Zus Health Lands $40M, Elation Partnership

Zus Health is the latest company to set off on a quest for the Holy Grail of healthcare – a universal patient record – and it just landed a $40M venture round to help it in its pursuit.

Founded in 2021 by healthcare veteran Jonathan Bush, Zus originally planned on creating a “Build-a-Bear for EMR, patient relationship management, and CRM” by offering a shared data record and software development kit that other companies could use to build their own tools.

That mission appears to be alive and well, but Zus is also looking to grow into a new role as “the common information ground” that brings comprehensive patient information to the point of care.

The Zus platform centers around the Zus Aggregated Profile (ZAP), a unified view of a patient’s healthcare info aggregated from EHRs, labs, claims networks, and other sources.

  • This network provides access to data across 70K+ provider sites and 270M+ patients, which Zus then distills into a user-friendly patient profile through FHIR-normalization, deduplication, and summarization.
  • The first time a provider uses Zus to “get up to speed” on a patient, Zus charges $4 to pull the data and plug it into the EHR. Zus then charges a monthly fee for providers to continue receiving updates on that patient.

Zus works with EHR companies that offer the ZAP as an upgrade to their provider customers in exchange for a share in the resulting revenue.

  • Alongside the funding news, Zus announced a partnership with Elation Health to bring the ZAP to its EHR that currently supports over 12M patients.
  • The Elation announcement follows similar partnerships with Healthie and Canvas, which both saw 95%+ of their providers included in the first rollout upgrade to Zus after a preview of the service.

The Takeaway
More than a few companies have been tempted by the prospect of bringing comprehensive patient information to the point of care, and it hasn’t exactly worked out optimally for any of them. That said, with the 21st Century Cures Act facilitating more health data sharing and a pandemic that’s pulled digital health innovation forward in a drastic way, there’s a case to be made that the timing’s never been better. It’s a long road to get from Build-a-Bear for Healthcare to Universal Patient Record, but the upside is massive if Zus can pull it off.

Medicare Advantage Plans Using AI to Deny Care

It’s a tough week to be working PR at Medicare Advantage plans after STAT put out an in-depth investigation revealing that payors are using  “unregulated predictive algorithms under the guise of scientific rigor” to cut off care for seniors.

Hit piece might be too aggressive of a label, but let’s just say it’s a strongly worded report that makes some MA players look very, very bad.

The booming popularity of Medicare Advantage has turned it into a cornerstone of many payor strategies. According to the report, these payors are now using AI to pinpoint when they can plausibly begin cutting off payments for treatment.

  • These algorithms have begun driving denials to new heights, delaying treatment of seriously ill seniors and setting off heated disputes between doctors and payors.
  • If patients or their physicians disagree with a denial, they’re funneled into an endurance race with payors through a lengthy appeal process.
  • As Calvary Hospital COO Chris Comfort described it, “We take patients who are going to die of their diseases within a 3 month period of time, and we force them into a denial and appeals process that lasts up to 2.5 years. So what happens is the appeal outlasts the beneficiary.”

An entirely new industry has sprung up to help payors predict everything from the providers patients might see to the minimum number of hours they’ll have to stay in a nursing home.

  • These AI-generated predictions have become so ingrained in MA that most payors have started bringing these capabilities in-house. Elevance, Cigna, and CVS Health have all made acquisitions in the space.
  • David Lipschutz at The Center for Medicare Advocacy told STAT that “while the firms say [the algorithm] is suggestive, it ends up being a hard-and-fast rule. There’s no deviation from it… no accounting for situations in which a person could use more care.”

One of the largest and most controversial companies supplying these predictions is NaviHealth, now owned by UnitedHealth Group, and STAT spent the second half of the report basically using them as a punching bag.

  • NaviHealth was founded by Tom Scully, the former head of CMS who played a pivotal role in creating the Medicare Advantage program under the Bush administration.
  • You’ll have to head over to the full report for the tear-jerking patient stories, but long story short Scully sold NaviHealth to Cardinal Health for $410M in 2015, then ownership bounced between different PE firms until it landed at United. Denials went up every step of the way, and now we have a STAT investigation.

The Takeaway

“The black box of the AI has become a blanket excuse for denials,” and nobody wants a canned response about a proprietary algorithm when they ask why they’re being kicked out of a nursing home. Federal officials have already proposed new rules that say MA payors can’t deny coverage “based on internal, proprietary, or external clinical criteria not found in traditional Medicare coverage policies,” and STAT just added more fuel to the industry’s push for change.

