The Healthy Muse (hospitalogy)

healthy muse healthcare news.

Hello and welcome back to another edition of the Healthy Muse! Happy February 2021 – the first month in 200 years to give us a perfectly rectangular calendar month.

• This week in healthcare: Three more SPACs on the horizon – Ro, Sharecare, and 23andMe. CovidTrackingProject shuts down, COVID variants are ramping up. JnJ’s single-dose vaccine is 66% effective but that’s good enough. FDA approves the first at-home over the counter COVID test. Drug costs increased a LOT in January. Biden issues more executive orders expanding access to Obamacare and women’s reproductive health. Finally, several of my favorite newsletters published great content this week.

The SPAC Takeover Continues: Ro, Sharecare, and 23andMe next up

Ro: Not to be outdone by its little brother Hims & Hers, the telehealth and online pharmacy firm Ro is in talks to go public via SPAC. The merger is expected to value Ro at around $4 billion.

• I would expect Ro to trade at similar valuation multiples to Hims & Hers, which has been on a tear since debuting on the public markets just a week ago. As of this writing, Hims is trading at about 28x revenue, so some significant growth seems to be priced in for Q4 earnings and/or 2021 outlook. (Link)

Sharecare: Will also go public via SPAC after also merging with doc.ai. Founded by WebMD’s founder, Sharecare is an online health & wellness platform that provides its customers with personalized programs and resources to help improve their health. The combined firm is expected to go public at about a $4 billion valuation. Seems like the lucky number these days. (Link)

23andMe: Also plans to go public via SPAC. You’re probably more familiar with this company – it provides personalized DNA testing to individuals and is also trying to leverage that genetic data with biotech firms, launching studies to see what insights can be gleaned from DNA data and drug development.

• 23andMe’s primary competitor, Ancestry, was valued at $4.7 billion as recently as December. Still, both of these businesses seem a bit risky to me given that the consumer DNA testing craze appears to be dying down while there’s no guarantee that any of these biotech data partnerships pan out. (Link)

Coronavirus updates: New COVID Variants.

Special shout out to the Covid Tracking Project, which took on the task of reporting key coronavirus metrics over the past year. Today, the team announced that the organization will be ending its data collection work on March 7th. (Link)

Cases: While numbers and hospitalizations are on the decline (Link), new variants are threatening to prolong the pandemic. The good news is that vaccines are still largely effective against the identified variants. Vaccinations per day are sitting at a run rate of between 1m – 1.5 million while 16 states have used less than half of their distributed doses. (Link)

• So far in 2021, Covid is the number one cause of death. (Link)

JnJ’s vaccine – Not quite a home run, but they still hit a triple: The pharma giant released results from its single-dose shot this week. While 66% effective, the vaccine still protected against serious infections and succeeded in preventing hospitalizations. (Link)

• The bigger picture: Take a step back. We now have three highly effective vaccines, all developed in about a year. All three prevent serious illness and hospitalizations, which is fantastic news. This table from Twitter helps break down the three vaccines’ effectiveness further. (Link)
• Novavax’s vaccine candidate released data this week as well. While the vaccine prevented Covid in studies, it turns out the vaccine is less effective against new variants emerging globally. (Link)

About those variants… There are five main variants that experts are tracking, each with their own nuances and mutation. Since I’m not an expert, here’s an article that informed me on the differences between each variant. (Link)

• B.1.1.7: This variant is expected to become the dominant strain within the U.S. soon. It’s the one from the U.K. you’ve heard so much about and spreads up to 50% faster. (Link) Importantly, vaccines are effective against this variant.

Testing: This week, the FDA authorized the first over-the-counter antigen test for use at home. It’ll grab samples via a nasal swab. The test is 96% accurate and guides users through the process via smartphone app. (Link)

Time for some drama:

Fraud: Some pretty scathing coronavirus-related stuff was published over the past week. Our first article from NPR details a non-profit led by a 22-year old tech wannabe who decided to bait-and-switch the entirety of Philadelphia. (Link)

Leadership Lessons from the Covid-19 Pandemic: Second up – in New York, Andrew Cuomo’s health department seems to be in shambles as 9 health officials have quit the department. Cuomo has publicly stated that he doesn’t trust the experts on vaccine rollout and wants to lean on his own expertise. Sounds…familiar (Link – NY Times)

• Context: The news comes as officials say that nursing home deaths in New York may have been understated as high as 50%. (Link). Maybe Cuomo should consider donating some of his book’s proceeds to coronavirus efforts.

