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Digital Health M&A Trends | Amazon Clinic Leak November 14, 2022
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Together with
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“The key is not to ask ‘What can we do with digital?’ but rather ‘What have we always dreamed of doing and can now do because we can make it digital?’”
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WellSpan Health CDO R. Hal Baker, MD
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One of the best reads of last week was Rock Health’s deep dive into the digital health M&A trends that have defined 2022 as the funding bubble lets some air out.
While big ticket acquisitions have taken up most of the spotlight, Rock Health makes the case that declining valuations, customer overwhelm, and an unfriendly IPO market are setting us up for a widespread upswing in M&A activity.
This year’s 144 M&A moves have been shaped in part by supply-side dynamics (harsh fundraising conditions make M&A look more appealing than a down round or shaky IPO), but the report lays out four acquirer archetypes that are likely to drive the next wave.
- Consolidation for inorganic growth – Lets startups grow their customer base while building confidence from investors looking for growth. This approach is particularly useful as purse strings tighten and customer acquisition costs climb.
- Enhancing core operations – These acquisitions ideally offset their cost with the internal efficiencies gained in areas such as data integration or analytics. Provider orgs are leaning into this approach, logging 11 transactions Q1-Q3 2022 (3x 2021’s total).
- Buy-and-build – Acquiring complementary features that enable the acquirer to move along the care delivery value chain or into adjacent categories. Examples include Quest Diagnostics’ acquisition of Pack Health (pushed Quest beyond lab testing into patient engagement / condition management) and Advocate Aurora’s acquisition of MobileHelp (propelled the health system into in-home care).
- Disruptive innovation – Transforms an acquirer’s existing services and positions them to create a new business model or drastically differentiate in the market (Ex. Amazon acquiring One Medical). Rock Health predicts that the most likely targets will have strong clinical evidence and user bases, but may be struggling with their business model.
The Takeaway
Rock Health makes a pretty convincing argument that digital health M&A is poised for an active year ahead, but also wraps up the report with a warning that acquisition announcements are rarely the end of the story.
“Successful M&A approaches are determined by important choices (e.g. how best to integrate tech stacks as well as cultures and operations, what to keep and where to cut bait, workforce strategy, etc.)… but assessing these frameworks alongside financial, cultural, and operational aspects of M&A is necessary to help organizations—both acquirer and target—maximize impact.”
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4 Tips for Licensing Your Telehealth Providers
Telemedicine is the next frontier of care delivery, yet many providers continue to be hampered by the complex process of medical licensing. If you’re one of them, check out Medallion’s four tips for licensing your telehealth providers.
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Innovation Starts With Listening to Nurses
Nurses are the most valuable players in the healthcare system. Their wisdom and dedication serves as a constant reminder for what’s possible in healthcare when we listen. If you’re at HLTH this week, visit the connectRN booth to hear 10 powerful stories from nurses who want to disrupt the industry. Not in Vegas? Check out the virtual experience here.
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- Amazon Clinic Leak: The Verge recently snagged screenshots of a video posted to Amazon’s YouTube channel that showcased a new Amazon Clinic telehealth service that allows patients to take a symptom checking questionnaire so that a clinician can diagnose and treat them. The video was quickly taken down and the “amazon.com/clinic” page it directed to hasn’t gone live, but the polish on the video makes it seem like an official announcement could be right around the corner.
- SDOH Interventions: The Commonwealth Fund published an updated guide to social determinants of health that investigated which SDOH interventions yielded the highest ROI. The short answer: improving home cleanliness and reducing asthma triggers produced returns of between 103% and 258%. The analysis of 80 SDOH studies found only “moderate” evidence that interventions for nutrition and transportation were effective, and inconclusive results related to interventions targeting loneliness.
- TytoCare Home Smart Clinic: TytoCare rolled out a remote primary care solution called Home Smart Clinic, which includes an FDA-cleared hand-held device for remote physician exams, an AI-enabled diagnostic support tool, and a suite of user engagement services – all fully tailorable to different patient populations and care modalities. TytoCare backs up the launch with some impressive stats, reporting that Home Smart Clinic reduces the total cost of care for health plans by 10% on average and resolves 98% of visits without necessitating an in-person appointment.
