Hgp platform high flyers v4


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Hgp platform high flyers v4

  1. 1. Healthcare Growth Partners, LLC 2014 All Rights ReservedCONFIDENTIAL Health IT – “High Flyer” Investment Trends May 2014
  2. 2. CONFIDENTIAL 2HEALTHCARE GROWTH PARTNERS Where are we? HITECH (2011-2017) (HITECH): Install and ensure the usage of electronic medical records and basic communications infrastructure with the capability of collecting and aggregating data across care settings ACA (2012-2020) (ACA Implementation): Lay the foundation for reform with pilot risk- based reimbursement models that are dependent on outcomes, quality and efficiency rather than the volume of service Value-Based (2015+) (ACO/Bundled Payment): Execute on a streamlined system of robust care coordination and population health to maximize quality as well as efficiency with the goal of delivering higher value Personalized 20?? (Personalized Medicine): Using big data, quality reporting, and genetic analytics, optimize care and medicine based on individualized characteristics and genomics
  3. 3. CONFIDENTIAL 3HEALTHCARE GROWTH PARTNERS Healthcare Stakeholders React to Cost, Access, and Quality Initiatives Providers • Direct Impact • Risk-based pilots • Readmission penalties • Fraud scrutiny • Quality reporting • ICD-10 (non- ACA) • Indirect • Resource constraints • Consolidation • Focus on care continuum Payers • Direct Impact • Public HIX • Private HIX • Rate hike caps • MLR caps • Medicaid expansion • Coverage requirements • Indirect • Expanding capabilities Employers • Direct Impact • Insurance requirements (min employees/ hours) • Indirect • Defined benefits • Private HIX • Wellness initiatives Med-Pharm • Direct Impact • Higher taxes • Comparative effectiveness • Sunshine Act • Indirect • Care management • Big data • Genomics • Personalized medicine Patients • Direct Impact • Greater protections (pre-existing conditions, denials, caps) • Greater coverage • More choice • Non- discrimination • Indirect • Greater Responsibility Information Technology – Quality & Cost (aka, Value)
  4. 4. CONFIDENTIAL 4HEALTHCARE GROWTH PARTNERS Volume to Value Driving the Trend • Payer • Disease • Care-setting • Treatment • Today, 10% of Patients
  5. 5. CONFIDENTIAL 5HEALTHCARE GROWTH PARTNERS Volume to Value Key Stats  Shift reflects the introduction of a series of accountable care pilots developed by CMS over the last few years—specifically, the Medicare Shared Savings Program (MSSP) and the Bundled Payments for Care Improvement (BPCI) initiative.  It’s important to note that the # of providers does not represent the # of patients – only a fraction of patients at the risk-contracted facilities will be risk-based.  Around two-thirds of providers report generating more than 80% of their revenue from standard fee-for-service contracts, and about half are still receiving more than 90% of payments for patient care from such contracts.  65% of providers are contracting with commercial payers on new payment models, in many cases in conjunction with Medicare’s risk-based payment initiatives. (Source: The Advisory Board Company)
  6. 6. CONFIDENTIAL 6HEALTHCARE GROWTH PARTNERS Volume to Value Transition 1. Payers: Orientation toward value (eg, risk) has been core to payers for years, in the form of utilization management, disease management, and cost containment. 2. Employers: As the cost burden explodes and with their place secured as a stakeholder in healthcare, employers are expanding the role in care management. This trend is coupled with built-in incentives from the ACA. Further, employers can be more nimble in navigating FDA vs non-FDA regulated mobile monitoring (eg, games, wellness platforms, etc). 3. Providers: As discussed, value is limited to narrow patient populations based on payer, disease, and care program. IT and services that complement value-based reimbursement must be consistent with incentives. 4. Patients: The out-of-pocket financial burden is expanding (now 25%+ of provider revenue and share is growing). For now, true patient care decisions tend to be managed by the stakeholders above.
