Tag Archives: ambulatory care

SPI Premium Insight: HeartBeam Tests Ambulatory DCAR Market’s Pulse with LIVMOR Deal

Earlier this month, cardiac technology company HeartBeam acquired the assets of digital health solutions company LIVMOR, including LIVMOR’s Halo+ Atrial Fibrillation (AF) Detection System. 

HeartBeam’s move to acquire the world’s first FDA-cleared prescription wearable for continuous cardiac rhythm monitoring aligns with its goals to improve patient outcomes and reduce healthcare system costs. But in a fast-moving ambulatory diagnostic cardiology space, will the LIVMOR deal be the disruptive ‘game changer’ that some observers believe? 

The Signify View 

The combination of HeartBeam’s so-called ‘world first’ AIMIGo 3D-vector ECG platform for heart attack detection technology, a credit card-sized device that can be slotted comfortably into a pocket, and LIVMOR’s Halo AF ‘smart watch’ monitoring system, is an exciting development. The combination promises to save lives and help keep patients out of hospital by intervening if they are identified as being at risk.  

While the tie-up is a potentially powerful proposition, HeartBeam is not alone in its quest to disrupt the stranglehold of ‘traditional’ ambulatory diagnostic cardiology vendors. 

We predict the overall value of the global ambulatory diagnostic cardiology market to reach $3.3B in 2026, from $2.5B in 2021. North America will account for $2.9B of the 2026 total. Of the three main segments of ambulatory diagnostic cardiology, Long-Term ECG and Mobile Cardiac Telemetry (MCT) will be the main growth engines, followed by Implantable Cardiac Monitors (ICMs), Short-Term ECG and Event Recorders (see below diagram).

Ambulatory Diagnostic Cardiology – Total – By Product Type – World 

Source: Signify Health

Like so many facets of digital health in the US in the post-COVID era, value-based care (VBC) provides the underlying theme for vendors serving the ambulatory diagnostic cardiology market. The pandemic triggered a rush for virtual and remote care solutions, and that shows no signs of abating amid mounting pressure on hospitals to plug staffing gaps, reduce patient backlogs and cut costs. HeartBeam is one of many vendors positioning themselves to take advantage of this opportunity. Having taken ownership of LIVMOR’s FDA-cleared product, it can be confident in its ability to positively impact clinical workflows. 

A Tale of M&As 

Across its market reports on diagnostic cardiology and previous insights on the topic Signify Research has assessed the impact of health systems seeking to shift more healthcare services from acute to ambulatory settings, and whether traditional ambulatory diagnostic cardiology vendors risk being left behind in the old paradigms of care.  

A flurry of mergers, acquisitions and partnerships have taken place as these vendors scramble to avoid that fate. Examples include Philips (which acquired BioTelemetry and Cardiologs in 2020 and 2021 respectively); Boston Scientific’s $925M acquisition of Long-Term ECG and MCT vendor Preventive Solutions; and Baxter’s $10.5B purchase of Hill-rom, both in 2021. Previously a large player in the short-term ECG market, in 2021 Hill-rom expanded into Long-Term ECG by acquiring BardyDx. 

Although it will be mindful of the competitive strengths this brings to these more ‘traditional’ vendors, HeartBeam plays in a slightly different field where the competitive battle lines have yet to seriously overlap. On this side, iRhythm (the second-largest player in ambulatory diagnostic cardiology when excluding ICM revenues) is partnered with Alphabet-owned Verily to exploit the potential of ECG sensors in wearable devices. Last July, the two companies’ jointly-developed Zio Watch and Zeus System, which identifies and monitors AF by incorporating iRhythm’s continuous PPG, AI-based algorithm, secured FDA approval. Other companies in the race to gain share in this side of the market include multinationals Huawei and Samsung, specialist GPS technology company Garmin, and French connected health company Withings.  

The ‘traditional’ vendors have yet to master ‘wearable’ technology at home, hence the relative lack of overlap at present. Until recently, the traditional cardiology vendors had focused on the hospital segment with solutions limited to the holter category.  

Even where devices are practical and comfortable to wear – for example, Apple Watch or Google’s Fitbit – they fall far short of the capabilities of HeartBeam’s solution. With just a single-lead ECG for AF and with no detection for heart attack risk, these devices are far less sophisticated that HeartBeam’s 12-ECG lead capability.  

AliveCor has been likened as a competitor for HeartBeam. We explore in this Insight how a collaboration with Biotronik to integrate AliveCor’s KardiaMobile 6L and KardiaMobile Card ECG technology with Biotronik’s BIOMONITOR Injectable Cardiac Monitor is among several initiatives shaping clinical diagnostic pathways for cardiac patients, setting an example of success that can come from further collaboration. 

