healthy muse healthcare news.
A big radiology deal.
Did we CT that one coming? This week, physician staffing firm Mednax (soon to be called Pediatrix, FYI) announced the sale of its radiology division to Radiology Partners for almost $900 million.
- What’s the strategy here? Radiology Partners wanted to expand nationwide to increase its scale. Mednax’s AI software platform further sweetened the deal. Read more from Radiology Partners’ CEO here on the deal.
- Meanwhile, Mednax has a bunch of activist investors on its back along with payor troubles (UnitedHealthcare cut them out of quite a few reimbursement contracts). The firm is looking to revamp its strategy back to its core physician specialties
The bigger trend: As Medicare and private payors continue to pressure reimbursement, radiology practices will be forced to consolidate further into mega-groups. “The days of the two-three-four radiologist practices are nearly over.”
Updates on Amwell and GoodRx, and a new diagnostic company.
Look for both telehealth firm Amwell and drug-savings company GoodRx to both debut on the public markets in the coming weeks.
- Amwell is seeking to raise $560 million in its IPO;
- Meanwhile, GoodRx is trying to raise $969 million in its own IPO. If you want a fantastic deep dive read into GoodRx’s operations, head down to the Healthy Muse top picks.
Other soon-to-be public companies: GRAIL, an interesting little diagnostic company focused on detecting early-stage cancer, just filed its S-1.
Insurers <3 Obamacare markets in 2021
Insurers are looking to enter more ACA exchanges after Medicaid enrollment has grown quite a bit amid the pandemic as individuals lose employer insurance.
- Medicaid specialist Centene is expected to enter 400 ACA counties nationwide
- Cigna also announced its expansion plans this week. The insurance giant will enter 80 new counties in 2021 – 50% growth in customer reach over 2020.
- Anthem BCBS and Ascension are planning to bring a new ACA plan to six counties in the Milwaukee area in 2021.
Hospital CEO shake-ups
Two large hospital operators will see new CEOs in the coming months.
- Universal Health Services CEO Alan Miller will step down in 2021 after four decades (!!!) in the position.
- Quorum’s CEO departed after just two months. Can you guess which system is faring better?
Coronavirus updates.
- Leading to significant outrage from scientists and physicians, HHS officials apparently tried to water down CDC report language related to Covid-19 in the controversy of the week.
- Fauci wants the US to ‘hunker down‘ for the fall and winter seasons. While overall US cases are trending down, we’re approaching a delicate time of year.
- AstraZeneca paused its COVID-19 vaccine trial this week after a patient developed spinal inflammation – a pretty serious condition. After an independent study determined that the condition wasn’t caused by the vaccine, the trial will resume this week. You should know that pausing a vaccine trial for safety review is not uncommon.
- Meanwhile, Pfizer is preparing for its own vaccine approval by the end of 2020. CEO Albert Bourla said in an interview Sunday that their studies and conclusions would most likely be known by the end of October, leaving everything up to regulatory approval from that point.
Quick Hits
Biz Hits
- While titans like CVS and Walmart are building out their own healthcare presence, Walgreens is outsourcing it to firms like VillageMD. Read more about the strategy here.
- Insurer Magellan Health and Livongo announced a partnership that will make Livongo’s behavioral health segment available to Magellan’s customer base.
- Something to watch in the post-acute segment: skilled nursing facilities may be poorly equipped to handle infection control, which will cause a drop in patient census at these sites. Who stands to gain from that? Home health businesses and inpatient rehabilitation facilities.
- Keep an eye on Truepill. The startup raised $75 million to expand into at-home lab testing.
- Gilead Sciences is planning to acquire Immunomedics at a valuation of $21 billion.
Policy Hits
- Anotha one: Trump signed another drug pricing executive order this week aimed at lowering prices by forcing pharmaceutical companies to sell their drugs to Medicare at the same prices as other developed nations.
- 340B Program scuffle: As drugmakers drop out of the 340B program (maybe illegally), hospitals are asking HHS to intervene on their behalf. In fact, more than 1,000 hospitals are disputing drugmakers like AstraZeneca’s and Eli Lilly’s recent moves in all but abandoning the program
- Fraud: Wheeling Hospital in West Virginia was caught riding dirty by overpaying physicians for downstream referrals – classic.
- Risk Adjustment Baloney? A recent Office of the Inspector General report found that CMS shelled out about $2.6 billion in Medicare Advantage risk adjustment payments despite not having much data on the underlying claims.
Other Hits
- Trend watch: Read this McKinsey report about the six trends to watch in health care post-COVID: reform, next-gen managed care, health for all, integrated care delivery, and more.
- Costs: Employers are struggling to come up with accurate calculations for 2021 medical cost trends due to the pandemic.
- Conflicts: A study published this week suggests that drug & device company payments to teaching hospitals may create a conflict of interest.
- Review: Operation Warp Speed promised to do the impossible. How far has it come?
Thought-Provoking Editorials
- How the FDA should protect its integrity from politics. (Nature)
- Why I’m short telemedicine. (Medium) – note: not me personally lol
- Health data after COVID-19: more laws, less privacy. (WSJ paywall)
- 340B: the federal program that keeps insulin prices high. (WSJ paywall)
Healthy Muse Top Picks
- Read this deep dive on GoodRx: how they make money, what PBMs are, and how GoodRx fits into the drug supply chain maze. (Case Load) – side note – feel free to subscribe to Case Load as well. It’s top-tier content.
- BCBS published a telling report on the physical and mental toll that the pandemic is placing on caregivers.
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