Category: Digital Health

The digital health sector has gotten a bit of an ego check since the white hot market at the start of the pandemic. Rising interest rates and a minor banking crisis continue to put a damper on startups’ ability to raise capital, but a mid-year prediction roundup from some of healthcare’s top dealmakers gives a good preview of what might come next as the market cools.

Dudley Baker, Canaccord Genuity. Notable moves: Privia Health IPO, Doximity IPO

• Since 2020, many startups have sprung up to provide specialized behavioral health and chronic condition management benefits to employers, but the surge in valuations made many of them too expensive to acquire. These companies could have a hard time raising more capital on their own, so Baker expects them to seek out mergers of equals instead.

Claire Pearson, Barclays. Notable moves: Cricket’s merger with InterWell and Fresenius 

• Pearson sees four areas ripe for M&A centered around new tech capabilities and scale: women’s health, orthopedics, cardiology, and kidney care. Pearson pointed to Cricket’s merger with InterWell and Fresenius as an example of what works in each of these sectors – it combined contracting, providers, and technology under one roof.

Fletcher Gregory, General Atlantic. Notable investments: Included Health, Vida Health

• Employers weary from working with too many vendors have begun narrowing their focus to companies that can deliver outcomes and lower costs. To make the cut, Gregory predicts that digital health startups working on a single problem are going to have to improve their clinical models in ways that they likely can’t do without combining.

Seth Kneller, TripleTree. Notable moves: KKR’s acquisition of Therapy Brands.

• Kneller favors companies that are addressing the labor crisis by helping hospitals and health systems become more efficient. Companies using AI to take over tasks like clinical documentation and administrative work look especially attractive to acquirers, but only if they can prove cost reductions for hospitals. 

Karl Palasz, William Blair. Notable moves: Fortive’s acquisition of Provation

• Companies that employ behavioral health providers to deliver virtual care have struggled to live up to expectations due to a lack of differentiation and the clinician shortage. Palasz has his eye on companies that provide software to niche behavioral health practices, such as substance-use recovery or autism.

The Takeaway

Pending any major economic catastrophe, it seems like the general consensus is that the tide could start turning for digital health M&A within the next few months. Although the IPO market will probably stay limited, the partnerships that are forming now are setting the stage for more M&A in the back half of the year as companies look to combine so they can better weather the tough funding environment.

The most talked about research of the week was easily the JAMA Internal Medicine study that found that licensed medical professionals prefer ChatGPT’s responses to patient questions better than doctors’ responses 79% of the time – in part because ChatGPT is more empathetic.

What wasn’t discussed as much was the fact that the doctors’ responses were sourced from questions on Reddit – AKA from doctors with the time and empathy to share their thoughts in the first place – so it’s possible that ChatGPT’s lead is even wider than it’s getting credit for.

Here’s how it worked. Researchers randomly pulled 195 exchanges from the r/AskDocs subreddit where a verified physician responded to a patient question.

• ChatGPT responses were then generated by entering the original question into a fresh session (without prior questions to work with). The anonymized responses were then evaluated by five licensed medical professionals.

• Evaluators chose “which response was better,” then judged “the quality of information provided” (very poor, poor, acceptable, good, or very good) and “the empathy or bedside manner provided” (not empathetic, slightly empathetic, moderately empathetic, empathetic, and very empathetic). Outcomes were transferred to a 5 point scale.

The results were a blowout. The proportion of responses rated as “good” or “very good” quality was 3.6x higher for ChatGPT, with 78.5% of ChatGPT responses scoring ≥4 points versus… 22.1% for physicians.

• The proportion of responses rated as “empathetic” or “very empathetic” was a whopping 9.8x higher for ChatGPT, with 45.1% of ChatGPT responses scoring ≥4 points versus just 4.6% for physicians. 

• Disclaimer: It probably wasn’t too hard for the judges to discern between ChatGPT’s well-punctuated prose (not to mention its 211 word average response length) and the off-the-cuff Reddit comments of the physicians (52 word average).

The Takeaway

When it comes to answering the health questions of random Reddit users, tireless AI robots appear to be far better than physicians donating their time. That said, overflowing EHR inboxes remain a leading contributor to physician burnout, and the authors summed it up perfectly with: “Despite the limitations of this study and the frequent overhyping of new technologies, studying the addition of AI assistants to patient messaging workflows holds promise with the potential to improve both clinician and patient outcomes.”

We’re dedicating today’s top story to the people and publications that we rely on to find the most interesting digital health stories from across the web. Assuming that you already subscribe to Digital Health Wire, these are the 45 other newsletters, websites, and podcasts to follow if you want to keep up with the latest and greatest in healthcare.

Although we stay on top of all the mainstream outlets and digital health journals, some of the best content is usually found just off the beaten path. We’re a newsletter, we love newsletters, so we’re kicking things off with our favorite healthcare newsletters. 

