Month: October 2024

IT Leaders Are Ready For New Solutions

Posted on by Jason Barry

The future’s looking bright for digital health after the Peterson Health Technology Institute’s 2024 State of Digital Health Purchasing Survey found that decision-makers across the industry are ramping up their tech investments.

  • The headlining stat: 97% of employers, 86% of health systems, and 84% of health plans intend to maintain or increase digital health spending in the coming year.

Three quarters of purchasers have already grown their budget for new solutions, motivated primarily by consumer demand (83%) and improved outcomes (62%).

  • Cost advantages were cited as a top investment driver for 60% of health plans and 49% of health systems, versus just 34% of employers.
  • Across all three groups, 43% have acquired enough solutions to address 6+ conditions, and it was interesting to see how their clinical priorities varied.

Purchasers are more hawk-eyed than ever when it comes to their contracts and vetting processes.

  • 59% of contracts have a duration under two years, leaving a short window for solutions to demonstrate clinical improvements and illustrate their value.
  • When comparing vendors, a proven track record was usually the deciding factor, beating out both ROI and ease-of-use for every group.

Looking ahead to next year, value-based care is top of mind, with 100% of employers expressing interest in risk-based contracts for new solutions, as well as 60% of health plans and 50% of health systems. Other top goals include:

  • 72% of health plans are looking to reduce costs and improve member experience
  • 74% of employers are looking to improve productivity
  • 80% of health systems are looking to improve patient experience

The Takeaway

Health plans, employers, and health systems all seem to be embracing the transformative magic of digital health, and this report gave vendors a way stack their decks with data on the unique priorities of each group.

Maven Clinic, Suki, Glooko Start Q4 in Style

Posted on by Jason Barry

It isn’t every week we see digital health startups score a hat trick of massive funding rounds – let alone one that rakes in a combined $295M – but Maven Clinic, Suki, and Glooko clearly came to play.

Maven Clinic kicked off the action by closing $125M of Series F funding and vaulting its valuation to $1.7B. The women’s and family health startup also gave us a behind-the-scenes peek at its 10-year roadmap:

  • Fertility Benefits – Maven’s fertility benefits administration product has brought millions of lives under management since launching last year, and it’s leaning in on forming more clinic partnerships to create a seamless experience between Maven’s virtual care model, financial platform, and in-person treatments. 
  • VBC – The maternity program that serves as the bedrock of Maven’s platform is moving past “phase one” by using real-time data to engage members with a broader ecosystem of services, enabling Maven to take on full-risk and align incentives with outcomes.
  • Engagement – Soon-to-be-announced AI capabilities will bolster Maven’s engagement engine with more insights into fertility, maternity, and family building, as well as often-overlooked areas like return-to-work, parenting, and menopause.

Next up we saw ambient AI startup Suki land $70M of Series D financing on the heels of  adding over a dozen new health systems in the past few months.

  • The release highlighted an expanded partnership with MedStar Health that’ll make Suki Assistant available to thousands of clinicians across specialties including primary care, cardiology, and gastroenterology.
  • Suki also teased plans to expand beyond its existing Suki Assistant and Suki Platform offerings, although details were sparse on what that might entail.

Glooko rounded out last week’s top scorers with a $100M Series F round and the appointment of a new CEO to guide the digital diabetes developer through its next chapter.

  • Freshly appointed chief Mike Alvarez will accelerate the global expansion of Glooko’s solution suite that helps diabetics take control of their condition and equips care teams with a unified platform for managing devices, data, and engagement.

The Takeaway

Digital health startups are off to a hot start in Q4, and Maven Clinic, Suki, and Glooko are the ones cranking up the heat. All signs are pointing to more late-stage mega-rounds as companies look to shore up their balance sheets and bridge the gap to a quickly thawing IPO market, unless of course they’re already eager to diveright in.

Rock Health Q3 Update: Tapestry Weaving

Posted on by Jason Barry

Rock Health’s Q3 Digital Health Market Update showed that investors have found comfort strolling down a path of “focused funding,” with last quarter’s innovation story shifting from transaction volume to market positioning.

The U.S. digital health sector logged $2.4B in venture funding across 110 rounds in Q3 2024, bringing year-to-date funding to $8.2B. 

  • While Q3’s 110 rounds marked a slowdown from 136 in Q1 and 133 in Q2, average investment size held steady at $22M quarter-over-quarter, indicating that investors are honing their focus while continuing to make sharp plays.
  • The analysis also noted that investments are overlapping with partnerships, with companies keen to support startups they’ve already worked with in crowded spaces like healthcare AI – as seen with NVIDIA and Hippocratic AI.

The real narrative behind last quarter’s activity was what Rock Health referred to as “tapestry weaving,” or digital health players building up their offerings to compete with legacy leaders and market incumbents. The related graphic was easy on the eyes.

  • While Q3 mergers and acquisitions were also low at just 21 moves – versus a quarterly average of 37 last year – companies like Dario and Fabric are using M&A to integrate new capabilities and expand their footprint.
  • Like weaving a tapestry, both Dario’s addition of Twill and Fabric’s acquisition of TeamHealth VirtualCare stitched together different solutions to create a more robust platform and address a broader range of customer needs. 

Tapestry weaving isn’t exactly an easy hobby. It involves integrating different products, teams, and go-to-market strategies that all have a chance of backfiring along the way.

