Soapbox: JPM’s Dimon takes the 50,000 foot view on the JP Morgan Chase-Berkshire Hathaway-Amazon health joint venture

Mr. Jamie Dimon, the chairman and CEO of JP Morgan Chase, had a few thoughts about the JPM-Berkshire Hathaway-Amazon healthcare JV for all three companies. You’ll have to fill up the tea or coffee mug (make it a small pot) for it’s an exceedingly prolix Annual Shareholder Letter you’ll have to sled through to find those comments. Your Editor has taken her punishment to find them, towards the end of the letter in ‘Public Policy’. 

They demonstrate what this Editor suspected–an headache-inducing mix of generalities and overreach, versus starting modestly and over-delivering.

  • Point #1 sets up what has gone wrong. Among several, “Our nation’s healthcare costs are twice the amount per person compared with most developed nations.” Under point 2 on how poor public policy happened, an admission that Obamacare fixed little:

Here’s another example: We all know that the U.S. healthcare system needs to be reformed. Many have advocated getting on the path to universal healthcare for all Americans. The creation of Obamacare, while a step in the right moral direction, was not well done. America has 290 million people who have insurance — 180 million through private enterprise and 110 million through Medicare and Medicaid. Obamacare slightly expanded both and created exchanges that insure 10 million people. But it did very little to fix our broken healthcare system and has, in fact, torn up the body politic over 10 years — and this tumult may go on for another 10 years.

  • Point #7 is about fixing the deficit and the ill effects if we don’t. In Mr. Dimon’s view, healthcare is a major part of this through the uncontrolled growth of entitlements, with Medicare, Medicaid and Social Security leading the pack–skipping over the fact that nearly all Americans pay into Medicare and SSI well in advance of any entitlement collection. Healthcare is also an offender through unnecessary costs such as administrative and fraud (25-40 percent),  and six mainly chronic conditions accounting for 75 percent of spending.
  • The experts–specifically, their experts–will fix it! “While we don’t know the exact fix to this problem, we do know the process that will help us fix it. We need to form a bipartisan group of experts whose direct charge is to fix our healthcare system. I am convinced that this can be done, and if done properly, it will actually improve the outcomes and satisfaction of all American citizens.”
  • The generalities continue with
    • The JV “will help improve the satisfaction of our healthcare services for our employees (that could be in terms of costs and outcomes) and possibly help inform public policy for the country.” 
    • Aligning incentives systemwide ‘because we’re getting what we incentivize’
    • “Studying the extraordinary amount of money spent on waste, administration and fraud costs.”
    • “Empowering employees to make better choices and have the best options available by owning their own healthcare data with access to excellent telemedicine options, where more consumer-driven health initiatives can help.”
    • “Developing better wellness programs, particularly around obesity and smoking — they account for approximately 25% of chronic diseases (e.g., cancer, stroke, heart disease and depression).”
    • “Determining why costly and specialized medicine and pharmaceuticals are frequently over- and under-utilized.”
    • “Examining the extraordinary amount of money spent on end-of-life care, often unwanted.”
    • “To attack these issues, we will be using top management, big data, virtual technology, better customer engagement and the improved creation of customer choice (high deductibles have barely worked”).

This Editor has observed from the vantage of the health tech, analytics, payer, and care model businesses that nearly every company has addressed or is addressing all these concerns. So what’s new here? Perhaps the scale, but will they tap into the knowledge base those businesses represent or reinvent the wheel? 

A bad sign is Mr. Dimon’s inclusion of ‘end of life care’. This last point is a prime example of overreach–how many of the JV’s employees are in this situation? The ‘attack’ tactics? We’ve seen, heard, and many of us have been part of similar efforts.

Prediction: This JV may be stuck at the 50,000 foot view. It will take a long time, if ever, to descend and produce the concrete, broadly applicable results that it eagerly promises to its million-plus employees, much less the polity. 

Is the Amazon Effect good or bad for consumers–and health tech?

