Signify Premium Insights - Digital Health: Round-up from November 2024
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Written by Mark Lazell | Editor of Signify Premium Insights – Digital Health.
This article provides several links to our Signify Premium Insights, evaluating recent industry-shaping events. To access these articles you will need a subscription or can simply request a 30-day free trial below.
Arguably the most eye-catching headline of the month was the rumour on US news website Axios that Oracle Health and McKesson are in the running to acquire outpatient, ambulatory and primary care EHR vendor Veradigm® .
Why?
Veradigm has been pivoting away from its ‘bread and butter’ EHR business and towards its payer/life science data business and Oracle Health has for some time harboured ambitions to become a data broker. McKesson, which is already active in that space, would meanwhile benefit from the scale that Veradigm would provide.
The rumour raises plenty of other questions, not least how much of a distraction such an acquisition would be for Oracle Health as it rolls out a new EHR solution, addresses Epic 's dominance in the US inpatient EHR market, and stage-manages the phase-out of its i.s.h.med EHR solution.
Another high-profile name to feature this month is Cleveland Clinic , the fourth-largest health system in the US by revenue which has become the latest one to join Amazon’s One Medical partnership network.
The story is interesting because the revenue One Medical generates from these health system partnerships as a proportion of its overall revenue actually declined from 2020 to 2022. However the tie-up with Cleveland Clinic is part of a speciality referral programme which is helping reverse that trend.
The referral programme sees One Medical refer members requiring speciality care to its health system partner, from which One Medical earns a referral fee. Health systems benefit because speciality care services are typically profit centres for them. These referrals also further benefit One Medical because it can promote (and deliver) wraparound care to its patients.
The partnership model is also part of a broader strategy by Amazon to develop a unified care offering. Encompassing primary care, its Prime subscription business as well as its pharmacy business, Amazon is beginning to extend its reach in healthcare in ways that some of its big-name rivals have failed to do.
Is the Big tech giant’s mission to disrupt now a reality?
Repositioning rather than disruption is the name of the game at Teladoc these days. In our regular look at the telehealth giant’s financial performance, we’re noticing a theme developing which offers clues as to its prospects in 2025 and beyond.
Its Q3 2024 results showed a 10% drop in revenue and a 41% fall in adjusted EBITDA for its BetterHelp virtual mental and behavioural health business compared with Q3 2023. However, its Integrated Care business saw a 2% year-on-year (y-o-y) revenue increase and an 8% y-o-y rise in adjusted EBITDA.
While these quarterly figures don’t tell the whole story (the company is still a net loss maker, although it is making progress on that) there was a sense during the earnings call that Teladoc’s management team is now trying to temper expectations a little.
Being more conservative with its forecasts in Q2 2024 meant the company’s Integrated Care business came in ahead of guidance in Q3 2024 (it has now stopped offering forward guidance for BetterHelp). In its Q3 2024 financial statement Teladoc expects Integrated Care to register 0%-2.5% year-on-year revenue growth for Q4 2024 and an adjusted EBITDA margin of 12.25%-13.75%. For full-year 2024 the company expects revenue growth to be in the low single to mid-single digit range, and an adjusted EBITDA margin of 14.9%-15.3%.
Can the company win back trust and credibility in the eyes of the market and investors?
Another company that’s had its challenges since COVID is Health Catalyst . Like Teladoc one of the beneficiaries of the pandemic boom which saw double-digit annual revenue growth at one, its financial performance has stuttered since. But, like Teladoc, this value-based care IT vendor appears to be adapting by refocusing its strategy.
The company is now focusing on its Technology business (where it sees the greatest opportunities going forward) and a gradual retreat from the most loss-making elements of its Services income (a perennial loss-making line which Health Catalyst appears to have little prospect of turning around).
Central to its approach is acquiring small, point solution vendors, and its acquisition of cybersecurity platform and services vendor Intraprise Health follows its purchase of oncology IT vendor Carevive in August this year.
Smaller acquisitions are attractive because they respond directly to needs and pain points expressed by customers, are a good way to deepen customer relationships and sell more products and services within a cosy ecosystem. Smaller deals are also less risky.
