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FDA Patient Engagement Advisory Committee (PEAC) Meeting on Adaptive AI and ML Event: (10/22) On October 22nd, the FDA Patient Engagement Advisory Committee (PEAC) held a meeting to discuss complex issues surrounding Artificial Intelligence (AI) and Machine Learning in Medical Devices. Attendees included several patients, companies, clinicians, and other high-level leaders. The meeting was centered on issues around the medical devices, its regulation, and usage by patients, in addition to their concerns on data privacy and transparency. The committee made recommendations on improving AI and machine learning in medical devices by giving careful consideration to datasets and how it can be used to train and improve algorithms. Adaptive AI presents new challenges for patients, companies, and regulators regarding informed consent, considering where the device would learn algorithms, use algorithms to improve decision-making, and make advanced improvements moving forward. Description: AI technology will be used to improve diagnosis and make recommendations for a course of treatment. Using adaptive AI will allow machines to learn more freely and improve what it learns from each sequence it is running. For future AI models to be successful, there must be a diverse representation in the intended patient population's data. Diverse and unbiased patient cohorts will allow for less biased data and remove clinical variables that lead to AI devices' mistakes. When data is not present for certain groups in a population, AI researchers cannot study them and find ways to combat societal issues. Incorporating and collaborating with patients in the creation of AI technologies will provide transparency and confidence in the products; however, many barriers exist even after a product makes it to market because criteria can change over the device's life. Adaptive AI makes decisions dependent on the life it sees out there – an apparent reason why it must be regulated because devices should differentiate between good and bad decisions to ensure safe outcomes. The committee struggled with a decision on how to explain the challenges of how explainability and transparency in AI models can be presented to patients. Implications: Large clinical datasets can be used to train and improve AI algorithms, leading to immense improvements in AI-based systems that diagnose as well as those that determine treatment protocols and actually treat patients. AI technologies will change clinician workflow and ensure continuous safety and efficacy in delivering ongoing quality care to patients.However, because ML algorithms can “learn” and “change” over time, medical diagnoses and treatment can change as adaptive AI models change as well, raising ethical concerns around transparency and informed consent. In addition, adaptive AI models also suffer from the shortcoming of biased training sets and under representation of underserved communities. As a result, patients and regulators need the ability to understand and examine models too so that the risks and consequences of any changes to treatment protocols due to improvements in the models can be assessed. In addition, the committee appeared to strongly imply that new informed consent releases would be required when changes to AI algorithms make meaningful changes in treatment or diagnosis protocols. FDA Patient Engagement Advisory Committee (PEAC) Meeting [YouTube Video] After COVID-19 Spurred a Boom in Telehealth, Systems Mull How to Sustain Momentum Event: (10/20) Healthcare Dive recently published an article highlighting the Center for Connected Medicine/Klas Research’s 4th Annual “Top of Mind for Top Health Systems Report”. Among other things the report looked at trends in telehealth reimbursement post-COVID and health system’s potential responses. Description: When the pandemic began both commercial and government insurers waived numerous rules and regulations to increase access to telehealth including waiving co-pays for telehealth visits and equalizing reimbursement for in-office and telehealth visits. While the Federal and State regulators continue to explore which rules to make permanent (for Medicare and Medicaid beneficiaries), some private insurers have recently changed some rules (including the waiver of patient co-pays) for telehealth visits. This survey of 117 executives at 112 provider organizations gave some insight into how provider organizations were planning to respond depending on how these changes settle out. Implications: As noted by Healthcare Dive “a lot of how much [providers] are going to invest in technology is going to have to have to do with what regulations end up looking like.” Since the regulations will to a large extent dictate reimbursement (which were approximately 30% lower for telehealth prior to COVID), despite the recent uptick in volumes, profitability will drive continued usage. For example, over 30% of respondents to the study noted that they were unsure of what they would do if reimbursement returned to prior levels, while 20% said they would continue providing telehealth services and 16% said they would analyze the continued viability of continued use. Moreover, it looks like payment and regulation will be top of mind for the foreseeable future with 25% or respondents noting that payment models and regulation were the top areas for future telehealth improvement. How [Vendor Neutral Archives] VNAs can Address the Challenge of Data Accessibility and Analysis How [Vendor Neutral Archives] VNAs Can Address the Challenge of Data Accessibility and Analysis Event: (10/19) A recent article in Mobihealthnews noted that if healthcare providers had more accessibility to aggregated data, it would be easier to combat difficulties such as reducing clinician burnout, improving efficiency, and increasing patient satisfaction. Vendor Neutral Archives (VNAs) can drive better outcomes by enabling data to be provided as a source of AI, business intelligence, or to deliver clinical information and insights. Description: A recent survey conducted by McKinsey & Company found that data integration and analytics is one of the major trends reshaping imaging services and influencing the future of healthcare. VNAs which allow access to data from any vendor system in multiple formats, improving workflow and reducing the time taken to complete different stages of an imaging exam will enable data to use artificial intelligence to provide decision-making support. This is an essential component in connecting existing systems to open platforms and specialists with patients. VNAs will eliminate the need to switch between systems or wait for data to arrive from other sites because prompt access will be given to correct data from any location in the network. Implications: The world and healthcare in particular is in the middle of a data explosion. The amount of healthcare data collected is currently projected to double every 73 days compared to 2010 when it was said to be doubling every three and a half years. As a result, healthcare costs have been growing faster than expected, and payers are looking to more sophisticated technology to improve the management of costs. Data integration and analytics to realize the value of data have become more crucial for healthcare delivery. Using VNAs will improve clinician workflow, financial, and operational performance of departments and organizations, reduce clinician demand, lower costs, and provide better patient outcomes. How [Vendor Neutral Archives] VNAs can Address the Challenge of Data Accessibility and Analysis CDC's 'Virtual Human' Relays Prostate Cancer Info Through Candid Conversations Event: (10/19) Mobihealth News recently published an article that the CDC launched a prostate cancer information program with a uniquely digital face: a "virtual human" named Nathan who speaks with men about screening and treatment. The CDC noted that the tool can help increase screening since “the decision to be screened and treated for prostate cancer can be overwhelming and complicated” … “some of this is driven by discomfort and long-identified stigma” with a prior examination protocol. Description: "Talk to Someone About Prostate Cancer" takes the form of an in-browser interactive video developed by health simulation company Kognito. In the video, Nathan introduces himself and prompts the viewer by asking how confident they are talking to their provider about prostate cancer screening. Users indicate their response by clicking one of several text responses, prompting a relevant reply, and kicking off a series of question and answer conversation trees. Implications: Prostate cancer is among the most common cancers in American men. Thirteen in 100 men will develop prostate cancer during their lifetime, and two or three will die due to it, according to the CDC. As symptoms vary, there is a high need for men to speak to doctors about whether or not they should undergo screening. Virtual health engagement tools that employ digital avatars can help some patients open up about difficult-to-discuss topics, providing a new way for individuals to become more engaged in their care. The CDC's virtual conversation effort comes after this summer's "Access Initiative for Quitting Tobacco," which combines free nicotine replacement therapies and conversations with a similar digital human named Florence that used a microphone and artificial intelligence to interpret spoken questions. CDC's 'Virtual Human' Relays Prostate Cancer Info Through Candid Conversations COVID-19 Impacts on Cancer Care Event: (10/21) On October 21st, the Journal of Clinical Oncology Clinical Cancer Informatics published an article highlighting the significant drop in cancer screening, diagnosis, and treatment for Medicare beneficiaries. The changes in the utilization of cancer care services is attributed to the decrease in routine healthcare visits brought on by the COVID pandemic.The research was conducted by Avalere, a leading healthcare consulting firm, in collaboration with the Community Oncology Alliance, a non-profit advocating for community oncology practices. Description: The study found that for the period March-July 2010 compared to 2019, there was a significant decrease in cancer screening, biopsies, surgery, office visits, and therapy with variation by cancer type and site service. At the peak of the pandemic in April, screening for breast (-85%), colon (-75%), prostate (-74%) and lung cancer (-56%) were all all significantly lower as indicated. The decrease in diagnosis and delay in care is attributed to the stay at home order to reduce COVID-19 transmission, especially amongst the elderly and immunocompromised. As a result, many healthcare providers accommodated short term adjustments to cancer care delivery, such as temporarily discontinuing non-emergent care screenings, shifting delivery of care to telehealth, and delaying surgeries and other in-office cancer services to reduce transmission risk. Although the stay at home orders were lifted in May and June, utilization of certain oncology services continue to lag, fewer patients are undergoing screening, with many providers and patients choosing to reschedule or completely forego screening, leading to fewer cancer diagnoses. Implications: With the decrease in screenings, diagnosis, and cancer care delivery, researchers found that cancer is likely to present itself at a later stage and require more complex care thus lowering the likelihood that patients will respond and ultimately be cured. To combat this, stakeholders are encouraged to increase awareness of the dangers of medical distancing and regain seniors’ confidence in their ability to safely receive care. Policies and technology to promote access to cancer care have the potential to reduce the projected morbidity and mortality amongst the population. However, further studies need to be conducted to understand the overall impact on different patient populations and potentially take corrective action. COVID-19 Impacts on Cancer Care Researchers Combine AI with EHRs to Improve [COVID] Hospitalization Prediction Event: (10/21) A recent study by researchers at the NYU Grossman School of Medicine has applied AI to EHR (electronic health records) data to predict more accurately good outcomes from COVID-19 treatment. In particular researchers wanted to provide clinicians with actionable information that could be easily integrated into their exister workflows Description: Researchers undertook the study to apply AI to EHR data to help hospitals and doctors more accurately manage patients who had tested positive for COVID. The model analyzed 3000 retrospective cases and developed a model that could identify hospitalized patients likely to have good outcomes with 90% accuracy. In addition, researchers deliberately sought to reduce the number of features and variables used in the model, opting to go with the minimum data requirement needed to make a prediction. Implications: The study predicts outcomes in hospitalized COVID patients with a high degree of accuracy while integrating to current data infrastructure. However, researchers noted the need to remain vigilant when designing AI related tools as there are instances where the physician’s knowledge exceeds that of the machine and must be integrated with the AI output. The researchers also found that to be effective AI learning solutions require two distinct components; 1) addressing a clearly defined use case that clinical leaders will champion and 2) [developing a model that] motivates changes in clinical management, based on model predictions. Researchers Combine AI with EMRs to Improve [COVID] Hosptialization Prediction

