Health in 2 Point 00, Halloween Edition (Ep 163)

It’s the Halloween edition of Health in 2 Point 00 where we round up a bunch of smaller deals plus Medidata buying MC10. The smaller ones include Navina, Nice Healthcare and Vitable (who appear to be the same thing in telehealth), Coa (mental health group classes), and Quit Genius (smoking cessation) which somehow has the tennis playing William sisters on board. But the main question of today is whether Jess DaMassa is wearing a mermaid tail below that wig!—Matthew Holt

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Election Issue Spotlight: “Junk” Insurance Makes a Pandemic Even Worse

By ROSEMARIE DAY and NIKO LEHMAN-WHITE

One of the most important responsibilities of the American government is to protect its citizens from harmful industry practices, from lead poisoning to dangerous pharmaceuticals to financial meltdowns. Its record is far from perfect, but government regulators usually act in good faith and in turn earn the trust of those they protect. As we head into Tuesday’s election, it’s important to shine a spotlight on the fact that the Trump administration has betrayed that trust yet again. They have allowed low-quality, unregulated forms of insurance called Short-Term Limited Duration Insurance (STLDI) to prey upon those who lost their jobs during this pandemic. Also known as “junk” insurance, this issue has gotten far less attention than the need to protect people with pre-existing conditions. But the consequences of its inadequate coverage can be just as devastating.

Only 57% of STLDI plans cover mental health care, only 29% cover prescription drugs, and virtually none cover pregnancy. These plans are also allowed to discriminate against the sick, which most do in order to save money. STLDI managed to penetrate the market through a combination of cheap prices, lucrative broker incentives, and deceptive marketing.

Consumers get very little back for their money with these plans. Plans on the Affordable Care Act’s exchanges must spend 80 cents out of every premium dollar collected on care. In 2018, the top five STLDI insurers spent only 43 cents.

Originally envisioned as short-term solutions to gaps caused by unexpected coverage loss, the Trump administration extended their maximum length from three to 12 months and allowed renewals that can essentially extend them to three years, thus drawing consumers away from the individual markets established under Obamacare. This was essentially a kick in the gut for the law, after the current administration was unable to win any legislative or court battles against it.

These last few years, the shortcomings of these plans have been blindsiding consumers, leaving some with hefty bills for $200,000 heart surgeries and $800,000 cancer treatments. But the current pandemic has exposed just how vulnerable consumers are and just how little foresight the Trump administration displayed in allowing these plans to operate freely.

An investigative report by the Economic Studies department at Brookings and the University of Southern California called STLDI brokers, agents and other salespeople posing as consumers. They found that these entities were greatly exaggerating the extent of coverage: only one out of nine provide an accurate description of the plan’s COVID-19 treatment coverage, and half of the others provided information that was demonstrably false. This is extremely concerning. With hospital bills for COVID treatment often reaching into the tens of thousands of dollars, unaware patients will be caught with devastating surprises.

States have a number of effective options to protect consumers from this junk insurance, and many have already taken action. They can limit their duration, require a minimum Medical Loss Ratio, require disclosures, prohibit pre-existing condition discrimination, and outright ban the plans, among other options. But in the absence of federal oversight, residents of many states are left unprotected.

14 million Americans are expected to lose their health coverage during this pandemic and will be unable to switch to a family member’s plan or be eligible for Medicaid. These Americans are vulnerable to these predatory plans. With the election right around the corner, it’s time for all states to protect consumers from being taken advantage of. And it’s time for the people to hold our state and federal governments accountable for our safety and consumer rights.

Rosemarie Day (@Rosemarie_Day1) is the Founder & CEO of Day Health Strategies and author of “Marching Toward Coverage:  How Women Can Lead the Fight for Universal Healthcare” (Beacon Press, 2020). 

Niko Lehman-White is a Consultant with Day Health Strategies.

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Rehash: The Health Assurance SPAC

Not so long ago (August) Jessica DaMassa and I ran a THCB Bookclub interview with Hemant Teneja & Stephen Klasko about their new book UnHealthcare. And, just because, their friend Glen Tullman sat in…..

