TTA’s week: messy payer divorce, HIMSS17, NHS digital health’s future, VA, Theranos, ATA, more

 

More news on the VA award, the messy Anthem-Cigna divorce, HIMSS17, a preview of ATA 2017, social determinants of health, digital health’s future in the NHS, tenders are up, Theranos down and much more in our busy week.

HIMSS17 news flashes: Lenovo, Orbita, Tactio, Garmin, Parallax, Entra Health, Philips, IBM (Some setbacks for Watson Health)
The Theranos Story, ch. 36: Their money–and time–are running out (The start of the denouement)
Tender up: Durham Smart County on Social Isolation (It’s not just telehealth)
ATA 2017 Telehealth 2.0 Conference, Orlando (Special offer for TTA Readers)
Disrupting the pathways of Social Determinants of Health: the transportation solution (A focus on Veyo)
Utah Senate removes telehealth bill abortion restrictions (Editor Chrys profiles, wait to see if it’s approved)
Tender up: NHS Hammersmith and Fulham CCG (UK) seeking telemedicine for care homes (New opportunities)
What is the future of digital technology in NHS England for the haves and have-nots? (Local innovation, but the funding?)
Anthem to Cigna: That’s Sabotage! You’re staying, like it or not! (updated 21 Feb) (It’s a foolish War of the Payers in Divorce Court as they slug it out)
Iron Bow partners with Vivify Health for $258 million VA telehealth contract (A real competitor to Medtronic)

The wheels fall off the two Big Payer mergers. Big Tech’s moves on 2020 healthcare delivery. Two sales jobs at Buddi. Dementia therapy, telestroke response, and more.

Cigna to Anthem: we’re calling it off too–and we want $13 bn in damages! (The War of the Payers heads to Divorce Court)
Aetna’s Bertolini to Humana: Let’s call the whole thing off (updated) (The merger failed, but they’re still friends. For now.)
Updated–MedStartr’s Rise of the Healthy Machines 1 March (NYC) (On trend half-day event)
Tender/RFI up: two more from EU-Supply (UK, IRL)
Towards 2020: Big Tech developments predicted to impact healthcare delivery (AI, machine learning, blockchain)
Buddi looking for two dynamic Sales Account Managers (UK) (Opportunity)
Telestroke continues to expand (US) (Editor Chrys’ take on bringing fast stroke response to regional and rural areas)
NY’s Northwell Health Home Care partners with HRS for telehealth tablets (Largest NY system bets on digital health)
Robotic cats, parrot aid dementia patients at Lincolnshire Manthorpe Centre (UK) (Simple aids)
Jawbone still in business–with Fitbit in court (IP and trade secrets may be what’s left)
The Theranos Story, ch. 35: Arizona lab in violation, is there a biotech ‘Theranos effect’? (More strikes against Theranos)
Further clarification on telehealth tenders and the North Yorkshire County Council (We got the straight story, and it’s delayed)
Anthem-Cigna merger nixed, finally (US) (The DC District Court decided, and set into motion the rest)

See further comments and debate on the VA $1 billion award to four providers–US telehealth’s biggest client. Jawbone’s exit, UnaliWear’s entrance. AI beating Watson? Merger, product and meeting updates round out a busy week.

Humana-Omada Health diabetes prevention program could cut $3 bn in Medicare expense: study (Weight loss and programmed coaching work)
TytoCare remote diagnostics comparable to in-person exam results: study (A big plus for home diagnosis with telemedicine)
Tender up: NHS Shared Business Services (SBS) (UK) (Its worth a mystery)
VA awards over $1 billion in Home Telehealth contracts–at long last (updated) (Be careful of answered prayers)
Jawbone out of the consumer fitness tracker business, going to clinical model, raising funds: report (A last ditch effort to save a $980 million investment)
Updates on Anthem-Cigna, Aetna-Humana mergers (Best if they don’t happen)
UnaliWear’s Kanega PERS watch nears US launch (And stylish, too!)
Your temporary tattoo, now with vital signs monitoring! (Only reason to get a tat)
AI as diagnostician in ophthalmology, dermatology. Faster adoption than IBM Watson? (Faster, specialized, cheaper wins)
British Journal of Cardiology (BJC) Digital Healthcare Forum’s inaugural meeting (Put on your calendar for 28 April)
Analysis of an underserved market: only 0.2% of migraine sufferers use migraine apps (r2g study points to app opportunity)
(more…)

TTA’s week: Big Mergers off, Big Tech on, Jawbone, Theranos, roboparrots, rural telestroke, more

 

The wheels fall off the two Big Payer mergers, and one winds up in Divorce Court. Big Tech’s moves on 2020 healthcare delivery. Two sales jobs at Buddi. Dementia therapy, telestroke response, and much more in our busy week.