Your busy Editor, who has been on business assignment this past month, has noticed the relative quiet around the subject of How Amazon is Rattling Healthcare. We’ve already noted here the retail and pharmacy/pharmacy benefit effects with CVS-Aetna, Albertsons-Rite Aid, and Cigna-Express Scripts. Aside from the bottom line, and Cigna finally closing a gap with other insurers with pharmacy benefit management services (PBM), is it good for the healthcare consumer as promised? 

Max Nisen’s article in Bloomberg Gadfly (sic) says ‘not so fast’. His argument is as follows:

  • Companies are largely following the lead of UnitedHealth and its Optum units, which integrate not only insurance and PBM but physician groups and analytics.
  • Deals will continue. There’s other insurers like Anthem, Humana, and the regional Blues; urgent clinics like CityMD, AtlantiCare, and MedExpress. Looming above all with clinics and retail pharmacies is Walgreens Boots and on the retail side, other supermarkets like Publix and Ahold Group.
  • Consolidation means fewer alternatives, competition, and thus less downward pricing pressure for both providers and consumers, as options decrease into what resembles a closed system. The merged companies will have debt to pay off, with pressure to pay off lenders and shareholders.

All this is regardless of what Amazon does with JP Morgan Chase and Berkshire Hathaway. Their admirable, seemingly altruistic reasons for this joint venture, in this view, has multiple unintended consequences and negative effects for ordinary folk–and doctors.

As for healthcare technology, when a Big Trend takes the air out of the room–EHRs, ACA, Watson/big data, even wearables, IoT and Big Data– more mundane everyday tech like remote patient monitoring and telecare, which depend on integrating into  healthcare/wellness/chronic care management systems and reimbursement (by those same insurers), tend to suffocate. 

Also of interest: Cigna may be too late to the PBM party (InvestorPlace)

CVS sets it up for Aetna with $40 billion in the third-largest bond sale ever

Obviously, CVS is confident of an approved merger and that it will work. CVS issued $40bn of investment-grade debt today (6 March) to finance the purchase of Aetna, according to sources talking to Bloomberg. The attraction was premium interest and other incentives, up to 1.95 percentage points above Treasuries in the 30-year portion of the nine-part offering. This serves to refinance a bridge loan of $49bn from 20 investors that was taken in December to initially finance the $67.5 bn acquisition. 

By Bloomberg’s calculation, the bond sale ranked only behind $40bn +blockbusters from Verizon (2013) and AB InBev (2016). Analysts and portfolio managers cheered at the terms. It’s expected to close by second half 2018. No word yet from DOJ, however, which asked for additional information on 1 Feb which further extends their waiting period. Mutual shareholder meetings are still scheduled for 20 March [TTA 2 Feb].

Another positive investor take is over at Seeking Alpha, citing excellent fundamentals, a diverse revenue stream, and innovation in “management’s commitment to evolve the company for the future” as well as “trying to revolutionize the doctor-patient-pharmacy relationship, and using its convenience store appeal to support it.” But we knew that already! The article goes on to extrapolate on the Amazon Effect and where CVS, with a bit of tweaking (healthier food choices with pre-made options in stores, much as many Duane Reade/Walgreens have in NYC), could steal a march. (Our prior coverage and mentions are here.)

Retail health convergence and ‘Amazon Effect’ continues with Albertsons’ acquisition of Rite Aid (updated)

The perceived ‘Amazon Effect’ continues. As predicted when the CVS-Aetna merger proposal made its first news last October while the Autumn Leaves were falling (cue the Ferrante and Teicher), other retail shoes would be dropping. Today’s major news is supermarket Albertsons buying most of drug store chain Rite Aid–the 2,600 stores that Walgreens Boots was prohibited from acquiring due to antitrust concerns. (Their eventual deal was for 1,932 stores.)

The terms are cash and stock with an estimated value of the combined companies of $24 billion (WSJ). Present Rite Aid shareholders will take 29 percent of the combined companies and present Albertson shareholders over 70 percent. Another benefit for Albertsons–it’s a quick and easy way to go public without an IPO using Rite Aid’s public status to effect a reverse takeover merger. It solves for Rite Aid (and Walgreens) the large problem of the unsold Rite Aid stores. 

