🏥 CVS and Virtual Primary Care
 PARTNERED WITH  Happy Tuesday, I hope everyone had a restful, long weekend. Me? I was in Cleveland celebrating a wedding, but that didn’t stop me from saving down the most important healthcare stories to Pocket while sipping on an old fashioned. In case you missed it, I published Part 1 of a 2-part series on the future of health system M&A on Thursday. Check that out here, because Part 2 is headed your way this Thursday at 11am CT. Also, I'd like to issue 2 corrections from that post, graciously caught by esteemed Hospitalogy readers - Beaumont merged with Spectrum Health, not SSM Health, and NorthShore is based in Chicago, not Colorado. These edits are reflected in the web version. I appreciate you guys! Was this email forwarded to you?  SPONSORED BY FRESHPAINT Healthcare is dang complicated. Founders building in digital health today get hit with a ton of questions on a variety of topics, and it can get overwhelming QUICK. When thinking about the right tools and tech solutions to implement in a stack, there are way too many variables to consider:
On June 1st, 2022 at 2PM PDT, Freshpaint is hosting an incredible panel of digital health leaders. They’ll walk you through how to think about the framework for developing the right tech stack for digital health founders today. Join 300+ other health tech leaders for the virtual panel by signing up at the link below!  VIRTUAL PRIMARY CARE CVS Launches Another Virtual Primary Care PlatformAnnounced this week, CVS is rolling out a new virtual primary care service for its Aetna members, which follows the trend of other major insurer players in offering new virtual care capabilities.
United and Anthem (ahem...I meant Elevance) also have launched virtual care offerings for their members, with Cigna & Humana quickly to follow, assuredly, with their clinical assets (MDLive, etc). Madden’s Musing: Based on the reading in the release, this announcement seems to fit as a complementary piece to CVS’ partnership with Teladoc - which was announced last August and whose relationship extends all the way back to 2018 with its MinuteClinic partnership. The announcement leaves me wondering...is CVS still looking to acquire an asset in this space like they mentioned at their investor day? If so, now seems like the perfect time to do it with digital health and market valuations at short-term lows. CVS is looking to continue to build out network offerings on the back of its acquisition of Aetna in 2018 The virtual care space is getting crowded as Walmart & MeMD just rebranded to Walmart Health Virtual Care and Amazon Care expands nationwide. Resources:
 BUYOUTS Talkspace Attracts Buyout OfferAn Axios Pro report (paywall) this week disclosed that Mindpath Health, a private equity backed outpatient mental health platform, approached Talkspace with a rumored $500 million take-private offer, although that price was subject to debate. Of course, Talkspace spiked 40% initially on the news given that the firm seems to be eliciting takeover offers. The rumored $500m price tag translates to just over a 4x multiple on trailing revenues, while Talkspace trades at 0.3x trailing revenues today and a nearly-negative enterprise value of around $35 million. So, for all you savvy healthcare analysts out there, the purchase price would have represented a hefty premium to EV and a 128% premium to Talkspace’s market cap this Friday. Madden’s Musing: Honestly I’m less interested in Talkspace specifically and more interested in these take-private offers. I think there are a lot of attractive assets out there in the public markets that could be strategically acquired soon. The market has obliterated valuations, especially in health tech, since last year. We’ve already seen an activist campaign in Cano Health. Who’s next? My speculative names to watch in the public sphere:
Who do you think might go private? It’s a fun thought exercise on who can unlock value in the private markets through these struggling assets currently being heavily discounted in the public markets. I'm also expecting to see plenty of private consolidation continue in health tech & services, but that's another story. Resources: KIDNEY CARE Medtronic and DaVita launch a new Kidney Care Medical Device CompanyHealthcare giants Medtronic and DaVita are teaming up to launch a new kidney-focused medical device company. Announced this week, the NewCo will focus on developing new types of kidney failure therapies as well as work on new home-based products. For all you marketers out there, don't worry - they're planning to rebrand once the JV closes. Medtronic is contributing its renal-related assets to the JV including its current product portfolio and all of its R&D. The press release makes no note of DaVita’s contribution, leading me to believe that the firm forked up cash