TTA’s week: CVS-Aetna–does it make sense? The Rivers of Babylon (Health). Tender alerts gift wrapped!

More on the ground-breaking CVS-Aetna merger–does it make sense? We wade into the rivers of Babylon Health’s pilots and present you with a large box of Tender Alerts for our UK companies.

And a reminder that you have just two more days to 15 Dec to submit your project for The King’s Fund 2018 Digital Health Congress.


Tender Alert: NHS England, London South Bank, Univ. of Leeds, NHS Digital, Halifax, Healthy New Towns (The last is big…really big)
Babylon Health: correcting earlier NW London CCG report; other concerns raised by CQC report (A deeper dive into The Rivers of Babylon and lessons to learn)
CVS-Aetna: the canary says that DOJ likely to review merger–plus further analysis and developments (It faces legal headwinds, may not make the most business sense–and has international repercussions affecting Walgreens Boots)

Is the CVS-Aetna merger heralding a new era, or an executional disaster in waiting? A lively #MedMo17 awards six startups. And Australia tries Health Care Homes for coordinated care.

Analysis of the CVS-Aetna merger: a new era, a canary in a mine–or both? (Are US healthcare execs in shock?)
#MedMo17: the conference, winning startups, Bayer, blockchain, and more (A lively conference report!)
Health Care Homes – treating chronic diseases in Australia (Coordinating care Down Under)

Does telemental care work?–the VA record. Secretary Shulkin moves forward on private care, Mayo’s Dr. Montori on care fitting into life. And HeyDoctor is Text 4 Doc.

OnePerspective: VA shows how technology can improve mental health care (Telemental health’s expansion chronicled in our new section)
VA’s Secretary Shulkin wants more private care options for veterans as part of reforms (Telehealth, private care coverage leading to better care)
Mayo Clinic’s Victor Montori MD calls for a ‘patient revolt’ for ‘careful and kind care’ (Expanding minimally disruptive medicine concept)
HeyDoctor! Come and get your diagnosis via text here! (Intriguing, but we see the downside)

Plenty of news before (US) Thanksgiving: NHS/Babylon Health’s London tests, Tunstall, Caribbean telemedicine. 

Rollout of second planned Babylon Health GP pilot for North West London scuttled (More unsettling news for Babylon’s model)
NHS, Public Health England testing multiple digital health devices for obesity, diabetes (Taking a year to do so with five suppliers)
NHS ‘GP at hand’ via Babylon Health tests in London–and generates controversy (Hits a GP brick wall)
Tunstall partners with voice AI in EU, home health in Canada, update on Ripple alerter in US (Changing their model, hopefully to profit)
Telemedicine comes to Saint Lucia–and the Caribbean (Seeking warmer climes doesn’t mean you leave telemedicine behind)

FDA’s approval of the first digital drug tracker. Reports on CES 2018, Aging 2.0.  Roundups on telehealth and companies. And Editor Charles cheerfully points out the difference between doers and advisors. 

Breaking: FDA approves the first drug with a digital ingestion tracking system (Proteus only took 16 years)
Telehealth roundups: Cuyahoga County (OH), BMJ systematic review, AAFP Forum (Telehealth results, PCP challenges)
Tender/Prior Information Alerts: North Yorkshire, North Ayrshire (Closing early 2018)
CES Unveiled’s preview of health tech at CES 2018 (5G, AI, VR, Extreme Tech, more)
BU CTE Center post-mortem presentation on Aaron Hernandez: stage 3 CTE (Can health tech even help?)
Some quick, cheerful updates from Welbeing, CarePredict, Tunstall, Tynetec, Hasbro, Fitbit
Themes and trends at Aging2.0 OPTIMIZE 2017 (Reinventing aging to thrive, not just survive)
A blogger’s lot is not a happy one (Editor Charles opines on the increasing disproportion between doers and advisers in the NHS) 

Of continued interest….

