News 11/15/23

Top News

New York Governor Kathy Hochul proposes regulations that would require hospitals to establish a cybersecurity program led by a CISO, assess their cybersecurity readiness, and develop and test response plans.

The state budget includes $500 million for healthcare facilities to upgrade their technology.

Reader Comments

From Kvetcher: “Re: investigative reporting. I would like to see more of that.” I always appreciate reader ideas for doing more, while simultaneously noting that all the writing you see on HIStalk is done by a two of us part-timers, or about 1 FTE, who have to be careful about overcommitting.

From Spock: “Re: SPACS. Maybe you’ve posted before, but I’m curious on the logic and money flow. Seems like I read every day another whose value has declined tremendously.” My SPAC opinions summarized:

1. Special purpose acquisition companies were a popular, backdoor method of going public in a “blank check merger” while offering minimal opportunities for investor due diligence, thus attracting low-quality companies whose financials could pass only superficial examination. SPAC sponsors could and did make wild, unsupported financial projections and lit up their social media accounts with self-serving bunk the SEC couldn’t do anything about it because IPO rules don’t apply to mergers. Most people haven’t noticed that the now-bankrupt WeWork went public via a SPAC merger, taking investors for a rough four-year ride as its valuation sank from $47 billion to less than $100 million while making its former CEO a billionaire (everything you need to know about SPACs is contained in that last sentence).
2. SPACs mostly benefitted their hype-spewing sponsors, who skimmed 20% or more of the overvalued proceeds immediately as their fee and then left less-knowledgeable investors ending up like Halloween night homeowners at their front doors stomping out a flaming bag of excrement .
3. SPACs were legally required to find merger partners within two years or else shut down, and mating became desperate as closing time neared.
4. The result was the companies that couldn’t pass IPO muster often failed spectacularly, leaving investors holding the bag and SPAC sponsors moving on to find new ways to move money from investor pockets to their own.
5. Some of healthcare’s big SPAC mergers were Babylon Health (went public in mid-2021 at a $4.2 billion valuation, since declaring bankruptcy for key businesses and selling parts for scrap); Clover Health (valuation dropped from $7 billion to less than $500 million); Cano Health (once valued at nearly $3 billion, now at $38 million and likely to shut down); 23andMe ($6 billion to $400 million); Butterfly Network ($3 billion to $230 million); Sharecare ($3 billion to $400 million); SOC Telemed ($1 billion to being taken private for $300 million); and ETAO ($1 billion to $17 million).
6. Struggling digital health companies were a favored SPAC target because they were already overhyping their prospects and performance, making them the perfect partner for scammy SPAC sponsors.
7. My takeaway is that SPACs were just another manifestation of greed as usual. Nobody forced investors to buy shares in obviously poor-quality companies – they did so voluntarily hoping to find a greater fool down the road who would buy them at an even more inflated price.

From Bergamoot: “Re: HIMSS. What business are they in selling tech services to Taiwan?” HIMSS sold its annual conference and now seems to harbor ambition for doing global consulting, which doesn’t seem like a core competency of a membership group. They signed a deal with Taiwan’s national insurance organization to provide “subject matter experts, thought leadership, and advice” in cybersecurity, analytics, and national education programs. HIMSS would not come to my mind in thinking of organizations who provide these services regularly and arguably well, although I would likely list the names of companies that support HIMSS financially and now find themselves as its competitors. Maybe HIMSS sees revenue opportunity in offering a marketplace for vendors who pay it for matchmaking them with clients.

From Horse Pistol CIO: “Re: CHIME. Made a pretty big tactical error by running its fall forum from Friday to Sunday. The number of CIOs who exited early was palpable. The final event on Saturday night was basically a vendor fest which is not ideal for anyone. It’s probably not surprising that folks would prefer to not give up an entire weekend for a conference and then have to go to work the very next day. Rumor was that it ran through the weekend due to prior feedback and that they won’t do it again. To me it was a big miss. Lots of heavy hitters were gone by Friday. Bummer.”

HIStalk Announcements and Requests

It’s funny how much stupider my Alexa devices and Google searches seem now that I’m using ChatGPT to selectively replace them.

Webinars

November 16 (Thursday) 1 ET. “How Scheduling Helped Streamline Memorial Hermann’s Communication.” Sponsor: PerfectServe. Presenter: Amee Amin, MD, hospitalist, Memorial Hermann-Texas Medical Center. Dr. Amin will discuss the challenges she experienced in creating schedules for her team of hospitalists, and how an optimized solution transformed her workflow. Attendees will learn now TMC gleans crucial data and analytics from their scheduling system, the impact of real-time schedules being pushed out to other applications, and how Lightning Bolt’s optimized, auto-generated schedules improve provider satisfaction and work-life balance.

Previous webinars are on our YouTube channel. Contact Lorre to present or promote your own.

