General Catalyst and WellSpan’s Digital Transformation

One of healthcare’s biggest venture capital hot streaks is adding fuel to the fire, with General Catalyst and WellSpan Health entering a new partnership to drive digital transformation.

General Catalyst and Pennsylvania-based WellSpan are aiming to improve care models and patient engagement by embedding tech from the VC firm’s “health assurance network” into the health system’s operations.

GC’s health assurance network is comprised of portfolio companies with broad expertise in everything from employer benefits to population health, and includes marquee names such as Aidoc, Cadence, Olive, Sword Health, and Transcarent.

  • The partnership involves no financial commitment from either party, but provides GC with insights from real-world clinical applications and allows WellSpan to invest in any co-developed solutions.
  • The formula appears to be working. This is GC’s fourth health system partnership of this kind, adding to collaborations with Intermountain Healthcare, Jefferson Health, and HCA Healthcare.

General Catalyst originally found success with grandslam investments in Airbnb, Instacart, and Snapchat, but it’s been pretty hard to miss the huge waves it’s been making with its dive into healthcare.

  • In July, GC raised its second $600M+ healthcare fund, which it followed up by tapping then-Intermountain Healthcare CEO Marc Harrison to helm its investment platform.
  • That also wasn’t exactly GC’s first hospital exec hire, with former Jefferson Health CEO Stephen Klasko joining the firm in February… Looking back up to the names of GC’s health system partners, WellSpan might want to take a hard look at its incentive packages if it wants to hold onto its leadership.

The Takeaway

General Catalyst couldn’t make its stance on healthcare transformation any more clear: incumbents hold the keys to the innovation kingdom. The VC firm is also keen on catalyzing its own thesis, so expect plenty more health system partnerships to be inked before the end of the year.

Amazon Ends Amazon Care, Pursues Signify

What a week for Amazon. Just when you think that entering the bidding war for Signify Health would be enough excitement for one top story, the tech giant had to overshadow the news with another major announcement:

Amazon Care will shut down at the end of the year.

In an internal memo obtained by The Wall Street Journal, Amazon Health Services SVP Neil Lindsay explained that the primary care offering wasn’t “the right long-term solution” for its enterprise customers.

  • The move comes as quite the surprise given that CEO Andy Jassy recently highlighted Amazon Care in his first letter to shareholders, as well as the fact that we just covered a new partnership with Ginger that would’ve brought behavioral healthcare to the service.
  • Although Lindsay didn’t give too many details on the matter, earlier this month The Washington Post reported on a growing tension over Amazon Care’s ability to balance growth with proper medical safeguards, as well as a nursing shortage that’s been hampering expansion. 

Amazon said that its decision to pull the plug on Amazon Care was made prior to last month’s $3.9B acquisition of One Medical, but the company’s second major headline from this week might cast some light on the course correction:

Amazon is on the list of heavy hitters competing for the Signify Health acquisition.

  • Other companies vying for Signify include CVS Health and UnitedHealth Group, with the latter bringing the highest reported offer (so far) to roughly $8B – implying a 20% premium at $34 per share.
  • We covered Signify’s core home care business in our initial writeup, but Amazon’s angle could center more around the treasure troves of data that the company collects on the Medicare Advantage population that just so happens to be the same patients served by the Iora segment of One Medical.

The Takeaway

Regardless of the outcome of the Signify acquisition, Amazon’s interest in the company and the abrupt end to Amazon Care seem to signal that it’s done its diligence and has decided to hone its focus on a combination of senior care (Signify + Iora), primary care clinics (One Medical), and prescription delivery (Pillpack). 

We’ll leave further speculation alone for now since we luckily shouldn’t have to wait too long for an official update. Signify is set to have a board meeting on Monday to discuss the offers, and negotiations are expected to conclude shortly after Labor Day.

Incredible Health Closes $80M Series B

Nurse staffing platform Incredible Health landed $80M in Series B funding as it looks to flip the script on the healthcare worker shortage by having hospitals apply for nurses, rather than the other way around.

