It’s M&A day here on Health in 2 Point 00! On Episode 229, Jess and I chat about the big news that Headspace and Ginger are merging to create Headspace Health (for more deets tune into Jess’s interview on WTF Health here). Next up, Connect America buys remote patient monitoring platform 100Plus. Finally, AllStripes raises $50 million in a Series B, bringing their total up to $67 million – this is a rare disease play for clinical trial recruiting. —Matthew Holt
Ginger and Headspace Merge: CEOs Let Us In On What’s Next for Digital Mental Health Super Company
By JESSICA DaMASSA, WTF HEALTH
The thinking behind the merger-of-equals between on-demand mental health company, Ginger, and mindfulness and meditation company, Headspace, is revealed in this in-depth chat with Headspace CEO CeCe Morken and Ginger CEO Russell Glass. The combined entity will be known as Headspace Health, with CeCe as its President and Russell as its CEO, and we’re chatting with both of them about go-to-market, strategic direction, and whether or not the next stop is an IPO.
“Low-cost, quality mental healthcare” is where these two minds seem to meet – playing on both Ginger’s reputation for being among the lowest cost providers of on-demand coaching and mental health therapy for the employer market, and Headspace’s budget-friendly, tech-first approach to mental wellness education and training for the masses. This is a critical point of differentiation, especially on the clinical side, where the cost of therapy is oftentimes a barrier for access to it.
Headspace will be rolled out to Ginger’s enterprise clients immediately (playing what sounds like a preventative medicine / early-detection role), but what might be even more exciting are plans to integrate Ginger’s therapy and coaching services into the direct-to-consumer product that has made Headspace a household name.
Is this the move before the BIG MOVE into the public markets? How will the integration work on the data side? And, for you long-time health tech followers and lovers of the digital therapeutics space, I ask about V1 of the Headspace Health brand, which, you might remember, announced bold plans to build the first-ever FDA-approved mindfulness DTx. The new combined entity is not only taking the name – it might one-day get back into the development of mental health digital therapeutics.
Lots to hear in this one as this Headspace Health positions itself to win in both DTC and Enterprise markets, starting Day 1 with 100M lives and 2700 enterprise clients around the world.
Delta Double-Down: A Universal Health Plan Is Long Overdue.

By MIKE MAGEE
On March 25, 1966, during the Poor People’s March that the Rev. Martin Luther King Jr. said, “Of all the forms of inequality, injustice in health care is the most shocking and inhumane.”
This week, my niece in Orlando, Florida, sent her 8-year old son, masked, back to public school. He has a history of severe allergies, including several anaphylactic episodes requiring emergency respiratory intervention. His class included a voluntary mix of masked and unmasked children. He now has a 105 degree fever and has tested positive for the Delta variant of Covid.
His crisis, and those of countless other children in Republican led states now lies clearly on their governor’s shoulders. It also suggests, as with voting rights, that we can no longer allow health planning and delivery to be captured entities of the states rights crowd. Dying children are just not acceptable in a civilized society.
The impassioned and illogical pleas of leaders like Florida Gov. Ron DeSantis are literally as old as this nation. As with many controversies in human endeavor, the easiest way to decipher history and meaning is often “to follow the money.” Such was the case in the battle between state and federal rights. This battle engaged early and often, with Thomas Jefferson and Alexander Hamilton on opposite sides of the spectrum.
Soon after the 1788 ratification of the U. S. Constitution, Washington’s Secretary of the Treasury, Hamilton, suggested a federal bank to manage debt and currency. Jefferson, then Secretary of State, opposed it for fear of a federal power grab. Regardless, in 1791, Congress created the First Bank of the United States with a 20 year charter.
When the charter ran out in 1811, it wasn’t renewed. But then the War of 1812 intervened, and in 1816 the Second Bank of the United States was created with the Federal government holding 20% of the equity. The divide led to the creation of two political parties – the Federalist Party and the Democratic-Republican Party whose members were committed to undermining the bank.
The battle came to a head when, in 1818, the Maryland’s state legislature levied a $15,000 annual tax on all non-state banks. There was only one – the Second Bank of the United States, which refused to pay. The suit rose to the Supreme Court with Maryland claiming the right to tax based on their reading of the 10th Amendment claiming state protection against extension of non-enumerated rights to the Federal government.
The landmark 1819 case – McCulloch v. Maryland, defined the scope of the U.S. Congress’s legislative power and how it relates to the powers of American state legislatures. In ruling against Maryland, Chief Justice Marshall argued that:
“Let the end be legitimate, let it be within the scope of the constitution, and all means which are appropriate, which are plainly adapted to that end, which are not prohibited, but consist with the letter and spirit of the constitution, are constitutional.”
It was the people who ratified the Constitution and thus the people, not the states, who are sovereign.