Albertsons’ 2,200 supermarkets are in 38 states and the District of Columbia and comprise multiple brands such as Safeway and Acme in addition to Albertsons. Rite Aid stand-alone stores will continue to operate under their brand name as will most in-store pharmacies. The Rite Aid CEO John Standley will become CEO of the combined company with the Albertsons CEO moving up to chairman. CNBC, Seeking Alpha

Updated: For your weekend reading, here’s Jane Sarasohn-Kahn’s measured take on this acquisition in her HealthPopuli.

Who’s next? Place your bets here in Comments!

Scary Monsters, Take 4: further investor thoughts on CVS-Aetna, the Amazon Threat–and Aetna’s skeleton in the closet? (updated)

click to enlargeThis Editor is always interested in Following the Money as a way to cut through the Fog of Hype and Headlines. The proposed CVS-Aetna merger is no exception. This recent article in Seeking Alpha is a must-read despite its click-bait headline because it not only looks at CVS-Aetna (a thumbs up generally) but also dissects the ‘Amazon Threat‘ and finds that like Oakland, there is (not much) there, there. Let’s look at the writer’s POV–who represents an investor group with no position:

  • CVS is in retail. Amazon is in retail. But CVS’ difference is that by and large, their retail is not a ‘destination’ (only 25 percent of their retail revenue) but a stop-off while a prescription is filled or there’s a visit to the MinuteClinic. I’d differ with this as many of their stores are semi-convenience stores and, at least in this New York metro area, located away from both traditional supermarkets and convenience stores. Some of us also don’t like to pay shipping on a few necessities, want the items now, prefer to pay cash, or coupon-clip. (And I just remembered I need a quart of milk, saving me a trip to the market….)
  • Amazon has exhibited some hesitancy in entering the pharmacy area. They won’t use their licenses to sell prescription drugs (CNBC, Nov) and canceled a wholesaler application in Maine. In the writer’s estimation, the threat to traditional PBM and prescription drugs is exaggerated because “For some reason, the market has been temporarily duped into thinking that a non-existent company with zero customers and zero experience is a real threat to a $70 Billion behemoth that has been at the top of its field for over 50 years.” Pharmacy is also heavily mail order for recurrent prescriptions or needed immediately, not suitable for the Amazon model unless they develop a true PBM and retail delivery. That isn’t to say that Amazon will never be a threat–just not right away. And what will happen before that is…
  • Through a merger with Aetna, CVS is demonstrating to shareholders that they are willing to diversify revenue and profit streams by adding over $60 billion in insurance business. An integration with Aetna (and providers) will help the profitable MinuteClinics grow and thrive, perhaps in non-traditional ways (e.g. anchoring malls).

Again, Amazon needs to enter profitable businesses (see our Follow the Money article) and create shareholder value, even at a $500bn valuation.

What may be a skeleton in Aetna’s closet is prior authorization procedures. Possibly spoiling a rosy CVS-Aetna merger picture is an investigation by the California insurance commissioner into Aetna’s prior authorization practices. It’s a result of a lawsuit in California Superior Court by a patient denied coverage for an intravenous immunoglobulin (IVIG) treatment. A former Aetna medical director admitted under oath in the case that he never looked at patients’ case files before denying authorization, accepting Aetna’s procedure of nurses making recommendations. This will not only affect Aetna, but also any payer doing business in California. Aetna claims that the plaintiff didn’t have necessary blood testing done prior to the authorization review and in fact avoided having it done. A decision here will be watched closely by every doctor who slaves on prior authorizations. With the CNN exclusive, expect many headlines and scrutiny with the spotlight on Aetna. Hat tip to Reader Howard Green, MD, via LinkedIn.

