Mercer, a large benefits consulting firm, confirms that health plan premiums are rising in 2023, publishing survey results showing that employers expect an increase of costs by at least 5%. Employers are taking steps to lower the cost increases by pushing employees to lower-cost providers and using other cost-control techniques.
More money pouring into young health care companies as Dispatch Health gains $330 million in new capital to deliver high acuity health care in a patient's home, rather than a hospital or an ER, which will supposedly save money. It won't. Nothing ever does in health care.
A lot of money is invested in health care startups and growth companies, since health care is 20% of the economy, but the returns aren't always good. Here is another company raising large amounts of capital to keep a marginal business going. Hazel Health provides services to students in elementary through high schools and raised another $51.5 million to support growth.
HealthJoy delights investors by garnering $60 million in mindless new capital to support its benefits navigation tool. Another sign of too much capital still floating around out there.
It may be investors that need the redesign. They just keep pouring money into this digital health crap despite all the losses. Redesign Health claims that it makes money by helping other digital health companies get going. If the whole sector collapses, and it should, it won't matter, but for now the company has just raised another $65 million in funding.
In truth, this seems like more money down a rathole. Google's parent and other investors are putting a billion dollars into Google's health arm, Verily. Apparently want to compete with Amazon or something.
It is like investors have learned nothing from the past two years. Even supposedly smart investors like Morgan Health, which is making a $20 million contribution to LetsGetChecked, which supposedly helps manage patient care in the home. It is a contribution, not an investment, because Morgan Health is highly unlikely to see any return.
What do you get when you combine a company with a commodity business model, that out of desperation massively overpays for another company that has a commodity business model? $10 billion in writeoffs if you are Teladoc. Teladoc arranges virtual patient visits. Livongo did some goofy care and disease management model. Neither company had any prospects of significant profitability because anyone can do what they claim to do. Teladoc's purchase of Livongo was beyond stupid and investors are paying the price. There are a lot of dumb people in business and finance.
The "stupid" model for health care venture capital investing is alive and well. Everside health, which operates primary care clinics and has grown by acquiring other failing health care businesses, some persuades investors to dump another $164 million into the company.
Apparently not even a cute name can save you if you have a stupid business. I constantly bemoan the mis-application of capital and health care is Exhibit A. Olive, another company whose function you would struggle to explain, raised a crapload of money and now has to lay off 450 employees due to lack of a real value to customers. Why did you ever hire that many staff?
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.