Despite its status as a pioneer of prescription digital therapeutics (DTx), Pear Therapeutics filed for Chapter 11 bankruptcy in early April.

Company co-founder and former CEO Corey McCann cited “market conditions” that “have challenged many growth-stage companies, including us,” and alluded to Pear struggling to get payers to cover its products, according to a LinkedIn post announcing the bankruptcy filing.

“Payors have the ability to deny payment for therapies that are clinically necessary, effective, and cost-saving,” McCann wrote in the post.

Health tech analysts told Healthcare Brew that other digital therapeutics companies are likely to face similar conditions as those that led to Pear’s bankruptcy, and that Pear could be emblematic of a larger challenge within health tech: figuring out a sustainable business model.

A harbinger for the DTx industry. DTx companies face a challenging environment. There are the issues pretty much every industry is facing—the high cost of capital and more conservative behavior from venture capitalists, Adriana Krasniansky, head of research at digital health seed fund Rock Health, told Healthcare Brew.

But the DTx industry also faces a unique challenge: the lack of a well-defined regulatory approval or reimbursement pathway, according to Krasniansky.

There has been some recent progress in terms of figuring out a reimbursement pathway. The Centers for Medicare and Medicaid Services (CMS) approved one Healthcare Common Procedure Coding System (HCPCS) code, for behavioral health digital therapeutics, in 2022, Julia Croxen, an engagement manager at Rock Health, noted.

But “even though change is happening, both on regulatory and reimbursement possibilities, it’s likely not happening at a pace that allows companies in the market right now to really operate sustainable businesses along the digital therapeutic product lines,” Krasniansky said.

Keep reading here.—MA

Do you work in healthcare or have information about the industry that we should know? Email Maia at [email protected]. For completely confidential conversations, ask Maia for her number on Signal.

In honor of National Nurses Week, we have an assignment for you. If you know a nursing professional, send ’em some love and recognize the hard work and care they put in for their patients and healthcare systems every single shift.

GE HealthCare is recognizing these superstars in scrubs in their own way—by painting portraits of 5 nurses, one of which will be displayed in Times Square on International Nurses Day. Ready for the really cool part? Every brush stroke represents an hour of the care they’ve given throughout their career.

For reference, a 30-plus-year career = a mighty 80,000 strokes.

Millions of nurses support a better patient experience, but they’re also facing the greatest headwinds in their industry. GE HealthCare is building tremendous momentum toward creating a world where healthcare has no limits for these priceless caregivers.

See how far they’ve gotten with their mission.

New York City’s public hospital system spent tens of millions more on temporary staff than expected to offset nursing shortages during the Covid-19 pandemic—and that elevated spending will likely continue in the coming months, according to a new report.

The findings from New York State Comptroller Tom DiNapoli underscore the effects staffing challenges continue to have on hospitals—particularly NYC Health + Hospitals (H+H) facilities that often treat low-income, undocumented, and uninsured New Yorkers—even as the country prepares to officially enter the post-pandemic phase.

“For many [New York City] residents, NYC Health + Hospitals is a lifeline to quality health care, but it is a public health system struggling to get fully back on its feet after the stress of the pandemic,” DiNapoli said in a statement.

The report, which updated a 2021 analysis, found that temporary staffing at H+H facilities grew by 83% (or 860 full-time-equivalent workers) between February 2020 and September 2022—a period in which many nurses and other healthcare staff left the workforce due to burnout, illness, or vaccination mandates, among other reasons.

That increase resulted in $125 million in unexpected costs for the health system in the city’s 2023 fiscal year, which ends on June 30. DiNapoli’s office said it expects those costs to “remain elevated through at least FY 2024.”

Contract labor costs at healthcare systems and hospitals across New York are estimated to have grown by more than 110% compared to pre-pandemic levels, according to the report. The average weekly salary for temporary nurses reached about $3,300 as of March 2022, up from $1,800 before the pandemic.

Keep reading here.—SY

Do you work in healthcare or have information about the industry that we should know? Email Shannon at [email protected]. For completely confidential conversations, ask Shannon for her number on Signal.

For years, home care aides, family caregivers, and other direct care workers have quit in favor of higher-paying, less demanding jobs—departures which only increased during the Covid-19 pandemic.

Now Congress is eyeing legislation to bolster the direct care workforce.

Sen. Tim Kaine, a Virginia Democrat, reintroduced legislation in late April to improve conditions for direct care workers and family caregivers, many of whom are paid low hourly wages—often at or slightly above minimum wage.

The bill, known as the “Supporting Our Direct Care Workforce and Family Caregivers Act,” aims to provide better pay, benefits, training, and career advancement opportunities for direct care workers, who provide long-term care to people who are generally older or have disabilities and chronic conditions.

Kaine argued that the loss of direct care workers—including home health and personal care aides and certified nursing assistants—hurts not only patients who rely on them but also the economy.

“That’s why I’m leading this legislation to help us address the root causes of shortages in our care system and ensure that our hardworking direct care workers and family caregivers can keep delivering their much-needed services,” he said in a statement.

The US is expected to have a shortage of 446,300 home health aides and 95,000 nursing assistants by 2025, according to Mercer estimates. Meanwhile, PHI, an organization that researches and promotes the direct care workforce, predicted that ​​demand for workers to provide home- and community-based services will increase 37% between 2020 and 2030, with almost 8 million new job openings.

Kaine’s bill would direct the Department of Health and Human Services (HHS) to award grants through its Administration on Community Living (ACL) to states and “other eligible entities for initiatives” that promote the direct care workforce and support education and training for family caregivers, his office noted.

Keep reading here.—SY

Today’s top healthcare reads.

Stat: A community relations representative for insurer Empire Blue Cross said he attends about 30 community baby showers a year to sign participants up for health coverage, compared to five in 2019. (Stat News)

Quote: “It will effectively ban many abortions altogether, because of the obstacles that they have created for women, for clinics and for doctors.”—North Carolina Gov. Roy Cooper on a state bill that would ban abortions at 12 weeks (Politico)

Read: “The corporate consumption” of primary care practices is growing rapidly. (the New York Times)

Catch up on the top Healthcare Brew stories you may have missed:

• Pharma companies lean on AI for better innovation, efficiency
• AstraZeneca has big R&D goals to mitigate future declines in Covid-related sales
• Say goodbye to trypanophobia—this biotech is trying to turn injectable drugs into pills