Category: Digital Health

The Promise of Digital Health

Posted on by Jason Barry

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

Posted on by Jason Barry

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

Posted on by Jason Barry

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

Posted on by Jason Barry

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.

Sesame Secures $27M for Healthcare Marketplace

Posted on by Jason Barry

Direct-to-consumer healthcare has attracted a lot of investor attention over the past few months, and Sesame recently continued the trend by raising $27M in Series B funding to help it become the “Expedia for medical care.”

Sesame is a two-sided marketplace for providers and patients. It allows users to quickly compare physicians with an interface that’s fine-tuned to make booking an appointment as frictionless as possible. Here’s a look at the layout.

  • There are over 2.5k providers on the marketplace offering primary care, chronic condition management, and over 40 specialties – with an average visit cost of under $40. Sesame claims that it is able to lower the cost of care by cutting out the bureaucracy that comes with working with payors.
  • Providers can leverage the platform to offer dynamic pricing based on peak windows, then patients can filter the list to match their needs. Since launching in mid-2020, more than 150k patients have used the platform, and Sesame reports that its revenue has grown nearly 500% year-over-year.

The Series B round brings Sesame’s total raise to $75M and will fund the commercial launch of its Sesame Plus membership product, which has been in beta since November 2021.

  • For $99 per year, Sesame Plus members get $20 off all telehealth / primary care visits and $30 off in-person specialist appointments, as well as other benefits geared toward supporting the 40% of Sesame patients not covered by a health plan.
  • Unlike most other subscription telehealth services, Sesame does not require a membership to book appointments, but the Sesame Plus incentives led to beta members booking 33% more appointments than other patients.

The Takeaway
Sesame isn’t the only company offering affordable direct-to-consumer healthcare (K Health and Teladoc both play in this space), but the marketplace’s dynamic pricing and wide variety of specialists are important differentiators that will only help more as the company scales. Transparency, affordability, and usability also seem like solid pillars to build a marketplace around, and Sesame’s recent growth suggests that the strategy is resonating with users.

Digital Health Primed for Consolidation

Posted on by Jason Barry

The market hasn’t been kind to digital health companies this year. The stock charts of most of these companies look like red lines in a race to the bottom-right corner, and at this point it’s safe to say that many founders are buckling down for a bumpy second half of the year.

The public market struggles are quickly carrying over to the private markets. Woodside Capital Partners counted 44 health tech funding rounds above $10M in Q1 2022, nearly half the total recorded during Q4 2021 (86). The investment bank’s latest market report calls out several main drivers for the slowdown, but the biggest one probably sounds familiar: 

  • Investors are looking for companies generating a profit, and staying far away from those piling on losses to reach meaningful scale.

On the flip side of the coin, the same public market volatility that’s hammering many high-flyers is creating bargains for M&A teams. 

  • The first quarter saw 63 health tech M&A transactions combine for a total value of $48B (an increase over the $41B seen in Q4 2021), which seems to indicate that the declining valuations have already begun translating to more M&A activity.
  • Many public companies have become solid M&A targets due to declines in their shares (Vera Whole Health’s acquisition of Castlight, Oracle’s acquisition of Cerner), while private companies have started rounding out their services by acquiring the missing pieces (Aledade’s acquisition of Iris Telehealth, Lightbeam’s acquisition of Jvion).

The companies most poised for consolidation are those offering point solutions or catering to a specific end market.

  • So many of these have popped up since the beginning of the pandemic that it’s made funding scarce at a time when other exit options are drying up.
  • This likely makes an acquisition look like one of the best paths forward, particularly as larger companies look to capitalize on the moment by expanding their platforms and pushing into new markets.

The Takeaway

It’s usually easier to acquire an established solution than to build one from scratch, and the ongoing market selloff has narrowed the exit options for many startups while also making their valuations more attractive to potential acquirers. These same conditions have made other startups begin looking for ways to bolster their strategies by merging into more comprehensive solutions, which could mean that the real consolidation is just getting started.