The round brings Incredible Health’s total funding to $97M and vaults it into the unicorn club with a $1.65B valuation.

Incredible Health’s hiring platform uses machine learning algorithms to match candidates to open nursing positions at health systems, focusing on permanent placements as opposed to temporary ones.

  • The platform first gathers information on each nurse’s licenses and certifications, then asks candidates about their goals, working preferences, and any skills they wish to gain.
  • This allows provider organizations to streamline hiring with highly curated lists of best-fitting candidates, which Incredible Health reports has reduced its average hiring time to 14 days (vs. an industry average of 82 days).

The fresh funding is earmarked to scale the platform from 35 states to 90% of the US nurse workforce while adding more support for users (skill growth, educational scholarships, cross-training) to help attract talent away from increasingly well-financed competition.

Here’s a snapshot of activity in the space within just the last year:

  • June 2022 – Nomad Health raised $105M in growth financing ($218M total funding)
  • April 2022 – Clipboard Health raised an $80M Series C ($94M total funding)
  • April 2022 – IntelyCare raised a $115M Series C ($171M total funding)
  • December 2021 – connectRN raised a $76M venture round ($96M total funding)
  • November 2021 – Trusted Health raised a $149M Series C ($175M total funding)

The Takeaway
Incredible Health’s funding arrives at a critical time, with 100k registered nurses leaving the workforce in 2021 alone. This has created a huge demand for solutions that can help address the problem, but it’s also led to a crowded competitive landscape that makes differentiated features like Incredible Health’s hospital-to-nurse application structure a necessity.

CVS Health 2022 Health Care Insights Study

CVS Health’s 2022 Health Care Insights Study revealed that people are eager for the next chapter in their health journeys after multiple years of delayed care and lifestyle disruptions. CVS surveyed 1,000 US consumers and 400 providers about their ideal care delivery experience, finding that the pandemic unsurprisingly caused many people to redefine what healthcare should look like.

The full study has 14 slides of insights to catch you up on the latest sentiment towards everything from patient engagement to primary care (the 1-pager can get you pretty close), but the biggest highlights fell into two main buckets.

Patients are embracing a more holistic view of their health, with 54% saying that it’s important for care plans to involve diet, exercise, and counseling. The pandemic proved to be a catalyst for positive change, with 22% of consumers reporting that they care more about their health than ever before.

  • As a result, patients are taking a more active role in managing their own healthcare, with 17% saying they’re now more likely to book their annual wellness checks.
  • 83% of consumers said good patient-provider communication and continuous care coordination is important to their health, yet 88% of providers reported that they don’t have enough time for strong patient engagement.

Virtual care is helping providers keep pace with rising consumer expectations. Nearly all consumers (92%) value convenience above all other factors when selecting a primary care physician, while 59% said it’s important to their health to have access to telehealth services.

  • 62% of consumers are likely to consider virtual visits if a physical exam isn’t needed, primarily due to convenience-related reasons such as not having to leave home (41%) or saving time (37%).
  • 53% of providers said that adding telehealth resulted in more patient visits, and a majority also believe it made patients more likely to make appointments (93%) and keep them (88%).

The Takeaway

If the CVS Health report made one thing clear, it’s that patients are engaging in their care with a renewed sense of urgency towards holistic wellness and convenience. All signs are pointing towards “coordination” and “communication” being two of the biggest watchwords for post-pandemic healthcare, and that’s a strong demand signal for solutions that make them possible.

Rock Health: Funding Cools Off in H1 2022

The numbers are in. After a record shattering year for digital health funding in 2021, the latest Rock Health venture recap shows that the sector’s frothiness has officially turned to a fade, which might actually be good news for opportunistic startups.

First things first, digital health funding totaled $10.3B across 329 rounds in H1 2022, placing it on a trajectory to end the year significantly lower than 2021’s $29.1B. As the broader market plummeted in response to recession worries and global conflict, digital health companies weren’t immune, resulting in a full year funding projection of $21B.

