lizzy's device digest
Stimwave CEO gets 6 years in prison
The former head of a medical device company that sold pain relief devices outfitted with useless plastic parts has been sentenced to six years in prison by a New York judge, our devices reporter Lizzy Lawrence writes. If you need a refresher, check out Lizzy's investigation into Stimwave from last year.
Led by Laura Perryman for 9 years, the company was aiming to score higher reimbursement from payers — the dummy parts let the doctors collect $18,000 more than they should have, and nearly 8,000 devices had the fake part.
"Laura Perryman callously created a dummy medical device component and told doctors to implant it into patients," U.S. attorney Damian Williams said. "Perryman breached the trust of the doctors who bought her medical device, and more importantly, the patients who were implanted with that piece of plastic." Read more on her sentencing here.
Telehealth
Done's top leadership arrested on fraud charges
In other misconduct news, top leaders from a closely watched telehealth startup known for prescribing ADHD-medication Adderall online were arrested and charged with fraud, the Justice Department announced late last week.
Done founder Ruthia He, and clinical president David Brody, were charged with allegedly taking part in a scheme to prescribe and distribute controlled substances online — along with submitting fraudulent reimbursement claims for stimulant prescriptions, I reported along with Katie Palmer.
The company is perhaps best known for its social media ads hawking ADHD treatment; it's also one of a small group of startups boldly seeking to profit off relaxed regulations for drug prescriptions during the pandemic. Read more here.
Report: One Medical yields patient safety issues
The Washington Post has an investigation into Amazon primary care tech property One Medical revealing several concerning patient safety issues, including routinely routing elderly patients to a call center that seemed ill-equipped to handle medical issues that required more attention. Among them: One patient called to report a blood clot and swelling, and the call center scheduled an appointment for the future instead of flagging the issue for more immediate examination. Read the investigation here.
industry forecasts
PTSD treatment company bets on slow and steady
My colleague Mario Aguilar has reported on digital health companies' herculean struggles to reach profitability; this week he spoke with one company betting that a slow and steady approach might be a better path to success than raising a lot of money and promising investors unrealistic revenue growth. Joe Perekupka, who heads Freespira, a company developing software- and device-based treatment for panic and post-traumatic stress disorders, told Mario it's signing on a few thousand patients at a time — but it's already heading toward a break-even point by the end of next year, and positive cash flow sometime in 2026. Read more here.
Cybersecurity
Drug changes for cyber hiring on the horizon?
Late last week I dropped by the CyberMed summit in Washington, where a small group of technical luminaries gathered to discuss the underplayed cybersecurity risks to health systems. Among speakers was the White House's Office of the National Cyber Director official Seeyew Mo, who teased a federal cyber workforce hiring change that could potentially open the floodgates to solve historical shortages: A pending update would modify questions related to candidates' drug use — long considered a barrier to entry for otherwise qualified candidates — to ask about their use of drugs that are widely illegal, instead of drugs that might only be illegal in some states. I'll be tracking the update and its implications for health.
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