Fall risk in older adults may be higher during warm weather–indoors (A counterintuitive surprise marks need for gait detection/analytics)
How does the NHS get funded and work? The King’s Fund pulls it together for you. (Graphics and video)
Public Health England: we’re hiring to expand digital initiatives (A hiring blitz of 9 openings, more to come)
A few short topical items: NHS Digital, DHACA, IET, more (Editor Charles’ update)

CareRooms: the perils of “Silicon Valley hype” when your customer is the NHS (Discretion is the better part of valor)
Tender Alert: advance notice for NHS England ACS-STP Innovation Framework (Another big part of this NHS initiative)
Will Japan’s hard lessons on an aging population include those with dementia? (Japan’s bellwether rings again)

Have a job to fill? Seeking a position? Free listings available to match our Readers with the right opportunities. Email Editor Donna.


Read Telehealth and Telecare Aware: http://telecareaware.com/  @telecareaware

Follow our pages on LinkedIn and on Facebook

We thank our present and past advertisers and supporters: Tynetec, Eldercare, UK Telehealthcare, NYeC, PCHAlliance, ATA, The King’s Fund, HIMSS, Health 2.0 NYC, MedStartr, Parks Associates, and HealthIMPACT.

Reach international leaders in health tech by advertising your company or event/conference in TTA–contact Donna for more information on how we help and who we reach. See our advert information here. 


Telehealth & Telecare Aware: covering the news on latest developments in telecare, telehealth, telemedicine and health tech, worldwide–thoughtfully and from the view of fellow professionals

Subscribe here to receive this Alert as an email on Wednesdays with occasional Weekend Updates. It’s free–and we don’t lend out or sell our list–no spam here!

Donna Cusano, Editor In Chief, donna.cusano@telecareaware.com, @deetelecare

– – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –

CVS-Aetna: the canary says that DOJ likely to review merger–plus further analysis and developments

click to enlargeThe canary is still tweeting. News reports indicate that the US Department of Justice (DOJ) will be in the lead reviewing the CVS acquisition of Aetna. This should be no surprise to our Readers. This Editor’s first analysis noted regulatory necessity and earlier this week, more explicitly predicted either the Federal Trade Commission (FTC) or the DOJ would be reviewing.

The New York Post’s Beltway sources (for ex-US readers, it’s the mass market News Corp. paper/site) are talking up DOJ:

President Trump’s Department of Justice appears to be the agency that will review CVS Health’s $69 billion merger with Aetna, sources tell The Post. While the decision is not yet final, the move would not be good news for the merging parties, sources said. “I think they would prefer it to be at the Federal Trade Commission,” one Washington, DC, source said.

The article explains that it’s a tossup as to bailiwicks–FTC reviews retail and drugstore mergers, DOJ insurance mergers. A sound but (by CVS) unwelcome reason for DOJ to review the merger is their familiarity with Aetna after DOJ opposing its failed merger with Humana in Federal court less than a year in the past. Their expertise would be wasted and politically, a cup that FTC would wish to pass inasmuch they are also short on commissioners.

As the Third Century Greek philosopher Sextus Empiricus stated, ‘The mills of the gods grind slowly, but they grind small’ (or ‘exceeding fine’ in more modern citations), which means that justice, at least in the Federal definition, will be served eventually.

  • The Trump Administration has let DOJ question the AT&T/Time Warner merger on antitrust reasons up, down, and sideways, to the point where it is nearly derailed. Much the same can be expected here.
  • The businesses create a new type of healthcare system. Expect HHS to have a say.
  • Congress is already demanding hearings, which given the short time to Christmas break will likely be January. 
  • What may help Aetna’s cause is that the merger with Humana was a friendly one; the decision, at least in the press, was accepted with grace. 

But as wags have said for at least two centuries, you can always tell the pioneers by the arrows in their back. When you’re redesigning the Conestoga Wagons, it has to be expected–which is why the experts gathering here in NYC over the past week have had not much to say about it to date.

