Luckily my hands have thawed out enough after experiencing that disastrous Texas weather, so you’re once again about to read the best healthcare newsletter around. Time for some lit healthcare stories.
- Last week’s edition covered big health systems’ venture into big data, a host of health-tech SPACs entering the public markets, interesting post-acute trends, and more. (Link)
healthy muse healthcare news.
- Walmart shifts its health clinic strategy into tortoise mode, ATI Physical Therapy goes public via $2.5 billion SPAC, coronavirus cases are plummeting, Community Health Systems is profitable, utilization trends in hospitals, and new drug pricing policies and a public option included in Congress’ budget?
Walmart scales down Health clinic goals.
After an initial enthusiastic and promising pilot and lofty goals for its health clinics rollout, Walmart might be slowing down the healthcare venture amidst shifting strategy.
A new article this week from Business Insider shed light on the operational speed bump. (Paywall)
- The initial rollout of the pilot health clinics was met with huge success. More than double the number of expected people visited the new clinics. Some drove more than 90 minutes away for an appointment as the ease of transparent, cash-pay drew in rural crowds. It seemed like a win-win – according to the article, the clinics were at a path to profitability within two years while boosting overall sales at the store itself.
Delays: Although the clinics were met with early success, a new CEO – along with the pandemic – slowed down the operation. From the article, it seems as if the new CEO wanted to pursue a new strategy: playing the long game by forging relationships with insurers, and slowing the rollout of new clinics as the firm worked to refine its care management strategy.
According to the article, Walmart was losing track of its ability to schedule people with their preferred doctors and keep up with communication because of the visit volume influx.
- Thoughts: I can’t say I’m not disappointed with this news. I can understand the delay from a logistical perspective (e.g., scheduling, prescription communication, etc.), but the fact that so many people were willing to travel large distances to visit your clinics indicates that you’re uniquely positioned to provide care in a transparent, cash-pay fashion while also boosting store sales.
- This quote from the article wraps up Walmart’s short-term sales-boosting strategy quite well: “One former employee who attended budget meetings said money to build new clinics dried up in favor of things like cooking devices that more directly boosted in-store sales.”
Side note: If you’re not subscribed to Insider, they post pretty great healthcare articles. Definitely check them out if you’re interested in content like this (and no, this is not a sponsored segment).
ATI Physical Therapy going public via SPAC in a $2.5 billion deal.
Next SPAC up: In this week’s big news, Fortress Value Acquisition Corp. II (don’t you LOVE these SPAC names?) is taking national physical therapy operator ATI Physical Therapy public in a deal valued at $2.5 billion. (Link)
It’s one of the first healthcare services-related SPAC I’ve seen. AKA, there’s no fancy tech involved and I’m actually fairly confident in what the biz does.
- Details: ATI PT operates 900 clinics across 25 states. Interestingly, its private equity backer Advent International is rolling over a significant portion of its equity stake into the public entity. Oh, and the valuation? ATI is going public at an adjusted EBITDA multiple of 14.0x…based on its EBITDA estimate for 2022. Physical therapy is a red hot space for acquisitions and heavily played by the private equity industry. It’s possible we see more public exits in the space.
Coronavirus updates.