  7. 7. CONFIDENTIAL 7HEALTHCARE GROWTH PARTNERS Changing Incentives = Changing Business Models The Spreading Cost Burden • Risk-based payment • Readmission programs • Higher patient pay • De-centralized care Phase 1 Technologies Phase 2 Technologies Phase 3 Technologies The Marketplace Response • Provider-focused • EMR/RCM • HIE • Establishes the “infrastructure” • Data collection and sharing • Employer Focus and • Population Health • Care Coordination • Data Analytics • Risk Stratification Providers • Patient/Individual Focus • Mobile apps • Tele/Monitoring • Personalized Medicine • Predictive Analytics • Data Optimization Payers Employers Consumers • MLR caps • Premium caps • HIX = “Consumer” • Coverage expansion • Comprise 40%+ of healthcare spend • ACA secured their stakeholder status • Higher patient pay (25% is out-of-pocket) • More (and less) choice • Patient Engagement
  8. 8. CONFIDENTIAL 8HEALTHCARE GROWTH PARTNERS Phase 3 Technologies Developments and Challenges There have been tailwinds in the emergence of consumer-facing HIT technologies • Proliferation of mobile technologies driven by advent of smart phones serve as a critical hub, and accessibility of sensor innovation which provide real-time data insights • Employers, payers, and even providers are subsidizing the cost of mobile technologies, either directly (by purchasing on behalf of patients) or indirectly (by monetizing data or through ads) …However, there remain some obstacles • Reimbursement for Tele-Health and Remote Monitoring remains vague • FDA and licensing ambiguity will stall growth and already lagging payer reimbursement trends • Physicians and other care providers are often resistant to the disruption of remote or tele- health • Today, the market is responsive to very target reimbursement programs (eg, Readmission Reduction Program), but these programs and risk-based payment models are expanding
  9. 9. CONFIDENTIAL 9HEALTHCARE GROWTH PARTNERS Keys to Success Valuation-Centric 1. Cloud technology (multi-tenant that enables scale and analytics) 2. For apps, developing a platform rather than an app 3. Open, accessible APIs 4. Recurring revenue model Customer-Centric 1. Hard ROI 2. Pricing that aligns with Hard ROI (increase revenue or drive down cost) 3. Policy/Political alignment with Business Model (government, associations, reimbursement, etc) 4. Non-disruptive or even enabler of clinical/admin/patient workflow
  10. 10. CONFIDENTIAL 10HEALTHCARE GROWTH PARTNERS Reasons for Failure 1. Innovating too far ahead of the adoption curve 2. Misalignment with the healthcare incentive model 3. Lack of clinical/workflow understanding 4. Inappropriate revenue model 5. Inefficient distribution model (go-to-market plan) 6. Data/architecture “closed” (note, this used to be a key to success) 7. Ramping up too quickly – going too deep into the red  Lack of readiness for long sales cycle 8. Losing focus on customer happiness/retention
  11. 11. CONFIDENTIAL 11HEALTHCARE GROWTH PARTNERS Trending Investment Verticals Employer Health Benefits Management Health Consumers Patient Engagement Big DataPM & EMR Remote Care ACO Tools ACO-Oriented RCM Guiding Theses • Transparency • Cost & Quality • Big data • Value-based payment • Patient vs Consumer Engagement • Informed, connected patient • Utilization Management • Real-time CDS • Care Coordination • Non-Acute care focus
  12. 12. CONFIDENTIAL 12HEALTHCARE GROWTH PARTNERS High Flyer #1: One Medical Group (http://vimeo.com/62750513) Series E: $20mm (9/11) Series F: $30mm (3/13) Growth Fund: $40 mm (4/14) Business Model: Membership based ($149/year), high touch, hi tech physician practice management serving multiple and an expanding list of US cities. Macro Thesis: A significant care experience and quality gap exists at most physician practices due to the underutilization of technology. Payers, patients, and providers all stand to benefit from IT-enabled care models. Opportunities: 1. Strong value prop to payers and patients 2. Savvy physicians may prefer hi-tech practice 3. Risk-based models that align with payers and employers may be viable once the value proposition is clearly defined 4. Last valuation 8x revenue! Threats: 1. Continued acquisition of physician practices by hospitals and health systems: model may need to find a way to serve health systems 2. Need to navigate any sensitivity with standard practices of the AMA
  13. 13. CONFIDENTIAL 13HEALTHCARE GROWTH PARTNERS High Flyer #2: FlatIron Health Series A: $8mm (10/12) Series B: $130mm (5/14) Business Model: Consolidate disparate structured and unstructured clinical data into a central EDW for purpose of driving best practices, cancer targeting and planning, and drug/treatment development and optimization. Macro Thesis: A specialized analytics play focused exclusively on cancer that addresses a high cost, high need segment of healthcare that should align with stakeholders across cancer care continuum, including providers, payers, consumers, drug development and hardware. Opportunities: 1. Acquired Altos – a cancer-specific EMR, to streamline the integration with regards to the data collection process Threats: 1. Need to overcome aggregation of data from disparate data sources (EMR, lab, pathology, imaging, etc) in order to create a longitudinal care record 2. Unstructured data requires NLP to make it actionable 3. Data “rights” 4. Can they be EMR-agnostic with Altos?
