Category: Digital Health

AppliedVR Raises $36M for VR Pain Management

Posted on by Jason Barry

Virtual reality (VR) therapeutics developer AppliedVR raised a $36m Series B round ($71m total funding) to fuel growth as it awaits a decision from the FDA on its first de-novo submission for pain management.

  • AppliedVR combines VR-based cognitive-behavioral therapies with mindfulness exercises to help manage chronic pain, with patients reporting reductions in the daily life interference caused by their pain for up to several months after treatment.
  • EaseVRx is the company’s flagship product awaiting FDA approval, standing out as the first VR prescription therapeutic to receive breakthrough device designation for treatment-resistant fibromyalgia and chronic intractable lower back pain.
  • Research published in JMIR found that EaseVRx produced “clinically meaningful” improvement in pain outcomes, and AppliedVR is investing heavily in building evidence demonstrating its therapeutics as effective for patients, scalable for providers, and viable for reimbursement.
  • The latest funding will be used to prepare for EaseVRx’s full market launch after FDA approval, as well as to build out its product pipeline that includes RelieVRx (for acute postoperative pain) and AnxietyVRx (for generalized anxiety treatment).

Industry Impact

Although other startups such as XRHealth are pursuing the therapeutic VR space, none have AppliedVR’s established client roster (AppliedVR partners with over 200 health systems) or supporting body of research.

Following its Series B, AppliedVR has a lot of momentum in a chronic pain market estimated to negatively impact the economy to the tune of $635b annually. EaseVRx’s FDA approval would provide another tailwind to help the company be among the first to make VR pain management a reality.

Kareo and PatientPop Merge to Help Private Practices

Posted on by Jason Barry

Cloud-based software developer Kareo and private practice growth company PatientPop announced the closing of their merger and unveiled the combined company’s new name, Tebra.

Tebra currently supports over 100k providers and is looking to combine the technology of both companies to help modern private practices along every step of the patient journey.

  • PatientPop helps physicians grow their practices through marketing assistance, virtual scheduling, and an online platform to practice care remotely. The company offers cloud-based solutions that automate tasks such as scheduling and referrals to grow bookings.
  • Kareo provides software that supports EHRs and financial services for independent practices. The technology includes features supporting practice management, patient engagement, and third-party app connectivity.
  • Tebra, as in “vertebrae,” aims to be the backbone of private practices, integrating PatientPop’s growth solutions with Kareo’s operations tech to allow physicians to work at the top of their licence while meeting the rising patient expectations for seamless digital experiences.
  • Advantages of scale might emerge as Tebra continues expanding its client base, such as networking its physicians to drive more referrals, or even the possibility of facilitating consolidation of the offices it helps grow.

Industry Impact

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 were severely impacted by the post-pandemic declines in patient volumes, and offloading administration and growth functions onto a company like Tebra could be a piece of the solution.

Hinge Health Raises $600M for Digital MSK Treatment

Posted on by Jason Barry

In a virtual care landscape where many competitors are looking to address multiple conditions with a single solution, Hinge Health is setting itself apart by taking the opposite approach.

Last week, online musculoskeletal (MSK) clinic Hinge Health raised $600m to help build its team and platform, doubling the fast-growing startup’s valuation to $6.2b. Despite the influx of capital, Hinge is keeping a singular focus on musculoskeletal therapy, and tackling the problem with a deep roster of solutions.

  • Hinge launched in 2015 with a mission to improve MSK treatment by combining wearable sensors and computer vision-assisted physical therapy with a multidisciplinary team of physical therapists, doctors, and health coaches.
  • Several acquisitions have helped fuel Hinge’s growth within the last few months, including both Enso (manufactures devices for electrical stimulation pain relief) and wrnch (digitizes human motion with computer vision).
  • Hinge’s holistic approach covers the complete MSK journey from prevention to post-surgery, using HingeConnect to integrate patients’ external EMR data and ensure continuous coordination with other providers.
  • Over 80% of employers that cover digital MSK solutions choose Hinge’s platform, utilizing it to reduce unnecessary surgeries through preventative interventions. Hinge doubled its customer base to 575 companies over the past year. 

