Health care is a fifth of the economy. Everyone wants a piece, including Walmart, which just purchased a telemedicine company, MeMD, for an undisclosed sum. Walmart has increasingly added health care services to its original pharmacy business, including in-store clinics. At least with Walmart, health care probably is made more affordable.
Vida Health comes alive with a $110 million capital raise to support its business of offering apps to help manage chronic health conditions. It only competes with a hundred other companies offering the same low value crap, so you can understand why investors jumped at the chance to put more money in.
Collective Health aggregates $280 million in new financing to support its employer health benefits management business. The investors have lost their collective minds. The company serves employers with 300,000 members in 55 companies, so it is being valued at about $1000 a member for a commodity business.
R1 RCM, a vendor of provider revenue cycle management software and services, is paying a healthy $300 million to buy VisitPay, which helps patients figure out to pay what they owe for health care services.
I have been writing this blog for a long time and I thought I had seen some wild times for investments and valuations, but this is insane. Every day, multiple new investments at very high valuation. CareSyntax, which offers software to help collect data on surgeries and help with decision support, raised $100 million in new capital. If I can't understand how a company can possibly deliver that much value, something is seriously wrong.
Capsule, which operates a "digital" pharmacy raised $300 million in additional capital. You can't have a health care business if it isn't digital, no matter how pedestrian its business. Craziness in the capital markets.
Digital health is a wasteland. Someone has developed an app or multiple apps for every possible disease or condition. These are all commodities and generally provide little real value, but investors are pouring money into them at very high valuations. Sorry to piss all over the idea, but here is an example, a company called Renovia raised $17 million for an app to help manage urinary continence. More specifically, the app will help with exercises for pelvic floor disorders. Well, I am floored by the investment and valuation.
Privia Health, which provides administrative and patient engagement software to physician practices, is planning to go public by raising over $300 million, which would value the company at almost $2 billion. Valuations are absurd.
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 [email protected].