US Markets – December 05, 2017

Healthcare Policy

US Healthcare Policy Highlights

  • The Senate passed the revisions to the U.S. tax code in a 51-49 vote. If passed into law, the bill will affect the US healthcare in the following ways:
    • Would abolish the government’s enforcement of the ACA requirement that most Americans carry insurance coverage
    • Would not only end the individual mandate itself but would also eliminate tax penalties for flouting that requirement
    • Will drive up insurance premiums in marketplaces created under the law
  • Republican Senator Susan Collins of Maine, who was concerned the individual mandate repeal would increase premiums, said she got Senate Majority Leader Mitch McConnell to support two pieces of legislation that would stabilize the ACA
    • The first is the Alexander-Murray bipartisan bill that would provide funding to stabilize the individual insurance exchanges
    • The second is a bill that would provide $5 billion to reinsure high-cost plan members and lower premiums (Washington Post)
  • Funding for Child Health Plan Plus (CHP+) is about to end in the State of Colorado and with it coverage for children and pregnant women. Alabama and Minnesota could also follow the same. CHP+ operates under the federal Children's Health Insurance Program(CHIP) and the state relies heavily on federal matching funds to keep operations going. Over 70,000 children and 800 pregnant women are covered by the program. While HHS plans to carry over unclaimed 2017 CHIP funds to cover pregnant women while industry lobbyists call this the worst fight over CHIP and the Medicare extenders as there seems to be no plan with the Congress to sort this out (Modern Healthcare)
  • The CMS to seek permission from the White House to impose a new data collection requirement on Medicaid agencies that will help it reduce their spending on medical equipment. If the plan is approved states would send their reimbursement rates for the products to a new CMS online database (Modern Healthcare)
  • The CMS aims to give states more flexibility in defining their essential health benefits by letting them adopt another state's 2017 benchmark plan or pick and choose a few elements of another state's benchmark plan or completely build a new essential benefits package from scratch. But health reform experts worry that this could lead to a proliferation of less costly, skimpier plans on the market. Major health insurers fear states would expand the benefits health insurers must offer causing insurers to spend more on medical care (Modern Healthcare)

Healthcare Economy

US Healthcare Economy Highlights

  • CVS Health Corp to buy Aetna for about USD 69 billion in cash and stock in an effort to transform itself and capture more of what consumers spend on health care. Key aspects:
    • It is one of the largest transactions this year. It values Aetna at about $207 per share, higher than previous estimates of $200 to $205 per share
    • Upon closing, Aetna's Chairman and CEO Mark Bertolini will join CVS Health's board of directors, along with two other Aetna leaders. Aetna will operate as a standalone business unit under the CVS Health
    • The deal will provide localized, community-based care across CVS Health's 9,700-plus pharmacies and 1,100 clinics, thus providing care in a lower-cost setting than a hospital
    • The transaction is slated to close in the second half of 2018, subject to regulatory approvals
    • The merger can make expanded CVS services in-network and others out-of-network, putting additional pressure on conventional health systems to lower the costs of their outpatient services
    • The combined company could leverage massive amounts of data from both Aetna's medical claims and CVS's vast number of touchpoints to consumers, including its 9,700 retail stores and 1,100 MinuteClinics (Washington Post)
  • Payment shifts and regulatory mandates are putting hospital Medicare margins on a downward slope. In 2015 the aggregate margin hit a negative 7.1% across hospitals and this year it is expected to sink to a negative 10% (Modern Healthcare)
  • Senator Chuck Schumer is cautioning consumers over purchasing mail-order DNA testing services as they could potentially put their personal and genetic data at risk of privacy. He is urging the Federal Trade Commission to investigate and ensure that the privacy policies are clear, transparent and fair to consumers (Mobi Health News)

  • Technology Briefs

    • According to Frost & Sullivan the global market for healthcare cloud computing—revenue generated by cloud computing services offered to providers will be worth almost USD 10 billion by 2021 which will be primarily driven by the need to store the exponentially increasing volume of healthcare data
      (PR Newswire)
    • Increasing number of healthcare providers move their EHR into the cloud along with practice management, revenue cycle and population health technologies since flexible platforms help them to prepare for population health management and value-based care. As a result EHR vendors are developing more software-as-a-service offerings.
      • Hospitals of various sizes, including University of California San Diego and UC Irvine Health just this month, have opted for cloud-based EHRs recently. On the smaller end of the provider scale, Lost Rivers Medical Center in Arco, Idaho, and Faith Community Hospital in Jacksboro, Texas, have also moved their EHR and related software into the cloud
      • Meditech in mid-November unveiled Meditech-as-a-service, a version of its EHR targeted at critical access hospitals and available in the cloud with a monthly subscription payment model
      • eClinicalWorks is gearing up to make the new version of its cloud-based EHR
      • Epic, too, is working on two forthcoming versions of its EHR for smaller providers (Healthcare IT News)
    • The FDA cleared the first medical device accessory for the Apple Watch made by AliveCor. Its CEO is former Google+ boss Vic Gundotra. The accessory is AliveCor's KardiaBand electrocardiogram (EKG) reader a sensor that pairs with an app and can detect abnormal heart rhythm and atrial fibrillation (AFib). The user touches the sensor which snaps into a slot on the watch's band to get an EKG reading in 30 seconds. The recording can then be sent to a doctor
      (The Verge)