Oracle Announces Plans for a Unified National Health Record

Posted on by Jason Barry

Fresh off the close of its $28.3B acquisition of Cerner, Oracle hosted a virtual event to outline its healthcare roadmap, which ended up being more ambitious than most analysts expected after the company announced plans to build a “unified national health records database.”

Oracle co-founder and CTO Larry Ellison said that the national database aims to replace the hospital-centric approach of current EHRs with a more patient-centric model, pulling data from thousands of separate hospital databases to create a unified view of patient health.

  • The goal of the database is to ensure that providers have access to a patient’s up-to-date medical data regardless of their location or past points of care. It will also incorporate real-time updates from provider EHRs to let public health officials monitor trends as they unfold.
  • Ellison stressed that data privacy will be a top priority for the buildout. Providers will only be able to access identifiable information with patient authorization, while other researchers and public health officials will be limited to a de-identified view.

While a unified patient record looks like a worthwhile pursuit on the surface, the health IT community was quick to express skepticism towards Oracle’s announcement, citing concerns over everything from data security to a complicated regulatory landscape.

  • Successfully building the database would also presumably involve cooperation from Cerner’s EHR competitors, but details were vague on its strategy to accomplish this. Epic’s Cosmos solution houses over 122M patient records and could easily be viewed as a competing product, which makes information sharing seem like an uphill battle.
  • Oracle’s presentation was light on information regarding the database’s timeline, cost, and outside access, but Ellison did acknowledge that it’s a “lofty vision” that will likely take a while to execute.

The Takeaway

Establishing a unified national health record has the potential to be a gold mine for Oracle, which mentioned the data’s ability to greatly accelerate life science research and new product development. That said, having the nation’s health data consolidated in a single database operated by a public company is understandably raising some concern, and Oracle has a long road ahead to gain the trust of both the patients it intends to serve and the competitors that will need to cooperate to make its vision a reality.

Innovation for Underserved Groups

Posted on by Jason Barry

Venture firm Rock Health recently published an interesting deep dive on the digital health adoption patterns of marginalized user groups that have carried a disproportionate amount of access disparities. The analysis was based on survey results from Rock Health’s latest Digital Health Consumer Adoption Survey of 7,980 US adults, which shed light on where digital health solutions are gaining traction, and where gaps still remain.

Rural households have one of the most persistent adoption gaps among all demographics, with rural respondents reporting lower rates of live video telemedicine use, wearable ownership, and digital tracking of health metrics… and not by a small margin. Rock Health found that rural residents trust health information from a doctor (88%) far more than from a website (52%), highlighting a need to invest in tools that empower rural providers.

  • Startups working to solve these problems include Main Street Health, which pairs rural MA beneficiaries with local health navigators to coordinate chronic care needs, and Homeward Health, which designed its RPM platform to function on cellular networks to bypass the need for a broadband connection.

Medicaid’s 80M beneficiaries account for over $650B in annual health expenditure, and the fact that they use digital health tools at similar levels to the survey average seems to bust the myth that people with low incomes or disabilities won’t use health technologies. 

  • Recent raises from startups like Waymark ($45M) and Clinify Health ($3.1M) have helped support Medicaid care hubs like Federally Qualified Health Centers, and Rock Health expects more innovation to be targeted at these community-based networks.

Women of color reported significantly lower satisfaction with digital health tools than women who identified as white, despite their strong adoption across all modalities. Although the survey didn’t explore the “why” behind the satisfaction levels, Rock Health believes that they may relate to disconnects between product design and the communities using the solutions.

  • Several startups have begun co-designing solutions with their communities to mitigate these satisfaction breakdowns, including Radical Health (online peer support for navigating healthcare journeys) and Grapevine Health (community-created health content that’s then distributed at scale).

LGBQA+ and transgender patients report some of the highest levels of discrimination in health settings, and their sky-high digital health utilization serves as a proxy for lack of trust in traditional care. Rock Health found that 85% of transgender respondents and 33% of LGBQA+ respondents delayed medical care in 2021, and several solutions are entering the market to ensure that care gap doesn’t persist.