Updated. Colorado’s Division of Insurance is reviewing this information to see if it violates Colorado laws concerning patients’ right to appeal and review procedures that meet standards of care for the state. Expect more states to follow.  Healthcare Dive  

But will this slow or stop the merger? Likely not, but roll ‘dem bones. Lawyers surveyed by the National Law Journal say probably not, as past conduct is usually known by the merging party and factored in. However, this merger must be approved by 50 states’ insurance departments (and more). The caveat is that they use a ‘public interest’ standard that is broader than the Federal anti-trust or fair trade regulations. Look for states to extract concessions before this merger is done.

Scary Monsters, Take 3: one week later, JPMorgan Chase takes heat, Amazon speculation, industry skepticism

It’s the Week After the Amazon/Berkshire Hathaway/JPMorgan Chase announcement of their partnership in a non-profit joint venture to lower healthcare costs for their 1.1 million employees, and there’s a bit of a hangover. Other than a few articles, there’s been relative quiet on this front. This could be attributed to the financial markets’ roller coaster over the past few days, at least in part due to this as healthcare stocks were hardest hit. In the US, healthcare is estimated to be 18 percent of the economy based on Centers for Medicare and Medicaid Services (CMS) actuarial statistics for 2015…and growing. 

Jamie Dimon, CEO of JPMC, had some ‘splainin’ to do with some of the bank’s healthcare clients, according to a report in the Wall Street Journal (paywalled) summarized on MarketWatch. He assured them that the JV would be to serve only the employees of the three companies. JPMC bankers handling the healthcare sector also needed some reassuring as they are “paid handsomely to help clients with mergers and other deals and worry the move could cost them business.”

Speculation on Amazon’s doings in healthcare remains feverish. A more sober look is provided by the Harvard Business Review which extrapolates how healthcare fits into Amazon’s established strength in delivery systems. Amazon could deliver routine healthcare via retail locations (Whole Foods, Amazon Go), same day prescription delivery, passive data capture developed for Amazon Go sold as a service to healthcare providers (on the model of Web Services), and data analytics.

Headlines may have trumpeted that the three-way partnership would ‘disrupt healthcare’, but our Readers in the business have heard this song before. While agreeing with their intent, this Editor differed almost immediately with the initial media cheering [TTA 31 Jan]. The Twitterverse Healthcare FlashMob in short order took it down and apart. STAT racks up some select tweets: in the ACO model, savings come when providers avoid low-value care; the contradiction of profitable companies avoiding profit; that the removal of healthy employees from existing plans will increase inequity and the actuarial burden upon the less insurable; the huge regulatory hurdle; and the dim view of investment advisory firm Piper Jaffray that it will not be a ‘meaningful disruptor’. 

In this Editor’s view, there will be considerable internal politicking, more unease from JPMC customers, and a long time before we find out what these three will be doing.

CVS-Aetna: DOJ requests additional information at deadline (updated for CVS earnings)

click to enlargeThe Canary Tweets. The sources [TTA 8 Dec] were correct that the Department of Justice (DOJ) would take the lead on reviewing the CVS-Aetna merger. Yesterday (1 Feb) they did, requesting additional information. This extends the waiting period for an additional 30 days or more.  The CVS Form 8-K (SEC), which reports the request for information, is here courtesy of Seeking Alpha.

The US law governing this is the Hart-Scott-Rodino Act Antitrust Improvements Act of 1976 (HSR). A pre-merger notification and report was filed with DOJ and the Federal Trade Commission (FTC) on 2 January. There’s a 30-day period for an additional information request and that was taken by the DOJ yesterday. The length of the compliance process may extend for 30 days but may be less if the request is satisfied or more if requested by the parties involved. 

CVS and Aetna still hope to complete the merger by the second half of 2018. The respective shareholder meetings are already scheduled for 20 March. Our previous coverage here.

Editor’s thoughts: CVS-Aetna, despite its size, is a relatively straightforward merger, but because of its nature and size, expect some political haymaking and delays to come. This will be a preview of the action around the Amazon-Berkshire Hathaway-JPMorgan Chase cooperative partnership, in whatever they decide to create, if they create: “there’s many a slip twixt cup and lip.”

