AthenaHealth buys Epocrates for $293M

By: Brian Dolan | Jan 7, 2013        

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Athenahealth iPhone appAthenaHealth, a provider of cloud-based EHR and practice management software, announced a definitive agreement to acquire Epocrates, a popular mobile medical app provider, for about $293 million in cash. Epocrates agreed to the offer, which was specifically $11.75 per share, a 22 percent premium over Epocrates closing price last Friday. Piper Jaffray & Co. and Cooley advised Epocrates on the deal, while Goodwin Procter served as Athena’s legal counsel.

Last May, following remarks made by AthenaHealth CEO Jonathan Bush, MobiHealthNews speculated as to whether the company might be considering an acquisition of Epocrates. (See: Why AthenaHealth might buy Epocrates.) At the time Bush noted how popular Epocrates was among hundreds of thousands of physicians who use the app to look up drug information on their mobiles before writing prescriptions. He also said that while his company may not be interested in Epocrates product itself, they “sure would like to be in front of 200,000 doctors”.

Bush said as much to Bloomberg this week when discussing the acquisition: “Our biggest obstacle is that 70 percent of doctors don’t even know we exist. Epocrates is to healthcare IT what Angry Birds is to games.”

In a statement, Bush said: “No other company has been able to replicate the brand awareness, familiarity, and trust that Epocrates has across the clinical mobile user base. We are confident that we can provide Epocrates with the stewardship and resources it needs to grow and develop within health care, and that Epocrates’ capabilities are going to mesh exceptionally well with athenahealth’s cloud-based physician and patient services. Together, we’re excited by the opportunity to redefine the mobile toolset for care givers.”

The deal will lead to a combined company that can leverage Epocrates’ mobile expertise and Athena’s cloud-based network to develop “new mobile applications that deliver high-value information to the clinical community when, where, and how they want it,” according to the companies. Moving forward Athena will work with the Epocrates team to develop “new mobile workflows” that initially might include ones that focus on care coordination, provider-to-provider communication, and patient engagement tools. Some of which may fall into the future plans Epocrates CEO Andrew Hurd laid out for MobiHealthNews in a recent interview.

Given how slowly Athena has been to embrace mobile in the past — its first mobile apps were only just announced at last year’s HIMSS event — the Epocrates acquisition helps the company play catch-up in a major way.

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Fitbit unveils Flex: a wrist-worn activity, sleep tracker

By: Brian Dolan | Jan 7, 2013        

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Fitbit Flex__ColorsAt the CES event in Las Vegas this week, Fitbit unveiled a new Bluetooth Smart-enabled, wrist-worn activity tracker, called Fitbit Flex. Like most of Fitbit’s other trackers, the Flex also promises to help users track their sleep health if worn at night. All of Fitbit’s previous activity trackers were intended to be worn clipped on to clothing or tucked into users’ pockets. The Flex, which is priced at $99.95 for preorders and begin shipping this spring, is the first wrist-worn device from the company.

“We’re aware that there is no ‘one size fits all’ option in fitness, so Fitbit wants to offer the widest variety on the market,” James Park, CEO and co-founder of Fitbit said in a statement. “When we saw that we could bring our knowledge to a wristband format done right, we had to create the new Flex.”

Given the popularity of the Nike FuelBand, it’s no surprise that more and more companies are offering activity trackers in wristband form factors.

Fitbit FlexLike the Fitbit One, the new Flex device tracks a variety of metrics, but no more than its predecessor: Steps, distance, calories burned, active minutes, hours or sleep, and times woken up. It also offers a sleep efficiency index score and a silent alarm that vibrates the wristband to wake the user up. Like other Fitbit devices, the Flex also feeds data into the Fitbit portal and app where users can review activity charts and leaderboards, set goals, view progress and earn badges. Fitbit users can also share some of their data with other apps like Endomondo, LoseIt, MapMyFitness, MyFitnessPal and more.

Fitbit Flex sports a series of LED lights that indicate progress towards reaching a goal in 20 percent increments. The device also offers five different band colors so users have the option of switching the color of their device to accessorize.

Fitbit said Flex will leverage Bluetooth Smart (also known as Bluetooth 4) to seamlessly connect to Android devices. The company said that Fitbit users who have Fitbit Ones or Fitbit Zip will also soon be able to track their progress on select Android phones and devices like the Samsung Galaxy SIII and Samsung Note II. Fitbit also announced that it had released an app built for Microsoft Surface Tablet users.

