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BFD Expert Voices - Health Tech Deals

BFD Expert Voices

📉 Situational awareness: Fears of a U.S. recession tanked global markets today, with Japanese stocks suffering their biggest single-day rout since 1987's Black Monday.

Digital health could be a new frontier for personalized medicine — but it needs more evidence-based research and payer buy-in, says Scan Health Plan and Scan Group CEO Sachin Jain, who last week joined the board of diabetes-focused Omada Health.

The big picture: Investors and founders should avoid pitfalls that took down high-flying unicorns of 2021.

This interview, part of our Expert Voices series, was lightly edited for length, style and clarity.

Studies on outcomes of diabetes management tools have yielded mixed results. How should companies like Omada be evaluated?

The science of evaluation hasn't necessarily been as rigorous as it might be if we were inventing a new plug, a new pill or a new device. One of the exciting things about companies like Omada is a deeper commitment to building the hard evidence base to actually demonstrate the efficacy of the interventions.

The evolving success of the space is going to really emerge from not necessarily peanut-buttering solutions across the whole population, but actually identifying the people who are most likely to benefit from a particular kind of intervention, and then driving adherence to that intervention. I almost think it's a new frontier of personalized medicine.

You recently wrote that "health care is awash with 'innovators' who are really grifters and profit-seekers." Examples?

I think one of our biggest challenges in our industry is our willingness to speak plainly about what works and what doesn't work and why it's not working. And I think we speak in circles because we don't want to offend people. We speak in circles because there's lots of sectors of health care that benefit from the dysfunction.

So much of health care is built on a utilization management platform. I think having unfettered access to all services is a recipe for very high degrees of medical cost inflation.

I see good companies and good leaders saying, "Oh, utilization management is really necessary." But does it have to introduce a one- or two- or three-week delay in care? Or can you provide someone tools and technologies to provide instantaneous feedback?

By utilization management, are you referring to prior authorization solutions?

Yeah. So many things that are represented as being innovative are really just prior authorization solutions and care navigation solutions.

I think about the structures that we have of copays in our country, and how much cost we push onto patients hoping to turn them into consumers — when, unlike any other good or service in America, nobody wants to be a consumer of health care. People just want to be healthy.

What areas of digital health are under-hyped or underserved?

There's a whole host of companies that are providing asynchronous chronic disease management for patients. And I think what we need to see more from a payer perspective is more attention to how to actually pay for these models and then integrate them with traditional care.

We have to get outside of the idea and the vision of patients just going to the doctor's office two or three times a year and start to help patients see  managing their own health as a more continuous behavior.

We need to see changes in medical education. We need to see changes in payment policy that adapt more to what is now possible through the lens of digital health. And we have to figure out how to better integrate asynchronous care into traditional care settings where most doctors still practice, and create those kinds of linkages. That's the work right now.

Editor's note: This story has been updated to correct the title of Sachin Jain.

Scan CEO on digital health's next era

Photo illustration of Sachin H. Jain surrounded by health pluses and abstract shapes.

Photo illustration: Gabriella Turrisi. Photo: Courtesy of Scan Group & Health Plan

Private equity is more likely to buy hospitals with normal performance than it is to buy facilities that are already struggling — but then load on debt and sell off underlying assets — according to a pair of new studies published in JAMA.

Why it's the BFD: This blows a hole in PE industry arguments that it shouldn't be blamed for facility failures, staffing reductions and worsened patient outcomes, Axios' Caitlin Owens writes.

The bottom line: Private equity is under growing political pressure for its health care services deals, even if it plays a relatively small role in the sector. These studies add fuel to that fire.

Private equity blame game

Illustration of a doctor in a white coat and scrubs standing at the end of a cliff formed by a large one hundred dollar bill which is laid flat then descends downward abruptly like a waterfall

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

• Labcorp (NYSE: LH) completed its $239m cash purchase of the assets of Invitae, a San Francisco medical genetics company and maker of genetic tests. Go deeper

• Eximia Research Network, a Raleigh, N.C., clinical research network, acquired Tidewater Clinical Research, a Norfolk, Va., clinical trial company focused on women's health and ophthalmology. Go deeper

Deals o' the day

• Raghav Gupta, former operating partner at Hyperplane, joined Aktiia as CEO. Go deeper

• Matt Oefinger, former chief data scientist at Ahara Corporation, joined Podimetrics as chief data and technology officer. Go deeper

• Masoud Nourmohammadi, formerly chief technology officer at Herself Health, joined CareAbout Health as CTO. Go deeper

It's Personnel

🏦 Conservatives put a target on Medicaid spending — Axios

💰 The one-hour nurse visits that let insurers collect $15b from Medicare — WSJ

 🧠 Mental health market surges — Axios

🗣️ Neuralink implanted a second trial patient with brain chip — Reuters

⚠️ Buyout firms adjust to higher rates while other hurdles loom — WSJ

Your daily dose

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🩰 Claire bought tickets to see Chicago's Joffrey Ballet perform a reimagining of Ian McEwan's "Atonement" in October.

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August 05, 2024

1 big thing: Scan CEO on digital health's next era