  14. 14. CONFIDENTIAL 14HEALTHCARE GROWTH PARTNERS High Flyer #3: Health Catalyst (http://vimeo.com/67330845) Series A: $Undisclosed (9/11) Series B: $41mm (1/13) Series C: $41mm (1/14) Business Model: Aggregate structured and unstructured data from disparate data sources and centralize into a data warehouse that drives actionable and predictive analytics. (Mostly) Subscription pricing mitigates upfront cost. Macro Thesis: Develop “content-driven clinical applications” that enable the management of quality measures and identification of care gaps with an eye toward value-based reimbursement and a sensitivity toward physician engagement. Opportunities: 1. EHR vendors (Epic) leave significant functionality gaps 2. Coupling EDW w/ quality improvement 3. Value-based pricing lends to ROI proposition 4. Very low penetration of EDW and large market opportunity – increasing digital data enhances value-prop 5. Estimated $100mm+ revenue in NTM Threats: 1. EHR vendors expand (Epic Cogito) 2. Increasingly structured data decreases value of data aggregation
  15. 15. CONFIDENTIAL 15HEALTHCARE GROWTH PARTNERS High Flyer #4: NantHealth (http://vimeo.com/75977508) First Round: $25mm (10/12) Second Round: $100mm (4/14) Business Model: Backed by billionaire Patrick Soon-Shiong, NantHealth aims advance diagnostics to better identify and target specific disease characteristics; transform clinical delivery with clinical data and promoting wellness for a healthier, happier world by building an integrated, evidence-based, genomically- informed, personalized approach to the delivery of care and the development of next generation healthcare solutions. Macro Thesis: The business model says it all… Opportunities: 1. Patrick Soon-Shiong has a large brain and large bank account – having sold two cancer therapeutic companies (American Pharmaceutical Partners and Abraxis BioScience) for an aggregate ~$10B Threats: 1. Data can only be aggregated and analyzed to the extent that it can be digitized, and a finite amount of digital information exists 2. Predicated on the cost curve continuing its downward trend in sequencing and personalized medicine
  16. 16. CONFIDENTIAL 16HEALTHCARE GROWTH PARTNERS High Flyer #5: Alignment Healthcare “Seed”: $125mm (4/14) Business Model: A de-novo pop health “start up” (similar to Evolent) that aims to create alignment between provider and payer organizations to smooth the transition to value/risk-based payment models. Macro Thesis: Provide technology and integrated care coordination models to improve quality outcomes, while lowering cost and eliminating waste in the care system by focusing on the highest-cost, most complex patient groups in Medicare Advantage, Medicaid, and commercial HMO populations. Opportunities: 1. Value-based care delivery is the future of health and healthcare 2. Providers have historically not been in the business of managing risk, thus are in short of expertise to make this transition 3. Combo of risk-based, project-based and subscription pricing model may prove lucrative Threats: 1. Large MCO’s are increasingly “owning” the technology offered by Alignment Healthcare 2. Competitors are coming from all directions
  17. 17. CONFIDENTIAL 17HEALTHCARE GROWTH PARTNERS High Flyer #6: Omada Health (http://vimeo.com/85544572) Seed: $0.8mm (12/11) Series A: $4.7mm (3/13) Series B: $23mm (4/14) Business Model: Based on the landmark NIH-sponsored Diabetes Prevention Program, Prevent provides digital tracking tools, personalized coaching, and social support to inspire and sustain healthy behaviors for consumers, employers, and payers with a focus on pre-diabetes and the intent to expand into other treatment programs. Macro Thesis: Links the trend toward consumer engagement, chronic care prevention in high risk populations, and alignment of stakeholders who Opportunities: 1. If high-risk populations can be identified and enrolled, the value proposition is extremely high across all stakeholders (except those who earn profits from diabetics) 2. Focus on behavioral change is notoriously challenging but, once proven hugely impactful 3. Expansion into other treatment programs Threats: 1. Requires earning clinical trust 2. Requires payment incentives to align with outcomes