Cases: Are plummeting. The U.S. seven day average is down to 64k as of this writing. (Link) The U.S. also surpassed 500,000 deaths as of this writing. (Link)
Vaccines: are trending at 1.4 million per day, slightly down from last week’s 7-day average of 1.7 million. (Link)
Good news emerged from Israel this week, as the Pfizer vaccine was proven to stop transmission by up to 90%. (Link) Based on efficacy of a single-dose shot, some researchers are calling for a second dose to be delayed until everyone receives their first dose. (Link)
Scam: The U.S. government seized over 10 million phony N95 masks this week as the result of an ongoing investigation. Fraud remains a major problem amidst the pandemic as hospitals are constantly seeking PPE for their workers. (Link)
Venture: A new firm backed by the Bill & Melinda Gates Foundation received over $300 million to fund ventures into public health, including vaccines and other important health initiatives. (Link)
Quick Hits
Biz Hits
Oscar Health: is planning to offer stock at a range between $32 and $34 per share at a valuation of about $7 billion. (Link)
- A couple more Oscar opinion reads, if interested: Diving into Oscar’s S-1. (Link). Perspectives on Oscar’s IPO filing. (Link)
CHS: Publicly traded hospital operator Community Health Systems reported a profit in Q4 after selling 18 hospitals this year. Comeback story? (Link) (Link to disclosures)
Utilization: Read this informative piece from KFF that highlights hospital admission trends and utilization over the past year or so. Bottom line – total hospital admits troughed at 69.2% of predicted admissions the week of April 4th before bouncing back to above 94% in December. The article also breaks out Covid and non-Covid admits. (Link)
CVS: Beat analyst estimates in Q4 and is diving back into the individual coverage market in 2022. Just like every other insurer on the planet. HealthHUB count is up to 650, on track for its 1,500 goal by the end of 2021. (Q4 Earnings)
More: Here’s a great article roundup summarizing all of the major payors’ Q4 earnings. (Link)
Watson: IBM is reportedly selling its Watson Health – a segment of IBM’s business focused on AI in healthcare. The segment generates over $1 billion in revenue yet is allegedly unprofitable. (Link) (Link to original WSJ paywall)
$$$: Overall health spending dropped in the U.S. in 2020, according to a preliminary analysis. It’s the first time spending has dropped since CMS began tracking the metric in 1960. (Link)
Care Management: Read about Humana’s new pilot, Humana Care Support. It’s an interesting chronic care management program that will offer a team of providers to its members to care for chronic illnesses. (Link)
Policy Hits
Big Budget Proposals: There are two major healthcare policies that Dems are trying to push through budget reconciliation (AKA, trying to avoid Senate filibustering):
- Drug pricing reform – allowing for the government to directly negotiate with drug companies to control prices. (Link)
- Public option – new insurance plan offered by government thru ACA exchanges that competes w/ commercial plans. (Link)
More resources: What exactly is a public option? (Link). Tell me more about drug pricing reform. and why it’s so difficult. (Link)
340B and Site Neutral Payments: The controversial drug program is still in court as the AHA and other hospital interest groups are asking the Supreme Court to throw out a lower court’s ruling that would lower Medicare drug payments by almost 30% at 340B-eligible hospitals. The hospital associations are also seeking to throw out HHS’ site neutral payment policy. (Link)
CMS Chief: Biden’s pick for CMS chief, Chiquita Brooks-LaSure would be the first ever Black woman to hold the post. (Link)
Transparency and Costs: Read the latest from Turquoise Health about the state of hospital price transparency. (Link) Along with this post, read this blog post from 1% steps about five ways to reduce hospital spending by addressing hospital market power. Not sure how feasible this one is. (Link)
Other Hits
Facebook: is building a health-focused smartwatch. I’m sure everyone is going to just magically forget about their data practices. (Link)
Nursing Schools: Are seeing an enrollment bump amidst the pandemic. (Link)
NYC: Report: New York Gov. Cuomo is under investigation over nursing home deaths. (Link)
Living: American life expectancy dropped by a FULL year in the first half of 2020. (Link)
Birth: Premature Babies and the Lonely Terror of a Pandemic NICU. (Link)
Thought-Provoking Editorials
SPACs: Read about the powers that be in the recent SPAC surge – and how it relates to healthcare. (Link)
‘Rona: Read Atul Gawande’s latest on the state of Coronavirus distribution and when normalcy might return. (Link)
Policy: Is the Democratic plan to temporarily expand health coverage worth it, or could the money be better spent? (Link)
Healthy Muse Top Picks
From the frontlines: Read about Clover Health’s CEO’s reaction to the recent short-selling controversy, something I covered a few weeks ago. It’s quite the entertaining read. Let me know if you can sense Mr. Garipalli’s frustration. (Link)
Corona Reads: A couple of powerful coronavirus related reads were published this week by ProPublic and NPR. The first article dives into physicians around the country who had to decide which patients could live or die due to limited resources and time. The second article documents a physician’s experience in the ER through words and photos. (Link)
Small-Town Hero: Read about Marilyn Bartlett, a CPA who has saved the state of Montana over $30 million by creating a reference pricing model for hospitals – and the problems with scaling such a program nationwide. (Link)
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