August is opening with a blood draw and a “flush” in two Financings and one substantial, additive GI Deal.

The much-ballyhooed Function Health raises another $450 million from General Catalyst. This debt financing adds to their war chest, now $804 million. Crunchbase The growth financing from General Catalyst, which makes news with its raises, follows on Function’s November 2025 Series B round of $298 million led by Redpoint.

Function provides direct-to-consumer 160+ lab tests in an annual self-pay subscription model ($365, HSA/FSA eligible). Their pitch is to enable you to “live 100 healthy years” by self-testing for conditions such as thyroid, cardiovascular, hormones, immune disorders, and early signs of fatty liver and cancer, plus two annual full-body scans. The tests are performed via Quest Diagnostics in 48 states (excluding Rhode Island, Hawaii, and the territory of Puerto Rico). Members also receive a physician-reviewed results and insights. Function also offers MRI and CT scans (for an additional cost below $1000). They acquired in the past two years Ezra AI (full-body MRI scans), Getlabs (at-home or office blood draw network), and SuppCo (supplements). Function members have performed over 100 million lab tests in the past three years.

According to their CEO Jonathan Swerdlin, their target is “anyone who wants to be healthy”, but drilling down, it is the worried well, those wanting to centralize their ongoing testing, and those managing chronic conditions. Having gone through (and will be going through) a battery of thyroid and related tests, those of us who don’t have a physician brother to write up testing (and now an endocrinologist) could find this very attractive indeed, especially those with HSA/FSA accounts. For Medicare beneficiaries, it’s strictly out of pocket but if you have a lot of testing to do, perhaps worth it. The next part of this, of course, is getting your labs to a specialist without going through a primary care provider.

Reaching out to sell memberships to a broad consumer audience via traditional and social media is going to be an expensive proposition. $365 is not a trifling sum and getting your labs done via procedures like blood draws isn’t wonderfully pleasant. It requires national marketing and promotion, with a value proposition that takes some of the sting out of that blood draw. We’ll see if this happens as a result of the debt financing this fall. Release, MedCityNews

Hinge Health expands into GI care with Cylinder Health. One-time MSK remote physical therapy specialist Hinge Health continues its specialty expansion with $105 million for gastrointestinal care management company Cylinder Health. The buy is all cash and expected to close during Q3, subject to the usual customary closing considerations.

Cylinder has already treated 150,000 people for gastrointestinal (GI) conditions and has a clinically validated ROI. From the release: “The acquisition will combine Cylinder’s clinical expertise and existing market footprint with Hinge Health’s AI-powered care model and technology platform to deliver support in a single app expected to launch in 2027. There is no mention of how the companies will go forward in management and workforce locations.

Hinge expanded from MSK therapy into pain relief via the Enso pulse wireless device, pelvic health, migraine care (Enso), and fall prevention. Interestingly, in the release the CEO quote from Daniel Perez, alludes to GI care being an unmet need.  “Many people we already serve for back, joint, pelvic, and migraine care also have chronic digestive conditions. After spending time with Terry Boch and the Cylinder team, it’s clear that Cylinder gives us a running start in a category with significant unmet need.” (If you, like this Editor, spend any time on YouTube, one is assailed with digestive health ads, often, as we said as teens but perfect here, ‘gross’.)

Hinge went public last year at $32/share [TTA 22 May 2025] and is currently trading at around $80/share, a gain of over 100%, so they are doing something right in a very competitive space against Omada Health and Sword Health. Mobihealthnews, Healthcare Dive

And while we are discussing things gastrointestinal, Throne Science raised a Series A of $10 million. It was led by Will Ventures with participation from Emerson Collective, Workshop, LEAD VC, Salt VC, Accomplice, Moxxie, Ventures Together, Symphony, Felix Capital, Cosmic Venture Partners, Offscript, V1.VC, and Morrison Seger. Throne Science has developed an AI-assisted toilet sensor for $399 (plus $5.99/month membership) that monitors for bathroom habits, specifically monitoring patterns around hydration and gut health. Last month, they launched the beta version of their Gut Health AI coach which allows users to query the app about their data. The fresh funds will be used for further R&D for the next generation of the device targeting early detection of colon and urinary tract cancers. Interestingly, one of the founders is John Capodilupo, formerly CTO at the previously mentioned WHOOP. Release, Mobihealthnews

Disclaimer: Throne Science has nothing to do with the British, or any other, Kings or Queens. 

Besides data center worries, AI governance and cybersecurity are very near the top of AI concerns.

• For the Feds, AI is being used to patch up cyber vulnerabilities at speed and scale. The Gold Eagle “Promoting Advanced Artificial Intelligence Innovation and Security” initiative established in Executive Order (EO) 14409 is designed to operate across agency lines, reduce bureaucracy, stimulate innovation, and utilize AI for security as well as develop internal, responsible AI practices. It also promotes cooperation between the private sector and government by being built out by open source software companies, The EO has three major parts: 
  1. Upgrading American Systems for Advanced AI–this sets a 30 day clock from 2 June for adoption across the Committee on National Security Systems, the Departments of War, Homeland Security, Treasury, OMB and others.
  2. Secure Frontier Model Deployment–setting benchmarking, frameworks, “covered frontier models” and partners within 60 days inclusive of confidentiality, cybersecurity, insider-risk, and intellectual-property protection.
  3. Protection Against Criminal Actors–tightening up existing US Code and criminal laws to penalize “anyone who utilizes AI to illegally access or damage a computer without authorization, or who utilizes AI while engaged in such illegal access to further any other crime”.