Transcarent Acquires 98point6 Care Delivery Assets

Employer-focused care platform Transcarent is acquiring 98point6’s entire care delivery division in a transaction that’s reportedly valued at the 2023 Digital Health Number of the Year: $100M.

If you’re unfamiliar with Transcarent, the company is helmed by Glen Tullman, a CEO who knows how to get a deal done. Tullman is the former founder of Livongo and guided it through Teladoc’s $18.5B acquisition in 2020.

Transcarent’s virtual platform lets patients book virtual visits, schedule in-home care, meet with therapists, and manage their prescriptions all within the same solution.

  • 98point6 technology will now power the front-end chat that Transcarent’s been using third-parties to handle. 98point6 also doubles Transcarent’s customer base to over 200 employers with a combined 4M employees. That’s a big jump from the 1M employees Transcarent currently supports.
  • Although Transcarent has historically depended on contracted clinicians, it will now gain 98point6’s ~150 physicians, as well as aforementioned employer clients such as Boeing, Costco, and Chipotle.

At its core, the acquisition is about obtaining 98point6’s head start on AI, and bringing Transcarent’s digital front door in-house. Tullman told MedCityNews he was looking for “full control of the front-end process, because how you start determines where you end up… You don’t get a second chance to make a first impression.”

  • What’s next for 98point6? First, a rebranding to 98point6 Technologies. Second, it will stop providing patient care and focus exclusively on licensing its software to health systems, and Washington-based MultiCare has already signed on as its first customer.
  • The pivot allows 98point6 to push toward pure play SaaS margins by licensing its chatbot and engagement suite while it lets hospitals use their own doctors and nurses to take over the actual appointments.

The Takeaway
Transcarent is aiming to simplify the process of finding and receiving care, and 98point6’s front-end chat and affiliated provider group will help it do just that. Simplicity is the value proposition, and it seems like a good one to bring to an employer healthcare market where complexity is the enemy.

Fertility Payvider Kindbody Raises $100M

Kindbody is looking to breathe new life into a fertility care market that’s in desperate need of a makeover, and it just secured $100M in Series D funding to help accomplish that mission.

Founded in 2018 by the femtech power duo of Joanne Schneider (now CEO of Oula) and Gina Bartasi (former CEO of Progyny), Kindbody is aiming to make fertility care more accessible in areas where a lack of competition is driving up costs.

How does Kindbody plan on achieving that? By functioning as both payer and provider to offer patients a top tier hybrid care experience while contracting directly with employers to keep costs under control.

  • The payvidor model also allows Kindbody to offer bundled rates for its services, which range from fertility consults to in-vitro fertilization and pretty much everything in between.
  • The company owns and operates a network of 31 clinics nationwide, placing a heavy emphasis on the patient experience that’s immediately recognizable in their design-forward “lobbies” – its term for waiting rooms where patients don’t have to wait. 
  • Now for the kicker: Kindbody’s on pace to be EBITDA positive by the end of this year.

The funds were earmarked for building 10 new clinics in underserved areas while continuing to expand employer partnerships. Last year Kindbody added 42 large employer clients, including the largest employer of them all: Walmart.

  • Kindbody is now the fertility benefits provider for 112 companies (covering 2.4M lives), which accounts for roughly half of its revenue. The other half is split between managed care services and D2C patients. 
  • Kindbody also made it clear that strategic acquisitions are on the table. It’s already acquired Vios Fertility Institute (clinic footprint expansion), Phosphorus Labs (genetic testing), and Alternative Reproductive Resources (surrogacy agency).

The Takeaway

Kindbody’s nine figure funding round propelled it to a $1.8B valuation, making it the second fertility startup to join the unicorn club and giving it a good amount of runway to sharpen its operations ahead of next year’s IPO season. It also reaffirmed what might end up being the digital health theme of the year: no market is a bad market for investing in profitable startups that are meeting a real need.

Consumer Adoption of Digital Health in 2022

The latest report from Rock Health and the Stanford Center for Digital Health showed that not even the end of the public health emergency or a looming recession could put a dent in the adoption of new health tech. All eyes are now on consumers’ wavering trust in the healthcare system to see if it’ll end the party early.

The headline stat from the 8,014 person survey was that 80% of consumers have now accessed care via telemedicine, with the largest surge in adoption coming from historically underserved groups. 

  • For the first time ever, telemedicine was also the preferred channel for prescription refills and minor illnesses, which could have major implications for virtual refill programs like Amazon’s new $5/mo RxPass. [Care Preferences]
  • On top of that, audio-only and asynchronous telemedicine beat out point-to-point video chats as the most used modalities, and Rock Health expects typical care journeys to start including multiple modalities to leverage the strengths of each.

