THIS WEEK IN HEALTHCARE
What happened in healthcare this week—and what we think about it.
COVID-related controversy and hope amid a week of politics
Week two of the 2020 Pre-Recorded Virtual Presidential Convention-thon wrapped up Thursday night, albeit with a decidedly less Zoom-Webex-FaceTimey feel for this week’s Republicans compared to last week’s Democrats. As delegates and VIPs sat cheek-by-jowl at several in-person events, with scarce masking and plenty of loud cheering, the viewer was left hoping that a rigorous attendee COVID testing protocol was being used. That hope may have been dashed by a significant change to testing guidelines from the Centers for Disease Control and Prevention (CDC), which reversed course on Monday by recommending asymptomatic people who have been exposed to the coronavirus should no longer be tested. The altered guidance drew sharp rebukes from doctors and infectious disease experts, who worried that it would undermine the ability to track the spread of the virus, which has now claimed more than 181,000 American lives. The flap over testing guidelines came at the same time as Food and Drug Administration (FDA) commissioner Stephen Hahn was forced to apologize for misleading claims he made over the weekend about the efficacy of convalescent plasma in treating COVID patients. In announcing an Emergency Use Authorization (EUA) for the treatment, Hahn dramatically overstated evidence supporting the lifesaving ability of the therapy. The missteps by CDC and FDA officials were undoubtedly an unwelcome distraction for the Trump administration, overshadowing the president’s bold promise in his acceptance speech that a COVID vaccine would be available before the end of the year.
There was hopeful news on the COVID front this week as well. In what was quickly hailed as a “game changer” in solving the nation’s faltering ability to deliver timely test results, Abbott Laboratories was granted its own EUA for a 15-minute, $5 rapid antigen test, which does not require laboratory analysis. The company plans to produce tens of millions of the new BinaxNOW test kits in the next month, and the US government has agreed to acquire nearly all of the 150M tests the company will produce by the end of the year, at a $760M purchase price. Although some antigen tests have been cited for accuracy problems, the FDA said that the new Abbott test delivers correct positive tests 97.1 percent of the time, and correct negative tests 98.5 percent of the time. Rapid, reliable point-of-care testing could allow for safer return to schools, workplaces, and public gatherings, and if successfully deployed will be an essential tool in managing the impact of the virus until effective vaccines are fully developed, launched, and administered. A genuine ray of hope as the nation looks ahead to the fall and winter. US coronavirus update: 5.9M cases; 181K deaths; 81.8M tests conducted.
Amazon enters the healthcare wearables market with Halo
This week Amazon announced its entry into the increasingly competitive healthcare wearables market, dominated by Apple and Fitbit (which Google is still in the process of trying to acquire). Amazon’s new wristband-mounted personal health data tracker, dubbed Halo, is a screenless device that provides capabilities beyond the average wearable, tracking body temperature, body fat percentage, and even the wearer’s emotions, in addition to the more standard physical activity, heart rate, and sleep. Some of the device’s expanded capabilities have drawn skepticism. Critics worry the body composition function, which allows users to visualize how their appearance may change as body fat increases, may be harmful to people with eating disorders. With two microphones and an artificial intelligence tool, Halo will also monitor a user’s voice to sense mood, and, according to an Amazon promotional video, “will show you what other people hear”. While the company says it aims to improve overall health, it’s not clear what consumer benefits the emotion-sensing capabilities will provide.
Halo’s launch unsurprisingly raised concerns about data privacy, and how data will be shared with partners, which include WW (formerly Weight Watchers), online mindfulness service Headspace, and Mayo Clinic. While Amazon is launching Halo as a wellness product, users can link collected data to their electronic health record through a collaboration with Cerner. San Diego-based Sharp HealthCare will be the first health system partner to participate. As Amazon, Apple and Google battle for share of the wearables market and access to consumer health data, it bears watching to see whether users find value in Halo’s expanded capabilities—and how Amazon and its partners, including affiliated providers, intend to use the health and wellness data generated.
Amwell plans public offering with $100M Google investment
Amid a surge in demand for virtual care services, telehealth company American Well Corporation, known as Amwell, has filed for an initial public offering (IPO) to raise up to $100M. Upon closing the offering, Google will invest another $100M through a concurrent private placement at the IPO purchase price. The two companies have announced a multi-year strategic partnership to integrate technologies and solutions, including joint development of new capabilities using Google Cloud’s artificial intelligence tools. Under the agreement, Amwell will migrate parts of its business to Google Cloud from Amazon Web Services. Amwell earns most of its revenue from charging recurring subscription fees to its customers, which include about 150 health systems and 55 health plans. The company has seen massive growth during the pandemic, with a 1,000-4,000 percent increase in telehealth visits, depending on the market. According to its IPO filing, Amwell’s revenue increased 77 percent in the first half of 2020—yet its net loss nearly tripled over the same period. This deal follows the recent announcement from Amwell’s largest competitor, Teladoc, that it will acquire remote chronic care management company Livongo for $18.5B. We expect this “land grab” for telehealth to continue as payers, providers, retailers and tech companies look to deepen their relationships with consumers by owning the virtual care platform. |