Cigna to Anthem: we’re calling it off too–and we want $13 bn in damages! (The War of the Payers heads to Divorce Court)
Aetna’s Bertolini to Humana: Let’s call the whole thing off (updated) (The merger failed, but they’re still friends. For now.)
Updated–MedStartr’s Rise of the Healthy Machines 1 March (NYC) (On trend half-day event)
Tender/RFI up: two more from EU-Supply (UK, IRL)
Towards 2020: Big Tech developments predicted to impact healthcare delivery (AI, machine learning, blockchain)
Buddi looking for two dynamic Sales Account Managers (UK) (Opportunity)
Telestroke continues to expand (US) (Editor Chrys’ take on bringing fast stroke response to regional and rural areas)
NY’s Northwell Health Home Care partners with HRS for telehealth tablets (Largest NY system bets on digital health)
Robotic cats, parrot aid dementia patients at Lincolnshire Manthorpe Centre (UK) (Simple aids)
Jawbone still in business–with Fitbit in court (IP and trade secrets may be what’s left)
The Theranos Story, ch. 35: Arizona lab in violation, is there a biotech ‘Theranos effect’? (More strikes against Theranos)
Further clarification on telehealth tenders and the North Yorkshire County Council (We got the straight story, and it’s delayed)
Anthem-Cigna merger nixed, finally (US) (The DC District Court decided, and set into motion the rest)

US telehealth’s biggest client finally awards $1bn in contracts to four lucky (?) providers. Jawbone’s exit, UnaliWear’s entrance. AI beating Watson? Merger, product and meeting updates round out a busy week.

Humana-Omada Health diabetes prevention program could cut $3 bn in Medicare expense: study (Weight loss and programmed coaching work)
TytoCare remote diagnostics comparable to in-person exam results: study (A big plus for home diagnosis with telemedicine)
Tender up: NHS Shared Business Services (SBS) (UK) (Its worth a mystery)
VA awards over $1 billion in Home Telehealth contracts–at long last (updated) (Be careful of answered prayers)
Jawbone out of the consumer fitness tracker business, going to clinical model, raising funds: report (A last ditch effort to save a $980 million investment)
Updates on Anthem-Cigna, Aetna-Humana mergers (Best if they don’t happen)
UnaliWear’s Kanega PERS watch nears US launch (And stylish, too!)
Your temporary tattoo, now with vital signs monitoring! (Only reason to get a tat)
AI as diagnostician in ophthalmology, dermatology. Faster adoption than IBM Watson? (Faster, specialized, cheaper wins)
British Journal of Cardiology (BJC) Digital Healthcare Forum’s inaugural meeting (Put on your calendar for 28 April)
Analysis of an underserved market: only 0.2% of migraine sufferers use migraine apps (r2g study points to app opportunity)

US healthcare starts transforming–what are the opportunities? A ‘ripple’ of a Tunstall partnership, NHS CCGs forcing disabled into care homes, and tenders posted in Scotland and Wales.

Action This Day in US healthcare: it’s coming in pharma, insurance, innovation (Pres. Trump’s ‘energy in the executive’)
A curious ‘Ripple’ of an announcement involving Tunstall Americas (A puzzler)
Two tenders up in Scotland and Wales (UK) (Alerting telecare companies)
What are the impacts of NHS CCGs forcing disabled and LTC patients into care homes? (UK) (Countering best practices and healthcare trends)

Aetna-Humana’s and Anthem-Cigna’s mergers on the (legal) rocks. Is there a conspiracy against Theranos? Get relief with NYeC’s conference videos and UK Telehealthcare’s upcoming schedule. And more of interest….

Breaking: Aetna-Humana merger blocked by Federal court (With Anthem-Cigna to follow)

The Theranos Story, ch. 34: It’s a conspiracy! It’s a vendetta! (Plus their CMS lab fail, and they add another governance board) (more…)

Updated: Aetna’s Bertolini to Humana: Let’s call the whole thing off.

