Dispensed: Medicare Advantage's surprising success, Nurx's rebound, and a new startup trying to upend how you get mental healthcare at work
Welcome to a holiday weekend edition of Dispensed, our weekly newsletter tracking developments in the healthcare industry. For those reading this today, thanks for making us a part of your pre-long-weekend reading list. For those reading this on Tuesday, I hope you had a restful weekend.Before I jump into this week's big stories, I wanted to make sure you didn't miss some news that dropped last Friday afternoon. My colleagues Emma Court and Erin Brodwin found that uBiome cofounder Jessica Richman had misled reporters - including yours truly - about her age to qualify for age-specific lists.
We'll be sending out a call for nominations for our next "under 40" list here shortly, and you'd better believe if you're not willing to provide an exact age, you won't be considered for this one! More on that next week.
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This week, Erin had the scoop on new funding for Modern Health, a company joining a competitive landscape of mental health startups.
Modern Health just raised $9 million from Kleiner Perkins and Jared Leto to upend how you get mental healthcare at work
- Modern Health, a startup aimed at providing varying degrees of mental healthcare to everyone, just won backing from Silicon Valley's most well-known VC firm, its founders told Business Insider.
- With a fresh $9 million from Kleiner Perkins, actor Jared Leto, and Stitch Fix cofounder and CEO Katrina Lake, the company hopes to ramp up sales of its offerings to employers.
- Modern Health joins a competitive landscape of mental health startups, but unlike most, it will avoid focusing on one specific group of people.
Elsewhere in the world of venture capital, I spoke to investors about making bets on taking care of people in the home rather than the hospital. Some have gone all-in on certain areas, while some have some lingering fundamental questions.
VCs are just starting to invest in companies that move medical care into homes and out of hospitals. We talked to 3 top investors about what's holding them back.
- Investors are gearing up to make bets in the multi-billion-dollar businesses that surround caring for the elderly and people with chronic conditions at home rather than in the hospital.
- But some, like GV, haven't invested yet, in part because it's not clear if it makes sense for hospitals to build up those skills themselves.
- Others, like General Catalyst are waiting to see early companies prove out the business model in the over-arching elder-care model before investing.
A top exec at GlaxoSmithKline gave us an inside look at the $100 billion pharma giant's experiment with a new way of getting paid for medicines
- Pharmaceutical companies need to move to new ways of getting paid for their products, said Jack Bailey, the president of US pharmaceuticals for the $100 billion British drugmaker GlaxoSmithKline.
- GlaxoSmithKline has been experimenting with a new approach for three to four years called value-based care. The practice means that instead of getting paid per pill, the company gets paid based on how well those pills work.
- Bailey gave us an inside look at the programs and what he's learned from the experience.
Emma also spoke with the new CEO at Nurx, the company that was the subject of a New York Times investigation calling into question some of the tactics the company used to grow. CEO Varsha Rao started in April, shortly before the piece came out. The company has also hired a new top doctor.
It's interesting to see the early pitfalls direct-to-consumer pharmacy brands are facing. I'd expect there will be more growing pains ahead.
- The CEO of $111 million birth control startup Nurx told us how she's charting a new path forward after a scorching New York Times exposé
- A $111 million health startup dubbed the 'Uber for birth control' is expanding into a sensitive new area: sexually-transmitted infections
- Embattled health-tech startup Nurx just hired a new top doctor to replace an employee who left in January and criticized the company
I spent my Tuesday at CNBC's "Healthy Returns" conference, in which I picked out some interesting commentary from a former Obama administration official, Peter Orszag.
In a panel, he spoke a bit about Medicare Advantage, a now-hot area for investment that once was predicted to crumble after the Affordable Care Act enacted cuts to the program. It's interesting to see how much has changed since 2010.
Obamacare was expected to kill off Medicare Advantage. Now, it's one of the hottest areas for venture investment.
- Peter Orszag, a former Obama administration official who's now CEO of financial advisory at Lazard, said that the biggest prediction some experts got wrong after the Affordable Care Act went into action was thinking that Medicare Advantage was dead.
- Medicare Advantage is the private component of the government-funded Medicare program for seniors, in which the government pays private insurers a set amount to cover members.
- At the time, experts assumed that cuts in payments to Medicare Advantage would lead to fewer people signing up for the health plans.
- Instead, the opposite's happened. "I would say it's on a more sustainable path precisely because the overpayments have been taken off the table," Orszag said at CNBC's "Healthy Returns" conference in New York on Tuesday.
Zach Tracer also took a break from editing this week to write up a project completed by high schoolers in Philadelphia.
Together, the high schoolers took hundreds of photos that were used to determine the healthcare needs of those living in North Philadelphia. That includes photos of trash-covered empty lots, discarded needles, and some beauty.
33 high-school students took photos to capture the everyday reality of living in North Philadelphia, where the poverty rate is 40% and life expectancy is 20 years shorter
- 33 high-school students took hundreds of photos as part of a project to assess the health needs of Latinos in a section of North Philadelphia.
- The photos show trash, abandoned buildings, and discarded needles. Some images are hopeful, too.
- "I looked for things that affect us in a way that people don't really think about," one student said.
While BI won't be in Chicago next week, I'm curious to hear what's on your radar going into the annual ASCO meeting. We'll be keeping an eye out for anything controversial, groundbreaking etc. so be sure to let us know what's catching your eye at firstname.lastname@example.org.And as always, you can find me at lramsey@businessinsider or on the encrypted chat app Signal at +1 646-889-2130.
Have a great weekend!