Questionable: In a period of time where money means next to nothing and appears to be falling from the sky, Stat News reported that last fall, Trump officials actively tried to prevent states from receiving funding for vaccine distribution.

• The move seems a bit odd considering that the administration was quite successful in its Operation Warp Speed effort to get those vaccines developed and approved. In addition, the lack of funding may have caused states to be underprepared for the current rollout. (Link)

Quick Hits

Biz Hits

• Oscar Health: Is providing its tech platform to an insurance plan in Florida. With this move, Oscar might be pivoting somewhat to more of a ‘platform’ play here – AKA, more akin to a software as a service rather than a pure healthcare play. Interesting venture to watch. (Link)
• Drug Costs: The latest 46Brooklyn research report found that drug-makers broke the record for most January drug list price increases in the last decade. (Link)
• Imaging: Read this informative article about the diagnostic imaging industry from Triple Tree highlighting key trends in the space (consolidation, reimbursement, outpatient growth), notable transactions, and future outlook post-COVID. (Link)
• Elective Losses: According to a recently published study, hospitals lost a collective $20 billion by pausing elective procedures during the 3-month shutdown in 2020. (Link)
• Behavioral Boom: Read about mental health startup Lyra Health’s surge to becoming a $2.3 billion company amid crazy growth in the behavioral health sector. SPAC incoming? (Link)
• Anthem: Similar to United and other payors, Anthem Blue Cross’ profits fell during Q4 as medical costs increased. (Link)
• Home Health: Read about the latest trends in home health, including what to expect in a post-pandemic world, and specifically what in-home services will flourish in the current environment. (Link)

Policy Hits

President Biden continued his healthcare executive action streak this week with a few notable orders:

• Reopening the open enrollment period for Healthcare.gov so that people who lost their jobs can sign up for Obamacare. Individuals can now sign up starting in mid-February and lasting thru mid-May. There are an estimated 15 million people lacking insurance right now. (Link)
• Expanding women’s health access and rescinding the global gag rule regarding abortion funding.
• Examining other policies to determine whether they limit Americans’ access to healthcare (AKA, Medicaid work requirements, short-term insurance plans, etc.)

Based on these orders, be prepared to gear up for some legal challenges from states like Georgia – which just privatized its ACA exchange; Tennessee – which just received approval for a block grant structure for its Medicaid program; and other states attempting to implement Medicaid work requirements.

Delayed: PBMs won big-time after the Biden administration announced its intention to delay the elimination of safe harbors for drug rebates by one year. The rule will not go into effect until January 2023 at the earliest. (Link)

Other Hits

• Physician Burnout: Read about how the pandemic and misinformation is only exacerbating physician burnout. (Link)
• Birth: Surrogacy reform is spreading in the rich world. (Link)
• Medicare Advantage: Enrollment in the privately run Medicare plans is skyrocketing. Learn more about the trend from the Kaiser Family Foundation. (Link)

Thought-Provoking Editorials

• ‘Rona: New coronavirus variants call for intensified surveillance, control, and vaccination efforts. (Stat News)
• M&A: Why the Livongo founders’ SPAC will acquire Color. (Exits and Outcomes)

Healthy Muse Top Picks

Caseload: Read this informative post from Steve Hardgrove’s Caseload, which breaks down Accolade’s business model and describes how the firm can create value by enabling employers to make informed decisions on health plans.

• The analysis also dives into Accolade’s decision to buy 2nd.Md and how Accolade is developing a platform for employers, including opportunities and potential pitfalls. (Link – 11 minute read)

Out-of-Pocket: Read Nikhil Krishnan’s latest on the value of patient communities and how they should evolve to better suit those they serve given the evolving social media world. (Link – 11 minute read)

Acute Condition: Olivia Webb dove into the world of specialty pharmacy – how the system works and why innovation is frozen. (Link – 7 minute read)

Fierce: How the NFL tackled COVID-19 spread among its players and staff. (Link)

Thanks for reading.

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