to create equal equity stakes in the new JV. Finally, NewCo will be operated as a separate company - independent operations from either parent organization. Madden’s Musing: I mean, these are two powerhouses teaming up, so this news is pretty notable. This JV is the biggest kidney care news in a minute after the $2.4 billion value-based kidney merger between Fresenius, InterWell, and Cricket Health was announced a couple of months ago. Also, don’t forget about the Strive partnership with Bon Secours. As CMS experiments with alternative payment models in the kidney space, I have to wonder if this partnership was somewhat of a defensive play to combat the Outset Medical’s of the world and its Tablo Hemodialysis product. Regardless, the kidney care space has seen a fair bit of activity over the past several months from major players involved in the space. Stay tuned. Resources:
 MARKET MOVERS  OG Hospitalogy folks will remember I had a Google Doc tracking all of the health tech & services companies. I’m currently in the process of revamping the doc, so stay tuned for the ability to download / review the Hospitalogy Health Tech & Services index in the near future! If you have features you'd like to see or track, holler at me. Top 3: GoHealth, AmWell, Talkspace Bottom 3: Augmedix, Oscar, Cano Big gains for most health tech & services this firms this week as the market rallied after 7 straight down weeks. SPACs and IPOs are at an all-time low. For the first time in 2 years, no SPAC or IPO took place last week. Makes me wonder when the market will stabilize enough to see some more public action in the healthcare sector. Babylon and Bright Health announced a partnership this week, expanding Babylon’s access to 19,000 more Medicare members. Under the agreement, Babylon using Neue Health to access direct contracting members. Trinity Health’s home health segment acquired Above & Beyond Home Health & Hospice. The article linked here from Hospice News does a great job of going into the recent M&A activity in the space from major players. In a move that surprises nobody, Walmart and CVS have halted filling prescriptions for controlled substances by Cerebral and Done. They’re not about to be on the hook for another opioid settlement. A key Senate group is looking to potentially relax or axe altogether the in-person requirement for virtual mental health services. This change would mean that seniors would not have to see an in-person provider every 6 months to continue online therapy. While this policy change seems like a no-brainer, it’s VERY notable that Congress is making moves to address telehealth regulations. UPMC released its Q1 financial results - the Pennsylvania giant reported $50 million in operating margin and experienced similar struggles to other operators in expense inflation from labor and supplies. Physician compensation trends from MGMA note that compensation is on the rise again in 2022, confirming the trend of outpatient utilization returning to normal and growing from here (assuming no more shutdowns).  MISCELLANEOUS MADDENINGS
 HOSPITALOGY TOP READS
 JOBS Here are some jobs that I’m curating for the healthcare industry. Use this link to submit your role to be featured if you’re looking to hire. Telemedicine Lead Psychiatrist, Lyra Health: Lyra is transforming mental health care through technology with a human touch to help people feel emotionally healthy at work and at home. We work with industry leaders, such as Morgan Stanley, Uber, Amgen, and other Fortune 500 companies, to improve access to effective, high-quality mental health care for their employees and their families. Senior Director of Customer Success, Health Plans, Virta Health: Virta is looking for a seasoned customer success leader to scale our health plan team while growing our relationships and footprint with our existing clients. You should be a subject matter expert at working with national & regional health plans and third party administrators across fully insured, ASO, and Medicare/Medicaid lines of business. Senior Data Analyst - Product & Clinical Analytics, Omada: Join Omada in helping to develop and derive data-driven insights focused on member engagement, clinical outcomes, and the overall effectiveness of our products and care teams. You’ll perform statistical analysis and develop dashboards with data from across our Diabetes, Hypertension, Musculoskeletal, and Diabetes Prevention programs. In your day-to-day, you will work cross functionally with our analytics, engineering, product, clinical, and commercial teams.  Thanks for the read! Let me know what you thought by replying back to this email. See you <next send>, — Blake   Loving this newsletter? Get in front of 3,500 executives and healthcare decision-makers by clicking below: |
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