Big Tech Expands Footprint in Health (WSJ)

November 27

TL;DR

• Amazon, like other big tech companies, is making its push into healthcare in multiple ways. The big push outlined in this article is its artificial intelligence platform, which purportedly can read text and digitize it for doctors, all the while pointing out major items from the text. This technology would obviously be highly impactful in the handwritten world of healthcare.

Muse

• It’s really fascinating to watch all of the ways that Big Tech is trying to make its way into healthcare as they try to “fix” healthcare.
• Google, Facebook, IBM, Apple, Amazon, and others have made various acquisitions, hired healthcare talent, and developed sophisticated AI in attempts to tap into the healthcare market.
• In a way, healthcare is one of the last tech frontiers. Given that the industry is so tightly regulated, and the various concerns surrounding a seemingly backwards-facing privacy law in HIPAA (we’ll get into that later in this article), it’s been a bit tricky for Big Tech to maneuver, and as a result, the market penetration has been slower thus far.
• Healthcare advancements in AI should only improve from this point forward. Look for these companies, along with the traditional healthcare incumbents (UnitedHealth, HCA) to ease the administrative burden that doctors face by integrating electronic health records with the cloud, digitizing notes, and developing medical algorithms for a variety of medical functions.

Overdoses, bedsores, broken bones: What happened when a private-equity firm sought to care for society’s most vulnerable (WaPo)

November 25

TL;DR

• Under the direction of private equity group Carlyle Group, nursing home operator ManorCare sold its real estate, then leased back those properties from the new owners.
• As ManorCare struggled to meet rent payments and cost-cutting initiatives began, the Washington Post found that its health code violations increased 26% over a four year span.
• Ultimately, ManorCare filed for bankruptcy.

Muse

• The Washington Post raises the question as to whether or not private equity investments are appropriate for all industries, as this investment seemingly resulted directly in the harm of elderly patients at ManorCare.
• If investments are conducted poorly, private equity groups can have the stigma of being too focused on generating returns for investors rather than focusing on the mission of the company and the people involved there.
• This effect is only exacerbated in healthcare, where people’s livelihoods are especially at stake.
• You have to remember, though – there’s 2 sides to every story.
• Related: Washington Post Blames Private Equity for ManorCare Woes
• Related: Why Private Equity Has Eyes on Vision Care

Imagine What We Could Cure (WSJ)

November 25

TL;DR

• This article explores the issue of big tech, big data, its integration into healthcare, and the issues of privacy that happen along the way.
• The authors argue that current privacy rules (HIPAA) surrounding healthcare are too strict, and inhibit innovation/better care through analytics.
• Furthermore, the manipulation of data to de-identify patients could mis-construe results, or lead to lack of statistically significant conclusions.
• The solution presented claims that health data could probably be bifurcated – that is, patient data could be made freely available (or MORE freely available) to health researchers, lab testing, genetic research, etc. but still be banned from any sort of non-medical or targeted advertising purposes

Muse

• An overhaul of HIPAA might help stem innovation for healthcare into the future. It will be interesting to see how Big Tech and HIPAA continue to clash.
• One big winner from this struggle might be Apple. The firm believes strongly in privacy (a core value of the company), which would fit perfectly into the current U.S. healthcare system. They are, after all, making a bigger push into the integration of health records into the iPhone.

Who Should Gain From Your Medical Data? (WSJ)

November 29

TL;DR

• The Wall Street Journal argues in an op-ed that “HIPAA restricts legitimate access to information by law enforcement. It results in ludicrous complaints. The costs are staggering and have added hundreds of millions of dollars to the cost of health care.”
• As a follow up to the “Imagine What We Could Cure” op-ed, this article argues that HIPAA has unnecessarily added millions of dollars to the cost of healthcare.
• The article argues that the implementation of HIPAA was flawed in the first place and a major over-reaction to a minor over-stepping by a few insurance companies.
• Now, the issue that the law has created is who, or what, owns the health data? Is it proper for a healthcare company to share its health data with a cancer center in which it owns a stake? Well…companies are doing things like this anyway.

