TTA’s Holiday Runup 1: Halamka follows the AI Star to Mayo. Changes at Google and NHS Wales Informatics. Dexcom’s outrageous outage. 26 counts and counting for Outcome Health.

 

Snow falls, what’s left of freeze-dried leaves clog the gutters, and we’re revving up the charge cards in our run up to the Christmas holidays. Dr. Halamka follows the AI Star to Mayo. But already there’s coal in the stocking for six former Outcome Health-ers.

News roundup: Philips allies with Humana for pop health, Dexcom’s outage outrage, Halamka ankles Lahey for Mayo, Google and NHS Wales changes, Agfa’s health sale, Victrix/WhatsApp, more

SEC, DOJ charges Outcome Health founders Shah and Agarwal, others, with $487 million fraud, 26 counts of indictment (Club Fed looms for decades)

BRRR! Winter’s preview has hit the US East Coast. Walgreens Boots Alliance and Google’s Project Nightingale may be feeling the chill. And NHS tries to find a workaround for app vetting.

Walgreens Boots going private in the largest ever leveraged buyout: reports (Maybe too big for the market?)
Google’s ‘Project Nightingale’–a de facto breach of 10 million health records, on a bridge too far? (Is there no end to Google intrusion?)
A change of vetting for the NHS Apps Library by spring 2020 (Outsourcing the accreditation problem)

Leaves are turning–and falling–as fall gets on. Getting on, many face the care gap that happens after a hospital discharge. Teladoc looks healthier, but Walgreens is rethinking its clinic strategy. Outcome Health avoids a reckoning with the DOJ. 

Short takes: Outcome Health pays up, Teladoc’s up in double-digits, Walgreens closing 40% of clinics, a health kiosk for hospital employees?
The biggest care gap: the fear of going home after discharge (What do you do–when you can’t do for yourself? The British Red Cross is applying some answers.)

 

Autumn’s more pleasant this week. As leaves fall, questions on age tech rise. Dissatisfaction with healthcare continues despite digital health’s rise. Cleveland Clinic’s telehealth tieup with American Well, Amazon’s buy of Health Navigator, and more. And get away to a digital health conference in historic Trondheim.

Short Takes: Amazon buys symptom checker Health Navigator; Ettain Group acquires EHR consultant Leidos Health (Amazon’s new foray into Amazon Care)
Is ‘age-tech’ a stereotype that misses the larger mark–and market? (A pernicious belief that helps no one)
Over half of Americans of all ages use digital health tools, self-diagnose after internet search: ResMed/Edelman survey (High levels of dissatisfaction with healthcare despite digital tools)
Cleveland Clinic, American Well extend partnership to high-acuity telehealth services with ‘The Clinic’ (Health system growth pinned to telehealth–and virtual visits specializing in complex conditions)
Tyto Care partners with Avera eCARE for telehealth delivered to medically underserved populations (Tyto Care obviously building a use case)
Call for abstracts extended: ISG’s 12th World Conference of Gerontechnology (Norway) (A chance to visit Trondheim)

Autumn’s rainy days set the stage for much M&A, departures, and company moves from Appello, NHS Digital, Babylon Health, Verita, Tyto Care, and more. And slow gait=fast aging in Duke University five-decade study. 

News, moves and M&A roundup: Appello acquires RedAssure, Shaw departs NHS Digital, NHS App goes biometric, GP at Hand in Manchester, Verita Singapore’s three startup buys, Novant Health and Tyto Care partner
Slow gait speed at age 45 as an accelerated aging predictor–and result: Duke University study (A Must-Read if you are interested in aging and its causes)


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, DHACA, 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

Thanks for asking for update emails. Please tell your colleagues about this news service and, if you have relevant information to share with the rest of the world, please let me know.

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

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

News roundup: Philips allies with Humana for pop health, Dexcom’s outage outrage, Halamka ankles Lahey for Mayo, Google and NHS Wales changes, Agfa’s health sale, Victrix/WhatsApp, more

Insurer Humana is identifying high-acuity and chronic CHF Medicare Advantage members and deploying two support programs utilizing Philips PERS and remote patient monitoring (RPM) systems. The first program identifies at-risk older people with chronic conditions and offering them Philips Lifeline with AutoAlert, Lifeline’s fall detection technology, and their CareSage predictive analytics. Philips Lifeline is already offered in select Humana Medicare Advantage plans. The second is a pilot with telehealth RPM to monitor a select group of CHF patients. This will use a Philips interactive tablet and connected measurement devices for care teams to actively monitor congestive heart failure patients. The rationale in the press release is centered on population health management, quality of care, and positively influencing patient outcomes, with “more efficient resource utilization” a/k/a lowering cost of care. Philips release.

