Huma Raises $80M to Shopify Healthcare

Our readers know better than anyone that building scalable digital health solutions can be a years-long voyage, which is why Huma Therapeutics closed $80M in Series D funding “to help cut that time down to days.”

Huma will be the first one to let you know that it’s the “Shopify for Digital Health,” offering modular platforms / software development kits that help provider orgs and pharmaceutical companies with use cases such as:

  • multi-channel patient engagement across entire populations
  • scalable remote patient monitoring programs
  • companion apps to support patients through treatment and drug therapies
  • digital clinical trials, including de-centralised trials to accelerate research

That technology has powered projects in over 3,000 hospitals and clinics, with 1.8M active users across its products in 70+ countries.

  • Huma’s partners include providers like the NHS and Johns Hopkins University, as well as pharma giants like Bayer and AstraZeneca – which also participated in the round.
  • The Software as a Medical Device (SaMD) behind Huma’s products also recently became the only configurable, disease-agnostic solution fully cleared by regulators in the U.S., E.U., and Saudi Arabia.

Up next is the Huma Cloud Platform, a no-code app builder that enables other companies to spin up their own solutions using a combination of GenAI prompts and pre-built templates.

  • The platform includes a library of modules and device connectivity tools for any therapeutic area, APIs and integration capabilities, and a marketplace that creates a flywheel of new features from existing users.
  • The best part? Huma’s SaMD clearance “solves all of the regulatory hurdles that developers usually face, freeing up their time and energy” to scale their apps.

Put it all together, and Huma’s tech infrastructure, partner roster, and regulatory grounding make a compelling case that we’re closer to a “Shopify for Digital Health” than we’ve ever been.

The Takeaway

Shopify brought an online presence within arms reach of millions of vendors that wouldn’t have had the resources to pull it off without them, and Huma is looking to make that same experience possible in digital health. Although healthcare is a far cry from slinging t-shirts and cookies, enabling people to focus on their craft instead of technical potholes seems like an end-goal worth striving for in any industry.

Alternative Staffing Models Harming Patients

New research in Medical Care found that hospitals opting to replace registered nurses with non-RN staff could be sacrificing patient safety for short-term financial gains.

This was one of the largest-ever studies investigating the tradeoff between RNs and lower-wage labor, yet it received surprisingly little coverage given the implications of its findings.

UPenn researchers analyzed clinical and claims data for 6.5 million Medicare patients across 2,676 US hospitals in 2019, finding that every 10 percentage-point reduction in RNs was associated with:

  • 7% higher odds of in-hospital death
  • 1% higher odds of readmission
  • 2% increase in expected days
  • “Significantly” lower patient satisfaction

Hospitals are often pressured to pursue “team nursing” models for the immediate financial lift of substituting RNs with nurses’ aides or licensed practical nurses, but the authors warn that the true impact of using less skilled workers is likely the exact opposite.

  • The study estimates that a 10 percentage-point reduction in RNs would result in nearly 11k avoidable deaths annually and 5,207 preventable readmissions.
  • That translates into roughly $68.5M of additional Medicare costs each year, with hospitals also losing nearly $3B annually because of patients requiring longer stays.

Then why do hospitals continue substituting RNs with lower-wage staff? From the patient perspective, the negative impact on outcomes – let alone mortality – should stop the idea of lowering the skill-mix in its tracks. 

  • That said, the average hospital sees an instant cost reduction of $31.94 per patient day for every 10 percentage-point reduction in RNs to total nursing staff.

The financial near-sightedness of that $31.94 cost reduction blinds hospitals to an estimated $66.03 of lost revenue per patient day for the same 10pp reduction in skill-mix… in other words the expected ROI is more than a two-fold loss.

The Takeaway

Nursing budgets are a huge slice of the hospital expense pie, making them a go-to target when leadership teams are looking to make cuts to fund other areas. This study reaches the paradoxical conclusion that the reason hospitals don’t have funds for other areas could be because they aren’t investing enough in the nurses they’re thinking of cutting.

Rock Health: H1 Funding Comeback

There’s a comeback brewing for digital health, with Rock Health’s latest funding report showing that the sector is officially on track to beat last year’s investment total.   

US digital health startups raised $5.7 billion across 266 rounds in the first half of 2024, setting a pace that could surpass 2023’s full-year total of $10.7 billion.

Most of the excitement came from early-stage startups. Seed, Series A, and Series B raises accounted for 84% of labeled rounds in H1. The median size of a Series A was $15M (up $3M from last year), driven by big showings from companies like Hippocratic AI and Fabric

  • Rock Health pointed out that larger Series As have helped AI startups manage costs for training models and acquiring datasets, while also helping others make well-timed M&A (Ex. Fabric’s acquisition of MeMD from Walmart).

