Month: November 2024

Oura Lands $75M From Dexcom to Bring Smart Rings to Healthcare

Posted on by Jason Barry

Smart ring maker Oura is taking the leap into healthcare, and it just landed a major investment from Dexcom to help it cross the chasm.

Things are looking up for the creator of the Oura Ring. In just the last week:

  • Oura entered a strategic partnership with continuous glucose monitoring giant Dexcom, who also handed it $75M in Series D funding and vaulted its valuation to a whopping $5B.
  • The release of Oura’s Perimenopause Report was well-received for including a trove of hard-to-capture data and highlighting gaps in women’s health research.
  • Apple squashed rumors that it was developing its own smart ring, meaning that the category dodged the same bullet that saw Apple steal nearly half of the headphone market overnight when it first launched the AirPods.

Oura got its start in 2013 helping health-conscious consumers optimize their performance with insights into areas like sleep quality and heart rate variability.

  • It’s since shipped 2.5 million of its flagship Oura Ring and expects annual revenue to double to $500M before the end of 2024.
  • Within the last year, Oura also began making a string of acquisitions to support its user base along more parts of their health journey, picking up both Sparta Science (data analytics) and Veri (glucose monitoring and meal timing insights).

Dexcom is hot on the heels of releasing its first over-the-counter Stelo CGM for prediabetic populations, which already has 70k users and is reportedly a “gateway product” to expand into the broader metabolic health market.

  • The Oura partnership will enable two-way data flow between Dexcom biosensors and Oura wearables to provide “a first-of-its-kind metabolic health management experience,” with the first app integration expected in the first half of next year.
  • The duo will also be co-marketing and cross-selling each other’s products to attract new customers who want to better understand the link between sleep, activity, nutrition, and their glucose.

The Takeaway

Oura has been looking to support its massive user base with deeper insights into their overall health, and Dexcom has been searching for ways to get its glucose monitoring devices in front of a non-diabetic audience. This seems like a match made in heaven.

Telehealth Prescribing Extended Through 2025

Posted on by Jason Barry

In a move that surprised basically no one, the DEA is extending pandemic-era telehealth prescribing flexibilities for controlled substances through the end of 2025.

The “Third Temporary Extension of COVID-19 Telemedicine Flexibilities for Prescription of Controlled Medications” was officially published on November 19th, ending a months-long stalemate among regulators.

The third time’s the charm (hopefully). The extension gives providers another year to prescribe Schedule II-V medications for conditions like ADHD and opioid addiction without first conducting in-person evaluations.

  • The move maintains the status quo that’s been in place since COVID hit, while effectively punting the decision on formal legislation to the new White House.
  • Both the DEA and the HHS will have fresh leadership, and it remains to be seen how the two agencies will work together to address the matter.

The policy hot potato just got passed to the Trump administration, so telehealth companies and patients will both have to prepare for another year of regulatory limbo.

  • By failing to issue a final rule, the DEA at least gains time to revise its most recent draft rules that sparked nearly 40k comments worth of industry pushback.
  • Those rules included requirements that half of a provider’s controlled substance prescriptions be written for patients seen in-person, and that every patient must be checked against drug monitoring programs in all 50 states. 

It’s a classic tension in healthcare: balancing legitimate access against potential abuse.

  • While the extension acknowledges the “urgent public health need” for access to addiction treatment meds like buprenorphine, the lack of legislation still leaves telehealth in a bucket of “stopgap measures” instead of “absolute necessities.”
  • Punting the decision should also mean better guardrails can be developed to prevent abuse at a time when the founders of pandemic-era pill mills are either fleeing the country or forking over millions in fines.

The Takeaway

The telehealth prescribing can has been kicked down the road for another year, and the industry will now be watching to see whether the Trump administration decides to repeal it. It’s more likely than not that the extension will stick – this isn’t exactly a hot button issue like raw milk.

Telehealth Doesn’t Lead to Low-Value Services

Posted on by Jason Barry

University of Michigan researchers just delivered some compelling evidence that telehealth doesn’t increase wasteful care, and may actually reduce it in several key areas.

This wasn’t a small study. The analysis in JAMA Network Open leveraged Medicare FFS claims data spanning 578k beneficiaries across 2,552 primary care practices between 2019 and 2022.

The researchers tracked eight measures of “low-value care” – services that provide little clinical benefit while racking up costs – across four categories: office-based, laboratory, imaging, and mixed-modality services.