Updated–Humana exits individual exchange policy markets

Breaking News On this Valentine’s Day, a Romance Gone Flat. This morning, both Aetna and Humana formally announced the end of their merger, ruling out any appeal of the Federal District Court decision against it last month [TTA 24 Jan]. While positioned as a mutual agreement, Aetna CEO Mark Bertolini took the key quote in the release: “While we continue to believe that a combined company would create greater value for health care consumers through improved affordability and quality, the current environment makes it too challenging to continue pursuing the transaction. We are disappointed to take this course of action after 19 months of planning, but both companies need to move forward with their respective strategies in order to continue to meet member expectations. Our mutual respect for our companies’ capabilities has grown throughout this process, and we remain committed to a shared goal of helping drive the shift to a consumer-centric health care system.”

Humana’s release limited the announcement to one line and briskly moved on to what really counts–the financials. They will receive a breakup payment of $1 bn (after taxes, $630 million) from Aetna, with their 2017 financial guidance call/release taking place after 4pm EST today. Molina Healthcare, which was to receive certain Aetna Medicare Advantage assets from Aetna post-merger to relieve an over-dominance in some markets, will also receive an undisclosed termination fee. Ka-ching! CNBC, Hartford Courant (Aetna’s hometown paper)

UPDATED 2/14-16 Humana’s financial release announced an updated strategy, share repurchases, a nicely increased dividend–and, buried in the release, their exit effective 2018 from the ‘individual commercial’ business, which are individual policies offered in 11 states through the ACA-created Federal Marketplaces, citing an ‘unbalanced risk pool’ and losses estimated at $45 million for FY17. (By 2018, it may be a moot point.) It is ironic that Aetna’s exit from exchange policies due to unprofitability (or not, as it turned out to be in a few cases) proved to be one of the many bricks that broke the merger, in Judge Bates’ view. The truth is that Aetna and Humana are hardly alone in fleeing the exchanges, and that they have turned out to be unprofitable, as predicted.

click to enlargeConsistent with their behavior over the 19 months of the proposed merger, both Aetna and Humana are publicly respectful, unlike….

These other two will never be one, something must be done? The demise of the Anthem-Cigna merger [TTA 9 Feb], now breaking up in Delaware Chancery Court, may mean a period of Payer Merger Quiet. Does this mean a refocusing on benefiting corporate and individual policyholders during the certain changes to come? Aetna may also proceed with a plan to move operations to Boston, which may affect hundreds of jobs, but has pledged to keep a presence in Hartford according to the Hartford Courant. Humana continues to be interested in investment opportunities and, from reports, another merger.

Goodness knows what the end will be! (Hat tip to Ira Gershwin for the title and the interpolated lyrics!)

Anthem-Cigna merger nixed, finally (US)

click to enlarge Breaking News. Not with a bang, but a whimper. Late Wednesday 8 Feb, the anticipated decision derailing the $54 million Anthem-Cigna merger was released by the Federal District Court, District of Columbia. Judge Amy Berman Jackson’s decision denying the merger was very much along the anti-competitive and anti-trust rationales contained in the 19 January advance report by the New York Post. There’s little that hasn’t already been explored in our prior reports, so we will leave the rehashing to sources like CNBC. The general consensus is that the four Big Payer Merger participants (Aetna and Humana merger denied [TTA 24 Jan]) will be moving on, perhaps to their advantage as most of the premises for merging, based on ACA’s effects, are expected to change, drastically.

Cigna must also be relieved after its reported ‘merger remorse’ after too many rumored disagreements with Anthem. According to Bloomberg, Cigna is sitting on $7 to $14 billion deployable capital, with the high end including extra debt. (Does this include the $1.85 bn breakup fee that Anthem owes to Cigna? Stay tuned on how Anthem tries to get out of this.) And the American Medical Association is beyond delighted (release).

Of course, there’s a lot of speculation about all that loose cash being deployed on new merger targets, which include the Usual Suspects of Humana, WellCare, Centene and Molina. Some free advice: all these companies should, for the next year, sit quietly and breathe deeply (as many employees who would be redundant in any merger are). They should also take care of business (TCB!), refocus on serving their policyholders, make their processes far less onerous on providers, and let it all shake out rather than rushing out to find out Who To Buy. (New Attorney General Jeff Sessions was sworn in this morning, and many changes are coming in both healthcare policy and the judiciary.) Also Neil Versel’s pointed take in MedCityNews.

