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Monday Morning Update 12/11/23

December 10, 2023 News No Comments

Top News

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The board of Veradigm fires the company’s CEO and CFO for failing to comply with financial reporting and disclosure policies, following an investigation by its audit committee. Veradigm hasn’t filed financial reports for a year due to accounting software problems, which caused Nasdaq to repeatedly warn the company about the potential de-listing of MDRX shares.

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The terminated executives are Richard Poulton, CEO, who also resigned from the company’s board, and Leah Jones, CFO. The company has named interim executives and has launched a search for their permanent replacements.

MDRX shares dropped 20% on the news Friday. They are down 46% in the past 12 months versus the S&P 500’s 16% gain, valuing the company at $1.1 billion.

Interim CEO Shih-Yin Ho, MD, MBA and interim CFO Leland Westerfield, who are both members of the company’s board, will be paid up to $770,000 and $1 million, respectively, for six months, with the option to extend the agreement. That includes $200,000 for each executive that is contingent on hiring their permanent replacements and filing the overdue SEC financial reports.

Severance for Poulton and Jones will total $2.1 million and $200,000 with accelerated share vesting, respectively, and Jones will provide consulting services for six months for $360,000.

Nasdaq has not announced the results of its November 16 hearing in which the de-listing of Veradigm’s shares was to have been decided.


Reader Comments

From Re-Joyce: “Re: R1 RCM. Quite a turnaround from its days as Accretive Health.” Accretive’s history is spotty – it had to settle FTC charges of poor data security, was banned from doing business in Minnesota for positioning bonus-incented debt collectors inside hospitals to press ED and breast cancer patients for payment while they waited to be seen, and had shares de-listed from NYSE for missing filings. The company renamed itself to R1 RCM in 2017 after getting a $200 million investment from Ascension and an investment firm and went public in March 2018. Shares have lost 60% since their highs in early 2021.


HIStalk Announcements and Requests

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Health IT conferences are a long way from earning an A grade from poll respondents for their presenter diversity.

New poll to your right or here: Has your resume ever included a paid-for award or vanity article? (should membership in Chief count?). Many years ago, I was annoyed at the proliferation of diploma mill degrees being claimed by healthcare folks and ran links to their LinkedIn on HIStalk, which earned me some nasty letters and threats. Interestingly, those people left their phony credentials intact, apparently convinced that their deceit would remain undetected if I didn’t call it out.

I’ve read several health IT “interviews” lately that quoted the subject as magically speaking in bullet lists and parenthetical asides, clearly indicating that the interviewee was responding to questions in writing and probably with the help of a PR team. I don’t give interviewees my questions in advance (because that’s not an actual conversation) and I don’t allow pre-publication review or editing. Interviewees have to trust me and be confident that they can answer without help, but the end result is far more interesting.

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My solution for Dr. Jayne’s “one space or two after a period” dilemma is to write like the imitative self-promoters on LinkedIn who waste reader time and patience by making each sentence its own paragraph in their attempt to seem patiently profound (not really — I move on quickly in assuming that a lot of white space in “content” means a lot of white space in the author’s thinking). I will also note that while Dr. Jayne is stricken with existential Gen X angst about unlearning now-illogical habits that she developed while using a machine that has been obsolete for 40 years, she can take comfort that Word removes the extra spaces, so they never showed up in her HIStalk posts anyway. Now do indented first paragraph lines.

John sent me a Donors Choose donation that, with matching funds, provided Mr. C’s middle school class in Pennsylvania with biology and physics hands-on activities.

I was snooping around the HIMSS conference website and noticed that HIMSS27 is now set for Chicago after two years in Las Vegas, so HIMSS24 will be the last stop in Orlando for a while. Exhibitor count is at 514 and most booths are showing as unavailable except the 10x10s that go for $6,000.


Webinars

None scheduled soon. Previous webinars are on our YouTube channel. Contact Lorre to present or promote your own.


Acquisitions, Funding, Business, and Stock

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Mail order teeth straightening device “teledentistry” vendor SmileDirectClub shuts down, telling customers that they won’t get the treatments remaining in their two-year, $2,000 program (but still have to pay their balance). The company went public in September 2019 at a valuation of $9 billion, with shares tanking 27% on their first day of trading. The company made its two 30-year-old founders billionaires, never turned a profit, and amassed nearly $1 billion in debt before it filed Chapter 11 bankruptcy in late September and then failed to find a buyer. The founders, whose previous business experience involved running a car detailing service, were financially backed by two private equity fund operators, the father and uncle of one of the founders (the three are pictured above). The father held shares that were worth billions, at least for a short time.

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Cigna ends its attempts to acquire insurance rival Humana when the companies fail to agree on a price. Cigna will instead buy back $10 billion of its shares, which the company says are “significantly undervalued,” and will seek bolt-on acquisitions.


People

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Clarify Health Solutions promotes Terry Boch to CEO. She replaces founder Jean Druin, MD, who will remain on the board.


Privacy and Security

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Cyberextortionists post a “proof pack” of patient information that they obtained from Tri-City Medical Center (CA) following a ransomware attack that took its systems offline for more than two weeks. Such groups often call patients whose information they’ve stolen to suggest that they urge hospital leaders to pay the ransom to avoid public release.

In a similar event, patients of Fred Hutchinson Cancer Center are being emailed by hackers who demand payment of $50 to prevent their information from being sold.


Other

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The New York Times reports that Bellevue Hospital (NY) is using aggressive marketing techniques and per-procedure surgeon incentive payments to create a bariatric surgery factory in which patients are scheduled for the OR after a single quick visit and little understanding of the risks involved. Some of the patients it recruited are prisoners who lave little chance of following the required post-surgery diet. The hospital is paid at least $11,000 for each surgery, sometimes much more, and expects to do 3,000 cases at an estimated revenue of $34 million. The Times says that the weight loss surgeries often get OR priority over patients with stab wounds and detached fingers.


Sponsor Updates

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  • Netsmart employees sort food donations at the Manna Food Bank in Asheville, NC.
  • Pivot Point Consulting Senior Director Jim Hogan attains CDHE certification from CHIME in digital health.
  • QGenda will exhibit at PGA 2023 in New York City through December 11.
  • AdvancedMD earns its Electronic Prescribing for Controlled Substances recertification from the Drummond Group.
  • Rhapsody publishes a new guide, “How to Reinvent Interoperability.”

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