Healthcare IT News

The American Telemedicine Association (ATA) and its advocacy arm, ATA ACTION, are establishing three working groups to help shape AI governance policy affecting virtual care and telemedicine. The first is on state-level AI policy, the second and third groups are centered on Federal policy agendas, regulations, and how state and Federal governments approach AI in virtual care. The three groups will present their report outcomes in December at the ATA EDGE Policy Conference setting the direction for ATA ACTION’s advocacy priorities in 2027. ATA Release

As payers continue to shrink due to plan membership declines and closures/selloffs, Centene actually is notching some profit and having some sunnier days. Centene’s Q2 closed with a stunning $1.1 billion in profit, with H1 at $2.6 billion, reminiscent of the palmy Michael Neidorff days when the sky was the limit and what was on the ground with the operating plans/companies was a jungle. This was quite a contrast versus 2025’s Q2 $253 million loss and H1  $1.05 billion profit. Revenues were also up nicely with H1 this year at  $103.5 billion, compared to $95.4 billion last year. All exceeded Wall Street estimates and gave Centene the opportunity to boost its 2026 full year outlook to at least $4.80 in earnings per share and revenue to between $193.5 billion to $197.5 billion, a flat-to-boost from 2025’s ending $194.78 billion and $2.08 per share.

At this point, it’s apparent that despite shrinking memberships down to 25.9 million as of Q2, both their sizable Medicaid and ACA plan memberships shrinking sharply, Centene has wrestled that old devil, the Medical Loss Ratio (MLR) to 89.6%, down from 93%. Another bright spot has been their commercial plans which have notched growth and a 10 point less MLR. ACA memberships are down from 5.9 million to 3.5 million. The ACA premium tax credit subsidies expired at the end of 2025, effectively causing premiums to double for nearly everyone. Aetna exited this year and Cigna will be out in 2027.

Share price is also sunny side up. Since April, shares have gone from the $31/share bottom in April to the $60 plus range since June. Centene is reportedly working hard to improve their plan STAR (CMS) and HEDIS (NCQA) ratings.

What is not so sunny is the number of people being shed at Centene. They’ve reported a cut of about 1,200 people as of Q2. It’s unknown how many have accepted the voluntary separation plan (VSP) that was announced in June and deadlined on 27 July. TTA 18 June  Centene reported that they forecast H2 severance costs between roughly $315 million and $365 million. Many of these severances will hit between early September and December, although on the Centene page on The Layoff, some employees accepting the VSP have dates into late 2027.

The VSP is in addition to prior layoffs that took place in H1. Centene reported H1 severance and third-party vendor costs of $61 million, with $47 million hitting in Q2. (This Editor knows a former colleague who was laid off after 16 years in June.) There are also rumors of further layoffs in H2 not part of the VSP as memberships shrink. FierceHealthcare, Becker’s, Centene earnings release

This Editor will reiterate that rarely does shrinking to profitability work except as an interim strategy to stem losses or look better to shareholders. Even with AI tools, operating plans without people on a ‘bare bones’ basis gets plans into quality ratings trouble, the nature of the health plan ‘beast’. That’s even true of commercial plans where employers and third-party brokers shoulder part of the load.

(Disclosure: this Editor was briefly a Centene employee after the company she worked for, WellCare Health Plans, was bought by Centene. She is a holder of Centene stock converted from her prior company. The above is strictly her opinion and protected speech, and should not be used as investment advice.)

DispatchHealth brightly announced what they termed a ‘refined market focus’ and a new website. This terminology means that Dispatch, which was previously known for providing home medical care, recovery services, and hospital-level care at home, now is stating that they are focusing on their B2B health system customers, “offering solutions that empower health systems and risk-bearing providers to build and scale their at-home programs, under their own brands”. Translation: they are now white labeling their CESIA platform and services to health systems to turnkey complex care at home via their workforce. Dispatch merged with Medically Home in June [TTA 21 Mar]. Investment to date has been $733 million through seven rounds (Series E) through 2022, which means that they’ve been paying their own way for some time. Dispatch release

WHOOP continues to “it” up, inking a new partnership in increasingly popular women’s digital health. The Natural Cycles app, which tracks fertility via the menstrual cycle and overnight skin temperature, will integrate with WHOOP’s biometric data collected from their wearable. This past spring, WHOOP definitely whooped it up with a $575 million Series G (for Giant) funding in April and claims 2.5 million members internationally. Natural Cycles has also enjoyed strong funding, including $55 million in a Series C round in 2024,  Mobihealthnews

And flying off way down under to New Zealand, Te Whatu Ora/Health New Zealand has enlisted UCLPartners for tech  modernization. Te Whatu Ora is New Zealand’s largest employer and provides universal health care to 5 million Kiwis. The partnership is for deployment of technology and AI through their digital and AI innovation program, HealthX. In April, they announced that they were working on five initiatives: AI scribes, remote patient monitoring (RPM) for heart failure patients, AI-enabled skin lesion assessments, AI-enabled diagnostics, and CoPilot for leadership and digital services. Health Informatics NZ  UCLPartners is a health innovations developer in care pathways and innovations and workflows. London-based, it works extensively with the National Health Service (NHS). The company worked with Te Whatu Ora on the HealthX AI scribe rollout for horizon scanning work. Healthcare IT News

Mr. Market woke up out of his summertime nap with some surprising end-of-July activity. What will August bring?

