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THCB Reader -- Dec 19, 2021

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THCB Reader

December 19 · Issue #138 · View online

Everything you always wanted to know about the health care system. But were afraid to ask.


Hi & Happy Christmas! On THCB Reader this week Mike Magee tells a cautionary tale on “playing doctor” in health IT, Kim Bellard takes a page out of President Eisenhower’s book and zooms out to look at our healthcare system’s problems, and Sarah Beth highlights the need for healthcare professionals to get trained in supporting human trafficking victims.
Now for some interviews. On WTF Health, Jess DaMassa gets the scoop from Innovaccer CEO, Abhinav Shashank, on their $150M raise and $3.2B valuation. She also interviews CEO Ravi Janapureddy of digital mental health startup Resony. In case you missed it, we also have three episodes of Health in 2 Point 00 where Jess and I talk about loads of deals - scroll down for all of that.
Finally, this week’s #THCBGang involved a topical and sometime combative conversation on what’s happening in health care and beyond were — featuring medical historian Mike Magee (@drmikemagee); futurist Jeff Goldsmith; fierce patient activist Casey Quinlan (@MightyCasey); and policy consultant/author Rosemarie Day (@Rosemarie_Day1).
Don’t forget to listen any time—you can subscribe to #THCBGang and #Healthin2Point00 podcasts with an easy click on Apple or Spotify.

For my health care tidbits this week, it’s time to bring up the disconnect between the continual collapse of #DigitalHealth stock prices and the continued increase in private sector investment and valuation in the same sector.
All of nine months ago, way way back in March 2021 market leader Teladoc hit a stock price of $308. Last week it hit a low of just under $90. Meanwhile several companies have IPOed or SPACed this year and almost all of them have seen their stock fall dramatically. For example, pioneer online mental health company Talkspace is now at a market cap of under $300m. This week a different mental health company Cerebral which was only founded in January 2020 raised $300m at a private valuation of over $4 billion. Yes they could have bought out Talkspace for that amount! In October Medicare Advantage plan Devoted Health raised money at a $12 billion valuation which exceeded the market cap of rivals Clover, Bright Health and Oscar–each of which has more members.
So what’s going on? Part of this is the wash of money still going into venture funds. Interest rates are historically low, while inflation is picking up, so that money has to go somewhere. Additionally some of the companies that SPACed out were probably unable to get such a good valuation in a private round. But it can’t be that all the 50 or so public companies are lower quality than the private ones. That indicates that either the private valuations aren’t real (because there are so many protections built into the deal for investors), or that the private and public valuations are going to get closer together. There is of course one more possibility–some of the private companies may pursue M&A and buy out some of the public ones. But in any event, this current arbitrage cannot last forever.
It’s not unlikely the public stocks may pick up. But we’ve seen private and public market bubbles before and the aftermath isn’t usually pretty.
Learn more at https://www.bighealth.com/
Learn more at https://www.bighealth.com/
Follow me on Twitter @boltyboy and THCB at @thcbstaff for more similar insights/nonsense (and even the occasional sensible idea)! Enjoy! – Matthew Holt
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One Drop is reimagining chronic condition care. Learn more at getonedrop.com
One Drop is reimagining chronic condition care. Learn more at getonedrop.com
BREAKING: Innovaccer CEO on Healthcare Cloud Startup’s $150M Raise & $3.2B Valuation Announced Today
Rcube Health’s ‘Resony App’ Catches Bayer Support for Mental Health DTx for Resonance Breathing
Health in 2 Point 00, Episode 243 | Quartet, Ribbon, Lyn Health, Medallion & Safely You
#Healthin2Point00, Episode 244: Transcarent, Suki, Robin, Cerebral, Nomi, and Apti Health
#Healthin2Point00, Episode 245: Bright Health, Innovaccer, Cadence, Ophelia, and Apti Health
Hope you enjoyed the newsletter. As ever let me know if you have any comments or want to sponsor/advertise–this newsletter doesn’t write itself but about 17,000 people get it and 80-100K visit the blog every month!
Matthew Holt
Matthew Holt
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