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In case you missed ANY healthcare story from the second quarter, don't worry - we've got you covered.

Welcome to the Q2 2019 installment of the Healthy Muse’s quarterly healthcare news update, where every single healthcare story known to man is summarized in one gigantic post.

Of course, the stories below were covered first in-depth on our newsletter over the course of the quarter. If you’re interested in following healthcare news in a weekly 5-minute easy read, then feel free to sign up!



4.1.2019 Healthcare Stories

1. New York Suburb Bans Unvaccinated Children from the Public

That seems drastic.

This week, Rockland County, a suburb of New York, declared a state of emergency based on the rampant measles outbreak facing their county’s population. The first step? Banning all unvaccinated children and teenagers from public places. This type of action is pretty unprecedented, but so is getting the measles. Although the measles vaccine is about 97% effective, only 72% of the Rockland adolescent population is vaccinated against the highly contagious disease. The ban comes at a time when measles cases through the first 3 months of the year have already outpaced last year’s total reported cases altogether.

2. PBMs going to testify before Congress Wednesday

This week’s hottest TV.

Tune in to the Senate finance committee hearing this Wednesday to see some absolutely heart-pounding, riveting, must-see TV. Last month in our March 4th edition, we covered lawmakers inviting drugmakers to Capitol Hill to ask why drug costs were so high. Those companies placed 100% of the blame onto pharmacy benefit managers (PBMs), who are basically the middlemen between the makers and the patients. Now, the Senate wants to ask PBMs some questions about their drug rebate practices and whether they’re ACTUALLY saving patients money on drugs. Companies like CVS, UnitedHealth, and Cigna are preparing to get grilled come Wednesday, especially as Congress prepares potential legislation around abolishing drug rebate practices for good (paywall).

3. Trump goes for the jugular on Obamacare

Fuel to the political fire.

As if declaring the Affordable Care Act unconstitutional weren’t enough, the Trump administration has now declared its intent to completely repeal and replace the ACA.

Remind me – what’s going on right now?

In 2018, the tax bill repealed the ACA’s individual mandate, meaning that people who opted not to have health insurance would not longer be penalized for doing so. After this happened, several states took the ACA to court in Texas late in December of last year. In that hearing, a judge ruled against the ACA, declaring the entire bill unconsitutional now that the individual mandate wasn’t a thing. Of course, the ruling was appealed and is still tied up in court.

Supreme Court Inbound.

With heated debates surrounding healthcare on both sides of the aisle, it seems as if a Supreme Court showdown is almost inevitable. Trump thinks he’s in good standing considering the currently conservative lean of the bench. But that raises the question – if the lawsuit against the ACA is successful, what comes next for healthcare? Because it doesn’t look like there’s any proposed system to take the ACA’s place. The debate around healthcare will only intensify as the administration turns up the heat and 2020 approaches.

4. Centene buys WellCare in $17 billion deal

A Medicaid Giant.

Centene secured plans this week to purchase its main competitor, WellCare, in a $17.3 billion deal (a 32% premium to their share price). The merger comes at a time when mega-sized healthcare firms are joining forces pretty frequently (think CVS / Aetna, Cigna / Express Scripts, and a whole host of others). What’s different about these firms, though, is that they’ve made their killing mainly by managing Medicaid programs for states. Their businesses really took off under the Affordable Care Act, which allowed for expansion of Medicaid, and thus, the expansion of Centene’s and WellCare’s businesses.

Not so fast.

Because this transaction is a huge ‘horizontal’ merger in a highly regulated area, this deal is highly likely to raise antitrust concerns. Also, as we just covered above, any existential threat to the ACA would probably REALLY hamstring any further growth available to the new company. If the deal does go through, look for these companies to leverage their size and aggressively target the Medicare Advantage market. Like we talked about in our February 11th 3rd story, Medicare Advantage is growing like a weed.

5. UPS Enters the Home Care Market

Robots and Drones.

As a part of UPS’ push into autonomous technology, the parcel giant is partnering with the drone company Matternet to deliver lab samples in North Carolina. The pilot program is part of a larger push from UPS into diversifying its revenue streams and changing home delivery as a whole. The approach is pretty innovative. If successful, the program could help seniors receive better and quicker care, all while pushing the lab industry toward an on-demand future (sound familiar, Theranos?).

6. Quick Hits

Keep on the look out for Johnson & Johnson’s new drug ad, which will disclose the cost of a drug for the first time on TV. Following last week’s story on the FDA’s secret medical device database, watchdog groups are now calling on the FDA to make all device data public. The FDA’s also looking into the safety of breast implants. And Thermo Fisher just bought Brammer Bio, a gene therapy specialist, for $1.7 billion.

Purdue Pharma reached its first settlement in the expansive opioid case coughing up $270 million in Oklahoma. Pediatricians now want soda taxes. Could artificial intelligence actually be bad for healthcare? And apparently Medicare made $23 billion in payment errors in 2017.



4.8.2019 Stories

7. Amazon’s Alexa is…HIPAA Compliant?

“Alexa, find me a doctor.”

Amazon (aka relentless.com) announced in a blog post this week that its personal assistant, our girl Alexa, is now HIPAA compliant. This means that the smart assistant can now securely access your personal health data on whatever Alexa enabled device you’re using. As a part of the initiative, several high-profile healthcare companies, including Cigna, Express Scripts, Boston Children’s Hospital, and Livongo developed and published ‘Skills’ for the Alexa app for use immediately following Amazon’s announcement. The skills involve allowing patients to check the status of prescription deliveries, receive information on post-op appointments, schedule primary care appointments, and much more.

8. Generic Drugs Expansion

CREATING Drug Competition.

One of the main ways that Congress is looking to combat rising drug costs involves increasing the supply of generic drugs. A lot of highly specialized drugs don’t have generic alternatives, which keeps those drug prices high. This week, the House approved the CREATES Act (now you see what I did with that sub-heading), which makes things a lot easier for generic drug makers to get drug-making approval. The bill has bi-partisan support and may have enough legs to get through legislation, especially since the Trump admin is all about lowering drug costs. The CREATES Act is expected to save about $4 billion over 10 years. Medicare spent about $100 billion on drugs as recently as 2017 – but still, the bill is a start.

9. Express Scripts Reduces the Price of Insulin

Good timing.

Ahead of the pharmacy benefit managers’ hot-seat meeting with Congress this week (yes, last week I told you guys the hearing was on the 4th, but it was re-scheduled to the 9th. I blame bureaucracy), Express Scripts, one of the said PBM companies testifying, conspicuously announced a new plan called the Patient Assurance Program. The new program aims to limit out-of-pocket costs for insulin to $25 per a 30-day prescription. This news is pretty uplifting for diabetes patients, who typically deal with ever-rising insulin costs and shortages of the popular drug. There are caveats, though: the new program will only be accessible to patients who participate in non-government funded plans (i.e., not Medicare or Medicaid), and plans that are managed by the newly combined Express Scripts and Cigna. Currently, the average out of pocket cost for insulin under these plans is about $41.50.

“What were they waiting for?”

That’s what Senator Chuck Grassley pondered wonderously. Via Axios, he had some choice words for the move: “Why couldn’t this have been done years ago? It shouldn’t take bad press and congressional scrutiny to get health plans, their pharmacy benefit managers and pharmaceutical companies to arrive at a fair price for a drug that’s been on the market for nearly a century.”

10. The Stem Cell Industry is out of Control

The modern day snake oil salesmen.

Stem cell therapy clinics have been popping up over the past few years, and the FDA is playing whack-a-mole to shut down the sketchy treatment sites. The shady clinics falsely market their ‘innovative’ stem cell therapies, even going so far as to say that the untested, unproven therapies can cure a variety of diseases and ailments, including uncured ones like Alzheimer’s and multiple sclerosis. The FDA is having none of it, sending dozens of letters to companies in its first pass at reining in the dangerous practices. Quite a few people have gotten hurt from the stem cell clinics, including several who were left blind after someone made the medical decision to have their eyes injected.

I’m skeptical.

It’s a shame because these shady clinics are overshadowing the promising future of stem cell therapies. Actual research shows that stem cell treatments could result in major medical breakthroughs, but the lack of trust propagated by these bad actors in the meantime might set back the industry’s development, especially as some hospitals venture dangerously close to unproven stem cell treatments, too.

11. Surprise Billing Solution

Solution in the works.

Along with controlling drug prices, ‘surprise billing’ is one of the rare public policy problems that has both bipartisan support and active solutions working through Congress. If you need a refresher on what surprise billing is, you can go back and read the 5th story on the February 1st edition. Insurance companies (think United Health) and providers (i.e., physicians) have been spatting for months about who’s to blame when a patient receives an exorbitantly large bill after an emergency visit. This week, panelists met with Congress to work through potential solutions to the issue – one that states have been working on for a while now.

So…any progress?

Main takeaways and ideas from the testifying witnesses included removing the incentives in place for doctors to remain out of network with insurers, forcing arbitration between the insurer, patient, and provider to find a reasonable payment solution, pinning out of network payments to Medicare rates, and implementing a bundled payment for all services rendered (i.e., one payment given for all hospital and physician bills). Most witnesses honed in on limiting the out-of-network status of physicians administering care at hospitals, ESPECIALLY in an emergency setting where patients have little to no say in where they receive care.

12. Quick Hits

Direct-to-Consumer medicine is picking up speed (i.e., you need Viagra, a company sends you Viagra directly), but at what cost? Encompass Health shelled out $218 million for Alacare Home Health & Hospice, based out of Birmingham – that’s more than double the amount they told investors they’d be spending on M&A in the entirety of 2019. And Trump just gave back ground on his administration’s plan to repeal and replace the ACA…for now.