The second pillar of the report was that 46% of consumers now own a wearable device, a steady continuation upward from 2021 (45%) and 2020 (43%). The vast majority of those owners purchased the device themselves (85%), signaling that there’s still a ton of work to be done integrating wearables into clinical pathways for chronic condition management.  

  • 74% of younger respondents with higher income and higher education reported owning a wearable (down from 80% in 2020), while only 21% of older, lower income, and lower education respondents owned one (up from 17% in 2020). [Wearable Ownership]
  • Those adoption stats are par for the course with any new tech and seem to be a healthy sign that wearables are continuing their shift along the technology adoption curve – from early adoption to majority acceptance. 

The final highlight was an overview of consumers’ trust – or lack thereof – in the healthcare system. “Health data sharing only moves at the speed of trust, and right now it’s slow-going.”

  • Consumers have grown far less willing to share health data since the start of the pandemic, with only a slim portion willing to share with research orgs (20%, 15pp decrease), tech companies (7%, 4pp decrease), and the government (8%, 4pp decrease). That’s a pretty steep drop off. [Willingness to Share Health Data]
  • Not a single one of the 10 healthcare stakeholders in the survey was spared from the decline in trust, although doctors’ 70% trust rating still led the pack by a wide margin (family ranked 2nd with 51%).

The “Prove It” Era of Digital Health

A few different articles have been published over the past month on the topic of employer priorities, and they all seem to be getting at a similar point: we’re entering the “prove it” era of health vendor partnerships.

Over the last decade, a hot labor market created an enthusiastic audience of employers looking to attract talent through new health benefits. Now, with premiums on the rise and a looming recession, these same employers are paring down their offerings with a heavy focus on integration and cost control.

Nearly 90% of employers are planning to make changes to their health vendor partnerships this year – only 46% did so in 2022 – and 55% intend to do the same with their wellbeing programs (per WTW survey results).

In a recent Modern Healthcare article, Andreessen Horowitz General Partner Julie Yoo said that “benefit managers are having a ‘come to Jesus’ moment around pricing.” If the last few years revolved around giving employees plenty of options, the next few will be “hyper-focused on return on investment.”

  • Yoo made the point that companies that take on risk-based contracts will be looked upon more favorably to employers going forward. 
  • By delegating more risk to providers, employers can lower costs and will be incentivized to keep patients out of high-cost settings.

The other major trend that’s coming up in these conversations is vendor fatigue, with the term “point solution” quickly becoming derisive among benefits managers and investors.

  • Even compelling one-off solutions are having their sustainability questioned if there isn’t an integration and navigation component backing them up. 
  • Business Group on Health CEO Ellen Kelsay said that “a lot of these companies come and talk about the merits of their own solution in a vacuum. They’re not paying attention to what success will look like for the patient and the employer.”

The Takeaway

There’s very little slack left in the system for nice-to-have offerings that aren’t driving quality or lowering costs. Point solutions in that bucket are going to have to start taking a close look at potential M&A partners or different distribution channels. The good news is that the flip side of that coin is also true. For companies that can demonstrate a healthy ROI with a comprehensive offering, this is shaping up to be a great time to get solutions in front of employers.

Accenture’s Nonnegotiable Patient Expectations

Healthcare consumerism isn’t new, but the last few years have rearranged the list of what patients are looking for in their providers more than any other time in recent memory.

To uncover what factors are currently patients’ top priorities, Accenture surveyed more than 21k US healthcare consumers since 2017, finding that loyalty is now more important and harder to come by than ever.

  • 30% of respondents switched to a new provider in 2021, up 4% since 2017.
  • Nearly 80% of patients who switched cited poor care navigation as the reason for leaving, including bad experiences with staff and inadequate digital solutions.
  • Millennials were nearly 8x more likely to switch providers than older adults (46% vs. 6%) – an important trend to keep an eye on considering that they’re in a unique position to make healthcare decisions for both their children and aging parents.

Accenture identified four focus areas for organizations looking to build patient loyalty in an increasingly competitive landscape.

  • Access: 71% cited access as the top factor in selecting a provider (availability, convenience, the ability to connect with providers through preferred channels).
  • Ease of Doing Business: People who find their providers “very easy” to work with are 9x more likely to stay. Even providers who were “somewhat easy” to work with were 3x more likely to keep patients.
  • Digital Engagement: 79% of patients who described themselves as “highly digital” were likely to stay with their providers. These patients exclusively prefer digital engagement and only fall back to traditional channels when digital methods fail.
  • Trust: Patients who trust their provider were 5x more likely to stay (84%), and almost 7x more likely to stay than those who don’t trust their providers at all.

