US Markets – October 31, 2017

Healthcare Policy

US Healthcare Policy Highlights

  • The latest ACA enrollment schedule may lock millions into unwanted health plans because of the Trump administration’s schedule for the enrollment season that starts in less than two weeks. The complication arises when people with health plans under the law are automatically re-enrolled in the same plan (Washington Post)
  • White House is eyeing value-based payment models for drugs and devices. Jeff Micklos, the executive director of The Health Care Transformation Task Force state supports the idea of accountability for drug and device spending but would like those metrics tied into models that evaluate the total cost of patient care (Modern Healthcare)
  • According to data from the US Chamber of Commerce Foundation and 1776’s annual Innovation that Matters report, the startup ecosystem of 25 major US markets saw a growth of 35% from 2016 to 2017, however investment in disruptive healthcare companies (digital care or other solutions) was relatively stagnant during the same period (Mobi Health News)
  • A Federal Judge denies a request from state attorneys general to stop the Trump administration from scrapping the cost-sharing reduction subsidies that are paid to insurance companies to help lower costs for low-income Americans (Modern Healthcare)
  • ACOs for specialty providers could be key to Medicare savings. A recent data shows that the value-based programs could find more success in a relatively untapped area: specialty medicine. The CMS releases data showing that three ACO programs saved providers millions of dollars. Last year, the Comprehensive End-Stage Renal Disease Care Model saved $75 million which is more than the $68 million saved by Pioneer ACOs, and the $48 million saved by NextGen ACOs in the same period (Modern Healthcare)
  • President Donald Trump declares the opioid crisis a public health emergency. But despite his August vow to spend a lot of money to combat it, he did not commit to additional funds into an epidemic that has ravaged communities and claimed tens of thousands of lives (Politico)
  • HHS announces code-a-thon to address national opioid emergency. Chief Technology Officer of HHS, Bruce Greenstein calls for developers to participate in a government-sanctioned code-a-thon to devise a technological solution to the epidemic (Mobi Health News)
  • Seema Verma, the director of the federal Centers for Medicare and Medicaid Services promises to give states an unprecedented level of flexibility to design their Medicaid programs (STAT News)
  • CMS launched Patient over Paperwork initiative to counter regulations that are reducing the time- providers spend with patients. CMS wants docs to spend more time on patients, less on paperwork. As part of the Patient over Paperwork initiative, CMS officials will travel the country to gather information on the impact their regulations have on physicians (Modern Healthcare)
  • CMS launched Patient over Paperwork initiative to counter regulations that are reducing the time- providers spend with patients. CMS wants docs to spend more time on patients, less on paperwork. As part of the Patient over Paperwork initiative, CMS officials will travel the country to gather information on the impact their regulations have on physicians (Modern Healthcare)

Healthcare Economy

US Healthcare Economy Highlights

  • Dr. Tom Delbanco, co-director of OpenNotes (an organization working towards making health care more open and transparent), mentions few insights and challenges:
    • The OpenNotes program is now available to 19 million people. >80 organizations have made patients’ clinical notes, in 47 states - all except Maine, Rhode Island and Alabama
    • 70% of patients feel more in control of their care and 97% wanted to continue the program
    • One challenge that is noted is, since clinical notes are usually made available through the patient portal in the EHR, it’s not always easy for patients to access them
    • Other challenges Delbanco mentioned included concerns around mental health, adolescents and domestic abuse (Mobi Health News)
  • A group of health startups in the digital therapeutics space domain join hands to create a new industry association, the Digital Therapeutics Alliance. The Digital Therapeutics Alliance defines the space as a new generation of healthcare that uses innovative, clinically-validated disease management and direct treatment technologies to enhance, and in some cases replace, current medical practices and treatments (Mobi Health News)
  • A survey report from eHealth Initiative, reveals that only 9% providers have fully implemented products that meet the requirements of the 2015 edition of Certified EHR Technology (CEHRT) and 41% are in the process of doing so. eHealth Initiative collected online responses from 107 industry professionals, mostly in executive, IT or administrative leadership positions or members of the clinical staff (Health Exec)
  • A survey report by Phillips, reveals incomplete Patient Data being the biggest threat to patient safety in the US. The survey rolled out responses from 251 physician and nurse leaders (HIT Consultant)
  • CVS Health (American retail pharmacy and health care company) is in talks to buy Aetna (a health insurance company USA). Based on current market value of Aetna, the deal value could be more than $60 billion (New York Times)

