The Healthy Muse

The Healthy Muse (hospitalogy)

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The Healthy Muse
The biggest healthcare stories from the third quarter of 2019. All 53 of them, including mega-deals, healthcare policy, and interesting innovations.


1. Sanford and UnityPoint combine to create a huge Midwest system



A 26-state giant.

This week, Sanford and UnityPoint announced their intentions to merge into a sprawling Midwest nonprofit giant. With the combined entity, the two health systems will boast 76 hospitals across 26 states, $11 billion in operating revenue, and significant heavyweight players in several markets (hello, North & South Dakota, Illinois, and Iowa) on their way to becoming one of the biggest 15 nonprofit health systems in the country.

Keep ’em coming.

The deal between the two Midwest giants is yet another example of hospital and nonprofit consolidation in healthcare. Both systems plan to merge for strategic reasons, including improving operational efficiencies by leveraging strengths from each side. For instance, per the WSJ article, Sanford’s research operations strong, while UnityPoint controls several medical schools throughout the region.



2. AbbVie buys Allergan for $63 billion



Not quite to Celgene’s level, but close.

AbbVie is buying fellow biotech giant Allergan in a $63 billion deal, just a smooth $11 billion below Bristol Myers Squibb’s $74 billion bid for Celgene. Allergan’s main claim to fame is Botox (heard of it?). Some investors are skeptical of the deal, since Botox, Allergan’s best selling drug, is expected to see increased competition once its patent protections are up.

Biotech Boom.

It’s been a good year for biotech M&A (and their investment bankers for that matter, probably). Deal volume has already blown past $200 billion for the year, and Big Pharma has plenty of cash to spend for the rest of 2019.



3. Digital Health IPOs Livongo, Change Healthcare, Phreesia, and Health Catalyst hit the market



A red hot IPO market.

A notable number of health-tech type startups are springing up in the IPO market:

Late last week, Change Healthcare ($CHNG), a revenue cycle management firm debuted on the trading floor and is up around 10% as of this writing.

Livongo is planning to go public soon, and describes itself as a chronic disease manager – helping to reduce costs by assisting patients with chronic diseases. The firm is aiming for a $2 – $2.5 billion valuation and is expected to work with the Apple Watch and other wearable devices. Here are some interesting insights from the company’s S-1 fililng.

Health Catalyst, a provider of healthcare data analytics and services, likewise aims to trade publicly and filed confidentially in April. We don’t know much about it, other than the fact that it’s trying to raise $200 million in the offering.

Phreesia, a patient intake and monitoring software company, is looking to raise $125 million in its IPO. The healthtech firm specializes in making the patient intake process easier for all parties (remember those lengthy check-in and check-out times?). It looks like Phreesia dabbles in payment processing too, which is a somewhat hot area right now. Of the startups listed above, this one sounds the most intriguing to me.



4. Dems debate healthcare



As I’m sure we’re all aware, the Democratic debate kicked off this past week with not one, but TWO nights of candidates grandstanding for attention.

From the healthcare side, candidates easily agreed on the need for drug pricing reform, but an interesting divide emerged from those who supported Medicare for All type policies versus those who supported a more moderate approach to healthcare reform.

Elizabeth Warren and Bernie Sanders (of course) quickly threw weight behind the Medicare for All cause. Kamala Harris seemed to do so as well, but then retraced her steps post-debate after saying she mis-interpreted the question.

Read more about the different healthcare policies and statements made during the debate here.



5. Quick Hits – UPMC and Highmark agree to a 10 year contract, a Netflix style model for Louisiana healthcare, Lyft as a Medicaid provider, and more.



State Hits:

Biz Hits:

Policy/Other Hits:



6. What you missed since the last Healthy Muse



-An executive order that could transform the kidney and dialysis industry.

-CVS is trying to break into the dialysis industry with an at-home machine.

-Trump lost big to Big Pharma as the courts strike down forced drug price TV ads disclosure.

-The ACA is probably headed back to the Supreme Court – for a 3rd time. Here’s what happened previously.

–Drug Rebates are living on – for the time being.

-And the Primary Care shortage probably isn’t going anywhere.



7. Digital Health IPOs Rock Wall Street



Big ROI.

How are all of the recent digital health IPOs faring? Let’s take a peek:

–Livongo surged 48% from its $28.00 offering price.

–Health Catalyst boomed 59% from its $26.00 offering price.

–Phreesia is up 46% over its $18.00 offering price.

–Change Healthcare is up just a meager 11% over its $13.00 offering price.

Needless to say, the digital health IPO wave that just hit was…pretty successful for the companies taking place. Considering that digital health was previously in a 3-year drought without an IPO, I’d call that a pretty good run. And you could argue that the market in general is in an IPO frenzy as companies rush to raise money before any recession hits.

Digital health IPOs – an emerging trend?

