Whatever mess is going on with VA aside, DoD has demonstrated that Cerner can be deployed successfully at large scale.…
Silicon Valley Bank, a major player in tech company financing, collapses and is taken over by federal regulators in the biggest US bank failure since 2008.
SVB has business relationships with half of all venture-backed technology and healthcare companies.
SVB failed as higher interest rates devalued its long-term, low-interest bond portfolio even as venture capital deposits dwindled in a down market, with the unrealized losses raising fear in depositors who created a bank run in trying to withdraw their money.
- Deposits are FDIC insured up to $250,000, meaning that 95% of the money held by SVB is uninsured.
- Tech companies that can’t get their deposits out of SVB are expressing doubt that they can meet payroll and pay bills in the short term.
- Venture capital firms used their now-frozen SVB lines of credit to make investments quickly. However, they also triggered the SVB bank run by advising their portfolio companies to pull their money out, which created a liquidity event that forced SVB to convert unrealized losses to actual losses in an attempt to cover withdrawals.
- Some of the VCs issued their SVB warnings on Twitter, which created a panic that one investor summarized as, “If you are in a movie theater and it’s not on fire and you yell fire, and then you congratulate yourself for being out first while other people are laying on the floor, do you sleep well tonight?”
- SVB supporters note that the bank has been an ally of innovation, didn’t mishandle deposited funds, and instead chose a conservative investment approach involving government-backed funds that was derailed by interest rate hikes. The company held so much startup money deposited from fundraising proceeds that it couldn’t originate enough profitable loans to invest it, so it turned to low-interest but safe investments.
- FDIC is expected to pressure another bank to buy SVB, which holds enough assets – albeit long-term and discounted — to cover deposits if it can continue operation.
- Long-term observers question the involvement of the Federal Reserve in first holding interest rates artificially low, then raising them repeatedly. They also worry that fear will drive companies to move their money from banks to other investments, which will cause other banks to fail as depositors withdraw their funds.
- Private equity investor Bijan Salehizadeh, MD, MPH, MBA worries that portfolio companies whose funds are tied up in SVB can’t count on their VCs to provide an emergency bridge loan since many or most VC funds also bank at SVB and can’t get their money either, and opening new accounts at overwhelmed banking competitors is not a quick process. He also notes that some companies are funded under terms that require banking with SVB, which means other banks may be wary of taking them on. He says that the federal government needs to force a big bank to buy SVB over the weekend or else “we have not just an academic catastrophe, but an actual catastrophe.” He also urges affected companies to stop all accounts payable activity immediately to preserve cash for payroll.
I would welcome opinions from readers who are involved in venture capital or whose company is being affected by SVB’s collapse.
HIStalk Announcements and Requests
One in five poll respondents have used telehealth to get a prescription they wanted knowing that the evaluation process would likely be superficial.
New poll to your right or here, following up on Dr. Jayne’ s impressions of ATA: what disappointed you most at the most recent in-person conference you attended? Someone told me once that the single most important item for attendees is food and the opportunities to socialize while consuming it, which brings back painful memories of waiting in endless food and coffee lines at HIMSS conferences only to end up sitting alone on the floor with my wildly overpriced purchase because of lack of seats.
Attention clock spring-forwarders, which is everybody in the continental US except those in Arizona. Avoid embarrassing yourself and mothball EST, CST, MST, and PST until November 5 since it’s all EDT, CDT, MDT, and PDT until then. You don’t get to pick which one you like better, but in a rare confluence of decreased effort accompanying increased accuracy, just write ET, CT, MT, and PT year round to always be correct (those of us in those time zones already know what time it is here). Perhaps unfairly, I assume that anyone who has lived their entire life under Daylight Saving Time but still writes it wrong can’t be all that bright or attentive to detail. TL;DR version – always abbreviate Eastern time as ET.
I keep seeing these clickbait articles in the form of “XXX hospital executives to know” whose selection methodology is whatever the fresh grad writer’s Google searches turn up. Does the “to know” encourage people to cold-call those who are named get acquainted? Otherwise, if they are so important that we should know them, wouldn’t we already?
Acquisitions, Funding, Business, and Stock
From the Oracle earnings call:
- CEO Safra Catz says that “cloud is no longer about just renting commodity white boxes” and instead offers velocity and value that supports business transformation.
