US Markets – January 09, 2018

Healthcare Policy

US Healthcare Policy Highlights

  • The ACA’s 2018 open enrollment period ended on December 15 with roughly 8.8 million people signing up for health plans through Healthcare.gov, the federal exchange that operates in 39 states, and witnessed a 4% decline compared to last year's total of 9.2 million sign-ups through the federal marketplace that operates exchanges in 39 states (Forbes)
  • The Agency for Healthcare Research and Quality (one of the 12 Agencies within the HHS) announces it will conduct a challenge competition this fall focused on developing new tools focused on patient-reported outcome (PRO) data. The agency aims to find user-friendly tools that will better enable collection of the data, as well as its integration into EHRs or other health IT products (Mobile Health News)
  • HHS finalizes a rule to ease the exchange of information on patients' substance use history between providers, insurers and third parties involved in the payment or delivery of care. Under current regulations, patients need to fill consent forms to share information on their substance use history with each individual entity involved in their payment or care delivery process. The update to HHS' Substance Abuse and Mental Health Services Administration's regulatory rules aims to eliminate red tape that can slow the reimbursement process and delay timely access to care (Becker’s Hospital Review)
  • A federal judge dismisses a lawsuit seeking to block CMS from implementing a USD 1.6 billion cut to hospital reimbursements under Medicare's 340B drug discount program—although hospital groups suggested they may take further legal action to try to reverse the cuts:
    • In November 2017, the American Hospital Association (AHA), Association of American Medical Colleges (AAMC), America's Essential Hospitals (AEH), Eastern Maine Healthcare Systems, Henry Ford Health System, and Park Ridge Health had filed a lawsuit against HHS seeking an injunction to stop HHS from implementing the cuts pending the lawsuit's resolution. The organizations had argued that the 340B cuts violate the Social Security Act and exceed the HHS secretary's authority because Congress had intended for hospitals to receive discounts under the program (The Advisory Board; Modern Healthcare)

Healthcare Economy

US Healthcare Economy Highlights

  • Celgene to buy blood disease biotechnology company Impact Biomedics for USD 7 billion. The deal is structured in three parts:
    • Celgene paying USD 1.1 billion in cash upfront
    • Celgene will pay an additional USD 1.4 billion, depending on the receipt of FDA approvals.
    • Finally, Celgene will make payments depending on sales, with a maximum of USD 4.5 billion due if annual net sales of Impact's treatments exceed USD 5 billion (CNBC)
  • Roche, a global pharmaceuticals and diagnostics company, is acquiring Ignyta, a precision medicine company focused on oncology. The deal is valued at USD 1.7 billion on a fully diluted basis and expected to close in the first half of 2018 (Becker’s Hospital Review)

Technology Briefs

  • San Francisco-based startup Akiri launches a blockchain-based network-as-a-service (NaaS) platform for healthcare. The development is currently underway for its initial product, Akiri Switch, which is a subscription-based data network that enables any type of health information to move seamlessly and securely throughout the US healthcare system. Akiri is fueled by USD 10 million funding from Health2047, an innovation enterprise whose founding investor is the American Medical Association (Healthcare IT News; PR News Wire)
  • HHS releases the Trusted Exchange Framework to strengthen its interoperability work as required by the 21st Century Cures Act. The proposed framework establishes a set of minimum requirements and conditions for a trusted exchange and attempts to streamline patient data access, and exchange provisions set out in the Act.
    • Part A of the framework establishes principles for exchange and principles to help networks support interoperability
    • Part B gets into the legal language and outlines how participation agreements should be constructed to support the process. Also brings up problem areas that have hindered issues with data exchange in the past (Healthcare IT News)
  • HHS releases a report indicating continued cybersecurity vulnerabilities among HHS' four operating divisions based on FY 2016 penetration testing. According to the report, Office of the Inspector General (OIG), “determined that security controls across the four HHS operating divisions needed improvement to more effectively detect and prevent certain cyberattacks” and “identified configuration management and access control vulnerabilities” (Mondaq)
  • The Black Book Research survey of 323 strategic decision makers at U.S. healthcare provider and payer organizations concludes:
    • 84% of US healthcare providers don't have a cybersecurity officer and only 11% plan to add one in 2018
    • 31% healthcare payers have cybersecurity manager, and 44% plan to hire one in 2018 (E-security Planet)
  • According to the report, "Top of Mind for Top U.S. Health Systems 2018," conducted by the Pittsburgh-based Center for Connected Medicine, Nine of ten healthcare leaders say they will boost spending on cybersecurity technology to help identify and respond to threats in 2018. Few key highlights of this study are:
    • Cybersecurity: 92% of respondents plan to increase spending on technology to boost cybersecurity
    • Consumer-facing technology: Less than 25% respondents expect wearables or mobile health apps to provide valuable patient-generated data in 2018
    • Predictive analytics: 50% of respondents said they are using – or plan to begin using – genomic testing as part of providing personalized medicine to patients. The efforts are focused on oncology, anesthesia and pharmacogenetics
    • AI: Compared with other IT priorities for 2018, implementation of AI solutions are a low or very low priority at nearly two-thirds of responding health systems (Healthcare IT News)
  • Following a recent research conducted by Accenture and the AMA (American Medical Association) showing 83% physicians experienced a cybersecurity attack, AHIMA (American Health Information Management Association) released a healthcare cybersecurity action plan to assist entities in preparing for potential threats. “AHIMA Guidelines: The Cybersecurity Plan” emphasizes on the importance of implementing an information governance (IG) program to combat cyber threats as well as other privacy breaches, and also includes a 17-step plan for preventing attacks and responding quickly when they happen: Few of those steps include:
    • Conduct risk analysis of all applications and systems
    • Encrypt workstations, smartphones and tablets, and portable media and backup tapes
    • Improve tools and conduct an internal phishing campaign—this should train employees on identifying suspicious emails that are the hallmarks of phishing attempts
    • Hire an outside security firm to conduct technical and non-technical evaluations
    • Recognize record retention as a security threat (AHIMA Journal)

