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March 28, 2024 News 3 Comments

Top News

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An Optum dashboard shows that 115 of the 137 Change Healthcare applications remain down 37 days after the company was hit by a cyberattack.


Reader Comments

From Former Epic: “Re: Epic. There has always been a board of directors, which includes outside directors from the community. Judy has voting shares (51%) but the foundation has the stock cash value. The family will be comfortable, but not Walton or SC Johnson wealthy. The foundation will sell stock back to the company to distribute donations. No public sale.”

From Diatom: “Re: disruption. Three technologies could disrupt health services delivery – surgical robotics, AI-powered drug discovery and development, and FHIR as a technology enabler for innovators. However, I share your skepticism about technology’s potential. We will continue to have a low-value, intervention-based system unless we change our agricultural policies, education policies, taxation and subsidies, and cultural habits related to food and work-life balance. Also, even if technology could significantly improve healthcare delivery, it wouldn’t necessarily reduce the cost of our system, which is one of its greatest travesties. Blockbuster drugs and robots aren’t cheap.”


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Acquisitions, Funding, Business, and Stock

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Walgreens announces Q2 results: revenue up 6%, EPS –$6.85 versus $0.81, beating expectations for both. The loss includes a $5.8 billion impairment charge related to its VillageMD primary care business, which will close another 160 locations versus the previously planned 60. The company said when it invested $5.2 billion in VillageMD in 2021 that it planned to open 1,000 new locations by 2027 – VillageMD had 230 practices in 15 markets then — and that it expected the standalone VillageMD to conduct an IPO in 2022. From the earnings call:

  • CEO Tim Wentworth says that US customers are seeking value due to inflation, depleted savings, and record household debt and delinquency, so its drugstore division is investing in key value items and pushing its own brands.
  • The pharmacy group’s outperformance was led by its vaccine portfolio.
  • VillageMD has issues with slower than expected patient panel growth, multi-specialty productivity, and Medicare payment changes.
  • The company has decided not to follow through on plans to create a new pharmacy technology platform and instead will modernize its existing systems, leading to a $455 million impairment charge for software and development assets.
  • The company will review its businesses and recommend to the board that they be sold if they don’t offer growth opportunities, with that work to be presented at the end of April.

Wound imaging vendor Spectral AI announces Q4 results: revenue down 13%, EPS –$0.22 versus –$0.13, beating expectations for both and valuing the company at $35 million. The company’s income came entirely from government research contracts, as commercial product sales launched in Q1 2024.

Toronto-based Healwell AI, which pivoted to AI-powered disease detection and changed its name from MCI Onehealth Technologies, announces Q4 results: revenue down 37%, EPS -$0.10 versus –$0.05. Shares are at $0.90, valuing the company at $129 million.

Financially teetering Steward Health Care sells its physician network to Optum pending government approval.


Sales

  • Sutter Health chooses Abridge for drafting visit notes from encounter audio.

Announcements and Implementations

Five9 announces GenAI Studio, which allows organizations to apply off-the-shelf generative AI models such as OpenAI and customize them for use in their contact center.


Government and Politics

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ONC releases the draft of the 2024-2030 Federal Health IT Strategic plan for public comment.


Privacy and Security

In England, computer systems at the University of Cambridge’s medical school remain down a month after an apparent cyberattack. The university’s systems previously went offline for a short time on February 19 from a hacker group’s DDoS attack.

in Scotland, hackers post sample data from the several terabytes they claim to have stolen in last week’s ransomware attack against NHS Dumfries and Galloway. 

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Experts say that the technology of startup HeHealth, which claims that its app can diagnose sexually transmitted infections from penis photos, is a “privacy disaster.” The company – whose tagline is “your intimate bestie for unprotected sex” — markets one product variation as a sexual wellness tool for women, who are encouraged to submit photos of the genitals of their prospective partners in claiming to have their permission. Forbes also notes that the system was trained on just five conditions but the company lists 10 that it can diagnose, also determining that the source of the app’s reference data is free Internet pictures and those that early participants were required to provide. TechCrunch observes that most STIs are asymptomatic and calls out company disclaimers that its results should not be considered medical advice, with the author adding, “You should not take a picture of anyone’s genitals and scan it with an AI tool to decide whether or not you should have sex.”


