Signify Premium Insights - Digital Health: Round-Up for November 2023
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Written by Mark Lazell Editor of Signify Premium Insights – Digital Health.
This article provides several links to our Signify Premium Insights, evaluating recent mergers and news events. To access these articles you will need a subscription or simply request a 30-day free trial below.
It was a case of another quarter, another round of disappointing results for Amwell , as the telehealth vendor’s Q3 revenues fell 10.5% compared to the same quarter of 2022 to $62M, losses reached $137M and the number of visits to its platform slid by 3%.
And yet there are still tantalising glimpses of hope peeking out from behind the clouds.
Could a recently-announced $180M deal from the US Defense Health Agency be the ticket to profitability that Amwell so badly wants? And could accelerating migration of customers onto its Converge platform begin to drive game changing new revenue streams?
Maybe, but time is Amwell’s enemy. Significant impacts from the DHA and Converge aren’t likely until 2025 at the earliest. The vendor might have a $418M cash and marketable securities war chest, but even that won’t last long for a business losing between $65M and $70M every quarter.
The lid on one of English healthcare’s worst-kept secrets was finally lifted as US data analytics giant Palantir Technologies was confirmed as the winner of a ￡330M contract to build a national data aggregation platform for NHS England .
It’s been a story that has generated plenty of debate, criticism and speculation as rumours that Palantir was in the running for the largest-ever single tech contract awarded by the NHS gained ground and credence through 2023.
The FDP will aggregate and interrogate anonymised and non-anonymised data from different EHRs and IT systems across ICSs, Acute Trusts and other providers in England. There will also be a ‘marketplace’ on which vendors can develop third-party applications that also use aggregated FDP data.
We asked the question earlier this year whether the FDP was little more than a nationwide carbon-copy of a regional Shared Care Record that has been rolled out by some of the 42 Integrated Care Systems (ICSs) in England over the last three years.
There are definitely plenty of similarities between the two, and it’s hard to see NHS England ploughing much more money into the Shared Care Record now. Is this the death knell for the Shared Care Record? And, if so, what fate lies in store for the vendors that have done well from it?
Earlier this year, Signify Research published two Insights exploring Accountable Care Organisation (ACO) Aledade’s acquisition strategy along with its credentials in helping smaller, independent primary care practices in the US access value-based care (VBC).?
Our findings concluded, with some caveats, that the likes of Aledade, Inc. , which also act as VBC enablement service providers or managed services organisations (MSOs), can indeed bring VBC to smaller practices, in parallel with changing CMS reimbursement rules.
That’s why news that MSO CareAbout has selected pop health vendor Innovaccer’s platform and data analytics solutions looks like a pretty good move for both parties. We think it offers both companies a foothold in helping independent primary care practices tap into VBC reimbursement models, something that remains relatively untapped.
While the signs are positive, we’re not so sure whether it will propel CareAbout to realise its stated ambition of doubling its network this year.
On to news that Artera has launched a new patient engagement tool in collaboration with conversational AI assistant developer Hyro . Artera Care Assist is, says the US vendor, a web virtual assistant deployed on a provider’s website to answer patient questions 24/7. The company claims the tool will help health systems and providers meet staff shortfalls, engage patients, and even generate profit.?
While the announcement isn’t really a game changer in and of itself, Artera is a useful bellwether for the US patient engagement/patient activation vendor market. It has around 750 health systems and federal agencies on its books facilitating 2.2B annual communications for more than 68M patients.
To what extent are partnerships such as this a vital survival mechanism for patient engagement vendors trying to compete in a very fragmented market?And does this give specialist vendors like Artera the tools to respond to the competitive gauntlet now being thrown down by EHR vendors?
Another sector that has yet to hit the heights is ‘hospital-at-home’ and our interest in this area was piqued last month by news that two US health systems (albeit not big ones) had pulled the plug on their programmes.
Our analysis confirms this was to cut costs and does not indicate a broader loss of enthusiasm for a care model that has gained some traction in the US over the last three years. Currently, around 300 hospitals across 125 health systems in the country are approved by the CMS to offer acute hospital care at home.?
But the announcements do reinforce the fact that, when belts need to be tightened, hospital-at-home programmes are more expendable than others.
Providers offering hospital-at-home have few options in this high-cost environment to scale. One, however, could be to team up with a retail player. Mass General Brigham , which claims to run one of the largest home hospital programmes in the US, enlisted Best Buy Health to do just that last month.
While this could work, ultimately much still depends on the long-term future of the Acute Hospital Care at Home Waiver, whose current incarnation expires next December.
Until then, expect more wavering among providers who may just have other, more urgent, priorities.
Another company that is changing tack in light of high operating costs is pharmacy giant Walgreens . It announced it is shutting almost 10% of the roughly 680 VillageMD health clinics it operates in the US as part of a wider goal to slash operating costs by at least $1B in fiscal 2024.??
The move is surprising given that only two years ago Walgreens splashed out $5.2B on boosting its share in VillageMD from 30% to 63%, and setting in motion an ambitious plan to open clinics across the US.