  18. 18. CONFIDENTIAL 18HEALTHCARE GROWTH PARTNERS Other Start-up Videos 1. Healthcare Blue Book: http://youtu.be/IWjanH2ifyg 2. Glooko: http://vimeo.com/53724549 3. Fitmob: http://vimeo.com/89156907 4. MyHealthTeams: https://www.youtube.com/watch?v=Xh1wFwf8PwA 5. Jawbone: https://vimeo.com/53768086 6. MindBody https://vimeo.com/30442715 7. MD Revolution: https://www.youtube.com/watch?v=srzArQD2SX8 8. Peloton: https://vimeo.com/84235357 9. Better: https://www.youtube.com/watch?v=OBSfE28g3EY 10. MD Live: https://www.youtube.com/watch?v=-CoZAIwikh4
  19. 19. CONFIDENTIAL 19HEALTHCARE GROWTH PARTNERS Other Start-up Videos 11. TigerText: https://vimeo.com/90250710 12. Voalte: https://vimeo.com/31567227 13. Specialists on Call: https://www.youtube.com/watch?v=plN2OWmXsrg 14. Tyto Care: https://www.youtube.com/watch?v=0UB51753X8k 15. Reflexion Health: https://www.youtube.com/watch?v=mv3emE8gkOQ 16. Liaison: https://www.youtube.com/watch?v=Av1v6HXSk34 17. InfoBionic: http://infobionic.com/mome-system 18. Wellcentive: https://vimeo.com/42380446 19. Doximity: https://www.youtube.com/watch?v=Nb3FKtaLpBc 20. PlanSource: https://vimeo.com/86025810
  20. 20. CONFIDENTIAL 20HEALTHCARE GROWTH PARTNERS Other Start-up Videos 21. Zenefits: https://www.youtube.com/watch?v=4cIR86F_210 22. bswift: https://vimeo.com/77795920 23. hCentive: https://www.youtube.com/watch?v=TdWjbP5s66s&list=UUFmjDGgFRvq- aqYkn3YjN1g
  21. 21. CONFIDENTIAL 21HEALTHCARE GROWTH PARTNERS Other High Flyers – Consumer Deals Quality and Pricing $7.0mm The Martin Cos Operates a Website that provides users with the knowledge and tools they need to shop for and receive a fair price for their healthcare products and services. Monitoring $7.0mm Samsung Venture Investment Corporation and The Social+Capital Partnership Offers blood glucose monitoring meters . Fitness $9.8mm Mayfield Fund, Silicon Valley Bank Owns and operates an online community for fitness enthusiasts. Social $3.4mm Adams Street Partners, 500 Startups, HealthTech Capital, Sand Hill Angels, The Westly Group Creators of social networks specifically for people with chronic health conditions. Fitness $250.0mm Rizvi Traverse Management Develops noise eliminating Bluetooth headsets and accessories. App $2.3mm Cowboy Ventures; FLOODGATE; Google Ventures; Greylock Partners A mobile app for dieting and health.
  22. 22. CONFIDENTIAL 22HEALTHCARE GROWTH PARTNERS Other High Flyers – Consumer Deals App $7.0mm Individual Investors Offers RevUp, a subscription-based online health monitoring platform for population health management. Fitness $50.0mm Bessemer Venture Partners, Institutional Venture Partners, Catalyst Investors, Montreux Equity Partners and W Capital Partners Serves fitness, yoga, Pilates, salons, spas, and martial arts businesses, a software company, provides business management software for personal service businesses in the health, wellness, and beauty industries. Adherence $1.5mm Jonathan Bush, Tim Draper, Sabaratnam Arulkumaran, Russ Nash, Carl Byers, James Nahirny Owns and operates an online community for fitness enthusiasts. Fitness $10.5mm Tiger Global Management Provides at-home fitness solution for live and on-demand indoor cycling classes. App $5.0mm Mayo Clinic, The Social+Capital Partnership A personalized health assistant app.
