1. Battle for the Healthcare Cloud
Electronic Health Record Battle Royale.
The battle is heating up between Big Tech titans as they compete for health data storage contracts (paywall – WSJ) with big-time health systems. As one of the final frontiers for Amazon, Google, and others, these Cloud contracts could get a foot in the door to work with healthcare folks that could result in long, lucrative relationships that expand beyond just the Cloud.
Recent Cloud deals announced included Google and the Mayo Clinic, Microsoft and Providence St. Joe’s, and plenty of others. Generally, the agreements really are just for storage of healthcare and financial information. But we already know that Big Tech has plans to expand capabilities further, like including electronic health records and finding clinically useful information for trials and other treatments.
Of course, these developments come with a slew of problems – namely, privacy concerns (shout out HIPAA) and security issues (healthcare companies literally get hacked all the time) so…we’ll see where it goes from here.
Tech firms don’t care, though. How mad would shareholders be if they missed out on the market expected to reach $100 billion by 2025?
2. The Sobering Reality of Healthcare Tech?
Is a healthcare tech disruption in sight?
All of this talk about Big Tech has me thinking…how far ARE we from seeing true ‘disruption’ in healthcare?
The answer is….we’re not quite there yet. As Axios reported this week, the healthcare system – and providers in general – have a bit of a ways to go to catch up technologically. We’re moving in the right direction, but patients still don’t really use much tech to actually benefit their health outcomes…yet. And the end result of healthcare innovation might be a bit messier than we think.
Still, there are plenty of positive and incremental takeaways each year. In its annual keynote, Apple announced 3 health studies – actual health studies – that will incorporate its Apple Watch in hearing, women’s health, and heart health (maybe in response to this open letter? And there are plenty of promising medical device and similar startups that could revolutionize methods of treatment.
Bad actors.
Don’t forget that reality always eventually sets in. Investors pouring money into the system might leave thoroughly empty handed. Just look at what happened with Theranos and now, uBiome’s bankruptcy.
uBiome raised more than $100 million in venture financing. What does that say about due diligence practices for the investors who vet these health-tech companies? Are they stringent enough?
— Christina Farr (@chrissyfarr) September 4, 2019
3. The good, the bad, and the ugly of hospital mergers
Controversy.
A report published from the AHA this week caused a bit of a stir from everyone, as its findings indicated that hospital mergers resulted in lower healthcare costs, among other assertions.
Opposing viewpoints.
Economists disagreed with the view, saying that mergers resulted in higher costs. Providers argue that mergers may be necessary in order to maintain leverage with insurers, improve operational performance, and provide better population health management.
What do you think? Read the full report here.
4. The Transforming PBM Industry
CVS Deal gets approved.
After a tumultuous 9 month run, a federal judge finally managed to approve the CVS-Aetna deal this week, paving the way for CVS to officially acquire Aetna (even though they’ve been operating as one entity for…almost a year). The approval comes at a time when CVS, traditionally a PBM player, is trying to transform its business model and the healthcare industry – even hiring a former Fitbit exec to lead its consumer health division.
Pharmacy Benefit Management’s evolution?
Ironically enough, though, the first industry to see significant change may be CVS’ core business of pharmacy benefit management. New startups are springing up, aiming for more transparency around the typically-shady PBM practice and a generally more consumer-friendly approach to the business. And don’t forget the heat the industry faced earlier this year from Capitol Hill.
Read for yourself an interview with PBM startup Capsule’s CEO, who talks about the changing industry. And another startup, Capital Rx (what’s with all the C names anyway?) just introduced a new way to price drugs in an itemized format.
5. Healthcare Policy Corner – Week of September 13
The Congress Strikes Back
Here’s a preview of Congress’ fall healthcare agenda:
- Lowering prescription drug prices – potentially allowing Medicare to directly negotiate drug prices with pharmaceutical companies
- Pelosi’s Plan, which includes the above direct negotiation tactic, might actually have bipartisan support
- Finding a solution to surprise medical bills
- But as of now, it looks like Congress is facing major pushback from industry leaders on surprise billing – from an extremely well-funded dark money group. We might have to wait a bit for more surprise billing legislation.
- Look for more action at the state level.
Other healthcare things to look out for this fall:
- Unveiling Trump’s healthcare plan (expanding Medicare Advantage, giving states more leeway, etc.)
- Resolving Gun-control disputes
In other policy news, HHS is releasing $1.8 billion to combat the opioid epidemic. And it looks like a top doctor from Texas, Stephen Hahn, is a top candidate to replace Scott Gottlieb as the head of the FDA.
Quick Hits
Biz Hits
Nobilis Health, a hospital and ASC operator, is getting de-listed after not reporting any financials since….2017. Oh yeah. They also lost 2 executives in this process.
Addus Homecare boosted its revenue by purchasing Hospice Partners of America. You can read more about Addus and its acquisition strategy (e.g., acquiring $230 million in revenue in 15 months) in an interesting article here.
Read an interesting story on how one of Pfizer’s top scientists helped to turn the company around (paywall).
State Hits
Michigan just became the first state to ban flavored e-cigarettes. A national ban might be coming soon, with Trump signaling support. Let’s ignore cigarettes, though – cool? Cool.
I thought this was amusing and somewhat sad. A California health official quit after blasting vaccine foes as ‘flat-earthers’
Other Hits
A Telemedicine CEO pleaded guilty this week in a $424 million Medicare fraud scheme – which I think is the largest fraud scheme to date? According to ProPublica, though, insurers couldn’t care less about fraud.
Google is now banning ads for ‘untested, deceptive treatments’ – stem cells & gene therapies
In other bizarre news, some providers are listing MRIs and other types of treatments on….Groupon.
My favorite reads this week
If you’re a fan of McConaughey, I thought this read was hilarious (paywall).
The Athletic: At Texas, Matthew McConaughey has found the role he was born to play: ‘The M.O.C., baby!’