TLDR: Massachusetts governor Charlie Baker signed bill S.2984, establishing indefinite payor requirements for reimbursement parity for telemental health services and 2 years of extended parity for virtual primary care and chronic care management. The 2-year extension will allow the state and payors to negotiate more permanent reimbursement guidelines for virtual primary and chronic care. 

So what? While likely to be extended given continued upticks in U.S. COVID cases,  impending end of the public health emergency (PHE) on Jan 31 threatens the security of telehealth reimbursement in states without legislation requiring payors to extend parity. While some payors have more progressively issued voluntary extensions, Anthem and UnitedHealth Group (collectively covering ~90M U.S. lives) previously announced plans to stop covering at-parity. Massachusetts’ new bill will hopefully “prime the pump” for states who have yet to enact similar extensions. While virtual mental health services will now permanently be reimbursed at-parity, primary and chronic care are likely being phased in more incrementally due to lingering uncertainties / criticisms of parity in care quality or costs compared to brick-and-mortar care (e.g., due to overutilization or lacking physical patient observation, respectively). While parity reimbursement is a significant interim win, significant innovation in value-based care (VBC) models expected under Biden’s CMS and CMMI may force near-term facelifts for these policies. Such facelifts will likely incorporate principles like value-based insurance design (VBID) to toggle cost-sharing based on physician-guided essentiality of services, and digital quality metrics (e.g., for access, utilization, per-clinical case presentation costs, aggregate costs) that drive HEOR to inform data-driven reimbursement models.

For a full reference of state modifications to telehealth requirements (as of Jan 1, 2021), see here.

TLDR: Haven, the Amazon-Berkshire Hathaway-JPM Chase joint venture that shocked the industry in 2018 due to its unlikely suspects, will cease operations in February. This announcement was largely expected by most due to limited progress in concerted / synergistic market offerings, individual company strategies (we’re looking at you, Amazon), and constant flux in leadership. 

So what? While the joint venture may be dissolving, there’s no doubt that the insights gained throughout its short life will (continue to) be leveraged in the respective individual businesses — especially for Amazon.  In 2020, Amazon launched its Amazon Care telehealth service for employees, Amazon Pharmacy via Amazon Prime (thanks, PillPack), and its first 5 Amazon Care “neighborhood health centers”, with another 20+ planned for this year. It’s no secret Amazon is planning to take off the “employees only” training wheels to transform the primary care ecosystem akin to its disruption of e-commerce, and we’re excited to see what 2021 holds for Amazon. 

TLDR: As we highlighted quarter-by-quarter throughout the year, 2020 was a quantum leap in funding for digital health, tallying a year-end $13.8B, nearly double 2019’s $7.2B and 2018’s $7.7B*. Despite Q3 reports that Q4 funding was on-track for a dip from 2020’s red-hot deal surge, investors doled out $3.8B in 92 funding rounds in Q4. Unsurprisingly, 2020 was also a landmark year for digital health M&A, with a whomping 64 deals* (20 in Q4), excluding 6 big SPAC “IPOs” (compare to 2019’s 53 deals).    
* Note: According to MobiHealthNews. Differing scopes / definitions of “digital health” drives slight differences in MobiHealthNews and Rock Health data — e.g., Rock Health estimated funding of $7.4B (2019), $8.2B (2018) and ~$12B (preliminary 2020). CB Insights estimates total 2020 digital health funding of ~$32B due to a far broader scope. 
 

So what? Despite early whispers that COVID would dry up investor funding in digital health for the year, the pandemic has since been labeled a “black swan” that set some digital health companies’ timelines back and drastically launched others into mainstream clinical care. While the latter are primarily responsible for 2020’s funding boom, companies facing COVID headwinds still benefited from resurgent and novel enthusiasm for digital health at-large. Temporary regulatory and reimbursement waivers drove first-time use of many digital tools by providers and patients alike, providing empirical basis for recognizing their relative value and combating some fears and perceptions previously gating significant adoption. These approvals also provided “natural experimental” data to regulatory agencies and payors. Increased federal and state funding and innovation initiatives for digital health, as well as voluntary payor coverage expansions (though more modest in scale) suggest some “success” of the COVID experiment from a value-based care standpoint.  Investors expect companies riding COVID’s tailwinds — telehealth, remote monitoring, decentralized clinical trial solutions, interoperability tools, patient engagement tools, symptom chatbots, among others — to continue or accelerate this trend in 2021, while global vaccination efforts will hopefully provide a boost for others, contributing to overall growth for 2021 funding.