Maine’s Medicaid expansion plan was approved this week. Alaska might be the first state to apply for Medicaid block grants – meaning the state would get lump payments to manage its Medicaid program. Health Quest and Western Connecticut Health Network are merging to form a $2.4 billion conglomerate called Nuvance Health. And some drug companies are still completely ignoring drug pricing pressures (paywall), raising their drug prices by hundreds of percentages.

Walgreens got hammered (paywall) after announcing its second quarter results, with its profits squeezed by the push for more generic drugs (they make more money based on the higher cost of drugs). Wal-Mart finds huge savings by picking and choosing the doctors (paywall) that its employees go see. Digital health investments slowed down a bit in the first quarter of 2019, but there’s still plenty of fish in the sea. A few states are suing because they don’t like the Trump admin’s new school lunch rules changes (hint – they weakened school nutritional standards for the food they provide). And telehealth use is growing faster than urgent care center use.



4.15.2019 Stories

13. Uber and Lyft’s Plans for Healthcare

Enter…Uber and Lyft.

As Uber and Lyft enter the publicly traded markets, the ridesharing duopoly has plans to expand their platforms into diversified services. Surprise! That includes our favorite industry – healthcare. Recently, Uber unveiled Uber Health, which allows healthcare providers to arrange scheduled and on-demand rides for patients with and without smartphones. Not to be outdone, Lyft announced Lyft Concierge, which partnered with providers, payors, and health tech companies to likewise expand ridesharing services into healthcare. It seems as if Lyft is taking a more serious approach to healthcare, identifying the industry as a key driver of revenue growth, whereas Uber sees the opportunity as another potential revenue stream. Both are shoe-ins to be large players in the home care rides market.

14. PBMs take center stage, grilled by Congress

The drug blame game continues.

In the March 4th edition, lawmakers invited drugmakers (AKA Big Pharma) to Capitol Hill to ask why drug costs were so high. Those companies placed 100% of the blame onto pharmacy benefit managers (PBMs). This week, the Senate held a hearing with the PBM companies (think CVS, Humana, Express Scripts, United Health) to hear the other side and drill down on the drug pricing issue some more. During the hearing, PBM executives gave a few potential solutions to the drug pricing problem, and, of course, shifted the blame back to Big Pharma.

So what do the PBMs think causes the problem?

PBM executives called for the end of ‘Evergreening,’ arguing that the tactic by which drug makers can impede the approval of generic drugs and biosimilars, and even extend their patents beyond the legal limits is anti-competitive. PBMs also argued that the current proposal to ban drug rebates would not result in lower drug costs, but rather take away one of the ways that drug prices are controlled, in addition to raising premiums (which consumers apparently hated). Ironically, Big Pharma stated in their hearing that PBMs benefited from higher drug costs too because when PBMs negotiate a rebate, they take a cut for themselves. Well…the PBMs stated that wasn’t entirely true, saying that around 7 – 8% of total prescriptions are actually subject to negotiation. It’s no wonder that nobody really knows what the actual problem is.

So where does this leave us now?

Long story short, the PBM executives seemed to get off pretty easily given all the scrutiny and blame coming their way. Some lawmakers even seemed to be swayed by the end of the hearing. To further prove its point against Big Pharma, CVS clapped back this week with a press release of its own, stating that its PBM solutions helped to lower drug inflation for its constituents, and 44% of its commercial clients saw a decline in net prescription drug pricing.

Any current proposals I should know about?

Good question. Currently, Congress appears to be targeting a few different aspects of drug pricing, with a focus on increasing transparency. One, lawmakers want to equip Medicare Part D (that’s the drug part of Medicare) with more tools and ability to negotiate discounts for patients directly. Two, the Trump Administration wants to push through required price disclosure on TV ads. We’re already about to see the beginning of that practice with Johnson and Johnson’s drug, Xarelto. After the hearing on the 9th, PBMs may have saved their precious drug rebate practices from annihilation, but the jury’s still out on whether rebates will actually survive long-term. Finally, Congress may look to end Evergreening practices by making things easier for generic drug manufacturers and easing patent laws.

15. Digital Health IPOs Hit Wall Street

More Healthcare IPOs!

Keep an eye out for digital health IPOs coming to Wall Street soon. There is a ton of private money investing into healthcare startups right now, so there are bound to be some more IPOs coming our way. Livongo, a provider of services and tools that assist people with managing medical conditions, and Change Healthcare, which specializes in bringing down the costs of care, both have plans to IPO this year. Look for potentially major disruptors to enter the public eye soon, along with the speculative money that will fuel their endeavors.

16. The Administrative Burden of Healthcare

Who likes report writing?

Not me. This week, the Center for American Progress (CAP) released a study detailing the estimated administrative burden that healthcare providers face on a day-to-day basis. While the CAP made a lot of estimates in its calculations, the report found that U.S. payors and providers could spend almost half a trillion dollars on administrative tasks this year alone, which is much higher than that of other countries. The whole point of the CAP study aimed to prove that excessive administrative costs (e.g., billing and insurance sort of expenses) exist in the healthcare industry, and that the first steps to cut costs in the industry could be addressing the administrative problems that payors and providers face.

17. Texas Tech Medical School Ends Use of Race in Admissions

No more race.

After a 14 year probe from the Education Department’s Office on Civil Rights, Texas Tech’s medical school will discontinue the utilization of race as a factor in the school’s admissions policy. Civil rights groups, of course, were not fans of the decision in an area that has seen a higher proportion of legal activity lately.

Is a doctor’s race important?

The college admissions ‘affirmative action’ debate has now expanded into medical schools and healthcare. Of course, this story begs the question: what role, if any, does race play in practicing medicine? Do physicians who treat their own race administer better care to that race, and build more trust?

18. Quick Hits

Morgan Stanley thinks that Apple has up to a $313 billion (yes, billion) opportunity in healthcare. On that note, Community Health Systems announced that many of its affiliated hospitals now support Health Records on the iPhone. Walgreens is playing copycat to CVS (are they really even different companies at this point?) by expanding its stores’ primary care capabilities. Speaking of CVS, that pesky judge Richard Leon is STILL keeping their Aetna acquisition tied up in court. And Teladoc announced its partnership with Cincinnati Children’s Hospital, one of the best children’s hospitals around.

A Florida man (what’s new) was caught defrauding Medicare for over $1 billion. Healthcare M&A transactions grew 19% in 2018, but overall transaction values were 31% lower (i.e., less mega-deals). Starboard, the same company that opposed the Bristol-Myers-Squibb and Celgene deal, is now working to turn around Cerner (paywall – WSJ). Hospital employees are fighting to solve a different problem – violence within their walls. And are Skilled Nursing Facilities in trouble?



4.22.2019 Stories

19. Healthcare Stocks Get Wrecked

BEARISH.

Healthcare is on track to be the worst performing sector since 2006 amidst political drama and existential risks facing the current system, leaving healthcare investors (at least in the public markets) skittish. With 2020 approaching and Medicare for All cries rallying, insurance companies like UnitedHealth, Cigna, Anthem, and Humana have suffered through the few months of the year. Providers fared poorly as well – in fact, the S&P Healthcare Services index ($XHS) is 15% lower than the S&P 500 as a whole (negative for the year!), which is a massive divergence. Don’t forget about the Drug-makers selloff either.

Adding fuel to the fire, UnitedHealth’s CEO’s comments on its Q1 conference call seemed to indicate a defensive position – warning those on the 80 minute call how any of the proposals floating in Congress or among Democratic candidates would cause “wholesale disruption” of American healthcare, including jeopardizing the relationship people have with their doctors, destabilizing the nation’s healthcare system, limiting clinicians’ abilities to practice medicine at their best, and a severe impact on jobs and the economy. UnitedHealth urged those seeking reform to work within the current system to find the right solutions and correctly align business incentives with patient outcomes.

20. High-Deductible Health Plans Linked to Delayed Treatment

“I’ll wait.”

That’s what those with high-deductible health plans are saying. To cut down on costs, employers are increasingly switching to high-deductible health plans (HDHPs), which could be causing delays in care for people who might otherwise seek treatments. HDHPs essentially put the patient on the hook for more of the medical bill, making the patient’s out of pocket healthcare costs higher due to the larger deductible (but generally lower premium). These HDHP plans come packaged with a Health Savings Account (but we all know how good most Americans are at saving money). Based on a Health Affairs study, women who were switched from low-deductible to high-deductible health plans waited months longer on average to seek care for various conditions. This factor did not change when income and geographical area were taken into account, either. The issue boils down to the fact that many patients do not have, or do not want to spend, the money needed to seek preventive treatment for their conditions.

21. The Healthcare Cost Blame Game

Whose fault is it anyway?

Healthcare players are all looking for someone to blame when it comes to high prices rather than proposing potential solutions, according to ModernHealthcare. Here are just a few of their perspectives from the main healthcare sub-sectors:

Hospitals. “Insurers are a problem. If hospitals lowered prices, insurers most likely would not pass along those savings to patients anyway.”

Insurers. “Premiums track directly to underlying healthcare costs as calculated by actuaries. We’re not pocketing the extra savings providers generate by cutting costs. Value based payment models and better integration and collaboration with providers should be the way forward.”

Physicians. “It shouldn’t be squarely on us to manage all of our costs. We have large administrative burdens to deal with as it is.”

Big Pharma. “Hospitals mark up drugs to make a higher profit. We’ll charge what we want.”

The article outlines a few potential solutions to high hospital prices, including better alignment with payors (value based care models), giving physicians more responsibility with financial decisions, increasing hospital operational efficiencies and undergoing cost-cutting initiatives, and having employers (as the largest purchasers of insurance) use leverage to negotiate down prices.

22. Congress is Considering Raising the Smoking Age to 21

Tobacco gets smoked.