Updates on Anthem-Cigna, Aetna-Humana mergers

click to enlargeFor our Readers following the Continuing Soap Opera which involves the payer mergers of Aetna-Humana and Anthem-Cigna, some updates:

  • Anthem-Cigna still undecided by despite our 19 January report that the merger would be denied by Judge Amy Berman Jackson of the Federal District Court for the District of Columbia. Reading the SEC 8-K filed in July 2015, the extension to 30 April is automatic if the merger is not consummated or is non-appealable by 31 January. Likely this is to Cigna’s chagrin, as multiple sources over the two years this has been going on have detailed the growing disagreements between the two companies. As we noted in January, Anthem is also running up against ‘the Blues rule’ where it does business as a Blue Cross Blue Shield plan. The arguments that this internal competition is beneficial are pretzel-like indeed.
  • A labor union investor, Westchester Putnam Counties Heavy & Highway Laborers Local 60 Benefits Funds, is suing Aetna for shareholder losses in the Federal District Court in the District of Connecticut (complaint here). The demand is for a jury trial and details what they believe to be false and misleading statements by management and not disclosing adverse facts.

Healthcare Dive is recommended for their two deeper dives: 1 Feb on Anthem-Cigna and the outcomes of both mergers, 30 Jan on the labor union lawsuit. The likelihood of either happening becomes more remote as time goes by, but there could be a surprise.

Breaking: Aetna-Humana merger blocked by Federal court

Breaking News from Washington Judge John B. Bates of the Federal District Court for the District of Columbia ruled today (23 Jan), as expected, against the merger of insurance giants Aetna and Humana. Grounds cited were the reduction in competition for Medicare Advantage plans, where both companies compete. “In this case, the government alleged that the merger of Aetna and Humana would be likely to substantially lessen competition in markets for individual Medicare Advantage plans and health insurance sold on the public exchanges.” The decision could be appealed in the US Appeals Court for the DC Circuit, or could be abandoned for different combinations, for example a rumored Cigna-Humana merger, or smaller companies in the Medicare/Medicaid market such as Centene, WellCare, and Molina Healthcare. Certainly there is money about: Humana would gain a $1 bn breakup fee from Aetna, and Cigna $1.85 bn.

No decision to date has been made in the Anthem-Cigna merger, but the general consensus of reports is that it will be denied by Federal Judge Jackson soon. [TTA 19 Jan]

Healthcare DiveBloomberg, Business InsiderBenzinga

Of course, with a new President determined to immediately roll back the more onerous regulatory parts of the ACA, in one of his first Executive Orders directing that Federal agencies ease the “regulatory burdens” of ObamaCare on both patients (the mandatory coverage) and providers, the denial of these two mega-mergers in the 2009-2016 environment may be seen as a capital ‘dodging the bullet’ in a reconfigured–and far less giving to Big Payers–environment. FoxNews

DC District Court judge to block Anthem-Cigna merger: report

Breaking News  Judge Amy Berman Jackson of the Federal District Court for the District of Columbia is expected to rule against the Anthem-Cigna merger on anti-trust grounds, sources have informed the New York Post. In anticipation of the appeal, Anthem has already filed an extension to the merger deadline from 31 January to 30 April, which Cigna is reportedly opposing in hopes of killing the merger.

The lawsuit was brought by the Department of Justice after Senate anti-trust subcommittee hearings and the displeasure of many state insurance regulators [TTA 21 July]. The hearing starting 21 November had two phases: the first on the merger’s effect on national employers, the second starting 12 Dec on local markets [TTA 21 Nov]. The huge stumbling block, according to the report, is Anthem’s unresolved conflict in a merger due to the ‘Blues Rule’, which requires that they have no more than one-third of its marketed products from other insurers in a state where they also market Blue Cross Blue Shield plans. Anthem is the licensee for Blue plans in 15 states, and according to court testimony by Anthem VP of corporate development Steven Schlegel, may have faced a $3 bn (£2.43 bn) penalty. This likely would have come from the Blue Cross Blue Shield Association, the licensor. Anthem’s hope reportedly was to transfer Cigna customers to its Blue plans to balance this out.

The NYP report also adds fuel to two years of rumors concerning governance and management succession conflicts between the two insurers. One revelation in the DOJ complaint was that in April 2016 “Anthem had established a separate, highly confidential team to work on integration planning without Cigna’s participation”. Earlier reports publicized that Cigna hoped that the DOJ lawsuit would have killed the merger; now Cigna wants no extension and to collect its $1.85 bn breakup fee. Sounds like a Fatal Case of Merger Remorse. Stay tuned. 

