Accelmed, a group of funds that invests in health tech companies, announced Monday that it is launching a new, nearly $100 million fund to invest in early-stage, pre-revenue medical devices and digital health startups in Israel and around the world.
This is the fourth fund launched by Accelmed, which currently manages more than $300 million. The new fund will be led by Dr. Irit Yaniv and Amir Blatt, both partners at Accelmed. Dr. Yaniv said that the fund will help to alleviate the problem that device entrepreneurs face in raising capital for their novel devices, in a news release. Blatt said that the fund will invest in device companies “in advanced clinical trials, nearing FDA approval, and after first-in-human trials” whereas in digital health, the fund will invest in “companies in initial commercialization stages in the US, be it with hospitals or insurers.”
The fund expects to make an average investment of $8 million to $10 million per startup, including follow-on investments.
Accelmed comprises of two entities:
Accelmed Partners – a U.S. -based private equity fund focused on health tech that does buyout and growth investments in commercial-stage companies.
Accelmed Ventures – an Israel based venture fund that invests in pre-commercialization health tech companies.
Since Aceelmed’s founding in 2009 by Dr. Uri Geiger, founder and managing partner and Mori Arkin, it has funded about 20 healthtech companies, of which several have been acquired.
These include Edge Medical Devices that was sold in 2011 to Claymount, which was then acquired by Varian Medical Systems; NLT Spine was sold to Seaspine Holdings in 2016; and MCS (Medical Compression Systems) was sold to Zimmer Biomet in 2017.
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– Recently, Walmart, CVS, and Walgreens have all announced their intent to invest in healthcare. Placer.ai, an advanced foot traffic analytics platform, analyzed their data to take the temperature of those efforts.
– Walgreens experiences an even greater reliance on evening hour visits than CVS. Analyzing the period from January 2017 through August 2019, Walgreens saw 27.6% of visits come between the hours of 6 pm to 12 am.
– While these moves may give a tremendous amount of hope to both brands, Walmart, the king of offline retail, is a significant threat looming on the horizon.
– The move into health services could provide a major boon for CVS, Walgreens, and Walmart, adding new revenue streams and increasing core retail metrics like visit duration and repeat visits.
One of the critical themes that will determine offline retail success in the coming years will be the capacity to maximize physical locations. That will obviously place a huge emphasis on site selections, store formats, localized approaches to store stocking and more. But an important piece of this puzzle will center around the ability to take full advantage of each space with added services. Whether it be classes in a Lululemon or a meal at a Crate & Barrel, the change is coming.
And no sector is experiencing this shift with greater force and focus than Health. In recent months, Walmart, CVS, and Walgreens have all made significant announcements regarding their intention to dive more deeply into Health services.
We dove into the data to analyze the potential impact.
When CVS announced the expansion of their Health Hubs, the first place to look was the potential value of pilot sites in Texas. Unsurprisingly, the locations showed a unique ability to extend visit durations, and to bring visitors during beneficial off-peak time periods. The result is a unique combination of a new revenue source, an ability to expand classic shopping with added visits, and visits that can be scheduled for off-peak hours to maximize the full day.
So to measure success, the locations would be looking to show ‘greater than average’ visit durations and visits during off-peak hours. And this is just what the CVS pilot showed. Two of the pilot sites have shown average visit durations of 42 (red) and 41 (green) minutes respectively. This is is 22.1% higher than the nationwide average for CVS, for the period since the launch of the pilot in February 2019. Looking at the graph below shows how much more dependant the CVS nationwide average is on shorter visits.
Even more, these visit durations amounted to an increase of 7.7% and 10.8% respectively for those specific locations when comparing the period between January 2017 through January 2019, to the time since the pilot was launched.
Why The Wider Trend?
There is always the concern that this is perhaps a CVS-centric benefit that has a unique capacity to support that chain. But, in this case, it looks like Walgreens may have even more to gain. Walgreens (red) sees an even greater reliance on evening hour visits that CVS (blue). Analyzing the period from January 2017 through August 2019, Walgreens saw 27.6% of visits come between the hours of 6 pm and 12 am. While the absolute number of visits may remain stagnant, the ability to drive more morning visits could help increase earning potential.
Beware The Giant
While these moves may give a tremendous amount of hope to both brands, there is a significant threat looming on the horizon – Walmart. Walmart, the king of offline retail, is obviously involved in the trend as well with a specific focus on leveraging its massive retail footprint to get involved in health services. Analyzing the location of one of their first Walmart Health sites shows a location that is already a strong and consistent performer.
