Tag: digital health

Foodsmart Loads Its Plate With $200M

Posted on by Jason Barry

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.

Telehealth Struggles to Live Up to Expectations

Posted on by Jason Barry

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.

Physician Compensation Rebounds

Posted on by Jason Barry

The numbers are in. Doximity’s always-anticipated Physician Compensation Report showed that overall compensation grew 5.9% last year – a welcome rebound after the 2.4% dip in 2022. 

Survey responses from 33k doctors brought more good news than that, with medicine’s gender wage gap narrowing to 23%, down from 26% in 2022.

  • Decent improvement, but women physicians are still taking home an average of $102k less than men after controlling for specialty, location, and experience.

Neurosurgeons continued to top the charts at $764k, nearly 4X the annual compensation of their pediatric endocrinologist peers at the bottom of the totem pole ($217k).

Other interesting highlights from the report included the fact that 81% of physicians reported feeling overworked, causing many to consider an employment change (59%) or early retirement (30%).

  • 88% of physicians also said that their practice has been impacted by the physician shortage, three-quarters of which described the impact as “moderate” or “severe.”
  • Funnily enough, the physician shortage wasn’t even the leading contributor to burnout, which 70% of respondents pinned squarely on administrative burden.

Despite recording a slight increase, total physician compensation has dropped 26% since 2001 when accounting for inflation. As it currently stands, only 40% of physicians are happy with their compensation, and more of these disgruntled doctors are unfortunately eyeing the exit.

The Takeaway

Physicians are still overworked and the wage gap is barely moving in the right direction, but at least they can rest easy knowing inflation is barely eating into their total compensation…

A Delicious Primer on Food-as-Medicine

Posted on by Jason Barry

Rock Health dished up a fantastic primer on the food-as-medicine market, serving as a helpful cheatsheet of which trends will stay fresh the longest, and which ones are already stale.

Fertile grounds for new FaM models have been created by shifting consumer behaviors around diet and wellness, with 20% of US adults saying the pandemic prompted healthier choices. [Graphic: Three eras of food-as-medicine]

  • Payors are also grappling with the rising costs of treating the nearly 50% of Americans with diet-related illness, and FaM offers an avenue to reign these in without pricey medications like GLP-1s.
  • Policy changes have also planted the seeds for growth, with new initiatives helping scale FaM programs like medically tailored meals. One wild stat is that FaM partnership volume in the last 18 months has surpassed that of the prior seven years combined.

As the FaM market begins to sprout, startups are facing an increasingly complicated menu of funding sources and potential partners

Value chain segment #1: Food access

  • Food and supply chain – Providers of healthy groceries, prepared meals, or digital marketplaces for third-party products, including delivery partners and food “farmacies” that fill clinician’s produce prescriptions. Examples: Mom’s Meals, Uber Health
  • Service navigation – Services that refer consumers to food access programs and support enrollment, often through community orgs like FQHCs. Examples: Findhelp, Unite Us

Value chain segment #2: Nutrition care

  • Medical nutrition counseling – Virtual or in-person nutrition counseling with dietitians to provide tailored nutrition plans and resources. Examples: Foodsmart, Season Health
  • Behavior change support – Tools for tracking diet and outcomes, educational content, and recommendations. Includes non-digital services like nutrition and cooking classes. Examples: Heali, SeekingSimple

Value chain segment #3: Program enablers

  • Fintech – Targeted tools and vouchers (category-restricted to healthy products) that enable consumers to use food benefits provided by their health plan. Examples: Solutran, Soda Health
  • Data and food benefits management – Data on consumer behavior or food products to help payors optimize benefit design, measure program impact, and inform engagement strategies. Examples: DietID, NourishedRx

The Takeaway

The food-as-medicine market is turning into a “cornucopia of innovation,” but founders looking to take advantage of new funding mechanisms now have to separate the wheat from the chaff when it comes to business models and potential partners.

Cross-Market Mergers Aren’t For the Patients

Posted on by Jason Barry

Make sure you’re sitting down for this one, because new research suggests that cross-market hospital mergers aren’t doing patient wallets any favors.

To investigate the impact of cross-market mergers on both prices and quality, researchers rounded up 214 hospitals that acquired hospitals further than 50 miles away, then compared them to 955 control hospitals without any merger activity during the study period. This was also the first study to use claims data to back its findings.

Six years after acquisition, acquirers had increased their prices for patients by an average of 12.9% relative to control hospitals, yet saw no discernible impact on mortality or readmissions.