What Startups are Missing When They Talk About the ‘Consumer’ Experience & To Boost Inclusivity, Words Matter in the Healthcare World Event: (9/22 & 9/23) Two recent reports in Mobihealthnews focus on the importance of including a health equity agenda and acknowledging the importance of langage to improve consumer experience and inclusivity in digital health tools. Digital health need to make sure they “have delivery systems that communities can trust and want to access” especially for groups of people who have been historically marginalized such as those in LGBTQ+ community and communities of color. Description: Two recent panels shed insights on lessons that could be learned from the dual crises of COVID and racial injustice which have had a disproportionate impact on underserved communities and communities of color. Participants noted that when designing digital solutions for marginalized communities, it is important to take a broad look at health care needs and meet communities where they are. Words and language used by clinicians have impact and can either boost inclusivity or cause exclusion. When designing healthcare solutions, people need to consider – does this work for marginalized communities and what does management and board teams look like from a diversity, equity and inclusiveness standpoint. Implications: Panelists noted that one of the challenges Silicon Valley has in changing health care at scale is that too often entrepreneurs are reflecting their own experiences onto the challenges of healthcare today. One solution would be to tailor efforts towards a specific population served rather than roll out a one-size-fits-all program. In addition, start-ups need to guard against the “Silicon Valley-ization of Healthcare” that focuses on transactions as opposed to relationships and driving outcomes. What startups are missing when they talk about the 'consumer' experience & To boost inclusivity, words matter in the healthcare world Pain and Dementia: Common Challenges for Care Managers [AI in Pain Assessment] Event: (9/21) On September 21st, AI technology pain assessment company, PainChek, released a report entitled “Pain and dementia: common challenges for care managers”, which investigates the complex challenges care managers face daily and the relationship between pain and dementia. In August, PainChek launched its new facial analysis technology in the UK, enabling care workers and clinicians to identify and manage pain in dementia impaired patients who struggle to communicate. Description: PainChek is working to raise awareness of the importance of effective assessment of pain in people with dementia after realizing inappropriate antipsychotic prescriptions were given to dementia patients in the UK. A UK Department of Health study found that of 180,000 patients living with dementia in the UK, 80% of them were inappropriately given antipsychotic prescriptions and at least 50% of people living with dementia in the UK’s 18,000 care and residential homes regularly experience pain. PainChek is using facial analysis technology which enables care workers and clinicians to identify and manage pain in dementia impaired patients who struggle to communicate and assist them with pain management. PainChek has been granted a US patent for pain assessment invention. Implications: Antipsychotic prescriptions are overprescribed to patients living with dementia and the use of AI assistive technology will help promote the move to value-based care, lead to improved patient experiences as well as better health outcomes for patients. One of the biggest challenges is assessing pain levels for people living with dementia. Using applications like PainChek will yield improvements in communication for patients living with dementia, helping improve the quality and appropriateness of care. Pain and dementia: common challenges for care managers [AI in pain assessment] Backed by Google’s Investment Arm, Home-Based Care Startup Ready Lands $54 Million Event: (9/16) On September 16th, Home Healthcare News announced that Ready, an on-demand health care startup has raised $54 million in Series C funding. Ready delivers home-and community-based services, aiming to provide a doctor’s office-type visit in the home. Description: Ready deploys “Ready Responders” — who are trained as EMTs, paramedics and nurses — to hundreds of patients’ homes per day. All responders are connected to Ready’s platform through their phones and are also equipped with iPads, testing and monitoring equipment. When Ready partnered with Ochsner Health System, there was a reduction in non- emergency ED visits by upwards of 70%. In addition, COVID-19 has accelerated Ready’s business in New York. Due to New York’s dire need for health care workers during the crisis, Ready launched a year earlier than anticipated, Ready’s original plan was to launch in New York in 2021, but New York’s dire need for health care workers and providers during the public health emergency sped up the process. Since Ready’s main payer is Medicaid, it was able to extend support to under-served communities throughout the pandemic. Implications: This funding will help Ready continue building out the infrastructure to scale the business, grow visit volume, enhance its product offerings and expand the range of conditions it can support. Even as the pandemic slows down, the company's market continues to grow as patients enjoy the convenience of in-home care. Given Ready's main payer is Medicaid, this service is expanding crucial care in areas of need. Backed by Google’s Investment Arm, Home-Based Care Startup Ready Lands $54 Million Amazon Expands Virtual Medical Clinic Across Washington State: 5 Details & Amazon Care: 5 Things to Know About Amazon's New Virtual Medical Clinic Event: (9/22) CNBC reported that in September 2019 Amazon launched the Amazon Care program, which offers employees virtual medical consultations with clinicians as well as in person nurse follow-ups for company employees and their dependents. Healthcare represents a $3.5 trillion sector for Amazon, which is looking for different avenues to bring technology into the work they already do. Description: The Amazon Care program was implemented to offer employees and their dependents virtual and in person medical consultations with physicians and nurse practitioners. Patients can also use the app to schedule in-home follow up visits, text a nurse on any health topic in minutes, and have medications prescribed delivered to their homes. CNBC noted the application serves to eliminate travel time, wait time, and connect employees and their families to the best trained medical professionals for optimal care. According to Amazon Care Director Kristen Helton, PHD, the program received a patient satisfaction score of 4.7 out of 5, which prompted the company to expand to all eligible employees in Seattle, Washington, where most of their corporate employees are based. Implications: With the rise of COVID, and the need to physically distance increased accessibility to virtual care is even more crucial for the well-being of employees and their families. This underscores the need for accessible and affordable employee healthcare plans which integrate virtual and in-person care like Amazon Care. For big tech companies like Amazon, Google, and Apple, among others, employee health programs represent a way to test new health-care products in an internal research and development lab. Amazon leads the way in making inroads into telemedicine, which represents a $130 billion market opportunity if the company expands its clinic beyond a pilot for its own employees. Although Amazon joined up with J.P. Morgan and Berkshire Hathaway in 2018 to form Haven, an exploration of new ways to manage healthcare expenses for their combined 1.2 million employees, that effort seems to have stalled. This new healthcare initiative may indicate that Amazon intends to pursue certain healthcare solutions on its own. Amazon Expands Virtual Medical Clinic Across Washington State: 5 Details & Amazon Care: 5 Things to Know About Amazon's New Virtual Medical Clinic Microsoft Teams Integrates with EHRs for Provider Telehealth Event: (09/22) A recent article in Healthcare Dive highlighted the fact that Microsoft Teams would integrate with EHRs providers for telehealth and that its industry specific cloud offering for healthcare, Microsoft Cloud for Healthcare, will be generally available at the end of October. Microsoft Cloud for Healthcare includes Microsoft 365, Dynamics, Power Platform and Azure and is aimed at managing patients and staff, deploying resources and promoting data insights. Microsoft also announced the AI-enabled speech-to-text software integration from Nuance. Description: Microsoft noted that its Teams platform, which has a workplace chat, file sharing and web conferencing and is HIPAA-compliant has seen rapid uptake amid the pandemic with telehealth meetings increasing 35% from April to July. Microsoft’s health system clients had pushed the tech giant to integrate with Epic and other EHRs while keeping privacy and security a top priority when creating the video platform for healthcare. In addition, Microsoft’s recent integration with AI-enabled speech-to-text software from Nuance allows patient data entry by automating physician notes taken during a virtual visit which transcribes notes into the correct EHR field, eventually doing so without human supervision Implications: Microsoft’s Cloud for Healthcare and Teams EHR integration allows it to link information and help hospitals with telehealth, care management and patient engagement through apps . This will make it easier for healthcare providers to access data and other services in a remote setting should another pandemic or crisis occur. The integration of Teams and Nuance potentially puts Microsoft at a competitive advantage over other existing large telehealth vendors like MDLive, Amwell and Teladoc, by eliminating the need to integrate a separate distinct telehealth solution and easing workflow via the automatic transcription of clinician notations directly into medical records. Microsoft Teams Integrates with EHRs for Provider Telehealth High-Tech Aids for Aging in Place Event: (9/23) On September 23rd, Kiplinger.com released an update on this year's technology to assist older users and their caregivers who cannot afford the high cost of assisted living/senior care.. Kiplinger’s highlighted six products across a range of devices not all of which are marketed direct-to-consumer. Two we are highlighting here are Smart Sole and Envoy at Home. Description: SmartSole provides a smart insole to fit into shoes with a built-in GPS. This is used to keep track of a loved one with dementia who may wander off and get lost. The device pinpoints the person’s whereabouts on a map, supplying addresses and outdoor locations to within 15 feet every five minutes. Envoy at Home is a remote caregiving service for older adults who live alone and can't afford a health aide. Using sensors, caregivers can monitor the person's wellness and safety, such as how long or frequent the patient's bathroom visits are, periods of inactivity, and whether they are taking prescribed exercise or rest. The caregiver can then receive reports and alerts on the patient. Implications: During COVID, many caregivers are socially distancing from their older loved ones and cannot be present to care for them as they are accustomed to or would like. SmartSole and Envoy at Home provide solutions to remotely care for older people living on their own. These solutions and devices like them, help older adults live independently at home longer and provide more flexibility for caregivers by allowing them to care for elderly parents from a safe distance. High-Tech Aids for Aging in Place

