What’s better than being the CEO of one blazing-hot disruptive health tech company that’s raised $450M to build “the internet of healthcare”? How about becoming the CEO of a second company – a new managed Medicaid health plan company – that’s to be built on top of your first company’s machine learning platform, which is chock-full of hospital data and learning how to automate healthcare admin expertise? So is the fate of Sean Lane, CEO of Olive and now, also CEO of Circulo.
What does a built-from-scratch, tech-first Medicaid plan look like? Sean talks through the strategy behind the new health insurance co, which is aiming to use Olive’s tech to automate every aspect of the way a payer functions in effort to 1) strip away health plan admin costs and 2) create a never-before-seen relationship between patient, payer, and provider. On this latter point, it’s the fresh approach to payer-provider relations that seems to really have Sean excited. With Olive already built into hundreds of health systems, and conveniently located on the desktops of those providers, Sean says Circulo will be poised to take advantage of that network’s data and distribution to forever alter the healthcare payment model. Submitting claims goes away. Denials go away. Costs drop. Care improves.
Backed by a fresh $50M from Olive’s investors (Drive Capital and General Catalyst led Circulo’s Series A with participation from Oak HC/FT and SVB Capital) the new plan is currently building team and tech and aiming “to cover one life, bring on one provider, and earn one dollar of revenue by the end of the year.” It’s early days, but we dive into the details behind the strategy and also explore how this fits into the “health assurance thesis” that’s lurking behind General Catalyst’s latest investments, particularly those spearheaded by Hemant Taneja, who literally co-wrote the book on the subject with Jefferson Health’s Steve Klasko, and is the CEO of the Health Assurance Acquisition Corporation ($HAACU) SPAC that’s just out there waiting to take a health tech business public.
The faxes keep coming in, sometimes several at a time. “Your (Medicare) patient has received a temporary supply, but the drug you prescribed is not on our formulary or the dose is exceeding our limits.”
Well, which is it? Nine times out of ten, the fax doesn’t say. They don’t explain what their dosage limits are. And if it isn’t a covered drug, the covered alternatives are usually not listed.
So the insurance company is hoping for one of a few possible reactions to their fax: The patient gives up, the doctor tries but fails in getting approval, or the doctor doesn’t even try. In either case, the insurance company doesn’t pay for the drug, keeps their premium and pays their CEO a bigger bonus.
First problem: This may be in regards to a medication that costs less than a medium sized pizza. And the pharmacy generally doesn’t even bother telling the patient what the cash price is.
Second problem: A primary care physician’s time is worth $7 per minute (we need to generate $300-400/hour). We could spend half an hour or all day on a prior authorization and there is absolutely zero reimbursement for it.
The April Fools joining me on THCB Gang today will be policy expert consultant/author Rosemarie Day (@Rosemarie_Day1), futurist Jeff Goldsmith, policy & tech expert Vince Kuraitis (@VinceKuraitis), and patient safety expert & all around wit Michael Millenson (@MLMillenson). There’s vaccines, a 4th wave, Texas reopening, Florida never having closed, and a whole mess of health policy. It’ll be fun — so come join us
You can see the video below live and the audio will be on our podcast channel (Apple/Spotify) from Friday
We’ve only got one $100 million deal today on Health in 2 Point 00 — has the bubble burst? On Episode 196, Jess and I talk about care navigator Rightway raising $100 million – there’s a lot going on with this space, does it make sense to do this right now with Transcarent? AKASA, formerly known as Alpha, raises $60 million bringing its total to $85 million for revenue cycle management. Viz.ai gets $71 million, bringing its total to $150 million, for its stroke diagnostic AI software, AppliedVR raises $29 million bringing its total to $35, and Harmonize Health raises $10 million working on remote patient monitoring. —Matthew Holt
Admit it: you’ve been following the story about the huge container ship stuck in the Suez Canal. It’s about the size of the Empire State building laid flat, and somehow ended up blocking one of the busiest waterways in the world.
As serious as this was for global shipping and all of us who depend on it, much hilarity ensued. Memes exploded, using this as a metaphor for almost everything, healthcare included. Once there started to be hope for getting the Ever Given free, people started new memes that it should be “put back.”
Well, I’m a sucker for a funny meme and a good metaphor too. Our healthcare system is that canal, and we’re the unfortunate ship. Only it doesn’t look like we’re getting unstuck anytime soon.