One hundred and thirty years later, on December 10, 1948, the newly formed United Nations, adopted the Universal Declaration of Human Rights. That day, Eleanor Roosevelt spoke for America, stating: “Where after all do human rights begin? In small places close to home…Unless these rights have meaning there, they have little meaning anywhere.”
Continue reading…I am Dr. Groot

By KIM BELLARD
The healthcare world is abuzz with Dr. David Feinberg’s departure from Google Health – another tech giant is shocked to find healthcare was so complicated! – while one of those tech giants (Amazon) not only just surpassed Walmart in consumer spending but also is now planning to build its own department stores. Both very interesting, but all I can think about is robots.
Most of the recent publicity about robots has come from Elon Musk’s announcement of the Tesla Bot, or the new video of Boston Dynamic’s Atlas doing more amazing acrobatics, but I was more intrigued by Brooks Barnes’s New York Times article Are You Ready for Sentient Disney Robots?
Like many industries that serve consumers, healthcare has long been envious of Disney’s success with customer experience. Disney even offers the Disney Institute to train others in their expertise with it. Disney claims its advantage is: “Where others let things happen, we’re consistently intentional in our actions.” That means focusing on “the details that other organizations may often undermanage—or ignore.”
You’d have to admit that healthcare ignores too many of the details, allowing things to happen that shouldn’t.
One of the things that Disney has long included in its parks’ experience were robots. It has had robots in its parks since the early 1960’s, when it introduced “audio-animatronics” – mechanical figures that could move, talk, or sing in very life-like ways. Disney has continued to iterate its robots, but, as Mr. Barnes points out, in a world of video games, CGI, VR/AR, and, for heaven’s sake, Atlas robots doing flips, its lineup was growing dated.
Mr. Barnes quotes Josh D’Amaro, chairman of Disney Parks, Experiences and Products, from an April presentation: “We think a lot about relevancy. We have an obligation to our fans, to our guests, to continue to evolve, to continue to create experiences that look new and different and pull them in. To make sure the experience is fresh and relevant.”
Enter Project Kiwi.
In April, Scott LaValley, the lead engineer on the project, told TechCrunch’s Matthew Panzarino: “Project KIWI started about three years ago to figure out how we can bring our smaller characters to life at their actual scale in authentic ways.” The prototype is Marvel’s character Groot, featured in comic books and the Guardians of the Galaxy movies (he is famous for only saying “I am Groot,” although apparently different intonations result in an entire language).
By 2021, they had a functioning prototype:
Matthew’s health care tidbits
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, I am featuring the the Urban Institute report on the uninsured that’s released today. “Between March 2019 and April 2021 the percentage of U.S. adults reporting they had employer-sponsored coverage declined from 65% to 62.3%, a decrease of approximately 5.5 million adults. The share of adults reporting public coverage increased from 13.6% to 17.5% percent, an increase of approximately 7.9 million adults”. So like it or not we are slowly becoming a public health plan nation–of course the public health plan picking up the slack is Medicaid. And that in practice means we are 2 nations. “In April 2021, the uninsurance rate in non-expansion states was more than double that of expansion states (18.2% versus 7.7%)”.
Which means that Texas & Florida (the two big non-expansion states) really don’t care about their people’s health. And taking a look at their governors’ current attitudes towards COVID, you would not be surprised.
George Halvorson HIMSS Changemaker Lifetime Achievement Award Acceptance Speech, Part 2

Former Kaiser Permanente CEO George Halvorson has written on THCB on and off over the years, most notably last year with his proposal for Medicare Advantage for All post-COVID. This month he was given a lifetime achievement award by HIMSS and we are running his acceptance speech in two parts. We ran part one last week, and here’s part two– Matthew Holt
We also initially have an important and continuously improving sense of the epigenetic processes that exist in all of us to develop our own responses to the world we are in at a biological level, and we should be able to use that information to improve our health and our care.
That is extremely relevant to you because it is very much a systems and coding issue to bring epigenetics into care delivery and care systems.
The magnificent, wonderful, and extremely powerful new CRISPR tool kit actually used computer like coding approaches and created a vaccine for Covid that explicitly triggered our body’s immune responses exactly as our epigenetics are naturally programmed and coded to do for other vaccine approaches.
We will be able to use that set of tools to improve our responses to cancer and multiple other diseases in a growing variety of important ways. We actually now can choose to evolve as a species because that particular tool actually allows us to change our genetic code in very channeled and intentional ways. That capability and reality is hugely important — and we will now be able to use those new tools in a growing range of ways.
We should be able to stabilize or reduce the amount of money we spend on care when we put these full sets of tools in place.
However — we also do need to become better and smarter buyers of care to make that full set of enhancements happen.
Every economic system on the planet does what it is paid to do. Care is not an exception to that reality.
That full connectivity level and organized team care for patients will only happen if we decide as a nation to stop buying all care by the piece — and if we move to paying for total care for our patients to teams of appropriately supported caregivers who are rewarded financially for continuous improvement.