Targeted Cyberattacks on Telehealth Vendors Skyrocketed Along with Adoption, Report Finds & Fewer than Half of Healthcare Institutions Met National Cybersecurity Standards Last Year Event: (9/10 & 9/17) According to two recent reports, not only has the number of cyberattacks targeting popular telehealth applications risen 30% since the pandemic began, but healthcare institutions are slightly less prepared to deal with them in 2019 than they were in 2018 or 2017. First, based on the “Listening to Patient Data Security: Healthcare Industry & Telehealth Cybersecurity Risks” report by Security Scorecard and Dark Owl, there has been a dramatic increase in attacks on telehealth which saw the increase in security alerts noted above compared to the healthcare industry in general which saw an overall 77% decrease in security alerts. In addition, the CynergisTek 2020 Annual Report noted declines in four of five core security functions outlined in that National Institute of Standards and Technology’s cybersecurity framework with assisted living facilities scoring highest (96%) and physician groups scoring lowest (20%). Description: Security Scorecard and DarkOwl compared security alerts sent to IT staff at 148 of the most popular telehealth applications for the period March through April of 2020 compared to the pre-COVID period of September 2019-February 2020. They found a 65% increase in patching cadence findings, a primary secret security approach to protect data and a parallel 56% increase in endpoint security attacks. They also found security issues were reported due to increased FTP attacks (which rose 42%) and RDP attacks (which rose 27%) both of which target increases in remote and virtual workers. The CynergisTek report showed that healthcare institutions compliance with IT security policies were sliding, scoring 44% in 2019, vs. 47% in 2018 and 45% in 2017. This included a decline in four of five core functions. Implications: With the growth in remote work and the explosion of digital health due to the pandemic, the number of “digital endpoints” exposing healthcare institution’s to cyber risk has increased significantly. As a result healthcare institutions need to be even more vigilant and conscious of the risks to patient data and IT system integrity/security. Healthcare companies must work on greatly improving and patching their critical security tools enhancing endpoint protection, improving identity access management, and data loss prevention. Targeted cyberattacks on telehealth vendors skyrocketed along with adoption, report finds & Fewer than half of healthcare institutions met national cybersecurity standards last year COVID-19 Tracking Tech – Weighing Personal and Public Health Benefits Against Privacy Event: (9/18) A recent survey conducted by SecureAge Technology shows that 67% of consumers and 91% of IT professionals said they'd support a nationwide rollout of contact-tracing apps or other technologies despite the fact that the clear majority of these groups believe COVID contact-tracing technologies put individuals' personally identifiable information at risk. The report notes many have strayed away from using these resources, afraid that their personal information may be compromised as COVID has caused an increase in technologies used to educate, contact trace, and symptom report for those who may have been exposed to the virus. Description: Public Health departments have begun rolling out applications to aid with contact tracing and educating individuals regarding COVID, but recent surveys are showing that there has been increased skepticism. Although these tools have been introduced to control virus transmission, the hesitation isn’t unfounded due to major technology firms like Google and Apple that have been facing scrutiny from the public and lawmakers over the collection and use of personal data for corporate gain. Additionally, published analyses suggest that many COVID apps made available for download make little effort to protect the data they are collecting. Despite the valuable aspects of these applications such as quarantine updates, healthcare contacts, location tracking, and educational tools, the cons have greatly overshadowed the pros. Implication: COVID applications are valuable in helping users understand their risk, so they can adjust their behaviors and seek testing if necessary, but proper education is necessary to maximize the use and to save lives. The information stored in these applications are critical and need to be protected at all costs to create a safe space for use. Public health groups need to better inform the public about the benefits of these apps and ensure that the information is given with proper consent and handled responsibility, especially amongst higher risk populations that may have varying levels of literacy. COVID-19 tracking tech – weighing personal and public health benefits against privacy Why Digital Therapeutics are Flourishing Under COVID-19 Event: (9/17) A recent report in Mobihealthnews highlighted the growth in adoption and acceptance of digital therapeutics during the COVID pandemic. The article noted that not only has COVID removed some of the stigma around the conditions being treated (mental health, psychiatric conditions, etc.) and the ability to treat them digitally, digital therapeutics is not facing some of the issues in trial design and recruitment that traditional trials are experiencing. As a result, there has been increased access to evidence-based interventions which show reliability and personability to patients. Description: Digital therapeutics are evidence-based therapeutic interventions driven by high quality software programs to prevent, manage, or treat a medical disorder or disease. As a result of COVID digital therapeutics executives and industry stakeholders have seen an increased demand for efficient and accessible treatments which can be done remotely without potentially exposing them to the virus and can be highly personalized. In addition, digital trials are decentralized, can be done from home and typically allow more flexibility in recruitment all of which have been advantageous vs. standard trial design during the pandemic. Implications: Digital therapeutics are likely to yield improvements in self-care particularly for patients who are isolated due to COVID as well as reduce the social stigma around many of their conditions. With a number of digital therapeutics already approved and companies such as Big Health, Click Therapeutics, Akili, and others focused on using digital technologies to reduce development costs and increase accessibility to care for many conditions they are likely to redefine how care is delivered in many areas. Why digital therapeutics are flourishing under COVID-19 The Rise of Venture Capital Investing in Mental Health Event: (9/16) On September 16th JAMA published an opinion piece about the increase in venture capital (VC) investment in mental health noting that the sector was ripe for innovation with fewer than ⅓ of the people in need of care receiving treatment and only a subset of those actually getting adequate care. The article went on to note that while VC investment has grown almost 23x since 2013 it was important to look at potential concerns and benefits associated with the influx of money. Description: The private sector is using health and wellness as an investment opportunity after realizing there is a supply/demand imbalance mismatch for those in need of mental health treatment. However, VC supported companies often rely on the ability to grow quickly and serve a large population to maximize their return on investment which could be at odds with medicine’s evidence-based approach and the one-on-one nature of mental health treatment. In addition, there have been concerns around the security of data, privacy of client information, the lack of informed consent and broad-based nature of the apps (vs. the need for personalized treatments). Implications: The rise in venture capital investment in mental health care offers an opportunity to scale treatments that work to address mental illness. However, while VC supported mental health companies can provide improvements in transparency with diagnosis, treatment process, and costs, concerns around developing evidence based treatment, appropriate quality controls, improved privacy safeguards and the continued need for solutions to treat severe mental illness, all need to be addressed further. The Rise of Venture Capital Investing in Mental Health (abstract) Telemedicine Projected to Account for 20% of Medical Visits in 2020, Report Says Event: (9/16) Telemedicine projected to account for 20% of medical visits in 2020 according to a new Doximity Report. The new report, published last week by the Doximity physician network, is based on a randomized survey of 2,000 American adults. Doximity network data reflects "physician adoption insights," and data from the Medical Expenditure Panel Survey and commercial insurance claims to gauge the telemedicine market. Description: The COVID pandemic has spurred widespread adoption of telemedicine along several fronts at health systems, hospitals, and physician practices—primarily over concern about the spread of the novel coronavirus in healthcare settings. Telemedicine visits for nonemergency care also have been shown to be efficient and effective from both the healthcare provider and patient perspectives. This has resulted in an overall increase in telemedicine visits. Since the Coronavirus pandemic began, the number of Americans participating in at least one telemedicine visit has increased 57%, according to the report. Implications: Although COVID numbers have recently appeared to improve, given concerns about an impending second wave and the successful increase in application during the pandemic the market for digital health and increased ways to apply it will continue to grow. COVID has accelerated the rate of deployment, overcome physician reluctance to apply its use and rapidly increased consumer acceptance. As a result. more than a quarter of survey respondents reported feeling telemedicine visits have the same or better quality versus in-person visits with Doximity predicting telemedicine will account for $106B of medical services by 2023 (up from $29B of medical services in 2020). Telemedicine Projected to Account for 20% of Medical Visits in 2020, Report Says U.S. HealthCare System on Life Support, Say Test Results from New Study Event: (9/14) A recent report from The Commonwealth Fund, entitled a 2020 Scorecard on State Health System Performance, which looked at 49 indicators of health care system performance was not encouraging. According to the report, the state of healthcare issues in the U.S. such as access to, and the cost of basic medical care and minority health outcomes have significantly worsened, especially during the recent pandemic. Also, resources linked to mental health treatment have lost funding, causing an increase in drug/alcohol abuse and suicide all over the nation. Description: The report, which drew primarily from 2018 data, and some preliminary 2019 data noted, among other things there is a nationwide crisis when it comes to overall health outcomes. The Black and Latinx populations are suffering the most as well as those residing in states that chose not to expand Medicaid services. The four main conclusions made from the data reviewed: 1) Americans are living shorter lives than in 2014, with Blacks twice as likely to die from treatable conditions than whites, 2) healthcare coverage gains have stalled with both out-of- pocket costs and insurance costs worsening, 3) increased healthcare prices have driven healthcare spending growth and the rise in consumer healthcare costs, and, 4) public health dollars are already being stretched while having to contend with unprecedented challenges due to the pandemic. Implications: The current state of the U.S. healthcare system highlights the need to combat extreme deficiencies to promote better healthcare outcomes. The global pandemic has brought to light the extent of the healthcare gap and lack of access to resources that has negatively impacted the nation, especially amongst minorities. If new solutions do not emerge, Americans will continue to see a downturn in overall health, especially as COVID-19 continues to spread throughout the world. U.S. health care system on life support, say test results from new study

