Well Health is flying under-the-radar as a white-label patient communications platform that lets more than 400 healthcare providers text message their patients via their hospital’s EMR. In the “is it a feature or is it a company?” debate that often surrounds digital front door startups, I ask CEO Guillaume de Zwirek why Well Health has decided to go out as an infrastructure play rather than own the patient relationship itself. How does he see this strategy lending itself to long-term growth?
One of the best-funded startups that I’ve never heard of (they’ve quietly raised $97 million from the likes of Dragoneer, Lead Edge Capital, Twilio Ventures and others) we get into the details behind the business model, the tech that’s supporting their patient comms platform, and why I haven’t heard about these big fundraises.
The health care industry is rapidly embracing new technologies. Covid-19 changed the way many industries operate, and healthcare is one industry that was particularly affected by the pandemic. Many health care organizations were already undergoing digital transformations, but Covid exponentially sped up those processes. Health care providers and health-tech companies were forced to adapt to the new normal and change the way they operate. Here are 3 major ways health care has changed in recent times.
1. Increased popularity of telehealth services:
Covid made telehealth appointments a necessity, but even in a post-Covid world virtual visits are likely to remain a core component of modern healthcare. According to McKinsey, telehealth utilization was 78 times higher in April 2020 than in February 2020. It remained nearly 40 times as popular in 2021 as compared to pre-pandemic levels.
Research shows that both patients and physicians are fans of telehealth. Many patients prefer the convenience of being able to speak to their doctor from home and physicians feel that offering telemedicine allows them to operate more efficiently. Phone and video-based medical appointments became mainstream in 2020, and they are unlikely to go away anytime soon.
2. More wearable medical devices with connected ecosystems:
The number of wearable medical devices in use has skyrocketed over the past 5 years. The wearable medical device market is expected to reach $23 million in 2023, a major increase from $8 million in 2017. Gadgets like heart rate sensors, oxygen meters, and exercise trackers are all becoming increasingly popular. Many popular consumer products such as cell phones and smartwatches ship with built-in medical tracking technology.
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
For my health care tidbits this week, the controversy about Medicare Advantage is getting louder and louder. There’s no question that it results in lower out of pocket payments for its members than traditional FFS Medicare. Medicare Advantage members use fewer services, and their care appears to be better “managed” –then again FFS Medicare’s “members” are barely managed at all.
But the big question is, Does Medicare Advantage save the government money? Critics (notably ex CMS veterans Berwick & Gilfillan) claim that risk adjustment games played by the private plans who run Medicare Advantage have cost up to $200bn over 10 years. Medpac (the independent body that advises Congress) estimates that “Medicare spends 4 percent more for MA enrollees than it would have spent if those enrollees remained in FFS Medicare” and go on to say “In aggregate, for the entire duration of their Medicare participation, private plans have never produced savings for Medicare”. However data from the Medicare Trustees and other research from ACHP & the trade group Better Medicare Alliance suggests that Medpac’s analysis is incorrect and that Medicare Advantage saves the government about 9% per enrollee.
THCB ran a long piece (pt 1, pt 2) about Medicare Advantage from former Kaiser Permanente CEO George Halvorson earlier this year, and a related one from current Permanente Federation CEO Richard Isaacs. But it’s much more nuanced than that. J Michael McWilliams has long piece on Health Affairs Forefront trying to capture the various strands of the argument. His conclusion? “The substantial subsidies MA receives are largely responsible for the extra benefits and have more than offset savings from any efficiencies, posing a net cost to Medicare and complicating assessments of MA’s added value.”
Meanwhile CMS has just changed the most controversial aspect of risk adjustment (which is the most controversial part of Medicare Advantage) by banning the plans from doing it, and only allowing providers to be involved.
Whether any of this is going to change CMS regulations or wider government policy regarding MA payments is less certain. CMS is currently dealing with its replacement for the even more controversial Direct Contracting (now called ACO REACH). But Medicare Advantage is the most profitable part of private health insurance and has many knock on effects for care services and technology. So I’ll be watching this space and you should too!