Certainly it has been a downer for investment pickers, though both companies had significant profitability challenges facing them in the future. We refer here to several articles in Seeking Alpha where it’s predicted that the acquisition will boost CVS’ growth, but saddle it with huge debt: $45B in new debt, $21B in new equity, plus using $4B in available cash. Are they overpaying? Will it reduce internal cost and boost profitability? Will it do what they say they’ll do, which is to bend the cost curve down by start-to-finish engagement with customers? What pieces are missing? And time is a critical factor–how long this will take to realize is not projected. If you like stock and value charts and graphs, here’s the place. Seeking Alpha (by author): Ciura, Arnold, Ward

Other retailers will have their say. We’ve noted earlier that the vast supermarkets like Publix, Wegmans, Shop Rite or Ahold (Stop & Shop, Giant) are likely looking at opportunities with logical alliances or buy-ins to insurers like Oscar, Clover, Bright Health, or the smaller Blues. Target is already allied with CVS for their in-store drugstores. And then there is retail/online giant Walmart. The Wal-Martians need plenty of healthcare and Humana, based on local Louisville-area reports, is in play after not merging with Aetna.

Looming over all this is Amazon. A little-noticed report in Becker’s from July indicated that their 1492 unit has set about extracting data from legacy EHRs and to build a telehealth platform on Amazon hardware such as Echo. Already noted has been their buying of pharmacy licenses in various states. None of which can make any of the usual healthcare suspects happy.

TTA’s week: CVS-Aetna’s implications, #MedMo17 report, Aussie Health Care Homes test

Is the CVS-Aetna merger heralding a new era, or an executional disaster in waiting? A lively #MedMo17 awards six startups. And Australia tries Health Care Homes for coordinated care.

Special to Alerts Readers: One free place at The King’s Fund Leeds meeting on 13 December. Last week! See offer below. And a reminder that you have one more week to 15 Dec to submit your project for the 2018 Digital Health Congress.


For our UK Readers: The King’s Fund has been kind enough to offer to our Readers one complimentary spot to their Wednesday 13 December ‘Sharing health and care records’ conference at the Horizon Leeds. If you would like to attend, email us by end of day Thursday 7 December at Extras@telecareaware.com with your name, title, and organization. Put in subject line of the email “KF-Leeds Ticket”. The winner will be chosen from best responses and notified by Friday 8 December.


Analysis of the CVS-Aetna merger: a new era, a canary in a mine–or both? (Are US healthcare execs in shock?)
#MedMo17: the conference, winning startups, Bayer, blockchain, and more (A lively conference report!)
Health Care Homes – treating chronic diseases in Australia (Coordinating care Down Under)

Does telemental care work?–the VA record. Secretary Shulkin moves forward on private care, Mayo’s Dr. Montori on care fitting into life. And HeyDoctor is Text 4 Doc.

OnePerspective: VA shows how technology can improve mental health care (Telemental health’s expansion chronicled in our new section)
VA’s Secretary Shulkin wants more private care options for veterans as part of reforms (Telehealth, private care coverage leading to better care)
Mayo Clinic’s Victor Montori MD calls for a ‘patient revolt’ for ‘careful and kind care’ (Expanding minimally disruptive medicine concept)
HeyDoctor! Come and get your diagnosis via text here! (Intriguing, but we see the downside)

Plenty of news before (US) Thanksgiving: NHS/Babylon Health’s London tests, Tunstall, Caribbean telemedicine. 

Rollout of second planned Babylon Health GP pilot for North West London scuttled (More unsettling news for Babylon’s model)
NHS, Public Health England testing multiple digital health devices for obesity, diabetes (Taking a year to do so with five suppliers)
NHS ‘GP at hand’ via Babylon Health tests in London–and generates controversy (Hits a GP brick wall)
Tunstall partners with voice AI in EU, home health in Canada, update on Ripple alerter in US (Changing their model, hopefully to profit)
A fistful of topical events (London Health Technology, NICE briefings, Planetary Health, RSM, DHACA, with a splash of Club Soda!)
Telemedicine comes to Saint Lucia–and the Caribbean (Seeking warmer climes doesn’t mean you leave telemedicine behind)

FDA’s approval of the first digital drug tracker. Reports on CES 2018, Aging 2.0. Looking forward to four conferences in NYC at end of November. Roundups on telehealth and companies. And Editor Charles cheerfully points out the difference between doers and advisors. 

