A new study in The BMJ attracted a lot of attention last week after finding that the full impact of misdiagnoses in the U.S. is likely being seriously underestimated by the medical community.
The researchers estimate that 371k people die every year following a misdiagnosis, and 424k are permanently disabled – meaning nearly 800k people suffer “serious harm” annually.
The lead author of the paper, Johns Hopkins Center for Diagnostic Excellence Director David Newman-Toker, said that “the number of diagnostic errors that happen out there in the U.S. each year is probably somewhere on the order of magnitude of 50 to 100 million.”
- While these misdiagnoses don’t usually result in serious harm (most people aren’t seeing a doctor for a life-threatening condition), the study found that just 15 diseases account for about half of all misdiagnoses.
Five diseases on their own – stroke, sepsis, pneumonia, venous thromboembolism, and lung cancer – caused almost 40% of the total “serious harm” incidents due to misdiagnosis.
- That equates to 150k prevented deaths or disabilities every year if misdiagnoses could be cut in half for just those conditions.
The authors’ solution? Take a cue from the heart attack model. Although heart attacks frequently involve vague symptoms like general chest pain, they have less than a 2% chance of being misdiagnosed (vs. 18% for stroke).
- The study attributes that success to a decade of concentrated efforts, which started with recognizing that misdiagnosis was a problem and culminated with heavy research investments, new guidelines, and tighter requirements around performance monitoring.
- “You end up ultimately with a system of care that focuses on not missing heart attacks. It’s the model for what we could be doing.”
Although 800k annual incidents is an alarming total, the study concludes on the optimistic note that there’s still less than a 0.1% chance of serious harm related to misdiagnosis after a healthcare visit. That said, there’s clearly more to be done around improving the diagnosis of diseases that have severe consequences when missed, and this research does a good job highlighting the areas that should be a priority.
Teladoc Health just released its second quarter earnings, and the results were somewhere between a return-to-form and an absolute home run.
Here’s Teladoc’s Q2 by the numbers:
- Revenue jumped 10% year-over-year to $652M
- Net loss shrank to $65M from $69M in Q1 (last Q2 saw a $3B Livongo writedown)
- Integrated Care revenue up 5% YoY to $360M
- BetterHelp revenue up 18% YoY to $292M
- Full-year revenue guidance raised to $2.6B-$2.67B, up $25M at the low end
Those figures helped push Teladoc’s stock up over 25% on Wednesday, with the narrowing loss and improved guidance both welcomed by investors. The conference call didn’t hurt either, and the four main themes that Teladoc drove home in the analyst Q&A were:
- BetterHelp customer acquisition costs are stabilizing after being a pain point over the last year. CEO Jason Gorevic said that consumer demand “has proven resilient through the first half of the year, even with the financial pressures that many households are facing.” BetterHelp now has 476k users, up 17% YoY.
- The Integrated Care segment saw growth across all chronic condition management programs. Digital diabetes prevention got a special callout, and over a third of Teladoc’s chronic care members are now enrolled in multiple programs. Total chronic care program enrollment was 1.07M at the end of Q2 (up 7% YoY), and CFO Mala Murthy said the 45k new enrollees drove the Q2 revenue increase.
- GLP-1 drug costs landed a major spotlight, with Teladoc’s employer clients clearly scrambling for ways to keep them contained. Teladoc is launching a new weight management program in Q3, giving patients access to GLP-1 drugs and personalized care plans developed with a physician to help manage outcomes and costs.
- AI, AI, AI. It wouldn’t be a 2023 earnings call if they skipped it. Teladoc apparently uses over 60 AI models in its products, ranging from member engagement to its virtual care queuing system. Leadership also drummed up hype for the Microsoft partnership expansion, which will integrate Azure OpenAI and Nuance DAX into the Solo platform.
All-in-all, Teladoc delivered a great second quarter, with every segment contributing to the revenue gains and proving that expanding within existing clients is a solid growth strategy. If there was something to harp on, it was the $200M worth of stock-based compensation that Teladoc is handing out this year, a pretty mind blowing total that’s a primary contributor to the company’s net loss.
K Health is the latest startup to deploy the “battlefield tactic” of raising an unlabeled funding round to help scale its platform, locking in $59M and a new strategic investment from Cedars-Sinai.
K Health’s been moving quickly since rolling out its AI-enabled symptom checker in 2018, raising $330M, expanding to 48 states, and seeing over 10M patients interact with its chatbot.
- CEO Allon Bloch told Forbes that the K Health platform aims to be the antidote to “Dr. Google” by ingesting user symptoms then stacking them up against its database of millions of patient visits to suggest possible diagnoses.
- The chatbot itself doesn’t give medical advice, but gives patients the option of having a human doctor take over the chat after providing them with potential diagnoses and a summary of the conversation. Over 70% of users reportedly opt for a chat-based visit.
That might sound similar to Babylon and Zipnosis, but K Health licensed its original dataset from HMO Maccabi in its native Israel, where patients tend to stick with the same payor most of their lives and thus provide a rare longitudinal view of clinical and outcomes data.
