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Infusion therapy provider Option Care Health may do well to stick to its knitting after losing its bid for home health player Amedysis to UnitedHealth-owned Optum.

Why it matters: Infusion services is a fragmented space with a handful of sizable sponsor-backed and independently-owned targets set to come to market, Aaron and Axios' Claire Rychlewski write.

What they're saying: "The company’s infusion suite strategy continues to fire on all cylinders as the suites scale to full capacity and nursing productivity continues to increase (expected to eventually exceed the current 10% uplift in productivity)," William Blair analysts Matt Larew and Madeline Mollman write.

"The standalone Option Care can generate high-single-digit organic top-line growth and EBITDA growth in the low double digits to mid-teens," they write.

"Option Care’s management team has said that should the deal fall through, Option Care will continue to explore strategic M&A opportunities and will be a disciplined acquirer," they continue, noting Optum has said its next acquisition does not have to be a home health asset.

Between the lines: "If they're smart they get ready to compete for Paragon," says one health care banker.

Infusion services company Paragon Health was acquired by Peak Rock Capital in 2020.

Another potential takeout candidate is Senderra, which hired a bank last year and is preparing to launch in the coming months, the banker says.

Catch up fast: Home health and hospice operator Amedysis accepted an approximately $2.8 billion stock-and-cash merger bid from Option Care in May — only to back out this month, after a surprise sweetened offer from UnitedHealth Group-owned Optum.

Optum is set to acquire Amedisys for $101 a share, or almost $3.29 billion, in an all-cash deal.

Baton Rouge, Louisiana-based Amedisys provides home health, hospice and higher-acuity care services across 522 locations in 37 states and the District of Columbia. It netted a total service revenue of $2.23 billion in 2022, up slightly from the previous year.

Of note: "Option Care Health benefits from a leading platform in home and alternate site infusion services and a proven track record of execution," CEO John Rademacher said in a statement. "We remain confident in our growth trajectory, which is underpinned by current industry trends and market forces as well as our strong financial position."

What we're watching: Beyond Option Care's next move, the Optum/Amedysis tie-up is likely to draw regulatory scrutiny under a more aggressive FTC.

1 big thing: Option Care's next move after lost bid

Illustration of a question mark with a dot shaped like a medical cross

Blueprint, a developer of patient tracking and outcomes assessment tools for mental health clinicians, raised $9 million in Series A funds, CEO Danny Freed tells Erin exclusively.

Why it matters: While recent allegations of misconduct among telemental health startups have grabbed headlines, the traditional therapy industry lacks technology-based tools to assess the efficacy of its treatments.

Details: Ensemble VC and Lightbank co-led the round.

Bonfire Ventures, Revolution, TAU Ventures, Data Tech Fund, and several individual backers joined.

Funds will go to doubling Blueprint's engineering team and honing its AI layer with an eye toward generating more personalized insights.

Freed declined to say when he expects Blueprint to collect a Series B.

How it works: The Chicago-based company offers software on a subscription basis that lets providers manage and track patients and gather large outcomes-based datasets to assess their own efficacy. The software also...

Lets providers administer clinical assessments, assign digital worksheets and track patient progress.

Offers guidance on which interventions to use for specific clients based on their symptoms and status.

Serves patients (who can use the software together with a therapist or without), clinicians and mental health organizations. Current clients include Crossroads Treatment Centers, Seaside Healthcare and the Center for Child Development.

The backstory: Freed was struck by the inadequacy of the current mental health system in 2013 when a close friend with bipolar disorder died by suicide in between therapy sessions.

"He actually had access to care, which not everyone has," recalls Freed. "He was seeing a therapist, he was seeing a psychiatrist, he was on medication. But at the end of the day, that access didn't matter — treatment obviously didn't work."

Three years later, a lightbulb went off while Freed was building a chatbot that let individuals track and measure their mental health.

"What all these users were trying to do is to share their progress and share their data with their clinician," Freed says. "And we said 'Hmm, maybe there's something interesting here.' So we started talking to clinicians and a few years later we started Blueprint."

What they’re saying: "We often say therapists are superheroes, but our take is they also need super software," says Freed.

"In mental health, it’s largely trial-and-error; maybe it works and maybe it doesn’t, and that outcomes data isn’t shared with insurers," says Ensemble managing partner Conrad Shang.

"As there’s an increasing transition toward value-based care, insurers are going to want this data," he adds.

💭 Erin's thought bubble: Nationwide psychiatrist shortages — predicted to worsen in coming years — could raise the appeal for efficiency-boosting tools such as what Blueprint offers, so long as they aren't perceived as adding more work to their already replete schedules.

By the numbers: A 2022 American Psychological Association provider survey concluded that 60% of psychologists had no new patient openings, and more than 40% had waitlists of 10+ patients.