Fast forward to this week and the three of them plus a cast of characters from General Catalyst & Livongo (Jenny Schneider, Lee Shapiro) have put $500m of their Livongo winnings into a SPAC. The book is based on the idea of Health Assurance and so is the SPAC. So if you are interested in figuring out what they are up to and what they might do or buy, here’s the interview–Matthew Holt

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#Healthin2Point00, Episode 162 | Whoop, Honor, Sidekick Health & more

Today on Health in 2 Point 00, Jess is dismayed at her rising premiums. On Episode 162, Jess and I have more deals to cover. Whoop, which makes a wearable, raises $100 million (including SoftBank money!), bringing their valuation to $1.2 billion. Next, Honor raises $140 million in a Series D and I weigh in on how this tech-enabled home care startup has evolved since it started out. DTx company Sidekick Health raises $20 million for its gamified medication management platform,, and SaaS telehealth platform eVisit gets $14 million—is this any different? Finally, Cricket Health which manages complex kidney diseases early names new CEO Robert Sepucha and raises $15 million. —Matthew Holt

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THCB “SPOOKY” Gang: Episode 30 10/29 LIVE 1PM/4PM ET

Episode 30 of “The THCB Gang” was live-streamed on Thursday, October 28th! Tune in below!

Matthew Holt (@boltyboy) will be joined by some of our regulars and this episode will be a COSTUME PARTY! Come join some of our gang and see the crazy costumes we have in store! Joining us tomorrow are data privacy expert Deven McGraw (@healthprivacy), writer Kim Bellard (@kimbbellard), health economist Jane Sarasohn-Kahn (@healthythinker), CTO of Carium Health Lygeia Ricciardi (@Lygeia), MD & hospital system exec Rajesh Aggarwal (@docaggarwal), policy & tech expert Vince Kuraitis (@VinceKuraitis) it will definitely be a ‘spooky’ one with the looming election, the ACA hanging by a thread, and all of the nerves that await the results of November 3rd.

If you’d rather listen to the episode, the audio is preserved as a weekly podcast available on our iTunes & Spotify channels — Zoya Khan, producer

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Can You Say “Chemputer”?

By KIM BELLARD

I learned a new word this week: “chemputer.”   It’s not a new word – it’s been around since at least 2012 — but chances are, unless you are a chemist or maybe a synthetic biologist, it’s not a word you knew it either.   Even if you don’t care about chemistry, biology, or, for that matter, etymology, this is something you might want to pay attention to, because it may end up revolutionizing healthcare. 

The term is credited to Professor Lee Cronin of the University of Glascow.  Back in 2012, when he was first discussing the concept, he told The Guardian: “Basically, what Apple did for music, I’d like to do for the discovery and distribution of prescription drugs.”

Fast-forward most of a decade and a pandemic, and Dr. Cronin and others are closing in on that goal — although they’ve updated their analogy to “Spotify for chemistry.”

I won’t pretend to understand either the chemistry nor the programming involved, but, simply put, chemputers automate the production of molecules – including prescription drugs, such as, for example, COVID-fighting Remdesivir.  CNBC recently profiled activity in the field, spurred by some new papers from Dr. Cronin and Dr. Nathan Collings of SRI Biosciences. 

The new paper from Dr. Cronin and his collaborators appeared in Science earlier this month, with the catchy title A universal system for digitization and automatic execution of the chemical synthesis literature.  The big breakthrough is more automation of the process, allowing robotic systems to do most of the work. 

Dr. Cronin described their work:

What we’ve managed to do with the development of our ‘Chemical Spotify’ is something similar to ripping a compact disc into an MP3s.  We take information stored in a physical format, in this case a scientific paper, and pull out all the data we need to create a digital file which can be played on any system, in this case any robot chemist, including our robotic system which is an order of magnitude lower cost than any other similar robot.

Dr. Cronin’s team uses a chemical description language called XDL.  CNBC says: “XDL is to the “chemputer” as HTML is to a browser—it tells the machine what to do.”  Software called SynthReader scans descriptions of chemical processes, usually natural language processing (NPL) and translates them into XDL, when the chemputer then can actually execute in the lab. The code can be corrected without programming knowledge and the process is hardware independent.

It’s not entirely free of human involvement – “The human will always need to be there to make sure you don’t have a dumpster on fire.” Dr. Cronin believes – but they are “dedicated to making chemical synthesis accessible to everyone, regardless of training.”

 Dr. Cronin has big ambitions:

We’re hoping that the system we’ve built will massively expand the capabilities of robot chemists and allow the creation of a huge database of molecules drawn from hundreds of years’ worth of scientific papers.

Our system, which we’re calling Chemify, can read and run XDL files which have been shared among users.  Putting that kind of knowledge directly in the hands of people with access to robot chemists could help doctors make drugs on demand in the future. 

He brags: “We’ve invented the CPU [central processing unit] for chemistry.  That’s really important right now, because all the chemistry robots in the world are not only expensive, but they can’t be programed in the same way.”

Kim Branson, the global head of artificial intelligence and machine learning at GSK, is wowed, telling CNBC: “The chemputer as a concept and the work [Cronin]’s done is really quite transformational.” 