  • Rock Health is quick to point out that “there are two sides to every (market) story.”  While this year’s funding will likely fall far short of last year, it’s still on track to outpace 2020’s $14.7B, representing an important return to long-term growth and supporting the view that digital health is a sustainable investment sector.

The slowdown impacted nearly every corner of the digital health market. Series B round sizes declined by an average of 25% in the first half of the year, while Series C and D+ rounds fell by 22% and 12%, respectively. The one bright spot was early-stage startups unburdened by an outdated sky-high valuation, with the average Series A size of $18M staying on par with 2021.

  • We’ve covered this often but it’s worth restating here: companies prioritizing growth-at-all-costs over a sustainably profitable business model are struggling in the current funding environment. As investors re-evaluate future revenue with a less favorable outlook, not a single digital health company decided the timing was right to go public in H1 2022, down from 23 in 2021.

The most-funded clinical area defended its title once again, with mental health startups bringing in $1.3B during H1 2022 on the back of a huge round from Lyra Health ($235M). This chart gives a full breakdown of the top clinical indications.

  • The value propositions that attracted the most investment were research and development at $1.6B, followed-by on-demand healthcare and disease monitoring each bringing in $1.4B. Administrative / clinical workflow automation also saw large totals as health systems continue to build back up their worn down workforces.

The Takeaway

Although the first half of the year brought a pullback in digital health funding, the return to a multi-year growth trend is a healthy sign for a sector that was overheating throughout 2021. This particular market moment gives companies a chance to tighten their belts and reorient towards a more fundamentals-driven direction, and we should start to see more differentiation and clinical rigor from the businesses that successfully navigate the transition.

Tebra Closes $72M to Become Digital Backbone for Independent Practices

True to its name originating from “vertebra,” physician enablement company Tebra closed $72M in growth financing to become the digital backbone for independent healthcare practices.

The funding brings Tebra’s total raise to $137M while minting a new digital health unicorn that’s looking to use the fresh capital to expand its market share, launch additional service lines, and overhaul its branding.

To jog the memory, Tebra was formed through the merger of Kareo and PatientPop late last year, and provides private practices a “complete operating system for practice success.” 

  • Tebra’s Care Delivery platform enables physicians to operate independently by providing a fully certified EHR, scheduling and billing support, and telehealth capabilities. Its Practice Growth service helps in areas such as patient marketing, website overhauls, and reputation management.
  • Since the merger, Tebra has launched a two-way product integration that allows both platforms to share data and optimize performance, and it now supports over 100k providers delivering care to 90M patients.

Physician enablement companies have seen business boom throughout the pandemic as doctors look to keep pace with rising consumer expectations for personalized and remote care.

  • Tebra counts athenahealth, ZocDoc, and Privia among its direct competitors, but new entrants like NexHealth and Podium have also been raising some huge funding rounds to compete in the healthcare arena.
  • Tebra points to its unification of fragmented software as its biggest differentiator, and outside of combining Kareo and PatientPop’s solutions, it’s been building its all-in-one platform through acquisitions such as billing-automation company PatientlySpeaking and patient-communications tool DoctorBase.

The Takeaway

As healthcare systems invest heavily in digital innovation, Tebra’s practice management platform is a lifeline for private practices trying to keep up. Without the financial buffer of larger systems, independent physicians have acutely felt the pandemic-driven declines in patient volumes, and Tebra’s new funding should help it support these practices by letting them offload administration and growth functions so that they can focus on delivering care.

The Promise of Digital Health

The National Academy of Medicine published a first-rate roadmap for digital innovation that stood out for its well articulated overview of the state of healthcare transformation as well as its author list filled with dozens of leading industry voices.

“The Promise of Digital Health: Then, Now, and the Future” wasn’t short on word count or insights, and delivered plenty of each on the potential for innovation in areas such as ensuring care continuity and partnering with individuals to support self-management.

