Council Foundation Logo Leaders Edge

May 22, 2017

As we approach the kickoff  of The Council’s 16th Employee Benefits Leadership Forum (EBLF) on May 30, it’s only fitting that we check in with an update on what we’ve observed so far this year in digital health.

The activity in the market is signaling business as usual. There are no signs of downshifting in digital health funding due to the uncertainty around healthcare reform coming out of Washington DC. Controlling costs, investing in analytics to improve data integration, and increasing healthcare consumer engagement and utilization of telemedicine are the leading areas of investment.

The five largest deals of Q1, making up 41% of total funding, were:

  • Alignment Healthcare ($115M) – Population health management company. Partners with brokers.
  • PatientsLikeMe ($100M) – Personalized health network and one of the largest repositories of patient-reported, cross-condition data. Aetna is a partner.
  • Nuna Health ($90M) – Medicaid data platform
  • Evariant ($64M) – Hospital system CRM analytics platform
  • Livongo ($53M) – Direct-to-consumer digital health company focused on chronic condition management, i.e., diabetes

According to leading early-stage digital health fund, Rock Health, nearly 20 digital health acquisitions also occurred this quarter, with two notable deals: CoverMyMeds and Jiff, which made headlines for transaction size.

  • Castlight Health acquired employee wellness platform Jiff for all-stock consideration of up to $135 million. Jiff previously raised $68 million from investors including Venrock, Aberdare Ventures, GE Ventures, Aeris Capital and Rosemark Capital Group.
  • The biggest digital health stock surge of Q1 was Teladoc; Q1 earnings reported revenue was up 65.5% YoY.

Separate from the digital health category but relevant to brokers, Alpharetta-based Decisely, a human resources industry tech platform, closed a $60 million funding commitment from Two Sigma Private Investments, and EPIC Insurance Brokers and Consultants, a portfolio company of The Carlyle Group.

We highly recommend reading The Q1 2017 InsurTech Report launched by Willis Towers Watson Securities and CB Insights which has an insightful Q&A with Decisely CEO Kevin Dunn on their broker-centric  digital model.

The Council looks forward to Maxwell Health, Castlight Health, Decisely, Health Advocate, ADP and Teledoc as participants at EBLF next week.

What We’re Reading

American Healthcare is So Messed Up That a Whole Industry Has Been Created to Help Navigate It

Convenience is often the enemy of right, right? We agree that watching how medical billing advocate companies use technology to change awareness and access  will be a strong signal of their ultimate utilization and success.

10 HR Tech Companies to Watch

The sizzling space of HR digital technology solutions in recent  years  has offered  abundant opportunities for forward-thinking brokers and employers when it comes to human capital management. Check out the slideshow attached showcasing Employee Benefits News’ top 10.: ADP, Maxwell Health, HealthiestYou, Deloitte, Paylocity, Paylogix, Hodges Mace, Namely, Withings and Maestro Health.

Advisors Must Identify Clients Ready for New Technology

Maxwell Health CEO & Co-Founder Veer Gidwaney provides straight forward advice to benefits brokers who are increasingly looking at technology partners:

“Not every (employer) group is ready for technology and automation. This is the case in in rural areas and outdated industries. However, as a benefits adviser, building your technology strategy around the late majority or laggards in your book of business does your entire agency a disservice. Start by looking within your current book of business, and identify your early adopter and early majority groups. Identify a common set of needs among that population, and focus on making decisions around innovation for those clients. These are the folks in your book that are most open to change, so implement technology with them first, learn from the process, and tease out success stories that will convince your late majority and laggard clients to adapt.”

Seven Questions to Ask to Avoid Hidden Benefit Technology Costs

Question for broker execs: How are your company’s client-facing employee benefits folks tackling these questions when raised by employer clients?