Muse

• The WSJ made a big push this week to discuss the emergence of tech in healthcare, the issues of privacy at hand, and a potential need for an overhaul to HIPAA
• I can’t see anything changing any time soon, until the privacy issue comes to a point where it absolutely must be addressed by Congress.
• I don’t really think the average consumer cares, or even knows, how much data companies have on them generally. Would the average consumer be concerned if their health data were being used to turn a profit? Is it really that different?

CVS-Aetna Deal Closes With Vow To Change ‘Consumer Health Experience’ (Forbes)

November 28

TL;DR

• After state approvals, the CVS-Aetna deal has finally closed.
• The vertical integration strategy will take effect, as CVS will look to transform many of their brick and mortar stores into a type of urgent care.

Muse

• It’s an interesting concept – people already go to many CVS stores for pharmaceuticals and Minute Clinics.
• Expanding the healthcare services at these sites for people who are already accustomed to shopping there could be a huge play and a large opportunity for growth at CVS.
• They better hope the integration is successful, because that $69 billion price tag wasn’t cheap.

In one of Massachusetts’ largest health care mergers ever, Beth Israel and Lahey Health are set to combine, with price caps (MassLive)

November 29

TL;DR

• The two larges health systems in Massachusetts (Beth Israel Deaconess Medical Center and Lahey Health) have received permission to merge into one gargantuan conglomerate, similar to Baylor Scott and White and Memorial Hermann in Texas
• It’s an interesting deal, because one stipulation of the merger stated that the combined entity could not raise prices above 3% over the next several years. This stipulation eventually expires, though, and they can adjust this upward if the state experiences rampant inflation.

Muse

• This is a pretty unprecedented merger, as it’s usually not a good idea to set a cap on a big source of revenue growth (raising prices).
• The merger will have to focus on cost-cutting initiatives, and improving administrative functions across the new system.
• It’s interesting to note that while several nonprofit mergers have been approved and gotten through the process relatively unscathed (Baylor Scott & White / Memorial Hermann, CHI and Dignity), others are seeing increased state scrutiny.
• A recent report from the New York Times indicated that health system mergers could actually increase medical costs. So that’s something to note while the mega-mergers continue. The general economic idea behind that is because there is less competition, prices continue upward. These newly founded hospital mega systems have increased pricing power against their managed care counterparts, and they have a lesser incentive to control costs since these can simply be passed along.
• Related: With Beth Israel-Lahey merger, state charts new course on health care (Boston Globe)

Other Interesting and Noteworthy Articles

• A look into hospital ERs, and things that can potentially go awry in the healthcare system. Investigation: Lives Lost Amid ER Violations (WebMD, November 29)
• This article delves into some of the reasons why large cap biotech companies, typically anti-cyclical, defensive stock plays, can be good investments Pharma Stocks Soothe Stock-Market Malady (WSJ, November 23)
• After the CVS/Aetna merger cleared regulatory hurdles, managed care rallied big-time. Big day for health insurers (Seekingalpha, November 28)
• Covering hospital admissions and other metrics for the month of October, from ModernHealthcare. Hospital volumes rebound in October, but large hospitals feel pressure (Modern Healthcare, November 30)
• UnitedHealth continues its climb atop the healthcare ant hill. UnitedHealth Group: 50M To Access New Personal Health Record In 2019 (Forbes, November 27)
• An article that gives a perspective into the typical struggles of a primary care physician. Listening to Primary Care Physicians for Low-Income Patients: What Gets in the Way of Good Care? (Commonwealth Fund, November 27)
• Political turmoil – repeal of existing conditions is WILDLY unpopular. Exclusive poll: Public fears lawsuit over pre-existing conditions (Axios, November 24)
• A good outline of the agenda for the New Congress. KFF Health Tracking Poll – November 2018: Priorities for New Congress and the Future of the ACA and Medicaid Expansion (KHN, November 28)
• Data on one of the more costly components of healthcare – drugs. Americans are still struggling with drug costs (Axios, November 26)
• And finally, a fun one (well…depending on your perspective): It Looked Like a Beer Belly. It Turned Out He Had a 77-Pound Tumor. (NY Times, November 29)

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