As part of its Flex announcement, Fitbit noted that it has experienced “triple-digit growth” for the fifth year in a row now. The Flex is just the latest product launch from the company since last year’s CES where it unveiled the Fitbit Aria connected weight scale. A few months ago it also announced a stripped down activity tracking device, Fitbit Zip, and its first Bluetooth-enabled tracker Fitbit One, which replaced its second generation device, the Fitbit Ultra. Fitbit products are now sold in more than 10,000 US stores in addition to stores in countries like Canada, Spain, UK, France, Germany, Australia and New Zealand.

Bill tackles telehealth reimbursement, licensure

By: Jonah Comstock | Jan 4, 2013        

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Mike ThompsonOn December 30th, at the very end of the 112th Congress, Rep. Mike Thompson (D-Cali.) introduced a comprehensive bill to improve Medicare and Medicaid coverage of telehealth. This isn’t new territory for Thompson; he introduced some major telehealth legislation as a California State Senator in the 1990s.

The latest bill’s definition of “telehealth” covers various health services delivered remotely, including remote monitoring and videoconferencing, both for home care use, and to enable specialists to virtually practice at hospitals where they’re needed.

Jonathan Linkous, chief executive officer of the American Telemedicine Association (ATA), told MobiHealthNews that when telehealth was in its infancy, legislators worried about abuse or that it wouldn’t be cost-effective and they limited Medicare and Medicaid coverage to very particular cases — only patients in rural areas could be reimbursed for any telehealth service that required patient-physician interaction, for instance. Thompson’s bill, H.R. 6719, called The Telehealth Promotion Act of 2012, eliminates any such “arbitrary coverage restrictions,” amending the Social Security Act to assert that telehealth must be covered in any case in which the corresponding in-person treatment would be covered.

Linkous said it’s the right time for a change in telehealth policy, due to a combination of the technology itself improving and becoming cheaper, and the fact that telehealth is a more proven technology now. Threats of abuse or waste have not materialized, he said, even though some 10 million people are being served by telemedicine today.

Another big provision of the bill is that it would allow physicians to practice telemedicine across state lines without having to be licensed in both states, something which ATA estimates costs physicians about $300 million a year.

“For purposes of reimbursement, licensure, professional liability, and other purposes under this title with respect to the provision of telehealth services, physicians, practitioners, suppliers, and providers of such services are considered to be furnishing such services at their location and not at the originating site,” the bill reads. In particular, Linkous cited the example of telehealth services for mental health, which can be done via mobile phone, and can currently create licensure problems if a patient wants to stay in touch with a therapist while traveling across multiple states.

The bill includes a positive incentive for hospitals to reduce readmissions, likely through the use of remote monitoring and home health. Previous legislation related to the Affordable Care Act had Medicare penalizing hospitals for failing to reduce readmissions. The provision in H.R. 6719 would, in addition, pass on some of the cost savings onto hospitals that were able to reduce readmissions more significantly.

It also includes a section that calls for Medicaid coverage for telehealth services in high-risk pregnancies. Linkous explained that in those cases it’s usually not home-based, but rather a matter of using telehealth to bring a specialist for high-risk pregnancies into a care setting. High-risk pregnancies can be as complicated as they are time-sensitive.

“This is well-documented, straight-forward, not a lot of investment of time or money, and it really pays off,” Linkous said. “So we wanted to get that one in there because it’s a clear winner.”

The bill also launches some new pilot programs for remote patient monitoring and expands the “Medical Home” coordinated care option for Medicare.

Linkous said the timing of the bill wasn’t accidental. Introducing it at the end of the session allows it to circulate through subcommittees for some time before being re-introduced to the 113th Congress, which began January 3rd. In the meantime, legislators can make changes and they can also insert pieces of the bill into other pieces of legislation as the year goes on.

“We expect it to be passed piecemeal,” Linkous said. “With a comprehensive bill like this you have to expect to get things passed however you can pass them.”

Linkous said telehealth is a fairly bipartisan issue, and he doesn’t expect the bill to face fierce opposition. State medical boards will likely object to the changes in licensure rules, and some doctors might object on the grounds that telehealth amounts to added competition. But most of the challenge, he said, comes from government accountants who don’t consider the full extent of savings created by preventative care.

“Say you have a stroke patient,” he said. “You save their life, but you also save them from years of being in a nursing home, or home care. It’s billions of dollars saved if you can treat someone early on for a stroke. But the federal government accounting people don’t look at the cost of the nursing home, etc., they just look at the cost of the hospital stay, which might be the same. We have a very siloed approach toward accounting in the legislative process that doesn’t allow you to recognize billions of dollars in savings.”