The IPO success could pave the way for future digital health IPOs, too – like 23andme or SmileDirectClub – as private investors get more friendly with exit strategies through the public markets.



8. How to get rid of your obscenely high medical bill



Contact a reporter.

Seriously – a man received 14 weeks of dialysis at an out of network clinic and was charged over half a million dollars, which, ironically, is more than the cost of a kidney transplant (as KHN points out). KHN picked up the story, and – lo and behold – Fresenius then decided to reclassify the treatments as ‘in network.’ Seriously, what a relief.

Still, these types of headline-grabbing stories pop up all the time in the news. “Man receives $60k surgery bill,” or “Insurer won’t cover treatment for child’s life-threatening disease.” Almost without fail, the company involved reverses course and provides relief to the families involved.



9. Tenet Spins Off Conifer and the Desert Healthcare Network play



Spun off to the masses.

After trying to sell its revenue cycle management arm, Conifer Health Solutions, Tenet is now looking to spin off its subsidiary to the public markets, creating a separately traded public company. Tenet’s stock shot up on the news, since Conifer is pretty profitable (23% margins on adjusted EBITDA) and investors want a piece of the Conifer pie. That demand could signify the hot market for healthcare data and payment management software.

Interestingly, CommonSpirit Health owns a small stake in Conifer, which is something I didn’t know before this story broke. The transaction is supposed to take place by the second quarter of 2021, so still a decent ways away. Tenet wants to make sure that the spin-off transitions well and is tax-free for all parties involved.

In other Tenet news…

The hospital operator is looking to make a large investment in their Desert Health Network by offering to purchase Desert Regional Medical Center in Palm Springs for $320 – $380 million.



10. Policy Corner, week of July 29 – Capping Medicare part D payments? Congress’ fall agenda, and the Dems’ drug pricing bill preview



Welcome to the newest addition to the Healthy Muse – the Policy Corner! From now on, you can find everything on healthcare policy in this section. Let me know if you absolutely abhor this change and I can reverse course. Also, I’m bad with coming up with fun names, but that’s why I’m not in marketing.

Let’s get to the policy, already.

Sheesh. Fine.

This fall will be quite the busy affair for Congress and healthcare policies. Votes are expected on drug pricing bills, surprise billing, and the beefy bipartisan health costs bill since none of them were finalized before recess.

On to the White House.

The Trump admin has been busy with an executive order on drug pricing that would cap Medicare beneficiary payments for drugs.

Meanwhile…

Not to be outdone, the Dems are expecting to release a ‘bombshell’ drug pricing bill in September. The bill might include some component where Medicare directly negotiates with drug-makers on price. Here’s some background on how that might look.

The Cadillac Tax, which taxes high-cost employer-sponsored health insurance plans, is not too popular in Congress. The House recently voted to overwhelmingly repeal the ACA provision.



11. Quick Hits – Robotic surgery reality, Joe Biden’s healthcare policy, and UHS settles criminal probe.



Biz Hits

State Hits

Other Hits

My favorite reads this week:

  • Okay listen…this is a 30 minute read minimum…but it is incredible.
  • The Battle of Grace Church. What happened when Brooklyn’s oldest nursery school decided to become less old-fashioned? A riot among the one percent.
  • This college dropout was bedridden for 11 years. Then he invented a surgery and cured himself


12. Big Tech’s plans for better access to medical information



Making healthcare accessible.

As a part of its ever-ongoing push into healthcare, the various Big Tech firms were in DC this week alongside plenty of other healthcare players at the 2019 Blue Button Developers Conference. At the conference, the coalition, called the CARIN Alliance, formed draft guidelines that will 1) set the standard for sharing medical claims data, and 2) make it easier for patients to access that claims data across healthcare companies.

How it (might) work.

The coalition is taking “Common Payer Consumer Data Sets” and making them easier to operate between platforms in order to make it easier for patients and plans to access the information. Keep in mind – as CNBC pointed out, this data isn’t clinical data, but rather claims data, which is a bit less useful.

All the big health systems and tech companies are playing nice for now, which could lead to some exciting results for consumers down the road.



13. The Remarkable Evolution of Diabetes Treatment



A modern marvel.

With the rising costs of insulin, diabetes has frequently found itself in the news as a hot-button disease for policymakers and journalists alike. A lesser-probed topic is the remarkable transformation that has taken place in diabetes management and monitoring – to the relief of patients.

The transformation of disease management.

The WSJ highlighted some ways that diabetes treatment and monitoring (paywall) is changing – for the better:

Continuous glucose monitors measure the body’s glucose levels constantly and can send results or warnings to multiple smartphones. Insulin pumps can either automatically or manually adjust levels in the body.

Medical device growth.

As the WSJ points out, glucose monitors growth have skyrocketed in the past few years. According to the companies that produce the monitors, the market is huge. It makes sense – this type of product is great for the consumer. Diabetes patients get more autonomy, (much) fewer finger pricks, and better disease control.