The Senate is considering raising the smoking age to 21, which would apply to all tobacco products (yes, even vaping). The federal move comes at a time when several states have already passed laws requiring the minimum age of 21. Interestingly, the large tobacco players actually support the legislation, despite the sell-off in their stocks on the news. Since the FDA is cracking down on youth vaping and tobacco products, Big Tobacco probably thinks this move is likely to keep them in somewhat good graces with the Feds.

23. Medical Professionals get Indicted in Opioids Case

You’re in trouble.

That’s what the feds are saying to 53 medical professionals. This week, the DOJ indicted these professionals, charging them with illegally prescribing and distributing opioids. Apparently these medical professionals also committed healthcare fraud. Swell. The opioids case continues to expand in scope, increasing the number of people charged with the crime of spreading the addictive drugs and perpetuating substance abuse nationwide. Some of the stories detailed in the article are absolutely wild.

24. Quick Hits

Bain & Co. released its 2018 Global Healthcare M&A Report this week. Louisiana might ban any new freestanding emergency rooms. Is there an impending U.S. healthcare crisis? How do insurance plans between America and Europe differ? Here’s the timeline for potential drug pricing rebate reform. In North Carolina, Atrium and Wake Forest are trynna merge in a $13 billion potential transaction. And bio-similars might not create effective competition.



4.29.2019 Stories

25. CMS Inpatient Payment Proposal Released

Inpatient payments boosted by 3.7%. Site neutral payment phase-in.

This week, the Centers for Medicare and Medicaid (AKA CMS) released its (their?) proposed 2020 ruling for the Inpatient Prospective Payment System (IPPS). The IPPS designates Medicare payments to hospitals and other providers for inpatient care. Note that this ruling is just the proposed changes to Medicare payments – the final ruling comes out later in the year. Still, the proposed changes give insight into what CMS wants to incentivize for inpatient providers. From Beckers, major highlights from the proposed ruling included the following:

  • 3.2% increase for acute care hospitals that report quality data metrics to CMS and use their electronic health records in a meaningful way;
  • 3.7% total estimated rate increase for all inpatient providers, when taking into account all new payment policies and uncompensated care;
  • About a 2.6% increase in hospital DSH payments (we’ve covered this before in our January 11 edition – 5th story – payments for hospitals that have a higher proportion of charity care patients);
  • Site neutral payment adjustments for hospital outpatient departments, which could have much broader implications on health system consolidation (FYI, hospitals are NOT pleased about this change) in addition to decreased physician employment by hospitals.

Rural hospital relief.

Among the more interesting changes, CMS seems to be extending a lifeline to rural hospitals, making adjustments to the wage index adjustment in addition to the floor payment that rural hospitals may receive.

26. Healthcare Stocks Bounce Back

That didn’t take long.

Eased by strong healthcare earnings reports from the likes of Centene, UnitedHealth, Anthem, Encompass, and others, healthcare stocks came roaring back this week. Last week, we covered the dramatic sell-off of these same stocks. The existential risk stemming from Medicare for All once again resurfaced after the proposed system was admonished as a “disruptive” threat to the economy on UnitedHealth’s Q1 earnings call.

Buy the dip.

Healthcare analysts were un-perturbed, though, calling it a baseless selloff. Remember that healthcare sold in droves (paywall – WSJ) before the 2016 election, too. People don’t like uncertainty, and healthcare has quite a bit of that.

Healthcare Risks.

Current legislation is not without its effects on public and private healthcare companies. This week, S&P released its global healthcare credit ratings report, which lists a few risks facing the industry this year. S&P expects policy changes this year in the areas of balance billing and drug pricing rebates, which would affect physician services companies like Envision and MedNax, and pharmacy benefit managers like Express Scripts, CVS, and UNH, respectively. Funnily enough, S&P has no faith in healthcare reform, at least for now: of all the current legislation and policy proposals out there, the firm lists ACA repeal and Medicare for All as extremely unlikely to happen within the next few years. It makes sense, given the current administration and the Senate makeup.

27. State of Washington Bill Restricts Nurse’s Shifts

A Hot Amendment Mess.

SHB 1155 was intended to be a bill that would help nurses out – mandating that nurses working in hospitals would be given uninterrupted breaks during their shifts. But the bill took a drastic turn when a senator proposed a wild amendment that suddenly morphed SHB 1155 into an entirely different beast – changing nursing shifts from 3, 12 hour shifts a week to 5, 8 hour shifts a week (what’s the grammatically correct way to structure that sentence, anyway? Someone PLEASE let me know). Now, hospitals and nurses alike are banding together (a rare occurrence, really) to oppose the bill.

Backlash from the Bill’s passage.

The Washington State Hospital Association (AKA the WSHA) had some strong words to say on the bill: “If SHB 1155 passes as amended, I am confident that hospitals will not be able to meet the care needs of their communities. Patients will suffer especially in emergencies. This would be terrible for the patients of Washington state.” It’s interesting to note that the WSHA INITIALLY opposed the bill, too. Now, the association ironically has the support of nurses across the state of Washington as they try to maintain their 3 day work weeks, an amenity that nurses greatly enjoy.

28. PBMs Taking Advantage of Medicaid?

Drug Pricing Contagion.

A new report from 46 Brooklyn analyzed various generic specialty drugs covered by pharmacy benefit managers (PBMs) under Ohio’s managed Medicaid program (i.e., Ohio essentially lets insurance companies run Medicaid for them). After matching state drug utilization data against PBM drug cost data, the 46 Brooklyn report found that PBMs appeared to be marking up generic specialty drugs (a practice known as spread pricing) by a total of almost $11 million in one quarter alone by controlling the specialty pharmacy market. As a result, Ohio’s Medicaid program probably way overpaid for these drugs, and cost the state’s taxpayers big bucks.

Broader ramifications.

If it’s happening in the Ohio managed Medicaid program, it’s probably happening elsewhere, too. The report concludes by stating SOME transparency in healthcare (specifically, drug pricing) is not enough. 46 Brooklyn called for a 100% transparent system to spur competition and bring to light the secretive pricing practices that PBMs seem to engage in.

The PBM Defense.

As Axios reported, the Pharmaceutical Care Management Association (AKA pro-PBMs) gave a strong response to the analysis. The PCMA claimed that the data was ‘cherry-picked’ questioned the reliability of its data sources, and stated that the analysis did not take into account rebates, discounts, or overall plan outcomes.

29. HHS Proposes ‘Transformative’ Primary Care Models

A new primary care path forward.

This week, HHS and CMS announced new initiatives designed primarily to lower administrative costs and consequently allow physicians more time with patients.

Tell me about these initiatives.

The proposal will have five payment models under 2 different systems – Primary Care First, and Direct Contracting. Primary Care First (PCF) seems to be more or less a value-based (i.e., patient outcome-driven) capitation type model – where a physician will receive monthly lump payments adjusted for his or her patient base’s acuity levels.

What about the Direct Contracting model?

While the PCF models are more focused on individualized primary care practices, Direct Contracting (DC) models will be focused more-so on patient populations. DC models will partner with ACOs, managed care plans, and other population health managers to give these plan providers various “risk” options. Based on the level of “risk” they choose, the DC model will reimburse them fixed monthly payments of varying amounts. For instance, if an insurer chose a “riskier” payment option, the insurer would receive a higher fixed payment up front from Medicare, but they would also be on the hook if catastrophic disease rampaged their population/covered lives. It all depends on how these participants manage financial risk versus receiving fixed, predictable revenue streams.

These new models were introduced in an attempt to reduce overall healthcare costs and to see whether these types of models would produce better outcomes for patients. We’ll see!

What else?

In other primary care news, Humana announced the launch of its new virtual care model, partnering with Doctor on Demand to form its On Hand health plan. In its press release, Humana touted the plan’s capabilities to lower healthcare costs and lower monthly premiums.

30. Quick Hits

Civica Rx opened its headquarters this week in Lehi, Utah. The nonprofit generic drug initiative plans to address drug shortages in over 900 hospitals, with ambitious plans to supply up to 14 generics in its first year in operation. Alexandria Ocasio-Cortez made some perplexing comments about the Veterans Affairs’ healthcare system this week. Amid nationwide political action and backlash, Walgreens raised the minimum age of purchasing tobacco products to 21.

Here’s something you don’t hear every day. MD Anderson kicked out 3 Chinese scientists over fears of data/intellectual theft. So much for collaboration! Amazon started to market its direct-to-consumer pharmaceutical business, PillPack (something we touched on in our 2nd story Feb. 11 edition), with free delivery for Prime members. Speaking of tech companies, Google is continuing to try to crack into healthcare by looking for new ways to implement its AI technology.

The Chinese are coming for our drugs market (paywall – WSJ). Home Health Care News had a great piece on LHC Group this week on how the company is leveraging its Accountable Care Organization in its business strategy and population health management. You’re more likely to die in the good ‘ole South. And Anthem and UnitedHealth are about to spar over the acquisition of Magellan Health, a fellow managed care player.

And finally, the Washington legislature passes its emergency room surprise-billing law. Providers and payors will now be forced to arbitration for any out of network bills that patients receive. Keep an eye on Colorado too, as the state looks to pass a similar bill.



5.6.2019 Stories

31. What Each Presidential Candidate Wants to do with Healthcare

20 Different Healthcare plans, all with the same name.

With 2020 looming, Bernie’s Medicare for All rallying cries, and Joe Biden’s presidential announcement, there are a lot of candidates – and a lot of healthcare policies – floating out there right now. Luckily for us common folk, Axios put together a handy article listing the 20 some-odd presidential candidates and where they stand on healthcare policy. Most Democratic candidates are in favor of single-payor options, or, at the very least, want to expand Medicaid and Medicare to more individuals. Notable candidate policy positions include Bernie – the most extreme – who wants to obliterate private insurance in lieu of a completely public, universal healthcare option. In a more moderate position, Joe Biden favors an optional Medicare buy-in that expands the pool of individuals and employers that could participate in Medicare. Finally, let’s not forget about Mr. President, who doesn’t really have any solid healthcare policy yet – but he does want to repeal the ACA and replace it.P

What do all of these policies even mean?