The Takeaway

By keeping MSK treatment as its exclusive focus, Hinge has quickly built one of the most robust solutions on the market while bridging the gap between in-person and digital care. The new funding adds to this momentum, and could lead to more developments for MSK patients seeking accessible care.

Oak Street Acquires Specialty Care Provider RubiconMD

Posted on by Jason Barry

Value-based primary care network Oak Street Health acquired RubiconMD for $130m, adding virtual specialty care to its existing services focused on seniors in the Medicare Advantage population.

  • Oak Street operates by initiating full-risk contracts with Medicare Advantage plans, taking on complete economic responsibility for patients in exchange for per-member, per-month compensation. Oak Street Health currently operates over 100 centers across 18 states and is the only primary care provider endorsed by the AARP. 
  • RubiconMD’s network contains over 230 specialists across all major specialties, with a virtual platform that provides clinical insights on specific patient cases and allows primary care providers to directly manage more of a patient’s care needs.
  • Integrating specialty care into Oak Street’s value-based model will enable it to improve coordination between PCPs and specialists while streamlining operations, an important component to successfully managing a full-risk model.

The Takeaway

RubiconMD was built to support the exact type of health centers managed by Oak Street, and the acquisition provides Oak Street with a proven platform and a large specialist network instead of having to develop both from scratch.

Although Oak Street was an early entrant in the value-based care segment, the RubiconMD acquisition highlights the scale needed to compete for contracts with a limited pool of employers and payors, likely foreshadowing more consolidation on the horizon.

Graphite Health Announces Open Marketplace

Posted on by Jason Barry

Piloting new digital health tools will soon be as easy as downloading a smartphone app, at least if Graphite Health has anything to say about it.

Intermountain Healthcare, Presbyterian Healthcare Services, and SSM Health recently announced the launch of Graphite Health, a member-led nonprofit aiming to create an interoperable data platform that will allow health systems to adopt new technologies “as easily as anyone can download an app from an app store to a smartphone.” 

Graphite Health is modeled on another Intermountain-owned venture called CivicaRx, which works to make generic medications broadly accessible, and is seeking to build an open marketplace for digital health tools.

  • Graphite Health Platform – To support the development of plug-and-play applications, Graphite Health is creating a common data language (built on the FHIR framework) that will allow providers to implement tools without unique customizations.
  • Graphite Health Marketplace – The marketplace will serve as a single location for innovators to distribute their solutions at scale, while giving providers a way to save months (if not years) of security and integration reviews when piloting a new tool.

In addition to the founding health systems, Graphite Health is planning on bringing additional organizations into the coalition over the coming months, with a target of reaching over 40m lives covered.

Industry Impact

Unlike current health marketplaces such as Epic’s App Orchard, Graphite Health’s nonprofit structure allows its marketplace to function as a “health utility,” serving members without the additional provisions of alternatives. If the company succeeds in its vision of streamlining interoperability, an elusive goal for many that have attempted, it will help facilitate the adoption of new tools while bringing operational efficiency to health systems.

Digital Health Funding Tops $21B in 2021

Posted on by Jason Barry

With three months left in 2021, digital health funding has reached a staggering total of $21.3b across 541 deals.

To put that number into perspective, last year was the first year that total digital health funding surpassed $10b, and 2019’s total was a small-by-comparison $7.9b.

These figures are from Rock Health’s Q3 2021 Digital Health Funding Report, which analyzed how 2021’s financing boom is shifting market expectations and creating a landscape that’s ripe for consolidation.

Funding themes remained similar to prior years, with investors focusing on value propositions such as R&D software and clinical indications like mental health. R&D funding was lifted by mega rounds from XtalPi ($400m) and Reify Health ($220m), while mental health services saw an influx of capital at Spring Health ($190m) and SonderMind ($150m).

Most funded value propositions:

  1. R&D catalysts ($4.7b)
  2. On-demand healthcare ($3.4b)
  3. Treatment of disease ($3.1b)
  4. Fitness & wellness ($2.9b)
  5. Non-clinical workflow ($2.1b)
  6. Consumer health information ($2.0b)

Most funded clinical indications:

  1. Mental health ($3.1b)
  2. Cardiovascular disease ($1.4b)
  3. Diabetes ($1.4b)
  4. Primary care ($1.4b)
  5. Oncology ($1.2b)
  6. Substance use disorder ($793m)

Industry Impact

This year’s unprecedented funding signals that investors are betting on a continued surge in healthcare innovation, but the wave of new entrants is creating a clutter of digital health options for patients and providers. As the market begins to call for more unified offerings, companies are turning to M&A for the answer.