A large market, you say?

With the boon of chronic disease management and medical device connectivity, it was only a matter of time until the Big Tech players got involved. All of Alphabet, Amazon, and Apple are developing new tools and services for diabetes management.



14. Amazon’s PillPack runs into trouble with ReMyHealth



Drama in PBM land.

This ordeal is probably as close as we’ll ever get to soap opera levels of drama for PBMs. PillPack is suing a company called Surescripts, which is a company that supports PBMs through “e-prescription,” or a fancy word for electronically transferring patient prescription data between healthcare organizations and pharmacies.

So what’s the beef?

In order to access patient data and prescriptions, Amazon’s PillPack partnered with a firm called ReMyHealth. ReMyHealth would then access the Surescripts database to give PillPack the appropriate patient prescription information.

More speedbumps for PillPack.

Everything was going pretty smoothly for PillPack…until Surescripts suddenly sued ReMyHealth and kicked the firm out of their database, claiming that they were illegally accessing Surescripts’ database and violating their terms by fraudulently handing over patient medication history to PillPack.

According to Surescripts, ReMyHealth apparently mis-represented who they were providing the data to, since the PillPack partner vaguely claimed that the prescription data was meant for “providers caring for patients in hospitals.” Surescripts has stated that the case is being handed over to the FBI. Meanwhile, PillPack sent Surescript a cease-and-desist notice. Yikes.

In other Amazon news…

Amazon and healthcare electronic health records firm Cerner announced a strategic partnership this week. And how do Amazon’s big healthcare plans involve Alexa?



15. Pfizer creates a generic drug giant along with Mylan



A generic merger.

This week, Pfizer announced its plans to spin off its generic drug making unit in order to combine that unit with Mylan, which is also a…generic drug making company.

This thing is gonna be massive. The newly combined company is expected to have about $19 billion in revenue, with Pfizer owning 57% and Mylan owning the other chunk (you do the math).

Some big-name generic drugs that the newly combined company makes includes the short-supplied EpiPen and the anxiety-reducing Xanax (heard of them?). The merger comes as a big sigh of relief to Mylan – the company has been struggling heavily lately.

Read the deal announcement here.



16. Policy Corner, week of 8.5.2019 – Trump’s executive order on pricing transparency, drug importation from Canada, and partial Medicaid expansion in Utah denied.



Get your popcorn ready.

Don’t worry fam, I’m here to sift through all of the policy noise for you. Let’s get after it.

Trump’s executive order on pricing disclosure.

As I’m sure everyone here has heard by now, Trump – through CMS – is trying to mandate hospitals and insurers to publicly disclose their secretly negotiated healthcare prices.

The industry speaks out.

While most legal experts are 50/50 as to whether or not CMS even has that authority, hospital and other healthcare interest groups are already spicing up their rhetoric, blasting the executive order by calling it a “misguided attempt” that fails to give patients the information they actually need (personal aside – do interest groups have some sort of handbook they follow for language to use in these situations? I’m genuinely curious).

Also, forcing the public disclosure of negotiated prices might even be a First Amendment violation of free speech, which would be a pretty wild conclusion to this whole ordeal.

How the executive order would work…if it makes it.

In summary, CMS would require for hospitals to disclose the prices of 300 healthcare services, 70 of which would be selected by CMS (with the rest selected by the individual hospital). The apparent fine for non-compliance would be $300 per day, or about $110,000 annually.

In other Trump news…drug importation.

In an effort to lower prescription drug costs, the Trump administration is mulling over the idea of importing drugs from other countries – namely, Canada, for starters. While this exact policy might not be implemented, the fact that importation from other countries is being considered (for the first time ever, actually) means that they’re pulling out all the stops.

Importing drugs from other countries, where they generally cost quite a bit less, sounds good in theory. But in reality, it might be tough to get other countries onboard with that idea. I’m sure Canada wants drug shortages.

Partial Medicaid expansion in Utah gets denied.

In other news, the Trump admin denied partial expansion of Medicaid in Utah. Something about how only partially expanding Medicaid is illegal.

Finalized payment rulings for hospice and inpatient rehab facilities.

On the CMS end of the policy spectrum, the institution finalized post acute rulings, which will result in payment increases for inpatient rehab facilities, hospice, skilled nursing, & more. Read more about the three proposed 2020 rules  here, too.



17. Quick Hits – Health Insurance Innovations looks for a sale, Private Equity is having no problems raising new funds, Anthem launches a new consumer app, and more.



Biz Hits

State Hits

Other Hits

My favorite reads this week:



18. Opioid distributors are about to get a BIG TIME fine.



That’s a big fine.