- K Health reportedly did $52M in revenue last year (margins currently still in the red), around 40% of which was direct-to-consumer and the rest was through enterprise contracts.
The next chapter of K Health’s journey is to build up its roster of hospital clients to serve as a “digital practice partner,” starting with its new investor Cedars-Sinai.
- Cedars-Sinai will be using K Health for virtual primary care, and by the end of the year expects to have an app co-developed to triage new patients to the system’s physicians.
One of the more interesting pieces of K Health’s funding announcement was Cedars-Sinai’s input into where K Health fits into its broader digitization strategy. While the health system excels in complex areas such as transplants and neurosurgery, primary care remains difficult to tackle due to physician shortages and burnout. These logistical challenges are the exact problems that K Health looks to address, and they’re also challenges that are far from exclusive to Cedars-Sinai.
New research out of the University of Texas added to the growing body of evidence that indicates telehealth’s promise of lower costs and utilization isn’t as straightforward as it appears – especially for certain types of diseases.
Researchers looked at patient visits across all hospital-based outpatient clinics in Maryland from 2012 to 2021, finding that virtual visits reduced the overall number of 30-day follow-ups by 13.6%, bringing down costs by $239 per patient.
Patients with behavioral health, skin, metabolic, and musculoskeletal disorders saw an even greater 19% reduction in follow-ups (an equivalent cost reduction of $179), suggesting that virtual care serves as a true substitute to office visits.
- Telehealth was also associated with a significant reduction in ER and specialist visits among patients in this category.
- The common thread between those conditions is what the researchers coined as “high virtualization potential,” or the ability for physicians to effectively measure symptoms over telehealth.
The flip side of that coin is that conditions with “low virtualization potential” saw nearly zero benefit from virtual care in terms of lowering costs, follow-ups, or future ER visits.
- These included circulatory, respiratory, and infectious diseases, where symptoms are difficult to observe over video and harder for patients to communicate.
These findings double down on the results from Epic Research’s study earlier this month, which found that 16 of the 24 specialties analyzed had fewer follow-ups after an initial telehealth visit.
- That study saw nearly identical overlap with behavioral health and MSK, which both saw a 20%+ reduction in follow-ups after telehealth. Podiatry, OBGYN, and ophthalmology were the greatest exceptions, in line with the “low virtualization potential” theme.
The difference in telehealth’s effectiveness between conditions caused the study authors to reach the conclusion that virtual care should be promoted in clinical areas where it is most beneficial, but it seems like there might be a bigger takeaway for our audience: There’s a huge need for innovative remote examination solutions, and circulatory, respiratory, and infectious diseases are a great place to start.
Although in-home care has made some major strides over the last few years, a recent 7wireVentures perspective piece laid out why we’re likely still in the “nascent stages” of a shift that has a long way to go before reaching its potential.
7wireVentures sets the stage by defining four distinct segments of home health consumers:
- Chronic Care – Seeks ongoing virtual care tailored to their needs, often with an in-depth treatment plan and frequent support for symptom and medication management.
- Preventative Care – Seeks routine virtual wellness appointments with a primary care physician, often desires convenient access to lab testing.
- Recently Discharged – Seeks consistent access to virtual care for support when issues arise, often related to new medications or health problems following in-patient care.
- Hospice Care – Seeks continuous in-person care to treat symptoms from the comfort of their own home, often facing a terminal illness.
The landscape of companies addressing those needs varies widely, but this market map does an excellent job grouping them across five primary categories: Preventative Care, Urgent Care, Chronic Care, Hospital at Home, Hospice and Palliative Care.
Using the above framework, 7wireVentures offers a trio of home health predictions:
Prediction 1 – As the industry shifts towards more home-based care offerings that bring a lower-cost site of care compared to traditional in-person settings, demand for such solutions will grow, thus setting in motion a virtuous cycle towards value-based care.
- This would also increase the focus on synchronized care and aggregated data collection, favoring platforms that can support different clinician types / modalities and tie it all together with EHR integration.
Prediction 2 – As demand for healthcare continues to outstrip supply and access to preventative care in traditional settings remains costly, incumbent healthcare stakeholders will expand offerings into the home.
- This would create the need for more partnerships to develop sustainable solutions, similar to Memorial Hermann’s joint venture with AccentCare that established the largest provider of in-home health services in the Houston area.
Prediction 3 – Given the increased ability to collect broader sets of user data, providers will be better equipped to develop deeper insights into consumers, and thus take a whole-person approach to care delivery.
- This would push personalized care toward earlier stage interventions, reducing costs further down the line and ultimately making the promise of always-on, preventative healthcare possible.
Rock Health’s H1 2023 digital health funding report confirmed the writing on the wall. We’re in a new market cycle, so it’s time to buckle up for fewer rounds, lower check sizes, and a smaller cohort of sector investors.
Here’s the first half of the year by the numbers:
- US digital health funding totaled $6.1B across 244 rounds ($24.8M average)
- Q2 contributed only $2.5B across 113 rounds (Q1 saw $3.6B across 131 rounds)
- Unprecedented 41% of H1 rounds weren’t tagged with a series or round label
- 12 mega-rounds over $100M accounted for 37% total funding
If the funding trend makes one thing clear, it’s that H1 2023 began to separate the best from the rest in Startup Land. (Chart: Funding Trend)
- We’re now on pace for the lowest funding year since 2019, and the fact that only 555 investors participated in digital health fundraises in H1 2023 (down from 775 in H1 2022) is another confirmation that we’re in the beginning of a new cycle.