The Takeaway

Accenture’s report underscores how important it is to lead with the patient experience when building loyalty… and just how difficult of a job that is to actually get right. Patients trust providers who make them feel heard and informed about the state of their health, but building true loyalty “not only requires the ability to meet people where they are, it also means understanding where they are going.”

UCSF Study: EHR Design and Provider Behavior

A new study published in JAMIA gave us a good look at how EHR design – particularly choice architecture – can significantly influence provider behavior.

University of California, San Francisco researchers investigated several workflows at a UCSF medical center where the existing choice architecture was potentially nudging providers toward waste or misuse.

The first workflow involved ordering “free phenytoin” levels, a costly send-out test that often results in delayed care for patients, despite a readily available “total phenytoin level” being sufficient in most cases.

  • The researchers hypothesized that the EHR alphabetically presenting “free phenytoin” before “total phenytoin” to providers searching for “phenytoin level” was influencing them to order the more costly and time-consuming test.
  • They then replaced the alphabetical structure with an order panel presented to any provider searching for “phenytoin” that gave an explanation of the circumstances when each test is appropriate.
  • They simultaneously nudged providers toward the “total phenytoin” test that is “almost always correct” by making it the default selection. The intervention improved the rate of correct test orders from 92% to 100%.

Another workflow the researchers examined was the prescription of benzodiazepines for procedural anxiety. The EHR originally set the default quantity for benzodiazepines to the same quantity needed for patients routinely taking the medications for a chronic disease, therefore nudging providers to overprescribe the pills.

  • The researchers created a new order called “Lorazepam (Ativan) tablet 0.5 mg for imaging/procedure” specifically for imaging patients with a default quantity of two tablets with zero refills.
  • The new order included a default comment “for anxiety (prior to imaging study or procedure)” to nudge providers toward the appropriate quantity. This intervention was also successful.

Despite the success at UCSF, the authors emphasized that organizations must balance the potential benefits of any EHR improvements against their implementation costs. The phenytoin nudge consumed six hours of implementation time and the Lorazepam nudge took almost 3x that long, which might make other investments more worthwhile depending on the org.

The Takeaway

Although choice architecture is the name of the game for pretty much every product and design team, it’s doubly important when the choices directly impact people’s health. This study was great at wrapping numbers around how this plays out in a medical setting, and it was also interesting to see the cost-benefit analysis that still takes place when deciding whether to implement a solution that clearly improves outcomes.

Amazon Launches RxPass For Generic Drugs

The biggest digital health news of the week was Amazon’s new RxPass offering, which sparked a ton of conversation around the tech-giant’s overall strategy and the direction of retail healthcare.

The RxPass details seem to have already been posted on every news site under the sun, but here they are in case you missed them:

  • Consumers can choose from a list of 53 generic medications for over 80 common conditions such as hypertension, anxiety, or hair loss, then have ALL of them filled for a total of $5/month, including delivery. Here’s the full list.
  • What’s the catch? You need to be a Prime member ($139/year), it’s OOP only (even Medicaid/Medicare coverage is a no-go), and residents of California, Texas, and a handful of other states need not apply… yet.

For patients taking multiple medications, RxPass has the potential to be an absolute game changer. It also seems like a great way to enroll new Prime members that don’t want to watch Jack Ryan or listen to Amazon Music, especially seniors.

  • Only a few other companies have the logistical prowess to put something similar together, such as Walmart’s generic drug service ($4/month PER medication), CVS and Walgreens’ prescription programs, and Mark Cuban Cost Plus Drug Company’s transparency-first approach.
  • What these competitors don’t have is 170M US Prime members and a website that averages two billion monthly visitors. Walmart’s probably the closest, and it last reported having about 12M Walmart+ members.

The Takeaway

Amazon’s RxPass launch is the latest link in a chain of healthcare moves that now looks something like this if you cut out the noise form Alexa / Whole Foods / Halo:

If anything, RxPass reaffirms Amazon’s commitment to compete in the healthcare arena through its core competencies, which isn’t exactly great news for D2C digital health startups or mail-order pill mills. The good news is that if anyone’s going to come out on top of all the competition, it’ll probably be the consumer.

DHW Q&A: Hospital Tech With Steward CEO

With Dr. Ralph de la Torre
Steward Health Care System, Founding Chairman and CEO

In this Digital Health Wire Q&A, we sat down with the founding Chairman and CEO of Steward Health Care System, Dr. Ralph de la Torre, to discuss the challenges facing US health systems and the technologies needed to overcome them. 