On the M&A front, virtual care mega Included Health is acquiring Firefly Health. This adds a virtual-first health plan and advanced primary care services to Included’s established telehealth and care navigation business. In February, Included quietly entered the health plan business with an Alternative Plan Design for employers that offers an alternative approach to health benefits. Firefly is classified as an Alternative Health Plan as Administrative Services Only (ASO), quoting a 15% savings in total cost of care and 90% member satisfaction. Interestingly, San Francisco-based Included’s acquisition cost of the Watertown, Massachusetts company is not disclosed nor are any management or service transitions. The deal is expected to close in Q3 2026 and is subject to regulatory review. Readers will recall that Included was formed from telehealth pioneers (2011-12) Grand Rounds and Doctor on Demand, with the small LGBTQ focused Included Health picked up in 2021, then rebranded with that name. It is solely focused on employers, health plans, public sector organizations, and unions.  Release, MedCityNews

Candid Health raised a $120 million Series D. Lead investor for this revenue cycle management (RCM) company is Sixth Street Growth, with participation from Oak HC/FT, 8VC, and Y Combinator. This follows a February $52.5 million Series C led by Oak HC/FT for a total raise of $220 million since 2020. TechCrunch Candid concentrates on provider financials, automating medical billing and health insurance claims to speed payments. Sixth Street release, MedCityNews

DarioHealth’s latest ‘rabbit out of hat’ is a $23.5 million RDO. As we’ve previously noted, DarioHealth started in MSK therapies and by 2023 branched out to clinically-based interventional care management solutions through apps and consults in cardiometabolic and behavioral health, including GLP-1 prescribing for weight management. DarioHealth’s latest is true to its form in creative financings as previously noted here and here. This bit of funding legerdemain is an RDO, a registered direct offering. From the SEC Form 8-K, DarioHealth is selling to institutional investors 2.4 million of their publicly traded stock at $6.80/share plus pre-funded warrants for over a million shares at $6.7999. This raises $23.5 million before deducting the offering expenses. The RDO  closed on 23 July. Mobihealthnews

Our old friends at TytoCare, notably quiet of late, added $25 million to their war chest and brought on some fresh horses. The growth/venture round brings their total financing to $231 million. The round for the remote physical exam tech company was led by Insight Partners, with participation from existing strategic investors OliveTree, HOOP, Qumra Capital, Qualcomm Ventures, OrbiMed and others. In the release, the lead repositions of the company as now a “AI-First Clinical Enablement Platform, Bringing FDA-Cleared AI-Powered Insights into Virtual Primary Care to Support Cardiopulmonary and Oncology Care” which doesn’t quite follow through on the website which focuses on their devices. Joining the company are Adam Pellegrini as CEO, replacing co-founder/CEO Dedi Gilad who moves to chairman. The other co-founder, Ofer Tzadik, remains with the operating company in NYC and Israel. Mr. Pellegrini is the former CEO of MSK/pulmonary management company Kaia Health, acquired last January by Sword Health for $285 million, and previously co-founder and former CEO of cancer support company Jasper Health out of Redesign Health. Also onboarding as COO is Greg Orr, former Walgreens VP Digital Health and COO of Jasper Health. One suspects some changes are in the offing. Mobihealthnews

Our last and most unusual company is Aurenar, which has developed a non-invasive neuromodulator for inflammation that stimulates the vagus nerve in the ear. The destined use is for ICUs to modulate the body’s secondary and toxic inflammatory responses to conditions such as subarachnoid hemorrhages and stroke. The V-Link vagus nerve stimulator gained FDA breakthrough device designation on 30 June. The oversubscribed seed round of $5.7 million was led by American Heart Association Ventures’ Go Red for Women Venture Fund and Solas BioVentures, with participation from BJC Health and Kaleida Capital. Initial validation has been through multiple pilot clinical trials at St. Louis-based Washington University, where Aurenar is located. The funding will be used for pivotal trials around stroke, including final device development, verification and validation testing, plus regulatory submissions to the FDA. Other uses will center on additional inflammatory conditions disproportionately affecting women. FierceHealthcare, MassDevice, Mobihealthnews

The Unexpected in the Terra Incognita of data centers whip up The Perfect Pricey Storm for Oracle.

In the New Mexico west bordering Texas, where it’s underpopulated and land is cheap, Oracle’s 1,400-acre, 2+ gigawatt Project Jupiter super data center build for OpenAI is hitting roadblocks, primarily around power. The original plan to power it with gas from its own natural gas plants hit environmental potholes. Then Oracle switched to natural gas fuel cells from Bloom Energy. They use little water, pollute less and are reasonable in carbon emissions. But the cost? $8 billion, a few billion more than the gas plants. They also have other sticky requirements; to not degrade, the cells must continuously run, which scuppers Oracle’s plan to switch off to far cheaper solar on sunny days. TTA 7 May

New Mexico and to a lesser degree west Texas have rising environmental concerns. New Mexico in particular is generally hostile to big business and fossil fuels. The natural gas pipeline needed to supply the cells that runs through New Mexico is on its second rejection by the New Mexico Environment Department. The next hearing isn’t till 19 October. The cherry on this cake? The state Attorney General is investigating complaints from local residents that their names were used fraudulently in support of said fuel cells. The greenhouse gas emissions are also claimed by environmental groups to be equivalent to New Mexico’s two largest cities, a claim that evades logic for Albuquerque alone. These groups now are pushing for a data center moratorium, a growing national cause that ignores that the data center is partly built, the water being used is non-potable from outside the area, and that the builder, Oracle, is working hard to respond to critics in the local areas by plowing money into local concerns.

Oracle isn’t the only one, but the one with the least resources. Oracle, Microsoft and OpenAI projects in Wisconsin are having costly difficulties with power authorities on building transmission lines and cost sharing. This may add another overrun of $100 million to Oracle/OpenAI’s Port Washington, Wisconsin data center. Oracle’s low credit rating also hurts them, where Wisconsin’s state power regulator is requiring financial guarantees in cash or lines of credit in case the project fails. This will cost Oracle $100 million–annually. In Texas, Big AI such as Meta and Google are having more success in partnering with local power utilities in building permanent infrastructure and renewable sourcing, including closed water systems to prevent toxic wastewater runoff into land and local water systems.