Unlabeled rounds started to wane as fewer companies pushed off a valuation haircut or delayed a labeled raise due to not meeting necessary benchmarks. Just 33% of Q2 2024 rounds were unlabeled, down from 47% in Q1 and 55% in Q4 2023.

  • This could mark the beginning of a return to a more normal cadence of labeled raises, which Rock Health predicted would be in the cards for 2024.

The most funded value proposition in H1 went to “treatment of disease,” thanks in part to Foodsmart’s $200M raise feeding the $1.1B total. 

  • Mental health retained its usual position as the most funded clinical indication, raising $700M as companies like Talkiatry and Brightside managed to attract more investor attention than the surging weight management segment ($300M).

The first half saw three public exits for digital health companies, ending a 21 month drought with stock market debuts for Nuvo (remote fetal monitoring), Tempus AI (precision diagnostics), and Waystar (revenue cycle management).

  • Among players still gearing up for an IPO, fewer companies were rounding out their offerings by acquiring the missing pieces, which was chalked up to companies wanting to be conservative with their runway. H1 2024 clocked in at 34 digital health acquisitions, well below half of 2023’s full-year total (83).  

The Takeaway

Resilience seems to be leading to brilliance for digital health founders, with overall funding momentum and fewer transition measures (AKA unlabeled rounds) suggesting the “new normal” is upon us. Although a presidential election and decisions around telehealth flexibilities will have a huge impact on the rest of the year, most signs are pointing toward H2 playing out just as well as the first half.

K Health Closes $50M to Bring AI to Primary Care

Momentum begets momentum, and K Health is building on the recent debut of its AI Knowledge Agent with the close of $50M in equity funding led by Claure Group.

K Health is on a mission to provide access to high-quality medical care at scale by using AI to turn patient smartphones into the first stop along their care journey.

  • K’s clinical-grade AI for primary care takes patients through a personalized chat to walk through their symptoms, develops an assessment grounded in the EHR, then delivers insights to providers to inform their diagnoses and treatments.
  • This allows providers to practice at the top of their license and engage with their patients instead of spending valuable time manually piecing together relevant information.

We unpacked K’s AI Knowledge Agent when it was first unveiled, but the short-and-sweet version is that it’s composed of an array of LLMs enhanced by K’s own algorithms, with a few key differentiators from today’s standard AI applications:

  • It incorporates the patient’s medical history to provide highly tailored responses, enabling a higher level of personalization than standalone models.
  • It’s optimized for accuracy by using curated sources, then leverages multiple specialized agents to verify the answer matches the sources and the EHR data is appropriate.

A core component of K’s blueprint is partnering with health systems to serve as an entry point to their larger care ecosystem, and Cedars-Sinai has been helping co-develop a longitudinal care program that integrates virtual care with in-person services.

  • By combining K’s AI with the patient’s EHR and Cedars-Sinai’s brick-and-mortar assets, patients can be intelligently routed to the right place to resolve their needs, reaching everything from primary care and specialists to labs and tests within the same interface.

K’s competitive advantage is its ability to do more with less. An AI-led model that eliminates the need to build clinics allows K to achieve better outcomes at lower costs than traditional primary care, and profitability looks like it’s in the forecast for next year.

  • The fresh funds will be used to fuel more health system partnerships and continue sharpening K’s AI, which should in turn allow it to keep improving the unit economics that separate it from the likes of Walmart Health (RIP) and VillageMD.

The Takeaway

Primary care is the gateway to the healthcare system, but that gateway is rusting away from the demands of an aging population and a shortage of providers. K Health is setting out to prove that AI can repair the situation, and it now has $50M to help it make its case.

Arcadia Acquires CareJourney to Advance VBC

At a time when many people are questioning the effectiveness of value-based care, Arcadia is doubling down on its potential to move the industry forward by acquiring health analytics firm CareJourney.

Arcadia helps payors and providers put their data to work by surfacing insights for use cases like closing care gaps, managing costs, or transitioning to VBC.

  • It recently locked in $125M to advance its analytics capabilities, which funded the launch of its data platform and the expansion of its partner ecosystem.
  • Last year’s revenue topped $100M, which put Arcadia in profitable territory.

CareJourney offers cost and quality analytics for value-based networks and providers, focusing on Medicare, Medicaid, Medicare Advantage and commercial claims data.

  • Its trove of data spans across 300M+ beneficiaries and over 2M providers nationwide.
  • That data feeds an analytics platform that helps organizations strengthen their networks, improve provider performance, and better manage at-risk populations.

The power to merge clinical data with claims records makes the combined company greater than the sum of its parts.

  • The expanded data resources will fuel advanced analytics for Arcadia’s customers, enhancing their ability to pursue value-based care and market expansion.
  • As these analytics unlock new insights, the integration of CareJourney’s solutions into the Arcadia platform will give organizations more operational tools to execute their strategies for improving patient and financial outcomes.

