Another over-hyped digital health company screws shareholders who bought the hype, as Babylon Health has to bail itself out by going private, with nothing being returned to ordinary shareholders. The epidemic froth created a whole boatload of these situations, and the bill is coming due now.
For those who would like to read more on the crisis of fake and bad science, read this excellent report from the National Association of Scholars. just click this post.
CVS has finalized its $10.6 billion buyout of Oak Street health, which operates primary care centers for Medicare members. People may think CVS is a drug store company, but it bought Aetna a few years ago and Aetna provides the majority of revenue. CVS also owns a very large pharmacy benefit management division. Insurers increasingly own providers, partly to help manage costs, but mostly to skirt profit limits on insurance products. More unneeded and ill-advised consolidation in health care.
Option Care, a large home health care provider is acquiring Amedisys, another large player in that market, for $3.6 billion, as consolidation ramps up across health care, likely meaning higher prices for consumers.
Another example of over-priced companies trying to find some way to survive in the post-epidemic financial world. Transcarent, which does something, somehow to "access high quality, affordable care" is buying the virtual care part of cutesy-named 98point6, one of ten million virtual care companies, none of whom have any competitive differentiator. Just ask TeleDoc. Supposedly the deal is for around $100 million. Very, very hard to believe, but desperate times take desperate measures. Oh, and did I mention there is some AI involved somehow?
In an attempt to swiftly revive two floundering health care companies, a PE firm has announced the merger and recapitalization of Revive Health and SwiftMD. You know they are floundering by the description of their businesses. SwiftMD is a "virtual" health company that is also "digital". These buzz words might have once summoned fear but now only loathing. Revive Health offers "integrated" care plans, whatever that is. More floundering to come for these fishy firms.
Investors have not yet learned their lesson, as Pearl Health gathers a new round of $75 million in capital for its business of supporting physicians who want to participate in value-based care arrangements.
Another merger of two struggling "digital" health companies, which use virtual reality as a product design. Apparently you are less likely to drown in high seas when you are holding on to another person than when you are alone, even though neither of you has a life jacket. BehaVR (aren't these health care company names cute) which focuses on milder mental health issues, and OxfordVR, which focuses on more serious mental health illness, are merging. Investors, who appear to have their own cognition issues, also pumped over $13 million in new financing into the combined company.
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.
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.