  23. 23. CONFIDENTIAL 23HEALTHCARE GROWTH PARTNERS Other High Flyers – Provider Deals Risk Undisclosed Health Enterprise Partners, Heritage Group Operates a care management company that focuses on the needs of patients with chronic and complex medical conditions. Analytics geared toward value $41.0mm CHV Capital, Kaiser Permanente Ventures, Norwest Venture Partners, Partners Innovation Fund, Sequoia Capital, Sorenson Capital Provider of healthcare data warehousing and clinical process analytics. Outcomes Undisclosed Sterling Partners Outsourced healthcare outcomes-data provider focused exclusively on serving the quality departments of acute care hospitals. Telehealth $23.6mm Heritage Group, Kayne Anderson Capital Advisors, Sentara Healthcare, Sutter Health Corporation A network of Board certified physicians and licensed therapists, provides online and on-demand healthcare delivery services and software that benefit patients, hospitals, employers, payers, physician practice groups, and care organizations.
  24. 24. CONFIDENTIAL 24HEALTHCARE GROWTH PARTNERS Other High Flyers – Provider Deals Referral management $21.0mm Easton Capital Investment Group, New Leaf Venture Partners, New Science Ventures, OrbiMed Advisors, Reed Elsevier Ventures, Shasta Ventures, TELUS Ventures Providing secure mobile messaging services for healthcare companies. Telehealth $32.0mm Warburg Pincus Provides specialist neurologists’ access to urban, suburban, and critical access hospitals through a consolidated infrastructure of people and videoconferencing technology. Referral management $35.9mm Bedford Funding Offers point-of-care communications solutions, including an iPhone solution for caregivers that connects with the EMR. Decision support $12.8mm Grayhawk Capital, Kansas Bioscience Authority Focuses on translating the advances in clinical research into decision-support products and services for physicians and their patients, healthcare organizations, and other medical software developers.
  25. 25. CONFIDENTIAL 25HEALTHCARE GROWTH PARTNERS Other High Flyers – Provider Deals Telehealth $4.0mm LionBird (Ventures), OrbiMed Advisors Develops a handheld device to perform self- examinations for remote diagnosis. Adherence $7.5mm The West Health Investment Fund Offers a rehab measurement tool to track patient adherence for the prescribed rehab plan. Analytics geared toward value $15.0mm Accenture (NYSE: ACN) Provider of cloud- based integration and data management services and solutions with funding to significantly accelerate its growth in the life sciences, healthcare and health information exchange (HIE) markets. Telehealth $17.0mm Beta Fund, Broadview Ventures, Launchpad Venture Group, Mass Medical Angels, Safeguard Scientifics Inc. (NYSE:SFE) A cloud-based SaaS service and wireless remote patient monitoring platform. Decision support $5.5mm Draper Triangle, Hopen Life Science Ventures, TriStar Technology Ventures Provides automated workflow, real-time decision support, and behavior change software solutions that consumers and businesses use to change outcomes and lives. Chronic management $23.0mm Andreessen Horowitz, Kaiser Permanente Venturesm, The Vertical Group, U.S. Venture Partners Provides group-based programs for chronic disease prevention.
