Natalie Schneider is CEO of Fort Health, a relatively new entrant into the children’s mental health market. Fort Health’s modus operandi is to partner with (i.e. market via) pediatricians to get them to refer patients. They are delivering integrated care and something called collaborative care…a newer model that has more frequent and shorter interventions and is more affordable. Natalie is concerned that only 20% of current psychiatric care for pediatric patients is currently evidenced-based and measured. Part of their secret sauce is through a partnership with the Child Mind Institute, and they also deliver a series of educational offerings for parents. Fort Health has raised $16m & they’re pursuing a market by market expansion working with those pediatricians starting with New Jersey–Matthew Holt
What would a rational DOG(gi)E do(o)?
By MATTHEW HOLT
DOGE, or Doggie as Kara Swisher has been calling it, has gone from being a meme about Shiba Inus to a crypto scam to a group tearing the Federal government apart.So I thought I would use the title of this piece to make a joke. Like Musk’s humor it’s puerile and not funny. What’s also not funny is what Musk’s team has done to small government agencies, like USAID & CFPB that really help people, not to mention the irrational firing of thousands of government employees that appear to be screwing up the NIH, the National Parks, the FAA and much more. But it’s all got me thinking, what in health care should an effort to quickly rationalize government spending do?
Now I’m not proposing that there’s anything OK with the way Musk and his team have been blundering around the Federal government, telling lies about what it does and indiscriminately firing the people who have the most important responsibilities and then desperately trying to get them to come back. This has been pure ignorance theater, and it would be hilarious if it wasn’t so damaging. Equally importantly the places DOG(gi)E has started are stupid because they don’t spend much money. But the government spends a lot on health care –between two and three trillion dollars, depending on how you count it.
So if you wanted to save some money and potentially change the system, what would you do? First you’d take a deep breath and get some real data, and improve your understanding about what is actually happening. There are some areas in health care where the issues are well understood and the data is clear and there are others where it’s less obvious.
Let’s start with a relatively small one–spending on Federal Employees health benefits. Chris Deacon’s Linkedin posts are a constant source of fun and games, and she has been highlighting screwups in the FEHBP administration for a long time. Essentially the government via the OPM pays lots of different insurance companies to manage Federal employees’ health care. There is very poor oversight of what happens in those programs and when the OPM’s OIG points that out, not much happens. The plans (including Horizon Blues in NJ and BCBSNC and many others) have been caught being sloppy or fraudulent but not much has happened. All DOG(gi)E needs to do is read the report on the audits, or look at what GOA said about $1bn being spent on ineligible members in 2022 and apply their recommendations.
Next let’s get into something that requires a little more investigation. In America we buy (and sell) drugs in a mind-bogglingly complex way.
Continue reading…Lynda Brown-Ganzert, RxPx
Lynda Brown-Ganzert is CEO of RxPx. The company is the 2022 merger of the company she founded, Curatio, which was a support system for rare disease patients, with RxMx, a complementary service that helped clinicians manage patients on treatment or clinical trials. Lynda says that somehow I inspired the merger! (Although I don’t remember it, nor did she send me my 10%!). Now the company is supporting rare disease patients, funded primarily by pharma, across the globe. Lynda gives a full demo of both the clinician and patient experience–coordinating meds, labs, imaging, appointments, content, symptoms, patient reported outcomes, peer and coach support, and more. And she discusses how a great PE takeover works. (Not all of them are!)–Matthew Holt
Did VC Bros Destroy Digital Health?
I’m on this new podcast from Alex Koshykov – COO @ BeKey.io & Sergei Polevikov, Founder @ wellai.health and author of the rather aggressive and very fun AI Health Uncut. The podcast is called Digital Health Inside Out. The other guest was James Wang, General Partner at Creative Ventures. We got deep into the topic of what is happening with VC in digital health, and did the VC Bros hurt or help? Take a watch/listen!–Matthew Holt
George Boghos, Imagine Pediatrics
George Boghos is CEO of Imagine Pediatrics, a company founded out of former CMS Innovation head Adam Boehler’s Rubicon Partners fund. Imagine is a wraparound tech-based service helping some of the sickest kids in America–think kids on feeding tubes, cancer, mental health conditions, autism and more. They provide telehealth and on the ground services (like EMTs) that supplement typical pediatrics offices. the goal is to improve the kids’ and parents’ experience and of course save money on emergency admissions, and hospital admissions. It’s a new idea but one that certainly is having a moment as we need to support families and improve care for kids. And hopefully do it for less money. George told me how it all works. Not simple!–Matthew Holt
VC returns: Well, it’s stock trading…
By MATTHEW HOLT
There’s been a lot of discussion lately about whether digital health is a legitimate place for venture capital. There have been lots of huge failures, very few notable successes (and certainly no “biggest companies in the world” yet), while some real giants (Walmart/Walgreens/Amazon) have come in and then got out of health care.
