US Markets – February 06, 2018

Healthcare Policy

US Healthcare Policy Highlights

  • In the first State of the Union Address, President Trump lays out his top priorities for the country. Below are few initiatives in support of his priorities:
    • Veterans' health: Department of Veterans' Affairs has been expanding and growing its digital health offerings.
      • Veterans E-Health and Telemedicine Support Act of 2017: Aimed at expanding the VA’s telehealth programs and letting VA providers cross state lines to practice telemedicine
      • Veteran Appointment Request app, which lets veterans schedule and change their appointments from their smartphone
    • Opioids: Trump reaffirms his commitment to fighting the opioid epidemic.
      • White House’s Drug Addiction and the Opioid Crisis report encouraged more digital technologies to address the crisis
      • HHS’s code-a-thon competitions to more digital technologies solutions to tackle the crisis
    • Pharma and the FDA: Trump emphasizes on developing more affordable drugs (by cutting drug prices) in the future and FDA’s speed in approval on both drugs and medical devices
      • In 2017, 46 original medical devices were approved by the FDA, up from 39 original devices approved in 2016 (Mobi Health News; CNBC)
  • CMS proposes to increase baseline Medicare Advantage payment rates for 2019 by 1.84% on average, up from the 0.45% plans received last year:
    • The average Medicare Advantage payment rate will increase by 3.1% after taking into account the way health plans code the members' diagnoses. That's up from a 2.95% increase last year
  • CMS also plans to increase the use of encounter data, or information about the care an enrollee received from a provider, to determine risk scores for plans:
    • The agency suggests of 75% of Medicare Advantage risk scores to be based on traditional fee-for-service data, and 25% are based on encounter data. That differs from 2018, when the agency used a risk score blend of 85% of fee-for-service data and 15% of the encounter data in 2018 (Modern Healthcare)


Healthcare Economy

US Healthcare Economy Highlights

  • Amazon, Berkshire Hathaway and JPMorgan Chase & Co. partner to address healthcare for their US employees, with the aim of improving employee satisfaction and reducing costs. The three companies will form a non-profit independent company. The initial focus of the new company will be on technology solutions that will provide US employees and their families with simplified, high-quality and transparent healthcare at a reasonable cost (Nasdaq)
  • Health-care insurers are beefing up their apps to make their customers like them more
    • Gurpreet Singh, U.S. health services sector leader at consulting firm PwC, mentions that more than half of health systems have beefed up investments in digital tools to communicate with patients on an ongoing basis
    • Mario Schlosser, CEO Oscar Health (a health insurance start-up based in New York) emphasizes of creating more virtual touchpoints to get more digital engagements. The insurer has signed up 255,000 members in six states, a 150 percent increase over 2017, after expanding coverage on the Obamacare exchanges
    • Dr. Pat Conolly, executive vice president of IT and CIO in Kaiser Permanente, mentions that they are rapidly expanding their patient use of secure messaging and scheduled telephone visits and video visits. Last year the company received more than 140,000 video visits and 8.4 million telephone visits with its members (CNBC)
  • Kaufman Hall & Associates (consulting firm) mentions that in 2017, companies having credit scores of A- or above more were acquired more. Kaufman Hall counted 14 of those last year, up from nine in 2016.
    • The company released the M&A counts among hospitals and health systems:115 in 2017, 102 in 2016, 112 in 2015 and 102 in 2014. In the early 2000s, the firm would only see 40 to 50 deals per year
    • The company also examined the revenue of the smaller organization in each of those deals and found that number doubled between 2016 and 2017: from USD 31.3 billion to USD 63.2 (Modern Healthcare)