  26. 26. CONFIDENTIAL 26HEALTHCARE GROWTH PARTNERS Other High Flyers – Provider Deals Population health $22.5mm Great Point Partners Offers healthcare solutions, including clinical and medical cost management, practice and office management, risk and financial management, and population health management solutions Engagement $28.7mm Bpifrance Financement, Cap Décisif Management SAS, CM-CIC Capital Innovation, Innovation Capital SAS, QUALCOMM Ventures, Societe Hospitaliere D'assurances Mutuelles, Vesalius Biocapital Partners Voluntis SA provides software and services to enable health care organizations build and manage patient relationship management programs Population health $12.0mm Harbert Venture Partners, Noro- Moseley Partners, Summit Partners Provides preventive care, chronic disease management, and health information exchange systems IT-enabled care $40.0mm Benchmark Capital; Oak Investment Partners; Maverick Capital, DAG Ventures, Google Ventures, Redmile Group Operator of primary- care physician offices that allow patients to book same-day visits online Provides technology enabled physician practices
  27. 27. CONFIDENTIAL 27HEALTHCARE GROWTH PARTNERS Other High Flyers – Provider Deals Population health $125.0mm General Atlantic Provides healthcare services which include offering care coordination solution for population health management. Data driven clinical support & drug optimization $100.0mm Kuwait Investment Authority Provides fiber-optic, cloud-based data infrastructure to deliver multimedia healthcare information to mobile devices. Referral management $54.0mm Draper Fisher Jurvetson, Emergence Capital Partners, InterWest Partners, Morgan Stanley Investment Management, Morgenthaler, T. Rowe Price (NasdaqGS:TROW) Operates a physician network platform that links medical professionals over the mobile and Web.
  28. 28. CONFIDENTIAL 28HEALTHCARE GROWTH PARTNERS Other High Flyers – Employer Deals $12.0mm Lemhi Ventures, Timucan Asset Management Helps employees discover and review benefit options with ease, as well as offer tools to help make complex benefit concepts and terminology simple. $17.1mm Andreessen Horowitz, Maverick Capital, Ltd., Venrock Provides payroll and benefits management, human resource, and insurance brokerage services. Benefits and HIX $51.0mm Great Hill Partners Offers software and services that streamline benefits, HR, and payroll administration for employers, brokers, and public and private exchanges.
  29. 29. CONFIDENTIAL 29HEALTHCARE GROWTH PARTNERS Other High Flyers – Life Sciences Deals Big data $15.0mm JAFCO Ventures, Kleiner Perkins Caufield & Byers Develops cloud based ingestion platform for drug developers and researchers. Big data $4.0mm Khosla Ventures Provider of predictive analytics for medical science and patient data.
  30. 30. CONFIDENTIAL 30HEALTHCARE GROWTH PARTNERS Other High Flyers – Payer Deals Payer Analytics $15.0mm Undisclosed Provides business process optimization and intelligence management technology solutions for health insurers’, commercial, Medicare, and Medicaid lines of business. Chronic care management $40.0mm Warburg Pincus Provider of face-to- face solutions for frail, special needs and complex populations, offering short-term and long-term care management and assessment services designed to improve quality outcomes, optimize revenue, and lower costs. Benefits Mgmt Undisclosed General Atlantic Provides evidence- based healthcare management programs. HIX $35.0mm Undisclosed Offers solutions that enable consumers and businesses to connect, communicate, and engage with health plans for acquiring health insurance. HIX $10.5mm Aberdare Ventures, FirstMark Capital An online health insurance marketplace.
  31. 31. CONFIDENTIAL 31HEALTHCARE GROWTH PARTNERS Technology-Enabled Healthcare Delivery – Who to watch? Humedica (2013), Connextions (2011), Ventures Group Coventry (2012), Healthagen (2011), Prodigy (2011), Medicity (2010) Linkwell (2013), Amerigroup (2012), SoloHealth (2012), Bloom (2011), CareMore (2011), HealthyCare Solutions Certify Data (2012), Anvita (2011), Concentra (2010) PureWellness (2013), Clairvia (2011), Resource Systems (2011), IMC Health (2009) Medical Referral (2013), 360Fresh (2012), Pivot Health & Cielo Med (2011), Southwind (2010), Crimson (2008) Array (2013), $11mm Carnegie Mellon Partnership, $100mm Medical Mall Data warehouse initiative, UPMC Health Plan CardioCom (2013) Health Catalyst, Telcare, AssureRx, Airstrip Navihealth, Hello Health, Patientco, change:healthcare, Essence Group, Bloom Health, Phreesia Quantros, Navihealth, Vivify, GetWellNetwork, BodyMedia, Phreesia Aviacode, Vivify, Awarepoint, Shareable Ink Transparent Insurance ($40mm investment in July ‘13) 35mm member “transparent” PBM Competitive Dynamics Oscar Health
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