Teladoc is a poster child for bad health care investments in overhyped technology. The vendor of telemedicine services did very well during the epidemic, did a really stupid purchase of Livongo, a disease management company, tanked its stock and is now trying to recover by making other acquisitions, in this case of Catapult Health for $65 million. Catapult supposedly will help because it has a virtual "wellness" check-up platform that will funnel people to Teladoc's chronic care business. Another poor strategy, over-priced acquisition for a company whose stock has gone from $300 to $12 in four years.
Transcarent sells services to employers to help employees and their families navigate the health system, find the best prices, get treatment for certain kinds of conditions. It is paying $621 million to buy Accolade, which offers a "personalized" health care platform and similar navigation services. Both companies are heavy on the hype and short on financial performance. Accolade, for example, had $414 million in revenue and lost $100 million. Wow, kind of hard to lose that much money on that much revenue.
The use of electrical stimulation for various health conditions which involve the nervous system in some way has increased dramatically. This company, Cala Health, has a device for a common but hard-to-treat condition involving slight hand tremors. A lot of people suffer from this issue. The company raised $50 million for further commercialization efforts.
SureScripts is one of those relatively unknown entities that forms the backbone of US HealthCare. A joint venture of pharmacy chains and pharmacy benefit ventures, it handles most of the pharmacy and many other health care transactions, facilitating e-prescribing and clinical interventions. The venture has now sold a majority stake to a private equity firm, allowing a large cash-out for the founding firms, but raising questions about the future plans for this entity that literally has connections to every provider and payer.
Alternative employee health plan vendor Centivo raises a new round of $75 million in capital. The company offers virtual primary care and a member engagement platform and will likely be out of business in about three years so good luck to those investors who think anyone can compete against UnitedHealth, Aetna, Cigna and the Blues.
Private equity firm New Mountain Capital is merging three firms in the business of managing various parts of the health care payments chain, including looking for fraud and abuse and reviewing high cost claims. The combination is said to be valued at over $3 billion.
Jul102024
Just as the stand-alone primary care clinic movement is going bust, HarmonyCares raises $200 million in new capital to support a model of delivering primary care at the patient's home. Not sure why investors think this might be more successful, but it generally isn't their own money that VCs and PE firms are spending.
Everyone wants to be a tech company, so they put what ever industry they are actually members of in front of "tech" to confuse people. Sidecar Health calls itself an "insuretech" firm and it must be working because investors just gave them another $165 million in capital. If your business is that great, why do you need that much capital? Anyway, the company purports to have a different model for employees to access health care.
Jun252024
Another value-destroying digital health company gets sold. Sharecare, which provides commodity consumer health app services, went public for $3.9 billion during the digital app hype, and was just sold for $518 million to a PE firm. I am sure shareholders are really happy and I am not sure what the PE firm is thinking.
The Healthy Skeptic is a website about the health care system, and is written by Kevin Roche, who has many years of experience working in the health industry. Mr. Roche is available to assist health care companies through consulting arrangements through Roche Consulting, LLC and may be reached at khroche@healthy-skeptic.com.
The Healthy Skeptic is a website about the health care system, and is written by Kevin Roche, who has many years of experience working in the health industry. Mr. Roche is available to assist health care companies through consulting arrangements through Roche Consulting, LLC and may be reached at khroche@healthy-skeptic.com.
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