healthy muse healthcare news.
- This week in healthcare: Humana buys the rest of Kindred at Home, the home care land grab continues with lots of deals in the space, price transparency gets canceled, getting closer to a vaccination tipping point, Q1 earnings season rolls on, HCA sells four hospitals, insurers benefit from ACA special enrollment, Biden’s trillions, and more.
The Home Health Land Grab.
After its transaction alongside private equity giants TPG and WCAS in 2017 to take post-acute operator Kindred Healthcare private, Humana is exercising its option to purchase the remainder of Kindred at Home in a $5.7 billion deal. This transaction price values Kindred’s home health and hospice assets at a separate $8.1 billion enterprise value. (Link)
- In a parallel vein, TPG and WCAS are also trying to exit the facilities segment of their Kindred investment as well. (Link)
Why you should care: Especially after Covid and the accelerated push toward home-based care, home health and hospice are a hot transaction market as major healthcare players pivot their strategies toward the home. We’ve seen quite a few acquisitions by a consortium of operators:
- Encompass purchased Frontier Home Health and Hospice, which operates in 5 states mostly in the Northwest U.S. (Link)
- Home care operator Aveanna Healthcare debuted on the public markets in late April. The firm raised about $460 million and now trades under the ticker ‘AVAH.’ (Link)
- Optum purchased Landmark Health for $3.5 billion. (Link)
- HCA also recently bought Brookdale’s home health and hospice assets for $400 million. (Link)
As you can see, the space is only seeing an increase in activity. I have to wonder if this entices Encompass to field more offers for its home health and hospice segment, as the firm is in the process of exploring strategic options for those assets. According to their management, we’ll have an update on their decision after the firm’s Q2 earnings release. My vote is on a spinoff! (Link to transcript)
Coronavirus updates.
Cases: Are dropping and have been dropping over the past few weeks. The U.S. seven day average is 49k – down from last week’s report of 58k – as of this writing. (Link).
Vaccines: are trending at 2.3 million per day, down from last week’s 7-day average of 2.7 million. (Link). Fully vaccinated = 32% of Americans. At least one dose administered = 44% of Americans.
- 100 million people are now fully vaccinated against ‘Rona. (Link)
- Up to 5 million people have skipped their second shot, with side effects ranking as a top reason. (Link)
- Johnson & Johnson’s vaccine has been given the all-clear after a safety review and updated guidance. (Link)
Quick Hits
Biz Hits
Q1 earnings season continues:
- Hospitals: Here’s a good overview of the publicly traded hospital operators and their performance in Q1. (Link)
- In general, health systems
- Insurers: The Biden Admin’s decision to re-open ACA sign-ups really benefited health insurers in Q1. (Link)
- Centene: Although its stock sold off a bit, Centene added 1.3 million members in Q1. (Link)
- Molina: Added 1.2 million members in the quarter – noticing the trend? (Link)
- Anthem: Noted a 20% jump in Medicaid plan participants (you get it now) (Link)
- Teladoc: The bears are rushing in on Teladoc after five straight quarters of financial results below expectations and guidance came in softer than desired. Unfortunately, the Livongo integration is taking longer than expected, but Teladoc doesn’t seem to be worried about looming competition. Interestingly, Teladoc is expecting another muted flu season and didn’t include any forecasted utilization numbers related to the flu. (Link)
Amwell: Rolled out a new tech platform that integrates with digital health tools this week. (Link)
Amedisys: Is piloting a SNF-at-Home program, asserting that 20-25% of SNF volumes could potentially go into the home. (Link)
M&A: Learn more about the newly formed health system Virginia Mason Franciscan Health up in the Pacific Northwest – how the two systems integrated, the first 100 days, deciding on a dual-CEO model, and more. (Link)
Mental Health: A few articles related to mental health:
- This was a solid overview of how mental health works from a business perspective – how investment in the space was neglected, drivers causing mental health to come to the forefront, and catching up after years of neglect. Note – perhaps a touch more opinion-based (Link)
- In a similar vein, CVS is planning to expand into providing mental healthcare in its stores. What CAN’T HealthHUBs do?? (Link)
M&A: This was a solid high level overview of transaction trends for hospitals, payors, and healthcare staffing deals. (Link)
M&A: HCA is selling four hospitals in Georgia for just south of $1 billion to Piedmont Healthcare. (Link)
Policy Hits
Policy Proposal: Biden’s $4 trillion proposals have a bit of everything in them. While the plans largely steer clear of healthcare proposals (Dems are apparently planning to tackle healthcare in a separate package), the proposals WOULD make permanent the increased ACA subsidies introduced in the stimulus package and also includes some child care measures.
- Total proposed healthcare spending is $600 billion – and this isn’t even a healthcare package. (Link)
Medicare: Here’s a handy analysis of what would happen to healthcare spending if 60-64 year olds were eligible for Medicare. The proposal is highly contentious among providers as the likely outcome would lower reimbursement. (Link)
100 Days: This article from the Keckley Report gave a solid summary of Biden’s first 100 days related to healthcare, and what to expect in the near future. (Link)
Colorado: is a state to watch – a year ago, the state drafted legislation to create its own public option plan. That plan has now evolved into requiring health insurers to provide plans that are closely regulated by the state. More in the article about this interesting development. Public options at the state level were increasing in popularity prior to ‘Rona. (Link)
CMS: The latest proposed IPPS (inpatient payments for hospital care) rule would result in a 2.8% payment increase ($2.5 billion). MORE interestingly – the Biden-led CMS is walking back a Trump-era requirement to force hospitals and commercial payors to disclose certain reimbursement rates closely held between the two.
- This is a major win for the healthcare industry and leaves me a bit perplexed, especially with other enacted policies – interoperability, procedures posted online, etc. Maybe CMS has something bigger in store for future reform. (Link)
Other Hits
Cigs: The U.S. wants to ban menthol flavor in cigarettes and cigars. (Link)
Venture: CVS is launching a $100 million investment fund to throw money at digital health like everyone else. As the article notes, anything CVS seriously pursues could scale very quickly, given the size of the business these days along with its retail footprint. (Link)
Thought-Provoking Editorials
Digital Health: A somewhat contrarian article from MedCity about how digital health seems to be focused on clinical and business outcomes and perspectives while receiving “little input from patients.” Healthcare tech is failing patients. (Link)
Lots of hot takes about telehealth lately – Telemedicine is a tool. Not a replacement for your doctor’s touch. (Link)
Healthy Muse Top Picks
GoodRx: This profile of GoodRx from Fortune was interesting, especially because while GoodRx helps patients navigate an extremely difficult drug industry, the firm technically shouldn’t need to exist. (Link)
Sewage: Here’s an interesting long-form read about sewage in the U.S., and using the system to improve our healthcare system and public health infrastructure. (Link)
The Flu: An interesting read on the potential return of the flu, with experts weighing in on what kind of flu season we might expect – if any. (Link)
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