Dr. Collins’ latest research has a similar title – Fully Automated Chemical Synthesis: Toward the Universal Synthesizer – and reports similar breakthroughs.  Their synthesizer AutoSyn “makes milligram-to-gram-scale amounts of virtually any drug-like small molecule in a matter of hours.”  Their paper demonstrated synthesis of ten known drugs and predicts success for a high percent of many other FDA approved small molecule drugs. 

Dr. Collins is a big believer in the combination of AI and automation to improve the pharma R&D process.  He wrote earlier this year: “Progress in AI offers the exciting possibility of pairing it with cutting-edge lab automation, essentially automating the entire R&D process from molecular design to synthesis and testing – greatly expediting the drug development process.”

“The majority of chemistry hasn’t changed from the way we’ve been doing it for the last 200 years. It’s very manual, artisan driven process,” Dr. Collins told CNBC.  “There’s billions of dollars of opportunity there.”  No wonder Dr. Branson and other pharma executives are paying close attention.

Darpa is also paying close attention.  SRI International, the parent of Dr. Collins’ Bioscience division, just received $4.3 from Darpa for a tool to help automate production of therapeutics for pandemics and other biological threats. 

Darpa also is funding a Make-It program to automate “small molecule discovery and synthesis to propel the field beyond conventional batch-based, intuition-driven capabilities,” and a related Accelerated Molecular Discovery program, in which, as Anne Fisher, the program manager, told CNBC: “We’re now trying now to harness what we’ve done in Make-It and expand it out so we can teach computers how to discover new molecules.”

Think about that “Teach computers how to discover new molecules” and let that sink in.  As Dr. Collins says, “This is still a very new science.  It’s started to explode really in the last 18 months.”

All this is taking place as 3D printing for pharmaceuticals is also starting to take off, such as for “low-cost production of customized pill medications for patients who need special dosing, quantities or composition of drugs. Pills can be 3D printed in unique sizes, shapes and with slow-release capabilities.”  The FDA is still working on how to regulate 3D printing of medical products (which now include prostheses, orthopedic and other implants, pharmaceuticals, and even organs. 

It better start thinking about chemputers, or at least the products made by them.  

At the very least, we can expect that chemputers and 3D printing could greatly speed and democratize the production of pharmaceuticals.  Imagine your doctor or pharmacist producing your medicine on the spot – or perhaps doing it yourself, in your own home.  Further development of AI could also greatly speed up on the discovery process, which could have major implications not just for our health but also for the pharmaceutical industry.  The old models are up for grabs. 

So, get to know chemputers.  They may be in your future. 

Kim is a former emarketing exec at a major Blues plan, editor of the late & lamented Tincture.io, and now regular THCB contributor.  

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#Healthin2Point00, Episode 161 | Partnerships galore & a new SPAC

Today on Health in 2 Point 00, we have some hot gossip re: Glen Tullman starting his own SPAC. On Episode 161, Jess and I discuss Bind Benefits raising $105 million, BridgeHealth merging with Transcarent and raising $40 million in a Series A, and Loyal raising $12.5 million in a Series A. Jess also asks for my take on a slew of new partnerships between Lyra and Calm, Cigna and MDLive, and Doctor on Demand and CareLinx. —Matthew Holt

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Viruses on Motorcycles

By ANISH KOKA

The most recent fiction dressed up as science about COVID comes to us courtesy of a viral Washington Post article.  “How the Sturgis Motorcycle Rally may have spread coronavirus across the Upper Midwest” screams the headline.   The charge made is that “within weeks” of the gathering that drew nearly half a million visitors the Dakota’s and adjacent states are experiencing a surge of COVID cases.  

The Sturgis Rally happens to be a popular motorcycle rally held in Sturgis, South Dakota every August that created much consternation this year because it wasn’t cancelled even as the country was in the throes of a pandemic.  While some of the week long event is held outdoors, attendees filled bars and tattoo parlors,(and that too without masks!), much to the shock and chagrin of the virtuous members of society successfully able to navigate life via zoom, amazon prime, and ubereats.

This particular Washington Post article’s sole source of data comes from a non-profit tech organization called The Center For New Data that attempted to use cellphone data to attempt to track spread of the virus from the Sturgis rally.  Unfortunately, tracking viral spread using cellphone mobility data is about as hard as it seems.  The post article references only 11,000 people that were able to be tracked out of a total of almost 500,000 visitors, and isn’t able to assess mask wearing, or attempts at social distancing. How many bars are there to stuff into in Sturgis anyway?? And so it isn’t surprising that even in an article designed to please a certain politic, this particular sentence appears:

“But precisely how that outbreak unfolded remains shrouded in uncertainty.”