Other

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Eight physicians from Israel’s Hadassah Medical Center apparently didn’t bother to read their own radiology article, which contains nonsensical ChatGPT output, before submitting it for publication. The piece appears in Elsevier-published Radiology Case Reports, an open-access journal that charges authors $550 to run whatever they submit. Elsevier notes that 80% of submitted articles are accepted and are posted online in an average of 19 days, which isn’t exactly a bragging point given this example. The authors ignored publication guidelines that require that any use of AI to be disclosed as a footnote. Surprisingly, the uncorrected article remains online. Thanks for reminding everyone that you can’t count on clinicians to catch AI’s mistakes.


Sponsor Updates

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  • Findhelp’s Customer Success Division delivers 30 bags of food and hygiene items to the little free food pantry at Padron Elementary School in Austin, TX.
  • Availity announces a comprehensive suite of technology solutions and services designed to assist health plans and providers with achieving compliance with the CMS Interoperability and Prior Authorization Final Rule.
  • Experity will exhibit at SPUC 2024 April 3-6 in Norfolk, VA.
  • FinThrive releases a new Healthcare ReThink Podcast, “Trailblazing the Next Generation of Healthcare Analytics.”
  • Healthcare IT Leaders releases a new Leader to Leader Podcast, “Transforming Community Health.”
  • Inovalon supports the California-based Integrated Healthcare Association’s Align, Measure, Perform Program with its Converged Quality quality measurement and improvement solution.
  • Laudio will exhibit and present at AONL 2024 April 8-11 in New Orleans.
  • Medhost will exhibit at the Texas Organization of Rural & Community Hospitals Spring Conference April 1-4 in Dallas.

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Currently there are "3 comments" on this Article:

  1. Re: Epic – “The foundation will sell stock back to the company to distribute donations. No public sale.”

    This plan works wonderfully as long as several key things hold up.
    1, The company keeps growing, never hits a plateau
    2. Because of growth cash is available to by back stock (at the Epic formula price) and enough to fund R&D and operations.
    3. There is no minority court challenge to the buy back formula- eg. we think the company is worth more and we want mo!

    If a group of minority stock holders hire a law firm to challenge the formula ( and it wouldn’t be hard to find one) if Epic has the cash as noted above they will simply negotiate a new price or formula. If they are facing issues 1&2 and enough cash is not available then they will have to find it in the public markets – via IPO or Priv Eq. Today this is not likely, but lets face it, no company is forever. Markets change, tech changes, and people change.

    Key rule of business is “never say never”.

    • One of the unknowns is, how much of Judy’s non-voting stock will she have cycled into the employee stock plan before making an exit? There’s a possibility that she might have time to, or maybe already has, diversified enough that her foundation could make 5% distributions for years before Epic’s capacity to buy back stock would become an issue for the foundation, and that the parties who would be most inconvenienced by Epic’s hypothetical future illiquidity would be the employee-shareholders of that time. Which at least would be aligned incentives.

  2. Re: Disruption Comments from Diatom

    Healthcare change could come from a different source. These comments are of the blue-sky variety, so be forewarned.

    It occurs to me that there is a template for people who lived unhealthy lifestyles, but then changed. And that is older Rockstars. There are many Rock gods from the 1960’s who gave up the drugs, learned to party without needing to Partaaayyy, began some kind of exercise, started to regularly sleep a full night, and so forth. I happen to believe many had severe health scares (Slash comes to mind, as does Mick Jagger, Joe Cocker, Long John Baldry, etc.). Others realized, if they wanted to keep playing music? They had to change something.

    If the developed nations generally started living healthier lifestyles? You have less need for for healthcare interventions. A problematic health system matters less if you need it less.

    There are of course, some issues with this idea.







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