a honeymoon period for Ms. Harris, her favorability and enthusiasm ratings have soared, and the Presidential race polls again show a dead heat, after President Biden’s polls had tanked following his disastrous debate performance earlier this month. The simple fact that the Dems have a candidate who can become a cultural meme, in a good way, feels refreshing, especially in a campaign that heretofore had evoked more dread and resignation than enthusiasm.

I wish healthcare was brat.

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Upgrading public health IT infrastructure: Craig Behm, CSS & Britteny Matero, Innsena

I had the chance earlier this week to talk with Craig Behm, CEO & President of Crisp Shared Services (CSS), and Britteny Matero, Partner & SVP at Innsena. The topic is the upgrading public health IT infrastructure which was exposed by the pandemic as a bit of a mess. CSS, Innsena and partners are one of four new centers set up with a $255m CDC grant to help public health departments upgrade their technology and get on the same page about reporting for all the good reasons we heard about in the pandemic. There are hundreds of public health departments running thousands of programs and they’ve been the ugly stepchild of health data. Craig and Britteny got in depth we me about what that looks like and how they’re going to change it! — Matthew Holt

Google Hopes Nobody Beats This Wiz

By KIM BELLARD

When I saw the Wall Street Journal article about Alphabet being in “advanced talks” to buy cybersecurity firm Wiz for an eye-popping $23b, I must confess that – never having previously heard of the company – my thoughts flashed back to the Seinfeld episode (“The Junk Mail”) where Elaine dates a man whose job turns out to be an outlandish mascot for electronics store The Wiz, whose motto he gleefully repeats: “Nobody beats The Wiz!”  That firm is long gone but this Wiz is alive and well, enough so that the acquisition would be Alphabet’s largest ever.

The Wiz was only founded in 2020, by four ex-Israeli military officers (they reportedly all originally worked together at Israel’s equivalent of the NSA). They had previously founded cloud cybersecurity firm Adallom in 2012, which they sold to Microsoft in 2015 for its Azure cloud computing firm. Wiz also specializes in cloud cybersecurity, and, according to WSJ, its clients include 40% of the Fortune 500 companies as customers, including Barclay’s, Mars, Morgan Stanley, and Slack. Other notable customers include BMW, DocuSign, EA, and Salesforce.

Pretty impressive for a four-year-old start-up.

Alphabet’s cloud business – Google Cloud Platform (GCP) — badly trails leaders AWS (Amazon) and Azure (Microsoft), although last year GCP’s revenue’s rose 26% and it recorded its first operating profit. It’s Q1 2024 revenue was up 28%. By the way, Wiz lists both AWS and Azure as partners, along with GCP, Oracle Cloud Infrastructure, VMware, and Alibaba Cloud. 

Alphabet had bought security company Mandiant two years ago for $5.4b, as well as Siemplify, another Israeli cloud cybersecurity company, that same year, and evidently sees these acquisition as a way to bolster its cloud business.

For some perspective, just this past May Wiz raised $1b in a funding round that gave it a $12b valuation. Its annual recurring revenues are estimated at $500 million, so Alphabet’s offer is a 46 multiplier. By contrast, WSJ notes that competitor CrowdStrike has a market capitalization that is 25 times annual recurring revenues. “This could be one of the largest and fastest returns ever for a private security company in tech history,” Alex Clayton, a general partner at Meritech Capital, told WSJ.

“There are two advantages of Google acquiring Wiz,” Ray Wang, principal analyst and founder of Constellation Research, told CSO. “One, cloud security is hot and allows Google to cut into AWS and Azure clients, and two, having Wiz would give them some consistently large workloads to monetize.”

If you’re wondering why cloud security is hot, I need only mention AT&T, which recently disclosed that the records of “nearly all” of its cellular customers had been breached. Well, those records came from its cloud provider Snowflake — and that was not the first time Snowflake has been attacked and possibly breached. Azure has also suffered some serious breaches, and has been accused of “repeated pattern of negligent cybersecurity practices.” AWS has had its share of data breaches as well.

So, yeah, a cloud service better have good cybersecurity.

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Digital Health: There is No Exit

By MATTHEW HOLT

All of a sudden we are back in 2021.