- She says that Oracle has improved Cerner’s operating margin by more than five percentage points in its three quarters of ownership.
- Chairman and CTO Larry Ellison says that Cerner’s healthcare contract base has increased by $5 billion since the acquisition. He called out wins at Ascension Health, Auxilio Mutio, Vandalia Health, Banner Health, VA, DoD, and NHS.
- Ellison said that MD Anderson has reduced readmissions by 30% by using Project Ronin’s AI model running on Oracle Cloud.
- Responding to an analyst’s question about “when does it become clear that Oracle is helping improve the quality of care and saving lives,” Ellison cited implementations at DoD, VA, and Nova Scotia, along with an NHS bid in progress.
- Ellison stated that Oracle has built “one patient, one record in the database” at Stanford, UCLA, Mayo Clinic, and Cleveland Clinic, failing to note that all of those organizations user Oracle Cerner competitor Epic.
OptimizeRx reports Q4 results: revenue down 3%, adjusted EPS $0.25 versus $0.22.
- An unnamed drug manufacturer hub services company will use OptimizeRx’s technology to determine patient drug eligibility and affordability.
Laura Wilt, MBA (Ochsner Health) joins Sutter Health as SVP/CDO.
Washington University in St. Louis hires Greg Hart, PhD (FTI) as its first CTO.
Announcements and Implementations
An AHA-commissioned report by Kaufman Hall finds that 53% of US hospitals expect to lose money this year, driven by high labor and supply costs.
Government and Politics
Rep. Matt Rosendale (R-MT), who was recently appointed chair of the VA’s subcommittee on technology modernization, says that he would like to cancel the VA’s Oracle Cerner contract, claw back some of the money that the company has been paid, and focus instead on improving the VA’s legacy VistA system. He says VistA is a better system for supporting safe, high-quality care, citing high dissatisfaction rates among the VA’s users of Oracle Cerner.
The former CEO of now-bankrupt medical device company Stimwave is indicted for selling a non-functional piece of plastic as a $16,000 implantable medical device for chronic pain patients. Stimwave settled for $10 million in October 2022. Doctors complained that the implantable part of the original nerve stimulator device was too big, and since the company knew that the technology could not be made smaller, created a plastic dummy component that could be cut to fit, enabling the doctor to bill for implanting the fake device.
Privacy and Security
Virtual mental health startup Cerebral notifies HHS that it use of pixel tracking has inadvertently exposed the information of 3.2 million users to third parties. The shared information includes website visitor responses to a mental health questionnaire that includes responses about panic attacks, alcohol abuse, and personality disorder.
- Wolters Kluwer launches the Outpatient Prospective Payment System Batch Grouper and Calculator Service within its MediRegs coding, reimbursement, and compliance solution.
- Nordic releases a new In Network Podcast, “Designing for Health: Interview with Dr. Srinath Adusumalli.”
- OptimizeRx announces a multi-million-dollar, three-year agreement with a leading Hub services company that will leverage its technology to accelerate patient access for its life sciences brands.
- Pivot Point Consulting announces new appointments to its Managed Services, Data & Analytics, Clinical Systems/EHR, Business Systems, and Advisory Services segments.
- Premier publishes a new success story, “Premier’s Pinc AI Clinical Intelligence: A Key to Reducing Clinical Variation and Improving Quality at St. Luke’s University Health Network.”
- Redox releases a new podcast, “Automation’s Impact on the Patient/Provider Relationship with Mytonomy’s Vinay Bhargava.”
- Spok earns top honors for the sixth consecutive year in a Black Book Market Research survey of healthcare industry clients on top-rated secure communications platforms.
- Volpara Health highlights studies presented at the 2023 European Congress of Radiology that demonstrate the important role AI plays in objective breast density assessment, cancer risk assessment, and mammography quality evaluation.
- Financial Challenges Facing Hospitals & How to Solve Them (Vyne Medical)
- Breaking down the barriers to health equity (Nordic)
- Can Healthcare Technology Beat Burnout? Not On Its Own. (PerfectServe)
- Four Trends Guiding Healthcare Supply Chain Workforce Management (Premier)
- AI in the contact center just expanded (Talkdesk)
- Advancements in PT Technology and Emerging Digital Trends (WebPT)