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Acquisition Sprees, AI Guidance, and Healthcare’s Worst Behavior
January 9, 2025
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Together with
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“I was watching my son play a game and I asked him, where are the directions? And he looked up at me and he said something I’ll never forget… ‘Dad, nothing smart has directions anymore.’ Things should be so intuitive that you don’t have to read something on how to use it. If our members can’t use what we send out, we’ve failed.”
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Transcarent CEO Glen Tullman
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It’s already shaping up to be a huge year for digital health M&A, and the headlining announcement from our action-packed first week was Transcarent’s acquisition of publicly traded benefits rival Accolade.
The $621M price tag is undeniably a big move for Transcarent, which launched in 2020 to make it easier for employees to access all of their care needs through a single convenient interface, their smartphone.
- The platform connects members to comprehensive experiences including Cancer Care, Weight Health, and Surgery Care (through provider partnerships), while also simplifying how employers manage and track that care.
- Transcarent recently landed $126M in Series D funding at a $2.2B valuation, which it earmarked for AI innovations like its new WayFinding solution, and for taking advantage of juicy M&A opportunities in beaten-down competitors.
Accolade is a personalized health and benefits company with a long list of offerings that includes virtual-first primary care, navigation services, and expert medical opinions.
- Despite raising $220M during its 2020 IPO, Accolade turned into an attractive acquisition target after struggling with revenue growth and booking a $100M loss during the latest fiscal year.
- Accolate will add over 1,000 clinicians to Transcarent’s team, as well as deep data integrations with a wide partner ecosystem across diabetes, mental health, fertility, and MSK care.
Transcarent now plans to fold Accolade into its existing platform, bringing together the “best of provider, partner, and payor ecosystems.”
- By integrating its WayFinding and comprehensive care experiences with Accolade’s expert medical opinions and primary care, Transcarent expects to drive higher utilization and lower costs (+Accolade’s 16 years of health data for AI training was a nice kicker).
The Takeaway
At a time when point solution fatigue is crippling employers and public healthcare companies have lagged behind the broader market rally, Transcarent’s acquisition of Accolade seems like the right move at the right time. It could also mark the beginning of a much bigger M&A wave in digital health, especially if valuations continue looking too appetizing to pass up.
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- Commure Acquires Memora: Commure scooped up fellow General Catalyst-backed startup Memora Health, a care plan management platform that last raised $30M in 2023. On top of notching an $6B valuation after merging with Athelas last year (not-so coincidentally another GC portfolio co.), Commure’s been on an acquisition spree rounding up various provider-facing solutions, including Strongline (workplace safety), PatientKeeper (workflow automation), and of course AI scribe powerhouse Augmedix.
- NeueHealth Goes Private: Less than four years after Bright Health’s blockbuster IPO, VC firm New Enterprise Associates took what’s left of it private by acquiring NeueHealth for roughly $61M. NeueHealth enables value-based care for over 500k patients through its owned clinics and partnerships with 3k+ affiliated providers, while also helping independent practices establish performance-based arrangements through offerings that are “scaled centrally and deployed locally.”
- SDOH Screening Improves: Doctors are getting better about screening their patients for social determinants of health like food and housing insecurity, but a study in JAMA Network Open highlighted more room for improvement. Results from a nationally representative survey of physician practices showed that 27% of practices screened for five common SDOH factors in 2022 (up from 15% in 2017), and nearly three-quarters screened for at least one social risk (up from 67%). FQHCs were 55% more likely to screen for social needs than other practice types.
- Suki Teams Up With Google Cloud: Ambient AI startup Suki began leveraging Google Cloud’s Vertex AI platform to enable new patient summaries and Q&A features. The partnership gives Suki Assistant the ability to summarize patient medical records and answer users’ medical reference questions. Suki recently raised a $70M Series D round, which brought its total funding to $165M.
- HEALWELL Acquires Orion: HEALWELL AI scooped up New Zealand-based Orion Health for $115M to combine their data infrastructure and AI capabilities while gaining access to over 70 large enterprise customers. The acquisition gives HEALWELL a new global distribution channel for its preventative care AI solutions through Orion’s health system partners and digital care record platform, which is currently used in 11 countries.
- FDA Posts AI Guidance: The FDA this week released a major draft guidance explaining its regulation of AI- and machine learning-enabled medical devices, focusing on lifecycle management and marketing submissions. The guidance is geared toward helping developers understand the documentation required for product submissions, touching on everything from design and postmarket performance monitoring to bias and transparency risks.
- Mobile App for COPD: New research suggests mobile apps could help improve quality of life for COPD patients receiving home oxygen therapy. The small study of 45 COPD patients equipped 23 participants with the SINCO AppO2 mobile app, allowing them to easily record their vitals, respiratory difficulties, and oxygen therapy regimen for providers to review. After three months, the intervention group had significantly fewer breathing issues than the conventional monitoring control (Borg dyspnea score 0.6 vs. 4.1).
- Actigraph Picks Up Biofourmis Tech: Rounding out this week’s M&A-heavy news cycle is Actigraph’s acquisition of Biofourmis’ life sciences business to accelerate clinical trials. Although Actigraph already supplies wearables and activity tracking solutions that cater to pharmaceutical companies, Biofourmis adds the ability to collect data from a wider range of devices, as well as its own digital trial platform.
- Anatomy Series A: Anatomy Financial secured $19M in Series A funding to scale its “AI healthcare lockbox” that provides practices with an email-like experience for simplified billing workflows. Practices can reroute their checks to Anatomy’s AI system to automatically convert physical Explanation of Benefits into electronic remittances – a potentially huge efficiency boost considering that 27% of insurer payments to medical organizations are on paper checks.
- UnitedHealth Extends Amedisys Deadline: UnitedHealth and Amedisys extended the deadline to close their $3.3B merger agreement to the end of the year. The extension arrives shortly after after the DOJ filed a lawsuit to block the merger on the grounds that it would reduce competition in the home health market. It’s been over a year since United beat out several competitors to acquire the home health giant, and it’s apparently willing to divest over 100 home care centers to get the merger across the finish line.
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