The practices with the highest telehealth usage (top third) showed:

  • Significant reductions in unnecessary cervical cancer screenings (-2.9 per 1,000 beneficiaries)
  • Lower rates of low-value thyroid testing (-40 per 1,000 beneficiaries)
  • No increase in wasteful imaging or other diagnostic services

Low-value care costs the healthcare system close to $100B annually, and while wasteful services have been extensively looked at using Medicare data, this was the first study to do so within the context of telehealth.

  • On one hand, virtual visits eliminate chances for clinicians to perform low-value services that need to be performed in-person.
  • On the other, it’s hard to imagine that the inability to conduct a physical examination won’t lead to more clinical uncertainty and low-value diagnostic testing, although that’s exactly what this research seems to disprove.

The Takeaway

This study tackles one of telehealth’s most persistent criticisms head-on, and the lack of a clear link between telehealth and low-value care should reassure policymakers weighing how to finance and regulate the segment going forward.

Babylon Founder Returns With Launch of Quadrivia

Posted on by Jason Barry

Babylon founder Ali Parsa is rising from the wreckage with a new startup – Quadrivia – and he’s certainly hoping that his second AI wonder app works out better than his first.

A LinkedIn post from Parsa laid out Quadrivia’s vision of using customizable AI agents to tackle “the main challenge” in healthcare: the structural imbalance between the elastic demand from our communities and the constrained supply of our clinicians.

  • Quadrivia’s undisclosed amount of seed funding was enough to kick off beta testing for Qu, a clinical assistant with “wide-ranging capabilities across the care spectrum.”
  • Qu’s agents have the lofty goal of assisting clinicians across the full stack of routine clinical and administrative tasks, patient interactions, decision-making, chronic and postoperative care, and continuous monitoring. 

Qu’s ambitious scope is reportedly made possible by its dual architecture: “System 1 includes tasks that rely on quick decision-making, such as answering direct questions. System 2 involves more complex tasks, like assessing patient symptoms and considering multiple diagnoses.”

  • These capabilities are supported by the patient’s EHR data (still working out the details), natural language conversations (but not real time), and a large clinical knowledge base (unclear from where).

The backstory of Quadrivia is inextricably linked to the backstory of Babylon, which has been called everything from the “future of the NHS” to “the Madoff of digital health.”

  • The grand promises of Babylon’s AI chatbot rhymed with the goals Qu outlined above, which was enough to fuel a $4.2B public market debut in 2021.
  • By this time last year, what we’ll call “difficulty living up to those promises” had Babylon shares trading at pennies, and it filed for bankruptcy in the U.S. after an odd takeover from digital therapeutics developer MindMaze turned out to be too good to be true.

The Takeaway

If Quadrivia is to succeed where Babylon failed, it’ll need a strategy that shores up the holes in its predecessor’s approach. That means peer-reviewed research, independent validation, and consistent messaging about Qu’s capabilities… and limitations.

Does Investing in Primary Care Lead To Lower Total Costs?

Posted on by Jason Barry

The idea that increasing investment in primary care will reduce costs down the road makes intuitive sense, but a recent article in Health Affairs suggests that there’s “limited evidence that directly ties higher primary care spending to lower total spending.”

Primary care is the foundation of an effective healthcare system, with plenty of evidence supporting downstream benefits like fewer ED visits, hospital stays, and better outcomes.

  • The secret sauce behind those benefits is the long-term relationships between patients and their PCPs, which brings a healthy dose of cohesiveness to otherwise fragmented care journeys.
  • Despite primary care’s effectiveness, it only sees 5-7% of total U.S. healthcare spending, prompting over a third of states to pick up the slack with their own investments.

Now for the bad news. Better outcomes are obviously a worthwhile aim, but unfortunately most stakeholders would rather see savings to justify increased investment in primary care.

  • Studies of Massachusetts’ Alternative Quality Contract and Rhode Island’s affordability standards – both examples of primary care investment that showed a slowdown in spending after several years – found that the savings were more closely tied to limits on price and total spending, rather than primary care itself.

Where does that leave us? Although it’s proven difficult to draw a straight line between primary care and its financial impact, some common threads are emerging between states that have tried.

  • Accountability: States that rely on transparency and public pressure to increase primary care investment have generally been less successful than those that require payors to foot the bill. Provider orgs should also be held accountable for ensuring these investments reach primary care in tangible ways. The shared responsibility creates multi-stakeholder engagement.
  • Long-term Lens: The benefits of high quality primary care accrue over time. Expectations for returns, shifting payor membership, and political winds don’t offer systems and payors enough patience for new policies to achieve their goals, so strong state leadership needs to sustain a long-term view.
  • Sufficient Investment: Investments need to adequately fund advanced primary care capabilities that can actually improve the delivery of care and outcomes of interest.