Hurdles to Adoption 

There are several factors affecting global uptake for ambulatory cardiology solutions, including a lack of, or complexity around, reimbursement, component shortages (due to supply chain issues) and demands placed on existing hospital IT and workflows (for example how to manage the huge amounts of data generated, along with interoperability concerns).  

As with many emerging healthcare technologies, reimbursement is crucial to market acceptance. It has proved complex and troublesome for some ambulatory monitoring vendors and their provider customers to navigate reimbursement provision for solutions being used outside the hospital. It is a similar picture around reimbursement structures for wearable devices and remote patient monitoring more generally. However, HeartBeam’s solution is covered by CMS reimbursement schemes. 

Disruptive Influences? 

Signify Research predicted last year in its Ambulatory Diagnostic Cardiology report that HeartBeam’s hand-held, 12-lead capability ECG device was one of a number of innovations that had the potential to disrupt the ambulatory diagnostic cardiology market in the short-to-medium term. We also noted other potential disruptors include multi-modality cardiac monitor Holter (Short-Term and Long-Term ECG, Event and MCT with built-in 4G connectivity) from Rhythmedix, whilst Indian vendor Dozee also released its ECG patch in 2022. A new cohort of vendors in Europe and the US are also looking to exploit the potential of AI for quicker and more accurate diagnosis. 

We also believe ongoing advances in adjacent technologies and markets, such as Remote Patient Monitoring and consumer devices, will continue to influence the ambulatory diagnostic cardiology market. The Long-Term ECG market in particular, where reimbursement developments have lowered barriers to entry, will likely see a proliferation in vendors over the short-to-medium-term. However, as is the case in all healthcare technology and software markets, providers continue to favour dealing with a small number of large vendors who can offer enterprise-level solutions (including ongoing technical, administrative and in some cases, monitoring support). Without this protective umbrella, vendors supplying specialist, single-point solutions may struggle to achieve critical mass. This suggests yet more mergers, acquisitions and partnerships involving the large traditional vendors are on the way. 

Big Tech Bets 

The extent to which the boundaries between the various product categories of ambulatory diagnostic cardiology begin to overlap is unclear at this point, making any definitive claims around disruption difficult in the near-term. 

Much will depend on whether big tech vendors decide to make a concerted play in this market. The Verily/iRhythm tie up previously mentioned indicates that at least Alphabet is certainly showing interest. If so, many of the new and emerging companies will come under their radar as acquisition targets. That could well include HeartBeam. With the LIVMOR intellectual property now under its control and two patented products HeartBeam AIMI software and the AIMIGo ECG device awaiting FDA approval, its attractiveness will be even more apparent.

Signify Premium Insight: athenahealth Floats Flotation Idea, Again

This Insight is part of the Signify Premium Insights (SPI)-Digital Health service, which will launch on 9 January 2023. From that date, this and all SPI-Digital Health Insights will be available only by paid subscription. Click here for a free one month trial of this service. 

Roughly four years after being delisted from the stock market, athenahealth is reportedly once again looking at an IPO. CEO Bob Segert floated the idea in an interview with the Boston Globe newspaper last month, but the cloud health IT vendor has since given no indication on timelines. 

The Signify View 

athenahealth is a primary and ambulatory EHR heavyweight, and partners with more than 140,000 ambulatory care providers across the US with more than 120 specialities.  

But it faces a number of challenges which could influence the timing of any return to market. In the Boston Globe interview, Segert insisted the company has created a ‘ton of value’ since 2019. Private equity firms Bain Capital and Hellman & Friedman, who paid $17B for athenahealth just over a year ago, will want to ensure the ‘ton of value’ created will offer an agreeable return on their investment before any IPO is set in motion. The company had been acquired by private equity firms Veritas Capital and Evergreen Coast Capital in 2019 for $5.7B. It then merged with Veritas-owned Virence Health, the former value-based care (VBC) division of GE Healthcare. Ex-Virence/GE executive Segert was appointed athenahealth CEO at this time.  

Positive Prospecting 

An athenahealth pre-IPO prospectus will show a company in decent overall shape, in terms of market position at least. Having profited initially from the US primary and ambulatory EHR boom (when it was achieving double digit revenue growth), the company was running around $1.2B in annual revenues before it was privatised. As well as being the leading US primary and ambulatory care EHR vendor in the US (in terms of revenues), it sits behind only Epic and Cerner in the wider EHR vendor league table. It occupies an enviable position. 