So why is Oracle making a chancy bet at the Data Center Infrastructure Landlord Table? Concluding from The Information: “even though the cost to build and power a gigawatt of AI is bordering on at least $60 billion, Nvidia servers powered by its Grace Blackwell chips, renting out at $3.50 an hour, could generate around $12 billion to $13 billion a year, including operating costs.” Your Editor reads this simply as a 4-5 year payback. However, that statement rests on a mountain of assumptions–that hourly rental costs remain high, that build costs remain somewhat stable or lower, that land and construction stay relatively cost static, that the small coterie of AI customers keep paying their bills, and that local groups do not succeed, as they seem to be doing, in increasing costs, demanding moratoria, and delaying online dates.

There are many reasons why Oracle’s bonds are hovering just above ‘junk’, as Mr. Market keeps reminding us. Computing UK. Add to that list that data center cost assumptions have gone spectacularly sideways and the expectations within Oracle didn’t account for (drum roll) The Unexpected.

Oracle did have some very good news last week from the Federal Government for its first Ladder in awhile. The Department of War (a/k/a Department of Defense) is contracting with Oracle for software in a deal that could be worth up to $7 billion over ten years. The exact contract has a base value of $3.31 billion for the first five years of the agreement and a total value of $6.99 billion if the additional option years are exercised.

The DoW Enterprise Software Initiative (ESI) puts contracting into a centralized framework to expedite procurement, versus the typical individual procurement process by separate agencies. The DoW ESI covers procurement for intelligence agencies and the Coast Guard. According to CNBC, “The contract covers the use of Oracle software in on-premises data centers for branches of the military, the U.S. intelligence community and the Coast Guard, according to a statement. The Central Intelligence Agency was Oracle’s first customer. A five-year base period for the contract includes perpetual and subscription-based software licenses, maintenance and consulting, according to one description.” DoW in its own release expects savings of $441 million when compared to the cost of buying Oracle products separately. (And come on, fellow writers. It’s the Department of War at the top of the release, not the Department of Defense, whatever arguments including historical you may have about it.) Oracle release, Federal News Network

Danaher closing the Masimo acquisition for a eyewatering $9.9 billion in early June definitely flew under this Editor’s  radar. Let’s catch up.

• The completion was 10 June, when Masimo stock was delisted at a final price of $179.95 (MASI, Nasdaq). The closing beat the expectation of H2 2026 by a month.
• The Danaher offer was $180/share (DHR, NYSE). When the offer was made, Masimo stock was trading around $130. This made for a very good deal for long-suffering Masimo shareholders and Politan Capital, which forced out owner/founder/CEO Joe Kiani in a blistering September 2024 proxy fight. Masimo shareholders approved it in May.
• Masimo will operate as a brand and division under Danaher Diagnostics, led by EVP Diagnostics Julie Sawyer Montgomery with Masimo CEO Katie Szyman continuing as CEO of the division.

Danaher updated its full-year 2026 guidance on 21 July with its Q2 earnings release. “For full year 2026, the Company expects non-GAAP core revenue will increase in the 3.0% to 4.0% range year-over-year. The Company is also increasing its full year adjusted diluted net earnings per common share guidance to a range of $8.45 to $8.60 versus previous guidance of $8.35 to $8.55. to incorporate Masimo’s expected contribution.” The $150 billion market cap Danaher is likely to pursue other acquisitions as well.

Competitively, it positions Danaher against industry giant Medtronic in patient monitoring, specifically in pulse oximetry and related technology. Masimo’s pulse oximetry and patient monitoring devices overlap somewhat with but extend Danaher’s existing Radiometer products in blood gas analysis and testing. Denmark-based Radiometer is stronger in European markets while Masimo is primarily US/Canada based. There is also diagnostic segment overlap with Beckman Coulter Diagnostics. It also expands Danaher’s offerings in sensor-based technologies and overall to integrated delivery networks, or IDNs. Other Danaher products within Diagnostics are Leica Biosystems and Cepheid. Given Danaher’s extensive and existing footprint in diagnostics and a legitimate fit, Masimo may get some long-overdue capital development and real management attention.

Courtesy of Editor Ted Green at Strata-Gee, in closing out the Masimo/Sound United file at his consumer electronics/AV custom integrations business newsletter here, this is how Danaher’s current products and Masimo’s complement each other in diagnostic market segments.

One caution for Masimo’s independent operation is that Danaher will now start executing on $125 million of annual cost synergies and more than $50 million of annual sales synergies by the fifth full year after the deal closure. “Cost synergies” usually mean shared corporate infrastructure, supply chain efficiencies, and streamlined back-office operations, although Danaher to this point has not filed any WARN notices for Masimo in California or Federally. Another caution is the meshing of Masimo’s corporate operations and ‘culture’ with the Danaher Business System methodology, as Masimo’s recent history has resembled a roller coaster ride at an amusement park with pieces coming off and the occasional passenger doing an aerial. Danaher closing release, MedTech Dive, Yahoo Finance

What’s left in LitigationLand?

• The Apple Watch litigation ended with a Federal win for Masimo. It won the Federal patent infringement case in November and was awarded $634 million in damages. A Federal appeals court rejected Apple’s request for a new trial last week. Orange County Business Journal, paywalled. 9 to 5 Mac
• Contrary to this, in April the International Trade Court (ITC) refused to reinstate the import ban on the redesigned Apple Watches imposed in December 2023. Reuters Whether Danaher will continue to pursue this isn’t known, but given the win versus Apple and the Danaher emphasis on diagnostics, the ITC import ban on a consumer product goes far down the list in importance.
• The Kiani lawsuits over his separation are proceeding in Orange County (California) Superior Court. These are over compensation owed to him when Kiani was ousted as CEO. His argument is that the employment contract is ambiguous about the timing of payments and that the unpaid compensation qualifies as wages. Judge Thomas Lo ruled last month that the suits could continue. The stakes are not small. The contract contained a $450 million severance payout. Kiani is seeking an added $100 million in damages from the company’s former six board directors affiliated with activist investor Politan Capital Management. Kiani is represented by Marshall Camp of Hueston Hennigan LLP. OCBJ In March, Judge Lo disqualified Quinn Emanuel Urquhart & Sullivan LLP from representing the six board members because the firm had originally defended Kiani’s employment agreement and violated ethics around confidentiality and loyalty. Daily Journal-Cal Lawyer 
• There are other lawsuits active in Delaware and Washington, DC.