The Takeaway

Primary care is the undeniable cornerstone of our healthcare system, and there’s a growing recognition that we should redirect more investment toward ensuring that it’s high quality and readily accessible. Policy makers need more evidence to support those investments, and articles like this one help get the ball rolling in that direction.

Bessemer’s Key Benchmarks for Health Tech

Posted on by Jason Barry

Bessemer Venture Partners put out an update to its top-tier blog series on benchmarks that health tech startups can use to see how they stack up against the competition.

We won’t dive into the full industry overview, but here’s a look at a few of the key metrics Bessemer shared to illustrate how the health tech segment has evolved since last year.

Graduating is hard. Health tech “graduation rates” from Seed to Series A and B have fallen significantly compared to previous cohorts.

  • Of the companies closing Series A rounds, the median time it takes to reach that milestone is 50% longer in 2024 than prior years, and is longer in health tech than any other sector.

We’re so back. Although the funding environment remains challenging, the good news for those that are able to raise capital is that valuations have rebounded to peak levels.

  • “Phoenix” companies that have risen from the ashes of the market correction are commanding premium valuations in massive late stage rounds (see Equip and Maven), while frothy investments in AI startups are fueling an early stage boom.

The AI factor can’t be ignored. The share of health tech investment directed at AI-focused companies has increased by 9 percentage points in just two years – hitting 38% in 2024.

  • These startups are reaching 30-50x ARR multiples, with valuations 2-5x higher than their non-AI counterparts.

Services-as-Software is the new paradigm. These businesses use AI to automate workflows historically performed by humans, and benchmarks show an accelerated go-to-market trajectory compared to traditional SaaS models. 

  • Services-as-Software companies are reaching $10M ARR at unprecedented speeds as the industry rushes to test if they can deliver on their value promises, and the following chart has the full breakdown – at least for the readers that know their finance acronyms.

The Takeaway

Bessemer’s full post goes much deeper on the overall health tech landscape and the intricacies of AI Services-as-Software, but the four charts above give you a solid lay of the land. Bessemer remains as optimistic as ever on health tech heading into 2025, and it’s definitely impressive to see the resilience that these companies have showcased over the last year.

PHTI Delivers Mixed Review on Digital Hypertension Tools

Posted on by Jason Barry

Digital hypertension management solutions received a mixed report card from the Peterson Health Technology Institute’s latest evaluation, which found significant differences in performance depending on the treatment approach.

The 71-page report assessed clinical and economic evidence across three solution types:

  • Blood Pressure Monitoring – extend hypertension care beyond in-person visits using home monitoring devices that stream data back to providers. Ex. AMC Health, Health Recovery Solutions, VitalSight (Omron)
  • Medication Management – employ dedicated virtual care teams to coordinate medication adjustments as a supplement to the patients’ main primary care team. Ex. Cadence, Ochsner Digital Medicine, Story Health
  • Behavior Change – deliver educational content, alerts, reminders, and virtual interactions with coaches or care teams to improve hypertension self-management. Ex. Dario, Hello Heart, Lark, Omada, Teladoc (Livongo).

PHTI’s signature chart delivers a great summary of the findings:

The analysis found that all approaches across all payor types increase total healthcare spending over a three-year time horizon, because the cost of the solutions exceeds the savings from improved clinical outcomes.

The good news – at least for Medication Management and Behavior Change solutions – was that improvements in blood pressure over a 10-year window reduced patients’ risk of cardiovascular disease and prevented enough deaths to justify the cost.

  • PHTI found that only Medication Management solutions demonstrated significant blood pressure reductions compared to usual care, and recommended that this is the “most pressing area of integration” for most practice settings.
  • BP Monitoring showed “slightly greater, but not clinically meaningful declines,” but failed to breakeven at current RPM reimbursement levels.
  • Behavior Change approaches produced only “limited incremental declines,” which doesn’t support broad adoption for most patients but could still play a role for underserved populations with difficult access to usual care. 

Those findings naturally led to pushback from some of the companies named in the report. 

  • Omada said that the analysis “inadequately groups companies with very different offerings” and “narrowly focuses on select clinical metrics,” while underweighting user experience and patient-reported outcomes. 
  • PHTI responded to the critics by saying that “patients expect that clinically-focused digital solutions are improving their health. We can talk about competing on user experience… but we need to prove that they work.”

The Takeaway

There’s a high bar for digital solutions that need to justify their cost above standard care, and PHTI just raised that bar even higher for hypertension management. Not all approaches are created equal, and while some companies might not agree with PHTI’s findings, reports like these are a maturity milestone for digital health as a whole.

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