Independa adds $1.65M in new funding from LG, City Hill

By: Neil Versel | Jan 4, 2013        

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angelaIndependa, a developer of telehealth products for senior care and aging in place, has closed its Series A funding at $5 million after landing $1.65 million in new investments from, among others, existing partner LG Electronics USA and earlier financier City Hill Ventures. Last October Independa announced $1 million in funding and in April 2012 it disclosed a $2.35 million raise, which along with the new investment brings the company’s Series A round to $5 million.

The San Diego-based company will use the new infusion of cash to widen its product distribution network as well as its sales, marketing, research and development operations. This will help Independa “expand our development to respond to growing needs in the market,” according to an email from CEO Kian Saneii.

A year ago, Independa and LG announced the integration of Independa’s Angela software platform into LG’s Pro:Centric line of televisions.

“Our investment in Independa is in line with our belief that Independa Angela is an ideal complement to our Pro:Centric platform for delivering services that can have a direct, quality-of-life impact on seniors and provide peace of mind to their loved ones, while also making the jobs of their professional caregivers easier and more effective,” LG Senior Vice President Nandhu Nandhakumar says in a statement.

City Hill and Independa have a relationship going back about two years. “City Hill Ventures has been a financial partner and active adviser to Independa since early 2011, and it has been gratifying to see the company’s progress in such a short time,” Dr. Jonathan Lim, managing partner of the venture capital firm, which also is headquartered in San Diego. “Independa is making a meaningful difference in the lives of caregivers and seniors alike, and we are thrilled to be a part of the company’s most recent financing to make its innovative solutions more broadly available.”

Independa plans on providing more specifics about its product development at the Digital Health Summit next week, part of the massive International CES in Las Vegas. MobiHealthNews will provide coverage of CES and the Digital Health Summit.

Roundup: Predictions for digital health in 2013

By: Brian Dolan | Jan 3, 2013        

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Brian Dolan, Editor, MobiHealthNewsAs the new year kicks off so, too, do the predictions for mobile and digital health. Pundits ranging from physician consultants and startup CEOs to investors and research analysts were busy last month assembling a wide array of predictions and trends lists for the coming year. Below is MobiHealthNews’ roundup of some of the best:

At a recent conference organized by The Economist, venture capitalist Esther Dyson and FutureMed Executive Director Dr. Daniel Kraft shared some of their thoughts on the state of health and healthcare in 2013. Dyson said that the healthcare system may undergo some changes thanks to changing reimbursement policies but that no dramatic changes should be expected. The real “exciting and dramatic” change will come in what Dyson called “the market for good health”, where user-generated data (quantified self) is a leading trend.

Kraft offered up a number of predictions for 2013 including the rise of inexpensive smart devices like the $35 tablet recently developed in India. Kraft believes physicians will soon begin giving devices like that one away to patients along with prescribed apps that leverage gaming elements to increase patient engagement. Kraft also noted that the fact that we can visit with physicians through our smartphones now is an offering that is going to evolve quickly in 2013.

Research firm InMedica circulated its top ten trends to watch in healthcare for 2013 and digital and mobile health are featured in at least three of them. As we reported recently, InMedica predicts the overall remote patient monitoring market to increase a whopping 55 percent this year, but the firm also expects that casual everyday use activity monitors will overtake high performance heart rate monitors as the most popular kind of wearable device. InMedica also expects to see continued uptake of wireless connectivity in X-ray technology and other medical devices used in healthcare facilities.

In its year-end webinar Manhattan Research said that those looking to develop content for physicians were beginning to pivot from a device-specific strategy to a platform strategy. The research firm said many of its clients were less focused on creating individual apps for individual devices and more about creating personalized services that store most of the information in the cloud. This leads to services that are “optimized across screen flow” since physicians are using smartphones, tablets, and PCs now. Manhattan also shared key metrics that it published during 2012: 85 percent of US physicians are now using mobile devices at work and 39 percent of physicians are communicating with patients via some kind of digital channel.

The Wall Street Journal’s technology columnist Walt Mossberg pointed to the growing number of health and fitness tracking devices that launched in 2012 and made a rather safe bet that more are likely this year: “I expect this trend to continue in 2013, in different forms and with more sophisticated sensors,” he wrote before citing Basis as an example.

Digital health consultant and Happtique app certification panel chairman Dr. David Lee Scher cast his vote for five likely developments set for 2013. Scher predicted that the development of digital health tools will become more collaborative globally; that final regulatory guidelines for mobile medical apps will be published; that meaningful use stage two will bring about more patient portals; that efficacy studies for digital health tools will accelerate; and that new digital health business models will emerge.