Prior to founding Steward, Dr. de la Torre was CEO of Caritas Christi Health Care, as well as the Chief of Cardiac Surgery at Beth Israel Deaconess, where he was widely recognized as one of the top cardiac surgeons in the nation. He’s since guided Steward’s expansion from a six-hospital system to the largest private for-profit hospital operator in the country.

Let’s start with some background on Steward. Can you share a little bit about the overall strategy and your original vision?

The premise of Steward has always been to create a truly integrated system where all of the providers, the hospitals, the care, and the patient are all completely coordinated and unified from a data perspective.

The goal is to understand the patient journey no matter where it takes place – whether at the hospital, the ASC, or the primary care office – and to have anything that comes out of those encounters captured in a central location so that everybody can use it to deliver better care.

Unifying all of that data under one roof is easier said than done. What are some of the technologies that Steward’s been using to make that vision a reality?

One of the biggest has been our enterprise data warehouse, where we collect all of our data in Massachusetts, and can then query a patient across all of their encounters. That’s a tremendous population health tool.

If you think about what payors do, more often than not they use claims data to make predictions and ascertain what needs to be done to keep a patient healthy. Our strategy involves actually using care data, which reveals problems much sooner.

By the time you get a claim, the problem’s already happened. But if you have the right stack of data coming from the providers, you can get out in front of those problems much sooner, and ideally prevent them from happening.

When you’re evaluating new digital health solutions for Steward, what separates the standout solutions from the rest? 

Easy. It’s the return on investment. Whether we’re integrating a new tool or investing in one, we need to know whether it’s a 1-year, 5-year, or 10-year return. The other thing is that it needs to be real. Having a new app that relies heavily on a highly trained workforce almost defeats the purpose of the app itself.

To add to that – one of the biggest problems as hospitals are coming under cost pressure is balancing Best-in-Breed versus Best-in-Suite solutions. Many of us have a suite of applications, whether it’s Epic or MEDITECH or something else, and sometimes these applications provide an element that’s “B” grade.

You might see a new solution outside of your suite with an element that’s an “A”, but is it worth the incremental cost? As cost pressures increase, more and more of these decisions are Best-in-Breed versus Best-in-Suite. If you’re going to go with Best-in-Breed, that automatically raises the threshold of how good the tech has to be.

Are there any areas in healthcare where you think startup founders should dedicate more attention to creating new products and services?

I think as a general rule of thumb in medicine, the United States gets more excited about the latest cutting edge therapy for a small subset of patients than about ordinary care for everyone. US healthcare isn’t lacking in high technology, it’s lacking in the basics. We don’t have basic wellness, we don’t have basic nutrition, we don’t have enough primary care visits.

In America, we don’t really take care of ourselves, but we’re great at keeping ourselves alive once we get sick. I think going back to the basics and building tools that help with basic nutrition, wellness, and population health will have a larger macroeconomic effect than tailoring the latest molecule for a small cohort.

Another area I think people have forgotten a little bit about is the business intelligence tools that make hospitals and physicians more efficient. We’re keeping a close eye on products that can help us improve our efficiency. You have to realize that in the long run, hospitals are cost centers, not revenue centers – so these are the tools that are going to move the needle for value-based systems and providers.

If you could push a magic button to create the perfect business intelligence tool for Steward, what would that look like?

It would be a tool that integrates everything together. It would be able to tell me what each component of care delivery costs in detail, then help proactively guide me to minimize the cost per unit, whether it’s a device or an hour of labor.

As an example, if we have too much staff on a Friday, that’s a huge expense. The tool would need to be able to look at something like OR cases and scheduling, then predict exactly what operating room utilization will be, so that we can move OR cases around to make sure our staff and supplies are there when we need them, and not there when we don’t.

What Steward initiatives are you most excited about right now?

I’m really excited about our Medicare Advantage play, particularly everything we’re doing with CareMax. Steward has an absolutely massive amount of Medicare patients, and we decided that we want to approach them with a complete managed care platform.

We quickly realized that it would take years to build that ourselves, so we went out and looked at the different models that were already out there. We thought that CareMax had the best IT and patient platforms for Medicare Advantage, and so we ended up doing a huge partnership with them.

The way I see it is that Steward has the largest ACO in the nation, and we’re great at managing care behind the scenes. CareMax has what we think is the best Medicare Advantage patient interface, and delivers a great experience at that level. Now we’ve united the two.

I think that the market is underestimating the massive value that uniting these two components really brings, and I think this combination has the potential to be the next big thing in healthcare.

Get the top digital health stories right in your inbox

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