The 216 digital health M&A deals through the first three quarters of the year have already eclipsed the 146 deals in 2020. Companies like Headspace and Ginger have combined to vertically integrate their solutions to provide their user base with a deeper well of resources. Other deals, like K Health’s recent Trusst acquisition, are focusing on horizontal integration to serve multiple channels with a single tech interface.

Regardless of the strategy, the rate of the dealmaking is causing many to wonder if company valuations can continue rising at the same pace for much longer, but for now it seems like we could be in the early innings of another record breaking Q4.

Amazon Announces Healthcare Accelerator Finalists

Posted on by Jason Barry

Amazon Announces Healthcare Accelerator Finalists

Digital health startups were in the spotlight this week as Amazon announced the ten finalists for its first ever AWS Healthcare Accelerator.

The companies were selected from 427 applications and 31 countries around the world, although each finalist is US-based. The finalists were chosen by a panel from Amazon Web Services (AWS) and KidsX, an accelerator for companies focusing on pediatric care. Each startup has a validated solution along with existing revenue and customers.

The AWS Healthcare Accelerator is a four week program that pairs finalists with technical and business mentorship from experts from AWS and KidsX, then offers collaboration opportunities with members of the AWS Partner Network looking for healthcare solutions.

AWS Healthcare Accelerator finalists include:

  1. AIVA is a voice-powered care assistant for hospital patient rooms and senior living communities with a mission to be the voice operating system for better care. 
  1. b.well offers an integrated solution for consumer engagement, holistic health management, and cost containment. They use longitudinal aggregated data to paint a picture of health for each consumer and aggregate data to show population health.
  1. Ejenta automates remote monitoring and remote care delivery using AI exclusively licensed from NASA. Their “intelligent agents” learn from connected devices and EHR data to monitor patients, predict health, and connect care teams.
  1. Giblib creates an educational content streaming experience for healthcare providers. It allows for on demand streaming of surgical videos and medical lectures from subject matter experts along with the ability to receive continuing education credits.
  1. Gyant is a virtual assistant and digital front door solution designed to optimize patient journeys. It navigates patients to the right care setting and resources while providing simple appointment scheduling.
  1. Kaizen Health is a healthcare logistics platform that connects healthcare and transportation to reduce access barriers.
  1. Medical Informatics Corp offers an FDA-cleared Sickbay virtual care platform that helps hospitals improve operational efficiencies by enabling the rapid scaling of remote patient monitoring across any inpatient setting.
  1. Neuro Rehab VR is reinventing training exercises for physical and cognitive therapy by leveraging VR and neuroplasticity for recovery. It allows providers to track their patients in real time and has shown increased patient engagement.
  1. OneRecord provides an app that helps patients build a consolidated health record of their entire medical history in a single place.
  1. Pieces uses AI to connect patients and health systems with solutions that address social determinants of health. They connect care providers to actionable data, people to services, and caseworkers to information.

Industry Impact

Amazon’s multi-pronged strategy for entering the healthcare market goes beyond its hands-on approach with Amazon Care. By providing companies such as these finalists with AWS solutions, Amazon is establishing itself as the cloud-based foundation for a new cohort of healthcare disruptors.

Verily Starts Planning for Life After Google

Posted on by Jason Barry

Alphabet’s life sciences division Verily is working to distance itself from Google technology as it plans for the next phase of its products and a possible future outside of its parent company, according to reporting from Insider.

The project known internally as Flywheel began in 2021 and involves transitioning Verily’s products away from Google’s internal cloud to a public version of the tech infrastructure.

Internal documents appear to reveal that an initial version of Verily’s updated technology stack is set to arrive by early next year.

