Healthcare Hot Takes is Luma Health’s monthly rundown of healthcare innovations happening right now. Check out what the industry is thinking, reading, doing. This month’s topic is the debut of new digital health companies.
Over the last month, three digital health companies have IPO-ed and seen strong results.
1. Phreesia, a patient intake company, raised over $167M in their public offering and popped 53% in its debut.
2. Livongo is a digital health company that helps individuals manage their chronic diseases, particularly diabetes. The company initially planned to price its shares at $20-23 at opening, but ended up pricing at $28 a share. These jumped to $38 during its debut, a 36% surge, to value Livongo at $3.4 billion after its first day of trading.
3. Similarly, Health Catalyst, a Utah-based healthcare data analytics software company, raised over $180 million in its IPO, being valued at over $1 billion.
Before this, there had been a drought of IPOs for digital health companies with the last one occurring in 2016, when iRhythm went public. According to a Rock Health report, digital health startups raised about $14 billion in 2017 and 2018, and the trend is sticking in 2019. “$4.2 billion was invested in digital health in the first half of 2019, on track to potentially beat out 2018’s record-breaking funding year.”
Luma’s Hot Take: This is exciting for all of us at Luma Health! Seeing other digital health companies raising large amounts of funding and even going public proves that we’re in the right space and that what we’re doing is being valued, even outside the healthcare world. Recently, we’ve been seeing the market finally catching up to meet our product, and more generally other solutions in the space.
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Tech giant Microsoft is partnering with Providence St. Joseph Health to create a new high tech hospital that will focus on improving health outcomes while also reducing costs. Specifically, the new partnership is aiming to improve on the existing electronic medical record to make it more interoperable and allow for better sharing between healthcare providers. Another priority for the hospital will be to implement new technologies like machine learning and natural language processing to help improve care.
The hospital will be in the Seattle area, close to Microsoft’s headquarters. The plan is to renovate and upgrade an existing medical facility. With the project still in early development, specific details surrounding the size of the facility or the scope of the deal have not yet been disclosed. However, Providence St. Joseph’s CEO Rod Hochman has come out saying that both companies are putting in significant financial investment.
As Apple, Amazon, and Alphabet have already made major plays into the healthcare space, Microsoft is trying to catch up. Having failed with adoption of their own health IT software called Amalga, Microsoft is now taking a different approach by partnering instead of trying to do it themselves. In terms of Providence, they have been positioning themselves as a digitally forward hospital system for years by hiring former tech executives (from Microsoft, Amazon, and more) to their C suite. The collaboration also plans to work with Amazon and their new employer led initiative, Haven.
Luma’s Hot Take: We’re super excited to see this partnership come together and are hopeful that this high tech hospital is the first of many. The specific priorities around improving the EHR and embedding new technologies like NLP and machine learning are definitely near and dear to our mission here at Luma, so we’ll be keeping a close eye on this project as it develops.
Through its partnership and acquisition of Aetna, CVS Health is launching a platform to address social determinants of health. Entitled Unite Us (https://www.uniteus.com/), the software aims to provide plan members with access to “social providers,” such as nutritionists, community organizers, and more. As insurers realize more and more the importance of social factors in a person’s health, they are investing heavily in food, nutrition, housing, and other social services. As health officials note, 60 percent of an individual’s life is influenced by social and environmental factors outside of the doctor’s office.
“Our mission is to connect individuals and families across the United States to the services they need through collaboration with local service providers, shared infrastructure, and an inclusive approach for those in need…Taylor Justice, Unite Us Co-Founder and President
“…working with CVS Health, we will foster a community of care and a local support system to empower community members to make the most of the services available to them.”
Similarly to Anthem and UnitedHealthcare investing in affordable housing and reimbursing living related costs, CVS and Aetna have pledged over $40 million to constructing and rehabilitating housing to help improve health outcomes. Studies have shown that providing safe and secure homes can drastically help to improve the health and well-being of those individuals with chronic disease.
The Unite Us social care coordination platform will first be made available to select Aetna Medicare and Medicaid members in Louisville, Tampa, and parts of southeastern Louisiana later this year.
Luma’s Hot Take: Social factors are critical in the short and long-term health of patients. That’s why we at Luma have focused our efforts so heavily on community health. Our goal is to be able to reach patients in the most underserved areas and make sure that they get to the right care at the right time. We’re hopeful that more insurers take notice of the impact of social determinants of health on patient lives and invest in building out similar resources to help individuals navigate outside the doctor’s office.