Despite the slowdown, H1 counted 12 mega-rounds comprising 37% of total funding, and the $185M average check size rivaled the $188M seen during 2021’s peak mania (Chart: Mega-Rounds). Investors are now competing to crown the next class of household-name startups, particularly in three transformation areas:
- VBC enablement (Strive Health $166M, Arcadia $125M, Vytalize Health $100M)
- Non-clinical workflows – bonus points for “Shift” in name (Shiftkey $300M, ShiftMed $200M, MedShift $108M)
- At-home care (Author Health $115M, Monogram Health $375M)
The other major story from H1 was the staggering 41% of digital health rounds that were “unlabeled,” the highest share since 2011 (Chart: Unlabeled Raises). Most founders raise unlabeled capital for one of two reasons, both surefire signs of the times:
- To delay haircuts to previously-established valuations
- To avoid bad PR associated with a down round or a smaller-than-expected lettered raise
The new funding cycle naturally brings growing pains, and the stopgap cure for those pains has been the unlabeled rounds that Rock Health referred to as “a battlefield tactic, not a long-term strategy.” When we eventually see the return of lettered funding rounds, Rock Health makes the case that founders should reset their valuations to match truly sustainable profitability and growth targets, which would ultimately position them for better long-term success.
“Cognitive behavioral therapy for X” is the backbone of many mental health startups and digital therapeutics, yet it’s unclear which individual components of CBT actually drive outcomes.
A recent study in JAMA Psychiatry attempted to tackle that question, randomizing 767 adults with depression into cohorts that received some, but not all, of the seven individual components of internet-delivered CBT.
- Those include: activity scheduling, functional analysis, thought challenging, relaxation, concreteness training, absorption training, and self-compassion training
While internet-delivered CBT resulted in reduced depression at six months (mean follow-up difference in PHQ-9 score: -8.63), the researchers were surprised to find that none of the factors appeared to drive an impact independent of the others.
- The one exception? Absorption training.
The absorption training module taught individuals to become immersed in what they are doing in the present moment to “improve their direct connection with experience and enhance contact with positive reinforcers.”
- Patients completed a behavioral experiment where they compared memories of being absorbed versus not absorbed in a task, learned about flow states, and identified activities that make them feel absorbed.
- Although statistically significant, the effect of adding this module was still only one-fifth of a PHQ-9 point.
At least within this study, none of the components of CBT – with the exception of absorption training – significantly reduced depression symptoms relative to their absence, despite an overall average reduction in symptoms. The findings suggest that treatment benefit from CBT probably accrues from factors common to all CBT components (e.g. structure, making active plans), and non-specific therapy factors (e.g. positive expectancy).
PwC’s annual medical cost report is out, and as always, it’s a lot to dig through. The full report breaks down each of the factors underpinning medical inflation, but the headline takeaway was that healthcare costs are projected to rise 7% in 2024.
That’s up from 5.5% in 2022 and 6% in 2023, with PwC attributing the acceleration to two primary changes.
Inflator 1: In an inflationary environment like the one we’re currently seeing, providers are pushed to seek significant rate increases from payors. That effect is only amplified by workforce shortages and the return of patient demand.
- PwC expects inflation to cause employers to focus on high performing networks, centers of excellence that target high-cost claims (particularly cancer and orthopedic cases), and health plans that steer patients to lower cost providers.
Inflator 2: Pharmacy expenses are skyrocketing, with the median annual cost of newly approved drugs reaching $222k in 2022. Combined with the introduction of new cell and gene therapies, we look poised for persistent double digit pharmacy inflation.
- The demand of GLP-1 medications is another strong contributor, and if the FDA decides that these drugs are appropriate for weight loss, their popularity is just getting started.
PwC called out a couple deflationary forces, most notably biosimilar drugs entering the market at less than half the cost of their reference products. In 2023, the launch of adalimumab biosimilars to Humira was “a new milestone” in the U.S.
- The shift to lower cost care sites also made an impact, with the report highlighting increased demand for outpatient surgeries, home-based services, and virtual care. PwC recommends that providers work with plans to establish models that share in the gains.
Cost Neutral but Key to Watch:
- Continued efforts to manage total cost of care (the growth of value-based care)
- The COVID hangover causing provider unit cost increases and pharmacy trends
- Behavioral health utilization increasing
- Health equity’s impact on population health
- CMS Health Plan and Hospital Price Transparency Rule
- Medicaid redetermination
Although healthcare’s multi-year contracts dampen some of inflation’s immediate impact, PwC’s prediction of a 7% cost increase suggests that we’re now past any buffer. Industry bellwethers like UnitedHealth and Humana have already begun signaling that pent-up-demand is adding even more pressure to the equation, and PwC thinks that cost mitigation strategies should now be a top priority for payors and providers alike.