Welcome back! Here’s a recap of what you missed last week in the healthcare world:
Providers scored a big win when a federal judge scrapped CMS’ Site-Neutral payment policy.
- The judge ruled that HHS doesn’t have the appropriate level of authority to enforce payment policy on hospitals. This ruling was reminiscent of the mandatory television drug ad price disclosure ruling that was also shot down in court earlier this year on a similar principle.
Nancy Pelosi released her plan to bring down drug prices (paywall – WSJ) – namely, the costliest 25 or so drugs would be subject to direct pricing negotiations with the federal government.
- These negotiations would be tied to an international pricing index, and drug-makers would be penalized for not participating. (If you’re so inclined, here’s the bill in its glorious entirety).
The Pharmacy Benefit Management industry continues to get challenged by new players and potential disruptions. The latest contender, Capsule (similar to PillPack), just raised $200 million to take on industry titans like PillPack, CVS, and others.
Walmart Health continues its surge forward. The retail giant just partnered with Amedisys, one of the largest (and still growing) home health and hospice players, to expand access to home health across the nation.
- Sam’s Club is also joining the party by offering a pilot program to its members to offer discounts on certain routine care items (shout out to the Groupon story from a few weeks ago).
Not to be outdone by the old guard Walmart, Google Health just completed its somewhat controversial acquisition of AI-focused DeepMind, which is expected to further enhance its efforts to push into healthcare – including data security, cloud storage, and other important characteristics.
Humana’s CEO David Jones passed away this week. The WSJ highlights his life and Humana’s origins in a memoir.
Washington Medicine, MultiCare, and LifePoint Health just created a huge clinically integrated network covering 14 hospitals, 6,500 providers, and 600 outpatient sites of care in the Pacific Northwest.
Onto this week’s healthcare stories.
Amazon Pilots Primary Care Program for Employees
Another day, another pilot program healthcare launch.
This week, Amazon launched Amazon Care for its employees. Basically, Amazon is trying to cut down on healthcare costs (like everyone else), so the company is offering a slew of primary care options – including virtual care and in-home nurse visits. The initiative is piloting in the Seattle area for Amazon’s employees. Don’t tell Whole Foods workers about it, though.
In other Amazon news…more health wearables tech.
Amazon wants to take on the ‘ole AirPods. This week, the e-commerce giant unveiled its wireless Alexa earbuds containing fitness tracking, among other planned gadgets recently announced.
Employer-Sponsored health insurance premiums top $20K for the first time
A new car a year…or health insurance?
A recent Kaiser survey showed that employer-sponsored health insurance premiums rose to an average of $20,576 for family coverage. It’s a bit alarming – the annual premium growth rate has been above both inflation and wage growth for quite a while.
Employees are increasingly paying a higher out-of-pocket share for healthcare costs. We all know how hard it is to spot a bubble but…are we in a bubble?
As we get closer to any potential breaking point (hopefully none), you’re going to start seeing employers take more extreme measures to lower their costs.
Such cost-cutting measures could include direct contracting with primary care physicians or self-funding insurance plans with insurance coverage for “extreme” emergency spending. Others might opt to cut their labor force.
Employers with larger, concentrated labor market share in local markets will have better leverage to push providers and payors alike for increased transparency and more favorable contracts.
23andMe’s predictable push into drug development
23andMe is moving quickly into the field of drug development, and its first push is a predictable and seemingly natural step for the company – clinical trial recruitment.
23andEveryoneElse.
- Based on all of the information us common folk paid to hand right on over to the DNA testing company, 23andMe is partnering with TrialSpark, a more tech-savvy version of a contract research organization, to recommend customers for clinical trials based on those customers’ DNA, demographic or other characteristics.
These DNA testing firms are now sitting on a ton of probably-valuable genetic testing data, and they’re not going to sit idly with that (potentially sensitive) information.
The more specialized data matching processes might actually be really helpful to drug makers and research teams as they work on developing drugs for tricky diseases.
Remote Access.
Here’s the revolutionary part. As Stat notes in its story, 23andMe and TrialSpark might actually solve what has traditionally been a huge barrier for clinical trials – geography.
- Instead of needing all of the patients for a trial in one location, the partnership is trying to digitize clinical trials. That might mean that patients could walk into their local doctor’s office to report data rather than flying to another facility.
Air Ambulance operator Air Methods is planning to cut insurance out and contract directly with employers
Fed up.
After its inability to reach contracted agreements with large payors like Cigna, United, and Aetna, Air Methods – an air ambulance operator (think helicopter care flights) – is cutting the insurance middleman out by attempting to contract directly with employers.
- Helicopter care flights are prohibitively expensive as-is, and even more so if that patient is out of network. By contracting directly with employers like Walmart and Tyson Foods, Air Methods might start the trend of cutting out payors and working directly with employers
Policy Corner, week of September 30 2019
Since you guys are probably getting enough of the whole impeachment thing in the 5-second revolving door news cycle, let’s take a breath of fresh air into the world of healthcare policy:
- Mitch McConnell is not a fan of Pelosi’s drug pricing proposal. He’s already planning to block the measure, citing socialist pricing controls. Pelosi’s plan might have missed the mark on other drug pricing inputs, anyway.
- Here’s the latest on surprise billing legislation, too.
Quick Hits
Biz Hits
- Peloton set its IPO price at $29…and it’s now trading at ~$22.50
- Anthem takes advantage of the Centene-WellCare deal and purchases the divested assets from the merger.
- Heal, a medical house calls startup, acquires Doctors on Call
- Trinity Health may issue $1.7 billion in debt – about 22% of the system’s total long term debt of $6.3 billion, per Modern Healthcare. Notably, around $1.4 billion of the debt is expected to be taxable bonds.
- Uber And Lyft Ride-Sharing Services are growing a footprint in Medicaid. About 15% of rides in Arizona’s Medicaid program were from one of the two.
- OxyContin’s solution to paying for the opioid crisis? Sell more opioids.
State Hits
- In Louisiana, Ochsner and Lafayette General just announced plans to combine into a 33-hospital system in a pretty interesting deal. Along with the merger, the combination is pledging to invest $365 million in community investments/resources in the parishes they serve, including the expansion of key services. Finally, the combined system isn’t planning to make any cuts to labor – in fact, they’re planning to raise minimum pay.
Other Hits
- What’s causing hospital consolidation?
- What a Johns Hopkins surgeon learned from researching US hospital billing practices
- Obesity just exceeded 35% in a record 9 U.S. states.
A couple of notable stories on AI in healthcare this week:
- Intel’s David Ryan on the past and future of AI in healthcare
- There’s a reason we don’t know much about AI
My favorite reads this week
A Brutal Murder, a Wearable Witness, and an Unlikely Suspect