Updated for 4th Quarter Financials: CVS is reasonably healthy and nimble. Their earnings report is positive in earnings, operating profit, and reinvestment versus prior year. Under US securities law, it’s silent on Aetna. Form 8-K and press release via Seeking Alpha.

Scary Monsters, Take 2: Amazon, Berkshire Hathaway, JPMorgan Chase’s addressing employee healthcare

Shudders through the US financial markets resulted from Tuesday’s Big Reveal of an Amazon-Berkshire Hathaway-JPMorgan Chase combine. Ostensibly they will be “partnering on ways to address healthcare for their U.S. employees, with the aim of improving employee satisfaction and reducing costs” and setting up an independent company “free from profit-making incentives and constraints. The initial focus of the new company will be on technology solutions that will provide U.S. employees and their families with simplified, high-quality and transparent healthcare at a reasonable cost.” This and the Warren Buffett quote about ballooning healthcare costs being a “hungry tapeworm” on the American economy have gained the most notice. Mr. Bezos’ and Mr. Dimon’s statements are anodyne. The company will initially and unsurprisingly be spearheaded by one representative from each company. The combined companies have 1.1 million employees. Release. CNBC.

There is a great deal in those lead quotes which is both cheering and worrisome. To quote a long time industry insider in the health tech/med device area, “What this tells me is finally, enough pain has been felt to actually try to do something. We need more of this.” This Editor notes the emphasis on ‘technology solutions’ which at first glance is good news for those of us engaged in 1) healthcare tech and 2) innovative care models.

But what exactly is meant by ‘technology’? And will they become an insurer?

What most of the glowing initial comments overlooked was the Absolute Torture of Regulation around American healthcare. If this combine chooses to operate as an insurer or as a PBM, for starters there are 50 states to get through. Each state has a department of insurance–in California’s case, two. Recall the Aetna-Humana and Cigna-Anthem mergers had to go through the gauntlet of approval by each state and didn’t succeed. PBM regulation varies by state, but in about half the US states there are licensing regulations either through departments of insurance or health. On the Federal level, there’s HHS, various Congressional committees, Commerce, and possibly DOJ.

Large companies generally self-insure for healthcare. They use insurers as ASO–administrative services only–in order to lower costs. Which leads to…why didn’t these companies work directly with their insurers to redo health benefits? Why the cudgel and not the scalpel?

Lest we forget, the Affordable Care Act (ACA, a/k/a Obamacare) mandated what insurance must cover–and it ballooned costs for companies because additional coverages were heaped upon the usual premium increases. Ask any individual buyer of health insurance what their costs were in 2012 versus 2017, and that’s not due to any tapeworm. Forbes

Conspicuously not mentioned were doctors, nurses, and other healthcare providers. How will this overworked, abused, and stressed-out group, on whose shoulders all this will wind up being heaped, fare? And what about hospitals and their future? Health systems? The questions will multiply.

Disruption is now the thing this year. Of course, shares of healthcare companies took a beating today, many of which do business with these three companies: CNBC names Cigna, Express Scripts, CVS, Aetna (themselves partnering for innovation), and UnitedHealthGroup. Amazon uses Premera Blue Cross (a non-profit). 

Because of Amazon’s recent moves in pharmacy [TTA 23 Jan], there is much focus on Amazon, but the companies with direct financial and insurance experience are…JPMChase and Berkshire Hathaway.

An Editor’s predictions:

  • Nothing will be fast or simple about this, given the size and task. 
  • The intentions are good but not altruistic. Inevitably, it will focus on what will work for these companies but not necessarily for others or for individuals.
  • An insurer–or insurers–will either join or be purchased by this combine in order to make this happen.

Hat tips to Toni Bunting and our anonymous insider.

What’s up with Amazon in healthcare? Follow the money. (updated)

Updated–click to see full page. Amazon is the Scary Monster of the healthcare space, a veritable Godzilla unleashed in Tokyo, if one listens to the many rumors, placed and otherwise, picked up in mainstream media which then are seized on by our healthcare compatriots.