Breaking: FDA approves the first drug with a digital ingestion tracking system (Proteus only took 16 years)
Telehealth roundups: Cuyahoga County (OH), BMJ systematic review, AAFP Forum (Telehealth results, PCP challenges)
Tender/Prior Information Alerts: North Yorkshire, North Ayrshire (Closing early 2018)
CES Unveiled’s preview of health tech at CES 2018 (5G, AI, VR, Extreme Tech, more)
BU CTE Center post-mortem presentation on Aaron Hernandez: stage 3 CTE (Can health tech even help?)
Some quick, cheerful updates from Welbeing, CarePredict, Tunstall, Tynetec, Hasbro, Fitbit
Themes and trends at Aging2.0 OPTIMIZE 2017 (Reinventing aging to thrive, not just survive)
A blogger’s lot is not a happy one (Editor Charles opines on the increasing disproportion between doers and advisers in the NHS) 


Having the ability to share health and care records digitally is essential to offering better, more co-ordinated care for local populations. But delivering the key benefits requires three things: the appropriate technology, the right governance structure and a culture of adoption. Learn about this at The King’s Fund’s 13 Dec full day conference at Horizon Leeds, where you will explore the different models that have been developed over the past few years and learn how local areas are overcoming these challenges. Click on the advert to register or here


Of continued interest….

Fall risk in older adults may be higher during warm weather–indoors (A counterintuitive surprise marks need for gait detection/analytics)
How does the NHS get funded and work? The King’s Fund pulls it together for you. (Graphics and video)
Public Health England: we’re hiring to expand digital initiatives (A hiring blitz of 9 openings, more to come)
A few short topical items: NHS Digital, DHACA, IET, more (Editor Charles’ update)

CareRooms: the perils of “Silicon Valley hype” when your customer is the NHS (Discretion is the better part of valor)
Tender Alert: advance notice for NHS England ACS-STP Innovation Framework (Another big part of this NHS initiative)
Will Japan’s hard lessons on an aging population include those with dementia? (Japan’s bellwether rings again)
CVS’ bid for Aetna–will it happen, and kick off a trend? (updated) (Where do payers, retailers go to expand?)


Have a job to fill? Seeking a position? Free listings available to match our Readers with the right opportunities. Email Editor Donna.


Read Telehealth and Telecare Aware: http://telecareaware.com/  @telecareaware

Follow our pages on LinkedIn and on Facebook

We thank our present and past advertisers and supporters: Tynetec, Eldercare, UK Telehealthcare, NYeC, PCHAlliance, ATA, The King’s Fund, HIMSS, Health 2.0 NYC, MedStartr, Parks Associates, and HealthIMPACT.

Reach international leaders in health tech by advertising your company or event/conference in TTA–contact Donna for more information on how we help and who we reach. See our advert information here. 


Telehealth & Telecare Aware: covering the news on latest developments in telecare, telehealth, telemedicine and health tech, worldwide–thoughtfully and from the view of fellow professionals

Subscribe here to receive this Alert as an email on Wednesdays with occasional Weekend Updates. It’s free–and we don’t lend out or sell our list–no spam here!

Donna Cusano, Editor In Chief, donna.cusano@telecareaware.com, @deetelecare

– – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –

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…)

Louisville’s Thrive Center showcases senior care technologies (KY)

Louisville, Kentucky is not the place our Readers would put at the top of their minds when thinking about assistive technologies for older adults, but the debut last week of The Thrive Center may change that. It’s a public-private partnership between the Commonwealth of Kentucky and Louisville Metro with private technology and senior living companies. It showcases technologies transforming senior care on a permanent, updating basis and demonstrated in use. 

The Center includes in their 7,500 square foot setting Samsung technologies integrated into a full-size kitchen, bathroom, living room and bedroom; AppliedVR virtual reality headsets; headphones from Eversound; brain fitness software from Posit Science; and music-as-medicine solutions from SingFit and wellness apps from EVŌ. The opening theme is assistance for memory care, which implies that the exhibits will be shifted to different themes in the future.