And in other June news, Masimo gained FDA 510(k) clearance for an opioid-induced respiratory depression detection capability integrated into the Radius VSM wearable continuous patient monitor. It uses Masimo’s smartSET pulse oximetry sensor platform to identify early signs of respiratory compromise in hospital patients receiving opioid therapy. Release 

One more TTA Hat Tip© to Ted Green of Strata-Gee for being an excellent inside source on Masimo, the agita around the (sold) Sound United, and the culminating proxy fight between Politan Capital and Joe Kiani. Here’s his history of Masimo’s “wild and crazy ride”.  He now returns to being THE newsletter for professionals in the consumer electronics/AV integrations business!

Mr. Zitron compares how data centers are financed today to the pre-2008 boom in collateralized debt obligations (CDOs) that insured mortgage bonds. CDOs, by raising money around these bonds near-endlessly, subsidized an artificial boom in housing demand stimulated by  historically low interest rates. Those of us around (nearly all our Readers) know how badly that wound up in 2008, with the circular grift crash taking down Lehman Brothers and other financial institutions and putting us into a four-year recession. It also made financing nearly unavailable for health tech companies just getting out of their Series A or B.

CDOs aren’t financing data centers, but Special Purpose Vehicles (SPVs) are. The SPV raises debt financing for a data center and sells it to institutional investors, asset managers or banks. The SPV makes the payments to the contractors and suppliers such as Nvidia for chips. How they pay interest on the debt is via a special account. Finally, when the data center starts to generate revenue, the SPV uses those funds to first pay for the operating expenses of the data center, then creditors (based on their seniority in the debt), then whatever is left goes to the holding company, such as CoreWeave. It reveals how companies like Meta, Google, Amazon, and Microsoft are financing their data center builds. (It does appear on this Editor’s reading that Oracle, by directly taking on debt, is taking a different route.)

It’s a complicated scenario. The analogy he draws is that the financing for data centers is equivalent to the subprime mortgages of 2008. It’s  compounded by the apparent fact that capacity being built in the pipeline far outstrips demand by a factor of 15, based on an industry report cited by Mr. Zitron. In addition, the demand is not from profitable companies. He cites that “70% to 90% of that demand is from Anthropic and OpenAI’s unprofitable services.”

It also assumes three factors govern AI expansion in a grab for world savings looking for safe bets:

1. AI data center demand is infinite and all compute will be used.
2. AI data centers all have “locked-in customer demand.”
3. That these are “safe” investments, backed by the richest companies in the world.

Exactly what demand is out there? Companies and countries are guessing and making huge financial bets. Mr. Zitron basically calls it an AI bubble inflated by AI companies and abetted by the media because no one is accurately measuring the demand versus capacity.

It’s a scenario that screams ‘red flags’ and ‘Danger, Will Robinson’.

Read, you decide. 

But the scenario Mr. Zitron outlined raised the goose pimples on this Editor’s neck.

Those of us in healthcare have been to this rodeo before. And the bronco riders were all taken to the ER. Or the morgue.

If the term SPV sounds a little familiar to Readers, to this Editor, the term and the structure strongly resemble Special Purpose Acquisition Companies (SPACs) which for a time in 2020-2022 were the It Girl of getting around the typical IPO process for many a health tech company, such as Babylon Health. Admittedly, SPACs and SPVs work differently. SPACs raised money from investors, IPO’d themselves to raise more money, and then in an ‘blank check’ transaction, sometimes with additional investment, acquired a private company, thus taking it public. All in 3-6 months! Simple, right? None of the muss and fuss, due diligence, or SEC scrutiny of an IPO. And as a device, it’s still being used.

Yet look at the outcome in healthcare. Nearly all of the healthcare SPACs ‘cracked’ after 2023 with stock values cratering within months or a year, Hims being one of the very few exceptions and maybe the only one. 30% went bankrupt. 26% were acquired well below their IPO price. And the remainder survive, some having flirted with the Devil of Demise, all below their IPO and valuation. For a tidy summary of the rolling SPAC collapse, read TTA 10 April 2025 and 26 June 2024. 

But what CDOs, the current AI bubble, and the 2020-2022 health tech/telehealth bubble have in common is a complicated way of financing designed to skirt regulations and proper market analysis, coupled with a healthy dose of illusions. Each bubble is based on a set of assumptions that envisioned endless geometric growth and future profitability, coupled with a “desire to believe” that negated logic and the entry of outright fraud. In 2020, we had a real lack of accurately gauging demand for health tech and telehealth services, especially in direct-to-consumer and telementalhealth services. The healthcare SPAC bubble also misread the viability of companies and their business models, many of which had more in the realm of hopes and founder dreams than validity in the marketplace. SPACs evaded scrutiny and created great headlines for this Editor. It was endless. Apprehensions were brushed away. It was also unsettling to this Editor who had a very small role in a long-ago iteration of a financing and business boom/bust–airline deregulation–at two airlines.

When the 2023 crash came, wiping out billions in investment, it was pretty much confined to healthcare and health tech. It’s still being worked through in the consolidation of health tech (not all bad and to be expected), in bankruptcy court (23andMe), and the outright frauds in Federal courts (Done Global). To quote myself from June 2024: The investment scene in health tech and AI strongly resembles the Wild West days of airlines post-deregulation 30 years ago. Investor money in, now fleeing for the exits, whether the bankruptcy court or passing the hot potato to others with money.