According to CNBC’s breathless reporting, they have set up a skunk works HQ’d in Seattle. When they posted job listings, they were under keyword “a1.492” or as “The Amazon Grand Challenge a.k.a. ‘Special Projects’ team.” In late July, these ads for people like a UX Design Manager and a machine learning director with experience in healthcare IT and analytics plus a knowledge of electronic medical records were deleted. Amazon has separate initiatives on selling pharmaceuticals and building health applications to be compatible with Echo/Alexa and other smart home tech. Both have come up in the context of the CVS-Aetna merger, where buying up state pharmacy licenses cannot be kept secret (see end of our 8 Dec article) and that efforts to extend Alexa and Echo’s capabilities aren’t particularly secret.

A quick look at Bezos Expeditions, Amazon supremo’s Jeff Bezos’ personal fund, on Crunchbase reveals several healthcare investments, such as GRAIL (cancer), Unity Biotechnology (aging), Rethink Robotics, and Juno Therapeutics (cancer). Not really things easy to sell on Amazon.

Last week, Amazon reportedly hired Dr. Martin Levine, who ran integrated primary health Iora Health’s Seattle-based clinics, according to CNBC and Becker’s. They met with Iora, Kaiser, and the now-defunct Qliance about a year ago on innovative healthcare models. More breathless reporting: they are hiring a “HIPAA compliance lead.” 

What does this all mean? It may be more–or less–than what the speculation is. Here’s what this Editor believes as some options:

  • Alexa and Echo are data collectors as well as assistants–information that has monetary value to healthcare providers and pharma. To this Editor, this is the most likely and soonest option–the monetization of this data and the delivery of third-party services as well as monitoring.
  • Amazon now employs a lot of people. It is large enough to create its own self-funded health system. It’s already had major problems in the UK, Italy, and even in the US with healthcare and working conditions in its warehouses. Whole Foods’ non-union workers are prime for unionization since the acquisition (and also if, as rumored, robots and automation start replacing people).
  • A self-funded health system may also be plausible to sell  (more…)

Analysis of the CVS-Aetna merger: a new era, a canary in a mine–or both?

click to enlargeThis Editor has been at two healthcare conferences in the last four business days (with tomorrow being a third). They should be abuzz about how the CVS-Aetna merger may transform healthcare delivery. To her surprise, there’s been a surprising lack of talk. There is a certain element of ‘old news’, as the initial reports date back five weeks but the sheer size of it ($240bn combined future value, $69bn purchase, an estimated $750 million in near-term synergies), being the largest health insurance deal in history, and the anticipated effects on the health delivery model normally would be a breaking news topic. To this Editor, it is a sign that no one truly knows what to make of it, and perhaps it’s too big–or threatening–to grasp for provider and payer executives especially.

For an overview of what we saw at the time as reasons why and possible competitor reaction, Readers should look back to our original article [TTA 28 Oct]. It’s being presented by both companies as a vertical merger of two complementary organizations, which already were moving towards this model, integrating their different services into “America’s front door to quality health care” (CVS CEO Larry Merlo)–a lower cost setting that saves premium dollars and brings integrated care to consumers’ doorsteps.

CVS brings to the table huge point of care assets: 9,700 pharmacy locations, 1,100 MinuteClinics, Omnicare’s senior pharmacy solutions, Coram’s infusion services, and the more than 4,000 CVS Health nursing professionals providing in-clinic and home-based care. Aetna has about 23.1 million medical members, 14.5 million dental members, and 15.2 million pharmacy benefit management (PBM) services members. Aetna also has a wealth of advanced data analytics capabilities through two subsidiaries, ActiveHealth Management and  Medicity’s health information exchange technology.