  • Big acquisitions help compete for big contracts, but they can also strain the acquirer’s balance sheet.
  • CVS is an easy example. In the last six years, CVS used $88B to add a major payor, a clinic operator, and a home-care provider to its flagship pharmacies. The entire company is now valued at less than the cost of those three moves ($83B current market cap).

The Takeaway

Although the raw count of digital health investments continues to drop off, activity volume isn’t the same as activity quality. The tapestry weaving trend is a reminder that the “true impact of digital health innovation is shaped in the details,” through its investment structures, targeted partnerships, and post-M&A playbooks.

Huma Acquires eConsult, Launches Huma Workspace for Health Systems

Posted on by Jason Barry

Huma isn’t wasting any time putting its $60M of Series D funding to work, acquiring digital triage and consultation platform eConsult less than a few months after closing the round.

The move aligns with Huma’s vision of becoming the “Shopify for Digital Health” by equipping provider orgs and pharma companies with modular platforms / software development kits for a wide range of use cases.

  • The Huma Cloud Platform is a no-code app builder that enables companies to spin up their own solutions using a combination of GenAI prompts and pre-built templates.
  • The platform includes a library of modules and device connectivity tools for any therapeutic area, APIs and integration capabilities, and a marketplace that creates a flywheel of new features from existing users.

eConsult’s intelligent triage platform adds an entrypoint to Huma’s ecosystem by guiding patients through a series of medical questions before determining an appropriate pathway.

  • From there, eConsult gives physicians a summary of any flags or considerations to review, then connects them to a “comprehensive array of digital health solutions” such as appointment booking, screening tools, or virtual consults.

Those capabilities strengthen the foundation of Huma Workspace for Health Systems, which was announced alongside the acquisition to provide seamless access to Huma’s library of pre-built modules and solution marketplace. Those support:

  • Check-in and Triage: Captures patient symptoms and clinical history to prioritize patients with immediate needs and optimize intake.
  • Communication Suite: Equips clinicians with tools to manage patients remotely, such as a full messaging suite, video, scheduling, and EHR integration.
  • Remote Patient Monitoring: Allows hospitals to quickly scale applications for diabetes, hypertension, CKD, and other conditions.
  • Proactive Engagement: Automates direct patient communication for screening, education, and engagement campaigns across entire populations.

Put it all together, and Huma is assembling the pieces to an end-to-end platform for delivering virtual care at scale, with over 3,000 hospitals and clinics already using it to power projects for nearly two million active users.

The Takeaway

End-to-end digital health platforms aren’t built in a day, and the acquisition of eConsult confirms that Huma isn’t afraid of using M&A to speed up the process. Huma is full-speed-ahead with adding new capabilities and growing its footprint, so it wouldn’t be surprising if more acquisitions were right around the corner.

2024 Trends Shaping the Health Economy

Posted on by Jason Barry

Trilliant Health just released its 2024 Trends Shaping the Health Economy Report, delivering a unique perspective on the healthcare market through the lens of supply and demand.

The fourth edition of the report builds on the core findings from the previous three:

  • 2021: Healthcare is a negative-sum game.
  • 2022: Every part of the health economy will be impacted by reduced yield.
  • 2023: The victors in healthcare’s negative-sum game will be those who deliver value.

This year’s 164 page analysis is organized into eight sections, each examining a significant macro trend and supported by a wide collection of data-driven stories:

  • 1) The healthcare system is disproportionately expensive. Despite spending nearly 2X more on healthcare than peer countries, utilization has remained largely unchanged, while increasing 7% in peer countries since 2000. U.S. outcomes are also far worse. (Page 11 Chart)
  • 2) Health status continues to decline. We’re seeing higher volumes of early onset cancers in patients under age 45 for breast (+6.6%), colon (+10.0%), and kidney (+2.1%) between 2018 and 2023. (Page 22 Chart)
  • 3) Government regulation is failing to produce value. This one’s a mixed bag. Regulating cigarettes decreased usage by 30%, but mandated reporting of quality measures hasn’t yielded enough improvement to offset the cost of reporting. (Page 46 Chart)
  • 4) The value of tech advancements is uncertain. Since 2018, multiple AI CPT codes have been introduced, but utilization remains infrequent and concentrated among cardiac conditions such as coronary artery disease and ECG cardiac dysfunction. (Page 77 Chart)
  • 5) Supply constraints are correlated with inadequate yield. The decrease in practicing physicians from 2019 to 2023 resulted in a -0.9% workforce reduction. Notably, 31.3% of physicians changed practice location over that time period. (Page 89 Chart)
  • 6) Forced consumerism has fostered fragmentation. Over 14% of patients with commercial coverage go out-of-network for behavioral health services, versus just 2% for physical care. (Page 111 Chart)
  • 7) Lower-cost care settings can offer better value. New treatment paradigms often start in the hospital but shift to new settings over time (due to new tools, reimbursement reform). How long will that continue? (Page 125 Chart)
  • 8) Employers are better equipped to demand value. Employers have historically been relatively passive in managing healthcare costs., but new transparency requirements compel them to change that. (Page 148 Chart)

The Takeaway

Trilliant’s report showcases the fact that the inputs of the U.S. healthcare system, as measured by cost, exceed the outputs, as measured by the actual value received by Americans. As Trilliant’s Head of Research Sanjula Jain puts it, “every stakeholder can – and must – deliver more value to their customers.”

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