Technology Briefs

  • Updates will be covered going forward

Market Segments

Oncology/Genomics

  • NantHealth’s Vitality Mobile App is now Available on Apple and Android Devices. Vitality GlowCap is a smart pill bottle that offers automated visual and audible alerts during scheduled medication dosage windows that signal when it is time for the user to take his or her medications (Business Wire)

Life Sciences

  • Quintiles IMS announces the Q3 results. Following are the highlights:
    • Third quarter revenue increased by 4.8% to a total of $2.019 million
    • Acquisitions contributed about 1.5 points to revenue growth - R&D Solutions' grew by 7.3%- Commercial solutions increased by 4% (Seeking Alpha)

Imaging

  • GE is looking forward to structure its portfolio under the new Chief Executive, John Flannery, and explore the divesture of its Healthcare IT and Transportation business. As per the sources (no revealed identity), this initiative would help GE to meet more than half of its stated goal of shedding more than $20 billion worth of assets (Reuters)
  • Identity and access management business of Caradigm (a population health company run by GE Healthcare) has been sold off to Imprivata (Lexington, Massachusetts-based health IT security firm). Caradigm focuses on population health, provides identity and access management solutions to more than 100 healthcare organizations across the globe. The financial terms of the acquisition were not disclosed (Health Exec)
  • The CEO of GE, John Flannery, says that GE will have more alliances to build its digital-industrial business in coming years. GE is investing $2.1 billion in GE Digital this year. This will also affect the healthcare business. GE’s digital strategy is built around a cloud-based software platform, known as Predix, that connects factories, power plants and other industrial equipment to computers that improve performance and predict outages (Reuters)
  • HealthONE, a HCA-affiliated leading health systems, sign on to deliver population health management with the Philips Wellcentive Informatics Platform. In addition to HealthONE, nine other health organizations have recently selected or renewed relationships with Philips to enable their transition to value-based care and enhance patient outcomes (PR News Wire)
  • GE discloses Q3 results. Following are the highlights:
    • $33.47 billion in revenue for Q3, increase of 14% over the same period in 2016
    • $1.69 billion in net earnings in Q3, decrease of 13% from the Q3 of last year- $4.72 billion revenue in the Q3 from Healthcare segment, increase of 5% from the Q3 last year.- Commercial solutions increased by 4% (Becker’s Hospital Review)
  • Phillips announces the Q3 results. Below are the highlights:
    • The profits in Q3 grew by 12% to €532 million ($626.1 million), as strong growth in China pushed comparable sales up 4%
    • The medical devices and healthcare products division, recorded total sales of €4.1 billion. Net income from continued operations grew 23% to €263 million (CNBC)