Companies which helped to establish Thrive include CDW Healthcare (IT), Samsung, Intel, Ergotron, Lenovo, HP/Aruba, Kindred Healthcare (post-acute care) and skilled nursing provider Signature HealthCare. Kindred and Signature are located in Louisville, which is a healthcare hub of the mid-South. It is also the headquarters of Humana and an operations center for Care Innovations–both notably absent from the partner list. CDW releaseSenior Housing News, Thrive Center website, Thrive Center release.

The End or Beginning? Anthem ends Cigna merger, won’t pay breakup fee, seeks damages (updated)

click to enlargeUpdated. Anthem on Friday 12 May beat Delaware Chancery Court’s Judge Travis Laster’s ticking clock [TTA 11 May], and finally, formally called off its merger with Cigna. Instead of sighs of relief and seeking oblivion in a few bottles of adult beverages, Anthem still won’t stop and let Cigna go. Anthem now refuses to pay the breakup fee per their agreement, claiming once again that Cigna sabotaged the merger, and wants blood from that rock. From the Anthem announcement:

In light of yesterday’s decision and Cigna’s refusal to support the merger, however, Anthem has delivered to Cigna a notice terminating the Merger Agreement. Cigna has failed to perform and comply in all material respects with its contractual obligations. As a result, Cigna is not entitled to a termination fee. On the contrary, Cigna’s repeated willful breaches of the Merger Agreement and its successful sabotage of the transaction has caused Anthem to suffer massive damages, claims which Anthem intends to vigorously pursue against Cigna. (Editor’s highlight)

Now we have Anthem seeking damages from Cigna, which is a matched set with Cigna’s Funny Valentine of 14 February adding over $13 bn in damages to recoup the unrealized premium that shareholders did not earn as a result of the merger failure. Anticipating Anthem’s position even at that time, they flipped a wicked backhand in their statement:

Anthem contracted for and assumed full responsibility to lead the federal and state regulatory approval process, as well as the litigation strategy, under the merger agreement. Cigna fulfilled all of its contractual obligations and fully cooperated with Anthem throughout the approval process.

Our Readers will also recall that in March, Cigna joined with Anthem in supporting Anthem’s appeal to the DC Court of Appeals, an unusual move in this light, but one that further reinforced their non-saboteur ‘we’re just innocent victims here’ position. Cigna has not yet publicly responded. The AMA cheered its apparent complete victory in the name of doctors and patients.

They hate each other and have from the start. The real victims here are the policyholders–patients–of both companies, with both companies distracted by a legal battle. How different they are from both Aetna and Humana, which (at least publicly) politely ended all efforts after the merger denial, paid out their breakup, and went back to business, which right now presents challenges with ACA hitting the long-predicted Actuarial Brick Wall. (Aetna exiting ACA individual exchange plans in 2018)

Judge Laster’s plans for a restful summer on Delaware’s beautiful beaches and bays are likely to have gone the way of the mouse in Robert Burns’ poem ‘To A Mouse’ (stanza 7). He is not alone in Indianapolis or Bloomfield, Connecticut:

But Mousie, thou art no thy-lane,
In proving foresight may be vain:
The best laid schemes o’ Mice an’ Men
Gang aft agley,
An’ lea’e us nought but grief an’ pain,
For promis’d joy!

See you in court! Fortune, Modern Healthcare, Healthcare DiveInterested in the previous details? See our coverage here, including our take on ‘whither the policyholders (patients) and corporate buyers’.

Anthem to Cigna: This merger is on, despite the appeals court decision, but the clock is ticking

click to enlargeThe War of the Payers continues.

Update: The DC Court of Appeals released its decision Friday 28 April to deny the Anthem-Cigna merger, upholding the District Court’s decision. This was a 2 to 1 vote that was issued immediately prior to the 30 April merger expiration. It cited that the savings would not mitigate the anti-competitive effects in the national, large group, and local markets, mainly in Medicare Advantage. What has been under-reported is that 11 states plus DC originally joined with the DOJ to enjoin (stop) the merger. In the US system, any healthcare merger also has to be approved by the states, and this merger was a failure in this area. Remarkably, even the dissenting judge cited problems with hospitals and doctors due to the combined company’s negotiating power.