I don’t have to tell you again that most of the publicly traded digital health companies are trading at pennies on the dollar to their initial valuations. But I will. Look at that chart below.
Heck even Doximity– which prints money (45% net margins!)–is trading at well under its post IPO high. My quick overview is that there are not very many publicly traded companies at unicorn status. With really only Doximity, HIMS and Oscar being very successful. (We can have a separate argument as to whether Tempus and Waystar are “digital health”). And there are many, many that are well off the price they IPOed at. All that at a time when the regular stock market is hitting record highs.
Which makes it interesting to say the least that Define Ventures just came out with a report saying that in general digital health has done well as a venture investment and that it was likely to do even better, soon.
The report isn’t that long and is well worth a read but their basic argument compares digital health venture investments to those in fintech and consumer tech. Essentially it took digital health a lot longer to get to 10% of total venture investment than fintech or consumer tech, but it got there after 2020. Now more than 10% of all VC backed unicorns out there are health tech companies. Yes there was a retrenchment in 2022-3 but health tech investment fell less than other sectors in 2022-3 and is basically back in 2024.
The Define forecast forecast is interesting (it’s the chart below). Define posits that it took 4-5 years after the fintech and consumer tech sectors became 10% of VC dollars for them to start pumping out exits and IPOs. There are 30-50 each in those sectors now, but health tech was ahead of that with 18 exits already in the first 5 years after getting to 10% of VC dollars, and those exits were on average double the size of the fintech/consumer tech exits. (Although to be fair the health tech exits were when the market was higher after 2020)
In fact their analysis is that capital returned was about 10x investment. You might say, but hey Matthew didn’t you just show me a chart that most of those 18 companies were public market dogs? And you’d be right.
Continue reading…Ian Morrison
I got the very sad news today that Ian Morrison died peacefully at home yesterday. He had been sick and in hospice for some time but a few months back he told me that he was going for Jimmy Carter’s record. Ian was my first boss in American health care when I worked for him at Institute for the Future and he was as kind and lovely as he was funny and knowledgeable. I was very glad that when I started THCBGang during the pandemic that he was a regular member.
Ian spent decades working with everyone across health care in American and internationally, but as he used to say essentially was paid to insult people. That he did it so humorously and usefully was the reason he kept being invited back. Any Ian Morrison keynote at a big health care conference was both a chance to learn something and laugh hysterically.
He also never ignored the chance to help those trying to make health care fairer and more equitable, serving on the boards of Martin Luther King Jr hospital, the California Healthcare Foundation and many others. He remained a jovial Glaswegian socialist at heart.
Ian liked to say that he went from Scotland where death was imminent, to Canada where death was inevitable, to California where death was optional. Sadly that last crack wasn’t quite true.
My heart goes out to his wife Nora and their children and grandchildren. There’ll be a more formal obituary and a celebration of his life in the days and weeks to come–Matthew Holt
Jonathan Bush, Zus Health
It’s always fun to chat with Jonathan Bush. You kids today may not remember that he was the first CEO to take a cloud-based (Health 2.0!) company public back in 2007! Athenahealth didn’t end up challenging Epic because a cosmically evil hedge fund took it (and him) down as it was on its way to try to do that, but Jonathan has moved on and is now building a clinical data integration company called Zus Health. We talked Zus, digital health, whether there will ever be value-based care and more. 20 mins of digital health gold right here–Matthew Holt
Peter Yellowlees, AsyncHealth
Peter Yellowlees MD is CEO at AsyncHealth–this is a new company that is doing the intake interview for a psychiatrist or psychologist session. Peter demos how the AI agent asks questions, how a patient answers in real time. Then after submitting the answers, the AI creates both a full transcript in the back end, and then a summary which the clinician can use in advance of seeing the patient. You’ll see the real time transcript and patient summary. Very accurate and impressive. That saves a significant amount of time in the intake process and helps the patent get to the right type of treatment. It’s early days for Asynch Health, but you’ll quickly get the idea about how this use of AI might change one part of care–Matthew Holt
Aniq Rahman, Fabric Health
Aniq Rahman is the CEO of Fabric Health. In basically two years Fabric has changed its name (nee Florence) bought some health tech standouts in the fields of symptom checking and asynchronous care (Gyant, Zipnosis), a medical group (Team Health’s virtual care) and the telehealth part of Walmart (MeMD). In the 2010’s Aniq built an analytics company acquired by Oracle & turned to health care after seeing his father go through the system. What he is trying to build is a company that can help providers (and now others) go from soup to nuts in helping a consumer online. He explained how those pieces fit together to match the look and feel of the customers to support their staff but also to augment them with Fabric’s people where needed. Now, with the Walmart/MeMD acquisition they are adding employers (and payers and even life science companies). There’s a lot to be done here, and we had a great chat about where consumers are going to get their care, what else Fabric needs to do (Aniq is thinking provider directories next!), and what the secrets are about General Catalyst’s work at Summa Health (sadly not much inside info!!)–Matthew Holt