  • The impact was even higher among serial acquirers with at least four separate acquisitions, which increased prices by a steep 16.3%. This wasn’t a small subset either, representing 45% of the M&A hospital group.
  • On top of that, there was a 21.8% price increase when the target’s market share was greater than the acquirer’s (vs. 9.7% when the opposite was true), which makes sense as smaller acquirers have more to gain from acquiring an entity with more market power.

There have been a couple of other studies examining the impact of cross-market mergers, but this was the first to use claims data to untangle some of the factors driving the price effects (serial acquisitions, target size) while showing no significant impact on quality.

Although the mechanisms behind the price effects weren’t within scope, there are a few potential reasons that likely contributed.

  • Common customers – If the target and acquirer hospitals both share the same customer, having a larger operational footprint improves bargaining power (e.g. employers need provider networks that span multiple patient markets if they have employees in multiple markets).
  • Tying – A health system with a strong position in one market could tie its services to a second market (e.g. a cutthroat system could operate at a loss in a second market to drive out competitors while staying afloat using margin from its primary market).
  • Change in control – Acquirer hospitals are able to increase prices at the target because it wasn’t maximizing profit for whatever reason. Given the increases this study shows at the acquirers themselves (which by definition didn’t change control), this one is probably ruled out.

The Takeaway

All-in-all, the evidence is mounting that competing hospitals don’t make massive acquisitions for altruistic reasons (earth-shattering, we know). If the scale wasn’t already tipped toward needing more antitrust scrutiny of cross-market mergers, this study seems to get us past the usual conclusion of “more research is needed.”

How Walmart F—– Around and Found Out

Posted on by Jason Barry

White flags are flying left and right, with Walmart announcing its retreat from care delivery less than a full week after Optum made a similar surrender.

Walmart’s five-year foray into primary care is ending with the closure of 51 health centers, the shuttering of its telehealth service, and the cancellation of any active ambitions in the space.

  • The press release chalked up the “difficult decision” to a challenging reimbursement environment and high operating costs, which ultimately made the business unsustainable.

The abrupt finale arrives shortly after Walmart laid out plans to nearly double its footprint to 75+ health centers by the end of 2024, as well as several other marquee announcements.

  • As recently as November, Walmart was inking health system partnerships with the likes of Orlando Health, and Bloomberg was even reporting on a potential acquisition of ChenMed that would have opened the doors to the Medicare Advantage market.

So what happened, and why couldn’t the nation’s largest retailer succeed in delivering care to the millions of underserved patients where it already has a presence? Mainly because retail clinics aren’t set up to succeed.

  • Scaling brick-and-mortar clinics is simply a low margin endeavor. Reimbursement is low, provider costs are high, and the telehealth piece looks more commoditized every day.
  • Even with Walmart’s economies of scale and armies of foot traffic, the system it was operating in doesn’t incentivize preventative care, but rather expensive procedures that it didn’t offer in-house.

The perfect storm of inflating costs and shiny technology that fails to actually reduce those costs is proving too much for retailers and telehealth companies alike. The only ones succeeding seem to have an edge that makes it possible:

  • They have access to better rates (One Medical’s health system relationships)
  • They have boosted margins from marking up generics (Hims & Hers)
  • They control premium through value-based care arrangements
  • They have some form of subscription revenue

The Takeaway

The moral of Walmart’s story is that even if you have all the best ingredients, the meal is still only going to be as good as the recipe. Having groceries and doctors under one roof doesn’t lead to more health visits if people don’t want to see a doctor where they get their groceries.

The Case For More Retailers and Health Systems to Partner

Posted on by Jason Barry

A new viewpoint in the Harvard Business Review made the case that health systems and retailers are only scratching the surface of their partnership potential.

The authors – a trio of professors out of Harvard and UNC – outline four actions they believe health systems and retailers should take to better coordinate their complementary services.

Move Beyond Convenience. Retailers like CVS and Walmart are beginning to add services such as primary care, mental health counseling, and home care, yet even more robust solutions like Amazon Clinic still fall short of integrated care. 

  • Things like cancer treatments and surgeries remain well outside the realm of retail health, yet a close partnership between a retailer and a health system could help integrate the many elements involved in treating more-serious conditions.

Move Care Into the Home. Although retail clinics are more convenient and accessible than hospitals, patient homes have them beat on both metrics. Hospitals have begun offering more care in the home, but often lack the logistical prowess to supply patients with the monitoring tech needed for larger programs.

