US Markets – November 14, 2017

Healthcare Policy

US Healthcare Policy Highlights

  • Alex Azar, a former pharmaceutical executive and a top health official during the George W. Bush administration, has been picked by President Trump to lead the Health and Human Services Department1
  • According to a weekly enrollment report from Centers for Medicare and Medicaid Services (CMS), more than 600,000 people (on average about 150,000 per day) signed up for coverage on Healthcare.gov during the first four days of open enrollment this year 2
  • Senators Chuck Grassley (Iowa) and Elizabeth Warren (Massachusetts), are urging the CMS to decide by Dec 1, 2018 whether the agency will include unique device identifiers (UDIs) on Medicare claim forms. CMS is also requested to clarify whether the agency plans to follow the recommendations by the US Department of Health and Human Services Office of the Inspector General and MedPAC to make sure UDIs are included on medicare claims forms 3
  • Seema Verma administrator of CMS, signals to provide more freedom to design programs to the states. CMS has updated Medicaid.gov to provide more information that allows states to align their Medicaid programs with the program’s core objective- to serve the health and wellness needs of the most vulnerable. 4 Medicaid programs and new policies will encourage states:
    • To create innovative programs that improve patient outcomes
    • To propose Medicaid reforms and to reduce federal regulations, increase efficiency and promote transparency and accountability

Healthcare Economy

US Healthcare Economy Highlights

  • Health Affairs' study suggests Frugal innovations (from countries with limited resources) could help the resource-rich countries like US in reining the healthcare costs. The US healthcare system operates under a fee-for-service model, adapting frugal innovations from the rest of the world will be difficult.5 The study:
    • Cites innovative approaches in other countries like: low-cost heart surgery (Narayana Health, India), geriatric consultations via telemedicine (GeriCare, Singapore) and community outreach workers for care management BasicNeeds(Kenya)
    • Uncovers trends in the US that support adapting innovations like:
      • growing interest in moving care- out of health care facilities and into community and home settings
      • the growth of alternative payment models and incentives to experiment with new approaches to population health and care delivery
      • increasing use of diverse health professionals (community health workers and advanced practice providers)
  • 16 major insurance companies make commitment to address the opioid crisis. They adopt eight 'National Principles of Care' for the treatment of addiction.7 Following are the 16 companies:
    • Aetna
    • AmeriHealth Caritas Family of Companies
    • Anthem, Inc.
    • Beacon Health Options
    • Blue Cross Blue Shield of Massachusetts
    • CareOregon
    • CareSource
    • Centene Corporation
    • Cigna
    • Commonwealth Care Alliance
    • Envolve Health
    • Horizon Blue Cross Blue Shield of New Jersey
    • Magellan Health
    • UnitedHealth Group
    • UPMC Insurance Division
    • WellCare
    • BCC Research, US-based market research firm, releases a report on global market for healthcare analytics6. Few highlights of the report are:
      • The global healthcare analytics market to reach USD 7.2 billion in 2017 and USD 14.9 billion by 2022 at a CAGR of 15.8%
      • Investment in clinical analytics by the hospitals to grow at a CAGR of 17% to reach USD 6.2 billion in 2022
      • The US governments initiative would have a major role in driving the healthcare analytics market

Technology Briefs

  • IEEE Standards Association (IEEE-SA) study reveals that Blockchain could encourage opportunities in the pharmaceutical supply chain including8:
    • Enable collaboration with trading partners by sharing and verifying data transactions with anonymity in a tamper-proof environment
    • Enable compliance with the FDA’s Drug Supply Security Chain Act (DCSA) and other regional regulatory track and trace guidelines
    • Eliminate opportunistic gaps that enable the proliferation of the growing counterfeit medicine market
    • Limit and/or eradicate nonregulated internet pharmacies
    • Better inventory management and control allowing for a more proactive approach in minimizing drug shortages
    • Enable a more efficient process for drug recalls
    • Provide visibility for all partners to verify a drug’s source by accessing one original source record that is time-stamped and cannot be changed, with each new transaction appended to the original source
  • Debbie Bucci, a lead IT architect for the HHS Office, mentions that blockchains can be used as a more efficient method of tracking payments made into and out of both systems, either by storing that information on a public ledger or holding some information and allowing subscribers to calculate their specific costs and benefits more easily12
  • KPMG’s CEO Survey reveals that artificial intelligence, cognitive computing and RPA are available to prepare organizations to better adapt to life sciences market from an efficiency and marketing effectiveness standpoint. These technologies when combined with real-world evidence render the organizations more effective to make better products and help them enter the market faster.12 Few highlights of the survey are:
    • Cognitive technologies, including artificial intelligence and machine learning, seem to get stronger endorsement from top executives with 30% seeing a significant investment and 42% planning incremental investment in the next 12 months
    • 43 U.S. life sciences CEOs didn’t seem too interested in investing in robotic process automation (RPA), a technology that can shorten processes and make routine repetitive tasks much more efficient
    • 43 U.S. life sciences CEOs vote digitization of their business as one of the top three strategic priorities
  • The National Institutes of Health with the financial backing of more than USD 1 million is exploring a three-year clinical study whether a chatbot can help terminally ill, geriatric patients with their end-of-life care.13 According to the Center to Advance Palliative Care, today about 90 million Americans live with a serious illness. This number is expected to double over the next 25 years. Key points about the study:
    CNBC