Seeking Alpha has an intriguing POV on this entry into a ‘new era’: that both CVS and Aetna consider this to be a long-term reshaping of their business model under the threat posed by Amazon, and are willing to do this despite little short-term financial benefit for either company. The problem as the writer sees it: execution. This is re-engineering care on a national scale, and its benefits are based upon combining intangibles, a murky area indeed especially in healthcare. Time is also a factor, as Amazon is getting pharmacy licenses in multiple states, and is rather an expert at combining intangibles.

Does it signal that the approach to a ‘new era’ in healthcare is accelerating? If this is a preview, 2018 will be extremely interesting. Our ‘canary in the coal mine’ may tweet–or fall over on its perch, asphyxiated.

Some additional points to consider: (more…)

CVS’ bid for Aetna–will it happen, and kick off a trend? (updated)

We have scant facts about the reported bid of US drugstore giant CVS to purchase insurance giant Aetna for a tidy sum of $200 per share, or $66 billion plus. This may have been in development for weeks or months, but wisely the sides are keeping mum. According to FOX Business, “an Aetna spokesperson declined to chime in on the reports, saying the company doesn’t “comment on rumors or speculation” and to Drug Store News, a CVS Health spokesperson did the same. Aetna’s current market cap is $53 billion, so it’s a great deal for shareholders if it does happen.

Both parties have sound reasons to consider a merger:

  • CVS, like all retailers, is suffering from the Amazon Effect at its retail stores
  • Retail mergers are done with the Walgreens Boots AllianceRite Aid merger going through considerable difficulties until approved last month
  • The US DOJ and Congress has signaled its disapproval of any major payer merger (see the dragged-out drama of Aetna-Humana)
  • It has reportedly had problems with its pharmacy benefit management (PBM) arm from insurers like Optum (United HealthCare), and only last week announced that it was forming a PBM with another giant, Anthem, called IngenioRx (which to Forbes is a reason why this merger won’t happen–this Editor calls it ‘hedging one’s bets’ or ‘leverage’)
  • Aetna was hard hit by the (un)Affordable Care Act (ACA), and in May announced its complete exit from individual care plans by next year. Losses were $700 million between 2014 and 2016, with over $200 million in 2017 estimated (and this is prior to the Trump Administration’s ending of subsidies).
  • It’s a neat redesign of the payer/provider system. This would create an end-to-end system: insurance coverage from Aetna, CVS’ Minute Clinics delivering care onsite, integrated PBM, retail delivery of care, pharmaceuticals, and medical supplies–plus relationships with many hospital providers (see list here)–this Editor is the first to note this CVS relationship with providers.

We will be in for more regulatory drama, of course–and plenty of competitor reaction. Can we look forward to others such as:

  • Walgreens Boots with Anthem or Cigna (currently at each others’ throats in Delaware court
  • Other specialized, Medicare Advantage/Medicare/Medicaid networks such as Humana or WellCare?
  • Will supermarkets, also big retail pharmacy providers, get into the act? Publix, Wegmans, Shop Rite or Ahold (Stop & Shop, Giant) buying regionals or specialty insurers like the above, a Blue or two, Oscar, Clover, Bright Health….or seeking alliances?
  • And then, there’s Amazon and Whole Foods….no pharmacy in-house at Whole Foods, but talk about a delivery system?

Also Chicago Tribune, MedCityNews.

UPDATED. In seeking an update for the Anthem-Cigna ‘Who Shot John’ court action about breakup fees (there isn’t yet), this Editor came across a must-read analysis in Health Affairs 

(more…)

Innovate UK’s £12m innovation challenge; Chiaro gains £4.8m for women’s health tech

The Innovate UK Biomedical Catalyst program now has a £12m challenge program for innovative projects in several healthcare areas, including:

  • stratified healthcare (both therapy and diagnostic components)
  • advanced therapies (cell and gene therapy)
  • diagnostics
  • digital health
  • enabling medical technologies and devices

The fund was established by Innovate UK, the Medical Research Council and Scottish Enterprise. Deadline for challenge registration is midday 31 May. A few more details: projects must be led by an SME either working alone or with others; projects can range in size from £250,000 to £4 million and to last between 12 and 36 months; businesses could attract up to 70 percent of their project costs. Innovate UK/Gov.UK page.