The big distributors of opioids were already expected to be on the hook for a hefty fine stemming from the opioid crisis, but it turns out that the fine is gonna be QUITE a bit more than expected – a range between $10 billion to $45 billion. As you can imagine, the news hammered drug distributors McKesson, Cardinal Health, and Amerisource Bergen, who would be on the hook for the settlement cash.

The companies combined are currently dealing with close to 2,000 lawsuits in 35 states stemming from the nearly 76 billion pain pills that they distributed during a 6 year period (according to the DEA). The prosecutors argued that the drug distributors in particular didn’t respond to signs of opioid abuse, and engaged in shady marketing.

Don’t forget that companies like Purdue Pharma, Teva Pharmaceuticals, and Johnson & Johnson (heard of them?) are also on the hook for the crisis, too.



19. Drug Data Manipulation at the FDA – Novartis hid safety data about Zolgensma, its now-approved $2.1 million drug.



Raising some eyebrows.

Faithful readers of the Healthy Muse might have seen Zolgensma (gesundheit), a drug that treats spinal muscular atrophy in children, making the news in the past few months for its unprecedented $2.1 million price tag. Now, it turns out that the drug’s maker, Novartis, may have manipulated and hidden some of the trial data from the FDA.

High stakes.

While the FDA maintained the drug is still safe and should remain on the market, questions are still arising as to whether or not Novartis knowingly manipulated the data and covered it up. The stakes were high – according to Stat, if the FDA had known about this extra data, the drug’s approval most certainly would have been delayed. Novartis claims they were as transparent as possible. Some members of Congress are pretty upset and want the FDA to take criminal and civil action against Novartis, the most expensive drug in history, and the big, bad pharmaceutical industry.



20. Can the iPhone and Apple Watch detect dementia?



Dementia Detectors.

In this week’s cool health tech story from Healthcare Dive, Apple and Eli Lilly are trying to determine whether the Apple Watch and iPhone can detect dementia in patients through small research studies. Basically, they’re observing whether or not common trends exist among those with dementia/cognitive decline as opposed to healthy individuals.

Some promising results.

As it turns out, preliminary results seemed to indicate that individuals with symptoms of dementia displayed differences in device use as compared to healthy folks, including “slower typing, less regularity in schedules, fewer text messages, and greater reliance on helper apps such as the Clock app.”

Pretty interesting stuff, and could be just the beginning of a deep dive into earlier detection of dementia.



21. CVS’ counter to Amazon Prime subscription – CarePass, complete with free drug delivery



Prime 2.0

Last week, our third story touched on the PillPack – SureScripts fiasco, where traditional PBM heavyweights are taking on Amazon’s attempted entry into the market. Now, CVS is taking on the online retail giant in another way: through a subscription based model similar to Amazon Prime.

Take that, PillPack.

As the traditional drugstore evolves its offerings into a healthcare wellness hub, CVS is offering CarePass – a $48 annual subscription – to customers, which will include free delivery of its drugstore products AND prescription drugs. If that’s not enough for you to consider the service, CVS is also including a monthly $10 coupon, too. I don’t know about you, but I’d say that’s a pretty decent offering.



22. Policy Corner, week of 8.12.2019 – Canadian drug importations and the finalized 2020 inpatient rule from CMS



A new healthcare plan from the Trump administration?

Everyone was wondering what the Trump administration would do if Obamacare is ACTUALLY struck down in court this time. Is there a plan in place for the expected turmoil? As it turns out, the White House might release a plan as soon as September with some interesting elements attached, including efforts to end surprise billing, give states more wiggle room on policies, and more.

In other news, the pharmaceutical industry isn’t a big fan of the whole ‘Canadian drug importation’ plan, and, unsurprisingly, the proposal even managed to rile up Canadians too.

Finally, CMS released its final inpatient rule for 2020. From Beckers, here are 8 things to know.



23. Quick Hits – Walgreens closes 200 stores, Addus HomeCare looks to take advantage of the expected 2020 Medicare Advantage boom, and 30 leaders transforming the future of healthcare.



Biz Hits

State Hits

Other Hits

My favorite reads this week



24. Want cheaper surgery? Go on vacation.



An all-inclusive resor- er…wait – hospital?

Save this wild story down for later. To reduce costs on healthcare, some employers – like Ashley Furniture – have been flying down patients along with physicians to Cancun, Mexico in order to perform surgeries and other procedures.

As KHN reports, one patient flew from Mississippi to meet an orthopedist from Milwaukee to perform a knee replacement surgery, and the patient was paid for it – that’s how much less it was to have the procedure done in an upscale hospital in Mexico rather than in America. Like, literally less than half as much money. Absolutely wild!

Read the whole story here.



25. The latest privacy battle: Patient DNA data?



The latest privacy battleground.

This week, the Wall Street Journal reported (paywall) on recent hospital system and drug-maker partnerships to access patient DNA information. The partnerships are aimed at advancing drug development, or other research-oriented purposes. But they might not be the most forthcoming with patients as to how they’re using patient data.