• Out-of-Pocket – These aren’t in any particular order… but OOP’s at the top for a reason.
• Health API Guy – Our go-to for How to Win Friends and Integrate Systems.
• Health Tech Nerds – One part DH community. One part newsletter. All fantastic.
• X = Primary Care – Wide-ranging insights that keep PCPs at the center.
• Dem Dry Bones – Never fails to bring new takes to the table.
• Hospitalogy – Healthcare business breakdowns that you won’t find elsewhere.
• Healthcare Huddle – Always delivers a deep dive on the topic du jour.
• Second Opinion – Who doesn’t love a good journalist turned VC success story?
• Hick-Picks – The series on payor plumbing made us instant fans.
• The Frontier Psychiatrists – All over the place in the best possible way.
• STAT Health Tech – The digestible gateway to the rest of STAT’s coverage.
• Digital Thoughts – Product management musings from a reformed pharmacist.
• Differential Diagnosis – Asking the hard questions about the industry’s biggest trends.
• Acute Condition – Everything from manufacturing to unbundling physicians.
• Wah’s Wonderful War Room – Few and far between but always worth the wait.

When we’re done rounding up the headlines from the major news sites and back out of our morning newsletter rabbit hole, we can count on finding more fresh perspectives from these specialty publications and blogs.

• The Imaging Wire (of course)
• Cardiac Wire (of course)
• a16z
• Health Populi
• The Keckley Report
• Home Health Care News
• Behavioral Health Business
• Rock Health
• Telecare Aware
• Vator News 

These days most of our favorite content isn’t published, it’s tweeted. These all-stars are the ones doing the tweeting. (With sample tweets for your viewing pleasure.)

• Rik Renard – @rikrenard
• Morgan Cheatham – @morgancheatham
• Nikhil Krishnan – @nikillinit
• Alyssa Jaffee – @AlyssaJoyJaffee
• Jay Parkinson MD, MPH – @jayparkinson
• Blake Madden – @B_Madden4
• Stuart Blitz – @StuartBlitz
• Andy Mychkovsky – @healthcareandy
• Jan-Felix Schneider – @jfschneidr
• Sanjula Jain, PhD – @sanjula_jain
• Julie Yoo – @julesyoo
• Chris Hogg – @cwhogg
• Erin Brodwin – @erinbrodwin
• Jessica DaMassa – @jessdamassa
• Dhruv Vasishtha – @dvasishtha

And finally, the podcasts that let our ears take over when our eyes are tired from all the blogs and tweets. We have a soft spot for founder interviews, B2B trends, and long form conversations.

• Vital Signs – If you’ve had a hard time finding a great healthcare pod, this is it.
• Pear Healthcare Playbook – Stellar interviews with movers and shakers.
• The Virtual Shift – True thought leadership on the shifting virtual care landscape.
• HIT Like a Girl Pod – Holding up a mic to the rockstar women of healthcare.
• Bright Spots in Healthcare – A relentlessly sunny gaze on healthcare’s success stories.

It’s a lot to keep up with, but if you want the best digital health news out there, these sources will do more than get you started. You can also subscribe to Digital Health Wire and we’ll do the heavy lifting for you:)

PS – This list could easily have been a top 100, so if there’s a publication or news source that we’re crazy for not including, hit reply and let us know!

Mindstrong might have flown a little too close to the sun with its promise of detecting early signs of mental illness through smartphone data, and it’s now shuttering operations after selling off its core technology to former competitor SonderMind.

Once a venture capital darling, Mindstrong wooed investors on the idea of an app that could serve as a “smoke alarm” for mental health issues by scanning smartphones for “digital biomarkers” such as erratic scrolling and typing errors.

That turned out to be a tall order. A recent investigation by STAT revealed that investors were leaning on Mindstrong to commercialize the technology too soon, and that the company lost momentum after the departure of key founders.

• As Mindstrong’s core technology struggled to get up to speed, the company pivoted to providing virtual therapy with a focus on serious mental illness.

• That road was equally rocky, causing Mindstrong to lay off a majority of its employees and stop treating patients earlier this year.

Enter SonderMind, a full-service virtual therapy platform that leverages machine learning to match patients with an ideal therapist for in-person or virtual appointments.

• Mindstrong’s purpose-built EHR and digital biomarker tech will help SonderMind offer more specialized care journeys and improve its ability to treat patients with serious mental illness.

• The move comes just months after SonderMind acquired Total Brain to enhance its user-guided wellness tools, and less than two years after it acquired Qntfy to unlock more value from its patient and provider data.

The Takeaway

Mental health remains one of the hottest corners of the digital health market, but outside of a few notable examples like the Headspace-Ginger merger, we haven’t seen a huge wave of M&A as valuations come back down to Earth. SonderMind now has a chance to be the next success story, assuming it can integrate its acquisitions into a cohesive offering for everything from wellness exercises to psychiatric care.