Health tech is great, when it works–and Dexcom found out how serious it can get when it doesn’t. Dexcom, a continuous glucose monitoring system, experienced a server outage over the US Thanksgiving holiday weekend into Monday. It knocked out its updates in the Follow feature, frequently used by parents to monitor Type 1 diabetic children, and those with artificial pancreas devices that adjust insulin based on monitored BG levels. Dexcom was not only blasted by users on the server outage, which they attributed to ‘overload’, but also on its communications of the problem to users which depended on Facebook postings and not on real-time direct contacts or messaging. It was a ‘big surprise’ to their CEO, who also dismissed the possibility of a data breach, which seems a bit premature. Both Google and Microsoft provide cloud and tech services to Dexcom. CNBC 12/2, 12/3

Comings and goings: HIT pioneer, strategist, and general guru John Halamka is following the AI Star, leaving Boston’s Beth Israel Lahey Health to head up a machine learning/AI initiative at the Mayo Clinic in Minneapolis. Mayo this fall announced a 10-year high-level partnership with Google Cloud to store patient data and analysis. Modern Healthcare  According to the Healthcare IT News article, he’ll be returning on weekends to the Bay State to his 250-acre working farm….Also moving on to Google Health is Facebook’s Hema Budaraju, a product management director. Business Insider has annoyingly hid the news behind its paywall, leading to speculation in Mobihealthnews that she will be engaged in Google’s “social and environmental impact” efforts as she was at FB…And speaking of Google, founders Larry Page and Sergey Brin are stepping down at long last from active management. Google CEO Sundar Pichai will now be running Google and its corporate parent, Alphabet. See their letter on the GoogleBlog.DigitalHealth reports on changes at the NHS Wales Informatics Service. Helen Thomas is now interim director as NWIS director Andrew Griffiths is departing this month. NWIS is also transitioning to a new Special Health Authority….Agfa’s Healthcare Information Solutions and Integrated Care, plus their imaging division, are definitely going to Italy’s Dedalus Holdings S.p.A. for €975 million. It awaits approval from various authorities, their employee groups, and the usual closing conditions. Release, DigitalHealth.

UK healthcare analytics company Victrix Socsan has signed a licensing agreement last month with WhatsApp. Victrix will use Whats App for communications with beneficiaries as part of their furnishing proactive preventive care services and provide secure information. Release.

News and event roundup: Amazon PillPack, Humana joins CTA, NH’s telemedicine go, Fitbit Lives Healthy in Singapore, supporting Helsinki’s older adults, events

Now that we are past the unofficial end of summer, it’s time to spin that lasso and rope us some news.

Amazon’s PillPack loses a critical data partner. Electronic prescriptions clearinghouse Surescripts terminated their data contract with ReMy Health, which supplied PillPack with information on patients’ prescriptions. Surescripts found fraud in several areas of their relationship with ReMy Health including medication history, drug pricing, and insurance billing. Now PillPack has to obtain it the old-fashioned way–by asking the patient. This can lead to errors and inaccuracies in things like dosages and whether a drug is brand-name or generic. Now PillPack, in the lurch, is seeking a direct relationship with Surescripts. Seeking Alpha, CNBC

Health plan Humana is the first payer to join the Consumer Technology Association (CTA). Humana has been building up his data analytics and digital health capabilities with new ‘studios’ in Boston and hiring USAA’s CTO.  It’s piloting an app for Medicare Advantage patients to connect them with pharmacists and medication management via Aspen RxHealth plus working on a virtual digital primary model with telemedicine provider Doctor on Demand. Fierce Healthcare

New Hampshire is joining the telemedicine reimbursement bandwagon, with its legislature and Gov. Sununu approving primary care providers and pediatricians to bill Medicaid and private insurance for telemedicine visits starting in January 2020. This also ties into rural telehealth. AP, Mobihealthnews