How it works.

Patients are given a free genetic test that shows them risk of various diseases and vulnerabilities, but they’re not necessarily told how their genetic data might specifically be used by companies for drug development or other commercial purposes.

Keep an eye on this one as genetic sequencing becomes more commonplace.



26. Is employer healthcare spending reaching a breaking point?



Humpty Dumpty sat on a wall….

Healthcare costs have risen for everyone – that’s a given. But because the U.S. healthcare system is set up how it is, employers foot a larger portion of healthcare costs. In an interesting and detailed brief from Axios, it turns out that the system could be close to a breaking point.

As these costs continued to rise for employers, companies shifted more of their healthcare costs to their employees (hello, high deductible health plans).

What does shifting costs to us do?

On top of an already high deductible, patients end up having higher premiums along with more responsibility to pay for their medical bills. Given these set of facts, the rise of out of pocket spending and healthcare inflation could be unsustainable and lead to a crisis.



27. Policy Corner, week of 8.19.2019 – an Obamacare Replacement? Cadillac Tax repeal. And what all of the 2020 candidates have to say on healthcare.



What’s your plan??

Democrats and basically everyone else were asking the Trump admin what the replacement healthcare policy would be if Obamacare were to fail in court in its 3rd victory lap around the Appellate Circuits. Never fear – Trump’s health chief came out and let everyone know this week that officials were actively working on an Obamacare replacement.

Any details yet, or nah.

The plan itself is skimpy on details so far, but we DO know that officials are targeting a September release date, and we would expect the plan to include certain elements like ending surprise billing, giving states more wiggle room on policies, potential drug pricing solutions, and more.

In other Trump news…

The administration just hit the brakes on a law that would have stopped ‘unneeded’ CT and MRI scans, since officials faced some backlash from physicians who thought the policy was disruptive to their practices.

Cadillac Tax repeal.

Finally, it seems pretty likely that the Cadillac Tax, a tax on more ‘generous’ insurance plans, would be repealed this fall. Here’s some background on that.

In the miscellaneous category..

Here’s a pretty handy little tool created by the Healthcare Economist that compares different Democratic candidate health plans at a high level, and here’s the full article.



28. Quick Hits – SmileDirectClub’s S-1, Uber expanding into Medicare, Centene planning ACA expansion, and how to save a Rural Hospital.



Biz Hits

  • SmileDirectClub, a direct to consumer “teledentistry” platform, just filed to go public. They lost about $53 million on revenues of about $374 million in the first half of 2019. Their prospectus is pretty interesting if you have the time to read through it.
  • Uber just sealed a deal with American Logistics to provide travel services for Medicare plans in its first tangible step into healthcare.
  • Centene is expanding its ACA plans into 10 more states.
  • Medicare Advantage growth is booming (obviously) but apparently the plans aren’t producing much savings?
  • CityMD and Summit Medical Group finalized their merger this week, bringing together an urgent care powerhouse and a huge physician group in the northeast.
  • Healthcare has always been seen as a defensive, anti-cyclical investment in the stock market. But have things changed?
  • Physicians are being targeted more and more for C-suite positions.

State Hits

Other Hits

My favorite reads this week



29. Johnson & Johnson Opioid Ruling – a $572 million fine



That’s painful. (get it?…I’ll see myself out)

This afternoon, a judge released the verdict (paywall – WSJ) of the first of many trials determining whether Johnson & Johnson specifically contributed to the Oklahoma opioid crisis. The state of Oklahoma asked for as much as $17 billion in fines from J&J, claiming it would cost that much to recover from the damage done.

While the judge found J&J liable, the fine was set at $572 million, which is about 3% of what Oklahoma asked for. And of course, since the fine for Johnson & Johnson wasn’t as big as expected, the stock shot up around 3% immediately after the news broke. The company will appeal the decision, too.

That’s not all.

This court case is the second of many trials taking place around the U.S: Purdue Pharma settled for $270 million, and Teva Pharmaceuticals settled for $85 million, also in Oklahoma. We’ll probably be seeing some more drug makers coughing up big bucks here before too long.

After all, there are almost 2,000 opioid related lawsuits out there right now, and almost all of them have consolidated around a federal court house in Ohio. Keep an eye on that case, which is slated for October.



30. Cue up the next blockbuster drug deal – Amgen is buying Otezla in $13.4 billy deal



In Monday’s other inflamed news story…

Amgen announced their plans Monday to buy the highly successful, lucrative anti-inflammatory drug Otezla from Celgene for a whopping $13.4 billion deal (keep in mind that Celgene is getting acquired by Bristol-Myers-Squibb).

A Win-Win Deal.