Matthew Holt categorized the triple-merger between Cricket Health, Fresenius Health Partners, and InterWell Health as a “take out merger” — proposing that Fresenius orchestrated the deal to “take out” rising-star kidney care startup, Cricket Health. Well, Cricket Health’s CEO Bobby Sepucha (who will also be CEO of the newly combined entity) “takes issue” with the health tech curmudgeon’s “take out” call and we find out the reasons why.
Listening to Bobby’s explanation, it sounds like the shrewd move Fresenius might be making here in giving up its value-based care arm, Fresenius Health Partners, and its joint-venture with 600 nephrologists in InterWell Health is one that better positions their core dialysis business for the value-based care future that is headed straight toward specialty medicine.
As Bobby puts it, “when you deliver a healthier patient to kidney failure, you don’t obviate the need for dialysis.” Instead, he says, you open up options for other treatments like transplant or home dialysis along the way, as well as the kinds of patient quality outcomes that satisfy the clinical accountability of providers in value-based arrangements.
The other gain is a move upstream for Fresenius. While there are 600,000 dialysis patients each year, the population of Americans with late-stage kidney disease who remain “wildly unmanaged” is 36 MILLION. And they represent $170 Billion in healthcare costs. If InterWell works the way it’s supposed to – with the first value-based care-designed model for late-stage kidney disease management – the potential to impact that patient population is what this merger is all about. Tune in and tell us what you think!
Joining Matthew Holt (@boltyboy) on #THCBGang on March 24 for an hour of topical and sometime combative conversation on what’s happening in health care and beyond were fierce patient activist Casey Quinlan (@MightyCasey); patient safety expert and all around wit Michael Millenson (@MLMillenson); THCB regular writer and ponderer of odd juxtapositions Kim Bellard (@kimbbellard); and back from his travels in Mexico and medical historian Mike Magee (@drmikemagee).
Special guest this week was population health and primary care expert Ines Vigil, who developed that program at Johns Hopkins but now hangs her hat at Clarify Health &is the author of Population Health Analytics. We dived deep into what populations health means. What we need to do to make it work and whether it’s real or not!
You can see the video below live (and later archived) & if you’d rather listen than watch, the audio is preserved as a weekly podcast available on our iTunes & Spotify channels.
Livongo Alumni Updates from ViVE 2022 continue! Former CEO Zane Burke drops in to talk about his new gig as CEO of Quantum Health, the “original” healthcare navigator biz, and how he’s bullish on the notion that navigators aren’t going anywhere any time soon.
Now, for those who’ve followed Livongo’s founder Glen Tullman as he’s launched his new business Transcarent – and a whole lot of “navigators aren’t working” rhetoric to position it – one might find it very interesting to hear Zane’s take, particularly how what he learned at Livongo has led him to adopt a viewpoint so opposite Glen’s.
Is the market large enough for both approaches to employer benefits optimization – and all the other permutations with and without primary care in between – to win? And for those of you who remember when Zane and Glen ran opposing EMR companies…is this Cerner versus Allscripts all over again?? And speaking of, I get a GREAT candid take on what IS happening in the EMR market today and whether or not Zane thinks challenger tech co’s will finally be able to win over health systems and unseat the EMR incumbents.
Joining Matthew Holt (@boltyboy) on #THCBGang at 1pm PT 4pm ET Thursday for an hour of topical and sometime combative conversation on what’s happening in health care and beyond will be: double trouble futurists Ian Morrison (@seccurve) & Jeff Goldsmith; consultant focusing on platform business models and strategy Vince Kuraitis (@VinceKuraitis), & back after a long while analyst and Principal of Worksite Health Advisors Brian Klepper (@bklepper1).
Today there will be more discussion than usual about platforms and whether health care is ready for them!