The separate Aetna-Humana hearing concluded on 30 December under a different DC District Judge, John D. Bates. Arguments here focused on overlaps in two areas: exchange policies (sold by Aetna in only four states, with overlap in 17 counties) and Medicare Advantage monopolies or near-monopolies. The judge’s ruling is still pending. Bloomberg, Hartford Courant, which lets hometown Aetna have its say.

Off to DC court we go: Anthem-Cigna, Aetna-Humana merger trials (US)

It seems like a year ago that the US Department of Justice sued to stop the merger of these healthcare payer giants on antitrust grounds, but it was only July! On the face of it, it would reduce the Big 5 Payers to the Big 3, with the $48 bn Anthem-Cigna matchup besting UnitedHealthcare for the #1 pole position with 45 million covered persons. DOJ also cited reduction of benefits, raising premiums, cutting payments to doctors and reducing the quality of service. 11 states, including New York, California and Connecticut, plus the District of Columbia, are backing the DOJ.

The Anthem – Cigna trial started today in US Federal Court in Washington DC. It is a two-phase hearing: the first on Anthem – Cigna’s merger’s effect on national employers, the second starting 12 Dec on local markets.

So much has happened since our July report, none of it good. ACA exchange plans have hiked benefits up well into the double digit increases by state due to lack of competition: CO-OP insurers couldn’t defy actuarial gravity for long and went out of business; commercial insurers lost too much money and bailed from multiple states (KFF). The effect on Medicare Advantage programs, which are judged on the county-state level, will be most significant with a combined Aetna-Humana having 40-50 percent market share in many counties. This triggers divestiture in current regulations.

These mergers rarely go to court after a DOJ action, so all eyes are on DC. An added fillip is that many expected the lawsuit to be the final kibosh on a Anthem-Cigna deal where reports of conflicts on future management and governance of a single entity were frequent. It wasn’t–and DOJ reportedly will be using documentation on the governance clash to demonstrate why it should not take place.

The $38 bn Aetna – Humana court date is 5 Dec, also in Washington, before a different judge.  All want a decision before year’s end so that (if positive) they can proceed with state regulatory approvals before deal expiration on 30 April 2017.

Bloomberg Big Law Business, USA Today  Also don’t assume this has much to do with a Donald J. Trump administration being ‘typical Republican=friendlier to Big Mergers’, because the president-elect has been hostile to other high profile ones, notably AT&T/TimeWarner, and this will be over before a new Attorney General is confirmed.

DOJ sues to derail Aetna-Humana, Anthem-Cigna mergers on anti-trust grounds (updated)

Breaking News. The anticipated shoe has dropped. With all the US news concentrating on the Republican convention, the US Department of Justice, late today, without much fanfare beyond the presser, lobbed lawsuits at Aetna and Anthem to stop their respective acquisitions of Humana and Cigna. US Attorney General Loretta Lynch was joined by Principal Deputy Associate Attorney General William Baer, who had been the DOJ’s point person for this anti-trust review.

According to CNN’s report, Mr Baer said “the two mergers would leave consumers at risk by reducing benefits and raising premiums. He also stressed that the most vulnerable would be hit the hardest and that competition would be reduced. “These are so-called solutions that we cannot accept,” Baer said. He added that the mergers are a “convenient shortcut to increase profit for these two companies,” and that the DOJ had “zero confidence” that they would benefit consumers.”

Reuters reported that Aetna and Humana expect “to vigorously defend the companies’ pending merger,” Anthem’s response was “more muted”, as industry observers expected, as it has been more problematic not only in size and with Medicare Advantage divestiture, but also with reports of disagreements on management and governance.

If these mergers were successful, the Big Five in US health insurance would be reduced to the Big Three, with the $48 bn Anthem-Cigna matchup besting UnitedHealthCare for the #1 pole position with 45 million covered persons.

Why is this important to those of us in telehealth, telemedicine and telecare? We are still seeking ‘who pays for it’ (remember our Five Big Questions/FBQs?) and when five becomes three, and things are unsettled….negotiations grind to a halt. (This Editor will reference the post-2008 years where health tech US deals and development came to a screeching stop as we waited to find out what was in that mystery ACA bill. Recovery/reset took years….)

Earlier reports via Bloomberg News and Reuters noted that both sets of insurance companies faced substantial opposition from the start. (more…)

A weekend potpourri of health tech news: mergers, cyber-ransom, Obama as VC?

As we approach what we in these less-than-United States think of as the quarter-mile of the summer (our Independence Day holiday), and while vacations and picnics are top of mind, there’s a lot of news from all over which this Editor will touch on, gently (well, maybe not so gently). Grab that hot dog and soda, and read on….