The hazards of digital mental health Event: Mobihealthnews examined the lack of scientific evidence backing digital mental health apps, noting “investors and entrepreneurs alike are pouring record time and resources into digital health” including almost $600 million into behavioral health. With the explosive growth in digital mental health services, concerns have arisen due to unclear evidence of whether or not their products actually work. Background: Many digital health companies are introducing products to the market without showing if their solutions work, publishing their raw data or publishing for peer review. This leaves many health professionals uncertain when recommending digital health treatments to patients. This is due in part to the fact that only 18% of psychiatrists use measurement-based care due to lack of time, training, and the sense scales don’t capture the diverse phenotypes of mental illness. Implications: The success of many digital mental health companies is determined by their financials and operation rather than how effective the treatments are for patients Healthcare researchers, clinicians, and technologists have to collaborate and use measurement-based care to ensure there are effective digital mental health products out in the market as care increasingly moves to virtual settings. The hazards of digital mental health Telehealth visits have skyrocketed for older adults, but concerns remain Event: The University of Michigan released its National Poll on Healthy Aging (NPHA) noting in 2019, many older adults expressed at least one serious concern around the usage of telehealth services. Since COVID-19, telehealth has become a much more popular option among older adults due to underlying health risks and closed medical facilities. Background: After states mandated reductions in elective and non-emergency healthcare, the University of Michigan conducted a poll finding that 30% of older adults participated in telehealth services by June 2020. Comfortability in using telehealth services increased by 11%, and privacy concerns have dropped significantly. Older adults have a growing interest in telehealth, but lack experience or access which remain barriers to receiving care. Implications: Many older adults have limited experience and aptitude with digital health technologies and may need additional help to gain comfort with the quality of communication and privacy. Some older adults continue to express concerns about telehealth visits, particularly regarding the quality of care compared to in-person visits and the inability for a physical exam. Until these issues are addressed, some older adults may be hesitant to engage in telehealth visits. Telehealth visits skyrocket for older adults, but concerns remain Large U.S. employers focusing on virtual care, mental health services in 2021 Event: The Business Group on Health published its 2021 Large Employers' Health Care Strategy and Plan Design Survey noting the Covid-19 crisis has caused employers to re-evaluate and expand the benefits offered to their employees. These benefits include virtual mental health and emotional well-being services which are projected to increase in the upcoming year. Background: In the past, employers covered nearly 70% of healthcare benefits for their employees. Due to the increase in virtual health usage, employers are set to expand their virtual health options, offering telehealth services, mental health services, and minor, acute conditions. Additionally, 45% of employers have included mental and behavioral health training for managers to ensure mental health issues are recognized and dealt with during this unprecedented time. Implications: The increase in the use of telehealth services has opened the doors for more virtual solutions with both employees and providers seeing benefits and embracing these solutions. This report reinforces the importance of employee health during the pandemic, noting that with 2021 rapidly approaching, employers should focus on further expanding telehealth platforms and providing additional training on awareness and usage. Business Group on Health Large Employer Healthcare Strategy & Plan Design Survey Uncovering the real value of the benefits you offer Event: A recent article in Benefits Pro, highlighted that employees’ well-being not only improved from utilizing health benefits, but also from being offered health benefits by in effect providing them peace of mind. Citing Fidelity Investments report, “Uncovering the real value of the benefits you offer,” the article pointed out “if 2020 has shown us anything, it’s that this is not a typical year and arguably, we are approaching the most important annual enrollment we will ever experience in our lifetime.” Background: Fidelity’s Health Solutions Group took a more holistic view of value that can guide employers to make more informed decisions on how to improve their benefits offering. In part, they found not all benefits actually have to be used to be effective, and employers offering mental health, life insurance, and remote added value by demonstrating they had the employees’ best interests in mind. HSAs, telemedicine and parental leave, however, need to actually be utilized to improve well-being Implications: Understanding the difference between awareness and utilization of benefits can help employers dig deeper into which benefits they should focus their attention on. One in four companies have changed employee health benefits since the COVID-19 pandemic began in March, complicating the upcoming 2020 annual enrollment period Employee benefits offered vs. used: What's the difference? The “at-home” shift continues to accelerate Event: Salesforce announced they would let employees work from home until August 2021, offering additional benefits to purchase office supplies to work from home and more paid time off. At the same time last week, retailers such as Home Depot, Target, and even digital laggard Kohl’s reported that eCommerce sales came in above expectations. Background: Salesforce CEO Marc Benioff has been one of the most forward-thinking CEOs in terms of COVID, laying out an 8 point plan to deal with COVID and developing the “work.com” website to help companies bring employees back to offices safely. In terms of retail sales, while eCommerce sales have benefitted from COVID lockdowns, many had expected this to begin to level off as a number of states had permitted physical stores to reopen during the quarter (May-July). Implications: The “At-Home” (work at home, shop at home) shift is not slowing down and may in fact be accelerating further solidifying the secular change to a hybrid delivery model of customer engagement (in-store, online, mobile). While some providers are focusing on an “outbound care” delivery model (bringing the care to patients) the vast majority continue to focus on an “inbound care” delivery model, (having patients come to offices, clinics, and physical facilities) and risk missing another paradigm shift. Salesforce will let its employees work from home until August 2021 Earnings roundup: Online sales double for Home Depot

Event: Thrive Global was founded by Arianna Huffington and launched in 2016 with a focus on reducing burnout with a strong focus on the proper role of sleep in self-care. While just one of many companies focusing on improving sleep habits, Thrive is at the forefront of this new technology. As noted by Thrive’s chief platform officer, “sleep is the underpinning of every aspect of our physical well-being, our mental well-being and our performance, including our creativity, decision-making, problem-solving and ability to focus.” Description: According to Crunchbase over $1.9B in venture capital has been raised to improve the quality of sleep. According to the same article, the global sleep market is expected to expand to over $150 billion by 2024 as lack of sleep and poor sleep hygiene remain a public health issues. Statista estimates that $430 billion is spent annually on sleep aids and that the global sleep economy will grow to almost $600B by 2024. Proper sleep is a key element of proper overall health and wellbeing; however, the majority of adults and children do not get the recommended amount of sleep. In fact, studies indicate that most people tend to overestimate the amount of sleep they get. For example, according to a study entitled, Sleep and Mental Health Amidst the 2020 Coronavirus Pandemic, “teens and young adults had the worst quality sleep, and reported the highest rates of depression; women were twice as likely to report taking longer to fall asleep than men; and 45 percent of respondents reported heightened anxiety while 24 percent reported heightened feelings of depression”. With COVID resulting in more employees putting in more hours while working from home, this made them more prone to burnouts, depression, and anxiety. The epidemic of poor sleep, when combined with a rigorous work culture and poor health literacy led many to look for immediate and accessible innovations. Arianna Huffington, the founder of the Huffington Post, collapsed from stress and burnout in 2007, which resulted in a broken cheekbone and the founding of Thrive Global. Thrive promotes mental health wellbeing through different mediums, including sharing her own experience of burnout. Thrive Global is a behavior-changing platform that seeks to promote health literacy through workshops, podcasts, and intelligently tailored “microsteps” allowing the individual to take charge of their health in achievable milestones, along with their peers for accountability and sustainability measures. With various “global hubs” including in Mumbai, Athens, and New York, Thrive Global is encouraging corporates to rethink their work culture, urging for a sustainable way of living, prioritizing wellbeing and health over success and work productivity. Thrive Global partners with larger corporations providing their employees with wellness tools and workshops resulting in better health outcomes. On their website, Thrive Global highlights its ability to boost work productivity and performance, reduce employee turnover rates and improve employee engagement. Along the same lines, the global sleep industry is seeing a number of other innovative startups to combat the state of sleeplessness. For example, Bryte, “a restorative sleep technology company that is developing an artificially intelligence-connected and robotics powered bed” raised $25M in Series A funding in January led by ARCHina Capital. The Bryte mattress intelligently monitors temperature and pressure points to provide an optimal sleep environment on a daily basis. This Los Altos sleep startup aims to accelerate the sleep tech industry by partnering with companies that will utilize their intelligent sleep platform. Sleep Cycle, a Swedish-based company, offers an app alternative to sleep aid which monitors sleep cycles and intelligently schedules an alarm to wake the person up during their lightest sleep phase. Implications: As sleep research improves from sleep logs to tracking sleep duration via mobile devices, sleep study is still insufficient. The novel pandemic is exposing the harrowing results of poor investment in mental and emotional health leaving many Americans, both adults and children, with an increase in reported new health conditions such as depression, anxiety, and stress. Poor sleep and its effects can lead to chronic health conditions but preventative care is available and readily accessible, due to strides in technological advancements and telemedicine. There is an opportunity for telehealth and healthtech to alleviate the burden placed on existing disease management services and equip patients with preventative care plans more efficiently. By allowing patients to measure their sleep patterns more accurately, conveniently, and safely, the new sleep startups have the potential to improve sleep tracking and research. More importantly, there is a way to aggregate these data points and connect patients with more holistic treatment plans as technology allows for accuracy and accessibility. The technology to collect and analyze data regarding sleep management and monitoring is a useful tool for telemedicine to incorporate for their patients. With proper utilization, the existing activity tracking technology has provided a working foundation for both providers and patients; additionally, it can also allow for an emphasis on preventative care from both parties. These Startups Want To Give Us The Best Night’s Sleep And Investors Are Tucking In & 10 Years Ago I Collapsed From Burnout and Exhaustion, And It’s The Best Thing That Could Have Happened To Me Bryte Raises $24M and Begins Licensing its Tech in Addition to Selling $8K AI-Powered Mattresses