Yet, there are already indications that the plan may indeed be working. Analyzing average daily traffic for September 2018 compared with the first 17 days of September 2019 shows an increase of 7.6%. This is a dramatic difference for a brand that already boasts huge daily visitor numbers. However, all this should be taken with needed caution as Walmart spikes can be related to a variety of factors, and not just the launch of a new service. In fact, even a minimal percentage increase could provide tremendous revenue improvements because of the audience size.
Moving Into Health
The move into health services could provide a major boon for CVS, Walgreens, and Walmart, adding new revenue streams and increasing core retail metrics like visit duration and repeat visits. Yet, the move must be seen within a wider context. Offline retailers have recognized that the full value of their physical footprint is not being met and are increasingly searching for new and innovative ways to fill this gap.
The experiential shopping perspective is spreading and more brands are going to ask how to better utilize the offline investment to maximize value.
– Datica launches new health data integration platform, Integrate that mitigates the complexity and risk of integrating and using healthcare data in the cloud.
– Integrate, is the first and only any-to-any solution that combines healthcare data integration with compliance, as well as a full set of services to ensure successful integration.
– Its HITRUST CSF Certified integration APIs also work with any EHR, any data, in any format.
Today, Datica, a provider of a complete, cloud-based platform that mitigates the complexity and risk of integrating and using healthcare data in the cloud, has launched a new health data integration platform. The solution, Integrate, is the first and only any-to-any solution that combines healthcare data integration with compliance, as well as a full set of services to ensure successful integration. Its HITRUST CSF Certified integration APIs also work with any EHR, any data, in any format. Integrate results in the most complete and scalable solution for those who collect, store, manage and share protected health information (PHI) in the cloud.
Activate Your Digital Health Product with Health Data In Any Format
brings together two industry-leading solutions, Datica’s
Compliant Managed Integration and Emissary, into a single advanced solution as
a result of the recent merger between Datica Health,
Inc. and Sansoro Health, Inc. Datica Integrate is a proven application
programming interface (API) solution that allows health data to be exchanged
across any EHR platform – while ensuring compliance and the utmost security for
PHI. Modern times call for modern measures. Datica Integrate allows you to
focus on your product – not on the integration.
days, you are up and running with comprehensive APIs that work across EHRs. Datica
Integrate is also a fully compliant application package that alleviates the
hardships of working with standards-based interoperability, such as HL7v2 or
The Bigger Picture
Healthcare’s adoption of the cloud is on the rise, which has
resulted in an increased need to use patient data to power the next wave of
innovative healthcare applications. However, the complexity of healthcare data
exchange and compliance has created significant hurdles to bringing advanced
digital health solutions to market. Datica Integrate now offers a complete solution
to solve the complexities of both healthcare data interoperability and
compliance, helping to streamline the development and management of
HIPAA-compliant, cloud-based digital health solutions. As a result, previously
cumbersome development processes become frictionless, resulting in enhanced,
secure solutions at lower cost and with greater speed to market.
“Developing healthcare applications in the cloud means overcoming key obstacles like compliance and integration—a big challenge for innovation teams that often prevents them from creating the breakthrough solutions healthcare needs,” said Dave Levin, MD, Chief Medical Officer at Datica. “Integrate removes the stress, risk and complexity of EHR integrations—without sacrificing PHI security—so our customers can focus on delivering exceptional solutions to today’s healthcare challenges.”
It’s easy to get caught up in all the excitement when new communication technology innovations in healthcare are revealed. We optimistically envision a better healthcare future and buy into the promises of a particular new entrant. But as an industry, we need to do a better job of remembering where we are today, the true purpose of communication technology innovation in our space and ultimately move the hype away from the technology itself and toward how it will enhance human-to-human relationships.
Let’s take Alexa’s move into healthcare as an example. The growth of Alexa’s capabilities to include the healthcare industry is positive. However, it just feels like so many people are letting their imaginations run wild and dreaming that care via Alexa will be simple and complete, as if all you have to do is ask Alexa one question and boom, you’ll get all the answers you need and get healthier immediately. Alexa is still just one, maturing mode of communication. The healthcare industry has some of the lowest Net Promoter Scores due to its complexity, lack of trust and poor end-to-end user experience. Is Alexa, a virtual assistant, really going to give consumers the trust and empathy they need to change the way they behave with their care teams and make smarter decisions about their health?