Care sites everywhere in the world do what they are paid to do. They also do not do things they are not paid to do. They function as businesses everywhere, so they do what every business does in every industry and they give their customer exactly what the customer pays for.
No business in any industry uses any other model.
With that reality in mind — we all need to understand the fact that we Americans buy care very badly.
Continue reading…#Healthin2Point00, Episode 228 | Mahana, Vera, Cadence, Commure & Ovia
#HealthIn2Point00 is still catching up on back deals from my HIMSS “vacation” when Jess lost track of me. Mahana Therapeutics gets $61m for its IBS related CBT DTx. Not everyone is happy! Vera Whole Health Clinic gets $50mm even if they don’t love Jess! Cadence gets $41m for RPM. Commure buys PatientKeeper from HCA, and LabCorp buys femtech co Ovia Health–Matthew Holt
It takes a pandemic: Mental Health parity may finally have its day!

By EMILY EVANS
Emily Evans is the health policy guru at equity research company HedgeEye. She sends out these reports in emails to her clients regularly but (since I asked nicely) she allowed me to publish this one from late last week on THCB. You can catch Emily in person on the “How Much Are These Companies Really Worth? The IPO & SPAC Panel” at Policies|Techies|VCs–What’s Next for Health Care, the conference Jess Damassa & I are chairing on September 7-8-9-10 — Matthew Holt
Politics. President Biden is going to have more important things to do this week than worry about the mask/vaccine wars. At some point though, probably soon, Biden will need a scapegoat at the CDC. Several reversals on guidance around masks for the vaccinated and the unvaccinated have left local governments confused and people, most notably, parents of school age children, angry. The spread of the Delta variant isn’t helping matters.
While there may be political motivations for some of CDC Director, Dr. Rochelle Walensky’s guidance. A better approach, this last week anyway, would be never assign to cunning that which can be explained by incompetence.
Bringing a large, sprawling bureaucracy into line after a decade or more of being considered irrelevant is not a simple matter. It is made particularly difficult by the agency’s remote location in Atlanta to which Dr. Walensky commutes.
For the time being eclipsed by a messy exit in Afghanistan, the CDC’s failures are still being noted by longstanding supporters of the agency like former Food and Drug Commissioner, Scott Gottlieb. As the Delta variant follows the same summer path as Alpha from south to north and break-through infections become identified as more common than previously thought (though mild for the vaccinated), the pressure to get the CDC reorganized will grow.
The good news, notwithstanding the vitriol over mask wearing and vaccine mandates, is the assumption underlying the CDC’s guidance on masks/vaccines is that children will be going to school and college students to class. It is, we can all hope, the first step in recognizing that there is no Zero-COVID; no magic bullet; just adaptation and adjustment, something at which humans excel.
Policy. Last week, the Department of Labor simultaneously filed and settled a lawsuit against UNH for violations under the Mental Health Parity and Addiction Equity Act of 2008. The dollar value of the settlement was immaterial but United HealthGroup (UNH) agreed to take corrective action which will be substantive.
Continue reading…#Healthin2Point00, Episode 227 | Maven, Carrot Fertility, Cricket Health & Sharecare
It’s the return of #HealthIn2Point00 after an overly long summer break (well, I went to HIMSS and Jess didn’t last week!). We have deals with Maven raising a big round, Cricket Health (from a few weeks back) filling its coffers and another fertility play, Carrot Fertility, getting $75m. Finally Sharecare gets its checkbook out — again–and buys a home care company. We have more to catch up on tomorrow–Matthew Holt
Cityblock Health & The ‘At-Risk’ Disruption of Medicaid Care
By JESSICA DaMASSA, WTF HEALTH
Innovation in Medicaid is HAPPENING – and not only is it capable of creating better, less expensive healthcare for Medicaid members, but Cityblock Health is proving that it can also be the underpinning of a business worth over $1B dollars.
Dr. Toyin Ajayi, Cityblock’s co-founder & President, walks through the company’s novel business model, which goes AT-RISK to take care of some of the highest risk patients in all of healthcare. Here’s how it works: the startup contracts with health plans that provide Managed Medicaid services, helps them identify groups of patients that are of highest risk or rising risk, then takes over the financial and clinical accountability for that group. Cityblock then envelopes those members in a suite of highly personalized services that address both their healthcare needs and the social care challenges that are connected to them. In short…Cityblock is a medical practice built at the bustling intersection of value-based care and social determinants of health.
Toyin talks through some examples of the unique challenges facing the 75,000+ members Cityblock works with, particularly what they are learning about what it takes to “earn the right” to provide this population with care. But, is the high-touch, tech-infused core of their model defensible? What stops a huge national Managed Medicaid health plan like Centene or Molina from simply replicating this within their own multi-billion-dollar enterprises? Competition, expansion, funding, and outcomes – we get into it all, and hear Toyin’s near-term vision for Cityblock as it puts the nearly $500M its received in venture funding to work on “transforming the healthcare ecosystem for those who need it most.”