    Market Segments

    Oncology/Genomics

    • West Cancer Center in Tennessee will participate in the CancerLinQ platform. CancerLinQ LLC is a wholly owned nonprofit subsidiary of ASCO. It is a powerful platform containing growing amounts of real-world cancer information. It is a national initiative that allows cancer providers to improve the quality and value of care by analyzing millions of cancer patient medical records. The platform has 100 practices in 40 states and the District of Columbia representing more than 1,500 oncologists (ASCO Post)

    Life Sciences

    • IQVIA Holdings Inc. launches an underwritten secondary public offering of 10,000,000 shares of its common stock by certain of its existing stockholders including affiliates of TPG Global, CPP Investment Board Private Holdings, investment funds associated with Bain Capital Investors and Leonard Green & Partners of which IQVIA intends to repurchase from the underwriter 2,500,000 shares. The Repurchase will be completed outside IQVIA’s existing share repurchase program under which IQVIA has approximately USD 195 million of remaining availability (Business Wire)

    Imaging

    • GE Healthcare signed partnership agreements with Nvidia and Intel respectively. The Nvidia partnership will bring artificial intelligence to GE Healthcare’s 500,000 imaging devices globally and accelerate healthcare processing. Nvidia-powered Revolution Frontier CT and advancements to the Vivid E95 4D Ultrasound and development of GE Healthcare’s Applied Intelligence analytics platform will be explored jointly. In a separate partnership with Intel, GE aims to boost patient care and reducing costs for hospitals and health systems using digital imaging solutions deployed via edge and cloud (Mobi Health News)
    • MedyMatch Technology a Israeli start-up partners with GE Healthcare to integrate its products with GE’s imaging solutions. MedyMatch Technology has developed an artificial intelligence based software to help clinicians assess head trauma or stroke. GE Healthcare is MedyMatch’s third partnership after IBM Watson Health and the healthcare unit of Samsung Electronics (Times of Israel)
    • Fujifilm expands artificial intelligence (AI) development initiative with its entry in the U.S. market. The AI initiative will harness the power of AI to enhance its imaging and informatics healthcare Synapse portfolio which includes Synapse PACS, Synapse Cardiovascular and Synapse VNA among other solutions (Markets Insider)
    • Agfa Healthcare Digital Radiography (DR) wins a new contract with Florida Hospital a part of Adventist Health System. Agfa will implement 80 DR Upgrades at 18 sites of Florida Hospital (Dotmed)
    • Google Cloud is advancing its influence in medical imaging by joining forces with multiple health IT companies, such as Change Healthcare, Campbell and Kanteron Systems.
      • Change Healthcare is the most recent one to have formed such a strategic alliance and will utilize Google Cloud’s G Suite to develop new solutions. The two companies will also leverage Change Healthcare’s imaging expertise and Google’s AI technology to equip providers with more data-driven insights
      • Campbell, a health IT company, will launch a hybrid cloud vendor neutral archive, de-identification and imaging data supply chain platform
      • Kanteron Systems (Imaging + Genomics platform provider) uses Google Cloud’s AI to help radiologists, surgeons and oncologists share patient data and have access to the proper clinical information.
      • Zebra Medical Vision (medical data research platform provider) relies on Cloud Machine Learning Engine to help providers identify specific patient conditions (MedCity News)

    Watson Platform for Health

    • Amazon Web Services and VMware unveiled new services at re:Invent 2017such as VMware Hybrid Cloud Extension. VMware Hybrid Cloud Extension is a new service that makes it easier for VMware customers running its virtualization software on their own infrastructure to move workloads to VMware Cloud on AWS. VMware Cloud on AWS allows companies to run their apps on AWS infrastructure and the new extension makes that migration easier by allowing those companies to keep the networking settings they have altered to fit the needs (Geek Wire)
    • Former Intel data center executive Diane Bryant joins Google Cloud as new COO. Bryant has been with Intel for the past 25 years and also sits on the boards of United Technologies (CNBC)
    • Amazon.com announces several new machine learning features for its Amazon Web Services cloud computing business that will enable AWS customers to develop and quickly “train” their own artificial intelligence algorithms, build software applications capable of translating language on the fly, analyze video and scan text for trends or key phrases (Fortune)

    VBC - Payers

    • Optum launches a USD 250 million fund to develop early-stage healthcare companies. Optum Ventures will be a venture fund focused on investing in startup and early-stage companies including include digital health firms “that use data and insights to help improve consumers’ access to health care services and how care is delivered and paid for and that make the health care system more reliable and easier to navigate (Forbes)
    • Royal Philips extends their multi-year partnership with Banner Health to include adoption of Philips' PerformanceBridge Practice helping Banner to accelerate its clinical transformation in radiology and further deliver on its goal of improving care for patients (epicos.com)
    • GE Ventures launches Drawbridge Health which is a personal diagnostic testing startup developing proprietary technology designed to integrate blood draw, collection and sample stabilization into a single device. The solution is designed to offer a way for healthcare providers and diagnostic testing companies to better engage their patient-consumers and help enable them to manage their own health. This solution is driving a shift from reacting to tracking (HIT consultant)
    • Tahoe Forest Health System (TFHS) a hospital in California goes live with its Epic EHR implementation with the help of Mercy Technology Services. The two-hospital health system offers services including 24-hour emergency care, orthopedic services and cancer treatment at its locations in Truckee, CA and Incline Village, NV. The Epic system may also position TFHS to successfully fulfil federal reporting requirements (EHR Intelligence)