Split decision probable for US insurer mergers. The Aetna-Humana and Anthem-Cigna mergers will reduce the Big 5 to the Big 3, leading to much controversy on both the Federal and state levels. While state department of insurance opposition cannot scupper the deals, smaller states such as Missouri and the recent split decision from California on Aetna-Humana (the insurance commissioner said no, the managed care department said OK) plus the no on the smaller Anthem-Cigna merger are influential. There’s an already reluctant Department of Justice anti-trust division and a US Senate antitrust subcommittee heavily influenced by a liberal think tank’s (Center for American Progress) report back in March. Divestment may not solve all their problems. Doctors don’t like it. Anthem-Cigna have also had public disagreements concerning their merged future management and governance, but the betting line indicates they will be the sacrificial lamb anyway. Healthcare Dive today,  Healthcare Dive, CT Mirror, WSJ (may be paywalled) Editor’s prediction: an even tougher reimbursement road for most of RPM and other health tech as four companies will be in Musical Chairs-ville for years.

‘thedarkoverlord’ allegedly holding 9.3 million insurance records for cyber-ransom. 750 bitcoins, or about $485,000 is the reputed price in the DeepDotWeb report. Allegedly the names, DOBs and SSNs were lifted from a major insurance company in plain text. This appears to be in addition to 655,000 patient records from healthcare organizations in Georgia and the Midwest for sale for 151 – 607 bitcoins or $100,000 – $395,000. The hacker promises ‘we’re just getting started’ and recommends that these organizations ‘take the offer’. Leave the gun, take the cannoli.  HealthcareITNews  It makes the 4,300 record breach at Massachusetts General via the typical unauthorized access at a third party, once something noteworthy, look like small potatoes in comparison. HealthcareITNews  Further reading on hardening systems by focusing on removing admin rights, whitelisting and endpoint security. HealthcareDataManagement

Should VistA stay or go? It looks like this granddaddy of all EHRs used by the US Veterans Health Administration will be sunsetted around 2018, but even their undersecretary for health and their CIO seem to be ambivalent in last week’s Congressional hearings. According to POLITICO’s Morning eHealth newsletter, “The agency will be sticking with its homegrown software through 2018, at which point the VA will start creating a cloud-based platform that may include VistA elements at its core, an agency spokesman explained.” Supposedly even VA insiders are puzzled as to what that means, and some key Senators are losing patience. VistA covers 365 data centers, 130 separate VistA systems, and 834 custom installations, and is also the core of many foreign government systems and the private Medsphere OpenVista. 6/23 and 6/24

click to enlargeDr Eric Topol grooves on ‘The Fourth Industrial Revolution’ of robotics and AI. (more…)

Care Innovations goes East–down home to Kentucky

Intel and GE’s joint venture, Care Innovations, is opening an IT and product development center in Louisville KY’s Norton Commons live/work community. According to reports, the 10-person office was opened to develop “software for medical monitoring systems that allow people to measure their vital signs in own homes and that will analyze the data for health care providers”, which sounds like a description of Health Harmony as mentioned further in the article. Also cited by CEO Sean Slovenski was the recent acquisition of several major clients in Mississippi, Louisiana, Kentucky and Tennessee. Headquarters will remain in Roseville, California, northeast of Sacramento and far east of Silicon Valley. Why Louisville? It’s the headquarters of Humana, currently in the early stages of a merger with Aetna. Mr Slovenski is an alumnus of Humana who undoubtedly recognizes that there’s always talent which shakes loose with any merger, often proactively. He has reorganized the company top to bottom since the days in the doldrums under Louis Burns, and added initiatives such as the Validation Institute plus academic relationships with the Jefferson School of Population Health, Xavier University and the University of Mississippi. Louisville is also a lot closer to Washington DC (1.5 hour flight time) and all those wonderful Federal programs with lots and lots of funding.  Louisville Business First, release.

Speaking of the Aetna-Humana merger, it now has a strong boss man to make sure it works–Rick Jelinek, CEO for a year of OptumHealth, 19 years at predecessor now unit UnitedHealthcare including leading the Medicare Advantage and Medicaid businesses. The stakes are high in that the merger will create the second-largest managed care company in the US. Mr Jelinek also will lead Aetna’s enterprise strategy division, and will report directly to Aetna’s CEO. The timeline, unless the Feds put on the brakes, is to close in second half 2016. The combined operating revenue is projected at about $115 billion, with about 56 percent from government-sponsored programs, such as Medicare and Medicaid. The plan, according to Louisville Business First, is to headquarter the combined Medicare, Medicaid and Tricare businesses in Louisville. But, as they say, the meal is still being prepared, and assuredly not everyone at either company will find a seat at this table, or one they want to sit in.