As the WSJ points out, this deal was pretty much a huge win for BMY since the drug maker was required by the FTC to sell Otezla anyway. Amgen is a fan of the deal too, since patents on the blockbuster drug don’t expire until 2028. It’s the latest deal in the usually highly active biotech space, which hasn’t been too active since January of this year.



31. Apple’s Health division faces personnel challenges



Secret’s out.

Tensions are rising inside Apple’s health division personnel. The highly secretive health operation has seen executives departing for other healthcare firms and ventures after growing frustrated with Apple’s progress in disrupting healthcare along with its various healthcare philosophies.

Apparently, while Apple is focusing more on bigger picture, general population health and incremental progress, individuals were hoping to solve more specific problems within healthcare at a quicker pace with more focus. That issue, coupled with more philosophical problems, led to the departure of quite a few employees.

My thoughts..

I’m all for the ambition, but the healthcare industry as a whole moves as slow as molasses to adopt any new technology AS IS. Some practices still transfer data via fax. I’ve even heard of one physician who had no clue what Microsoft Excel was. (FYI – the CNBC article linked above also has some interesting insights into Apple Health’s operations and structure, if you’re into that sort of thing).

In other Apple healthcare news…

The tech giant just announced a strategic partnership between Allscripts and Apple Health Records. According to the release, Allscripts will now let any patient using the platform access their personal healthcare data via iPhone – even if using several providers.



32. Higher temperatures create more health problems



Sticky.

As if you haven’t heard enough about climate change, NPR published an article this week highlighting the negative health effects that come along with rising temperatures. The story details how health problems and mortalities rose drastically during summer heat waves in various cities.

Don’t forget though, that some may stand to gain from rising temperatures. Since diseases spread more easily in higher heat environments, Axios pointed out in January that warming global temperatures could be a huge boon to Big Pharma and drug development/sales to counteract the potentially higher occurrence of diseases if temperatures continue to rise.



33. Healthcare Policy Corner, week of 8.26.2019 – controversial public charge rule takes heat, and Democrats debate healthcare – just not Medicare for All.



Widespread critics are speaking out against the administration’s Public Charge Rule expected to take effect in October.

What’s the Public Charge Rule?

Basically, the administration is looking for more ways to control immigration. As a way to deny people from receiving green cards, the admin created a rule that limits immigrants from receiving public benefits for more than 12 months.

For instance, if said immigrant were to use Medicaid, which is a designated public benefit under the Public Charge Rule, for more than 12 months within a 36 month period, that individual would then be denied a green card.

How does this affect healthcare?

Since Medicaid is listed as one of the public benefits, healthcare providers (including the AHA) and state officials alike have warned the admin, saying that Medicaid enrollees would plummet as a result of the rule.

Lower levels of Medicaid enrollees would lead to higher percentages of un-insured populations, which means providers would potentially be faced with much higher levels of uncompensated care, worse health outcomes in their population, and worse financial outcomes that they and the state would eventually have to pay for, anyway.

As you can imagine, several states are suing and we’ll see where all of this ends up.

In other policy news…

Democratic Senators aren’t fans of Medicare for All policies. Instead, according to Politico, both representatives in battleground states and incumbents alike favor supporting the healthcare rhetoric already floating around: expansion of Medicaid at the state levels, and adding public insurance options to states. But they’re shying away big-time from touting Medicare for All.



34. Quick Hits – Cigna starts scooping up providers, huge state Medicaid contracts in limbo, Wyoming tries to classify air ambulance services as a public utility, and more.



Biz Hits

State Hits

Other Hits

My favorite reads this week



35. Vaping Related Illnesses are Spiking



The Vaping Epidemic.

The CDC is reporting hundreds of vaping-related illnesses across 29 separate states, which is a huge spike in what most might think is a ‘safer’ practice in vaping. Apparently, most of the incidents are happening because of third party, foreign substances (like THC) somehow making their way into the vapes.

The exponentially increasing number of reports shows us just how far behind vaping regulations are when it comes to preventing these sorts of things. Forget about the shady marketing tactics. Now, real health scares are coming into the picture as a result of the wild-west vaping industry. Look for more potential regulation to hit the main stage soon.



36. Audits for Medicare Advantage, and DOJ Investigations for Providence



CMS wants to audit Medicare Advantage.

Medicare Advantage (AKA more or less Medicare plans managed through big insurance companies) has been a huge boon for the health insurance industry and the main driver of growth on quarterly earnings calls. So it comes as no surprise that the big insurers would strongly oppose any regulation on their biggest growth vehicle.

What’s the looming regulation?

As Axios reported this week, the Centers for Medicare and Medicaid want to audit Medicare Advantage plans to make sure that the plans are not billing Medicare for more services than they ought to be. They’re calling the audits “risk adjustment data validation.”

Insurers Hate This One Thing!

Insurance companies had plenty to say about the pending regulation. Centene even had enough nerve to warn that the regulatory action could cause further market consolidation…

Read the full Axios article here.



