View profile

THCB Reader - Digital Health is Dead (well not quite...)

Revue
 
 

THCB Reader

May 23 · Issue #146 · View online

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


We have been way behind in getting out the THCB Reader lately, but we are back to catch you up on all the action from May so far! Jeff Goldsmith and Eric Larsen discuss the digital health reckoning and what will happen to it after COVID. Kim Bellard writes about how abortion pills are going to force changes to our health care system, what innovation really means in health care, and patient bias. Mike Magee argues for the role of health tech entrepreneurs in promoting contraception in the context of abortion rights.
Interviews! On THCB Spotlight, I interview Biofourmis CEO Kuldeep Singh Rajput on their huge $300M Series D raise. On WTF Health, Jess DaMassa gets the scoop on Vida Health starting to prescribe, the case for preventative health from Newtopia, and the way digital health & tech are changing Pfizer. Jess also interviews ATA’s CEO Ann Mond Johnson on the “Telehealth Cliff,” Amwell CEO Roy Schoenberg on how telehealth tech is changing provider and payer business models, and Micky Tripathi on all the work coming out of ONC including information blocking, API standardization, and TEFCA.
Jess and I have done five episodes of Health Tech Deals so far this month, including deals from: Legacy, Ness, NowRx, Monument, Mahmee, Turquoise Health, Osmind, Alan, HealthMap Solutions, Sidekick Health, and many, many more. Scroll down for all of that.
Health Tech Deals and also #THCBGang are also available as podcasts with an easy click on Apple or Spotify.

For today’s health care tidbits, the elephant in the room has truely come home to roost, and now it’s landed on the phone wire, it’s close to breaking it. OK, I have stretched that metaphor to death but you’ll get my point. Writing on THCB earlier this month Jeff Goldsmith and Eric Larsen picked up on something I’ve been saying for a while –the fall in valuation of publicly traded digital health companies will have a knock effect on private companies. It took a while–those public companies stock prices started falling from their heights 14 months ago–but in the last month the venture capital scene has gone quiet. The days of sub $20m ARR companies getting mutli-hundred million dollar valuations are over for now. They will be back at some point in the future, as that’s how Silicon Valley has always worked, but it’ll be a while and in the meantime everyone is going to have to figure out what to do in the new world.
The “What to do?” question is getting harder as the data starts to come in, and it’s getting ugly. On the one hand the two fastest growing digital health companies ever have both had their comeuppance. Livongo was a tremendous exit for its investors and ended up trading at 20 times future revenue before it got acquired by Teladoc for $18bn mostly in stock. This quarter Teladoc wrote off much of its investment in Livongo and the whole company is now only worth $5bn. Clearly those “synergies” between telehealth and chronic care management didn’t work. The other rocket ship was Cerebral, which went from nothing in Jan 2020 to by Jan 2022 having over 100,000 patients and thousands of providers on its system as it raised over $300m from Softbank et al. Its aggressive & expensive customer acquisition costs, with its controversial controlled medication prescribing patterns, brought it way too much controversy. Its young CEO is gone, and it’ll be a slow climb back with bankruptcy and collapse the likeliest of outcomes.
But the part of digital health that’s trying to replace the incumbents is not the only place showing ugliness. The technologies and services being rolled out are often not working. Exhibit A is a randomized controlled trial conducted a Univ of Pennsylvania. One set of heart patients was set up with connected blood pressure cuffs, a pillbox that tracked their Rx adherence and lots of coaching help. The others were sent home with the proverbial leaflet and told to call if they had problems. You’d assume many more deaths and hospital readmissions in the second group. You’d be wrong. There were no differences.
So digital health needs to see if it can produce services companies that move the needle on costs and outcomes. The advantage is that they are eventually competing with hospital systems whose DNA doesn’t allow them the ability to let them cross the chasm to the new world. The bad news is that those systems have huge reserves which they can use to subsidize their old world activities.
I’m hoping digital health’s impact in the next 2 years will be as big as it was in the past 2, It’s by no means dead or over, but I am pessimistic.
Follow me on Twitter @boltyboy and THCB at @thcbstaff for more similar insights/nonsense (and even the occasional sensible idea)! Enjoy! – Matthew Holt
Think a friend or colleague should be getting this newsletter? Share this link with them to sign up.
THCB Spotlight
CEO Kuldeep Singh Rajput talks about Biofourmis' huge Series D raise
From Jess DaMassa & WTF Health...
ATA's CEO Ann Mond Johnson Takes on the "Telehealth Cliff"
Vida Health Starts Prescribing: Meds, Labs, Devices, & More for Mental Health & Diabetes
The Pandemic, Bad Habits, Riskier Population Health & The Case for Prevention Coming from Newtopia
Digital & Tech Are Changing Pfizer: Pharma Co’s Chief Digital & Technology Officer Takes Us Inside
ONC Explainer: Micky Tripathi Deep-Dive on Info Blocking, API standardization & TEFCA
Amwell CEO Roy Schoenberg: Telehealth Tech Is Now Changing Provider & Payer Business Models
#HealthTechDeals
#HealthTechDeals Episode 30 | Legacy, Ness, NowRX, and Monument
#HealthTechDeals Episode 29 | Osmind; Turquoise Health; Mahmee; Simplifed
#HealthTechDeals Episode 28 | Alan; HealthMap Solutions; Sidekick Health: Dialogue & Tictrac
#HealthTechDeals Episode 27: Levels, Waltz Health, Safety Wing & Implicity
Ep 26 #HealthTechDeals: Hello Heart, Concert Health, Vivian Health, Curebase, Mendel.ai & Blue Spark
Follow @THCB on Twitter, Linkedin
Subscribe to THCB Reader
Listen to THCB’s Podcasts on iTunes or Spotify
Subscribe to Health Tech Deals on Youtube
Subscribe to WTF Health on Youtube
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 16,000 people get it and 80K+ visit the blog every month!
Matthew Holt, Publisher THCB
Matthew Holt, Publisher THCB
Did you enjoy this issue?
In order to unsubscribe, click here.
If you were forwarded this newsletter and you like it, you can subscribe here.
Powered by Revue
The Health Care Blog: 120 Humboldt Avenue, San Anselmo, CA 94960