You can see the video below. If you’d rather listen than watch, the audio is preserved as a weekly podcast available on our iTunes & Spotify channels
It seems inevitable that, in the near future, an innovative health care organization – Let’s call it The Platform – is going to seize the market opportunity of broader value. It will cobble together the pieces, and demonstrate to organizational purchasers that it consistently delivers better health outcomes at significantly lower cost than previously has been available.
To manage risk and drive performance, The Platform will embrace the best healthcare management lessons of the past decades: risk identification through data monitoring and analytics, driving the right care, quality management, care navigation and coordination, patient engagement, shared decision-making, and other mission-critical health care management approaches. It will practice care that is grounded in data and science, and is outcomes-accountable.
But The Platform will also appreciate that a few specialty vendors have developed deep expertise in dealing with clinical or financial risk in high value niches – where health care’s money is – like management of musculoskeletal care, chronic disease, maternity, surgeries, high performing providers, or specialty drugs. It will understand that it often makes sense to partner with experts who can prove and guarantee high performance rather than trying to learn to achieve high performance within each niche. The Platform also will realize that simplicity is a virtue, and that bundling specialized services under one organizational umbrella is easier for health plan sponsors to manage and for patients to negotiate than an array of individual arrangements.
Turns out, that if you’re lucky enough to catch Glen Tullman in an impromptu chat just off the main stage at ViVE 2022, he’s warmed up enough (we could maybe even call it ‘fired up’ enough) to kick it into overdrive, roar past the usual talking points, and tell us what he REALLY thinks about what’s happening in the healthcare market today.
Things are changing. And, if you listen to this chat from start-to-finish, one of the key, overarching themes is payment model reform. From the news about Civica RX’s commitment to $30-dollars-or-less insulin (an initiative Glen helped lead and fund via his family foundation) to the 10X growth of virtual care coming out of the pandemic and the rise of “Big Customer” (aka Walmart and Amazon) in healthcare, the bottom line is that we’re no longer talking about fixing the way care is paid for – it’s actually starting to happen.
What is Transcarent’s role in all this? For those who might still be confused, tune in. This IS confusing, but I think the candor of our situation here may have given rise to one of the best descriptions of the business yet. Glen goes point-by-point on the way Transcarent is attempting to shift the paradigm for cost-and-quality across five (5!!!) different aspects of care at one time, using different strategies, novel technologies, cross-industry partnerships, and never-before-seen relationships with health systems to deliver what “20 years working with payers and 5 years working navigators didn’t deliver” for self-insured employers and their employees.
Sprinter Health bills itself as “the “DoorDash for lab draws” – sending nurses and phlebotomists out to patients’ homes to collect blood samples and urine samples, check vitals, and even perform Covid tests. Their model has been received with some skepticism (most notably by my Health Tech Deals co-host and legendary health care curmudgeon Matthew Holt) so we get down to the bottom of what’s REALLY going on with CEO Max Cohen.
The long-term play is NOT to just rove the streets like some nomadic Quest Diagnostics; it’s to support the emerging market of virtual care and telehealth-based next-gen healthcare companies that will, ultimately, be limited in their abilities to diagnose-and-treat unless they can easily – and inexpensively – get patients lab tests.
Sprinter hopes to be that logistics company, extending the ‘value of virtual’ so it can live up to its promise of providing less expensive, more convenient care to patients. Max says only 15-20% of their business is made up of consumer-directed concierge calls; instead, the focus is on having a provider – think home health providers, specialty labs, virtual-first primary care clinics – dispatch Sprinter instead. Their pricing is built to attract these kinds of providers, giving Sprinter an advantage over, say the kind of medical transport services that are typically engaged to bring home health patients to the lab instead of the other way around.
Less than one-year old, Sprinter has already raised more than $37 million and counts health-tech-famous funds like Andreesen Horowitz, General Catalyst, Accel, Google Ventures – and even the real DoorDash’s co-founder and CEO Tony Xu – as investors. So, what’s ahead in the short-term to expand services out of LA, San Francisco, and Sacramento? We talk geographic expansion (hello, Texas and Georgia) and how Max is planning to continue to expand the utility and value of virtual care without increasing cost.