37. Wal-Mart’s Healthcare Expansion – starting with primary care clinics



Enter: Wal-Mart Health Clinics.

In direct competition with the likes of CVS and other direct to consumer primary care-type offerings, Wal-Mart has decided to make an even more serious push into healthcare by opening up primary care clinics.

Its pilot store opens in Georgia and looks to offer quite the decent selection of offerings for consumers, including dental, optical, audiology, and other entry-point services for…you guessed it…everyday low prices!

Read more about the offering here.



38. The Wellness Trend



Banking on Wellness.

This week, Peloton filed its S-1 form – they’re expected to IPO later this year. As Nathaniel Meyersohn noted on Twitter, there was a little nugget in their S-1 that noted the wellness trend happening in the U.S. has been a huge boon for the Peloton business. As we all know, Peloton sells overpriced, glorified stationary bikes with a fitness subscription on top of it (and they’re still not profitable…that is beyond me).

But Peloton’s recent success shows the push that wellness has made into society, especially among employers, who are now offering wellness programs that include everything from on-site yoga to stress management (I should note that the jury’s still out as to whether or not these types of programs are effective), to more robust offerings like mental health screenings, tele-health, and women’s health.

Fitbit jumps in to care management.

Don’t stop with just the employers, though – traditional ‘generalized’ medical wearable makers like Fitbit and Apple are jumping in on the trend, too. In fact, the former is looking into piloting a care management program for its users later this year.



39. Policy Corner, week of 9.2.2019 – Trump’s rumored healthcare offering



Obamacare, meet Trump-Care.

Some additional clues about “Trump-Care” emerged this week from an NPR feature. Some components of the plan might include recommendations made in a white paper published by the Department of Labor in 2018. The white paper made note of various reforms like expanding the roles of health savings accounts, heightened anti-trust scrutiny, and (ironically) easing restrictions around Medicare Advantage plans.

Read the full article for more insights into a potential Trump-Care offering. Also, don’t forget that the ACA is still tied up in court and might make it back to the Supreme Court for a third showing.

Be on the lookout for any potential healthcare proposals this month as Uncle Sam ramps back up for the fall.



40. Quick Hits – SmileDirectClub’s IPO, Epic’s Epic plans for its E H R platform, Purdue Pharma’s Opioid Settlement offer, and a Medical Mission Control Center.



Biz Hits

State Hits

  • Lawmakers are currently fielding complaints about Aetna’s handling of the Managed Medicaid program in Kansas. Basically, they’re telling Aetna to shape up or SHIP OUT. The Kansas Hospital Association thinks they can shape up.
  • Kaiser Health is under pressure in its home state of California – a bill passed the state’s legislature that would require each Kaiser facility to report profits.
  • Similarly to Kansas, Louisiana is working on issuing an emergency Medicaid contract as the state holds talks with major Managed Medicaid insurers after a long dispute.

Other Hits

My favorite reads this week

  • In the Straits: An Inmate Turned Millionaire Turned Lone Survivor


41. Battle for the Healthcare Cloud – Big Tech goes to war



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?



42. 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.



43. 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.



44. 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.



45. Healthcare Policy Corner – Week of September 13 – Nancy Pelosi’s rumored drug pricing plan, surprise billing pushback, combating the opioid epidemic, and a new potential FDA head.



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.



46. Quick Hits – Nobilis Health gets delisted, Addus HomeCare doubles its revenue through acquisition, Michigan bans flavored e-cigs, and more.



Biz Hits

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

My favorite reads this week

If you’re a fan of McConaughey, I thought this read was hilarious (paywall).



47. Walmart Health’s partnership with Amedisys, Google Health’s push into AI, Nancy Pelosi’s drug pricing plan, Site Neutral payments shot down, a Pacific Northwest clinically integrated network, and more.



Providers scored a big win when a federal judge scrapped CMS’ Site-Neutral payment policy.

  • The judge ruled that HHS doesn’t have the appropriate level of authority to enforce payment policy on hospitals. This ruling was reminiscent of the mandatory television drug ad price disclosure ruling that was also shot down in court earlier this year on a similar principle.

Nancy Pelosi released her plan to bring down drug prices (paywall – WSJ) – namely, the costliest 25 or so drugs would be subject to direct pricing negotiations with the federal government.

  • These negotiations would be tied to an international pricing index, and drug-makers would be penalized for not participating. (If you’re so inclined, here’s the bill in its glorious entirety).

The Pharmacy Benefit Management industry continues to get challenged by new players and potential disruptions. The latest contender, Capsule (similar to PillPack), just raised $200 million to take on industry titans like PillPack, CVS, and others.

Walmart Health continues its surge forward. The retail giant just partnered with Amedisys, one of the largest (and still growing) home health and hospice players, to expand access to home health across the nation.