In case you wanted a refresher on healthcare policy vocabulary, Kaiser compiled the different healthcare proposals into one useful list. And we touched on the different healthcare terms in our February 18th first story.

What about that CBO report?

Now you’re getting ahead of me. This week, the Congressional Budget Office released its long-awaited report regarding the issues, challenges, and opportunities that would come along with creating a single-payor health care system. The report noted that a single payor system could potentially reach $32 trillion over a decade (which might not be that different from the current U.S. healthcare spending), incentivize providers to invest in preventive care, and result in better population health management. However, the report also mentioned that lower Medicare rates (as opposed to higher commercial insurance rates) could lead to poor financial performance for providers, and thus reduced quality and amount of care. Conclusion: it’s somewhat of a mixed bag.

32. Centene / WellCare Deal Gets Challenged

AHA: “Not so fast, Centene.”

In our April 1st edition 4th story, we touched on the Centene / WellCare $17 billion merger and discussed that the horizontal nature of the transaction (i.e., both companies compete in the same markets in many states) would raise eyebrows and antitrust concerns. Well, this week, the American Hospital Association (AHA) affirmed those concerns in a report, stating that the merger, if approved, would significantly reduce competition and thus reduce quality and cost of care. The report went on to claim that allowing the merger to stand would give the newly combined company significant pricing leverage over providers in the Medicaid market. Centene has acknowledged that the firm would need to sell some of its plans in those overlapping areas, but the company does not believe that there is antitrust concern beyond those divestitures due to the fact that Medicaid rates are set by individual states – not by them.

33. Smartphones as Medical Devices, and Machine Learning in Biotech

A new kind of medical device. Your smartphone.

Scientists at the Michigan Kellogg Eye Center may have found an innovative new way to detect and diagnose Diabetic retinopathy in patients. The solution? Attaching an AI-enabled device to your smartphone, and screening often. The AI-enabled device sends pictures of patients’ eyes remotely to ophthalmologists, and recommends whether or not they should come in for additional screening. This promising sort of mobile medical device innovation could have widespread use in the early detection of diseases that are otherwise highly debilitating if left unchecked.

The Golden Age of Drug Discovery – Using Machine Learning.

Not to be outdone by the folks at Michigan, Y Combinator is developing a machine learning biotech platform through partnering with its promising startup, Atomwise. Atomwise developed an artificial intelligence interface called AIMS, which assists with computational drug discovery, and plans to make AIMS open-source software for academics. Y Combinator wants to incentivize all academics to use Atomwise’s software (called AIMS) for drug discovery. The startup incubator is providing an expedited path to creating new biotech firms for those academics that use AIMS and find new promising drug therapies. Under this platform, the firm believes that AI – specifically, machine learning – can lead to increased scientific discovery and potential therapies.

Flashy Headlines.

In our third ‘Healthcare Innovation’ story of the day, AstraZeneca, a large drugmaker, announced its partnership with BenevolentAI this week to – guess what – find new relationships and biomedical insights through the use of AI and machine learning programs. The partnership aims to begin with targeting new treatments for kidney diseases and pulmonary fibrosis, but the implications are clear: AI has found its place in biotech. Just be careful about the potential bias it brings along, too.

34. Recession-Proof and Recession-Exposed Healthcare Companies

What happens in a recession?

S&P Global Ratings issued its latest report on the healthcare sector this week and made several notable observations regarding the potential viability of various healthcare sub-sectors given an economic downturn. Although S&P maintained that healthcare is a more defensive investment (given that demand is generally constant), the firm cautioned that healthcare companies have increasingly worse credit ratings, meaning it’s harder for these companies to borrow money. Couple that with the regulatory uncertainty surrounding 2020, and healthcare companies are having a harder time raising capital than in year past.

Who’s at risk?

S&P noted hospitals like HCA and Tenet as among the sectors most vulnerable to an economic slowdown due to a rise in people who might be unable to pay for the care that they received. With the recent pressure on drug pricing and the potential elimination of rebates, PBMs such as CVS and Express Scripts were cited in the report as well. Of all the healthcare services firms, temporary staffing companies were listed as the riskiest, given the cyclical nature of employment. Interestingly enough, drug-makers like Pfizer and medical device companies such as Cardinal Health were on the lower end of the risk spectrum given the consistent demand that these companies serve.

35. Healthcare First Quarter Earnings Roundup

Earnings Palooza.

Last week was a big week for earnings, and healthcare companies were no exception. Here are some of the highlights:

CVS‘ acquisition of Aetna helped offset struggling retail margins this quarter. The company raised its full year guidance based on Aetna’s solid performance.

Similarly, Cigna bragged big time about its Express Scripts acquisition during the firm’s first quarter earnings parade, touting the innovative programs the combined companies can now create given the merger.

Teladoc passed the 1 million quarterly visits milestone during the first quarter, but shares slid in trading due to the company’s high valuation and growth expectations. On a positive note, the company expects to be cash-flow positive soon.

A still-struggling hospital operator, Community Health Systems surprised no one by continuing its divestiture strategy and losing $118 million. Still, the company produced more operating cash flow than expected.

U.S. Physical Therapy grew revenues 7.3% quarter over quarter, attributable to its increase in total patient visits and positive operational performance in its industrial injury prevention business. As a result, the company improved its gross margin to 23.0%, up from 21.4% a quarter ago.

HCA Healthcare’s same facility equivalent admissions grew 1.8%, while revenues totaled $12.5 billion in the first quarter of 2019. The efficient hospital operator re-issued its guidance based on its recent acquisition of Mission Health, a 6-hospital rural health system in west North Carolina. Compared to Q1 2018, its adjusted EBITDA grew over 150 bps to 20.3%.

Amid buy-out rumors for its London operation for $1.3 billion, Acadia Healthcare reported a slight earnings beat. The potential sale would comprise between one third and one half of the behavioral health company’s existing annual revenues.

Amedysis reported a strong 6.0% same-store sales growth figure, but the company’s shares sold off almost 6% shortly afterwards. A notable development: the home health and hospice firm is working with members of Congress to pass the Home Health Innovation Act, which would make reimbursement modifications to the PDGM legislation going into effect in 2020.

Tenet Healthcare beat the market consensus in Q1, but struggled with declining revenues, visit volume, and adjusted EBITDA.

Humana reported better than expected results for both revenue and earnings and upped its guidance for 2019, but shares dipped after the insurance giant received several analyst downgrades.

Fresenius Medical finished above the consensus for the quarter, with both its products and services segments contributing to the revenue increase.

MedNax came up short in both the revenue and earnings category, but investors must have liked something – the stock finished up on the day after starting more than 5.0% down at the open.

Molina Healthcare reported a 16% margin for its managed Medicaid business, and 7.5% margins for its managed Medicare operations. The firm increased its guidance for the rest of 2019.

Encompass Health had a strong quarter. The post-acute behemoth achieved higher volume in its home health operations, and investors received a bit more insight on its recent $218 million purchase of Alacare Home Health & Hospice.

Despite the impact of PAMA – price reductions in the laboratory industry – LabCorp beat expectations and is one of the best healthcare performers year to date on the market.

Universal Health Services‘ earnings missed by a wide margin in Q1.

Finally, Select Medical, which reported at the end of March, reported in-line with expectations. This week, the company announced a joint venture with Norton Healthcare for outpatient services in Kentucky and Indiana.

Overall, the S&P 500 Healthcare Sector returned -2.6% in the month of April, which was….the worst performing sector over the month. Notable outperformers included Cerner (+16.2%), Quest Diagnostics (+7.8%), CVS (+1.8%), McKesson (+1.9%), and LabCorp (+4.5%). Notable decliners included Anthem (-8.3%), Eli Lilly (-9.8%), and Intuitive Surgical (-10.5%).

36. Quick Hits

Some healthcare startups are great. Some might not live up to their fancy marketing. Physicians might be UNDER-prescribing painkillers now amid the opioid crisis. Kansas legislation kills its Medicaid expansion plans. Florida legislature repealed its Certificate of Need Laws. Kaiser Health’s bill of the month: a $142,938 snake bite. And did you miss any regulatory changes in the first quarter? GHA has your back there.

Epic and Cerner, two huge electronic health record providers, apparently control 85% of the large hospital (i.e., over 500 beds) market. Blackstone is getting into the ‘gambling on pharmaceuticals’ market. And HealthEquity just made a $2 billion bid for WageWorks, the other major H S A money manager in the market.



5.13.2019 Stories

37. Drug List Prices are now required on TV Ads

The Countdown Begins.

In an act that is almost certainly going to be challenged in court, HHS released its final ruling requiring all drug manufacturers to disclose drug prices in TV advertisements, in an effort to increase consumer awareness about drug prices. The pricing information must be displayed in a “legible textual statement at the end of the advertisement” for a “sufficient duration.” Drug-makers aren’t allowed to use any wacky fonts, either. Bummer – I was holding out hope for Wingdings.

A Lopsided Effect.

Interestingly enough, the ruling affects the five biggest drug-makers quite disproportionately, as StatNews reports. Pfizer, AbbVie, Eli Lilly, Amgen, and Allergan together comprised over half of all drug television ads over the past year. In response to the ruling, the drug-makers argued that drug list prices are an ineffective way of increasing price transparency, since insurance plans negotiate lower rates for their consumers anyway.

Together with PhRMA, the powerful drug advocacy lobbying group, drug-makers have announced their own commitment to drug pricing transparency in their own way – by publishing pricing tools online and creating voluntary guidelines that they argue would increase transparency in a more effective manner than what was proposed by HHS. They have about 60 days to comply with HHS before the hammer comes down.