The other striking feature of the article is the timing of this ptome to journalistic excellence. The article is published in the latter half of October precisely because South Dakota is documenting its highest numbers of new cases now.  It doesn’t seem to matter that the Sturgis Rally was held in early August, more than 2 months prior to the recent spike in cases. The Post article spends the majority of its time meandering through a few anecdotes from rally attendees who have finally seen the error in their ways, but provide no other data points to substantiate the condescension of the blue-checkmark twitterati that were all too happy to amplify the article.

In fairness, this isn’t the first time a scarlet C has been attempted to be hung on Republican Governor of South Dakota, and the band of deplorables she leads.  The unabashed Trump supporting Governor has had the conventional public health experts on mute for much of the pandemic.  The South Dakotan approach has emphasized private personal responsibility and was one of only eight states to eschew stay-at-home, or safer-at-home orders.  The really annoying aspect of this approach to public health autocrats was that it seemed to work really well, as new COVID cases leading up to the Sturgis rally numbered in the 5o’s and 60’s per day while other, admittedly larger states, had outbreaks in the tens of thousands per day.

The current attempts to tie increasing cases to a gathering that took place months earlier is squarely in the realm of politics, not science.  After almost eight long months the citizens of the globe are weary, and are restarting life out of necessity.  Schools are opening, traffic into cities is building, and grandparents are hugging their grandkids again.  Tracking spread of the virus as this happens is simply a reflection of the social interactions that have come to define life.  Testing for COVID is ubiquitous enough at this point to have largely become a meaningless exercise used primarily to support shoddy scholarship that generates a clickbait headline.  If it was politically expedient to connect France’s recent spike in COVID case to the Sturgis Rally, some ‘researcher’ would find a way to make science say it was so.

An earlier, more scholarly attempt to make the Sturgis Rally the nation’s largest super-spreading event provides a particularly good example of how science bends to politics.   In September, economists tried to use another cellphone dataset to show that counties across the nation that contributed more travelers to the Sturgis Rally saw a much higher rise in COVID cases than those that sent relatively few travelers.  A closer read of the paper finds the wheels start coming off this particularly poorly constructed narrative almost immediately.  One would think that researchers intent on demonstrating a COVID apocalypse triggered by a mass gathering would use deaths, but instead COVID cases are used.  The authors explain that their reason for using cases is because of the relatively low level of mortality since the Sturgis event.  At the time the article was published September 2nd, there had been one recorded death since the rally. 

It is true that South Dakotans appear to obey the natural laws of viral spread.  As people gather and socialize doing the things they value, whether that be at motorcycle rallies or the local Target, cases rise.  Two weeks after the Sturgis rally, South Dakota goes from seeing fewer than a 100 new cases per day to almost 400 new cases per day.

To put these numbers into context, one need only look at the rise in cases in California, Washington and Florida, all seemingly quiet until a few weeks after massive gatherings in major cities during the Memorial Day Weekend.

Fascinatingly the same researchers confident about the link between national superspreading and the Sturgis Rally also found no link between widespread Memorial day protests and a spike in cases 2 weeks later. 

The data in early September, almost one month after the Sturgis Rally actually suggests S. Dakotans had a reasonably small uptick in cases that was already beginning to dissipate according to the snapshot available from the South Dakota COVID dashboard.

And its not just PCR positivity, even the weekly influenza like illness reporting trends year-over-year, shows no significant spike compared to prior years.

The danger of superspreader events is that they create a conflagration that overwhelms hospitals, yet the hospital occupancy data In South Dakota shows almost 50% of regular hospital beds, and 36% of ICU beds were empty one month after the Sturgis Rally.

The real meat in this scholarly work, of course, is the proposition that Sturgis spread the virus far and wide.  The paper sought to demonstrate this by by showing counties across the country that contributed a high number of attendees to the Sturgis Rally saw higher rates of COVID spread in the weeks that followed. 

The following national map shows the counties that were noted to contribute a high number of travelers to the sturgis rally.  The deepest blue are high inflow counties, that were found to have an increase in cases between 6-12% after the Sturgis Rally.  Conversely, low inflow counties appeared to have no increase in new COVID cases.

This would appear to be concerning, visual evidence of COVID spread directly as a result of the Sturgis rally, until one actually uses the nice map to take a look at outbreaks in high inflow counties.  Here is one of the graphs of COVID cases in the deep blue high inflow Weld County, Colorado.  Even an electron microscope wouldn’t be able to manufacture a meaningful spike three weeks after the Sturgis even in early August..

Weld County, Colorado

The next high inflow county of interest is the home of Las Vegas, which also shows absolutely no visual evidence of chaos unleashed after the August gathering. The spike in cases here instead seems to time out well with casino openings in mid June.