The article begins by making the case that despite important gains over the last two decades, the promise of digital health remains illusory. User interfaces of inpatient care systems are often clumsy, health data is still difficult to aggregate in a meaningful way, and there’s plenty of work to be done to incorporate SDoH factors into care plans.

  • Although there are thousands of individual applications that could have been used to explore digital health’s path toward making improvements, the authors provided a useful visualization of twelve application arenas creating the biggest impact.

Foundational infrastructure requirements were a key discussion point to help bridge the gap between digital health’s future promise and its current implementation. Of particular interest for focused efforts were individual engagement, equity and ethics, interoperability, AI/ML, and workforce.

  • This graphic presented the essential infrastructure requirements for progress, and the authors stressed that each area must be carefully addressed to establish a complete framework for durable improvements.

The paper concluded on an optimistic note with tactical actions for achieving the promise of digital health. At the top of the list was a call to create a panel to develop recommendations for engaging individual healthcare consumers that follows the adage “nothing about me without me” to ensure equity and transparency as a first principle.

  • Other line items included “rational, right-sized, risk-based regulation,” sustainable reimbursements from the CMS to ensure equitable access to new digital tools, and a full implementation of data standards from the ONC.

The Takeaway

Like most blueprints for changing healthcare, the reality is more difficult than the brochure, but the benefits far outweigh the challenges. Digital health promises to improve medical diagnoses, treatments, plus everything in between, and thought leadership papers like this one are a good step toward making that future a reality.

Nomad Raises $105M to Expand Staffing Marketplace

Big problems require big solutions, and with worker shortages still topping the list of issues at almost every major health system, it’s no surprise that staffing marketplaces like Nomad Health are continuing to haul in 9-figure funding rounds.

Nomad Health recently secured $105M in “mostly equity” financing as it looks to grow beyond its roots in travel nursing by expanding to new clinical specialties.

Nomad’s staffing platform allows candidates to search for and apply to temporary positions that usually last around 13 weeks. It takes care of sourcing candidates, filtering qualifications, and matching credentials to available roles. 

  • To differentiate itself from similar solutions, candidates who accept a role on the marketplace are hired by Nomad as W-2 employees rather than contract workers, giving them access to health benefits, malpractice coverage, and even a 401(k) for the duration of the gig.
  • Nomad attributes its seven-fold revenue growth since the beginning of the pandemic to its candidate-centric approach. The marketplace is now used by over 4k healthcare facilities and 250k healthcare workers, with Nomad expecting to generate a profit on $700M in revenue for 2022. 

After peaking in 2021, research firm Staffing Industry Analysts is projecting demand for travel nurses to decline nearly 14% by the end of the year before stabilizing at a level still substantially above its pre-pandemic baseline. 

  • To get ahead of the cooling demand, Nomad will use its new funding to expand its platform to allied health professionals outside of nurses, specifically laboratory technicians, physical therapists, and ultrasound technicians.
  • While the front-end service will look nearly identical for the new roles, Nomad said that the expansion will require a significant buildout to add more credentialing features and extend the service to other facilities besides hospitals.

The Takeaway

Staffing solutions have been an investor-favorite throughout the pandemic, with connectRN, Trusted Health, IntelyCare, and plenty of others raising capital to help fill shifts while giving healthcare workers more flexibility. Now, as demand for temporary healthcare workers begins to ebb alongside the pandemic, it’s likely that we’ll continue to see companies like Nomad turn to new clinical specialties, service lines, and permanent position placements to set themselves apart in a crowded market.

Patients and Providers Report Different Telehealth Experiences

Patients are more likely to report a positive telehealth experience than providers, at least according to Zocdoc’s new Healthcare Experience Report that broke down many of the highs and lows of delivering virtual care over the past two years.

Zocdoc analyzed the trends from its appointment booking platform between May 2020 and May 2022, then conducted patient and provider surveys to uncover insights into how care experiences evolved throughout the pandemic. The final report got pretty granular with different specialties and care types, but delivered a few overarching themes worth taking a look at.