Given that, like Teladoc, Health Catalyst’s share price has been battered over the last four years, could this more conservative, piecemeal approach pay dividends for investors?
A company that is catching investors’ eyes is RPM platform Glooko and news that it recently sealed a $100M Series F funding round. It’s a pretty impressive development for a vendor with a relatively narrow focus on the care management of diabetes and its co-morbidities.
RPM vendors continue to face challenges with scaling as well as profitability. International expansion is limited by the fact that most RPM markets are saturated by local players with very little upside opportunity for overseas vendors. Margins are often razor-thin.
RPM vendor strategy remains closely linked to reimbursement. It’s no coincidence that Glooko has made strategic acquisitions and partnerships in France and Germany, two countries where the reimbursement environment is becoming more favourable for RPM platform vendors.
With $100M in hand, can Glooko break the strangleholds that local vendors have to build on its footprint in North America and Europe? Could it be a beacon of hope to other RPM vendors looking beyond their home markets?
Staying in RPM and news that Biofourmis and CopilotIQ have merged.
The new entity, which is known as CopilotIQ and Biofourmis, claims that it will offer healthcare’s ‘first AI-driven platform delivering in-home care from pre-surgical optimisation to acute, post-acute and chronic care’.
This is potentially significant because, of the various challenges providers have when running (or trying to implement) in-home care programmes, the complexity of managing multiple point solutions across the care continuum is one of the greatest.
Although point solutions still feature widely in hospital-at-home and RPM programmes there’s a shift towards single, integrated solutions as providers take a more strategic approach when selecting devices and analytics platforms.
The merged entity will play into that demand for integrated solutions.
However, how will it overcome some of the logistical and regulatory barriers holding the market back, for example the Acute Hospital Care at Home Waiver?
Onto news now of data aggregation platform provider 1upHealth, Inc. ’s update to 1up Patient Connect, its FHIR-enabled claims and clinical data acquisition and exchange tool.
The US company says the updates will enhance its customers’ patients access to their comprehensive historical health records to share among and between different healthcare organisations. Previously manual processes like chart chasing and self-reporting are also now automated. It adds that the data is now more accurate because it is sourced directly from documented records in claims and clinical systems.
Seamless data exchange between patients and the different parts of the healthcare ecosystem is the Holy Grail for tech vendors such as 1upHealth, whose strategy is influenced by regulatory changes, for example a CMS rule mandating providers and payers to enable their patients to securely access, use and share their electronic health information.
However, two of the leading barriers to integrated care and value-based care adoption are data governance/privacy considerations as well as data quality concerns. As large EHR vendors move into data aggregation and health analytics, smaller specialist vendors must innovate and differentiate into areas like patient engagement/activation.
Is 1upHealth poised to gain in this evolving space?
Another company operating around value-based care is health IT vendor Inovalon . It recently hosted its annual summit at its Maryland headquarters where it unveiled four new solutions and three feature-set expansions of existing products.
Of the launches and upgrades, one stands out.
The new Converged Record Review tool, due for general release next month, leverages natural language processing (NLP) and machine learning (ML) to automatically differentiate medical records between those that do and those that don’t have clinical value and patient insight. The company claims the number of unnecessary reviews can be slashed by half by this tool, and the accuracy of risk adjustment programmes can be improved.
Reducing admin burden on care staff is crucial for organisations striving for value-based care. That includes health plans that rely on medical records data to support comprehensive and accurate documentation and reporting.
Because it uses NLP, Converged Record Review can interpret natural language requests instead of relying on data engineers or coding experts. The upshot is that data value can be unlocked by a larger number of non-expert clinicians.
Differentiation is key for vendors like Inovalon. How does Converged Record Review sharpen its edge against the likes of Innovaccer and Health Catalyst ?
Last, but by no means least, we caught up with Signify Research’s Principal Analyst Arun Gill and Market Analyst Calvin Chan to discuss the findings from their recently-published Oncology IT - World - 2024 Report.
Arun and Calvin picked out three main takeaways from their research.
First, that there is a mounting competitive battle being waged between best-of-breed oncology IT vendors and EHR vendors.