Forbes’ contributor and Ogilvy CommonHealth exec John Nosta offers up his top ten drivers for the rise of digital health in 2013 and includes high level predictions from Misfit Wearables’ Sonny Vu, Scripps Health’s Dr. Eric Topol, former Apple CEO John Sculley and Scanadu’s Walter de Brouwer. Nosta argues that 2013 is the year for digital health thanks to explosive new technology, the Affordable Care Act, “the caldron of connectivity”, the “power of cool”, the rise of the quantified self movement, pharma’s search for new meaning, big data and EMRs, the financial opportunity, the quality of people working in digital health, and the moral imperative.

Reports in The Wall Street JournalThe New York Post, and Fast Company all point to the rise of new smartphone-enabled, medical peripheral devices as a clear trend that will shape medicine in the coming year and beyond. Many of these innovations are presented in the context of the Qualcomm Tricorder X Prize, but the category includes many more point solutions than the all-in-one device that the prize hopes to encourage. Bradley Kreit, a director at the Institute for the Future, wrote in Fast Company that “by all indications, 2013 will mark the emergence of a much more sophisticated set of tools for people to track–and diagnose–their own health problems.”

Business Insider posted a video interview with Dr. Mehmet Oz, the TV personality, that included some of his predictions for digital health. Dr. Oz said the car would become a “mobile examination suite” for patients that can measure a number of biometrics and deliver care. He also said that malls should all include automated kiosks that can diagnose a variety of conditions and diseases.

Meanwhile, Government Health IT keeps it simple with four solid but not at all controversial health IT areas to watch in 2013: Patient engagement, data, payment reform (ACOs), and meaningful use.

Forbes contributor David Shaywitz continues to stand out from the pack by writing some of the most substantial columns on digital health. These two recent ones are not to be missed: Three Tensions in Medical Innovation to Watch in 2013 and Turning Information into Impact: Digital Health’s Long Road Ahead (co-written by healthcare consultant Tory Wolff).

What trends and predictions do you have for the year ahead?

Consumer-driven health plan members more likely to use health apps

By: Jonah Comstock | Jan 2, 2013        

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A new report from the Employee Benefit Research Institute (EBRI) suggests that not only are people who are enrolled in consumer-driven health plans more cost conscious, but they’re also more engaged with mobile health and digital health tools.

EBRI app chartEBRI is a nonprofit, nonpartisan group that seeks to provide objective data about different employee benefit options. In December, the group conducted an online survey of 4,498 privately insured adults.

The survey found that about 10 percent of the population (about 11.6 million adults) is enrolled in a consumer driven health plan (CDHP), defined as an account-based health plan with either a health savings account or a health reimbursement arrangement. This is up from 7 percent in 2011 and 5 percent in 2010, so enrollment in these types of plans is on the rise, albeit slowly.

As Jane Sarasohn-Kahn writes over at Health Populi, the objective of these plans is to get health plan users to behave more like consumers by increasing their personal financial exposure to their health care costs. Once healthcare consumers start acting more like consumers, the theory goes, free market forces will start to drive down healthcare costs.

Much of EBRI’s  data suggests that where CDHPs are being adopted, they are having that predicted effect, at least to some degree. For instance, those on CDHPs were more likely than those on traditional health care plans to check whether their plan covered a treatment, to ask for a generic drug rather than a brand name, or to check the price of a service before getting it. Generally these differed by 7 to 10 percentage points from CDHP users to traditional plan users. Twenty-six percent of CDHP users had developed a budget to manage health care expenses, compared to 16 percent of traditional plan users and 23 percent had used an online cost-tracking tool, compared with 11 percent of traditional plan users.

In addition, EBRI asked respondents about their use of health apps and whether use of health information technology affected their choice of physician. Out of those who are already using a smartphone or tablet, the report indicates that CDHP users led the pack in using health apps for nutrition information (32 percent versus 27 percent), general health information (29 percent versus 25 percent), weight management or diets (27 percent versus 23 percent), and exercise programs (25 percent versus 23 percent). However, with a margin of error plus or minus 2.2 percent, there may be less of a difference between the two groups. The one area where adoption of apps showed a distinct difference was using apps to research medical claims history, something 11 percent of CDHP users did compared with only 6 percent of traditional plan users.

When asked whether they would switch to a doctor who used more health information technology (having a secure website for patients to access records, using a smartphone or tablet, and emailing with patients) CDHP enrollees were more likely than those on traditional plans to say they would switch doctors for that reason, with or without a cost-sharing incentive.

EBRI acknowledged that the differences between the groups could be as much about the character of people who currently choose CDHPs as about the effect the CDHP itself has on decisions. The CDHP group was healthier overall, less likely to smoke, and more likely to exercise.