Happy March to the best newsletter subscribers around. This week’s edition is short and sweet, just like February was.
- If you missed last week’s edition, we covered Walmart’s shifting healthcare strategy, ATI Physical Therapy’s $2.5 billion SPAC, Community Health System’s profitable Q4, and more. (Link)
healthy muse healthcare news.
- This week in healthcare: Healthcare M&A heats up. United’s Optum reportedly acquires Landmark Health for $3.5 billion, Cigna snatches up telehealth provider MDLive for $1 billion, HCA makes a play for post-acute assets, coronavirus vaccinations skyrocket while cases level off, J&J vaccine gets approved, Teladoc’s disappointing Q4, new HHS head Becerra testifies, learning about value-based care, and more.
Big M&A announcements this week.
Lots of M&A in healthcare to headline the week and some interesting transactions in notable sectors to follow.
First up is the UnitedHealthcare and Optum reported acquisition of Landmark Health for $3.5 billion.
- Landmark is an in-home care provider that focuses on the sickest and most frail population of people. The firm works in 17 states and is involved in one of CMS’ new direct-contracting models. Seems like the firm is pretty scalable and with Optum backing it, we’ll probably see Landmark expand nationwide. (Link)
Next up: Cigna’s subsidiary Evernorth acquired telehealth provider MDLive for a reported $1 billion.
- The announcement is interesting as MDLive considered going public in early 2021. I’m thinking the firm left money on the table by being acquired but maybe not since the taste for telehealth is dying down a bit, especially after seeing Teladoc’s soft guidance numbers in its latest earnings report (more on that below). (Link)
Finally, hospital operator HCA is acquiring an 80% stake in Brookdale Senior Living’s home health and hospice firm.
- While HCA has traditionally focused on elective surgeries and expanded outpatient capabilities, the investment signals that HCA has plans to expand into post-acute and integrate care even further. (Link)
- Side note – Hospice is a hot, hot space right now as multiples are rising. Just last week, the Pennant Group (another publicly traded home health and hospice firm) boosted its credit facility to make way for more hospice acquisitions. (Link)
- Read more – why the HCA deal is a win-win transaction for Brookdale. (Link)
Coronavirus updates.
Cases: Have tapered off and are stabilized at around the 50k – 70k range per day. The U.S. seven day average is down to 67k – up from 64k last week – as of this writing. (Link)
Vaccines: are trending at 1.74 million per day, slightly up from last week’s 7-day average of 1.7 million. The U.S. set a vaccination record on Sunday, vaccinating 2.4 million people in one day. (Link). Vaccine hesitancy is shrinking, but it really depends on which poll you ask. (Link)
Scariants: As new variants pop up domestically and worldwide, be careful about what you read. The NY Times has a good tracker in place to provide readers with factual data on newly discovered variants. (Link)
Johnson & Johnson: The biotech and makes-everything-in-existence giant JnJ had its vaccine approved for emergency use by the FDA on the 26th of February. The development is notable – JnJ’s vaccine provides a third supply, is a single dose, is pretty effective against top variants, and can be stored in a normal fridge for a few months. (Link)
- JnJ will send 20 million doses by the end of March with the goal of vaccinating 1 billion folks by year end. Woof. (Link)
Quick Hits
Biz Hits
Consolidation: The FTC will no longer stand in the way of the previously announced Jefferson Health-Einstein Network deal, creating a new 18-hospital system in the greater Philly area. (Link)
Teladoc Earnings: Displayed impressive growth, but Teladongo sold off fiercely after providing softer than expected guidance for 2021. (Link)
- More: 4 takeaways from Teladoc’s earnings. (Link)
One Medical: Received some flak in the media this week for allegedly line-jumping family and friends for vaccines. In addition to the criticism, the firm sold off after its Q4 earnings report in response to a weak outlook. (Link)
Project Nightingale: Ascension and Google are expanding their initial pilot of Google’s EHR search tool. They’re probably being a bit more careful after the patient privacy disaster in 2019. (Link)
Urgent Care: What’s the outlook for urgent care headed into 2021? More consolidation, fewer mom-and-pop stores. Interesting trend to say the least as competition from HealthHUBs and others ramps up. (Link)
Policy Hits
Becerra Testifies: HHS nominee Xavier Becerra testified in front of the Senate this week. He made a wide range of comments signaling a desire for increased price transparency, more scrutiny on hospital consolidations, revamping the 340B program, and building upon Obamacare. (Link)
Regulatory: the OIG is planning to ramp up fraud oversight for home health. (Link)
- OIG will also look into anti-kickback problems currently plaguing telehealth and electronic health records. (Link)
Costs: A KFF analysis found that limiting commercial insurance payments to Medicare rates would lower total U.S. health spending by about $350 billion. In other obvious news, if my job were to pay me less money, I would make less money. (Link)
Other Hits
Technology: In today’s cool story, the RNA technology used for COVID could lead to a malaria vaccine. (Link)
Thought-Provoking Editorials
Read this informative newsletter from Acute Condition on hospital consolidation. (Link)
How did private equity investment in a small subset of nursing homes affect care for patients? (Link)
Healthy Muse Top Picks
Value-Based: Read this great breakdown of value-based care models from the Prescription. Worth a (sub)scription. (Link)
Disruptor: The healthcare revolution at-home. (Link)
Behavioral Health: The money behind mental health: How the pandemic increased innovation, investment in behavioral health care. (Link)
Policy: Read about Biden’s healthcare policies in the ‘new Washington.’ Deep dives from Axios on what to expect and what’s going on. (Link)
Rock Health: Read the latest from Rock Health on digital health – what’s working and how things are trending. (Link)
Report: Read McDermott, Will & Emery’s 2021 Health Report, which provides a spin on the legal ramifications of 2020 in healthcare. (Link)
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