Not so fast, though – this ruling is going to almost assuredly be challenged in court.

38. 40+ States Attack Generic Drug-Makers with Scathing Price Fixing Lawsuit

Drug Pricing Conspiracy.

As if drug-makers couldn’t get any more PR lately, 40+ states filed a massive lawsuit on Friday that blames generic drug-makers for price fixing (AKA, keeping generic drug prices higher than they should be). They might have a point, considering some of the drugs mentioned in the lawsuit shot up thousands of percentage points over a few short years. For instance, the average market price of doxycycline increased over 8,000% in a single year. Oof. The lawsuit accuses 20+ companies of wrongdoing including collusion to ‘divide’ up the generic market in an effort to avoid competition with one another. The lawsuit singles out Teva Pharmaceuticals in particular as a central figure in the pricing conspiracy. In response, the drug-maker aggressively denied wrongdoing (duh). The unnaturally high generic prices could result in higher insurance premiums for the average consumer in the long run, which is why states are keen on getting to the bottom of these allegations. Drug-makers are, after all, the most profitable segment of the healthcare industry.

39. Huge Price Disparities between Medicare and Private Insurers

Speaking of Healthcare Pricing…

A study released by RAND Corp concluded that private insurers (AKA, the health plans that most employed people are covered) pay hospitals 241% more on average than Medicare does for the same services. The pricing study is the most comprehensive one to date, since it covered almost 1,600 hospitals in 25 different states – although the study did acknowledge its somewhat small sample size. Before we get ahead of ourselves here with the pitchforks, though, let’s remember – generally, Medicare generally reimburses hospitals at below-cost or at break-even levels of cost of care for patients, as the American Hospital Association is keen to point out. Hospitals argue that higher private insurance payments are needed to keep their lights on. Still, the study raises a few noteworthy observations – there are wide variations in payment rates from state to state. Is expensive care better than no care?

A Closer Look.

What each private insurer pays hospitals relative to Medicare reimbursement rates – by state. Indiana tops the list at 311% of Medicare, while Michigan resides at the low end at 156%

40. Surprise Billing Marches Forward as Trump Jumps into Action

A Tricky Issue.

As an update to our 5th story on the February 1st edition, President Trump continued his comments regarding support for a solution to surprise billing. Oddly enough, doctors, hospitals, and insurance providers all want to end surprise billing price gouging practices, yet they all seem to be at odds over the proper solution to the issue. Moral of the story: nobody wants to get stuck with sticker-shocking ER bills to pay.

What are the Proposed Surprise Billing Solutions?

The Trump Admin seems to be in favor of bundled payments – where the hospital and provider would receive one payment for services rendered. Some states, including Colorado, have introduced legislation to limit surprise billing to a maximum fixed percentage of Medicare – in Colorado’s case, no more than 125%. Others, like New York, prefer arbitration. Under New York’s arbitration, patients are not required to pay more than in-network rates, and an independent arbitrator resolves the payment difference between the insurer and provider. Although many solutions have been proposed (with some even already implemented at the state level), none have taken a firm federal hold. Stay tuned!

41. Medical Device Patents have Skyrocketed since 2007

A surge of medical devices.

With a 50% share of the global medical device market, the U.S. experienced a surge in medical device patents over the past 10 years, according to research conducted by Kilpatrick Townsend – significantly higher than any other observed industry. Of the various device segments, wearable device (AKA, Apple Watch), telehealth (AKA virtual visits; looking at you, Teladoc)) and surgical device (AKA, robotics) patent filings grew at the highest rates. Wearable devices drew a massive 359% increase in patent filings from 2007 to 2018, followed by a 181% increase in surgical device filings over that same time period. Coincidentally, most industry leaders identified these segments as having high growth potential in the near future. For instance, the Telehealth market is projected to reach a whopping $93.5 billion by 2026, according to Reuters.

42. Quick Hits



5.20.2019 Stories

43. Trump is SERIOUS about Price Transparency

Pricing Power.

Back in the March 11th 1st story, we touched on a proposed HHS rule that would force hospitals to post prices for the surgeries and procedures performed – the ACTUAL ones that they negotiate with insurers (not just the chargemaster rule that’s currently in effect). At that time, the HHS simply wanted comments and feedback on what might happen if that rule were to go into effect. Well, in an interesting turn of events, the Trump administration took that HHS proposal to another level this week by announcing its plan to increase pricing transparency a step further, as the WSJ reports. A LARGE step further.

What’s Trump proposing?

For one, Trump’s admin really wants insurance companies to publish the rates that they pay for healthcare services. They might even FORCE these companies (think UnitedHealth, Cigna) to do so. Secondly, the administration wants providers to be able to give patients the entire price of care they would receive BEFORE any treatments are performed, which is QUITE different from the ‘guesstimate’ that we all receive today after a doctor visit.

How could that change healthcare today?

There’s no telling what might happen if healthcare entered a free-for-all period and prices were disclosed everywhere. Some smaller players might realize they were getting ripped off from a payment perspective and demand higher rates, which might increase costs. From a common sense perspective, these rules would more than likely equip the patient to make more educated decisions on where to receive care. I mean, hopefully.

Eventually, providers would theoretically compete on prices like other industries (I’m no economist, though). But in markets where little to no competition exists (think rural), experts think the hypothetical pricing transparency rule would have little to no effect.

44. Wal-Mart gets picky with healthcare providers

Picky providers and a quality first approach.

As a follow up to the WSJ’s story on Wal-Mart getting more selective with which providers they allow their employees to see, KHN revealed this week that Wal-Mart is also extending this selective practice to imaging centers. Basically, the retail giant is leveraging its data to see which diagnostic imaging centers are the most cost effective and deliver the highest quality care based on error rates and other factors. Then, the company delivers an approved list to its employees. A very interesting note: Wal-Mart and Covera (the company they’re partnered with on this stuff) chose the centers based on QUALITY – meaning that price was not a factor in the development of the Quality Centers List.

The larger trend.

Given how our healthcare system is structured with employer sponsored health plans, Wal-Mart and other large firms like GM have taken it upon themselves to combat rising healthcare costs. We could see this trend continue as employers move toward more narrow network-esque strategies, where poor-quality providers are given the boot from employer health plans.

45. The State of Washington just went public

States going rogue.

The state of Washington has taken the initiative upon itself to enter the private health market with a universally available public option. The plan will be called Cascade Care, and it works as more of a ‘hybrid’ option between the public (think Medicare, Medicaid) and private (think employer sponsored plans) health plans currently out there. The plan would cap payments at 160% of Medicare for services rendered. As an aside, keep payment caps in the back of your head moving forward, because there have been plenty of references to capping payments at certain percentages of Medicare rates from state legislatures.

Is it really ‘Public’ though?

Yes and no. Although the state of Washington is offering the plan, it’s still going to be run by a private health insurance company of the state’s choosing (a la, Medicare Advantage). Overall, though, the plan is an interesting mixture of moving toward universal health coverage while also working within the current healthcare system. The jury’s still out as to whether it will help with costs, but most state officials think it’s a step in the right direction.

46. Big Pharma wins big on Medicare Part D final rule

CMS Backs Off

CMS released its final Medicare Part D (the part of Medicare that covers drugs – D for drugs, get it??) ruling this week. In a resounding victory for drug-makers and pharmacy benefit managers, the agency maintained that Part D would continue to cover ALL drugs that are included in the 6 “protected classes,” which are categories of drugs that are required to be covered by Medicare. Prior to the announcement, that protection was in limbo.

CMS was actually considering whether or not to continue the 100% coverage, or replace the current system with a more flexible model where the agency would be able to exclude certain drugs. Instead, the agency decided to shelf the issue for another year.

Stop Gagging Me.

In other news, the final ruling included some additional guidelines around increased drug price transparency. CMS finally outlawed so-called Gag Clauses, where pharmacists were prevented from telling patients if the cash costs of a drug or similar drug happened to be lower than the price they were playing through their insurance (honestly, what even). Pharmacy groups weren’t happy, however, with CMS’ decision to hold off on changes to drug price concessions.

47. Senate and House get after surprise billing

Congress began work on abolishing Surprise Billing once and for all by drafting legislation this week that would get rid of the practice for good.

Proposed House Bill.

The No Surprises Act, which is the nifty name for the proposed Surprise Billing bill (that’s a bit repetitive, sorry) drafted by the House, would ban surprise medical billing for good and set a minimum payment rate for out of network providers based on median geographical in-network payment rates for those ER services. Notably, this bill does not include an arbitration clause – where a third party arbitrator would negotiate a rate between providers and insurers for the out of network bill. Insurance companies would be the big winners if this bill were to pass.

Proposed Senate Bill with a Key Difference: Arbitration.

Essentially, the STOP Surprise Medical Bills Act is the same as the House bill, except that this bill includes arbitration. Hospitals and providers are more into the arbitration idea, but the Trump Administration opposes it, citing the potential for disruption, less pricing transparency, and increased administrative burden associated with arbitration.

Both branches think that some sort of Surprise Billing legislation will be ready to sign by Trump by the end of summer. Read our timeline of Surprise Billing in 2019 to catch up what’s been going on in 2019.

48. Quick Hits



5.27.2019 Stories

49. Senators draft huge-ass bill aimed at big-time healthcare reform

They DO listen to us, sometimes.

The Senate released a bipartisan 165 page bill this Thursday called the Lower Health Care Costs Act. It’s designed to lower health care costs (ignore me).