- Telehealth vs. In-Person ED Follow Ups: A JAMA study found that patients with telehealth follow-ups are more likely to return to the hospital than patients with in-person appointments, which the authors conclude should be considered when evaluating its appropriateness as a modality for post-ED follow-up. The study included 16,987 ED visits, with telehealth follow-ups associated with 2.8% more repeated ED encounters and 1.1% more return hospital admissions than in-person follow-ups.
- Wheel Acquires GoodRx Care Tech: Wheel is acquiring GoodRx’s backend virtual care technology, including its EHR, clinical management tools, and modular patient experience software. Wheel will integrate GoodRx Care into its existing virtual care platform while GoodRx continues to own the consumer-facing GoodRx Care website / app. The acquisition looks like a victory for both sides, with Wheel rounding out its platform through new services and GoodRx gaining access to Wheel’s underlying tech and clinician network so that it can continue providing telehealth to its users.
- MindMaze + Mount Sinai: MindMaze is partnering with Mount Sinai Health System to launch an outpatient neurological rehab program using MindMaze’s unique platform that we covered in-depth during its $105M raise earlier this year. MindMaze combines AI-enabled software with hardware peripherals to produce immersive VR/AR experiences. As an example, a movement impaired stroke patient could attempt to move their hand and see a normal motion response in VR, which helps the brain create new neural pathways and regain real-world motor control.
- Cardiac Racial Disparities: New research presented at the American Heart Association’s Scientific Sessions showed that Black patients were the only racial group that hasn’t recently experienced a significant drop in cardiac arrest deaths, highlighting the need for greater efforts to address racial health disparities. The analysis found that overall cardiac arrest deaths fell by more than 40% from 1999 to 2020 (7.7 to 4.4 deaths per 100k people), while Black communities saw a higher death rate (8.7) with no significant change over the time period.
- Twill + e-Psychiatry: Twill, formerly known as Happify Health, is partnering with e-Psychiatry to offer high-acuity patients virtual access to psychiatrists, psychologists, and therapists. e-Psychiatry’s teletherapy services will be integrated within Twill’s Sequences, a configurable digital care solution that weaves together digital therapeutics, community groups, and coaching to address specific conditions like mental health challenges or pregnancy.
- Onduo Virtual Care Study: New results show Verily’s virtual care app Onduo improves glucose and cholesterol management in type 2 diabetes patients. Among 578 participants with type 2 diabetes who had engaged in a different wellness program the previous year, nine months of engagement with Onduo was tied to improved HbA1c, fasting glucose, HDL, and LDL levels. People with the highest baseline glycemic indices and who took part in telemedicine visits saw the greatest improvements.
- CareMax Completes Steward VBC Acquisition: CareMax completed its acquisition of Steward Health Care’s Medicare value-based care business, gaining over 170k senior VBC patients (5x the ~34k seniors CareMax currently covers). CareMax now serves as the exclusive management services organization across Steward’s Medicare network and will aim to reduce costs through its tech-enabled hybrid care model as CareMax sets out to transition Steward’s 380k+ MA FFS patients to global cap arrangements.
- Retail Care Trends: An NEJM Catalyst survey revealed that 70% of healthcare leaders believe the quality of care in retail settings is lower than primary care practices, although they also believe that retail care is here to stay. The authors recommend that traditional healthcare looks at the following areas to help adapt to the emergence of retail clinics: expand primary care access with new treatment modalities, meet patients where they are (especially through smartphones), focus more on in-home care, and partner with retail care sites.
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What’s Patient Engagement to a PAC Manager?
Nuance’s patient engagement guide for hospital execs shares the challenges faced by Patient Access Center Managers and explores how equipping them with the right solutions can help give every patient simple access to care.
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Prescription Assistance Made Easy
Synapse Medicine’s quick-deploy Prescription Assistance API and components can be up and running in less than a day and instantly connect your HCPs to the drug data and prescribing support they need in their everyday practice. If you’ll be at HLTH 2022, make sure to get an in-person demo and see how easy it can be to onboard reliable real-time drug data for your providers.
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Human Factors in Medical Device Design
How patients interact with a medical device can have as much impact as the device itself. Check out this Q&A with Hyperfine Lead Product Designer Corinne Hay to learn how human factors influence the design of everything from prescription containers to portable MRI systems.
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