Clark County, Nevada

Campbell County, Wyoming, another high inflow county, is perhaps more promising for the Sturgis superspreader narrative on first glance.  There appears to be a spike in cases about 2 weeks after Sturgis, but a closer look at the y-axis shows the spike in cases was 8 new cases in one day.  Not 80, not 8000, but eight cases.

Campbell County, Wyoming

But as cases rise across the nation in October in multiple disparate states, somehow the edifying narrative the Washington Post and other social media influencers are latching onto is that the Sturgis rally was the unique event that set fire to the midwest. Never mind that non-contiguous Alaska and Sturgis-adjacent North Dakota have new case/hospitalization peaks that appear to mirror each other by both accelerating in October, well after one would expect Sturgis to be responsible. 

Alaska

North Dakota

On the other hand, Hawaii appears to have some cause to blame its epidemic on the irresponsible Dakotans from Sturgis based on the timing of its new case and hospitalization peaks.  It’s just too bad motorcycle traffic between Hawaii and South Dakota is of the non-existent variety.

Even casual observers at this point should realize that Science is in the process of being shaped by politics. Perhaps this has always been so, and it just took COVID to make the contortions transparent.  Nonetheless, we live in a world where the answers are known before the research begins and the headlines are written before journalists put pen to paper.  This goes well beyond the garden variety cherry picking of research that is the hallmark of all debates, whether they be scientific or political.  This is utilizing the research enterprise to manufacture science that suits a particular politic. And so we get a particular focus on Sturgis two whole months after the event because the point is to shame deplorables in states with Republican leadership 3 weeks before a Presidential election.  In this brave new world, the science tells us that massive Memorial Day protests don’t trigger viral outbreaks, but motorcycle rallies in South Dakota do.  “Science” careens towards science fiction. 

Anish Koka is a cardiologist in Philadelphia.  He is co-host of the Accad & Koka report.  Follow him on twitter @anish_koka.

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Remote Patient Monitoring Sets Up Big Tech to Revolutionize Telemedicine and Healthcare

By JAMES MOELLER

Remote patient monitoring has emerged as the next significant challenge for virtual healthcare and that challenge is creating significant opportunities for many companies largely outside of the traditional healthcare technology marketplace. In particular, it is potentially setting up an opportunity for Big Tech companies like Apple, Google, and Amazon, to revolutionize telemedicine and healthcare similar to what those companies have accomplished in mobile phones, Internet search, and retail.

Next Generation Remote Health Monitoring

Next generation remote healthcare monitoring will likely look much different than anything done before. What is emerging today is the potential for the broad adoption of remote health monitoring devices and systems that leverage consumer wearables, smart home communication systems, and big data to produce holistic views specifically for healthcare providers. The pandemic has thrust telemedicine solutions forward by years if not a decade or more in the short span of three to six months. This is creating an opportunity for remote patient monitoring to provide even better visibility into patients beyond what can be accomplished with basic video conferencing.

But while telemedicine is now becoming more firmly established, remote monitoring seems to still have a long way to go. This is evident in a new report by KLAS Research (a healthcare industry research firm) published on August 27^th, where they interviewed 19 executives from 18 healthcare organizations regarding their challenges and solutions during the outbreak of the pandemic. Not surprisingly, telemedicine was the top challenge with 32% of the executives. Overall, though, 84% of the executives indicated that the telemedicine issues were already solved and the remining 16% indicated that the solutions were in progress. However, remote patient monitoring ranked as the second most significant challenge with 26% of the respondents. But furthermore, only 22% of the executives indicated the remote monitoring challenges were solved, with 33% saying it was in progress, and 45% indicating it was completely unsolved. So, a clear opportunity exists.

Big Tech’s Virtual Healthcare Market Leverage

For Big Tech, the leverage into virtual health comes from the ability to offer remote monitoring solutions across wearables, ambient sensors, and smart home communication devices, as well as the capability to apply big data, AI, and machine learning to the information from those devices. Big Tech is even combining these technology solutions with healthcare specific services like telemedicine, prescription drug delivery, and medical testing. Market evidence suggests that Big Tech is already putting these pieces together and using this leverage to expand into the broader healthcare market.

Wearables and Ambient Sensors

Wearables and ambient sensors, and particularly consumer-oriented versions of these products, are a key enabler of next generation remote healthcare monitoring by serving as the principle connection with the individual. Over just the last few years the overall market for wearables has increased significantly and the market demarcations are blurring between traditional medical wearables and consumer health and fitness wearables.