Anyway, the bill is pretty comprehensive in its efforts to address all of the following hot-button issues:

  • Wiping Surprise Billing from the face of the earth with 3 proposed solutions:
    • 1 – Independent, third-party arbitration to negotiate payments between insurers and providers (providers like this method);
  • 2 – Payment caps/benchmarks for reimbursing out of network providers. This type of pricing method would target payments for services at a certain percentage of Medicare payments (e.g., “I’ll reimburse you at 200% of Medicare’s rate for that surgery”) or at the median in-network rate for those services, adjusted for geographical region (insurers like this method);
  • 3 – In-Network guarantee. This new proposal would require any hospital to guarantee/promise that anyone working there is also in-network with that patient’s health plan. The guarantee would also extend to laboratory and imaging testing, too (insurers like this method)

Interestingly, there’s no mention of bundled payments as a potential solution to surprise billing in the legislation. Originally, the Trump administration was pretty into tackling surprise billing via the bundled payment approach. It’s possible that bundled payments might get introduced in future bill iterations.

Here’s the general reaction from various healthcare trade organizations.

  • Reforming Drug pricing:
    • An easier ability for generic drugs to get to market, which would increase the supply of generic drugs and hopefully lower costs;
    • A stricter drug patent law, meaning that companies wouldn’t be able to hold onto exclusive ‘brand-name’ drug patents as long;
  • Increasing pharmacy benefit management (PBM) price transparency:
    • Requiring PBMs to provide quarterly reports that would include information on drug costs, fees received, and rebates detail;
    • Eliminating the drug rebate (i.e., requiring 100% of the discount to be passed along to patients);
    • These changes are actually pretty dang substantial.
  • Creating an entity to manage claims data (i.e., the details behind a hospital or physician visit – this would be a BIG first)
  • Increasing vaccination education;
  • Granting funding for infant mortality, postpartum treatment, and healthcare professional discrimination training; and
  • Improving privacy laws concerning HIPAA info online.

The bigger picture.

As you can probably tell, there’s a ton of healthcare change packed into this one bill. So it’s more than likely a bit ambitious to think that all of this will get passed at once, especially with the presidential election looming in 2020 and other bills circulating. Still, it’s interesting to note how Congress is approaching these issues and the attention that healthcare is receiving overall.

Keep an eye on the expected vote date, which is expected to take place sometime in July. Also, there are a few other senators whipping up their own healthcare bill, so stay posted…

Trump’s Big Healthcare Stick

Not to be outdone by his colleagues in Congress, Trump and the dream team are planning an executive order on healthcare, which is a bit skimpy on details, but lays out ambitious changes to the system. Most people expect the order to include increased disclosures of cost data among insurers and providers along with tackling local health system monopolies that could be driving up prices in their markets.

50. Is Direct-to-Consumer the future of Primary Care?

Add that to my Netflix subscription.

Forget Trump: there’s yet another healthcare model making its way into headlines. Direct primary care is gaining traction among physicians in several states.

How it works.

Rather than working through insurance plans and billing indirectly for primary care services, direct primary care practices will charge patients a monthly membership fee up front. It varies from site to site, but that membership fee covers pretty much every ‘routine’ service – including various forms of testing.

According to the Wall Street Journal, cutting out the insurance plan and having patients deal directly with providers may help to lower drug costs, testing costs, and increase transparency. One flat fee – no billing, no co-pays. Keep an eye on the potential trend here. There are plenty of healthcare startups (not just in primary care) that are targeting direct-to-consumer strategies. Don’t forget though – there are plenty of growing pains with DTC healthcare.

51. The latest beef: are nonprofit hospitals getting too much of a break?

Tax Exempt in Limbo.

Add nonprofit hospital systems to the list of healthcare folks getting put under the microscope. Senators (specifically, Chuck Grassley if you care) noticed that the amount of dollars spent on charity care is decreasing, while hospital margins appear to be doing pretty well. Don’t tell that to Johns Hopkins, though, which decided to sue low income patients for medical debt.

As a result, the Senate is asking the IRS to investigate nonprofit hospitals. Specifically, they want the IRS to check into whether nonprofit health systems have enough oversight when it comes to their required charity care spending. What are those nonprofit health systems actually spending funds on? Hopefully patient care!

Arguably, nonprofit hospitals should in theory be doing worse, relative to their for-profit brothers. Think about it – the tax cuts enacted a few years ago only benefited for-profit health systems, giving these profit-driven systems extra cash to work with in lieu of the income tax they were previously paying.

Anyway, the AHA (of course) had a prepared statement over the spat, arguing that hospital charity care more than covered the required amounts.

52. Google’s AI making healthcare headlines

Google’s healthcare AI platform, Verily, made headlines this week by announcing several partnerships with big-name pharmaceutical companies including Novartis and Pfizer. It’s the latest push by big-tech as the firms try to break into the stubborn healthcare space. From the partnership, Verily and Google are looking to enter the business of clinical trials, including developing drug algorithms and aggregating E H R / wearable data to find new potential therapies and trial candidates.

On the other side of health IT, Google’s lung screening software showed serious promise in finding lung cancer, with a 94% sucess rate. The algorithm could turn into a very powerful tool at the hands of radiologists.

In other A.I. news, could robots be a boon to therapists when it comes to children with autism?
 

53. Healthcare Price Inflation Update

To the moon.

A recent report by Modern Healthcare highlighted healthcare inflation in various subsectors. Notably, healthcare services prices in April grew at a 2.3% rate, which was slightly above the rate of inflation. The real kicker here, though, was inflation in the health insurance sector.

Over the past 12 months, health insurance prices grew at a whopping 10.7% rate. This rate tells us how much insurers have been retaining (as profits, administrative cost, or re-distributions after factoring in the regulated medical loss ratio). If a managed care company does not meet the medical loss threshold, that company must issue rebates to their plan members to make up for ‘overcharging’ on premiums.

The hell happened?

Altarum, a consulting firm, thinks that premiums were much higher than expected claims for the year, which led to decreases in insurers’ medical loss ratios. Expected rebates that insurers must pay out are continuing to rise as managed care profits skyrocket.

54. Quick Hits

State highlights: Colorado is becoming the first state to cap the price of insulin at no more than $100. Connecticut decided to follow Washington’s footsteps to develop a public insurance option. Kansas in particular is getting hit hard by rural hospital closures. California, like most states, is dealing with a physician shortage, but physicians might be the ones keeping it that way? On another physician note, they don’t really like to stay in rural areas.

The FDA just approved the most expensive drug on the planet. Haven, everyone’s favorite mysterious startup, just lost its COO. Speaking of Amazon joint ventures, the e-commerce giant is working on a device that can…read human emotions. I like to think that it’s a smart mood ring. We’re long overdue for one of those, aren’t we? The biggest healthcare brand name is UnitedHealth. Here’s the rest of the list.

Here’s a nice longform piece from Fortune about CVS and the company’s vision for the future of healthcare. Right before Peloton Therapeutics (no, not the bike company) went public, Merck snatched the biotech startup for $2.25 billion in cash and future incentives. Did someone say snatching? In an interesting development, Blue Cross is taking a page from UnitedHealth’s book and scooping up physician practices nationwide. And the WSJ is bullish on healthcare stocks, citing cheap valuations (paywall).



6.3.2019 Stories

55. Healthcare heavyweights throw shade at Trump’s attempted healthcare pricing executive order

Healthcare heavyweights pull an Andy Ruiz.

You might have missed it among all the other healthcare legislation drafted last week (catch up on that here), but in the midst of it all, Trump has been preparing to issue an executive order that would force increased price transparency. Is that even within the executive branch’s constitutional powers? Anyway, as we all expected, this potentially disruptive change was hit with a massive amount of backlash from the healthcare industry.

So what’s the major beef?

The AHA argued that the order would cause the opposite of the desired effect and ultimately cause prices to RISE, as the price disclosures could create a FLOOR for prices.

Insurers aren’t happy about the news, either. The price negotiations are closely held trade secrets, and advocate groups argued that pulling the rug out from under those arrangements could result in a form of “bad transparency.” Both sides (shockingly) agreed that in such a situation of negotiation, there needs to exist at least a little bit of privacy.

My thoughts.

This price disclosure policy could actually have a substantial impact on the industry, but only in situations where the patient makes informed healthcare decisions based on price. Most of it boils down to the patient: if the patient blindly follows a physician’s orders regarding site of care, or doesn’t receive treatment at the appropriate setting, then price disclosures probably won’t really even matter.

Furthermore, the pricing policy might not be as effective in areas where less competition exists. Areas dominated by a few large health systems (think mainly rural regions) would theoretically maintain a good amount of pricing leverage.

Still, in competitive markets where providers are more prevalent, I HAVE to think that healthcare would more closely resemble a free market and at least somewhat compete on price. That’s economics 101, right?

By the way – personally, I’m not buying the industry’s argument about the whole floor pricing thing causing prices to rise. If someone has a different opinion, please feel free to reach out. Here are some other thoughts from the Incidental Economist on implementation of a claims database.

56. Cigna and Connecticut scuffle over proposed public health plan

Pivoting to state news – remember when we talked about Washington passing a public health plan option in the May 20th edition? Well, Connecticut was trying to pass something similar, except this plan would have been much more limited as to who was eligible for the public plan. This plan, though, was faced with massive opposition from Cigna, which made for quite the hairy situation. Can I get some #HealthcareDrama?

Sharply-Worded concerns.

Some who listened to the insurer’s remarks about the bill assert that Cigna threatened to leave its home state if the public option weren’t nixed. Cigna claims they said no such thing. Some legislators called Cigna’s remarks “sharply worded concerns.” I’ll leave that up to the experts to decide what actually happened.

Later, the insurance company stated that the legislation would “not be helpful to businesses that provide health insurance,” and that the plan “threatens the long-term viability and vitality of the state.”

It’s notable to mention that Cigna actually doesn’t have any customers on any of the plans that would have been affected by the public option, since the bill was only intended to cover both individuals and employers with less than 50 employees.