You digital health fans remember that halcyon time. In 2019 a few digital health companies went public, and then somehow got conflated in the pandemic meme stock boom, with the harbinger event being the August 2020 sale of Livongo to Teladoc that valued it at $19bn and early in 2021 rather more, as Teladoc itself got to a market cap of $44bn in February 2021

Venture money poured into digital health as a fin de siecle for the ZIRP, that had been going for a decade, combined with the idea that Covid meant we would never leave our houses. The vaccine that became generally available at the start of the Biden Administration in 2021 put paid to the idea that telehealth was the majority of the future of care delivery.

Nonetheless between mid 2021 and early 2022 Jess DaMassa and I were reporting on VC funding in a show called Health in 2 Point 00 (later Health Tech Deals) and every week there were several deals for $100m and up going into new health tech companies.

Things don’t look so pretty now. Even while venture money was flooding into digital health, those public companies, as exemplified by Teladoc, started to see their stock price fall. While it was actually a good year for the stock market overall, in 2021 the digital health sector fell by around 60%. It kept going down. 2022 was worse and although one or two individual companies have recovered (Hi Oscar!), nearly two years later the market cap of the entire sector remains in the toilet.

Of the list that I’ve been following for years there’s only 11 broadly defined digital health companies with a market cap of more than $1 billion–that is only 11 public unicorns

What’s worse is that only one company on that list is decently profitable, and that’s Doximity. It made over $170m profit on revenue of less than $500m last year and trades at 10 x revenue. But Doximity always was profitable, going way back to 2014 (long before its IPO), and although it’s doing cool stuff with AI and telehealth, it’s basically an advertising platform for pharma.

There is no such thing as a profitable public digital health company in the mainstream of care delivery or even insurance–unless of course you count Optum. Which means there’s almost certainly no profitable VC-backed private company either.

Which leads me to this month. You remember those huge rounds that Jess & I used to report on and make fun of? They’re back.

I get it. The stock market is hot and all those pension funds are trying to put their winnings from Nvidia somewhere. VC looks a reasonable bet and there have been a few tech IPOs. If you squint really hard, as STAT’s Mario Aguilar did, you can pretend that Waystar & Tempus are health tech IPOs, although a payments/RCM company and a diagnostics company which are both losing a ton of money wouldn’t give me confidence as an investor.

But the amounts being thrown around must give anyone pause. Let’s take a few examples from the last month. Now these aren’t a knock on these companies, which I’m sure are doing great work, but let’s look at the math.

Digital front door chatbot K-Health raised at a $900m valuation. This round was a $50m top-up but it has raised nearly $400m. It says it’ll be profitable in 2025, and has Elevance as its biggest client. Harmonycares is a housecall medical group, presumably pursuing the strategy that Signify and others followed. It raised $200m, so presumably has a $500m+ valuation–Centene bought an earlier version of the company for $200m a decade ago and sold it to some investors two years back. Headway is a mental health provider network that uses tools to get providers on their system and markets them to insurers. It raised $200m at a reported $2.3bn valuation.

You can look at that list of public companies, including ones taken private like Sharecare, and see that there are lots of telehealth chatbots, medical groups and mental health companies on the list. Any of which probably have similar technology buried inside them. I’m sure if you shook Sharecare hard enough all those technologies would fall out given the number of companies it acquired over its decade plus of expansion.

But let’s take mental health.

Amwell acquired a mental health company called Silvercloud, and a chatbot called Conversa. Its market cap is bouncing around between $250m & $350m and it has more than that in cash–which means the company itself is worth nothing! The VCs who put money into K-Health and Headway could literally could have bought Amwell for about what they invested for a fraction of those companies. Is Headway doing more than the $250m a year in revenue Amwell is putting up? Headway’s value is nearly 6 x the value of Talkspace which is bringing in about $150m a year in revenue. And if you consider BetterHelp to be 50% of Teladoc — which it roughly is — Headway is 3 x the value of BetterHelp which is doing $1bn a year in revenue. Is there any chance that Headway is doing close to those numbers? Maybe somone who saw the latest pitch deck can let me know, but I highly doubt it.

Now of course these new investments could be creating new technology or new business models which the previous generation of digital health companies couldn’t figure out. They might also have figured out how to grow profitably–although as far as I know Doximity stands alone as a profitable company that took VC funding it never needed and never used.