In my experience working outside of healthcare, in fintech and entertainment, I believe chatbot-led communication can be sufficient when human interactions are meant to be transactional. Healthcare is arguably the most difficult maze to navigate on a good day. When a person is under duress, such as experiencing flu-like symptoms that are worsening, trying to coordinate hip replacement surgery, or preparing to have their first child, a bot simply cannot be the first and primary interaction a person has throughout their care journey. Unlike other industries, where artificial intelligence has successfully replaced many human interactions, healthcare must remain human first, technology second. Chatbots can assist care teams, but they cannot replace them.
If implemented into healthcare properly, chat and bots have tremendous potential. After all, 5 billion people use chat to communicate on a daily active basis, according to a worldwide chat usage study by Statistic Brain. More than 40 percent of consumers prefer live chat support more than any other channels, according to a study by Kayako. Text-based conversations enable endless opportunities to improve operational efficiency and ensure clinical quality. So, what does this look like? Chat (as well as video and voice interactions) must mirror how people use communication tools with family and friends in their daily interactions. They should improve communication, collaboration, teamwork and information sharing to ultimately enhance the way people engage with their healthcare.
The key to a truly effective and efficient care journey is having human-to-human interaction at the core and then add whatever technology is necessary. For example, if a patient prefers chat as a communication method, then use it to instantly connect them to their human care team.
We’ve passed the tipping point with Alexa. She is going to further infuse into our healthcare world, which again is great. But when the next wave of Alexa headlines come…let’s all just remember that human interactions are still the real key to getting the care you need.
The company hopes its new Destination: Health offering – can successfully connect high-need members to social services. CVS is working in concert with Unite Us, a New York startup that builds networks of local social service providers and provides software to connect individuals with those organizations, track outcomes and collaborate on care.
“Both Aetna and CVS Health have a long track record in supporting local community-based providers from a corporate social responsibility and foundation-giving perspective, but the question is how do we embed it as a core part of the business?” said Leila Nowroozi, a leader in CVS Health/Aetna business strategy division.
If this news sounds familiar, that’s probably because Unite Us was the partner recently chosen by Kaiser Permanente to build out its Thrive Local network, a system with the same broad strokes mission to integrate non-clinical services like transportation and housing support into its larger offerings.
Kaiser’s network is meant to scale across the organization’s 12 million members over the next three years if all goes according to plan.
CVS Health hasn’t set as strong of a public timetable for the expansion of its own network and put its own near-term goals as seeing results from the network through metrics like member satisfaction, the usage rates of linked services and the impact on community-based organizations
Eventually the ambition is to have a measurable impact on Aetna’s claims through a reduction in downstream healthcare spending. A key part of moving towards this ultimate goal is developing an infrastructure where outcomes can be reliably measured
“There’s a void in that type of feedback loop, many of these community partners are under resourced entities who are focused on trying to improve people’s lives and not on reporting data,” Nowroozi said. “These collaborations through Unite Us helps with the whole industry migration towards better data and evidence-gathering.”
The Destination: Health network will launch later this year with Aetna Medicaid members in Louisville, Kentucky and Aetna dual-eligible special needs plan members in Tampa, Florida and Southeastern Louisiana.
As for what services the company hopes to prioritize? That depends on the market, according to Garth Graham, CVS Health’s vice president of community health and impact.
“It’s really what’s defined locally as necessary. That’s why the partnership with Unite Us is key since they are the ones building these local networks,” Graham said. “All health is local, so each community has its own set of challenges.”
As part of its collaboration with Unite Us, Kaiser became a strategic investor of the company, which Graham said that was one option being explored by CVS.
Medicaid looks to be an initial major focus for the company as it looks to grow out its network. Aetna currently offers Managed Medicaid plans to more than 2 million beneficiaries across 16 states.
While Unite Us will eventually make it possible individual members able to identify and select social care providers, CVS Health officials say that selected Aetna members will initially be linked to local providers through nurse case managers and community liaisons.
The large retail footprint of CVS pharmacies are certain to play a role in the build out of the Destination: Healthcare network, but executives are short on details on what exactly that could look like.
One possibility – especially as the company continues to grow its HealthHUB model – is that stores could become distribution points where members could meet with local case managers, access supportive housing services and get warm hand-offs and introductions to local community resources.