  • Startups supporting queer and transgender patients raised a record $311M in 2021, including Folx, which raised $25M to expand its virtual clinical services, and Plume, which raised $14M to help deliver holistic gender-affirming care to anyone who needs it.

Turquoise Health Closes $20M to Bring Transparency to Healthcare

Posted on by Jason Barry

New CMS price transparency rules have created a massive headache for hospitals looking to publish data often hidden in archaic systems and fragile spreadsheets, which is why Turquoise Health raised a $20M Series A round to help ease the pain and increase compliance. 

The Turquoise platform allows provider organizations and payors to digitize their service catalogs and pricing information, creating what it calls a “pre-revenue cycle” where patients know costs upfront and providers receive quicker compensation.

  • Although most of this data reaches care navigation platforms through an API, patients can also use a search engine on the Turquoise Health website to compare hospitals across all 50 states.
  • Turquoise’s recent investment will be put to work developing the software needed to aggregate the wide range of inputs contributing to a procedure’s final cost, as well as determining health plan coverage at each step.

In anticipation of new payor rate disclosure requirements arriving in July, Turquoise also announced the launch of its Clear Contracts platform, which streamlines the direct contracting process with premade agreements generated from its pricing data.

  • At launch, Clear Contracts will support single case agreements, retrospective out-of-network agreements, and group health agreements, with the boilerplate contracts allowing for a quicker back-and-forth during negotiations.
  • a16z’s Julie Yoo called payor-provider contracts “the tail that wags the dog for most healthcare navigation decisions,” and Turquoise’s mission to modernize them was a key driver behind her decision to lead the Series A.

The Takeaway

Leveraging data from the Turquoise platform to support contract negotiations seems like a smart move for a company looking to build a business model around a valuable data asset. CMS transparency rules, the No Surprises Act, and the upcoming payor rate disclosure requirements have created a sea of regulations that’s extremely favorable for startups that can help navigate these waters, especially if they can translate their data into supporting services like Clear Contracts.

Digital Health, Bubble or No Bubble?

Posted on by Jason Barry

Pandemic-fueled digital health adoption and regulatory changes have brought a wave of new entrants and climbing valuations, but a cloudy macroeconomic outlook has caused many to wonder when the music will stop playing. Digital health venture firm Rock Health recently published its thoughts on whether digital health is in an investment bubble, providing a framework for innovators to assess their individual bubble risk to help navigate a downturn.

Is digital health in an investment bubble? Rock Health assesses “bubbliness” with a six point rubric based on analysis of past bubbles. The rubric currently indicates that digital health is not in an investment bubble, but has more valuation risk than in the past.

To assess the bubble risk of an individual segment, Rock Health maps the segment’s market infrastructure (tech stack, regulatory framework, business models) to its market traction (adoption, outcomes, integration). The resulting framework (pictured here) lets companies plan different bubble strategies depending on their quadrant.

  • “Early days” startups have emerging market infrastructures and limited market adoption, giving them long growth runways but only if they can put in place mission-critical infrastructure pieces (scalable tech, sustainable business models). Example: VR therapeutics
  • “Disequilibrium” companies have high market traction that outpaces the maturity of the market infrastructure, creating the need to partner with companies that fortify this infrastructure with complementary assets (regulatory expertise, foothold in adjacent markets). Example: Consumer genetic testing
  • “Niche” companies have limited traction despite a mature market infrastructure, and Rock Health suggests that they should expand the types of customers they target in order to secure more stable (bubble-proof) revenue. Example: Personal health records
  • “Established” companies have a high degree of market traction and a mature market infrastructure, so continued growth hinges on expanding into novel use cases and investing in technology that reduces the chance of commoditization (cloud/AI, reimbursement mechanisms). Example: Telemedicine

The Takeaway

Rock Health’s current stance is that “digital health is not in an investment bubble, but it is frothy.”  That said, the report’s true call-to-action applies regardless of whether or not we’re in a bubble: now is the time for companies to evaluate their bubble risk and put a plan into place to prepare for whatever the market brings in the future.

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