Anne Wojcicki, CEO and Co-Founder of 23andMe

Primary Care

23andMe Enters Virtual Care With Lemonaid Health Acquisition

Genetic testing company 23andMe announced plans to acquire Lemonaid Health, a virtual care and pharmacy provider, in a $400m agreement expected to close by the end of 2021.

After going public earlier this year, 23andMe began to see a slowdown in purchases of its direct-to-consumer genetic tests, causing the company to search for new revenue drivers outside of its flagship product.

• 23andMe is a consumer genetics company with a mission to help people access and benefit from the human genome. It has multiple FDA authorizations for genetic health risk reports, and began working on drug development with GlaxoSmithKline after an investment from the pharmaceutical company in 2018.

• Lemonaid Health offers same-day telemedicine appointments and prescription drug delivery, leveraging clinical algorithms to assist its medical providers with treatment of a variety of common medical conditions.

• Following the acquisition, 23andMe will be able to provide genetically-informed primary care, using genetic testing as a foundation for individualized treatment plans and disease management. 23andMe plans to accomplish this in part by using its FDA-approved pharmacogenetics reports, which indicate how efficiently different people metabolize certain drugs.

The Takeaway

Combining 23andMe’s consumer business with Lemonaid Health’s telemedicine and pharmacy services gives the company unique positioning in the increasingly crowded virtual primary care market. Activating a large existing customer base with a promise of personalized healthcare has been a popular strategy with recent digital health moves (Headspace Health, Crossfit Precision Care), and could give 23andMe an advantage over more traditional providers.

Digital Health

Oak Street Acquires Specialty Care Provider RubiconMD

Value-based primary care network Oak Street Health acquired RubiconMD for $130m, adding virtual specialty care to its existing services focused on seniors in the Medicare Advantage population.

• Oak Street operates by initiating full-risk contracts with Medicare Advantage plans, taking on complete economic responsibility for patients in exchange for per-member, per-month compensation. Oak Street Health currently operates over 100 centers across 18 states and is the only primary care provider endorsed by the AARP. 

• RubiconMD’s network contains over 230 specialists across all major specialties, with a virtual platform that provides clinical insights on specific patient cases and allows primary care providers to directly manage more of a patient’s care needs.

• Integrating specialty care into Oak Street’s value-based model will enable it to improve coordination between PCPs and specialists while streamlining operations, an important component to successfully managing a full-risk model.

The Takeaway

RubiconMD was built to support the exact type of health centers managed by Oak Street, and the acquisition provides Oak Street with a proven platform and a large specialist network instead of having to develop both from scratch.

Although Oak Street was an early entrant in the value-based care segment, the RubiconMD acquisition highlights the scale needed to compete for contracts with a limited pool of employers and payors, likely foreshadowing more consolidation on the horizon.

Nuance’s Patient Engagement Must-Haves

Consumer demands are shifting, and they’re looking to get more out of their digital health technology. Nuance outlines the 5 must-haves for your patient engagement strategy here.

The Wire

• SPAC Frenzy: CB Insights’ State Of Healthcare Q3’21 Report revealed that healthcare companies are increasingly choosing to go public through mergers with SPACs rather than via traditional IPOs, with the first three quarters of the year seeing 25 SPAC exits (vs. 7 total in 2020). The popularity of the SPAC route is due in part to the $1.3 median exit valuation through Q3 2021, over double the $579 median exit valuation for an IPO over the same time period.

• Bardavon Funding: Bardavon Health Innovations, a Workers’ Compensation and MSK treatment company, recently closed a $90m Series C ($109m total funding) to help broaden the reach of its technology platform that connects patients to physical rehabilitation services. In a large strategy shift for the company, Brightline announced that it is expanding its MSK platform beyond Workers’ Compensation, and is developing partnerships with “marquee clients” in the MSK commercial health industry.

• Better Ratings, Better Outcomes: A cross-sectional study from UCLA examined online reviews of 95,120 health care facilities across 1,301 US counties, finding that facilities with a 1-point higher mean rating (5-point scale) had 18.1 fewer age-adjusted deaths per 100k people. While it may seem intuitive that regions with well-reviewed hospitals tend to have lower patient mortality, the study confirmed that online provider reviews can demonstrate regional health inequities while providing significant insight into quality of care.

• The New Digital Health Playbook: a16z General Partner Julie Yoo recently wrote an excellent piece on the venture capital firm’s blog, titled The New Go-To-Market Playbooks for Digital Health Startups. Although it would be doing the blog post a disservice to distill it down to a few lines, the article is a worthwhile read for anyone interested in digital health go-to-market strategies and product distribution.

• Digital Health Searches: A new study published in BMJ Open found that online searches for digital health services in the UK surged 343% between January 2019 and December 2020. Searches for online MSK and physiotherapy products saw the largest increase (+2,036%), followed by digital products to help allergies (1,253%) and healthy living apps (1,051%). Overall, 92% of medical conditions saw an increase in searches for digital solutions, with the magnitude of the search interest signalling that consumers are more willing than ever to consider digital tools for treatment.

• Brightline ASD: Family digital mental health service provider Brightline is continuing its rapid expansion with the announcement that it is launching services for children with Autism Spectrum Disorder (ASD) in early 2022, as well as additional programs for LGBTQ and BIPOC youth. Brightline’s new services include on-demand digital content and virtual coaching, arriving within months of the rollout of similar programs for pediatric behavioral health.

• Value-Based Care Awareness: A survey of 970 US adults from nonprofit payor EmblemHealth found that only one in four respondents were aware of the term “value-based care,” while only a quarter of those familiar with the term could define it accurately. After reading the definition of value-based care on page 12 of the study, 75% of respondents reported feeling that it is extremely important for providers to utilize this approach, indicating that there’s a breakdown in communication preventing patients from understanding care options.

• Navina Series A: AI-enabled primary care platform developer Navina recently raised a $15m Series A round ($22m total funding), which it will use to accelerate its machine learning research and expand within the enterprise healthcare market. Navina’s platform takes complex primary care EHR data and creates actionable Patient Portraits (concise clinical summaries of patients), designed to give clinicians immediate comprehension of an individual’s health record while informing them of potentially missed diagnoses.

• Why Not Fear AI: A new JMIR paper detailed why future clinicians shouldn’t be as concerned about AI’s impact on their careers as many recent surveys say they are. The authors shared a long list of reasons why these AI concerns might be overblown (at least in the short term) including: 1) AI’s current performance limitations; 2) Healthcare’s disconnected and heterogeneous digital infrastructure; 3) Lacking AI literacy and training; 4) Liability and ethical barriers.

• CMS Strategy Change: The CMS Innovation Center released its five primary healthcare transformation objectives that it aims to accomplish by 2030. They include: 1) increase the number of people in a care relationship including all Medicare beneficiaries; 2) advance health equity by mandating that new models report demographic information; 3) support innovation by sharing actionable data; 4) address affordability to reduce skipped care; 5) partner to achieve system transformation by aligning policies across CMS to engage payors, providers, and patients.