The Healthy Muse (hospitalogy)

Novartis buys cholesterol meds.

Novartis, a $225 billion Swiss pharmaceutical company, is buying Medicines Company for about $10 billion, or $85 a share. What’s so special about the Medicines Company? They’re in the process of developing a cholesterol drug with tech called RNA interference.

• Since the heart disease market is huge (cholesterol alone is expected to reach a $17.7 billion market by 2024), Novartis probably wants to get ahead of the new tech and combine the cholesterol drug with its own heart failure drug, Entresto.
• Keep in mind that this deal comes on the heels of a landmark heart disease study released last week, which indicated that invasive surgery (AKA stents) is no more effective than drugs at treating heart disease.

Patient Privacy backlash.

Patient privacy has been top of mind over the past couple of weeks after the Google-Ascension partnership dropped last week (read about that here). As is the case with ANY big story, there’s been plenty of follow up. People – me included – are starting to ask the question: “what’s really going on behind the scenes?”

• Read Google’s response to the controversy.
• It turns out our health data might not be as secure (WSJ paywall) as we think.
• Even consumer-focused DNA test kits might threaten the privacy of children in ways we haven’t even considered.
• Finally, IT execs are calling for a HIPAA overhaul. Given today’s current tech environment, most people think that better HIPAA guidelines are long overdue.

Blue Cross Blue Shield’s National Plan(s).

Blue Cross Blue Shield unveiled plans for a national provider network. The “Blue high-performance network” will cover 185 million people in 55 markets!

Generic drugs and price-fixing.

Despite the FDA’s best efforts with approving more generic drugs, these generics drugs did not reach the consumer. The WSJ looks into why. Speaking of generics, Teva pharmaceuticals and others are in talks to settle the U.S. probe into the generic drug price-fixing scheme.

Value-based payments for expensive drugs.

A new value-based payment model for MS drug treatment between UPMC and Biogen was announced this week: payment linked to the therapy’s success.

• As these highly specialized, extremely expensive drugs enter the market (remember the $2.1 million drug?), I’m thinking that we might see more of these value-based type arrangements as a way to stem the costs of the specialty drugs; i.e., “if the treatment is working, we’ll pay you more. If not…less $$$.”

Warren backs off on Medicare for All.

Elizabeth Warren backtracked a bit on her Medicare for All plan. Her 100-day healthcare blueprint would put a public option in place, rather than fully-fledged single-payer, as a “step” toward Medicare for All.

• Her camp would target a Medicare for All overhaul from there. Health insurance stocks rallied hard on the news.

Starboard Value invests in CVS

Finally, a highly reputable activist investing firm called Starboard Value took a stake in CVS today, the WSJ reports.

• The firm has a knack for improving operations with investments ranging across industries, including Macy’s and Papa John’s.

Thoughts from the week.

My knee-jerk reaction to the Google-Ascension news was betrayal and outrage. How could a nonprofit health system let Google, one of the worst offenders when it comes to consumer data, get its hands on a slew of patients’ private health data – without seeking any permission first from either providers or patients?

Once I settled down, thought about it, and read a few articles with varying viewpoints, I realized that maybe Google wasn’t necessarily cooking up some evil, nefarious plot to commercialize patient health data.

While it would be naïve to assume that their intentions are completely pure, I DO think that one of the main objectives of the partnership is to decrease the administrative burden on both the patient and the provider.

Think about it: how else is Google (or anyone else) going to solve the administrative complexity puzzle in healthcare? Only through seeing the data firsthand, understanding how everything works, and identifying the current system’s shortcomings. In my mind, this is why the partnership was created in the first place.

Why they were so secretive about the whole thing is anyone’s best guess, though. Transparency is important, especially when it involves protected health data. Gotta be smarter than that, Google.

Nevertheless, If Google can find a lasting solution to one of the biggest problems in healthcare, then I’m on board. Just be smart about using that data for other purposes…

Policy Corner, week of November 25

Surprise Billing and Drug Pricing Update: No progress.

As we all know, Congress’ main healthcare objectives during the fall session were to curb surprise billing and make progress on decreasing drug price inflation.

As the impeachment proceedings suck up legislative time, it’s unlikely these issued get resolved in 2020. Bipartisan deals are probably a bit hard to come by right now.

Congress once again delays DSH cuts.

As a part of the broader budget deal, the House pushed back Medicaid DSH cuts (i.e., the program that pays back hospitals who see a lot of charity care patients) until December. Remember that the ACA initially wanted to phase out these payments by 2025.

In its final rule this year, CMS already laid out a roadmap to reduce DSH payments as compelled by the ACA, but Congress keeps intervening and delaying the cuts. I would look for potential reform to the disproportionate share hospital program in 2020.

Right now, DSH is paying out around $18.1 billion to over 3,000 hospitals.

Hospitals sue HHS over alleged underpayments.

Over 600 hospitals just sued HHS over an a few billion dollars in underpayments.

They claim that HHS illegally reduced inpatient hospital reimbursements starting in 2017 and continuing into 2018 and 2019

FDA nominee testifies.

Stephen Hahn, the current FDA nominee, testified (WSJ paywall) in front of a Senate panel this week.

The panel focused in on whether he’d be willing to combat vaping as well as fight drug prices. He’ll most likely be confirmed by the end of 2019.

Biz Hits

Warby Parker is launching its own line of contact lenses.

Walmart’s telehealth pilot program will partner with UnitedHealth and Doctors on Demand, allowing Walmart employees in 3 states to use telehealth for a $4 copay. The pilot launches Jan. 1.

Procter & Gamble’s Do-it-yourself healthcare biz (WSJ).

State Hits

Colorado officials have finalized their proposal for a public health insurance option. Here’s what we still don’t know about it.

Tennessee just became the first state to seek a Medicaid “Block Grant” in the amount of $7.9 billion from the federal gov.

Other Hits

Health systems are issuing debt like crazy to take advantage of historically low interest rates.

S&P notes 7 key trends to watch in 2020 – it’s gonna be an election year, and healthcare is taking center stage.

Beckers did us the favor of summarizing the latest financial updates from some big name nonprofit and for profit health systems. Axios also has a great healthcare revenue and earnings spreadsheet, too.

Humana saved $3.5 billion through value-based care arrangements on its Medicare Advantage plans.