Apple leads the overall wearables market with its Watch, Beats, and AirPod products. Across those product lines the company shipped 29+ million units in Q2 2020 and holds an approximate 30% market share, which is nearly three times the size of its nearest competitor. In addition, the Apple Watch is aggressively pushing into classical medical applications with its ability to measure blood oxygenation levels, its electrocardiogram (ECG) capability, and its ability to detect atrial fibrillation (AFib) as well as other cardiovascular conditions. (5)

Fitbit, which is in the process of being acquired by Google, typically ranks 5^th in the wearables segment with a market share of approximately 3%. While Fitbit’s market share has been declining as of late, it would still position Google with an immediate unit shipment customer base (for Q2 of 2020) of approximately 2.5 million as well as its active user base of approximately 30 million.

Not to be left out, Amazon recently introduced its own wristband wearable device for health and fitness tracking called Halo. Its aiming to differentiate in the wearables market by offering capabilities to measure and track body fat, sleep temperature, and emotional state.

Smart Home Communication Devices

Smart home communication devices such as smart speakers and home control systems will also be a key component of next generation virtual healthcare. These systems can serve as communication access points to the Internet for lower power wearables and ambient sensors, and also enable intelligent personal assistant capabilities, such as reminders to take medications, and help in monitoring exercise and other behavioral health aspects.

Amazon is the dominant market leader in smart home communication devices with its Echo Alexa personal assistant, which has estimated 50%+ market share as of January 2020. Amazon was first-to-market with its smart speaker system and continues to augment its capabilities with an ever-expanding array of interactive skills. This includes skills to integrate Amazon’s Ring home security and control system, its portfolio of Alexa wearable devices, and numerous third-party products.

Google has the second position in the smart home communications device market with an approximate 30% market share for its Nest smart speaker products. (8) Recently the company make a $450 million investment in ADT, Inc. with the aim of growing its Nest deployments specifically in the home security market. Google also has a relationship with the Cleveland Clinic that has recently materialized into a capability for its Nest smart speakers that allow users to ask for Cleveland Clinic health tips. This is a perfect example of the virtual healthcare synergies that can be accomplished with smart home communication devices.

Apple is behind the competition in the smart home communications market. The company’s HomePod smart speaker is a distant 4th in market share at only 2.8%. So, while Apple’s Siri assistant has been an integral part of its iPhone for quite some time, the company has yet to make an impact in combining Siri and HomePod for the home market.

Big Data

The big data processing of medical information will become increasingly important as virtual healthcare remote monitoring grows. The ability to analyze the vast amounts of real-time, streaming data to produce trends, correlations, and medical diagnoses can potentially transform how healthcare is applied at both an individual and societal level. Big Tech is uniquely positioned with shear corporate size and technology assets to pursue remote monitoring big data. In addition, Big Tech is already pursuing healthcare data relationships with significant healthcare providers and can leverage those projects into new applications processing remote monitoring data.

In 2019 Google made waves in establishing relationships with both Ascension Health and the Mayo Clinic to partner on the development of digital tools that integrate healthcare data into new patient care models. While the Ascension deal, in particular, raised concerns about patient data privacy, the two relationships will provide Google valuable experience in processing healthcare data that can be leveraged into future remote monitoring data applications.

Apple is leveraging its iPhone and wearables products in its health data initiatives. In 2018 the company introduced a health records app for the iPhone where Apple partners with healthcare providers to deliver a patient’s records to their mobile phone. In addition, Apple has established a variety of research relationships with organization such as Harvard’s T.H. Chan School of Public Health, Brigham and Women’s Hospital, University of Michigan, and others, that focus on cardiovascular projects related to the Apple Watch and hearing projects related to the AirPod earbuds.

Amazon’s principle relationship for health data is with Cerner Corporation, which has an approximate 25% share for electronic health records systems across the entire healthcare marketplace. In 2019, Cerner chose Amazon Web Services as its preferred cloud provider for its healthcare patient data. More recently the companies announced a further collaboration where consumers using Amazon’s Halo wearable can opt-in to share their activity and health data and allow that information to be stored in their patient record in Cerner’s systems. The patient’s healthcare provider can then access and evaluate that information directly in the patient’s records. This is another example of virtual health synergies accomplished via the integrated capabilities of a consumer wearable, health data systems, and a patient’s healthcare provider.

Healthcare Services

As the most straight-forward initiatives toward revolutionize healthcare, Big Tech is also directly entering the healthcare provider and services market, which at a minimum provides a convenient platform to leverage its healthcare technology and data solutions.

In 2018 Apple launched a group of health clinics called AC Wellness for its employees and their families. These clinics are generally focusing on providing primary care but have extended that to also included on-site lab testing and wellness care such as exercise and dietary programs.