The Ever Given got stuck a week ago. It is one of the world’s largest container ships, but high winds, poor visibility (due to a dust storm), and, perhaps, human error caused things to go sidewise, literally. It got stuck on the banks. Over 300 other ships have been blocked as a result; alternative routes add several thousand miles to the trip, making it a tough choice between waiting/hoping and rerouting.
Anyone who follows me knows that I’ve been questioning whether digital therapeutics are real and more importantly whether the people building and trying to sell them are simply trying to replicate the American drug pricing model–patent, protect, prescribe & price gouge. So who better to have this conversation with than the person in charge of explaining and selling the notion of digital therapeutics to the world? Megan Coder is Executive Director of the Digital Therapeutics Alliance. She graciously and bravely agreed to talk to me. Who won the argument? You’ll have to watch to decide, but I found our discussion to be a lot of fun and very interesting and I hope you will too – Matthew Holt
The transcript is below
Hi, it’s Matthew Holt with a THCB spotlight. I’m here with Megan Coder. Megan is the executive director of the Digital Therapeutics Alliance. And we’re here to talk about this thing called digital therapeutics, as to what they are, what the alliance does and whether they really exist and how we should treat them. Megan, thanks for coming on. I know we’ve done a little bit of sparring online and in-person, but I’ve never interviewed you. So I’m looking forward to this. So how are you doing?
Good. It’s more fun to spar in-person, but I miss the in-person aspect.
Today on Health in 2 Point 00, I’ve been banned from talking about the Suez Canal by Jess. On Episode 195, we cover Cityblock raising $192 million in a C extension, adding to their $160 million Series C in from December. Crossover Health raises $168 million in a proper D round, Redesign Health raises $100 million adding to their capital of $250 million for their digital health studio, and Vesta, formerly called Hometeam, raises $20 million which has flopped from working to get caregivers into the home to helping care agencies do telehealth at home. —Matthew Holt
Despite nearly 900 employer clients (including big brands like Burger King, Kroger, and DoorDash), a net promoter score of 84, and a new pharmacy benefits management (PBM) program launched mid-pandemic, healthcare navigator startup, Rightway, seems to have come out of left field with its $100M Series C fundraise and $1.1B valuation. CEO Jordan Feldman introduces us to the company he’s built and its pretty impressive ability to achieve double-digit decreases in the cost of healthcare for mid- and large self-insured employers.
We walk through the business model, talk about the well-funded competition in both the care navigation and PBM spaces, and get acquainted with Rightway’s plans for scaling up and attracting new clients. An added little point of intrigue? As Rightway looks to gain a foothold working with health plans, Jordan mentions some interesting ties via its Series C investors. While the round was led by Khosla Ventures, with participation by Tiger Global and existing investors, it’s Thrive Capital, also an investor in the health insurance startup Oscar Health, that sounds like it might help Rightway make its way into the payer market.
The hackneyed windows phrase, about what a domestic employee will and will not do for an employer, represents a concept that applies to the life of a doctor, too.
Personally, I have to do Windows, the default computer system of corporate America, even though I despise it. But in my personal life I use iOS on my iPad and iPhone and very rarely use even my slick looking MacBook Pro. I use “tech” and machines as little as possible and I prefer that they work invisibly and intuitively.
In medicine, even in what used to be called “general practice”, you can’t very reasonably do everything for everybody. Setting those limits requires introspection, honesty and diplomacy.
In my case, I have always stayed away from dealing with machine treatments of disease. But I do much more than just prescribe medication. Since the beginning of my career, and more and more the longer I practice, I teach and counsel more than I prescribe.
I have decided not to be involved with treatment of sleep apnea, for example. It may sound crass, but I don’t find this condition very interesting: The prospect of reviewing downloads and manipulating machine settings is too far removed from my idea of country medicine.
Worse than CPAP machines are noninvasive respiratory assist devises. I won’t go near those.
This week (for one week only) #THCB Gang was on Friday. Matthew Holt (@boltyboy) was joined by regulars medical historian Mike Magee (@drmikemagee), Fard Johnmar (@fardj), from digital health consultancy Enspektos, THCB regular writer Kim Bellard (@kimbbellard), and employer health expert Jennifer Benz (@jenbenz). Sadly Casey Quinlan was ill and couldn’t join last minute.
It was an extraordinary week, especially in terms of digital health investment. We talked a bit about that and a lot more about high deductible health plans, whether the filibuster will be busted, and what that might mean for Medicare for all. A wide ranging and big picture conversation!
The video is below but if you’d rather listen to the episode, the audio is preserved as a weekly podcast available on our iTunes & Spotify channels.