Event: On March 23rd, DexCare, an AI-powered platform that manages and schedules patient care, raised $20M in oversubscribed funding led by Define Ventures joined by Kaiser Permanente Providence among others. DexCare is a spin-out from Providence St. Joseph’s Digital Innovation Group which attempts to incubate innovative healthcare solutions for health systems by spinning out digital start ups. Puget Sound Business Journal reported that DexCare partnered with 6 major health systems, providing them multiple point solutions through a unified system. including “Providence, Community Health Network, Houston Methodist, and Froedtert and the Medical College of Wisconsin health network”. Description: Founded in Seattle 2016, DexCare, a platform-as-a-service (PaaS), promises to support the increased patients’ consumption for healthcare to match the novel demand for ambulatory and telehealth services simultaneously. According to DexCare, “the innovative technology allows [patients] to access healthcare, make appointments and receive follow-up care based on [their] health needs, preferences, location and schedule. In terms of ambulatory care the service connects patients to clinics or providers that are the most appropriate site of care and where care can be provided within the same day. While DexCare was initially used as the platform to access same-day care at Providence, when COVID hit, Providence scaled up the DexCare platform to increase its use in other areas. As the innovative technology evolved it helped Providence coordinate resources and shift from in-person care to telehealth visits to ensure providers could meet the unprecedented demand. During COVID health systems saw unprecedented increases in telehealth volume causing a need to coordinate numerous variables in healthcare delivery. DexCare aims to intelligently provide on-demand healthcare services by leveraging the health systems’ available resources and capacity. For patients, the DexCare platform provides a self-directed, easy-to-use digital experience that removes barriers to care and improves access by allowing them to use whatever modality is most convenient for them (online, in-clinic, chat-based or in-home). In addition, DexCare allows patients to understand and select the best care option given your symptoms and appointment availability, determine insurance eligibility and matches them with a provider that has the highest net promoter score (NPS) a form of customer satisfaction score. On the hospital side, the benefits of sustaining ambulatory care are cost-effectiveness, prompt care delivery, and increased patient retention and satisfaction. According to DexCare it “has enabled service lines to attract 30% more new patients, capture 5x downstream revenue, generate $22 per patient encounter in cost savings, and deliver a net promoter satisfaction score greater than 80”. Implications: While the use of telehealth increased dramatically during COVID the delivery of care, the customer’s journey through the healthcare maze and the quality of the patient experience really did not change dramatically, Getting patients into the system, handling all the administrative tasks and directing them to the most appropriate sites of care to deliver a consumer focused experience is still not delivered in an integrated manner. For telemedicine and healthtech to finally achieve it’s promise not only must care be delivered more efficiently it must be delivered where consumers want it (home, online, facility), when they want it, and easily like all of their other digital experiences. DexCare and other services like it, are helping to make the patient journey more consumer-centric and retail-like, which will be necessary to both meet demand and lower cost as well. Latest Providence Spinout Raises $20M to Fuel Expansion Plans & Providence’s Newest Digital Health Spinout Snags $20M

Event: On March 5th, MobiHealthNews reported that TytoCare raised an additional $50 million in Series D funding this year .TytoCare innovated a handheld comprehensive exam kit; making telehealth more accessible and reliable. Ten days later, West Michigan’s Spectrum Health, announced its partnership with TytoCare. TytoCare aims to use the funding to update their AI functionality and expand its platform to more markets in Europe, Asia, and the U.S. Lessons Learned Along the Way: Telehealth has still not fulfilled its promise, there's more to be done in remote and virtual care Convenience and access are key, patients will transform healthcare just as they've changed ever other industry Increases in technology have realistically reached the point where they can increase the nature of procedures done outside of hospitals/physician offices. AI and ML will allow providers to leverage clinicians in areas where doctors/specialists are in short supply Description: Founded in Israel in 2012, TytoCare markets telehealth-enabled/connecting medical devices through a kit that includes a stethoscope, a high-definition camera, an infrared thermometer, an otoscope-device to examine the ears, and a tongue depressor adapter for examining the throat. By using the kit, patients can enhance a traditional telemedicine visit enabling doctors to remotely measure blood pressure and examine a patient’s ears, heart, lungs, and skin (among other things). As TytoCare describes it on their website, their innovation delivers care “just like visiting the doctor in person”. We spoke with David Bardan, VP and Head of U.S. Commercial at TytoCare who noted that the COVID pandemic had increased the demand for telehealth services generally resulting in a 2.5x increase in demand for the company recently. Bardan also noted that approximately 90% of the company’s business is in the U.S, where they have partnerships with over 120 health systems and are in over 300 Best Buy retail stores. TytoCare said they will use the funds to expand its platform into additional markets in the U.S., Europe, and Asia. In addition to expanding their platform, TytoCare will introduce more machine learning capabilities to their examination kit making these telehealth visits even more personalized and accessible. For example, Venture Beat noted that 9 out of 10 seniors prefer receiving at-home health care; increasing a demand for remote health monitoring innovations, long before the pandemic. Barden also pointed out the TytoCare devices enable the ability to perform more health management and monitoring at home which should help greatly with improving diagnosis and outcomes and even allow the company to extend the reach of care in rural communities where the number of doctors and specialists may be limited (ex: by having patients visit a clinic staffed by a PA or LPN who could then transmit the data to a doctor at another location). The company also plans to use the AI and Machine Learning capabilities incorporated into its products to broaden and deepen its clinical services. Barden noted that the company’s products can already detect a wheeze in a patient’s lungs. Implications: TytoCare has created a product that has the potential to dramatically change the way telehealth is being practiced; allowing for patients to perform clinical tests at home. In addition to reducing the burden on healthcare providers and systems, TytoCare will allow patients to be more hands-on with their health, allowing for wellness and preventive checks even when they aren’t sick. TytoCare is already updating its practices and closing the information gap by allowing TytoCare providers to “transfer data into the EHR” via Epic’s App Orchard. Additionally, TytoCare is working on improving its AI functionality; allowing for patients to detect heart murmurs simply, without the use of ECG. The ability to gain series of vital measurements cheaply, cost-effectively, and with better quality can alleviate much of the burden currently placed on strained healthcare resources while simultaneously lowering costs. Bardan noted that as telehealth and TytoCare’s digital health devices improve, the company envisions a model where clinics equipped with the company’s devices can function as a hub for patients who may not have access to care or broadband services that allow them to take advantage of its products. This hub and spoke model has great potential to bring affordable healthcare to many who are geographically isolated or technologically deficient. TytoCare is hoping to change the way people perceive healthcare to one focused on wellness and preventive care all the while taking advantage of the shift in the way people acquire healthcare as a result of COVID. Let us help you: Design/refine your go-to-market strategy Develop a targeted pilot project strategically designed to match your domain expertise with pre-identified prospects Establish a continuous feedback loop from early wins to build a growth flywheel and scale your solution

Event: Redox recently announced that they raised $45M in a Series D round, bringing its total raised to $95M. The round was led by Adams Street Partners, joined by Avenir and prior investors Battery Ventures and .406 Ventures and RRE Ventures. Redox’s cloud-based platform simplifies integration and scaling for software developers looking to build applications for healthcare providers. Lessons Learned Along the Way: Analyze where the value is being created and move in that direction Create a defined and integrated way of attacking the problem Tackle the problem in phases and keep working incrementally to maintain and improve functionality. Description: Redox is a Wisconsin domiciled cloud-based integration software provider that helps accelerate the adoption of healthcare technology. We spoke with Redox President Niko Skievaski, the company’s data platform allows developers and providers to connect its network once and then exchange data across the company’s platform with any other connected company once they join the platform. More than 1,400 healthcare delivery organizations, including most top hospitals, and 350 independent software vendors use Redox’s service to exchange and integrate more than 12 million patient records. According to the company, almost 70% of the traffic on its network is bi-directional. Redox’s system is able to exchange data across over 50 EHR systems and currently has over 1,400 live connection points (as of the time of our interview). Visually one can think of Redox as powering a “two-sided network” with software developers on one end and healthcare providers on the other, with the Redox cloud powering the connection between the two. According to Skievaski, the power of Redox’s model is that once an app developer or provider is connected to the network, each successive integration becomes “magnitudes easier”. While the average implementation time is approximately 4-6 weeks (currently running 35 days), the company pointed to one example where the company tested and implemented an application for an existing customer during a 30-minute phone call. Interestingly, from a business model perspective, while Redox could have chosen to focus on selling to providers, they felt that would require them to customize each integration and probably would have effectively ended up leaving them with 20 large customers. By contrast, Skievaski noted that while selling to developers was initially a risk, by “seeing where the value is and moving in that direction” they were able to create a whole network of data and share it more effectively. As a result, their software developer customers actually end up recruiting providers to the Redox network thereby enhancing its power. Similarly, following a sharp slowdown in project activity at the beginning of the pandemic (when almost 70% of projects were put on hold or canceled) ensuing layoffs precipitated Redox to form specialized verticals focused on growth areas such as remote patient monitoring, telehealth, labs and diagnostics all of which are projected to do quite well coming out of the pandemic. Implications: The ability to exchange information and turn it into timely, usable, and actionable data will probably be the single most important issue in controlling healthcare costs and improving the delivery of healthcare over the next decade and beyond. As demonstrated by the COVID pandemic, in a hyper-connected world, disease and pathogens can spread across the globe in the course of a few plane trips. As a result, the need to track, trace and type people and goods that may harbor pathogens will be dependent upon our ability to gather and share quality data. On a more local level, data will power earlier/improved diagnostics and risk-stratification needed for improved population health, comparative effectiveness, and attribution for value-based care as well as the user analytics and recommendation engines that will power consumer health apps. Healthcare has tremendous amounts of data but it is difficult to get to, often siloed off, and even harder to share. Solutions from standards bodies like FHIR and HL7 as well as private market solutions like Redox and others are necessary to break the logjam to free up data intelligence and make healthcare more responsive and adaptive to the demands of the market. Let us help you: Analyze how your core competencies match up with unmet needs in the market Develop a targeted pilot project strategically designed to match your domain expertise with pre-identified prospects Establish a continuous feedback loop from early wins to build a growth flywheel and scale your solution This Startup Raised $45 Million To Connect Healthcare Data In The Cloud & Healthcare Strategy Bullpen Interview Niko Skievaski, President Redox, 3/10/21