Unnerving mergers (US-UK); DoD’s EHR picked; EHRs & AMA

Blues feeling Blue about…The Anthem-Cigna merger, finalized last week (but yet to be approved by the US and likely the UK Governments as Cigna issues policies there), gives them bragging rights over the Aetna-Humana merger and Optum/United Healthcare in their covering of 53 million US lives as the largest US health insurer. Unnerved is the Blue Cross and Blue Shield Association, of which Anthem is a part of with the Anthem and Empire Blue Cross plans plus others in a total of 14 states. But Anthem also competes with ‘the Blues’ in 19 additional states where it markets under a non-Blue brand, Amerigroup, primarily for Medicare and Medicaid (state low-income coverage). Many of the Blues are non-profit or mutual insurers; many are partial or single-state, like Independence, Capital and Highmark (PA/DE/WV) in Pennsylvania and Horizon Blue Cross of New Jersey. Their stand-alone future, not bright since the ACA, now seem ever dimmer in this Editor’s long-time consideration and that of Bruce Japsen writing in Forbes. Also Morningstar considers Anthem’s overpaying and the LA Times overviews.

Walgreens Boots Alliance, another recent merger of quintessentially American and British drug store institutions, named as its interim CEO Stefano Pessina. He previously ran Alliance Boots prior to the merger and is the largest individual shareholder of WBA stock with approximately 140 million shares, so one cannot call it a surprise. At a youthful 73 (see video), one assumes he also takes plenty of Walgreens vitamins and uses Boots No 7 skin care. Forbes.

Updated: The big EHR news is the US Department of Defense announcing the award of its Defense Healthcare Management System Modernization contract this week. At 10 years and $11 billion, even giant EHRs went phalanxed with other giant government contractors to face DOD: Epic with IBM; Cerner with Leidos, Accenture and Intermountain Healthcare; Allscripts with Computer Sciences Corp. and Hewlett Packard. Certainly there will be ‘gravitational pull’ that affects healthcare organizations, but the open and unanswered question is if that pull will include the far nearer and immediately critical lack of interoperability with the Veterans Health Administration’s (VA) VistA EHR. The Magic 8 Ball reads: Hazy, try again later.  Leidos/Cerner announced as winners close of business Wednesday 29 July. 

In other EHR news, US doctors vented last week on how much they hate the @#$%^&* things to the American Medical Association‘s ‘town hall’ in Atlanta. Bloat, diminished effectiveness, error, getting in the way of care due to design by those without medical background presently prevail. The AMA’s Break the Red Tape campaign asks CMS to “postpone” finalizing Stage 3 Meaningful Use (MU) rules so that it can align with new payment/delivery models. Better yet, they should buy thousands of copies of Dr Robert Wachter’s book [TTA 16 Apr] and drop them on every policymaker’s desk there, with a thud. Health Data Management 

Breaking (holiday weekend) news: Aetna does the ‘deal deal’ with Humana

Crap Game (Don Rickles): Ya make a DEAL!
Big Joe (Telly Savalas): What kind of a deal?
Crap Game: A DEAL DEAL.

Kelly’s Heroes (1970), on getting the German Tiger tank and commander to help them in their bank heist

A $37 bn deal, that is. Announced on the Friday before the US Independence Day holiday (a day which may define media ‘black hole’), Aetna and Humana announced either their merger or the acquisition by the former of the latter, depending on what account you read. If approved by the Feds, the combination of #3 and #4 insurers (by revenue) respectively will exceed 33 million insured, making the combined entity #3 in insured individuals (after UHG and Anthem) and #2 in revenue. The announcement also stated that Louisville, Kentucky, Humana’s current headquarters, will continue to manage the Medicare, Medicaid and military Tricare businesses. Both are in Medicare Advantage, which is problematic due to market share and anti-trust considerations in at least four states, according to Reuters. (Humana has about 20 percent of national Medicare Advantage private policies.) We’ve previously noted the unfavorable comparison to the end stages of airline deregulation–consolidation reducing competition and consumer-favorable pricing. No word on the future of the Humana brand and marketing, which has always been executed well.