  • Efficiently equipping patients’ homes with RPM devices is right in the retailer wheelhouse, and a partnership could fill the gap. Look no further than Best Buy and Geisinger for proof.

Leverage Data to Improve Care. The data held by retailers and health systems largely remains in separate databases, with some notable exceptions like Target-Kaiser Permanente.

  • The authors point out that better integration could help with everything from flu outbreak prediction (grocery carts filled with tissues = sick people) to food-as-medicine programs (well-timed nudges and incentives).

Change Who Delivers Care. Labor shortages are one of healthcare’s biggest immediate obstacles, and few employers have a larger workforce than retailers. The article gives the example of Walmart, which subsidizes education for its employees to train for roles like pharmacy technician and medical assistant.

  • Health systems could ensure these training programs meet quality standards and help graduates find jobs, creating a model where retailers attract more ambitious candidates and providers have a new talent pool to tap into.

The Takeaway

One way or the other, retailers are moving past the Retail Care 1.0 era, and it’s hard to argue against the case for tighter retailer-provider partnerships. Even if consumers might not jump at the idea of sharing their grocery list with their physician, the ideas outlined in this article are good food-for-thought for combining the complementary strengths of retailers and providers to improve the system as a whole.

A Hospital Sector Under Siege

Posted on by Jason Barry

Flare Capital’s Michael Greeley and Dr. Gary Gottlieb published a stellar breakdown of the current challenges barraging US hospitals, unpacking how the convergence of cost pressures and workforce issues is creating a perfect storm of financial distress.

It’s a thorough overview to say the least, but most of the issues fit into a few main buckets that are worth considering when mapping out how to best partner to help tackle them:

  • The median debt-to-EBITDA ratio for US hospitals stands at approximately 3.9x (up from 2.5x in 2021), and 60 health systems have seen their debt ratings downgraded this year. The looming restructuring negotiations are going to be painful.
  • CMS hospital star ratings for 2023, which measure performance along five key areas (mortality, safety of care, readmission, patient experience, timely/effective care), showed slight declines across the board. That directly translates to worse reimbursement.
  • Over 600 of the country’s 1,800 rural hospitals are at risk of closing, and mostly in states with a large number of disenrolled Medicaid members. The upcoming spike in disenrolled patients that no longer have health coverage could be the tipping point for many of these hospitals due to increased bad debt and charity cases.

One “promising shiny penny” for avoiding hospital closures has been the broader adoption of technology to reduce clinical and administrative costs.

  • In today’s environment, hospitals need a clear ROI from their vendors. The writeup makes the case that a more patient-centric care delivery system might sound seductive, but could also actually increase a provider’s overall cost structure. That might give solutions that directly drive better star ratings an edge in the current market.

The Takeaway

Hospitals are a customer base that’s under siege from a ton of angles. It’s tough to solve these problems without first identifying their root causes, and this article is a great tool for honing in on those underlying issues.

HLTH23 Recap and Major Announcements

Posted on by Jason Barry

Another HLTH is in the rearview mirror, and this week’s exhibit hall chatter was a testament to how much things can change in a single year.

It’s hard to believe that this intro for last November’s show didn’t include a single mention of generative AI. In a few short months, nearly every exhibitor has not only thought about incorporating LLMs, but has implemented new features and shipped entire solutions centered around the technology. 

It was also refreshing to see the amount of good ol’ fashioned innovation happening outside of the AI-focused spotlight. To help keep it all straight, here’s our recap of the major announcements, launches, and partnerships from HLTH23: 