Last September Amazon introduced its pilot telemedicine program, Amazon Care, for its employees in Seattle. This service includes virtual primary care as well as home consultations and prescription drug services via Amazon’s PillPack division, a virtual pharmacy Amazon acquired in 2018.

Google’s most recent activity takes a different approach where on August 24^th it announced it was investing $100 million in telemedicine provider Amwell. The synergies mentioned in the deal specifically focused on Google’s cloud computing services, but the intersection extends into its data processing and machine learning expertise and can potentially tap into its home personal assistant products for remote monitoring capabilities.

Challenges and Opportunities Ahead

When Big Tech pursues business growth, the companies must think big and look for markets that are ripe to be thoroughly transformed. With the global healthcare market size at more than $8 trillion and new technologies poised to transform how healthcare is executed, a prime opportunity exists. But significant questions remain in terms of the technological solutions, the market competitive and relationship dynamics, and of course, concerns about regulatory and information privacy.

Despite the market positions of Big Tech in wearables, smart home communications, and big data, there continues to be significant venture capital and start-up activity in the technological areas of virtual health that tend to focus on opportunities that Big Tech hasn’t yet pursued. The companies that achieve some degree of success will likely experience a very attractive market to be acquired by not only Big Tech competitors like Apple, Amazon, and Google, but also the leading telemedicine companies like Teladoc Health, Amwell, MDLIve, and SOC Telemed as well as technology-oriented insurers like UnitedHealth Group. From a Big Tech product portfolio perspective, two of the more significant gaps pertain to Apple’s position in smart home communications and Amazon’s position in wearables. In the smart speaker market, Apple’s 4^th place position behind Sonos Inc. has led to speculation that Apple might buy Sonos purely to increase its market share. This is very unlikely to happen given Apple’s reluctance to large M&A deals and, more importantly, its recent announcement that it is will stop selling Sonos products in the Apple Store. So, for the moment, Apple looks to be preparing to grow its market share on its own. For Amazon in the wearables market, the situation is similar. There doesn’t look to be any wearable or smartwatch companies that help Amazon’s market position. Even if Amazon were to acquire a company like Garmin, it would only improve its market share by a few percentage points.

The competitive and relationship dynamics of the virtual healthcare market will continue to be very active as broad industry solutions come together. Ultimately, this market is a non-trivial combination of technology, information systems, and healthcare providers. Big Tech has significant positions in many key markets, but lacks considerable exposure to others, most notably in the healthcare provider area. The first six months of the Covid-19 pandemic has thrust telemedicine providers like Teladoc Health, Amwell, MDLive, and SOC Telemed to the forefront and positions them as key parts of future virtual health solutions. Teladoc just recently announced an $18.5 billion deal to acquire Livongo, a company focused on remote monitoring and virtual health services for diabetes and related health issues. Amwell, MDLive, and SOC Telemed are all accessing the public markets to shore up access to capital and the ability to leverage stock as an acquisition currency. So, watch for all these companies to be active acquirers. But for Big Tech there are many more private telemedicine companies that could be acquisition targets to improve Big Tech’s connection to the healthcare provider market. These include companies such as Doctor on Demand, Crossover Health, 98point6, and HealthTap. In fact, Amazon just recently announced a partnership with Crossover Health to provide health services to its employees and health centers near its fulfillment and operations facilities. This could potentially be a precursor to a more significant acquisition opportunity.

Last, but certainly not least, are the concerns over regulatory issues and information privacy. For Big Tech, under the current environment, any initiatives to capture significant portions of the next generation virtual healthcare market are likely to attract even more scrutiny regarding antitrust issues and the companies’ abilities to keep patient information private. But even these challenges are unlikely to deter Big Tech’s pursuit of healthcare. The market opportunity is just too attractive.

Jim Moeller provides business intelligence data analytics consulting services including reports, strategic planning, competitive analysis, technology assessment, and intellectual property research.

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Not Just Faxes

By KIM BELLARD

I missed it when it was first announced in Japan, but fortunately the U.S. mainstream media has finally picked up on the story, with articles in both The Washington Post and The Wall Street Journal: Japan’s new Administrative Reform Minister Taro Kono has “declared war” on fax machines, among other paper-based traditions. 

Wait, what?  “Administrative Reform Minister?”  The U.S., or at least the U.S. healthcare system, has to hear about this. 

Mr. Kono is a well known Japanese politician, including stints as Defense Minister and Foreign Minister.  He is thought of as something of a maverick, at least by Japanese political standards.  New Prime Minister Suga installed Mr. Kono in mid-September, making overhaul of bureaucracy a top priority: “Wherever there are problems, I want all of them brought to Mr. Kono for handling on behalf of the nation.” 

