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BFD Expert Voices - Health Tech Deals

BFD Expert Voices

Opmed.ai, a Boston-based startup working to optimize operating room workflow, raised $15 million to expand in the U.S., the company tells Axios' Claire Rychlewski exclusively.

Why it matters: Scheduling difficulties drive growing OR costs, which represent 40% of a hospital's total expenses.

Zoom in: NFX and Grove Ventures co-led, with participation from Secret Chord Ventures, impact investor Ronald Cohen and Unbox Ventures.

The funding comprises seed and Series A funding, CEO Mor Brokman Meltzer tells Axios.

How it works: Using a mix of AI models, Opmed.ai automates and optimizes scheduling and operations for ORs.

Integrating with legacy electronic health record systems, Opmed.ai can detect and address potential issues in upcoming surgery schedules.

The company's software then runs "billions of permutations ... moving five minutes to the left and minutes to the right, making really small micro-shifts," says Brokman Meltzer.

"In a couple of seconds, we can create and generate an alternative schedule that is much more efficient, so we can increase our prime-time utilization," she adds.

The big picture: Most health systems have teams of five or six people managing surgery schedules and "everything is done manually," says Brokman Meltzer.

"Not with a piece of paper but without the right technology, with systems that were developed 20, 30 years ago," she adds.

The latest: Opmed.ai works with the Mayo Clinic and will announce partnerships with three more U.S. health systems soon, says Brokman Meltzer.

What's next: Opmed.ai will raise its Series B in the next two years and could be profitable "hopefully very soon," Brokman Meltzer says.

She declined to disclose the company's revenue.

1 big thing: Opmed.ai raises $15M to manage ORs

An illustration of a doctor holding files

Troubled hospital chain Steward Health Care officially filed for Chapter 11 bankruptcy as it finalizes a rescue loan with Medical Properties Trust.

Why it's the BFD: While not unexpected, Steward's implosion will draw more heat to private equity's involvement in health care, Aaron writes.

Zoom in: Dallas-based Steward, which filed in the Southern District Court of Texas, is finalizing the terms of a $75 million loan from MPT, the company that bought its Massachusetts hospitals in 2016.

Steward will get $225 million more if it meets unspecified conditions acceptable to MPT.

Its bankruptcy filing lists 30 creditors owed more than $500 million, including the U.S. government, which is owed more than $32 million in reimbursements for insurance overpayments.

Catch up quick: The operator of nine hospitals throughout Massachusetts has been struggling with liquidity and stopped paying vendors, per reports from earlier this year.

Massachusetts Gov. Maura Healey and House Speaker Ron Mariano in February called for Steward to reveal finances, sell its hospitals and leave Massachusetts entirely.

What we're watching: UnitedHealth subsidiary Optum was planning to buy Steward's physician network Stewardship Health — to the chagrin of Massachusetts legislators, many of whom expressed concerns.

Steward did not immediately respond to Axios' request for comment. UnitedHealth declined to comment.

Flashback: Cerberus Capital Management bought Steward in 2010, embarking on an acquisition spree that eventually made Steward the country's largest private for-profit hospital chain.

In 2014, it closed one of the Massachusetts hospitals it had acquired, despite having pledged not to do so for at least 10 years after the acquisition, as part of the state regulatory approval process.

Cerberus began to exit in 2020, agreeing to sell control in Steward to the hospitals' physicians in exchange for an interest-paying note. The physicians soon borrowed $335 million from MPT to buy back the note.

The big picture: Sen. Ed Markey (D-Mass.) used Steward as a springboard for a new bill calling for increased transparency around private equity investment in health care services companies.

State regulators are also getting increasingly stringent on merger notification requirements for health care deals involving private equity.

Yes, but: While Markey's ambitious draft Senate bill is drawing attention, provisions like granting HHS increased deal oversight are not likely to be popular with Republican lawmakers.

The bottom line: Regulators didn't need more ammunition against private equity in health care, but this latest development is another strike against the industries' involvement in health care and hospitals.

2. The BFD: Steward Health files for bankruptcy

Illustration of a frowny face with "11" as the eyes.

Want more health tech deals? Check out the Axios Pro Deals Tracker.

• AISAP, an Israeli ultrasound diagnostics company, raised a $13m seed co-led by Harel Insurance and Shoni Top Ventures. axios.link/3QUsHyT

• Medeloop, a Menlo Park, Calif.-based clinical research analysis startup, raised an unlabeled $5m from Healthier Capital. medeloop.ai

• PAI Partners agreed to acquire a 67% stake in the Vamed rehab business of Germany's Fresenius at an €853m ($914m) enterprise value. axios.link/4a6K7yH

• KKR agreed to purchase Healthium Medtech, an Indian medical device maker, from Apax Partners for around $839m. axios.link/3WtjvFa

• Aquiline Capital-backed Avel eCare, a Sioux Falls, S.D.-based telemedicine provider, acquired Horizon Virtual, a St. Cloud, Minn.-based virtual hospitalist services provider. avelecare.com

• Partners Group-backed ophthalmology network EyeCare Partners closed a follow-on debt exchange with holders of its existing term loans. axios.link/3yajvzJ

• Guardian Dentistry Partners secured a growth capital investment led by Morgan Stanley Private Credit's investment funds, with participation from Prudential Private Capital. The company previously raised $100m in debt financing from Twin Brook Capital. axios.link/3WMJWWD 

• CVC Capital-backed MedRisk, a managed care organization focused on physical rehabilitation and medical bill review for the casualty claims industry, acquired business service company Conduent's Casualty Claims Solutions business. axios.link/3QzIToZ

• Mars is in exclusive discussions with French veterinary network Cerba HealthCare to buy its stake in Cerba Vet and animal genetics business Antagene for an undisclosed price. axios.link/4dwqdAn 

• Latticework, a Dallas health care-focused PE firm, raised $345m for its second fund. latticeworkcapital.com

3. Deals o' the day

•  Stephanie Lovell, former EVP at Blue Cross Blue Shield of Massachusetts, and Jeremy Delinsky, former COO at Devoted Health, joined Devoted Health's board of directors. axios.link/3UND6yw

• Dave Driscoll, former CRO at Welldoc, joined Vitalchat's advisory board. vitalchat.com

• Justyna Evlogiadis, former VP of marketing at Quil, joined Kipu Health as SVP of marketing. kipuhealth.com

4. It's Personnel

👀 Hospice remains a blind spot for Medicare Advantage — Axios

💊 FTC seeks more information on $16.5B Novo-Catalent deal — WSJ

❌ Rite Aid closes a quarter of stores as it navigates bankruptcy — Bloomberg

5. Your daily dose

Illustration of a prescription with a handwritten note saying "daily dose."

☀️ Aaron is going to enjoy the nice warm weather this week as much as possible before it rains for three straight days.

Thanks for reading, and extra thanks to newsletter editor George Moriarty and copy editor Egan Millard. Please ask your colleagues, friends and family to sign up.

May 06, 2024

1 big thing: Opmed.ai raises $15M to manage ORs