The Healthy Muse (hospitalogy)

Top Weekly Healthcare Stories

Welcome to the 52nd edition of the Healthy Muse! You know what that means: we’re officially one year old today.

To thank all of the wonderful readers, we’re gonna try something CRAY.

We’re giving away a $52 Amazon gift card (signifying our 52 weeks of writing – duh). 

To enter the giveaway, refer a friend to the Healthy Muse by having them follow this link.

1 referral = 1 entry for you AND your friend (that’s additive, so the more referrals, the better chance you have to win).

The winner will be announced on February 29, 2020.

As an aside, I want to thank all of you for reading the Healthy Muse weekly. It’s been to learn more about healthcare, share amazing and interesting stories, and get to know some of you.

On to this week’s stories!

The Big Stuff.

Must-Reads from the Week

Read our news roundups from Q4 2019! A lot of these will look familiar to you if you’ve been a long-time subscriber.

• 11 trends to watch headed into the 2020s (Link)
• 12 big digital health stories (Link)
• 11 notable M&A from Q4 (Link)

One Medical’s IPO skyrockets.

One Medical, the primary care startup backed by Google, soared in its IPO debut Thursday, closing up over 50% (~$21) after pricing its IPO at $14/share.

• As of this writing, it’s up over 70%. Maybe it’s because people think One Medical will ‘disrupt’ healthcare. Sound familiar?

Primary Care JV for Seniors.

Humana, the large health insurance payor, and Welsh, Carson, Anderson, & Stowe (WCAS) entered into a joint venture on Monday. The JV will be operated by Humana’s primary care subsidiary called Partners in Primary Care and will be focused on providing preventive care services to Medicare beneficiaries.

• Other deal structure details: Humana will get a management fee and will have options to purchase more JV interest over the next five to ten years.

In the news…struggling pharmacies.

The WSJ reports that pharmacies located inside supermarkets are closing at increasing rates for a number of reasons:

• They’re not big enough to have leverage on reimbursement rates
• They’re disconnected from larger supply chains or payor networks
• They don’t have other services that would otherwise draw someone into a drugstore.

Understaffed and overworked pharmacists.

The struggling supermarket trend isn’t the only headwind facing pharmacies. A NY Times report released Friday claimed that most pharmacies are understaffed and the pharmacists working the counters are stretched thin.

It’s no wonder – if you meander over to the r/pharmacy subreddit, it’s littered with stories about the same type of things.

• Here’s the originally reported story from the NY Times. Moral of the story: be nice to your pharmacist 🙂

The Fed won’t let Martin Shkreli go.

• While in prison, Martin Shkreli is now getting sued by the FTC for anti-competitive behaviors. Exhibit A on how NOT to run a biotech company. Still, highly entertaining.

An automatic opioid subscription – Practice Fusion’s part in the opioid crisis

In a first for an E H R vendor, Practice Fusion was forced to pay $145 million for its involvement in the opioid crisis.

• Thanks to a secret deal between Practice Fusion and an unnamed drugmaker, the E H R was programmed to automatically recommend a prescription of opioids at time of treatment. Read the source Bloomberg report here.

A brief update on the Coronavirus.

• Here’s our recap from last week.
• Airlines are halting flights to China, Chinese markets are selling off, and most companies and institutions in the U.S. are erring on the side of caution, the WSJ reports.
• Axios is covering the number of infected with a live updating article. (over 17,000 infected, mainly in China). Earlier in the week, the U.S. didn’t think it was a big deal. The WHO disagreed, calling it a public health emergency. Then that Friday, the U.S. went ahead and declared the same.
• There were 7,000 people stuck on a cruise in Italy because of it.
• Johnson & Johnson says they’ve already started development on a coronavirus vaccine. After a rough couple of years in the spotlight for the wrong reasons, I’m sure J&J is looking for ways to make up some goodwill. Other biotechs like Gilead and GlaxoSmithKline are jumping on the coronavirus train too.
• The virus might affect the global biopharma supply chain, since a lot of drugs and ingredients are produced in China.
• Artificial Intelligence is actually being put to very practical use in predicting the global spread of the virus. In fact, an algorithm detected the outbreak a week before the CDC.

In the miscellaneous category…

CVS Health unveiled a diabetes model for its Aetna enrollees guaranteeing zero out of pocket costs.

Digital Health Stories

The interoperability schism rages on.

Last week, we touched on HHS’ proposed interoperability ruling (i.e., make patient data easier to share with patients) and the controversy that followed after Epic (a major electronic health records operator) responded harshly to the ruling, citing patient privacy concerns.

On Jan. 27th, the CARIN Alliance, comprised of new entrants like Apple, Google, and the rest of Big Tech, issued a short letter (read it here) to HHS in major support of the data sharing proposal. They think that the new healthcare data laws would ‘revolutionize the exchange of medical records.’

The bigger picture.

• Amidst all of the data privacy concerns as of late, Google and others want better guidance around patient privacy. They want the data sharing rules to be consistent with other modern data standards.

How would this affect me?

If the HHS’ proposed ruling were to go through as-is, then approved third parties would be able to access your medical records via application programming interfaces, or APIs.

• APIs would make it much easier for third party software to communicate with your medical records. So, in theory, you would be able to access all of your medical records and patient history on your smartphone or anywhere you go to get healthcare.
• It really might open up healthcare to vast opportunities, with – of course – some privacy concerns.