Arcadia’s analytics models are a core differentiator from competitors like Innovaccer and Health Catalyst, and it’s now looking to separate from the pack by leaning in on its strengths.

The Takeaway

Value-based care is hard to get right, but not getting it right hasn’t exactly worked out either. The holes in healthcare’s data analytics capabilities have been a go-to argument for VBC naysayers, and that’s exactly what Arcadia is aiming to solve with its acquisition of CareJourney.

Foodsmart Loads Its Plate With $200M

The headliner of this week’s funding-heavy news lineup was Foodsmart, which loaded its plate with over $200 million to expand the reach of its virtual nutrition services.

Foodsmart supports patients facing chronic disease and food insecurity by partnering with health plans and providers to improve access to personalized healthy eating options.

  • The FoodSMART telenutrition platform delivers virtual nutrition counseling from the largest standalone network of Registered Dietitians in the US, with integrated benefits management to help with things like applying for SNAP/EBT benefits.
  • The FoodsMART marketplace then bridges the gap between the visit and the table, allowing patients to order quality food and have it delivered to their doorstep.

The combination of Foodsmart’s dietitian network and food marketplace sets it apart from most of its competitors, which either focus on supporting specific conditions or avoid tackling the logistics of grocery delivery.

  • That versatility has led to Foodsmart serving over 2.2M members, as well as numerous peer-reviewed studies highlighting the cost reductions and health improvements resulting from the approach.

The food-as-medicine movement has provided fertile ground for startups since the pandemic, with shifting consumer behaviors and regulatory changes planting the seeds for growth.

  • Investors are taking notice, and Foodsmart’s mega-round follows close behind other raises from Season Health ($7M), Fay ($25M), and Nourish ($35M).

The Takeaway

At a time when weight management medications are getting all the attention, Foodsmart is paving its own non-pharmacological path to preventing diet-related issues. If an ounce of prevention is worth a pound of cure, then $200M should be heavy enough to help Foodsmart improve the lives of plenty of patients.

Spotlight on Prior Authorization, Humata Health

Digital health’s flavor of the week was prior authorization, which has clearly been leaving a bad taste in people’s mouths.

Humata Health took center stage by adding $25M in unlabeled funding to advance its AI prior auth automation suite for payors and providers. 

  • CEO Dr. Jeremy Friese was president of Olive’s payor business before forming Humata to acquire the PA assets after the company was forced to wind-down, and dealt with the headaches of prior auth first-hand during his time practicing at Mayo Clinic.
  • The round was led by Blue Venture Fund (representing the majority of BCBS plans) and LRVHealth (investing on behalf of nearly 30 health systems), which sends a strong signal about Humata’s ability to support both sides of the prior auth equation.

MedPAC’s annual report to Congress did a great job highlighting the prior auth inefficiencies that Humata set out to solve:

  • 95% of PA determinations by Medicare Advantage plans in 2021 were “fully favorable.” In other words, the plans approved nearly all treatments deemed necessary by providers at full coverage.
  • Further, after providers appealed an initial PA denial, MA plans reversed their decision and fully approved the PA request in 80% of cases. That means all of the manual labor and staff hours results in the same outcome 99% of the time.

Right on cue, the AMA put out its own physician survey on the topic, finding that the average physician fields 43 PA requests per week that require 12 hours of staff time to resolve.

  • Two-thirds didn’t believe that PA decision criteria are evidence-based, and nearly all reported that PA increases burnout. 
  • Most physicians also agreed that PA increases overall utilization as patients are forced to pursue less effective treatments or schedule additional appointments after PA delays.

The Takeaway

You’d be hard pressed to find a single payor or provider that thinks prior authorizations are perfect in their current state, and regulators are starting to take notice. Bipartisan leaders recently reintroduced legislation to mandate electronic processes for streamlining PA, following a final rule from CMS in January with the same goal.

Talkiatry Hauls in $130M Series C

Times are tough, which means business is booming for virtual behavioral health providers like Talkiatry – a telepsychiatry startup that just hauled in $130M in Series C funding.

Since launching in 2020, Talkiatry has built a network of over 320 psychiatrists, who serve patients with conditions ranging from anxiety and depression to OCD and PTSD.

  • Talkiatry operates in 43 states, and is in-network with more than 60 payors, reportedly covering 70% of commercial lives in the US.
  • It’s also begun leaning in on partnerships with health systems, and recently scored a major contract with HCA Healthcare.

Unlike most behavioral telehealth companies that got their start at the onset of the pandemic, Talkiatry’s physicians are W-2 employees, rather than contractors.