Market Segments

Oncology/Genomics

  • CancerLinQ LLC enters into an agreement with Tempus and Precision HealthAI that will accelerate development and delivery of high-quality, de-identified clinical databases for use by CancerLinQ, its oncologist subscribers, partners, and the broader cancer community. The agreement will also enable CancerLinQ to quickly build and expand on its core data sharing and quality improvement platform for oncology practices, and facilitate Tempus’ and Precision HealthAI’s connection to industry to support faster and better development of new treatments for patients (ASCO)
  • Accenture forms a collaborative services agreement with Roche. Accenture will provide digital data integration services to Roche’s NAVIFY Tumor Board solution. The data integration will allow Roche to integrate patient data between hospitals and the NAVIFY Tumor Board solution to support clinicians in arriving at the best possible treatment decisions for their patients.
    • A Tumor Board is a meeting in which multi-disciplinary healthcare teams review and discuss individual cancer patient cases and available treatment options. The NAVIFY Tumor Board solution streamlines and standardizes the Tumor Board workflow process by aggregating relevant patient data from disparate IT systems into a software solution that fosters efficient team collaboration, reduces errors, and gives the care team more time to evaluate individual patient cases (Business Wire)

Imaging

  • GE Healthcare expands partnership with Intel that aims to enhance patient care and reduce costs for hospitals and health systems using digital imaging solutions, deployed via edge and cloud technologies. Below are the highlights of the benefits both the companies will have in this expanded partnerships:
    • GE Healthcare will use the new Intel Xeon Scalable platform with an aim towards lowering the total cost of ownership for imaging devices by up to 25%
    • Paired with GE Healthcare’s imaging solutions, the Intel Xeon Scalable platform may improve radiologists’ reading productivity compared to the prior generation by reducing first image display down to under two seconds and full study load times down to under eight seconds
  • GE Healthcare and Intel are also investing in a new digital development lab in downtown Chicago. The Joint Performance Acceleration Lab (JPAL) will be dedicated to the development, testing and validation of new innovations across a wide spectrum of GE Healthcare imaging hardware and software solutions (Healthcare Informatics)

Watson Platform for Health

  • Microsoft partners with Adaptive Biotechnologies (Seattle based biotech company) to create a universal blood test that reads a person’s immune system to detect a wide variety of diseases including infections, cancers and autoimmune disorders in their earliest stage, when they can be most effectively diagnosed and treated. Microsoft is investing an undisclosed sum in Adaptive and is offering the company cloud computing and machine learning services. The project is part of Microsoft’s Healthcare NExT program, which aims to put Microsoft technologies to work on solving problems in healthcare (Geek Wire)
  • DNAnexus (the global leader in biomedical informatics and data management) receives USD 58 million financing led by new investor Foresite Capital with strategic investment from Microsoft, GV (formerly Google Ventures), TPG Biotech, WuXi NextCODE, Claremont Creek Ventures and MidCap Financial. DNAnexus plans to use this investment to expand use of the company's platform in the clinical trials market as well as in the deployment of the company’s pioneering Translational Informatics Suite for pharmaceutical and other research organizations (Becker’s Hospital Review)

VBC - Payers

  • GE Healthcare and Lifespan enter into a six-year, risk-sharing collaboration where both companies will work together to identify inefficiencies and decrease costs, improve patient flow, increase capacity for services and reduce wait times. This will be done through a capacity management strategy, assessing Lifespan's imaging needs and co-designing a workforce management system, among other efforts. Overall, Lifespan aims to curb costs by USD 182 million over the six-year period (GE News Room)
  • Adventist Health expands strategic partnership with Cerner. Through this expansion, Cerner will assume day-to-day management of Adventist Health’s revenue cycle and clinical applications IT staff. Adventist is a nonprofit integrated health system that serves more than 75 communities on the West Coast and Hawaii (Global News Wire)
  • Epic Systems reveals its new EHR offering, dubbed Sonnet, which will be available in March 2018. Sonnet is designed for small hospitals, small physician groups, post-acute care facilities and some international organizations (Healthcare IT News)
  • Horizon Health Network and Service New Brunswick extend its contract term with Allscripts through 2024, to further clinical advancements in EHR software and enhance the care experience for patients in its community. The organization has been an Allscripts client for more than two decades (Allscripts)
  • Allscripts acquires Practice Fusion (cloud-based EHR company for doctors and patients) for USD 100 million in cash. The deal is expected to close in the first quarter of 2018. Allscripts strengthens its presence in ambulatory space with this acquisition (Healthcare IT News)
  • Vizient, Inc. launches a new Clinical Documentation Improvement (CDI) solution designed to support the implementation of best-in-class processes, education, and training for hospitals (Vizient)
  • Health Catalyst and Health Share of Oregon expand their partnership through the implementation of a data-first application platform and associated tools to further enhance quality and lower the cost of healthcare. As per the partnership terms, Health Share will expand its current deployment of the Health Catalyst Enterprise Data Warehouse to adopt the full Health Catalyst Data Operating System (DOS), an application platform that combines the features of data warehousing, clinical data repositories, and health information exchanges to simplify the secure sharing, analysis, and availability of information from multiple data systems (Health Catalyst)
  • Health Catalyst signs a multi-year agreement with Hospital Sisters Health System to implement the Health Catalyst Data Operating System (DOS). Hospital Sisters Health System (HSHS) is a multi-institutional health care system that cares for patients in 14 communities in Illinois and Wisconsin (Health Catalyst)