Still, as constituents of the state, Cigna’s opposition left lawmakers to question whether the public option needed some revision. As a result, legislators are taking a step back to reconsider the bill and make sure everyone’s on the same page next time.

57. Healthcare laws might be stifling payment innovation

Some healthcare specific laws, specifically the Stark and Anti-Kickback statutes, might be preventing new value based payment models from maximizing their potential. For instance, health systems might try innovative approaches to rewarding physicians for various quality metrics.

Blurring the regulatory line.

But because the law strictly prohibits health systems from giving financial or other rewards for physician referrals, the other, well-intentioned payments/incentives for value based care could also get caught up in the regulation, too (i.e., others may think that the health system is rewarding that physician for referring patients to them – which is illegal – rather than fairly reimbursing the physician under an alternative payment model).

As a result, many executives are asking for a reform to Stark and anti-kickback statutes, especially as value-based care models grow increasingly prevalent in our modern-day healthcare system. These health execs want the outdated laws to address newer forms of reimbursement and draw lines that health systems can’t cross in the new value-based wild frontier.

58. Stop me if you’ve heard this before: a lab testing startup gets in major trouble after lying to a bunch of people about a bunch of things

ANOTHA’ ONE.

What’s with it with these healthcare startups and their propensity for fraud? Following Theranos’ legendary footsteps, the microbiome testing startup cleverly named uBiome is refunding federal insurers after engaging in some faulty billing practices. The story actually goes further than that and gets a bit wild. Maybe they’ll get a book, too.

House of cards.

uBiome’s original co-founders were given the boot after its board discovered the billing practices. Don’t even mention the fact that they were in a romantic relationship AND one of them lied about their age to be put on Business Insider’s “30 under 30” feature.

To put a cherry on top of uBiome’s issues, the new CEO then discovered a plethora of hidden expenses and liabilities running through the startup’s financial statements. So…if I were a betting man, I’d say uBiome might not be around much longer. Oof.

59. Quick Hits

State highlights.

New York is (once again) mulling over single-payer (paywall – WSJ). And Utah is trying to cap Medicaid spending (don’t forget – previously, the state attempted to expand Medicaid and only partially succeeded)

Business highlights.

Universal Health Services invested a minority stake in Vera Whole Health Primary Care. It doesn’t seem like the DOJ is a huge fan of the Centene-WellCare Deal, which seems much more likely now that Humana’s bid for Centene is off the table. Here’s the top 4 medical device players. Acadia Healthcare is looking to sell its UK biz. And here’s a fantastic summary of the state of the PBM market.

Policy/Other highlights.

Healthcare spending is projected to hit $3.6 trillion this year, up from $3.5 trillion last year. There’s another battle brewing over lien practices. And what’s the potential impact of higher Medicare payments for rural hospitals?



6.10.2019 Stories

60. Managed Care’s big week

Over the past few weeks, the largest managed care players have provided us with insights into the healthcare industry from a payor’s perspective. Anthem, UnitedHealth, Humana, CVS, and Cigna all had interesting things to say.

Here’s what you need to know:

UnitedHealth wants to grow Optum to $100 billion in revenue by 2028, but they’re not planning on building any hospitals. The growth strategy banks on Medicare Advantage growth, increased local care delivery, expanding into areas of healthcare with increasing intensity of services (like ambulatory surgery centers), and increasing medical efficacy.

Anthem touted its investments in AI during the conference, giving mention to predictive analytics, adjusting for social determinants of health, and health risk assessments with the ultimate goal of driving down costs. The payor also wants to continue its Medicaid joint ventures with the Blues and likewise continue the integration of its newly established PBM Ingenio Rx.

In other Anthem news, the payor is making a push into behavioral and mental health with its recently announced acquisition of Beacon Health Options, a behavioral health management organization.

Humana‘s Chief Medical Officer made it clear that the payor’s strategy revolves around the home. He continued by saying that Humana differentiated itself from UnitedHealth and CVS/Aetna by focusing on the home, whereas UnitedHealth is focused on a primary care physician acquisition strategy, and CVS is honed in on retail settings.

CVS/Aetna‘s investor day was chocked full of growth details surrounding its new “HealthHUB” in-store plan. I touched on the HealthHUB plan previously while covering the JP Morgan investor conference at the beginning of the year. Anyway, CVS is expanding the “health and wellness” store concept to 1,500 locations by 2021. Ambitious af.

Cigna brushed off any challenges involved in the changing healthcare regulatory landscape, touting their ability to work through tough policy environments. The firm shrugged off any possible effect of drug rebate reform and reiterated its approach to partnering with physicians (rather than buying them) to separate themselves from the healthcare delivery system for the purpose of enhanced patient support.

Return of the Jedi health insurance tax.

Several insurers were asked about the return of the health insurance tax, and how the tax might affect the industry in 2020 and beyond. As you could imagine, they responded with some distaste, stating that the health insurance tax would cause instability in the insurance market and probably result in higher premiums.

Interestingly, some think that the health insurance tax wouldn’t affect insurers on the ACA exchanges – meaning that they could simply raise the price of premiums to exactly counteract any taxation.

Stunting Medicare Advantage growth to Tyrion’s level.

On the other hand, insurers might not get away with that tactic in the rapidly growing Medicare Advantage market due to the current competitive nature of that exchange (insurers want the Baby Boomer Biz – duh). Instead of passing on the tax via higher premiums, insurers might opt to provide less coverage through these plans, or compete in other ways.

Either way, insurers definitely do not want to lose any MA enrollees, since MA is the major driver of their growth story on quarterly conference calls. In fact, the health insurance tax might deter would-be enrollees from even signing up for Medicare Advantage, instead opting for traditional Medicare.

61. Veterans Affairs shifts to private model

VA gets privatized.

Enough about managed care companies. Veterans are about to be given the green light to receive care at any hospital – beyond just VA-designated hospitals. The policy appears to be a somewhat unprecedented move – according to the NY Times, the VA has about 9 million enrollees, which would mean that this shift would be the largest change in healthcare since the ACA.

Essentially, this move is more or less privatizing VA healthcare with the intention of “greatly opening” medical care to veterans.

62. Congress gets fed up with health data breaches

Whipped into shape.

An EVER growing number of healthcare companies continue to get hacked.  This time, though, Congress had some things to say to Quest and LabCorp, who got in trouble from some reps after using a third party agency called American Medical Collection Agency.

Representatives thought that the companies were acting pretty lazy with the precious data by outsourcing. It’s also worth noting that while the companies won’t be fined or financially punished by the hack, the data breach is a credit-negative event.

63. Is a $2.1 million drug price ethical?

A price tag on life. Sort of.

Novartis drew raised eyebrows over the weekend when it priced its spinal muscular atrophy treatment Zolgensma at $2.1 million. Yep, you read that right. But is that a good or bad thing? Is the price ethical when it’s saving lives? Some of my (somewhat ignorant) thoughts are below. Interested to hear others’ opinions as well.

In this specific case, here’s the perspective of Novartis: drugs in general are extremely costly to research, develop, and bring to market. The disease that the drug treats, spinal muscular atrophy, is extremely rare. If the disease is NOT treated, then the infant may die and/or struggle long-term with expensive treatment and machinery for the rest of its life.

But if the drug is effective – which it appears to be in most instances – it could save quite a bit of time, money, and healthcare utilization by stopping the disease in its tracks.

In my mind, it seems as if Novartis more or less attempted to estimate the cost to the healthcare system of that patient WITHOUT the new drug, then priced their drug within – or, as they claim, well below – that range. Still, the distinct possibility exists that the drug might not work in all patients, and the final list price was $2.1 million, after all.

It remains to be seen whether insurance covers any of that price, but Novartis is guaranteed to have a payment installation plan in lieu of insurance.

Since Novartis developed the drug, the biotech firm gets ‘rewarded’ for taking on the high, high risk of developing a cure for SMA. If Novartis hadn’t found a cure for the disease, the company would have pumped billions of dollars into R&D and received…nothing. Which happens decently often.

Despite these factors, many experts still consider the list price excessive. The final question I would ask on the ethics, though, is would you rather have the drug at an excessively steep price or no drug at all? It’s a tough one, huh…

Read some perspectives from parents and individuals who actually have, or have seen, the disease firsthand:

Is $2.1 million too much for a drug? For affected parents, there is no debate

I have spinal muscular atrophy. Critics of the $2 million new gene therapy are missing the point

64. Quick Hits

Business Highlights:

LabCorp has its new CEO – the former Merck President. The firm also just bought Envigo. CVS and Walgreens are thought to be the same exact company, but they’re taking very different strategies when it comes to healthcare. Oh, yeah…that whole CVS/Aetna merger? STILL tied up in court. Someone let me know why that didn’t happen to Cigna/Express Scripts. Pfizer isn’t very happy with Johnson & Johnson over anticompetitive issues with its drug, Remicade. Medical device companies might get screwed by Trump’s Mexico tariff.

Could patenting actual genes become a thing? Not the Onion: a group of Senators just asked Big Pharma’s lobbying group for ways to reform drug pricing. Apple’s Watch can now track menstrual cycles and tell you when an area is too loud. And tech companies seem to be hitting the same wall in the attempted disruption of healthcare. In fact, there could be a big Medical AI Data problem brewing.

State Highlights:

Here’s a comprehensive list of all the big managed care players by state. Beckers did us a big favor by publishing the largest commercial insurance health plans by state, too.

Apparently 16 hospitals in Massachusetts are storing a smooth $1.6 billion in offshore accounts.

Louisiana just officially banned freestanding Emergency Rooms in a ploy to save rural hospitals.

And a Kentucky hospital lost its Medicare licensure and had to cut half of its staff as a result.

Policy/Other Highlights:

Big news from the Supreme Court: the DSH changes enacted were ruled to be illegal, meaning the cuts to the program won’t go into effect yet.

