Sometimes you wonder where the line is in health care. And perhaps more importantly, whether anyone in the system cares.
The last few months have been dominated by the issue of costs in health care, particularly the costs paid by consumers who thought they had coverage. It turns out that “surprise billing” isn’t that much of a surprise. Over the past few years several large medical groups, notably Team Health owned by Blackstone, have been aggressively opting out of insurers networks. They’ve figured out, probably by reading Elizabeth Rosenthal’s great story about the 2013 $117,000 assistant surgery bill that Aetna actually paid, that if they stay out of network and bill away, the chances are they’ll make more money.
On the surface this doesn’t make a lot of sense. Wouldn’t it be in the interests of the insurers to clamp down on this stuff and never pay up? Well not really. Veteran health insurance observer Robert Laszewski recently wrote that profits in health insurance and hospitals have never been better. Instead, the insurer, which is usually just handling the claims on behalf of the actual buyer, makes more money over time as the cost goes up.
The data is clear. Health care costs overall are going up because the speed at which providers, pharma et al. are increasing prices exceeds the reduction in volume that’s being seen in the use of most health services. Lots more on that is available from HCCI or any random tweet you read about the price of insulin. But the overall message is that as 90% of American health care is still a fee-for-service game, as the CEO of BCBS Arizona said at last year’s HLTH conference, the point of the game is generating as much revenue as possible. My old boss Ian Morrison used to joke about every hospital being in the race for the $1m hysterectomy, but in a world of falling volumes, it isn’t such a joke any more.
Today on Health in 2 Point 00, we’re celebrating Valentine’s Day with many new funding deals! On Episode 109, Jess and I discuss Flywire, a payment startup that received not only $120 million from Goldman Sachs, reaching unicorn status, but also acquired the healthcare payments company Simplee which aids the hospital-patient billing process. Headspace raises $93 million, around half of which will be used to build a new ‘Health’ category and the other half to teach meditation. Outset medical raises $125 million for a portable dialysis machine and Iora Health raises $126 million for Series F funding. Finally, I give my take on patient-centric SaaS company Seqster receiving an undisclosed amount from Takeda. –Matthew Holt
Today on Health in 2 Point 00, we’re starting out with a riddle: what’s the similarity between the 49ers Super Bowl performance and digital health? Find out on Episode 108, where Jess and I discuss other news in health tech starting off with another IPO, OneMedical. Now worth more than Livongo at $2.7 billion, this went better than anyone could’ve expected. Hinge Health raises $90 million in a Series C round, offering physical therapy at home and tapping into the loads of waste that goes towards back surgeries. Finally, Humana partners with a private equity company to expand primary care centers, what is the deal with this? —Matthew Holt
Today on Health in 2 Point 00, we have SoftBank Money! I managed to beat Chrissy Farr to this piece of gossip by about 3 weeks, but digital pharmacy startup Alto raises $250 million from SoftBank. Medloop raises 6 million euros doing communication with patients, and mental health startup Spring Health raises $22 million as well. Turning to the EMR drama, I also give a rundown on Judy Faulkner’s letter, and explain the cautionary tale that is Practice Fusion & the Purdue opiate promotion. —Matthew Holt
Today on Health in 2 Point 00, everybody’s getting 20 million dollars! There are so many deals to cover. AI chatbot symptom checker Buoy gets $20 million, Clew gets $20 million, diabetes management company Oviva gets $21 million, Covera gets $23.5 million for diagnostic improvement in radiology, Zipari gets $22.5 million working on engagement in health plans. Another $20 million for Kaizen (yet another nonemergency medical transportation company), and Color raises $75 million for personal genetics testing. In other news, Google and Cerner—the catfight begins just in time so we don’t have to talk too much about interoperability at HIMSS. And if you were also waiting with bated breath for where Mona Siddiqui ended up, tune in for the gossip on this episode of Health in 2 Point 00. —Matthew Holt
Today on THCB Spotlights, Matthew chats with a couple of the OGs from the original days of Health 2.0—Scott Shreeve, founder and CEO of Crossover Health, and Jay Parkinson, founder of Sherpaa, who were the first ones doing something different in terms of doctors figuring out this digital health stuff. The two of them ask the question, what would happen if you married the physical world with the online world and created a new care model that exceeds at both? While Scott was putting in onsite primary care clinics to employers like Apple and Facebook, he realized Crossover wasn’t reaching 70% of the people they were contracted with because many employees were geographically remote. Meanwhile, Jay was doing something similar with virtual primary care—which differs from traditional telehealth in that his model enables a true relationship between patient and provider—and the rest is history.
Today on Health in 2 Point 00, Jess and I have a million deals to talk through. My Softbank rumor from last week hasn’t been announced yet, but there’s still plenty to discuss before JP Morgan. In this episode, get key takeaways from OneMedical’s S1, Swedish company KRY raising $155 million, ClassPass reaching unicorn status with a $285 million round, Komodo Health raising $50 million, and LeanTaaS raising $40 million. Be sure to follow along with all the JPMadness next week. —Matthew Holt
Today on THCB Spotlights, Matthew interviews Carolyn Magill, CEO of Aetion. Aetion is a real world evidence analytics company working to accelerate time to regulatory grade insights. In fact, Aetion recently did a study with Horizon Blue Cross Blue Shield of New Jersey where they analyzed the type 2 diabetes population, identified a subset of patients who should be on a different class of drugs—which are more expensive—that would improve health outcomes and bring down the total cost of care, saving about $5 million for Horizon. Find out where the data and intelligence for this platform came from, and how this female CEO works to empower women both internally and externally.
Today, I’m closing out the year of Health in 2 Point 00 from the ski slopes. In Episode 103, Jess asks me about the ACA ruling that the individual mandate is unconstitutional, whether Sutter Health got what they deserved after the $575 million settlement, health insurer Bright Health raising a huge $635 million round, and a rumor about a $250M Softbank investment coming next week. Wishing you all a very happy 2020! —Matthew Holt