Second, that while EHR vendors are making significant gains in the US, best-of-breed oncology IT vendors are holding their own in EMEA and APAC regions.
And third, that specialist oncology IT vendors are acquiring solutions or partnering with other vendors in long-term arrangements to respond to the growing threat posed to them by EHR vendors. This includes Varian ’s 2023 acquisition of medical physics, dosimetry, and strategy consultation services Aspekt Solutions, along with GE HealthCare ’s purchase of AI-enabled image analysis and workflow tools vendor MIM Software .
Varian has also secured two ten-year partnerships just this year. One will see US health system Ballad Health invest $260M on Varian hardware and software over the coming decade to bring advanced oncology treatment to rural parts of Tennessee. The other is a $131M hardware/software deal with Canadian health system Nova Scotia Health Authority .
Varian’s two partnerships are unprecedented in size, scope and commitment but are they a one-off, or can we expect more such arrangements in future?
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About Mark Lazell | Senior Editor of Signify Premium Insights – Digital Health
Mark joined Signify Research in 2022 as Associate Editor to lead on the company’s Premium Insights - Digital Health service. Prior to Signify, Mark spent 25 years as an editor, publishing detailed analysis of healthcare and other high-tech sectors in the Middle East and Asia Pacific. He was the launch editor of Middle East Medical magazine, and produced detailed country reports and analyses, including interviews with regional policy makers and healthcare executives.
About the Signify Premium Insights Contributing Analysts
Signify Premium Insights rely heavily on the industry expertise from Signify Research’s expert medical imaging analyst team. This team brings with it many years of experience developing market reports, insights and providing consultancy services to the medical imaging industry.
Alex Green | COO
Alex has 24 years’ experience in tech market intelligence. He leads on Signify Research’s Digital Health offerings focusing on integrated care IT, EHR/ EMR and telehealth. Prior to joining Signify he served as a Senior Research Director at IHS and as a Business Analyst/IT Project Manager in a joint NHS/ Government role.
Jack Goode | Research Manager
Jack joined Signify Research in 2024 as Research Manager in digital health overseeing content on EHR, telehealth generative AI and value based care as well as the associated clinical and application specialties within each of these fields. Prior to joining Signify Research, Jack was a senior analyst in the NHS and has previously worked in commercial and academic research environments.
Vladimir Kozynchenko | Senior Market Analyst
Vlad joined Signify Research in 2023 as a Senior Market Analyst in the Digital Health team. He brings two years of experience in the consulting industry, having undertaken strategy, planning, and due diligence assignments for governments, operators, and service providers. Vlad holds an MSc degree with distinction in Business with Consulting from the University of Warwick.
Arun Gill | Principal Analyst
Arun joined Signify Research in 2019 as part of the Digital Health team focusing on EHR/EMR, integrated care technology and telehealth. He brings with him 10 years’ experience as a Senior Market Analyst covering the consumer tech and imaging industry with Futuresource Consulting and NetGrowth Consultants.
Hamir Harbham | Market Analyst
Hamir joined Signify Research in 2022 as a Market Analyst within the Digital Health team. He holds a BSc in Economics having graduated from Loughborough University in 2022.
Jon Hill | Market Analyst
Jon joined Signify Research in 2023 as a Market Analyst within the Digital Health team. He holds a BSc in Pharmacology having graduated from the University of Bath in 2023. He has a keen interest in hiking, having spent 2 weeks in the Atlas Mountains in June 2022.
Calvin Chan | Market Analyst
Calvin joined Signify Research in June 2024 having previously worked in sales, clinical, and laboratory environments. He holds a BSc in Biomedical Science with Placement Year from the University of Warwick having graduated in 2023.
About Signify Research
Signify Research provides healthtech market intelligence powered by data that you can trust. We blend insights collected from in-depth interviews with technology vendors and healthcare professionals with sales data reported to us by leading vendors to provide a complete and balanced view of the market trends. Our coverage areas are Medical Imaging, Clinical Care, Digital Health, Diagnostic and Lifesciences, Healthcare IT and AI in Healthcare.
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