Tag: digital health

The pent-up-demand narrative is back on the menu. Speaking at Goldman Sachs’ Global Healthcare Conference, the CEO of UnitedHealthcare’s Medicare business Tim Noel said that costs are on the rise due to elevated demand for outpatient procedures.

• “We’re seeing that more seniors are just more comfortable accessing services for things that they might have pushed off a bit like knees and hips.”

That quip sent shares of UnitedHealth Group sliding over 6%, wiping out roughly $29B from the healthcare giant’s market capitalization in one of its largest single-day drops in years.

• United now expects its Q2 medical loss ratio (percentage of spend on claims versus premiums collected) to be moderately above its full year forecast (82.1% to 83.1%).

• The stocks of other major Medicare players took a pretty significant sympathy dive, with CVS (-7%) and Humana (-11%) getting the worst of it.

Why is this important? Payors have been enjoying a lull in surgery expenses due to hospital-wary patients postponing care during the pandemic, but that trend might be reversing.

• Although several surveys have suggested that some of these skipped appointments are lost for good, United’s comments show that Medicare patients are getting back on track.

That’s good news for hospital operators and medical device companies, whose revenue is closely tied to surgery frequency.

• Shares of hospital operators Tenet Healthcare and HCA Healthcare each jumped on the news, while joint replacement and implant manufacturers like Stryker and Zimmer Biomet climbed around 4%.

The Takeaway

Investors are listening closely for any signs of increased payor costs as patients start catching up on postponed care, and United’s role as the bellwether for the group means that even off-the-cuff comments at conferences are heard loud and clear. While the extent of the pent-up-demand remains to be seen, United seems to think the pressure could start shifting from hospitals to payors in the second half of the year.

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!