  • Verily is aiming for independence. As the company matures, it is looking to diversify its product offerings into new areas such as telehealth, but potential partners have often needed reassurance that Verily’s data would not be shared with Google.
  • Flywheel could signal an IPO. Verily CEO Andy Conrad has previously mentioned a push towards an initial public offering, although the pandemic pushed back those plans. A current employee interviewed by Insider confirmed that an IPO is “the carrot Andy is always dangling in front of us.”
  • Verily’s recent moves support the theory. It raised $700m in late 2020 before acquiring clinical trial management system SignalPath in August to expand its commercial offerings. It also recently partnered with Mayo Clinic to develop a clinical decision support tool, all while bolstering its leadership team.

The Takeaway

When Google reorganized as Alphabet in 2015, the structure was designed to give subsidiaries more flexibility to expand away from the company’s core operation. Although no large companies have yet to be spun out, the Flywheel project makes Verily look like a strong contender to be the first one. Possibly as early as next year.

Xealth Makes Digital Health Usable

Posted on by Jason Barry

The booming digital health sector has seen such rapid expansion that it is beginning to enter the next level of its industry life cycle: the stage where solutions have solutions.

Digital health integration platform Xealth recently closed $24m in Series B funding, bringing the Providence St. Joseph Health spinoff’s total funding to $52.6m.

Xealth aggregates and organizes digital health tools within the EHR, enabling not only easier reporting, but also centralized distribution, enrollment, and patient monitoring.

The Xealth platform has three interdependent modules:

  • Xealth Clinical Interface – Solutions are ordered, delivered, and tracked from within the EHR, with clinical decision support matching patients to relevant solutions.
  • Xealth Digital Command Center – Provides customized reporting of patient and provider engagement, which is aggregated to match demographics to solutions.
  • Xealth Integration Layer – Supports deployment of multiple solutions through a single integration with the EHR, allowing health systems to save IT resources by avoiding independent vendor integration.

The Takeaway

As health systems pursue innovation, they’re presented with an abundance of disjointed products with specialized use cases, creating the need for a platform that allows physicians to prescribe and monitor these solutions within a single cohesive workflow.

Xealth’s services are already available to over 100k physicians, and the company states that care teams are seeing improved patient engagement metrics as a result of measuring outcomes across a health system’s entire virtual solution ecosystem.

Aggregators that improve usability of existing solutions have emerged as success stories in other industries such as business collaboration software, and Xealth is looking to replicate this success within the digital health landscape.

Under the Radar Healthcare Disruptors

Posted on by Jason Barry

Digital health venture fund and advisory team Rock Health recently published an excellent blog post outlining what they call healthcare’s “middle children,” defined as large-but-not-huge companies that should be eyeing expansion into healthcare.

The authors argue that these middle children have distinct competitive advantages over the cohort of technology giants that have recently been pursuing the healthcare space, which include the likes of Amazon, Alphabet, and Apple.

  • Middle children with market capitalizations between $10b and $350b are large enough to make an impact in healthcare, but small enough to avoid the scrutiny of massive players. They are often consumer-facing, with business lines that could pivot towards a healthcare use case (picture Lululemon’s acquisition of Mirror).
  • Larger middle children have deep pockets and talents pools (Salesforce, Nike), with the capabilities to pursue large healthcare goals.
  • Smaller middle children have more specialized capabilities (Garmin, Airbnb), that could help with solving more focused problems.

Middle Children Advantages

  • Smaller healthcare goals are big enough for middle children to pursue for growth, whereas much larger companies need loftier projects to warrant market expansion.
  • Loyal customer bases can be activated by middle children to establish initial users while avoiding the regulatory attention quickly drawn by larger competitors.
  • Specialized assets from middle children, such as logistics expertise or data analytics, can provide a competitive edge in healthcare. 

Potential Middle Children Plays

  • Blizzard could passively monitor behavioral health conditions for children playing its games
  • Paypal could integrate Health Savings Accounts to help users manage healthcare spending
  • Hello Fresh could offer health insights and recommend food products for delivery

The Takeaway

Gaining share within the $3.5t US healthcare market is a powerful motivator for any company looking to pursue a strategy shift, but even consumer-favorite brands will need humility to navigate the complex and quickly evolving environment.

Although middle children don’t specialize in the sector, Rock Health makes a solid case that they might be some of the best-positioned companies for healthcare disruption, and I wouldn’t be surprised if we’re reading about some of the plays listed in this blog post in next year’s business news.

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