  • Sam’s Club is also joining the party by offering a pilot program to its members to offer discounts on certain routine care items (shout out to the Groupon story from a few weeks ago).

Not to be outdone by the old guard Walmart, Google Health just completed its somewhat controversial acquisition of AI-focused DeepMind, which is expected to further enhance its efforts to push into healthcare – including data security, cloud storage, and other important characteristics.

Humana’s CEO David Jones passed away this week. The WSJ highlights his life and Humana’s origins in a memoir.

Washington Medicine, MultiCare, and LifePoint Health just created a huge clinically integrated network covering 14 hospitals, 6,500 providers, and 600 outpatient sites of care in the Pacific Northwest.



48. Amazon Pilots Primary Care Platform for Employees



Another day, another healthcare launch.

This week, Amazon launched Amazon Care for its employees. Basically, Amazon is trying to cut down on healthcare costs (like everyone else), so the company is offering a slew of primary care options – including virtual care and in-home nurse visits. The initiative is piloting in the Seattle area for Amazon’s employees. Don’t tell Whole Foods workers about it, though.

In other Amazon news…more health wearables tech.

Amazon wants to take on the ‘ole AirPods. This week, the e-commerce giant unveiled its wireless Alexa earbuds containing fitness tracking, among other planned gadgets recently announced.



49. Employer-Sponsored health insurance premiums top $20K for the first time



A new car a year…or health insurance?

A recent Kaiser survey showed that employer-sponsored health insurance premiums rose to an average of $20,576 for family coverage. It’s a bit alarming – the annual premium growth rate has been above both inflation and wage growth for quite a while. Employees are increasingly paying a higher out-of-pocket share for healthcare costs. We all know how hard it is to spot a bubble but…are we in a bubble?

As we get closer to any potential breaking point (hopefully none), you’re going to start seeing employers take more extreme measures to lower their costs.

Such cost cutting measures could include direct contracting with primary care physicians, or self-funding insurance plans with insurance coverage for “extreme” emergency spending. Others might opt to cut their labor force.

Employers with larger, concentrated labor market share in local markets will have better leverage to push providers and payors alike for increased transparency and more favorable contracts.



50. 23andMe’s predictable push into drug development



23andMe is moving quickly into the field of drug development, and its first push is a predictable and seemingly natural step for the company – clinical trial recruitment.

23andEveryoneElse.

Based on all of the information us common folk paid to hand right on over to the DNA testing company, 23andMe is partnering with TrialSpark, a more tech-savvy version of a contract research organization, to recommend customers for clinical trials based on those customers’ DNA, demographic or other characteristics.

These DNA testing firms are now sitting on a ton of probably-valuable genetic testing data, and they’re not going to sit idly with that (potentially sensitive) information.

The more specialized data matching processes might actually be really helpful to drug makers and research teams as they work on developing drugs for tricky diseases.

Remote Access.

Here’s the revolutionary part. As Stat notes in its story, 23andMe and TrialSpark might actually solve what has traditionally been a huge barrier for clinical trials – geography. Instead of needing all of the patients for a trial in one location, the partnership is trying to digitize clinical trials. That might mean that patients could walk into their local doctor’s office to report data rather than flying to another facility.



51. Air Ambulance operator Air Methods is planning to cut insurance out and contract directly with employers



Fed up.

After its inability to reach contracted agreements with large payors like Cigna, United, and Aetna, Air Methods – an air ambulance operator (think helicopter care flights) – is cutting the insurance middleman out by attempting to contract directly with employers.

Helicopter care flights are prohibitively expensive as-is, and even more so if that patient is out of network. By contracting directly with employers like Walmart and Tyson Foods, Air Methods might start the trend of cutting out payors and working directly with employers



52. Policy Corner, week of September 30 2019 – Democratic Drug Pricing Proposal will get shot down. The latest on surprise billing.



Since you guys are probably getting enough of the whole impeachment thing in the 5-second revolving door news cycle, let’s take a breath of fresh air into the world of healthcare policy:

  • Mitch McConnell is not a fan of Pelosi’s drug pricing proposal. He’s already planning to block the measure, citing socialist pricing controls. Pelosi’s plan might have missed the mark on other drug pricing inputs, anyway.


53. Quick Hits – Peloton’s IPO, Ridesharing surges in Arizona Medicaid program, a merger between Ochsner and Lafayette General in Louisiana, and some notes on Artificial Intelligence.



Biz Hits

State Hits

  • In Louisiana, Ochsner and Lafayette General just announced plans to combine into a 33-hospital system in a pretty interesting deal. Along with the merger, the combination is pledging to invest $365 million in community investments/resources in the parishes they serve, including the expansion of key services. Finally, the combined system isn’t planning to make any cuts to labor – in fact, they’re planning to raise minimum pay.

Other Hits

My favorite reads this week



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