There are plenty of headaches and complications behind full price transparency in healthcare. CMS is trying to get rid of some of those headaches by asking for ideas to cut down on the red tape in healthcare.

The Medicare Advantage growth hype might not live up this year. And what might happen in the event of an international pricing index model for Part B drugs?



6.17.2019 Stories

65. Therapy through your Phone, and the growth of the mental health industry.

Therapy as a Service.

A slew of mental health apps have been making their way through the app store and onto people’s phones in a big way. Whereas apps like Headspace and Calm are focused on meditation and mindfulness, newer platforms such as BetterHelp, a subsidiary of Teladoc and leader in the online therapy space (makes sense) and Talkspace, which recently raised $50 million and is partnering with Optum, are bringing counseling and therapy services directly to your phone.

Mental Health’s growth.

The apps point to a larger trend. The mental and behavioral health industry is growing like wildfire and is projected to continue at a 7% clip through 2024. Just last week, Anthem acquired Beacon Health, a huge behavioral health organization.

Easy Money.

Now, mental health startups like BetterHelp, Talkspace, and Quartet Health are popping up. Just this week, the startup announced a successful $60 million Series D funding round courtesy of Centene (another big Medicaid player). To date, Quartet Health has raised almost $153 million so far, which is only one example of not only the deep pockets of healthcare venture capital, but also the ease of fundraising in 2019.

66. Are Patients a big part of the U.S. healthcare spending problem?

Fat Americans.

An interesting article this week brought up a fascinating topic of discussion: should consumers be blamed at all for the high cost of healthcare in the U.S? 

I’ll take a Big Mac.

The Atlantic article published this week argued that Americans have unhealthy behaviors rooted in cultural norms, which leads to poorer outcomes for the population (hello, pizza night!).

It goes on to state that Americans tend to be over-treated, disregard preventive and routine care, undergo dangerous elective surgeries, and treat physicians like deities. It concludes that a high cost healthcare system is enabled by the poor healthcare choices made by Americans.

The story only covers the consumer side of the healthcare cost argument, but it’s an interesting perspective, and one not touched on as often. Don’t forget – American’s aren’t exactly healthy.

Who do people normally blame for high healthcare costs?

67. AMA Spurns Medicare for All…for now…and other highlights from the conference

AMA vs. Medicare for All smackdown.

During its annual Chicago meeting, the American Medical Association, or the advocacy group for physicians, voted on various policies and stances to support over the next year. Of course, the big ticket item this year was whether or not the AMA would support any single payer, or as the media so fondly calls it, ‘Medicare for All’ proposal. While the vote was ultimately struck down, it was much closer than most expected – 53% of participants voted against the policy.

In other developments, the AMA voted to adopt more technology and A.I. friendly policies, including working toward developing applications for A.I. in healthcare, technology training for physicians, and generally deeper integration of tech in healthcare.

68. Pfizer buys Array Biopharma in huge $11.4 billion deal

In a deal that led to an across the board biotech rally, Pfizer announced its intention to acquire Array BioPharma for a total of $11.4 billion, or $48 per share – which is a gigantic 60ish% premium over its most recent share price.

Array was a pretty attractive buyout option given its super innovative cancer therapies along with its licensed revenues and medicines.

It’s been a pretty good 30ish months for biotech M&A.

69. California expands health insurance to illegal immigrants

On the taxpayers’ dime?!?!?!

This week, California unveiled a public health plan that would be made available for illegal immigrants in the state. The plan would more or less be an extension of Medicaid and is expected to cover about 90,000 19 to 25 year old individuals. Although the plan hasn’t passed yet, it’s expected to move through Cali’s legislature quickly.

70. Quick Hits

State Hits:

Where does your state rank on healthcare performance and outcomes? And Maine just became the 8th state to legalize medically assisted suicide.

Business Hits:

Ever wondered what a healthcare startup pitch deck looked like? Novant Health just launched its Institute of Innovation & Artificial Intelligence. As we all expected, U.S. drugmakers filed a lawsuit against requiring drug prices in TV ads. And Medidata just got snatched up for $5.8 billion

Policy/Other Hits:

Trump is planning on rolling out a new healthcare plan in the next couple of months – stay posted! What happens when the medicine your child needs isn’t available in your country’s single payer system? And the U.S. healthcare system is full of monopolies – which might cause problems with any price transparency disclosure.



6.24.2019 Stories

71. Trump just issued an executive order on price transparency

He just did that.

Toda, Trump issued an executive order all about healthcare price transparency.

All bark, no bite…for now

The mandate doesn’t really do anything…yet. More or less, it just asks Health & Human Services to propose ways to increase price transparency in healthcare, specifically around the prices that insurers and providers negotiate for services rendered along with the prices that patients would pay out of pocket.

The backlash.

As you can imagine, there’s plenty of back and forth among industry players regarding the transparency push (you can read about that and my brief thoughts here), and some legal battles that are bound to take place.

Legal questions to consider: does HHS have the authority to push this type of issue? Is the forced disclosure of prices constitutional? There’s more to come – that’s for certain. Isn’t healthcare fun?

You can read all about the executive order here (paywall).

72. UnitedHealth: the Dealmaker.

Pac-Man Optum gobbles up more physicians.

UnitedHealth is the deal making machine in this week’s Muse after buying/closing DaVita Medical Group for $4.3 billion, healthcare payments firm Equian for $3.2 billion, (remember, JP Morgan just bought one too), and PatientsLikeMe over the past 7 days.

Tell me more about DaVita Medical Group.

The healthcare behemoth finally received FTC approval for the $4.3 billion purchase of DaVita Medical Group, with a few conditions:

UnitedHealth has to sell off DaVita’s Vegas operations (no craps for you) to Intermountain, who I’m sure is stoked about that development, and must give up a few exclusive managed care contracts in Colorado (not even a scratch).

As a reminder, DaVita Medical Group’s operations include primary care and specialist physicians, urgent care centers, and surgery centers across quite a few states. I’m sure this acquisition will be pivotal in OptumCare’s push for $100 billion in revenue by 2028.

Vertical Integration: Good, or Bad?

Bear with me, but I thought Colorado’s state attorney general’s office had some REALLY interesting comments about vertical integration in healthcare.

Since UnitedHealth-Optum is a payer (really morphing into a payer-provider at this point), and DaVita Medical Group is a provider, the two firms will integrate vertically. UnitedHealth seeks to benefit from the acquisition by directing patients to its newly acquired providers for the sake of lowering costs to its insurance plans.

Think of vertical integration almost as a completely siloed supply chain, where one company controls all inputs and outputs to the same product. This effect works especially well in healthcare, where insurance plans direct patients to specific providers and services.

So what did Colorado have to say?

Colorado was asked after the fact as to why the state didn’t further press the issue given the size of the transaction and the ever growing presence of UnitedHealthcare. The state attorney general responded with the following intriguing comments:

“We do not rule out the possibility that vertical mergers can harm competition under a RRC theory. We both voted to issue the complaint, which alleges a similar vertical theory of harm in Nevada. And given both substantially stronger facts and the significant horizontal overlap in that state, that was the right call.

“But vertical mergers often generate procompetitive benefits that must also factor into the antitrust analysis.

“A major source of these benefits is the elimination of double-marginalization, which places downward pressure on prices in the output market. We conclude that the evidence in Colorado, quantitative and qualitative, reflected both dynamics, with mixed results.

“In our view, taken together, the evidence would not have convinced a judge that the proposed acquisition was likely, on balance, to harm consumers in Colorado.

“As our colleagues note, a lawsuit based upon this evidence posed significant litigation risk. Among other things, the law on vertical mergers is relatively underdeveloped, and an adverse decision can impact enforcement in later cases that present clearer harm.

“Of course, all litigation presents risks, and sometimes the risks are worth taking. But, faced with a body of evidence of harm that was ambiguous in the first place, we cannot agree with our colleagues that this was a case on which to roll the dice.”

Final Point.

It’s interesting to note that horizontal mergers, especially in healthcare, are much more obvious and are scrutinized much more heavily than are vertical acquisitions, where there exists less precedent.

The quotes above indicate that the jury is probably still out as to whether or not vertical consolidation is good OR bad for consumers. That, or the state attorneys are looking for bigger fish to fry than a relatively small $4.3 billion deal.

TL;DR – UnitedHealthcare is everywhere.

73. People don’t really understand what Medicare for All is

Who trusts survey data anyway?

Good ‘ole Kaiser Health just released the results of a Medicare for All survey, and it turns out that a lot of people in the US on both sides of the aisle really have no idea what Medicare for All is, or what the probable consequences will be from the policy.

Most new proposed policies from Democratic candidates seem to get improperly lumped under the ‘Medicare for All’ reform umbrella in one way or another. Don’t forget that #feelthebern Bernie Sanders is the original brainchild of Medicare for All.

Everything in moderation.

Moral of the story is that since healthcare is confusing, and Medicare for All is confusing, maybe a more moderate, stepwise option would make more sense – like Biden’s proposed Medicare buy-ins, or state public options run by private payers, similar to the one that just passed in Washington.

74. Amazon’s master PBM takedown plan was just…partially revealed

Remember when we caught a glimpse into Haven’s covert operations after UnitedHealth took the Amazon-Berkshire-JP Morgan healthcare venture to court?

Well, we just learned a little bit more about Pillpack and Amazon’s potential strategy to disrupt the PBM industry through its litigation with CVS over a former employee non-compete.

Thanks to Stat, who dug through plenty of court documents (truly saints), it looks like Amazon is aiming to cut out these gigantic middle men altogether by contracting directly with health plans and employers.

Not so fast.

It’s probably gonna take Amazon a little while to make its way into the industry.

75. Quick Hits

State Hits

Business Hits

Policy/Other Hits



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