This week we present a review of our favorite posts of the year. "Our Take" and our regular updates will return next week. Slipping Away: Does the Employer-Sponsored Health Care System Have an Expiration Date? Event: On November 3rd, Benefits Pro released an article stating that the employer-sponsored health care system may come to an end if employers don’t move more quickly to improve the system. According to former Florida Governor Jeb Bush’ “for those who believe in markets, choice and patient responsibility haven’t been offering creative 21st-century suggestions...there has been very little discussion about alternatives” to expanding Medicare. Description: The article noted that unless the Employer-sponsored insurance (ESI) industry can deliver on much needed reforms, its day’s might be numbered. It added, that “while there is still time to step in with solutions that ease the pain”, by some estimates, “if the health care system can’t be righted within the next five years, we’ll be looking at a full government takeover”. It is also clear that existing healthcare industry participants are resisting change and that the current system is “riddled with throwing technology on top of broken processes” instead of fixing “the process and then [applying] the technology”. As a result many are looking to big names like Amazon (and its Haven health care venture), Google, Apple, and Microsoft to bring health care costs under control and improve outcomes. Implications: ”Our country is creeping--in some cases jogging and even sprinting--toward a government dominated healthcare system” as pointed out by former Florida Governor Jeb Bush, but employer resistance to innovation and true improvement risks crippling the system. While COVID has laid bare the shortcomings of the system it has also dramatically accelerated the pace of change. Taking advantage of this opportunity now is especially important as Millennials, the largest generation in history who are expected to make up 75% of the workforce by 2025, are starting to get to the point where they interact with the healthcare system and demand more. Smart employers can take advantage of the opportunity to design a curated, more modern ESI healthcare plan or risk a permanent move toward a government-run healthcare system. Slipping Away: Does the Employer-Sponsored Health Care System Have an Expiration Date? What Startups are Missing When They Talk About the ‘Consumer’ Experience & To Boost Inclusivity, Words Matter in the Healthcare World Event: Two recent reports in Mobihealthnews focus on the importance of including a health equity agenda and acknowledging the importance of langage to improve consumer experience and inclusivity in digital health tools. Digital health need to make sure they “have delivery systems that communities can trust and want to access” especially for groups of people who have been historically marginalized such as those in LGBTQ+ community and communities of color. Description: Two recent panels shed insights on lessons that could be learned from the dual crises of COVID and racial injustice which have had a disproportionate impact on underserved communities and communities of color. Participants noted that when designing digital solutions for marginalized communities, it is important to take a broad look at health care needs and meet communities where they are. Words and language used by clinicians have impact and can either boost inclusivity or cause exclusion. When designing healthcare solutions, people need to consider – does this work for marginalized communities and what does management and board teams look like from a diversity, equity and inclusiveness standpoint. Implications: Panelists noted that one of the challenges Silicon Valley has in changing health care at scale is that too often entrepreneurs are reflecting their own experiences onto the challenges of healthcare today. One solution would be to tailor efforts towards a specific population served rather than roll out a one-size-fits-all program. In addition, start-ups need to guard against the “Silicon Valley-ization of Healthcare” that focuses on transactions as opposed to relationships and driving outcomes. What Startups are Missing When They Talk About the 'Consumer' Experience & To Boost Inclusivity, Words Matter in the Healthcare World Patient Experience Better When Patients Visit Docs of Same Race Event: On November 11th, PatientEngagementHIT released a study conducted by the Perelman School of Medicine at the University of Pennsylvania, addressing the correlation between patient experience scores and the race of both patient and doctor. In addition, the study looked at the need for health systems to address racial implicit bias in medical settings. The study concluded that patient experience scores tend to be at their highest when a patient sees a physician of the same race and that health systems must do a better job at addressing implicit racial bias in medical settings. Description: The researchers looked at approximately 120,000 patient experience scores for an urban academic medical center, focusing on the “likelihood to recommend” domain. The study found that patients who saw physicians of their own race or ethnicity were more likely to rate their physicians higher on patient experience surveys than those who saw physicians of a different race or ethnicity. Although the differences in rating seems small, with black patient’s rating white physicians 0.03 points lower on “likelihood to recommend” than their rating for black physicians, that 0.03 points difference could lower a physicians mean score on Press Gainey ratings from the 100th percentile to the 70th percentile. Implications: The results of the study reiterate the association between race/ethnicity and patient-physician interaction/ outcomes and the implicit racial bias black patients have experienced in healthcare. This ultimately impacts healthcare delivery, health disparities, and morbidity and mortality rates amongst African Americans. The results serve as a warning for healthcare organizations, especially those that may rely heavily on patient experience scores for compensating physicians, and that addressing the needs of their patients from a culturally diverse perspective is crucial. The study reinforces the belief that cultural competency and efforts to address implicit bias in healthcare is essential as is the need to understand/pay attention to non-verbal social cues. Patient Experience Better When Patients Visit Docs of Same Race The Mismatch of Telehealth and Fee-for-Service Payment Event: Due to the COVID-19 pandemic, telehealth enabled patients to connect to their providers and avoid in-person facilities for regular office visits. Telehealth is now a core element of care delivery. However, payment for telehealth under fee-for-service is not structured well. Telehealth services are treated differently from their in-person counterparts. Although Medicare has enacted several temporary waivers to incentivize telehealth during the pandemic. The current structure of telehealth billing is not sustainable and needs to adjust to the realities of a post-COVID world. Description: Medicare pays for almost 250 telehealth services. About half of the current Medicare billing codes for telehealth services were added as temporary measures during the public health emergency (PHE) to help providers deal with the impact of the pandemic. However, their popularity will make it difficult to abandon them wholesale as telehealth and digital tools have cemented themselves in the healthcare delivery system. Also, some common telehealth services were covered by Medicare at a rate too low to be viable for providers and had their reimbursement greatly increased to supplement expanded coverage. For example, the standard Medicare rate for a 5-10 minute phone call, equivalent to a virtual check-in, is $15, which doesn’t even cover the cost of providing the service and submitting the claim, estimated to be $20.49. Practices were also obliged to collect the $3 coinsurance from the patient on that $15. As a result, only about 12,000 codes for check-ins were billed in 2019, totaling less than $200,000 in revenue. The temporary pandemic increase in reimbursement for this code brought it up to $46. This policy of “overpaying” makes sense when it is a measure to aid providers facing constraints during the pandemic. However, if Medicare does not continue to “overpay” for or even cover these services, providers, and patients may suffer as flexibility and access to additional options for care is lost. Telehealth billing codes are not specific and concise enough for fee schedules to be effective, cataloging several characteristics that are not reflective of clinical distinctions. Implications: Use of the existing Medicare fee for service payment structure for all telehealth codes at current rates will increase administrative burden and cost. A different approach is necessary to ensure providers can continue to use telehealth to reach patients outside of providers and physicians in-person facilities. One solution is to pay providers lump-sum amounts for primary care telehealth services. These would be compatible with the monthly per capita payments for primary care under Medicare’s new optional reimbursement program, the Primary Care First model. The Mismatch of Telehealth and Fee-for-Service Payment Hims, A Direct-to-Consumer Health Company, is Going Public via SPAC Event: On October 1st, 2020 Hims. Inc., a direct to consumer digital healthcare company, agreed to merge with a Special Purpose Acquisition Company (SPAC) formed by Oaktree Capital Management to go public. As a result of the transaction, Hims may raise up to $280M in cash, be valued at $1.6B and trade on the NYSE under the symbol HIMS. Description: Hims, Inc., is a direct to consumer company that sells health products targeted at Millennials. for both men’s and women’s health brands. Their focusing is on a variety of everyday issues and products such as skincare, hair-loss, sexual health and more recently primary care. Hims is fairly unique in that most of its products are sold via a monthly subscription and a high percentage (approximately 90% according to the company) is recurring. The transaction is expected to close by the end of 2020. Hims is the second digital health company to go public via a SPAC according to Fierce Healthcare, following acute care telemedicine company SOC Telemed’s July deal announced with Healthcare Merger Corp. Oaktree Acquisition Corp, is a SPAC formed by Oaktree Capital Management that went public in July with the intent of using the proceeds to make one or more acquisitions. A SPAC is a “blank-check” company that has the intention of buying or merging with one or more companies with the caveat that if the capital raised from investors is not invested within two years it must be returned to them. SPACs are also seen as an easier way for private companies to go public more rapidly and have less regulatory paperwork than the typical initial public offering (IPO) process. Implications: SPACs are an increasingly popular way for companies, typically those that may be earlier in their lifecycle, to come public with approximately 115 SPACs raising approximately $43B through October according to Bloomberg. SPACs also have the advantage of allowing companies coming public to make financial forecasts and raise greater amounts of capital. This can be especially attractive for competitive and financial purposes in an emerging industry such as digital health. As a result, SPACs could provide an avenue for some smaller and less mature digital health companies to go public and keep pace with many of the larger players in the space who came public via IPOs. (ex: Teladoc, Amwell, Oak Street Health, One Medical, etc). [As we were going to publication Clover Heatlh agreed to go public via a SPAC in $3.7B merger with Social Capital's Hedosophia Holdings III per Bloomberg]. Hims, a Direct-to-Consumer Health Company, is Going Public via SPAC High-Tech Aids for Aging in Place Event: On September 23rd, Kiplinger.com released an update on this year's technology to assist older users and their caregivers who cannot afford the high cost of assisted living/senior care.. Kiplinger’s highlighted six products across a range of devices not all of which are marketed direct-to-consumer. Two we are highlighting here are Smart Sole and Envoy at Home. Description: SmartSole provides a smart insole to fit into shoes with a built-in GPS. This is used to keep track of a loved one with dementia who may wander off and get lost. The device pinpoints the person’s whereabouts on a map, supplying addresses and outdoor locations to within 15 feet every five minutes. Envoy at Home is a remote caregiving service for older adults who live alone and can't afford a health aide. Using sensors, caregivers can monitor the person's wellness and safety, such as how long or frequent the patient's bathroom