Watson Platform for Health

  • Google and Cisco join hands to have a technology partnership that will make it easier for Cisco customers to move their applications and data into the Google Cloud platform (Business Insider)
  • Microsoft partners with Green Bay Packers (a professional American football team) to work on healthcare tech projects (new tech accelerator). The Accelerator will work with startups and young companies to accelerate and bring to market new digital technology products and services (Healthcare IT News)
  • Microsoft and Cray (an American supercomputer manufacturer) announce that Cray supercomputing systems will now be supported in Microsoft Azure datacenters. Users can now run heavy workloads such as advanced healthcare analytics and artificial intelligence (AI) in their Microsoft Azure environment (HIT Infrastructure)
  • Microsoft partners with Parexel (a life sciences consulting firm) to develop software capable of accelerating drug development. The collaboration will use Microsoft’s Azure cloud computing platform, onto which Parexel will move its informatics software (Pharma Phorum)
  • Microsoft is strategically focusing on healthcare technology. The latest initiative, NeXT, is a cloud-based, artificial intelligence and research project aimed at developing digital tools to ‘empower people to lead healthier lives’ and transform healthcare and research. The first strategic partnership in it's Healthcare NExT initiative was with UPMC (University of Pittsburgh Medical Center) aiming a view to transform clinician empowerment and productivity (Digital Journal)
  • Amazon won wholesale pharmacy licenses in multiple states in USA. The states include Nevada, Arizona, Idaho, Louisiana, North Dakota, Alabama, New Jersey, New Hampshire, Michigan, Connecticut, Tennessee and Oregon (Fortune)

VBC - Payers

  • Updates will be covered going forward

  • VBC - Providers

    • The Department of Defense (DoD) announces that it has successfully deployed MHS GENESIS - the new Cerner electronic health record system at Madigan Army Medical Center in Tacoma, WA, as part of the EHR’s initial operating capability phase. The initial deployment of MHS GENESIS was slated for December 2016. But, DoD delayed the rollout until February 2017 to allow additional time to resolve technical issues. Full deployment of DoD’s new EHR is slated for completion in 2022 (Health Data Management)

    • David Shulkin, MD, secretary of the U.S. Department of Veterans Affairs (VA), mentions that the transition from its legacy electronic health record (EHR) to a new Cerner system will take 7 to 8 years. Few trending highlights of this projects are:
      • Shulkin selected Cerner without going through a competitive bidding process by allowing a “public interest exception,” to cut the bidding war time
      • The contract could be awarded to Cerner during the first two weeks of November. As per a source reported to POLITICO, the contract value is estimated to be $18 billion
      • An EHR vendor CliniComp sued the VA over the Cerner decision, arguing the urgency to award a contract was only based “on a lack of advance planning.” The suit was dismissed in the U.S. Court of Federal Claims on Oct. 2017 (Health Exec; Becker’s Hospital Review)
    • Pine Rest (a mental health care provider in US) is investing $18M in new electronic health record system. The Epic EHR system will be fully implemented by June 2018. The EHR will store records that span the continuum of care for nearly 50,000 patients (GRBJ)

    • MultiCare Health System (Tacoma, WA) is investing $25 million in EPIC EHR to be deployed next year in its Spokane, WA, locations. MultiCare is using EPIC in its Providence Health Care facilities since 2012 and 2013, but the newest expansion will bring the EHR to its MultiCare Rockwood Clinic and MultiCare Valley by March, followed by its MultiCare Deaconess in August (Becker’s Hospital Review)

    • Ocean Beach Hospital & Medical Clinics implemented a systemwide Epic EHR and MyChart patient portal. It cost the hospital $2.2 million (Becker’s Hospital Review)

    • Optum's Vice President, Abbas Mooraj emphasizes that healthcare organizations should break down data into smaller sets that can be used to build into larger programs. He mentions in speaking at the HIMSS Big Data and Analytics Forum that “Small data will tell us more than all of the big data we have now” (http://www.healthcareitnews.com/news/go-figure-key-big-data-actually-small-data)

    • Cerner announces the Q3 results. The highlights of the results are as following:
      • Q3 revenue was $1.276 billion, up 8% compared to the Q3 revenue of 2016
      • Adjusted Net Earnings for Q3 was down to $205.9 million, compared to $202.6 million in Q3 2016 (Global News Wire)
    • McKesson announces the Q2 (ended on September 30th) results. The highlight of the results are following:
      • Revenues of $52.1 billion for the Q2, up 4% year-over-year
      • Q2 Adjusted Earnings per diluted share of $3.28, up 11% year-over-year, compared to $2.96 in the prior year (Business Wire)

    Government

    • Updates will be covered going forward