Mr. Kono set up a hotline for people to report government red tape, which was quickly overwhelmed with thousands of examples.  It soon reopened.

It didn’t take long for Mr. Kono to start calling for significant changes.  “To be honest, I don’t think there are many administrative procedures that actually need printing out paper and faxing,” he said in a press conference in late September.  “My job is to clear the road of obstructions to allow the Ferraris and Porsches of digital innovation to speed through.”

I wonder what Honda and Toyota thought about that.

Part of the problem in Japan is the hanko, a personal stamp that is routinely used for authentication (and which thus requires paper.)  He’s now at war with that as well, tweeting:

We checked 800 most often used government procedures with hanko, or name stamp or seal, and found few of them need to continue with hanko. This is the first step to make those procedures online.

One ally, futurist Morinosuke Kawaguchi, pointed out:

More than 97 per cent of the documents that are produced in companies and government offices presently need a hanko, but these are hanko that can be purchased in a convenience store, so there is no meaning to this habit.  It makes no sense, it’s completely ridiculous.

If you’ve ever envied Japan for its bullet trains, its early adoption of robots, or its broad use of consumer electronics, you may be surprised to hear that more than 95% of Japanese businesses still use faxes, and 34% of Japanese households have a fax.  Mr. Kawaguchi admitted: “It may be 1970s technology, but it is extremely secure and very difficult for someone on the outside to hack…Digitisation may make things more efficient, but there is clearly a trade-off when it comes to security.”

Jonathan Coopersmith, a Texas A&M professor who is an expert on faxes, told WaPo:

The primary mode of writing is by hand, and this is a technology that fits this perfectly.  One of the reasons it’s still there is that you have an older generation that’s never really wanted to use computers, and a lot of small businesses that never adopted computers and didn’t need to.”

Not surprisingly, the COVID-19 pandemic has been a big driver in the anti-fax initiative.  Health care professionals were overwhelmed by the amount of reports that had to be prepared by hand and then faxed.  “Come on, let’s stop this already,” one physician tweeted.  “Even with corona, we’re handwriting and faxing.”  Mr. Kono quickly retweeted it, even though he was still in his former position as Defense Minister – and within a week the health ministry announced a system of online filing (which, not surprisingly, has not entirely succeeded).

An independent report on Japan’s response to the pandemic found that their system “made it difficult to grasp the spread of infection in real time nationwide, and exhausted health center staff.  The new coronavirus crisis was also Japan’s ‘digital defeat.’”

We don’t have hankos in the U.S., and we’re not as reliant on faxes as Japan is, even in our healthcare system.  But red tape, inefficiencies, and antiquated technology?  Yeah, we’ve got all that, especially in healthcare.  But where’s our Secretary of Administrative Reform?  Where are our Chief Administrative Reform Officers? 

Heck, where are our hotlines to report red tape? 

Even now, well over six months into our pandemic response, we have a slapdash, state-by-state (or even county-by-county) system of reporting, with hospitals and HHS still struggling to figure out what and how to report.  We’re driving by looking in our rearview mirror, and images – data — may be distorted.  They certainly aren’t real-time.  Dr. Ashish Jha, director of Harvard’s Global Health Institute, lamented: “The CDC during this entire pandemic has been two steps behind the disease,”

“We are woefully behind,” one senior CDC official said.  She likened the state of U.S. public health technology to “puttering along the data superhighway in our Model T Ford.”  Where are those Ferraris and Porsches Mr. Kono is expecting? 

And, to be fair, it’s not just the U.S.  Jen Spahn, Germany’s federal minister of health, admitted:

Faxes are still the most used way of communication in our health system, at least when it comes to communicating between the different players.  Within a hospital, that might be very much digitised, but as soon as you want to communicate with another hospital or another player in the healthcare system, it’s very much like the 1990s and not like 2020.

Yoshimitsu Kobayashi, chairman of Mitsubishi Chemical Holdings, sees the pandemic as an opportunity: “The very negative damage it has inflicted on Japan has in turn served as a powerful accelerator.  If we miss this chance, we won’t be able to do it next time.”

Economist Paul Romer is usually credited with the quote, “A crisis is a terrible thing to waste.”  Well, we certainly have a crisis, and I’m worried we’re going to waste it.  Using it to just get rid of faxes would be a waste.  We’re already using it to streamline development of therapeutics and vaccines, although not without problems.  But will we use it to solve fundamental problems in our healthcare system, such as inequities, inefficiencies, and infrastructure? 

Maybe we could recruit Mr. Kono to do the job. 

Kim is a former emarketing exec at a major Blues plan, editor of the late & lamented Tincture.io, and now regular THCB contributor.

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