In closing VillageMD clinics in less strategic areas, Walgreens says it will instead focus on increasing its density in ‘markets with the greatest potential for profitability’, as well as more broadly integrating its digital assets.
There’s absolutely no indication this is the start of a wider, phased decline in the VillageMD brand presence, but it does once again indicate how businesses are reacting in light of soaring costs.
Another company battling the cost challenge is Health Catalyst . Our analysis of the company hung on its latest acquisition - this time of US cancer registry software and services business Electronic Registry Systems (ERS). ?
The ERS move is the latest in an ‘era’ of acquisitions that has seen Health Catalyst significantly bolster its analytics, care management and workflow tools portfolio over the last five-plus years.?
As well as assembling an impressive vendor line-up, publicly-listed Health Catalyst turns over some $250M in annual revenue, and is widely regarded as one of the leading PHM point solution vendors supporting the transition to value-based care (VBC) in the US.?
But revenue growth is declining sharply and losses are mounting.
Does the ERS acquisition hint at a change in strategy by Health Catalyst towards tech-enabled managed services, and away from its core professional services business, which has become a millstone of losses around its neck?
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We also explored patient-facing health management platform b.well Connected Health (b.well) tie up with Samsung Digital Health. The deal aims to develop longitudinal health data, personalised health insights, care recommendations and connections with care providers for Galaxy smartphone users.?
Why is the news significant? Because until now, and with perhaps the exception of Microsoft’s ill-fated Health Vault platform, the longitudinal health record (LHR) discussion has revolved almost exclusively around the provider or payer. Information siloes and data exchange barriers have historically conspired against the development of consumer-centric platforms for LHRs.?
The obvious question then: how can b.well succeed here where Microsoft couldn’t?
Finally, our take on the main opportunities currently available to vendors in the fast-moving generative AI (gen AI) space. We conclude that support tools that connect patient and provider remain the focal point of vendor activity and are already well established and commercialised.
The next steps for gen AI tech vendors will be up the value chain. Using summary data is the next natural progression, where data is fed into the EHR and gen AI then generates medication or treatment plans, or transcripts are fed into the EHR to assist with strategy planning and billing functions.
Summarisation is also a gateway into interpretation and conversational capabilities, which again offer high value potential. Last month, Dutch vendor Wolters Kluwer launched AI Labs to bring gen AI to its UpToDate clinical decision support solution.??
Applications that support coding and analytics can be considered ‘low-hanging fruit’ and, at this stage, are less susceptible to commoditisation. That said, this applies to the text interpretation and medical language elements of interpretation (unlike image interpretation for diagnosis and treatment, which is a much longer play). ?
We also think those gen AI products that require FDA or MDR approval will take far longer to come to market.
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About Mark Lazell
Mark joined Signify Research in 2022 as Associate Editor to lead on the company’s Premium Insights - Digital Health service. Prior to Signify, Mark spent 25 years as an editor, publishing detailed analysis of healthcare and other high-tech sectors in the Middle East and Asia Pacific. He was the launch editor of Middle East Medical magazine, and produced detailed country reports and analyses, including interviews with regional policy makers and healthcare executives.
About the Signify Premium Insights Contributing Analysts
Signify Premium Insights rely heavily on the industry expertise from Signify Research’s expert medical imaging analyst team. This team brings with it many years of experience developing market reports, insights and providing consultancy services to the medical imaging industry.
Alex Green, Managing Director and Principal Analyst
Alex has 24 years’ experience in tech market intelligence. He leads on Signify Research’s Digital Health offerings focusing on integrated care IT, EHR/ EMR and telehealth. Prior to joining Signify he served as a Senior Research Director at IHS and as a Business Analyst/IT Project Manager in a joint NHS/ Government role.
Kelly Patrick, Research Director
Kelly joined Signify Research in 2020 as a Principal Analyst. She brings with her 12 years’ experience covering a range of healthcare technology research at IHS Markit/Omdia. Kelly’s core focus has been on the clinical care space, including patient monitoring, respiratory care and infusion.
Arun Gill, Senior Market Analyst
Arun joined Signify Research in 2019 as part of the Digital Health team focusing on EHR/EMR, integrated care technology and telehealth. He brings with him 10 years’ experience as a Senior Market Analyst covering the consumer tech and imaging industry with Futuresource Consulting and NetGrowth Consultants.
Vladimir Kozynchenko, Senior Market Analyst
Vlad joined Signify Research in 2023 as Senior Market Analyst in the Digital Health team. He brings two years of experience in the consulting industry, having undertaken strategy, planning, and due diligence assignments for governments, operators, and service providers. Vlad holds an MSc degree with distinction in Business with Consulting from the University of Warwick.
About Signify Research
Signify Research provides healthtech market intelligence powered by data that you can trust. We blend insights collected from in-depth interviews with technology vendors and healthcare professionals with sales data reported to us by leading vendors to provide a complete and balanced view of the market trends. Our coverage areas are Medical Imaging, Clinical Care, Digital Health, Diagnostic and Lifesciences and Healthcare IT.
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