Close to half of the survey respondents reported feeling burned out.

📋 One fun thing: The origins of Blueprint's name center on how the tools offer clinicians a kind of “blueprint” to guide future treatment.

2. The BFD: Blueprint stamps $9M Series A

Animated gif of loading screen with a brain

Specialty-specific administrative and analysis tools represent a nascent but growing subsector of the health tech ecosystem, particularly in behavioral health. For example:

Heard, which handles administrative tasks for behavioral health providers, earlier this month raised $15 million in undesignated funding, following a $10 million in Series A last May.

Eleos Health, which uses voice technology to analyze behavioral health sessions, last April collected $20 million in Series A capital.

Journey Clinical, a provider of software tools for psychedelic-assisted psychotherapy, in January, pulled in $8.5 million in Series A funding.

3. State of play: Health admin and analysis tech

Illustration of sticky notes overlapping that say State of Play

• HighFive Healthcare, a Homewood, Ala.-based specialty dental partnership organization focused on endodontics and oral surgery, raised $100m in growth equity financing led by Norwest Venture Partners. https://axios.link/3PPXehB 

• Augmedics, an Arlington Heights, Ill.-based AR navigation platform for spinal surgeries, raised $82.5m in Series D funding led by CPMG and joined by Evidity Health Capital and insiders H.I.G. Capital, Revival Healthcare Capital and Almeda Ventures. https://axios.link/44mQrzB

• Algorithmiq, a Finnish developer of quantum algorithms for life sciences, raised $15m in Series A funding led by Inventure VC and joined by Tesi, Presidio Ventures and Thames Trust. www.algorithmiq.fi

• Gradient Health, a Raleigh, N.C.-based medical AI data-sharing company, raised $2.75m in seed funding led by ReMY Investors & Consultants with participation from new backers Boro Capital, Supernode Ventures, MedMountain Ventures, The Triangle Tweener Fund, David Golan and SV2, plus insiders VentureSouth and Wavemaker Three-Sixty Health. https://axios.link/3NO7Eg0 

• SnapCalorie, a California-based developer of AI-based nutrition and calorie approximation imaging tools, raised $2m from Accel, Index Ventures, former CrossFit CEO Eric Roza and Y Combinator. https://axios.link/3NQx50F

• Upfront Diagnostics, a London-based developer of a blood test for stroke diagnosis, raised £1.6m in seed funding led by Apex Ventures. www.upfrontdiagnostics.com

• H.I.G. Capital invested in Advanced Dental Brands, a Canton, Mass.-based dental partnership organization. www.teamadb.com

• Zavation, a Flowood, Miss.-based portfolio company of Gemspring Capital, acquired CoreLink, a St. Louis, Miss.-based maker of spinal implant and instrumentation systems, from The Stephens Group. www.zavation.com

• Comvest Partners acquired Your Behavioral Health, a Torrance, Calif.-based behavioral health services company. www.yourbehavioralhealth.com

• Stella, a Chicago-based provider of alternative mental health treatments, acquired the U.S. assets of Field Trip, a provider of psychedelic therapies. https://stellacenter.com/  

• Baird Medical, a Chinese maker of microwave ablation medical devices, agreed to go public at an implied $300m pre-money valuation via ExcelFin Acquisition Corp. (Nasdaq: XFIN), a SPAC formed by Fin VC and Grand Fortune Capital. https://axios.link/3Pw8FuD

4. Deals o' the day

• Royce Brunson left a role as chief commercial officer at Health Recovery Solutions to become chief growth officer at GetWellHealth.

• Guy Maytal, a clinical assistant professor of psychiatry at Weill Cornell Medicine, became chief of integrated care at Forge Health.

• Sneh Shah left a role as product manager at Verily to become senior product manager at Bayesian Health.

• Camila Caso left a role as director of platform at Recharge Capital to become VP of business development at Conceivable Life Sciences.

5. It's Personnel

🧠 Why insurers' mental health coverage falls short — Modern Healthcare

🤖 AI may someday work medical miracles, for now, it helps do paperwork — NYT

💰 Health services M&A holding steady despite economic headwinds — Healthcare Dive

6. Your daily dose

Illustration of a Axios brand medicine bottle that says "your daily dose" next to a spoon.

🍴Aaron continued to eat his way through restaurant reservations, dining at Foul Witch. Menu highlights included veal tortellini, sake lees cake with honeycomb and clotted cream and house-made bread. 

❤️‍🔥 Thanks for reading, and extra thanks to newsletter editor Claire Rychlewski and copy editor Mickey Meece. Please ask your colleagues, friends and family to sign up.

June 27, 2023

1 big thing: Option Care's next move after lost bid