    • Over the next three years, Northeastern University professor Timothy Bickmore and Boston Medical Center doctor Michael Paasche-Orlow will distribute Microsoft Surface tablets preloaded with a chatbot to about 360 patients who have been told they have less than a year to live
    • The study aims to find out if artificial intelligence is better suited to talk death with patients than doctors
      Specially designed chatbots are being used in palliative care to see if patients might be more inclined to share their symptoms or ask questions when no other human is present
    • The interactions of patients these chatbots are monitored continuously by nurses, who can activate care if a patient tells the chatbot they're experiencing symptoms
  • The department of Veteran Affairs in the US published the Tech Insights on Blockchain.oit The report noted:
    • Blockchain can alleviate the issues concerning to ensuring security and streamlining enterprise-wide technology. It can reduce operational costs, increase digital security and instantaneously update systems
    • The governments around the world are exploring uses for blockchain. In the US, security concerns contribute an amount of opacity between government branches. Building on the open data movement, blockchain could introduce opportunities for departments and agencies to securely share information and services
    • Governments foresee internally using blockchain as a database to manage physical and digital assets, record internal transactions, verify identities, reconcile internal databases, and increase interoperability. A registry of all devices connected to the VA’s IoT is a potential beneficial use of blockchain
    • Health researchers are also exploring using blockchain in healthcare records management. Blockchain could be used to securely exchange large volumes of data while ensuring patient privacy and maintaining data integrity
  • FDA cautions the healthcare industry to be vigilant about networked medical devices containing off-the-shelf (OTS) software that can connect to networks because they are vulnerable to cyber breaches. Both healthcare IT professionals and manufacturers are responsible for securing medical devices by performing regular software updates and applying security patches. Stolen medical records are 10 times more valuable to fraudsters than credit card credentials. Even though medical devices don’t house full patient records, they can be targets if they are connected to networkssecurityintelligence
  • As per Politico, a healthcare-specific cybersecurity communication center within the U.S. Department of Health and Human Services (HHS) is now at the center of an investigation into contracting irregularities and possible fraud allegations. (healthcare-informatics) According to the report:
    • An HHS official mentions the agency is investigating irregularities and possible fraud in the contracts signed. The Healthcare Cybersecurity Communications Integration Center (HCCIC), which went live at the end of June, was established to protect the nation’s healthcare system from cyber attack. It focuses on analyzing and disseminating cyberthreats across the healthcare industry in real time
    • Two top officials’ (Leo Scanlon, deputy chief information security officer and his deputy, Maggie Amato) allege they were targeted by disgruntled government employees and private-sector companies worried the cyber center would take away some of their business.
    • Leo Scanlon, who ran the HCCIC, was put on administrative leave in September and his deputy, Maggie Amato, left the government

Market Segments

Oncology/Genomics

  • Syapse raises USD 30 million in Series D financing, which will enable more healthcare providers to use precision medicine to improve care for their cancer patients. The participants include existing investors Ascension Ventures, GE Ventures, Intermountain Healthcare Innovation Fund, Safeguard Scientifics, and Social Capital, as well as new investors Amgen Ventures, Medidata Solutions, Merck Global Health Innovation Fund and Roche Venture Fund (syapse)
  • NantHealth, Inc. announced that it received a rank of 304 on Deloitte’s Technology Fast 500™ a ranking of the 500 fastest growing technology, media, telecommunications, life sciences and energy tech companies in North America (nanthealth)