Acquisitions, Funding, Business, and Stock

A former employee’s LinkedIn post says that Health Catalyst laid off another 120 employees this week, as suggested in last week’s earnings call in which the company said it would lay off 10% of its people in late Q4. The same call touted the company’s high level of employee engagement and winning five “best places to work” awards. HCAT shares are down 19% in the past 12 months versus the S&P 500’s 12% gain, valuing the company at $456 million.

Henry Schein reports Q3 results: revenue up 3.1%, adjusted EPS $1.05 versus $1.09, falling short of estimates for both even though the quarter was impacted by its October cyberattack. The company lowered full-year revenue and earnings estimates. It says it will file a cyber insurance claim, but its policy has a $60 million limit. Schein expects to restore online ordering next week, which represents most of its business, and said on the earnings call that it hopes to regain the 10 to 15% of its sales that were to customers who order exclusively electronically without a sales rep who took their business elsewhere when systems were offline.

Well Health reports Q3 results: revenue up 40%, adjusted EPS $0.05 versus $0.07.

Hackensack Meridian Health signs a partnership with Amazon’s One Medical primary care service, the latest of a couple of dozen big health systems opening brick-and-mortar locations together, sell One Medical memberships to employers (the same package that Amazon Prime members get for $99 per year), and then the health system gets the referrals for specialty care from all over the state in claiming to offer coordinated care and connected technologies. Amazon doesn’t like low-margin business, so it would be interesting to see contract details to know whether the health systems are paying Amazon for referral exclusivity or a share of the business it generates. Also, this deal seems to be based on signing up employers to pay the membership fee, which would seem to keep the health system from getting referrals of uninsured patients.

MIT spinoff Layer Health comes out of stealth mode with $4 million in funding. Its Distill product uses AI to use unstructured patient data for a variety of chart review tasks.

Sales

• Presbyterian Hospital (NM) chooses the social services referral platform of Unite Us.

People

Availity hires Sean Keneally, MBA (Elevance Health) as COO.

Announcements and Implementations

Australian Capital Territory Government notes the one-year anniversary of its Epic go-live, listing statistics about MyDHR use, internal messaging, and turnaround time for diagnostic studies.

Surescripts applies to become a QHIN.

A Stat investigation finds that UnitedHealth group used a computer algorithm to cut off rehabilitation services to Medicare Advantage plan members, threatening to discipline or fire employees who failed to hit a 1% variation target even when Medicare coverage rules warranted more days of service. Ironically, the algorithm that was developed by NaviHealth – a company that UHG acquired in early 2020 – was designed to help patients meet their rehab goals, not to cut off their financial access to it. Algorithm-denied care isn’t exactly the poster child that AI healthcare proponents are seeking.

Marketing and PR firm Amendola Communications wins awards for its work with KeyCare, DrFirst, and Equality Health.

John Muir Health implements Epic integration with Ambience Healthcare’s ambient AI scribing system, which allows clinicians to view their Epic schedule in the Ambience app, record audio of their visits on desktop or mobile, and immediately view and edit AI-generated documentation within Epic.

FDA designates Mednition’s AI early sepsis detection solution as a breakthrough device.

Mercy launches The Chen Chemotherapy Model, which sends a daily text message to outpatient chemotherapy patients and uses their responses about symptoms to proactively manage their care. It was named after former Mercy data scientist Jiajing Chen, PhD, MPH, who developed it before dying of cancer in January 2023 at 42.

Other

The American Medical Association reviews at its interim house of delegates meeting a previously rejected member proposal to ban the corporate practice of medicine. A radiologist member who spoke on behalf of reviewing the measure said,

We are being picked clean by private equity. There are people who don’t know where their next paycheck is even going to come from because their groups have been flipped so often … [This resolution] is protecting both physicians and patients, it is preserving physician autonomy and preventing burnout. Seventy-four percent of physicians [are] employed; just four years ago it was 50 percent. Private equity has spent $1 trillion in the last decade on acquisitions in buying medical practices. We need to have something to talk about with respect to private equity at this meeting.

Andreessen Horowitz predicts that the “Google –> WebMD –> Friend” protocol of patients entering the health system via a doctor friend or relative will be replaced by personalized large language models that will use a few rules to send instructions to third-party software while simulating empathetic guidance. It describes a potential experience in referencing the Baymax healthcare robot from the movie “Big Hero 6,” which it argues could give companies control of revenue streams worth billions of dollars in connecting an LLM to a marketplace of services that consumers can book directly:

One day, you wake up with a hint of a headache and a sniffle. You sneeze. What do you do next? You turn to your Baymax-like app, input your symptoms, and after a few follow up questions, it predicts— given your current location, the weather, your recent sleep scores, your diet, and your personal trends—that you’ve got allergies. It offers you a same-day appointment with a nearby allergist covered by your insurance to confirm the diagnosis. In the meantime, it recommends you try an over-the-counter allergy medication, offering to have it delivered to your house. It orders extra tissues for you, for good measure.

Contacts

Mr. H, Lorre, Jenn, Dr. Jayne.
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