In any rational business deal, this would be the final nail in the coffin, especially with one of the merger partners already wanting to leave. Unless Anthem wants to appeal to the US Supreme Court, this merger has reached The End of the Line. Yet publicly Anthem is pursuing, at least for the time being. In a statement, Anthem expressed “We are committed to completing the transaction and are currently reviewing the opinion and will carefully evaluate our options.”  Court decision in full. Healthcare Dive. MedCityNews.

To recap other recent developments: In February, the two insurers were filing and counter-filing each other in Delaware Chancery Court–Cigna to end their merger, Anthem to continue. Last Wednesday (19 April), Anthem filed an injunction to prevent the deal from expiring as per the merger agreement on 30 April. This injunction may be heard by the Chancery Court on 8 May, according to Anthem documents, but the main court documents are still under seal. (Law 360, via Healthcare Dive 24 April)

In prior Federal court actions, the Federal District Court in DC, based on action by the US Department of Justice, first denied the merger on 8 February on antitrust and anti-competitive grounds [TTA 9 Feb]. Unlike the also denied Aetna-Humana merger, it was publicly known, to the point where it was cited in the District Court decision, that the companies had significant disagreements on the merger. After the denial, Anthem wasted no time in appealing for a reversal of the decision with the DC Court of Appeals. Cigna lost no time in initially wanting no part of any appeal of the ruling by Anthem–and filed in Delaware Chancery Court for $13 bn in damages in addition to the contractual breakup fee of $1.85 bn [TTA 14 Feb]. Two days later, Anthem filed in the same court for an injunction to delay the merger agreement’s legal termination [TTA 16 Feb]. In March, Cigna surprisingly filed a brief in support of Anthem’s appeal (Healthcare Dive). Anthem has also denied rumors of an appeal to the Justice Department to save the merger (Reuters), which is now moot if it ever existed.

As the clock winds down, there remain rivers of bad blood and accusations of bad faith between these two organizations which will continue to be fought in court. Was this merger ever really necessary? No, and it never was, and in our 16 February/21 February update (see analysis), this Editor opines on why Anthem’s to-date persistence in pursuing this has been extraordinarily harmful–to their customers and to both companies.

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.

Humana-Omada Health diabetes prevention program could cut $3 bn in Medicare expense: study

A study performed by insurer Humana using the Omada Health program for diabetes prevention effectively lowered weight, improved cholesterol, blood glucose and mood. 500 volunteer subjects from Humana’s Medicare Advantage program, enrolled during 2015, lost an average of 13 to 14 pounds over a year (7.5 to 8 percent). They also saw improvements in cholesterol levels, blood glucose levels and subjective measures of moods and self-care. Individuals were chosen from administrative medical claims based on metabolic syndrome diagnosis or a combination of three of four of the following diagnoses: prediabetes, hypertension, dyslipidemia, and obesity. Based on the researchers’ calculations, this type of prevention program among this group if widely implemented among overweight adults could reduce Medicare costs by $3 bn over 10 years, not only for diabetes but also heart disease and high blood pressure.

Omada Health’s program included an online small group support, personalized health coaching, digital tracking tools, and a weekly behavior change curriculum. These one-hour lessons focused on a single topic were delivered via laptop, tablet, or smartphone, and included interactive games or exercises, written reflections, and goal-setting activities. The content was approved by the CDC Diabetes Prevention Recognition Program. Data was gathered via wireless scale, pedometer for physical activity, online food intake logging and standard lab results. “In conclusion, this study demonstrated that older adults who agreed to participate in this program were able to engage meaningfully and gain important health and wellness benefits during a relatively short time frame.”

While the cost reduction estimate is exactly that, other studies directionally confirm health improvement and savings: the National Diabetes Prevention Program (NDPP) which is the model for the Omada program, the BMJ/Noom Health study, and the Fruit Street/VSee telehealth program being used by St. Jude Children’s Research Hospital, University of South Florida and University of Michigan. mHealth Intelligence, study (full text in Journal of Aging and Health/Sage Journals)

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…)