Life Sciences

  • The Advisory Board Company Stockholders approve merger agreement with Optum. Optum will take over the Advisory Board's healthcare business for an estimated USD 1.3 billion.20 Highlights of the agreement are:
    • The agreement combines The Advisory Board Company’s industry-leading independent research, strategic healthcare advisory services and strong capabilities in analytics with Optum’s complementary products and services for the benefit of healthcare stakeholders
    • Optum’s exceptional data analytics resources, operational expertise in delivering large-scale solutions and services and investment capital will strengthen The Advisory Board Company's offerings and enable it to expand more fully into new health care markets while preserving the autonomy and member-driven nature of its research
  • Oracle Health Sciences identified as a Leader in the top quartile in Everest Group's PEAK Matrix™ Assessment of Life Sciences Clinical Trial Products 2017. Oracle Health Sciences announced that it received superior marks in "clinical trials value chain coverage" which included pre-clinical, clinical trials, pharmacovigilance and regulatory affairs (Oracle)

Imaging

  • At RSNA 2017 (Radiological Society of North America Annual Meeting), Agfa highlights the following on how Augmented Intelligence will be an integral part of the Radiologists' Journey towards Value-Based Care (prnewswire)
    • Cognitive Computing, Artificial Intelligence (AI) and Machine Learning augments visual intelligence thereby addressing the clinical needs of care providers
    • The path to realize value is achieved by embedding intelligence in the clinical workflows to increase productivity, reduce care variance and streamline care delivery.
    • Organically conceived and third-party algorithms embedded within Agfa HealthCare's Enterprise Imaging solution will provide tools to help care providers to accelerate overall throughput and screen for critical diseases
    • London Health Sciences Centre and St. Joseph's Health Care London will implement a single platform approach with Agfa HealthCare Enterprise Imaging and will include other regional hospitals in southwestern Ontario, creating one of Canada's largest integrated digital imaging systems (prnewswire)

Watson Platform for Health

  • Sciformix Corporation collaborates with Oracle Health Sciences to offer full service Validated Argus Enterprise Edition Drug Safety Solutions platform. The collaboration helps Sciformix Corporation in offering a fully automated and integrated safety database solution, allowing easy reporting and analytics for improving the quality and efficiency of drug safety operations
    (dailytelescope)
  • Microsoft uses AI to empower people living with disabilities. Seeing AI is a free mobile application by Microsoft is designed to support people with visual impairments by narrating the world around them. The app is an ongoing research project and brings together deep learning and Microsoft Cognitive Services. It can read documents, making sense of structural elements such as headings, paragraphs and lists, as well as identify a product using its barcode (zdnet)

VBC - Payers

  • Milliman Inc., acquires the MicroInsurance Centre (MIC). MIC is a for-profit consulting firm based in Wisconsin that provides “product development, research, and advocacy” services relating to insurance services to poor people. The terms of the agreement have not been made public26 (Microcapital)

VBC - Providers

  • The VA and Cerner to finalize the contract for the VA's new electronic health record. Dr. David Shulkin (the VA Secretary) assured the House lawmakers that the new system will result in greater interoperability between both the VA and the Defense Department as well as the VA and community providers.27 28 Key updates are:
    • Shulkin predicts that it would take 18 months after the contract is signed for the first site to go live with the new system and eight years after that for it to be live across all VA sites, a project estimated to cost USD 10 billion
    • Shulkin asks the House Appropriations Military Construction-VA Subcommittee to reprogram USD 782 million from its current budget so the agency can get started on replacing its current VistA EHR with Cerner at VA facilities in the Pacific Northwest
  • GE Healthcare and Bernoulli Health, the developer of the advanced Bernoulli One™ clinical surveillance, medical device integration (MDI), and real-time data analytics platform will collaborate on the new CARESCAPE Connect data aggregation solution to enable interoperability. The CARESCAPE Connect vision is to unlock data to enable outcomes research (prnewswire)
  • A Florida whistleblower lawsuit alleges that Epic Systems Corp.'s software, used by four South Florida hospitals and hundreds more across the US, double-bills for anesthesia (dailybusinessreview)
  • Medical records of patients stored using Epic Systems’ software can now share key medical information with any physician or other healthcare provider in the country, or even the world. The feature, called Share Everywhere, will be available this month with an update of MyChart, Epic's online portal that gives patients access to key information in their electronic health records (jsonline)
  • Deloitte receives USD 10 million contract for Medicaid eligibility contract in Nevada. Steve Fisher, head of the Division of Welfare and Supportive Services, states this is the final phase of the Affordable Care Act project and will ensure Nevada meets the requirements of that legislation (nevadaappeal)