Strong Foundations 

athenahealth has built an impressive primary and ambulatory EHR portfolio. Its billing/revenue cycle management software is used by around 120,000 doctors in the US. As well as selling the billing software, athenahealth also provides billing-related services, for which it takes a commission. The company has also been successful in selling patient management and patient record solutions to many of its revenue cycle management customers. All three primary care solutions are bundled in the athenaOne product. 

Ahead of the Game 

The market will also look favourably at athenahealth’s forward-thinking approach over the last few years. For example, it was implementing EHRs in an SaaS/cloud-based environment at a time when many other EHR vendors (such as GE) were still favouring on-premise solutions. This provided first-mover advantage which reflects a nimble response to market conditions. 

athenahealth also has a well-developed marketplace where third-party software developers pre-integrate their solutions and offer them to athenahealth’s customers. This is common among ambulatory EHR vendors, and athenahealth has a leadership position in this. This is a captive market, reducing the likelihood of customers migrating to another product.  

Any IPO prospectus will also demonstrate athenahealth’s successful recent, proactive product launches. In 2020, in rapid response to the fast-unfolding Covid situation, it launched athenaTelehealth, a telehealth tool integrating video conferencing into the athenaOne EHR platform. This enables practitioners to conduct HIPAA-compliant telehealth visits within practice workflows. It also released a reworked PHM/VBC solution in 2022, expanding the company’s care management services and IT portfolio. 

A Question of Time 

Despite the above, athenahealth faces several structural and market challenges which could influence its valuation and, ultimately, the timing of an IPO. 

Firstly, it may be the market leader in terms of ambulatory revenues, but athenahealth is the leader in a saturated primary and ambulatory care EHR market with a shrinking total available market (TAM) (we discussed this recently in this Insight). The largest share of the company’s customer base is independent practices (approximately 60%), whose numbers are falling. Forty percent of its customers are IDNs, but athenahealth will inevitably lose some of these contracts to Epic, Cerner and even MEDITECH, who all offer EHR solutions in a wider cross-section of settings. The fact that athenahealth has no footprint outside primary and ambulatory care is a major constraint, especially given the trend for buyers at IDNs and big health systems consolidating on one EHR vendor across all settings.  

Getting any more mileage out of a shrinking market will require athenahealth to displace rival tier 2, tier 3 and other primary care EHR vendors. These include eClinical Works, NextGen Healthcare and Allscripts (post-Altera split), as well as a long tail of small tier 2 and 3 speciality vendors in areas such as podiatry, women’s health, optometry, dermatology, etc. athenahealth has a speciality EHR portfolio, but continued investment in these specialty solutions will be needed if it is to take share off these smaller vendors. 

athenahealth will also need to ensure the re-engineered VBC products it brought to market in 2022 are successful and can drive up average revenue per practice. 

Achieving the above will demonstrate a viable strategy for long-term growth for athenahealth. Any traction gained in this area should only improve the company’s valuation. 

Competitive Threat 

athenahealth also faces another competitive threat from Epic and MEDITECH in particular. These dominant vendors have historically only sold to large health systems, not independents, and (in the case of Epic) allowed the large health systems to resell their EHR to the independents. For example, some independents run a version of Epic’s Community Connect, leased to them by the health system, not Epic. This strategy has proved highly successful for Epic with more than 40,000 providers now accessing Epic via this solution. 

In March 2022, both vendors announced they were launching primary care solutions (Garden Plot in the case of Epic and a version of Expanse in the case of MEDITECH) that independent practices could buy themselves, outside of any relationship with a health system/IDN. This was a direct encroachment on athenahealth’s territory. Both Garden Plot and Expanse are offered as SaaS solutions enabling independent practices to implement without significant IT investment, a barrier with previous Epic and Meditech solutions.  

What Now for the IPO? 

It is against this background that Bain Capital, Hellman & Friedman, Segert and his management team must now consider when (the ‘if’ seems to be a foregone conclusion) to push ahead with the IPO. With a reliance on business with independent practices (a shrinking market segment), and a narrow focus on primary and ambulatory care products, athenahealth’s growth options look quite limited. $17B already looks like a lot of money paid out. 

But the company has put behind it a turbulent history, which included a scandal involving a former CEO and having to lay off of almost a tenth of its workforce. In 2022, it is on solid footing in primary and ambulatory care and fighting its corner against its larger EHR competitors, albeit with challenges to address. 

Athena was the Greek goddess of wisdom. Conventional wisdom suggests that an IPO for a primary care vendor in her name would represent something of a risk at this time. By all accounts, it looks like a risk the company is willing to take – but it might not happen soon if it wants a gain on $17B.