Technology Briefs

  • A research study conducted by Google, University of California San Francisco (UCSF), Stanford University, and University of Chicago Medicine (UCM) proposes a representation of a comprehensive patient EHR using Fast Healthcare Interoperability Resources (FHIR) that can be used for more accurate predictive analytics. They claim to demonstrate deep learning methods using this representation are capable of accurately predicting multiple medical events from multiple centers without site-specific data harmonization.
    • Researchers used de-identified EHR data from UCSF and UCM gathered from 2009-2016 during inpatient and outpatient encounters. Datasets included patient demographics, provider orders, diagnoses, procedures, medications, lab values, vital signs, and flowsheet data. In total, the study included data about 216,221 hospitalizations involving 114,003 patients (EHR Intelligence; Arxiv)
  • Damo Consulting releases the “2018 Healthcare IT Demand Survey” results:
    • Long sales cycles is the biggest challenge in achieving growth objectives in Healthcare IT
    • Value-based care initiatives will be the biggest driver for technology spending in 2018
    • Data analytics will be the leading technology to drive IT spend in 2018
    • Lack of enterprise readiness for new technologies to be the biggest headwind for growth in healthcare IT spend in 2018 (Damo Consulting)
  • Reaction Data (market research firm) reveals majority of imaging leaders see important role for machine learning in radiology based on a survey feedback from 133 imaging professionals, including directors of radiology, radiologists, imaging directors, radiology managers, chief of radiology and PACS administrators, to gauge the industry on machine learning (Healthcare Informatics)
  • According to BCC Research, the global healthcare cloud computing market will reach USD 35 billion by 2022, with a compound annual growth rate of 11.6%. Out of the total market, the network technology sector is expected to generate USD 4.2 billion in 2022, up from USD 2.6 billion last year. North America will play a lead role in overall spending as healthcare policies promote lower costs and outpatient care (Healthcare Dive)
  • Zebra’s (a health care technology company) “2022 Hospital Vision Study” forecasts the following:
    • The top three trends in the industry will be remote monitoring, telehealth and artificial intelligence
    • A growing number of healthcare workers using mobile health by 2022, 97 percent of bedside nurses and 98 percent of physicians will be using mobile devices, a significant increase from 2017, where responders reported 65 percent of nurses using mobile devices and 51 percent of physicians using mobile devices
    • The implementation of digital health will be expanded across disciplines to include pharmacists, lab technicians, and ER nurses.
    • The use of mobile devices is expected to grow by up to 40 percent for all hospital employees by 2022 (Zebra; Mobi Health News)

Market Segments


  • Syapse and Medidata partners to develop portfolio of solutions to address precision medicine challenges and accelerate clinical research in oncology trial process. The partnership will initially build products to assist trial sponsors in designing eligibility criteria, identify community health systems as trial sites, and enable oncologists and their care teams to easily identify patients for enrollment into cutting-edge clinical trials (PR News Wire)


  • Change Healthcare receives a new Digital Imaging Network-PACS (DIN-PACS) IV contract by the United States Defense Logistics Agency. The DIN-PACS IV contract is a multiyear, indefinite delivery/indefinite quantity (IDIQ) contract with a combined five-year base period and one five-year option period. As per the contract terms, the Military Health System and Veterans Health Administration (VHA) facilities can procure the full suite of McKesson enterprise imaging solutions, which are now part of Change Healthcare (HIT Consultant)

VBC - Providers

  • Advocate Health Care selects Epic to provide the health system with a single-platform EHR and revenue cycle solution. Advocate Health Care officials expect to complete the transition to the Epic system within three years. More than 17,000 Advocate physicians, nurses, and associates will undergo training for the new system, as Advocate Health Care currently operates on Cerner and Allscripts EHRs (Becker’s Hospital Review)
  • Perry County Memorial Hospital (PCMH) in Missouri announces to begin Cerner implementation across all acute and ambulatory care sites. The integrated Cerner Millenium EHR will enable providers at the community hospital to access comprehensive patient medical histories and share patient health data for improved care coordination. Additionally, patients will gain the ability to access their own EHRs, schedule appointments, and securely message physicians through Cerner’s patient portal
  • Medtronic and Philips partner to develop and commercialize the LungGPS Patient Management Platform. LungGPS Patient Management Platform is a comprehensive patient and data management platform designed to make it easier for clinicians to identify and manage potentially cancerous lung nodules (HIT Consultant)