visits are, periods of inactivity, and whether they are taking prescribed exercise or rest. The caregiver can then receive reports and alerts on the patient. Implications: During COVID, many caregivers are socially distancing from their older loved ones and cannot be present to care for them as they are accustomed to or would like. SmartSole and Envoy at Home provide solutions to remotely care for older people living on their own. These solutions and devices like them, help older adults live independently at home longer and provide more flexibility for caregivers by allowing them to care for elderly parents from a safe distance. High-Tech Aids for Aging in Place Targeted Cyberattacks on Telehealth Vendors Skyrocketed Along with Adoption, Report Finds & Fewer than Half of Healthcare Institutions Met National Cybersecurity Standards Last Year Event: According to two recent reports, not only has the number of cyberattacks targeting popular telehealth applications risen 30% since the pandemic began, but healthcare institutions are slightly less prepared to deal with them in 2019 than they were in 2018 or 2017. First, based on the “Listening to Patient Data Security: Healthcare Industry & Telehealth Cybersecurity Risks” report by Security Scorecard and Dark Owl, there has been a dramatic increase in attacks on telehealth which saw the increase in security alerts noted above compared to the healthcare industry in general which saw an overall 77% decrease in security alerts. In addition, the CynergisTek 2020 Annual Report noted declines in four of five core security functions outlined in that National Institute of Standards and Technology’s cybersecurity framework with assisted living facilities scoring highest (96%) and physician groups scoring lowest (20%). Description: Security Scorecard and DarkOwl compared security alerts sent to IT staff at 148 of the most popular telehealth applications for the period March through April of 2020 compared to the pre-COVID period of September 2019-February 2020. They found a 65% increase in patching cadence findings, a primary secret security approach to protect data and a parallel 56% increase in endpoint security attacks. They also found security issues were reported due to increased FTP attacks (which rose 42%) and RDP attacks (which rose 27%) both of which target increases in remote and virtual workers. The CynergisTek report showed that healthcare institutions compliance with IT security policies were sliding, scoring 44% in 2019, vs. 47% in 2018 and 45% in 2017. This included a decline in four of five core functions. Implications: With the growth in remote work and the explosion of digital health due to the pandemic, the number of “digital endpoints” exposing healthcare institution’s to cyber risk has increased significantly. As a result healthcare institutions need to be even more vigilant and conscious of the risks to patient data and IT system integrity/security. Healthcare companies must work on greatly improving and patching their critical security tools enhancing endpoint protection, improving identity access management, and data loss prevention. Targeted Cyberattacks on Telehealth Vendors Skyrocketed Along with Adoption, Report Finds & Fewer than Half of Healthcare Institutions Met National Cybersecurity Standards Last Year

Coronavirus Has Changed Healthcare Delivery-Likely Forever “Our Take”: On December 2nd the Cleveland Clinic announced it was postponing all “nonessential inpatient surgeries; from December 7th through January 4th, 2020, marking the second time the system has had to postpone elective surgeries due to the pandemic (the first following a statewide order in March of 2020). Postponements of highly profitable elective surgeries are but one of the ways that the Coronavirus has changed healthcare delivery, likely forever, leaving a digitally transformed, facility-lite but potentially less profitable system in its wake. However, providers and practitioners that embrace existing and emerging digital technologies can potentially replace lost revenues with virtual and remote care to those reluctant to use institutional settings, and even play a greater role for those looking to take charge of their own care. Description: The forced deferral of elective procedures and routine clinical care has dramatically undermined the profitability of physicians and providers. A recent article in Health Affairs noted that between February and April 2020, hospital volumes declined almost 20% and while they had recovered somewhat by June/early July 2020 they remained well below pre-pandemic levels. Nevertheless, while patients have largely scaled back in-person care below pre-pandemic levels they have embraced accessing the system via telehealth, telebehavioral health, and even at-home or self-administered testing. These changes combined with the fact that the strain on the healthcare system has made patients more amendable to obtaining care from other levels of clinicians in the system (PA’s, LPN’s, Pharmacists, etc), have permanently altered by where and from whom patients will be willing to get care in the future. In addition, with nursing homes and long-term care facilities accounting for 38% of all deaths and 5% of all U.S. COVID cases according to the New York Times, seniors are now much more reluctant to seek care in those facilities. This human tragedy caused regulators and caregivers to seek additional evidence that facilities will embrace new ways of caring for the elderly in order to restore confidence in the safety and well being of patients at these facilities. Along those lines, seniors are now much more likely to attempt to age in place longer, which is more practical with the aid of certain technologies. Finally, while a vaccine will aid in the long-term recovery from COVID’s healthcare impact, the economic impacts will be long-lasting and unfortunately cause even more people to remain unemployed for longer periods of time. For example, according to the Bureau of Labor Statistics, by November 2020 the percentage of unemployed individuals who had been unemployed for 27 weeks or more rose to a seasonally adjusted 36.9%, up from 19.2% before the pandemic began, With research showing a direct correlation between the period one remains unemployed and their ability to eventually return to the workforce, many people will likely remain permanently unemployed and as a result, permanently lose employer-sponsored coverage. Given that by some estimates as many as 4M could remain permanently unemployed post-pandemic, and that employer-sponsored coverage is by far the most profitable form of coverage, effectively subsidizing Medicare and Medicaid, this shift in payor mix will further hurt providers. Implications: The pandemic has brought about a of sea change for healthcare condensed into just a few short months. While the changes have put tremendous pressure on the finances of providers in the near-term if they don’t respond by embracing a dramatic change in business models they may not survive. While typically slow to embrace change, consumer acceptance of new delivery models and unprecedented regulatory responsiveness to COVID have created one last opportunity for the healthcare system to bring itself into the digital age on its own terms or risk being overhauled by outside forces. First and foremost, although there are highly effective vaccines on the horizon, and we are on the cusp of bringing this pandemic under control, there is no guarantee the world will not see another virus in the not-too-distant future. We must be prepared financially as well as clinically. Moreover, despite the current reimbursement and regulatory uncertainty surrounding many telehealth changes during COVID, providers have to embrace the new normal as this is what consumers have now come to expect. As Joseph Kvedar of the ATA put it “the doctor’s office is now in your living room”. Although some will cite potential reimbursement differences, given the low incremental cost to treat patients virtually, physicians should be able to see patients more efficiently provided they are given tools to help with administrative tasks. For example, virtual transcription tools could aid with paperwork to allow larger panel sizes at a fraction of the cost of physical scribes. In addition, early research indicates that missed appointments have decreased markedly with the implementation of telehealth with one study showing that overall missed app[intments telehealth are down over 35% and almost 24% for Medicaid patients. In addition, many forward-thinking elder care facilities are now embracing the use of telemedicine and other remote care tools to connect patients to clinicians (and families) and keep patients out of harm’s way or from going to centralized “nursing stations”. Bluetooth-enabled fall-detection systems, motion and video sensors, and other wearables now allow for real-time monitoring at a much more sophisticated and connected level than ever before, facilitating aging in place. Although dealing with the shift in payer mix will be difficult, in a transformed healthcare delivery system providers and physicians will need to reduce their reliance on high margin episodic and elective procedures. Over time we see the plethora of real-time sensors, monitors, therapeutics, recovery tools, and data science changing the very nature of healthcare from periodic check-in and repair to one of constant monitoring and fine-tuning. More Than 100,000 U.S. Coronavirus Deaths Are Linked to Nursing Homes; COVID-10 and the U.S. Economy; New Data Shows Patients Save Fuel, Time And Missed Appointments With Telehealth The Employer’s Role in Creating a COVID-19 Testing and Vaccination Infrastructure Event: On November 30, 2020, Benefits Pro released an article explaining why employers will be well-positioned to support large-scale vaccination efforts. As employers are typically responsible for vaccinating about 25% of the U.S. population for flu, they can bring the same strength and efficiency to a COVID-19 response through testing and vaccination. Description: Many employers have already initiated testing programs in an effort to responsibly bring employees back to the worksite. For example, CVS Health has included retail and onsite point-of-care testing where physical distancing can be difficult. In addition, Delta Air Lines is providing employee COVID-19 testing with a rapid-response option for flight crews to help employees and customers build confidence about traveling with Delta. As employers already educate and engage their employees, they can help employees overcome any apprehensions or barriers to access, achieving a more widespread immunity. As a result, employers will be well-positioned to support a large-scale vaccination effort. Implications: Just as employers have supported influenza preparedness, they can build on the infrastructure they’ve already created for immunizations to support the national COVID-19 testing and vaccination infrastructure. Employer-provided vaccinations could be the first step for companies to finally open their offices. This could bring more productivity and well-being among the employees. Companies could require or financially incentivize employees to be vaccinated in order to physically come in to work to promote the vaccine. Rolling out employer-provided vaccinations could also reduce health disparities as companies can cover workers from underserved communities and backgrounds. While some may not have access to a vaccine in a vulnerable neighborhood, his / her employer may provide another means of accessing the vaccine at a more convenient time or place. Employers could also educate the employees and customers to encourage them to trust the vaccine in order for a safe return to the workplace. While there may be some logistical obstacles in vaccinating employees at work such as refrigeration, freezing or even ultra-cold storage, which could complicate the transportation, storage, and location decisions, many employers may be large enough or work with trade associations to figure out ways to overcome these. The Employer’s Role in Creating a COVID-19 Testing and Vaccination Infrastructure Antiracism Training in Medicine Event: On December 3rd, JAMA Health Forum published an article addressing the ongoing racism and biases not only occurring today, but specifically within the healthcare realm. Given a rise in the deaths of unarmed African Americans, disparities in infection and death rates due to the Coronavirus, and lack of both healthcare and everyday resources during this unprecedented time, healthcare organizations are being urged to address racism and discriminatory practices within their organizations to promote better patient outcomes and health equity. Description: As a result of the visibility that racial injustice and discrimination have been given outside of healthcare, addressing this