After five years in Israel, US health insurance giant Elevance Health Inc. is shutting down its activity here, "Globe" has learned. The development center, formerly called Carelon, and managed by Udi Goori, dealt with development of strategic digital health solutions for Elevance, and employed about 40 people with special know-how and training in artificial intelligence and data processing in the medical field.
Besides technological development in digital health, the center was also responsible for collaborations with Israeli startup companies. Through the center, deep cooperation was created between Elevance and companies such as K, TytoCare, VIM Diagnostic Robotics, MDI Health, and other companies, all of them concerned with the journey of the patient in the health system. In the case of some of the companies, Elevance helped in integrating their products in the US health system, and for TytoCare in particular the link (which will continue) is significant, and includes the installation of thousands of its home healthcare devices with Elevance’s customers.
In addition, Elevance recently carried out a fostering and acceleration program for younger startups to help them understand in depth the needs of the US health system.
The loss of the connection with Elevance is a significant blow to the digital health sector in Israel. The distance from the US market and the fact that most Israelis do not know the US health system from within makes it hard for them to understand its needs. Cooperation with Elevance helped them to make their value propositions more precise, and also with proof of value and formation of connections with the US health system. The saving grace is that the center’s employees will be able to bring their knowledge of the system to other companies, perhaps companies that they will found themselves.
Share price down 15%
The reason for the closure of the Israeli center is not clear, but it would appear that it is not the political and security situation in the country or disappointment with the quality of the center’s output, since, as far as is known, its activity was extensive and successful. Besides the work with startups, Elevance’s Israeli group built the company’s digital program for advising on and managing chronic diseases, and a support program for patients discharged from hospital, and it also published articles on medical subjects.
The reason for the move is probably more to do with problems at the company itself. Elevance has a market cap of $95 billion, and in the past month its share price has declined 15% following poor quarterly financials and a cut in its guidance, a consequence of a decline in the number of its subscribers from the government insurance scheme Medicare.
Asked by "Globes" about the development center closure, Elevance responded: "As part of a general process at the company because of changes in conditions in the health market, Elevance Health has made the difficult decision to close the Israeli center of Carelon. We thank and appreciate our employees in Israel for their dedicated work and for their achievements, and we are committed to supporting them throughout the process."
Published by Globes, Israel business news - en.globes.co.il - on November 15, 2024.
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