  • b.well Connected Health is integrating with Samsung Health to give millions users control of their longitudinal health record plus proactive insights from a growing network of providers, including Walgreens, ThedaCare, Lee Health, and Rise Health.
  • CirrusMD showcased its Physician-first Care & Guidance model that streamlines care journeys by building around the physician, allowing them to overcome traditional limitations of one-to-one encounters through collaborative virtual environments. 
  • Darena Solutions took the lid off its new MeldRx platform-as-a-service that enables the rapid creation of FHIR-compatible healthcare apps, taking much of the guesswork out of app development while ensuring that new tools integrate seamlessly with EHRs.
  • DrFirst unveiled its Fuzion platform that uses “clinical-grade AI” to streamline clinical workflows such as medication reconciliation, eliminating the need for manual data entry while offering analytics on drug fills, patient engagement, and improvement areas. 
  • Google Cloud announced healthcare-focused search capabilities that connect clinical data to the Vertex AI algorithm development platform, functionality that can be combined with Med-PaLM 2 to let providers surface answers to specific medical questions.
  • HATCo – AKA the Health Assurance Transformation Company – is on the M&A hunt after General Catalyst unveiled the company with the intention of acquiring a health system to serve as a proving ground for tech-enabled care. We’ll unpack this one more on Monday.
  • Health Gorilla announced that 17 healthcare organizations have committed to its QHIN once designated (on track to be before the end of the year), a list that included heavy hitters such as Evernorth and Virta Health.
  • MDLIVE, the telehealth arm of Cigna’s Evernorth, acquired the technology behind Bright.md to begin offering asynchronous options for virtual care in 2024, with plans to expand to chronic condition management and wellness visits at a later time.
  • Nuance shared some impressive results from Atrium Health’s roll out of DAX Copilot, which included 92% of clinicians saying the automatic documentation solution was “easy to use” and 84% reporting an overall improved documentation experience.
  • PEP Health put out a stellar report using AI-powered natural language processing on over 25M patient comments across 8.5M unique web pages to create what might be the first national index on experience scores that doesn’t rely on survey data.
  • Solera Health launched its HALO unified benefits platform that allows payors and employers to manage all Solera and non-Solera point solutions within a single interface, including a consolidated dashboard to assess program effectiveness side by side.
  • SteadyMD is rolling out an all-in-one virtual care solution that combines 98point6’s tech backend with SteadyMD’s 50-state clinician network to help short staffed healthcare organizations lower operational costs while handling additional patient volume.
  • Talkiatry debuted its new Mindshare partner program that lets providers easily refer their patients for telepsychiatric care from Talkiatry’s network of 300 psychiatrists across 44 states, with NYU Langone, NOCD, and Transact Campus signed-on at launch.
  • Walgreens is throwing its hat into the virtual care ring as it continues its strategic pivot to healthcare services, with virtual consultations for common medical needs and prescriptions slated to begin later this month.
  • Withings Health Solutions is partnering with Validic to integrate its suite of cellular devices with the IoT platform, providing seamless access devices such as the Withings Body Pro smart scale and the Withings BPM Connect Pro blood pressure monitor.

Special thanks to everyone at HLTH who caught us up on the latest and greatest, and welcome to all of our new readers we met at the show! Stay tuned for deeper dives into many of these announcements in next week’s Digital Health Wire.

Health System Partnership Playbook

Posted on by Jason Barry

Andreessen Horowitz partner Julie Yoo and Bassett Healthcare CDO Paul Uhrig recently shared their playbook for entrepreneurs looking to partner with health systems, which included plenty of insider tips to stand out in a crowded field.

Getting in the (right) door is the first step to any pitch, but an academic medical center with a healthy mix of payor contracts will have a different lens than a rural hospital serving mostly Medicaid patients.

  • Advice: Research target health systems and make sure they align with your product’s value proposition. Make sure you’re reaching the right person, which usually involves multiple stakeholders across clinical, operational, and financial leadership. The value proposition needs to hold up to each.

Making the pitch will vary by health system (an asterisk that could probably be added to every tip), so it’s important to tailor all information and supporting data to individual priorities. This section stresses that it’s “imperative” to illustrate a positive financial impact. 

  • Advice: Don’t be afraid to ask about budget and clarify your revenue model. Even if stakeholders like the solution, it’s moot if they aren’t able to find the funds for it. 

The evaluation process can run the gamut from informal discussion to formalized diligence, but health systems aren’t usually opposed to giving visibility into the evaluation checklist.

  • Advice: Upfront qualification work is intended to de-risk the implementation process and identify potential blockers early. Be prepared with case studies and references from other customers to support the evaluation process.

Pilot programs are a health system favorite, but clearly defined success criteria and a commitment to move forward if those are met are two key ways to avoid “death by pilots.” 

  • Advice: Try not to get hung up on IT integration, and if possible steer toward an implementation scope that requires minimal integration before phasing into a full-blown integration to ramp up to your product’s full value.

The Takeaway

As Yoo and Uhrig describe it, partnering with providers is a bit like “making an emulsion from oil and water,” especially at a time when many of them are grappling with rising labor costs and slim margins. Health systems see a daily flurry of startups offering to solve these problems, and if this playbook makes one thing crystal clear, it’s that the only way to get a pitch to land is to make it hit squarely in the center of their individual needs.

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