issue within healthcare has become a key issue. Currently, many medical programs lack cultural competency as well as diversity and inclusion training within their curriculum, leaving medical professionals ill prepared when treating patients of other ethnicities. As a result, many organizations have incorporated mandatory antiracism practice and training to address racism and bias and to advance health equity. Although this serves as a significant steppingstone, the article states that more can be done to make real advances as opposed to surface level training activities that ultimately show no improvement in antiracism competencies or in institutional measures of inclusion, equity, or health outcomes. Implications: As a result of the pressing need to assure that healthcare workers are adequately trained, several recommendations have been proposed including: 1) aligning antiracism training with the mission, vision, values, and priorities of the institution to provide that it is factored into the institution’s strategic goals, success metrics and incentives to ensure that it is effective, 2) establishment of steering committees made up of diverse institutional leaders, faculty, staff, and students to oversee and direct training, 3) ensuring institutions are building antiracism vocabulary to promote consistent communication and developing a longitudinal anti racist training curriculum that ultimately meets stakeholder needs, and, 4) developing external partnerships to build trust with vulnerable communities and community organizations and to create good relationships between students and trainees to avoid, consciously or unconsciously, harming participants. By incorporating these recommendations into healthcare organizations and curriculum, healthcare professionals can successfully fulfill their oaths and ethical responsibilities to treat patients, students, trainees, and colleagues with the utmost respect and equity. Antiracism Training in Medicine Primary Care Leaders Call for Clarity About Booking and Recall IT Systems for COVID Jabs and Distributing a COVID-19 Vaccine Across the U.S. - A Look at Key Issues Event: A recent article in Mobihealthnews highlighted the raised concerns in the U.K. about the IT system that will be used to book and recall patients for administration of both doses of the COVID-19 vaccine. Analogous to the U.K., the U.S. faces similar challenges in the rollout of the vaccine distribution process, as presented in an article by the Kaiser Family Foundation. Description: Questions surrounding the logistics of the distribution of the COVID-19 vaccine remain as concerns have been raised that the current booking system is not prepared for the vaccine rollout. The biggest challenge lies in how national mass vaccination centers would link to primary care IT systems to view records of those who received the vaccine to ensure that the entire population is vaccinated. Under Britain's National Health Service (NHS), DrDoctor has launched a solution aiming to streamline the vaccine booking process by linking two required appointments. The Medicines and Healthcare products Regulatory Agency (MHRA) has an AI tool that will process adverse reactions to COVID vaccines in the U.K. Vaccine distribution in the U.S. faces similar but more complex challenges. First, funding for vaccine distribution is critical to health outcomes because there is a strain on state and local public health infrastructures. Secondly, logistics and monitoring are also expectd to be an issue because government-led distribution has never before been done in the U.S for the entire population over a short period and this will be done individually by each state. Actual vaccination sites and accessibility to these sites remain an issue and follow up with each individual who has received the vaccine to ensure they receive the same vaccine on time. Similar to MHRA, the U.S. is implementing an enhanced safety monitoring system to track vaccine adverse events. Lastly, getting the public to trust the vaccine is crucial to positive health outcomes because of concerns around the speed with which the vaccine came to market, general concerns around safety, efficacy and side effects and the concerns raised within the context of the political differences during the election. Implications: There is no doubt that distributing the COVID-19 vaccine will be a massive, complicated effort in both the U.K. and U.S. While planning for distribution has been underway for months, there are still numerous questions and concerns about how challenges will be overcome. Operation Warp Speed has provided pharmaceutical companies with over $10 billion to support research, development, manufacturing, and distribution of COVID-19 vaccines, yet challenges remain. COVID-19 has disproportionately affected specific populations who are vulnerable and may face severe outcomes if not vaccinated. The accessibility of sites for equitable access to the vaccine remains unclear due to the transportation and location-based barriers to health care. The CDC and local jurisdictions are currently implementing a new vaccine tracking system to monitor vaccine administration; however, it remains unclear if the new system will integrate with existing immunizing information systems. Successfully addressing the barriers and challenges identified is essential to ensure the most excellent health benefits accrues from administering COVID-19 vaccinations across the globe. Primary Care Leaders Call for Clarity About Booking and Recall IT Systems for COVID Jabs & Distributing a COVID-19 Vaccine Across the U.S. - A Look at Key Issues DeepMind AI's Protein Folding Prediction Achieves Unprecedented Accuracy, Opening Doors to New Disease Treatments Event: On November 30th the DeepMind subsidiary of Google announced it has cracked a decades-old protein-folding challenge with an artificial intelligence system called AlphaFold. DeepMind noted that “figuring out what shapes proteins fold into is known as the ‘protein folding problem’, and has stood as a grand challenge in biology for the past 50 years”. This discovery could eventually help identify new treatments for diseases, among other nonmedical uses. Description: DeepMinds’ winner for the Critical Assessment of protein Structure Prediction (CASP) competition, AlphaFold’s average error in predicting protein structure is a distance of 1.6 angstroms, which roughly translates to 0.1 nanometers, or the width of an atom. Among a collection of the most difficult protein targets, the system’s median score dipped down to 87 Global Distance Test (GDT). By understanding the protein-structure, it will play a key role in developing cures for diseases such as Alzheimer’s, Parkinson’s, cystic fibrosis and Huntington’s. DeepMind also announced working on predicting protein structures within the COVID-19 virus of which the technology will play a key role in environmental sustainability. Implications: Such machine learning techniques bring new breakthroughs in both human health and fundamental biology and will bring better understanding of the body via accurate protein-structure prediction. Since a protein’s shape is closely linked with its function, and the ability to predict this structure unlocks a greater understanding of what it does and how it works, developing treatments for diseases or finding enzymes that break down industrial waste, are fundamentally tied to the shapes of proteins and the role they play. This discovery will dramatically reduce the time and cost involved in determining a proteins structure versus current methods. Not only will this help researchers develop new cures for diseases associated with misfolded proteins but it will also brings major breakthroughs in understanding the disease and in drug discovery. AlphaFold: a Solution to a 50-Year-Old Grand Challenge in Biology

On Wednesday August 5th, two of the larger public names in the digital health space, Teledoc (TDOC) and Livongo (LVGO) announced they were merging, while we understand the stated logic behind the merger, we were a bit puzzled by several issues, our thoughts on each of them are below: Timing: there is a tremendous amount of runway for both of these industry-leading companies to grab before they are likely to stunt the growth of the other. No matter how well-executed or how experienced the integration teams, a merger is likely to distract attention from the sales and execution engines of companies with dramatic sales potential +70% est. for LVGO and +40% est. for TDOC. While telehealth has been moving at blinding speed due to COVID we still would expect consolidation of industry leaders when digital health growth begins to slow and applications for the technology begin to narrow. We see no signs whatsoever that this is the case. Valuation: At Tuesday's close TDOC is paying approximately 36x sales for LVGO a very steep price for a company whose stock has already risen over 200% YTD. While telehealth is a large and untapped market (estimated at ~ $100B pre-COVID to as much as $250B in a recent McKinsey estimate post-COVID) and significant amounts of care remain to be moved to digital, the deal is expensive under even the best of assumptions. At 36x sales, the deal would be more expensive than most recent acquisitions in software, which already tend to be expensive, and which we view as the most appropriate comparable. Best of Breed vs. All-In-One: In announcing the merger TDOC noted that the merger would create what amounted to a one-stop-shop for digital health needs, allowing employers and providers to work with numerous disease states and care models. However, our work indicates that about one-third of large employers prefer a best-of-breed approach to employer benefits and have found superior results from their plans. Given the lackluster results that many employers have gotten from their health benefits, our belief is that the trend will be towards this approach as opposed to an all-in-one solution. Go-to-Market Strategy: Although LVGO has been working to increase direct selling efforts, historically they have gone to market via channel partners and resellers such as Caremark, Express Scripts and Anthem, etc. (for YE 2019 over 60% of the company’s revenues came from these channels). TDOC has traditionally used large health plans as it’s distribution network such as Aetna and BCBS. We see it as highly disruptive to continuity of sales and sales management to attempt to modify (even modestly) growth strategy in the midst of a hyper-growth market. This combined with the fact that successful sales and marketing people will be highly sought after given how hot the market is, these types of changes could end up impacting growth (our understanding is that RSU’s vested 6 months after the IPO or with a change in control). Strategic positioning: While we believe that the deal makes sense for TDOC, as we see the basic delivery of telehealth being commoditized over time, there is likely more risk for LVGO based on their competitive positioning and the difficulty recreating the chronic care delivery model they have created. Given the opening that the declaration of a public health emergency (PHE) created for the use of non-HIPAA compliant vehicles like Zoom, Google Hangout, Microsoft Teams, etc.over time we see potential for other large video platforms to partner with/usurp the provision of basic connectivity. In addition, over time we expect video technology to change so that patients will no longer have to install separate telehealth apps on devices increasing ease of use and substitution. Consequently, we expect a stand-alone LVGO with a focus on chronic disease to have greater competitive advantage than TDOC. This is evidenced by LVGO’s sales growth rate in the 50% range vs.TDOC’s organic sales guidance in the 20%-30% range. Rollup risk: The LVGO acquisition will mark TDOC’s 11th acquisition since 2013 and the 2nd this year (recall TDOC agreed to buy InTouch in January 2020). First, as noted above, given the red-hot nature of the digital health market we have no doubt that both teams are already working all out to capture as much share as possible, a fact that is further compounded by the demands of COVID (physician shortages, supply chain issues, etc). When combined with the difficulties inherent in managing the merging of any two organizations, no matter how good or experienced the integration teams are, leads us to believe there is more downside than upside risk. In addition, we see roll-ups in emerging industries and in healthcare in particular as a difficult way to make money. While there are exceptions (i.e, Quest), they tend to be just that, exceptions, rather than the rule (i.e, physician practice management). We find this to be the case, particularly as roll-ups grow in size, with an early study by Booz & Company finding that once roll-ups got past $500M in value they often lose value.