As to the outlook for digital health support–the prognosis by this Editor of this combination is, in the Magic 8 Ball’s answer, ‘reply hazy, ask later’.

  • Humana was known in the industry for being fairly open to opportunities and backed them with funding (Healthsense, Vitality, what remained of Healthrageous) under business such as Humana Cares. Humana at Home also owns a home care management company, SeniorBridge. Will this be of interest to Aetna in population health management, or an early ‘For Sale’?
  • Aetna, by contrast, has pivoted several times. CarePass consumer apps was a patient engagement experiment that proved the point that policyholders don’t want apps from insurers. Healthagen (an acquisition) was first positioned as an ’emerging businesses’ skunkworks of sorts umbrella-ing over iTriage (now integrated into the parent), ActiveHealth, Medicity and other digital health/analytics related businesses, then scaled back in early 2014 [TTA 28 Feb 14]. Repositioned as ‘population health management, the ACO business dominates.

Various reports: Daily Mail, Forbes (which likes it not at all and sees none of the touted ‘economies of scale’) and the WSJ.

A ‘Game of Thrones’ analogy to potential health insurer mergers

The Wall Street Journal has likened the merger action pending among America’s largest insurers to the series ‘Game of Thrones’, said thrones occupied by Aetna, Cigna, Humana, UnitedHealthcare and Anthem. These more aptly remind this Editor of the final stages of airline deregulation, except that none are in a non-medieval bankruptcy court. Their actions reflects the payers’ urgent concerns that now is the time to reinforce a national presence, that revenues in a Obamacare environment (well, we’ll see the effect of that US Supreme Court subsidy decision due imminently) can do nothing but go down and that Medicare Advantage, commercial accounts, health system relationships (ACOs) and health IT systems are the place to be. What is missing: the fate of those independent, state and regional Blue Cross-Blue Shield (collectively, the ‘Blues’) which are not part of Anthem, many of which are ‘non-profit’ (note the quotes); the positive effect of competition on pricing and a fair consideration of the negative effects of monopoly. Ah, but there are no flung axes, regicide or poisonings to be found here. The real theme of ‘Game of Thrones’ is the effect of the powerful on the powerless (we the insured), which the WSJ writer doesn’t address…..Insurers Playing a Game of Thrones (if you hit a paywall, search on the title)

Aetna may ‘buy into’ more analytics, digital health

Rumors now mainstreamed into press surround Aetna’s apparent interest in fellow insurers Humana and Cigna. Forbes last Friday started the ball rolling with an article last Friday focusing on the main event driving insurance payer consolidation: the transition of Medicare from fee-for-service to value-based bundled payments and accountable care organization (ACO) models. Humana has substantial Medicare business and a foot in home care (SeniorBridge), but has innovated in digital health: partnerships (Healthsense, TTA 20 Dec 13), purchases (what remained of Healthrageous, TTA 16 Oct 13), employee wellness (Vitality) and app development. Cigna is a major insurer with corporate business, but has struggled a bit in the digital health arena with the flashy-but-flopped patient engagement platform GoYou. It’s piloted telehealth to reduce readmissions with Care Innovations [TTA 7 Oct 14]  and Coach by Cigna, a mobile health platform in conjunction with Samsung for the Galaxy S5 and S6 phones.

Aetna has had some success with working with ACOs, with 62 contracts covering about 1 million lives, but this Editor counts over 400 practice-based ACOs in the Medicare Shared Savings incentive program alone. Their experiment in consumer app aggregation, CarePass, came to a quiet end last August and Healthagen, their ’emerging businesses’ unit, has had some swerves in rationale including iTriage and even ActiveHealth Management, their long-time population health analytics arm. While digital health is part of it (see Mobihealthnews), (more…)

Hackermania running wild, 2015 edition

click to enlarge

Do we need the Hulkster Running Wild against Hacking? It’s so heartwarming to see the mainstream press catch up to what your Editors have been whinging on for the past few years: that healthcare data is the Emperor With No Clothes. Here we have Reuters and the New York Times with a case of the vapors, seeking a fainting couch. Reuters dubs 2015 ‘The year of the healthcare hack’. The FBI is investigating the AnthemHealth breach, while their counterparts UnitedHealth, Cigna and Aetna are in full, breathless damage control mode. The Times at least delves into the possibility that it was at least partially instigated by China and the People’s Liberation Army (PLA) unit that trolls for intellectual property.

Our Readers, savvy to your Editors’ warnings since at least 2010, were aware that the drumbeat accelerated this past summer. (more…)