  • This allows Talkiatry to standardize the quality of physician care and influence patient outcomes over time, crucial ingredients to any recipe for value-based care success.
  • That model also makes Talkiatry one of the few companies that can demonstrate superior outcomes to major payors. A recent cohort study showed that Talkiatry led to a 68% reduction in hospitalizations, 32% fewer ED visits, and $700 lower monthly care costs.

The benefits of Talkiatry’s model compound with scale: as its full-time psychiatrists continue demonstrating superior outcomes, it can sign more partnerships with payors and reach more patients. That puts it in a solid position to take on additional risk.

  • Talkiatry earmarked the fresh funds to scale up its VBC offerings and begin taking on more downside risk, a move that few behavioral health companies have been willing to make given the difficulty of proving performance. “There’s no blood test for depression.”

The Takeaway

Demand for behavioral health resources only continues to climb, yet there are still significant barriers to delivering the care that’s being called for – particularly a shortage of providers and a lack of technology to help fill the gap. Talkiatry overcomes both of these hurdles by offering virtual treatment from in-house psychiatrists, and it now has $130M to continue scaling its model for patients in need.

Are Preventable Hospitalizations A Flawed Measure?

Preventable hospitalizations are one of healthcare’s most widely adopted quality measures, which is exactly why they ended up in the crosshairs of a new opinion piece in Health Affairs.

Rates of preventable hospital admissions were first developed as an indicator of access to timely ambulatory care over 30 years ago, yet they’re now used to judge the performance of hospitals, health plans, and even individual providers (MSSP is an easy example).

  • These measures are typically based on inpatient admissions or ED visits for conditions like hypertension or asthma, where hospitalizations can potentially be avoided if patients have access to effective ambulatory care.

The authors argue that the metamorphosis of preventable hospitalizations from an access measure to a quality indicator was a serious misstep, and incorporate nearly a dozen studies to help make their case.

  • One of the most rigorous studies was from the Agency for Healthcare Research and Quality, which found that differences in socioeconomic status explain “a substantial part – perhaps most” of the variation in preventable admissions for many conditions, and recommended against using the metric as a standalone way to assess provider quality.

Those findings prompted the director of the AHRQ to publish an editorial outlining the “persistent challenge of avoidable hospitalizations,” which referenced a VA trial suggesting that high-quality ambulatory care might result in more, not fewer, admissions.

  • The VA analyzed 1,400 veterans hospitalized with potentially avoidable admissions for congestive heart failure, diabetes, and COPD. Veterans that received intensive primary care were hospitalized more frequently than those in the usual care group, but were also more satisfied with their care despite the additional hospitalizations.

Other evidence suggests that using preventable hospitalizations as a measure of provider quality can actually decrease care quality by discouraging necessary admissions.

  • This study linked reduced readmissions to increased mortality for heart failure patients, unexpected results that might be explained by the fact that “incentives to avoid readmissions may lead to potentially inappropriate management of higher-risk patients… in the outpatient rather than inpatient setting.”

The Takeaway

Whether or not preventable hospitalizations are a flawed quality measure, this article is a solid reminder that “strong beliefs should be loosely held,” and that widely adopted views are often the most important ones to stress-test.

Telehealth Struggles to Live Up to Expectations

Telehealth demand hasn’t exactly lived up to expectations, but that might have more to do with manic forecasting than real-world performance when a 6,000x utilization increase isn’t enough to satisfy the naysayers.

There’s nothing like forced adoption to kickstart a market, and the combination of in-person office closures and pandemic-era legal flexibilities caused telehealth utilization to vault from less than a million visits in Q4 2019 to over 60 million visits by Q2 2020.

(Overly) enthusiastic forecasts quickly followed the early data, but Trilliant Health’s latest telehealth tracker shows that demand has only headed downhill since the initial spike. 

  • As of Q3 2023, sustained declines have left telehealth volumes 54.7% below their peak, and the trendline doesn’t appear to have found a bottom.

Recent high-profile retreats from players Optum and Walmart have sparked solid viewpoints from pessimists and optimists alike, although the general consensus is that patients don’t view telehealth as a substitute for in-person care for most conditions.

  • Since 2019, behavioral health has represented a consistently increasing share of overall telehealth utilization, and accounted for a substantial majority (67%) of all virtual visits in Q3 2023.

E-prescribing increases closely mirrored the telehealth growth, and now represent a significant share of prescriptions for many drug classes:

  • 30.3% of antidepressants, 38.9% of stimulants, and 5.4% of opioids. It’ll be interesting to see the GLP-1 data when it catches up.

The Takeaway

Event-driven demand shocks don’t last forever, and the telehealth slowdown showed that reality is usually more nuanced than an overnight paradigm shift. New modalities don’t magically create better businesses, but they can be the tools that founders use to build them.

Get the top digital health stories right in your inbox

You might also like..

Select All

You're signed up!

It's great to have you as a reader. Check your inbox for a welcome email.

-- The Digital Health Wire team

You're all set!