The company’s effort to address social determinants are also being expanded among its commercially insured population through the rollout of new analytics tool to help plan sponsors identify where there are specific socially-related vulnerabilities among their patient population.
This data could shape the development of new plan design. For example, Aetna plans that emphasize primary care and chronic care management provided through CVS clinic locations.
CVS Health’s initiative is meant to build on a previous pledge made earlier this year soon after the closure of its Aetna acquisition to direct $100 million over five years toward areas including free health and wellness screenings, donations to nonprofits working in areas like substance abuse recovery and financial and volunteer support for local community organizations.
Housing has also been a major philanthropic priority for the company, which is slated to invest more than $50 million in 2019 toward the construction or rehabilitation of more than 1,600 affordable housing units across six states.TrendMD v2.4.3
Following on a strong performance in 2018, global venture capital funding for digital health companies hit $5.1 billion in the first half of this year, the highest it has ever been, a new report says.
According to a new report by global communications and research firm, Mercom Capital Group, VC funding for the first half of 2019 was $5.1 billion compared to $4.9 billion in 2018. However, there were fewer deals in the first half of 2019: 318 compared to 383 in the previous year.
The report focuses on funding and mergers and acquisitions (M&A) activity for the digital health (Healthcare Information Technology) sector for the second quarter and first half of 2019. The second quarter recorded a strong performance showing $3.1 billion in 169 deals. In the first quarter, $2 billion was raised in 149 deals.
Weak M&A activity not a cause for concern
“Funding activity was robust in digital health in the first half of 2019, while M&A activity was weak. Weak M&A activity has not affected investment activity over past years. We are in an ‘invest first and ask questions later’ environment where investors are more worried about missing out in this hot space,” Raj Prabhu, CEO of Mercom Capital Group, said.
Prabhu added that after a long break, several digital health companies were entering the initial public offering (IPO) market in the United States. “Successful IPOs could open the floodgates, whereas if IPOs fizzle out, it could shut the IPO exit path for many digital health companies.”
Breaking down the deals
The report said the top digital health VC deals in the first of 2019 were $250 million raised by Tencent Trusted Doctors, followed by $205 million raised by Collective Health, $200 million raised by Tempus, $170 million raised by Doctolib, and $100 million raised by Health Catalyst.
The report further breaks down funding stats, revealing that 821 investors participated in digital health funding deals in the first half of 2019. Also, 450 investors participated in funding deals in the second quarter of this year compared to 371 investors in the first quarter.
The major corporate investors in the first half of the year included Amazon’s Alexa Fund, GV (formerly Google Ventures), Goldman Sachs, Merck, Wells Fargo, MassMutual Ventures, UnitedHealthcare’s Optum Ventures, Piper Jaffray, BlueCross BlueShield, Honda, Oracle, Merrill Lynch, Fidelity, and Cisco Investment among others.
Twenty-six different countries recorded digital health VC funding deals in the first half of the year. Of these, 21 recorded digital health VC funding deals in the second quarter.
In addition, the report says in the first half of this year, there were 91 digital health M&A transactions (16 disclosed) down from 116 transactions (26 disclosed) in 1H 2018.
“Notable M&A transactions in 1H 2019 were: Dassault Systemes acquired Medidata for $5.8 billion, Golden Gate Capital acquired a 51 percent stake in Ensemble Health Partners for $1.2 billion, Nordic Capital acquired a majority stake in ArisGlobal for $700 million, JPMorgan Chase acquired InstaMed for more than $500 million, Thomas H. Lee Partners (THL) acquired Nextech Systems for $500 million, and Hill-Rom Holdings acquired Voalte for $195 million,” a release accompanying the report said.
The top VC funded digital health categories in the second quarter of 2019 were telemedicine with $676 million, followed by analytics with $551 million and wellness with $304 million. There were 73 early stage deals in Q2 2019, compared to 48 in Q1 2019.
Wearable sensors also had a strong performance, raising $285 million in funding, while mobile wireless raised $264 million, and healthcare benefits brought in $208 million.
The report adds that since 2010, digital health companies have now raised over $40 billion in VC funding deals since 2010. U.S. digital health companies have raised approximately $30 billion to date.
Funding for digital health has had a strong performance in recent times. In its annual report for 2018, Mercom Capital Group said investments in the sector hit $9.5 billion, a rise of 32 percent compared to 2017, where there were deals worth $7.2 billion.