AI, of course, dwarfs the SPAC-driven health tech boom by a 1000X factor. And has the capacity to take down a world economy.

In the Chutes department, it’s an insurer breach and an AI model that broke dramatically out of its sandbox.

Clover Health reported that three employee accounts were breached. The breaches were implemented through a ‘classic’ social engineering scheme such as phishing–the kind that this Editor was trained on years ago when she worked in marketing for a unit of a well-known health insurer. This sounds minor except that the three accounts were of “non-managerial employees with access to member visit-scheduling and broker-facing sales functions.” However, these employees also had access to some personally identifiable information (PII) and protected health information (PHI) of members. Apparently, there was outside, non-authorized activity because Clover’s SEC Form 8-K filing reported that it was “contained and terminated” but Clover is still investigating the extent of the breach and must complete required reporting and member notifications. The employees did not have access to claims or corporate financial systems. Clover Health, considered a pioneering ‘insurtech’, has remained relatively small, with 156,000 Medicare Advantage PPO members in Georgia, New Jersey, Pennsylvania, South Carolina, and Texas. Healthcare Dive

Agentic AI Gone Wild–the breakout of its sandbox of an advanced OpenAI agentic AI system into Hugging Face’s open-source AI model repository platform. OpenAI admitted in a blog post published yesterday (21 July) that the attack originated during internal testing of its own AI models. In what it called an “unprecedented cyber incident”, their own investigation revealed that “we now know that this particular incident was driven by a combination of OpenAI models — including GPT‑5.6 Sol and an even more capable pre-release model, all with reduced cyber refusals for evaluation purposes — while being internally tested on a benchmark⁠ of cyber capabilities.” Even though the testing was run in a ‘highly isolated environment’, OpenAI admits that the models found a way to gain internet access and attacked Hugging Face’s servers. Hugging Face detected and stopped the activity while OpenAI claims it found the activity internally. What’s scary is that Anthropic (Claude Mythos) and OpenAI now have had ‘out of the sandbox’ incidents in their frontier AI development worlds. As OpenAI put it, “The incident also makes clear that advanced models can discover and exploit novel attack paths in real-world systems without source-code access. It highlights that advanced cyber capabilities must be developed alongside stronger safeguards and defensive tools.” Hugging Face reportedly had to use GLM 5.2, an open-weight model developed by Chinese firm Z.ai, to investigate it because US AI models had restricting guardrails that blocked investigation. Computing 21 July, 22 July

And there are a few Ladders this quiet week.

Precision Neuroscience has successfully implanted its brain-surface brain-computer interface (BCI) into able-bodied test subjects and achieved successful thought-controlled cursor control. Unlike Neuralink, Precision’s implants rest on the surface of the brain, not in the brain. Neuralink’s subjects are also are mobility-impaired [TTA 10 July]; Precision’s patients have full movement but had neurosurgical procedures for a variety of reasons. By enrolling in the Precision research study, the patients were able to move solely by thought cursors to navigate games like Pong and Mario Cart on tablets and smartphones while in recovery. The 510(k) investigational devices were removed in a five-minute procedure before the patient went home. This is a real advance for a less-invasive BCI. Mobihealthnews, video (YouTube)

Tempus AI has agreed to acquire Personalis for $1.5 billion. Both are public companies listed on Nasdaq. Tempus AI is a precision medicine company using AI to analyze data for personalized care and therapeutics. Personalis is a cancer genomics company that uses DNA minimal residual disease (MRD) testing to detect cancer recurrence. The offer to Personalis shareholders is for $16.25 per share of common stock which was a 6% premium to last Friday’s closing price; it closed today (22 July) at $12.47.  The deal is for Tempus shares with the option for cash. Personalis had Q2 preliminary revenue of $22.4 million. The transaction is expected to close in late 2026 or early 2027. Mobihealthnews, Tempus release

We close with a fairly hefty (for these days) $16.2 million Series A for cardiovascular tech company Karoo Health. The oversubscribed raise for the Albuquerque, New Mexico company was led by 7wire Ventures and Allumia Ventures, with participation from First Trust Capital Partners, LLC, SpringRock Ventures, Hyde Park Angels (HPA), and other marquee investors. Karoo combines on-site and virtual care teams with their proprietary technology in cardiac care for cardiology practices and health systems in a value-based care model that connects, patients, providers, and payers. The technology platform is designed for earlier detection, improved coordination, and data-driven care delivery. Karoo release, FierceHealthcare

Withings USA expands monitoring into clinical care services.

Withings Medical Group will concentrate on cardiovascular, kidney, and metabolic health (CKM), beginning with hypertension, diabetes, and obesity. The medical group’s care team will work with the beneficiary’s primary care providers to build an individualized care plan for each member. The Withings Medical Group teams can also prescribe and adjust medications and support the beneficiary on lifestyle changes.

From the release: “This focused scope reflects a deliberate, clinically rigorous approach to entering care, and it marks only the beginning of a broader ambition for how Withings supports health over the long term. It also aligns with the ACCESS Model’s ten-year, phased approach to testing whether outcome-aligned, technology-supported care can improve outcomes for Medicare beneficiaries nationwide.”

In the UK, two Commons committees have urged the Health Innovation Minister to cancel the contract for the NHS Federated Data Platform (FDP).  The developer, Palantir, has come under fire in both the UK and US on its ties to defense and security agencies in those countries and with Israel. Palantir contracted with NHS England starting in 2023. The Commons committees objecting to Palantir to Health Innovation Minister Preet Kaur Gill are the Health and Social Care Committee and the Science, Innovation and Technology Committee. They are urging using a contractual break in February 2027 to term the contract, seek another contractor, or develop one in the UK. The concerned Members cross parties and are joined by the trade unions and 100 NHS data and technology specialists, who have separately objected to the FDP in a letter to Health Secretary James Murray.