If you’re more of a visual learner, Zocdoc also put together an infographic that does a good job summarizing the main findings.

Differing perspectives between patients and providers are common. Just over 30% of patients surveyed indicated it was easier to build a relationship with their provider via telehealth due to less formality and more relatability in the interactions. Only 7% of providers felt the same way.

  • Similar discrepancies were seen with tech difficulties. While 58% of providers indicated they or their patient has had tech issues during an appointment, just 30% of patients said they’d ever experienced a problem.

Mental health is the only specialty where virtual care remains dominant. No surprise here, but it was interesting to see how virtual mental health appointments have continued to overtake in-person visits over the last couple of years.

  • Virtual appointments comprised 74% of mental health bookings in May 2020, 85% in May 2021, and now account for 87% of appointments. Survey respondents cited convenience and the benefits of at-home comforts as reasons they appreciate virtual mental health visits.

Telehealth is a supplement, not a substitute. In May 2020, one-third of all appointments booked via Zocdoc were telehealth visits. By May 2022, that number had declined to 17%, and it dwindled to just 9% if you exclude mental health appointments.

  • Although telehealth is well above its 1% pre-pandemic numbers, 77% of patients reported that they’re still leaning towards a combination of in-person / hybrid care. This is easily seen in the rebooking trends, where over half of virtual visits with a new OB-GYN, eye doctor, or dentist resulted in an in-person follow-up. 

The Takeaway

We’ve seen many of the themes from Zocdoc’s report before, but it’s nice to wrap some numbers around them from an appointment booking perspective as opposed to the usual claim lines or anecdotes. The discrepancies between patient and provider views on telehealth were also good additions that get studied less frequently, as were other hidden gems like the fact that 36% of providers have seen a patient’s pet during a video appointment.

Improving Risk Scores With Machine Learning

Risk scores are used to help predict everything from hospital readmissions to medication adherence, but more-often-than-not these valuable metrics are still generated by adding up a few key predictors in a simple model. That makes the difficult task of selecting the right variables extremely important, which is why researchers out of Duke-NUS Medical School in Singapore developed a machine learning system to help optimize the process.

Most current risk scores are generated from regression models that are popular for their simplicity and predictive power. The widely-used LACE index predicts unplanned hospital readmissions using only four components: inpatient length of stay, acute admission, number of ED visits in the past 6 months, and comorbidities.

There have been several efforts to improve risk scores using advances in AI, but these models are usually “black boxes,” making it notoriously difficult to interpret variable selection and importance.

The Duke-NUS researchers proposed an AutoScore-ShapleyVIC machine learning model for improving risk score variable selection while maintaining interpretability, then compared it to the LACE index for predicting 30-day readmissions of patients who visited the ED of Singapore General Hospital between 2009 and 2017.

We’ll leave the model development details to the AI experts, but here’s a look at how AutoScore-ShapleyVIC performed against the LACE index:

  • AUC: 0.756 (AutoScore-ShapleyVIC) vs.0.733 (LACE)
  • Accuracy: 71% vs. 64%
  • Sensitivity: 66% vs. 74%
  • Specificity: 72% vs. 62%

The final AutoScore-ShapleyVIC model significantly outperformed the LACE index, but didn’t sacrifice interpretability to achieve its results. Although it was able to narrow 41 candidate variables down to just 6 for the final model (number of ED visits in past 6 months, metastatic cancer, age, sodium, renal disease, and ED triage), the logic behind the variable selection can still be visualized to help with interpretation.

The Takeaway 

Although we don’t usually cover AI studies, this research helped illustrate that machine learning models have a lot of potential to improve existing care paths without sacrificing interpretability. The authors emphasized how this particular approach is not limited to any specific clinical application, suggesting that machine learning algorithms are still in the early stages of improving risk scores in other areas such as ED triage or cardiac arrest survival.

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