But isn’t it more likely that they are in the market competing with the public companies and those private companies that got funding in 2020-22, have similar pitches, similar tech and are similarly losing money?

I am a long time proponent of digital health and really hope that technology can change the sclerotic health care sector. I want all these companies to do well and change the world. Maybe those VCs investing in those mega rounds are more sensible than they were in 2022. But given the state of the digital health sector on the current stock market–which is otherwise at all time highs–I just don’t know what the exit can be, and it pains me to say it.

Pamela Stahl, Avalon Healthcare Solutions

Pamela Stahl is the President of Avalon Healthcare Solutions. You’ve heard of pharmacy benefits managers (PBMs) but Avalon is a labs benefits management company. Working on behalf of health insurers Avalon ensures that patients are getting the right labs at the right price, . Why are they needed? There are 14 billion lab tests and they drive a lot of health care decisions (70%+!). As you might guess there’s a ton of variation in test price, lots of test are ordered in error, many are repeated, and many are unnecessary. Avalon’s job is to figure that all out!–Matthew Holt 

Health Care Needs a 21st Century Infrastructure

By KIM BELLARD

Matthew Holt is going to tell me I’ve been thinking about infrastructure too much lately (e.g., cybersecurity of them, backup plans for them), but if you don’t have infrastructure right, you don’t have anything right.

And healthcare most definitely does not have its infrastructure right.

We’re spending between 15-30% of our healthcare dollar on administration, and no one views our healthcare system as efficient or even particularly effective. We have numerous intermediaries like PBMs, billing services, revenue cycle management vendors, and all sorts of digital health solutions. There are layers upon layers upon layers, each adding its costs and complications.

In some ways, healthcare’s infrastructure has changed remarkably in the last two to three decades. Most transactions – e.g., claims or eligibility – are sent, and often processed, electronically. Most physicians, hospitals, and other health care clinicians/organizations have electronic health records. You can find out the expected cost for prescription drugs at point-of-sale. You can do a virtual visit with your doctor. There are vast amounts of health information available online. AI is coming to health care, and, in some cases, is already here.

But: we’re still sending faxes. We’re still filling out paper forms, repeatedly. We still make innumerable phone calls, usually spending long waits in queue. Everyone hates provider directories, which are never up-to-date and often inaccurate. Talk of interoperability notwithstanding, there are far too many data silos, leading to at best us lugging around disks with our downloaded records to at worst physicians acting with incomplete information for us. Healthcare has had far too many data breaches, and cyberattacks have held patient data hostage (e.g., Ascension) or put a halt to those electronic transaction (e.g., Change Healthcare). And we’re not at all sure how to govern AI.

The amount of medical literature has been growing exponentially for decades, and the volume of health care data is growing much, much faster. Physicians once guarded health information like the guild they are, but the Internet has democratized health information – while doing the same for misinformation. If anything, we have too much information; we just can’t use it as effectively as we should (e.g., it can take 17 years for evidence to change physician practice).

This is not an infrastructure that is not coping well with the 21st century.

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Batteries All Around

By KIM BELLARD

Quick question: how many batteries do you have? Chances are, the answer is way bigger than you think. They’re in your devices (e.g., smartphones, tablets, laptops, ear buds), they’re throughout your house (e.g., clocks, smoke detectors), they’re in your car (even if you don’t have an EV), and they may even be in you. We usually only think about them when they need recharging, or when they catch fire. They can be an environmental nightmare if not recycled, and recycling lithium-ion batteries is still problematic.  

So I was intrigued to read about some efforts to rethink what a battery is.

Let’s start with some work done by Swedish tech company Sinonus, a spinout of Chalmers University of Technology and KTH Royal Institute of Technology. The company is all about carbon fiber; more specifically, integrating structural strength and storing energy.

It seeks to make things multipurpose: “Just think of your smartphone, today it seems farfetched to use a single purpose phone, camera and mp3 player when you can have them all in one. In the same way we can transform single purpose materials, such as structure materials and batteries, through our multipurpose carbon fiber composite solution.” 

Or, as TechRadar put it, “how the laptop could become the battery.”

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