The FDP is a key part of NHS digital transformation to facilitate storage and analysis of health datasets to improve planning, patient care and hospital operations. But the concerns apparently are more political, targeting Palantir and alleging that its defense and security contracts will discourage patients from allowing their medical information to be used. If we in the US shared similar concerns, Microsoft, Meta, AWS, and Oracle wouldn’t have a single healthcare contract. Computing UK

IKS Health wrapped up its TruBridge buy last Thursday for $557 million. The acquisition, announced last April, closed a quarter earlier than expected. IKS is a healthcare software company for administration and documentation, with TruBridge an EHR and revenue cycle management (RCM) provider to primarily rural hospitals. The combined company now has a US customer base of 150,000 clinicians and 2,000 healthcare organizations. IKS Health is traded in India with US operations in Dallas. The TruBridge acquisition is their third this year, financed with $600 million over five years in debt sourced from Citibank, JPMorgan Chase and Deutsche Bank. TruBridge shareholders received $26.25 in cash per share as offered in April. The release is singularly unrevealing on whether TruBridge will continue as a separate product line, nor on any operational/management continuity. It is another example of consolidation and ‘line extension’ between similar companies. MedCityNews

If it’s midyear, it’s time for a preliminary CMS Physician Fee Schedule draft. ATA ACTION has an early review of its telehealth and technology changes proposed by the Centers for Medicare & Medicaid Services (CMS) that affect physicians serving Medicare beneficiaries. From the release (PDF):

• Telehealth: In addition to changes to extend existing telehealth flexibilities, CMS proposes adding five codes to the Medicare Telehealth List, clarifying critical care consultation code descriptors, creating two new telehealth modifiers, and allowing physicians to bill for telehealth services involving residents when either the teaching physician or resident is in the room with the beneficiary.
• Remote Patient Monitoring: CMS proposes tightening guardrails and recalculating payment for remote patient monitoring (RPM) and remote treatment monitoring (RTM) services. Key changes include restricting RTM billing to patients with an established relationship with the billing practitioner, requiring a separately reportable initiating visit tied to the start of monitoring services, prohibiting use of third-party remote monitoring companies, lowering monitoring valuations, and potentially consolidating current CPT codes into four new G-codes (two RPM, two RTM) covering initial setup and monthly monitoring/management.
• Technology-Enabled Care: CMS is seeking broad feedback on modernizing Medicare reimbursement for technology-enabled care, with particular interest in primary care, care management, capitated payment models, and AI.
• New–Software as a Medical Service (SaMS): Aligning with the OPPS proposed rule, CMS introduces a new category – Software as a Medical Service – defined as algorithm-based clinical decision-support software with clinical or diagnostic functionality (excluding remote monitoring and prescription digital therapeutics). SaMS providing secondary analysis of lab data would shift from the Clinical Laboratory Fee Schedule to the Physician Fee Schedule.
• Merit-based Incentive Payment System (MIPS) Improvement Activities: CMS proposes two new technology-focused improvement activities: clinician use of AI to improve patient care, and use of interoperable clinical decision support.

Whether these survive to the Final PFS is dependent on comments, Congress, and budgets.

And now we have AI for our electronic toothbrush. Philips goes AI in its latest model, the Philips Sonicare DiamondClean 9900 Prestige. It uses built-in, on-device AI and spatially aware guidance to track brushing. There’s a 12-segment “Mouth Map” on the handle, with a light ring that gives real-time visual feedback on your coverage, pressure, and scrubbing habits. For those of us who like to press down, the SenseIQ sensor automatically adjusts intensity so we aren’t so bad. It has eight modes and three intensities, a bit more than their top-of-the-line existing Sonicares. And it comes in five premium colors! Well, well…as a faithful user of my Philips Sonicare toothbrush since a rather extensive dental  ‘remodeling’ a few years ago, and guilty of sometimes being a bit sketchy about my completeness, I am somewhat dismayed that to be au courant, I will need to acquire this new model…but it won’t be available till this fall in the US and Europe. Release, Mobihealthnews

Oracle is beginning to turn into one of those cautionary case studies. And that’s not good news for healthcare.

A recent analysis published in Seeking Alpha (may require free account, PDF here) will give one further pause.

The debt load is a crusher. There’s anywhere from $72 to $100 billion in debt on Oracle’s books, and that preceded the PIMCO financing of $16.3 billion that included equity. Their credit rating from major raters is one step above junk: BBB-negative from S&P Global Ratings and Moody’s Baa2 Negative outlook. [TTA 7 May] Oracle has already projected it needs more: an additional $40 billion in fiscal 2027 through a mix of debt and equity.

Net debt is soaring. Oracle ended FY 2026 with net debt of $97.6 billion. This represents a ~20% increase versus the $81.4 billion of FY 2025. Looking forward, this analyst is projecting that the net debt by end of FY 2027 will be in the range of ~$120 billion.

There’s another little problem called cash flow. Years of positive free cash flow, even during the pandemic recession, turned sour in their FY 26 to a negative $23.7 billion. The analysis states that Oracle is now heavily dependent on external cash–debt–to finance its AI infrastructure building. S&P also noted that capital expenditure has been geometrically increasing: $6.9 billion (2024), $21.1 billion (2025) and $55.7 billion (2026). The guidance for fiscal 2027? Between $90 and $95 billion. That is over a 70% increase. Cash flow clearly can’t pay down the debt they already have, a fact that banks factored in to cut off the lending spigot.