Read all about it:

• Apple, Cerner call for interoperability rule release ‘without further delay,’ highlighting industry rift (Fierce Healthcare)
• Privacy versus access debate rages on, rekindled by Epic lobbying (Healthcare Dive)
• All kinds of perspectives on the ruling (Beckers)

Deals Roundup

Notable healthcare deals

• Why the Centene/WellCare merger is the biggest deal in 2020.
• Eyemart Express, a retailer that sells glasses & other optical services, is considering a sale (WSJ)
• Many are expecting strong healthcare consolidation to continue in 2020. Side note: I’m not so sure…
• Walgreens teams up with Microsoft to launch ‘health corners‘

Graphic of the week

Election 2020

Keep an eye on the upcoming Iowa caucus. Healthcare is a big focus – especially amidst big policy changes at the state level in Iowa.

Michael Bloomberg has been making waves in recent weeks.

• He has a ‘radical’ plan to cut prescription drug costs – by only allowing one patent per drug.
• He ran a Super Bowl ad on gun control (the dude is work like $50 billion after all – he has money to blow).

Other Democratic stuff.

• Watch for the increasing mention of insulin costs on the campaign trail.
• Meanwhile, Bernie Sanders, who seems to be the media’s favorite candidate to pick on, is under increasing pressure on how he’ll find funding for ‘Medicare for All.’
• Democratic voters are in support of both a public option and Medicare for All (what are those?)
• Can presidents bypass Congress on drug pricing? Elizabeth Warren thinks so, and Kaiser Health News agrees.
• Hospital and insurance execs are favoring moderate Democrats in early campaign giving.

Policy Corner

The Trump Admin wants to overhaul Medicaid into Block Grants.

On Thursday, CMS gave the OK on a block grant structure for states’ Medicaid programs. If this proposal were enacted, it would mean that states would have the ability to receive a fixed sum of money to spend on healthcare how they see fit. States would also be able to impose further conditions of eligibility in determining whether an individual would be qualified for that state’s Medicaid program.

• CMS thinks these changes are necessary as a cost control in order to guarantee that the program has enough funding in the future.

How does that differ from Medicaid today?

As Medicaid exists today, states receive varying levels of payment based on how many ACA enrollees they have. Additionally, there are no community guidelines, work requirements, or any other steps needed for Medicaid eligibility.

• Read the full 56 page CMS letter to state Medicaid directors here.

I need more background on this.

Remember that Congress rejected this block grant proposal back in 2017 when the GOP was making a push to repeal and replace Obamacare. Now, the admin is trying to work directly through CMS.

• I would expect this policy to be challenged in court – I’m not a lawyer, but I would assume there’s an inherent question of legality in circumventing Congress.

So…Is this controversial?

I should note that Republicans tend to favor the block grant strategy (in an attempt to rein in Medicaid spending), but Democrats oppose these changes, saying that states need more accountability in how they spend these funds.

Most media outlets are labeling this policy as drastic and controversial, but I’ll leave that up to you to decide. Here’s the big picture: the Trump administration is trying to make changes to the largest public insurance program in the nation serving our poorest population, so any alterations are almost guaranteed to have differing viewpoints.

• An ER doctor even went so far as to confront Mike Pence over the Medicaid changes in a diner.

Some more resources for a deeper dive:

• Trump administration to give states wide latitude in Medicaid Block Grant plan. (WSJ)
• CMS to allow Medicaid funding caps: 5 things to know (Beckers)
• (Opinion) The problematic law and policy of Medicaid Block Grants (Health Affairs)
• How would Medicaid block grants affect major payors?

In the miscellaneous category…

• The Supreme Court allowed the Trump admin to enact its controversial ‘public charge’ rule
• Hospitals may be double dipping in drug discounts, GAO finds
• Payers and employers are protesting HHS’ price transparency rule. Bottom line: they’re in support of letting patients know how much things will cost them out of pocket, but they’re not fans of publicly disclosing their reimbursement rates. Payors also think it’ll cost them bigly in administrative costs to get all of that data uploaded.
• Axios reports that a CMS proposal called the Medicaid Fiscal Accountability Regulation would place more scrutiny on types of state Medicaid payment arrangements and potentially cut Medicaid payments by 6% to 8%

Quick Hits

Biz Hits

• CommonSpirit partners with Lyft, creates strategic innovation taskforce to boost transportation
• Major global industrial conglomerates like 3M and GE are pivoting to bet bit on healthcare in the coming years.
• Hospital operator HCA reported a strong 4th quarter on the back of higher ER visits and bolstered same-store admissions. They’re truly a machine.
• Pfizer, the pharma giant, is planning to launch 3 biosimilars (copycat drugs) over the next quarter. Many think that biosimilars are a possible way to cut high drug costs in the U.S.
• Healthcare Services Corp (AKA Blue Cross) is laying off 400 jobs.

State Hits

• In Atlanta, a $1.2 billion home health merger was cancelled after the FTC got involved to investigate antitrust concerns.

Other Hits

• More and more schools are allowing mental health days for students. (WaPo)
• The FDA approved the first drug designated for….peanut allergies. (WSJ)
• Mommy can’t talk right now – she’s dopamine fasting. (The Cut)

Thanks for reading.

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About the Healthy Muse.

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