‘Fem-Tech’ is a new term to this Editor, but it perfectly describes Chiaro with its smart pelvic floor exercise tool and app, Elvie. It was originally grant-funded by Innovate UK, but has gained an additional £4.8 million from Octopus Ventures and Allbright for a total funding of £9.6 million. It is profitable with direct sales of £800,000, which is another proof that innovators ‘playing the niches’ in the current fragmented environment may be the smartest of all. Plans include building on current major retailers including John Lewis and Amazon, developing three more smart female health products and expand into 25 countries. Innovate UK/Gov.UK page  Hat tip for both Innovate UK items to our Eye on Tenders, Susanne Woodman.

Dream team or dance of the dinosaurs? Another view of Legrand’s recent acquisition

The recent news of  Legrand’s acquisition of Jontek Ltd to join Tynetec in their Assisted Living & Healthcare Business Unit stirs many nice memories, as this editor has much to thank both Tynetec, and Jontek for.

Once Tynetec quality was a match for the other major player in the telecare market, their competition was truly appreciated in restraining the cost of delivering telecare. They were enormously helpful, particularly when this editor was working in Surrey. However at the end of the day, their systems, like the other major competitors in the market, were proprietary. Thus once a Tynetec dispersed alarm unit was installed, only Tynetec peripherals could be added.

Jontek on the other hand were able to receive alerts from all the major telecare players, so enabled mixed economies (as we had in Surrey) to be managed by the same call centre. Although “for legal reasons” there were problems with getting (more…)

Wearables and mHealth: a few observations

The Telegraph reports on the creation of Amazon UK’s wearables store, following on from their US launch that we covered on April 30th. Unlike in the original US launch, locating the store is not that challenging, however it is very much a jumble of products: if you know what you want then you probably don’t need a store to find it; if you don’t, there’s precious little to guide you to find the right product.

One of the wearables they’ll doubtless think carefully before stocking is (more…)

Wearables and Simple Telehealth – another step forward?

In addition to Managing Editor Donna’s items on the opening of the Amazon Wearables Store, and the use of wearables by older ‘quantified selfers’,  Prof Mike Short has kindly drawn our attention to the most recent BBC Click programme which features wearables. Of particular interest to me was the first item on how Formula 1 technology involving measuring drivers’ heart activity is now being developed for the mass market, at rather lower cost. That will overcome a serious limitation of existing activity trackers that rely on accelerometers – for example my Jawbone UP faithfully measures every step I take whether walking or on a cross-trainer. However sessions on the rowing machine – or indeed a recent row in the London Head of the River race (for me definitely the most physically exhausting event so far this year), record no activity.

Another intriguing way of measuring heart activity is (more…)

Amazon’s new wearables ‘store’ needs a location guide

click to enlargeAmazon’s flashy ‘wearable technology store’ which debuted today (29 April) is touted by a company representative as “…an exciting category with rapid innovation and our customers are increasingly coming to Amazon to shop and learn about these devices.” It features all the trendiest fitness bands too: Misfit Shine, the new Jawbone Up24 sleep tracker, smartwatches, wearable cameras, healthcare devices and even an Editor’s Corner with Advice for the Wearable-Lorn. The store is well stocked for fitness/wellness devices and smartwatches, but the shelves are bare for healthcare devices: the 12 listed include sleep tracker Lark, Withings and BodyMedia along with the exceedingly pricey HeartMath and iHealth telehealth products. The unfortunate problem is for those without the direct link to find the store. A search will divert you to a list of products. It isn’t listed under Electronics, nor if you search ‘wearable technology’, not listed under Departments or the show results for category bar (both at left). It’ll be fixed, being Amazon, and it does point to the now high profile of wearables. Amazon release, Silicon Republic (which features Amazon as a tech employer) Hat tip to Contributing Editor Toni Bunting, who reminded this Editor today that none of this appears on Amazon.co.uk!