Its performance obligations are also crushing. $553 billion has been reported for OpenAI alone [TTA 7 May].  This article reports remaining performance obligations of $638 billion, about half of which is for OpenAI. Despite the disparity in numbers (perhaps completed obligations?), in this analyst’s view, something happens to OpenAI–for instance, a pullback in the confidence of markets to finance their aggressive expansion (and, this Editor would add, an IPO)–Oracle would be hit hard. To paraphrase an overworked analogy, if OpenAI stumbles and sprains its ankle, Oracle would break both legs.

But..but…isn’t demand supposed to be increasing, infinitely?  Increased demand is critical to continued financing. Yet there are leading indicators that demand is leveling off. Corporations are increasingly limiting internal use of AI by employees to tamp down soaring token usage costs and control budgets. These companies have also found that AI tools often do not work as well in replacing humans as they were cracked up to be. And now seemingly every software offering is ‘powered by AI’. The newness is wearing off.

The chip cycle is speeding up–not good news for AI infrastructure builders.  Nvidia is now in full production of its Vera Rubin chip, which is dramatically faster than the previous generation Blackwell chip. Our March reporting picked up that Oracle had forward commitments with Nvidia to use the older Blackwell chip for the OpenAI data centers, and OpenAI wasn’t happy about that. It’s not a simple matter of going to Nvidia and returning old chips and getting new ones–that isn’t done. Vera Rubin is also twice as expensive on a per-rack basis than Blackwell–$7.8 million versus $4 million. Add to this the long taffy pull of building (online is 12-18 months minimum), power, water, and labor costs…it adds up, as any builder will tell you.

Given the above factors, it shouldn’t be any surprise that Oracle stock is down 30% since last December and continues to decline.

Extra: The article also contains a short history of financial cycles. There are parallels drawn comparing the AI boom we are in to similar technology-driven boom and bust cycles, dating back to the building of canals in the 1700s, railways in the 1800s, and electrification in the early 1900s.  

Editor’s note: Any analysis of Oracle’s financial health is based on this article, previous articles, multiple sources, and Oracle’s disclosures. Our interest is primarily in the well-being of Oracle Health and the markets it serves. We do not engage in stock picking and none of the above should be construed as financial advice.

Bankrupt 23andMe finally settles with 2023 data breach victims

The benefits to those affected and filing a claim are:

• Up to $10,000 for Extraordinary Claims;
• Up to $165 for Health Information Claims;
• An estimated $100 for Statutory Cash Claims; and
• 5 years of Privacy & Medical Shield + Genetic Monitoring

This is a second round settlement. The first settlement dates back to before the bankruptcy [TTA 17 Sept 2024] and was for $30 million. 23andMe filed for bankruptcy on 24 March 2025 after multiple buyout offers by Anne Wojcicki and others. Wojcicki eventually bought the company through her TTAM Research Institute in July 2025, then converted the holding company name to Chrome Holding Co. and ChromeCo, Inc. d/b/a 23andMe.

What exactly Wojcicki intends to do with what’s left of 23andMe after emerging from bankruptcy is anyone’s guess.

The estimated number of people affected by the breach was 6.9 million. $14.29 million has already been distributed, possibly through the earlier settlement agreement. At the time, 23andMe said that $25 million was covered by their cyber insurance. Kroll authorized website, BBC News, Fox 5 Washington

The Neuralink brain computer interface (BCI) implant hits #26 in clinical trial, has first Canadian ALS patient. Lee Marten is a sergeant with the Vancouver police department who has had ALS since 2022. His mobility is limited to his hands operating his electric wheelchair. With the Neuralink N1 BCI implant, he can move a computer cursor by thought. Sgt. Marten is part of a clinical trial at University Health Network’s (UHN) Toronto Western Hospital. He is the 26th patient in a series of US and Canadian clinical trials among spinal injury quadriplegic and the first Canadian with ALS.  Mobihealthnews, CBC News

Resmed sells its MatrixCare software business for $490 million in cash. The buyer is private equity firm Frazier Healthcare Partners. Going forward, ResMed will use the cash to expand and concentrate on its core sleep health, respiratory, and connected home-based healthcare. The press release anticipates the closing as Q1 2027. (Resmed’s FY closes in September so this is end of 2026.) There is no information in the release on management or headquarters transitions. The Reuters report ​said that “transition ⁠services agreements with Frazier are expected to help ensure continuity across systems and operations and ​largely offset stranded costs in the first year ​after closing”.

The haircut was substantial. Resmed purchased MatrixCare in 2019 for $750 million for its EHR and software products to expand into a specialized area of post-acute care–an extremely tough one. They currently serve 15,000 providers across ​skilled nursing, senior living, long-term care, home health and hospice ​markets under the MatrixCare, Healthcare First, and Citus brands. However, its growth lagged company averages, according to KeyBanc Capital Markets’ note to investors. The sale at a clear loss has all signs of ‘throwing in the towel’ on a difficult to market and lower margin sector.

ResMed is retaining Brightree in the US and MEDIFOX DAN in Germany. Brightree provides business management and clinical solutions for post-acute care providers. MEDIFOX DAN provides management software for the German healthcare and social care sectors. Their individual value and profitability is unknown.

MatrixCare in the preliminary filing generated about $220 million in revenue and about $55 million in adjusted operating ‌profit ⁠in fiscal year 2026. Healthcare Dive

And to wind up on a lighter marketing note, Teladoc is now the preferred telehealth provider of the National Basketball Players Association (NBPA). The NBPA is the union for the professional players in the National Basketball Association (NBA). Teladoc will provide virtual care services for active and retired NBA players and their families. They will have access to Teladoc’s multidisciplinary virtual services, including primary care, 24/7 urgent care and preventive health screenings. NBPA and Teladoc Health will also host a preventive health screening for NBPA members at Summer League in Las Vegas. NBPA release, Mobihealthnews