I have mentioned before the phenomenon in excessive capital times that scads of money goes to unproven companies, who then try to obscure their lack of coherent strategy by acquiring with other similar companies. Health care is rife with this tactic. Here we see Signify Health acquiring Caravan Health for $300 million, much of which is funny money stock. Both firms work in the commodity space of value-based purchasing and accountable care organization support. One plus one still equals zero.
IBM ending a huge bust in its health care efforts, selling its Watson health care assets to a PE firm. IBM spent a fortune building this and claimed it would revolutionize health care, but it has very limited clinical utility. More hype in health care.
More lunacy, kind of ironic for a mental health company, as Lyra Health raises a fresh $235 million in capital at over a $5 billion valuation. Just gonna say the company will never earn enough money to justify that valuation. But institutional investors work on the greater fool principle--they think they can always find someone stupider to take a dumb investment off their hands.
More froth in the capital markets as R1 RCM pays $4.1 billion for CloudMed. R1 RCM helps health care providers with billing and other practice management software and services and CloudMed supposedly brings artificial intelligence to those activities.
Medically Home, which attempts to outfit the homes of patients with serious illnesses so that they can be treated outside of a hospital, has raised an additional $110 million in capital to support growth of the business.
The day's second incomprehensible deal involves Babylon Health babbling on about buying Higi Health, which offers kiosks for biometric screenings. Babylon is a digital and telehealth company. No price announced but whatever it was, it was too much.
More goofy deals. Nomi Health, which supposedly helps connect employers directly with providers, is buying Artemis Health, which helps employers control health benefit spending, for $200 million.
This is why I don't invest in "digital" health BS. Castlight Health went public at a huge valuation. The hype caught up with it and the valuation plunged. It now has agreed to be bought by Vera Whole Health for $2 a share or a whopping $370 million. I doubt it is worth that much, but Vera is another hype-driven company, although in theoretically a more solid segment--primary care, desperate to find some way to make it look like it actually is adding value to the system. I always find it hilarious to see the rational for these deals. Castlight's tools will supposedly help Vera's providers. Right, sure, of course, anything you say, load of crap.
Livongo was one of the hottest "digital" health companies, and investors may feel like they got a certain digit from the company, as Cigna drops it as a preferred vendor and the company's acquisition by Teladoc for an outrageous sum also look like less than a brilliant move. Two overpriced companies do not make one fairly valued one.
Large database firm Oracle is buying electronic medical records and administrative software vendor Cerner for $28.3 billion, a move that likely is aimed at further penetration in a heavy software use industry and at competitor Salesforce.
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.