Internationally….Fitbit is partnering with Singapore’s Health Promotion Board (HPB) for the Live Healthy SG behavioral change program, based on the Fitbit Premium program, starting in late October. Mobihealthnews A-P   In Finland, Digital Service Center Helsinki is creating digital tools and virtual care systems to enable older adults to safely and independently live at home, including socialization to prevent loneliness. It’s a significant challenge as over 22 percent of Finland’s population is over 65. Mobihealthnews Europe-UK

Events:

The 9th International Digital Public Health Conference series (#DPH2019), 20-23 November, Marseille, France. This conference is billed as the digital health partner of the 12th European Public Health Conference and brings together the areas of public health, computer and data science, medtech, and NGOs. Conference information here.

Aging 2.0 New York Global Innovation Showcase 4 December, NYC. One of a series of global Aging 2.o events, startups will present aging-focused innovations. Want to pitch? It’s still open–apply here. Register to attend here. Additional information on this and on CREATE’s Design for Older Adults Workshop on 21-22 October at Weill Cornell is here.

 

Drawn-out decision on the CVS-Aetna merger held up again in Federal court

“The Perils of Pauline” saga that is the CVS-Aetna merger continues. Judge Richard Leon of the US District Court for the District of Columbia twirled his mustache and announced that his court will hold a hearing in May on the merger. Practically nobody dislikes this particular $69 billion merger that’s already closed–not the companies, shareholders, Congress, the states, and not the Department of Justice, once Aetna sold off its Medicare Part D drug business to WellCare. But Judge Leon is an exception.

The Tunney Act requires the government to file proposed merger settlements as an approval of the consent decree with a Federal district court to assure they are in the public interest. Most are filed, reviewed by a judge, and approved with no hearings. Since October, Judge Leon has been examining the merger up, down, and sideways in, of course, the public interest and great attention by the press. Now a week (or more) of May hearings will commence with those who don’t like this merger, including the American Medical Association, the AIDS Healthcare Foundation, pharmacy and consumer groups.

Certainly this is long and drawn out, even for the DC district court. Even the high drama of the Aetna-Humana and Cigna-Anthem mergers took a little less time. Judge Leon continues to get coverage and the merger continues to be held up. Reuters, Fox News, Seeking Alpha

News roundup: Walgreens Boots-Microsoft, TytoCare, CVS-Aetna moves along, Care Innovations exits Louisville

Walgreens Boots finally does something. Their teaming with Microsoft to migrate their IT infrastructure to the Azure platform will eventually lead to “more personalized care experiences from preventative self-care to chronic disease management. WBA will leverage the cloud for wellness and lifestyle management programs.” It was important enough to both companies to have a photo op with twin CEOs: Walgreens Boots’ Stefano Pessina and Microsoft’s Satya Nadella. The ‘consumerization of healthcare’ and ‘transforming healthcare delivery’ phrases liberally sprinkled throughout the article and the press release are today’s prevalent clichés, as ‘synergy’ was the buzzword of say, 1999. Healthcare IT News, CNBC  In the long run, this IT overhaul may actually mean more to their customers than, say, the Amazon-JP Morgan-Berkshire Hathaway hydra.

A vote of confidence in diagnostic telehealth pioneered by young Israeli company TytoCare. They added $9 million to their Series C from investors including Sanford Health, Itochu and Shenzhen Capital Group (and its affiliates). This adds to last year’s round led by Ping An Global Voyager Fund for a total Series C of $33.5 million. TechCrunch. TytoCare also was named one of Wired’s Best of CES (CBS TV video, at 1:35) and earlier this month announced the integration of Health Navigator’s symptom checker into their system.

The judge says ‘No Delay For You’! In the CVS-Aetna hearing, Federal Judge Richard Leon refused to give the Department of Justice any more time to submit comments in the CVS Health and Aetna merger case. The deadline remains 15 February despite the government shutdown furloughing much of the antitrust division. Judge Leon is reviewing the decree under the Tunney Act requirement that the merger meet the public interest. Healthcare Finance

Care Innovations ankles Louisville. A modest and mainly paywalled item in Louisville Business First may point to something larger at Care Innovations. After two years of operation and a much-touted expansion to one of Louisville’s better addresses, the telehealth/RPM company has quietly vacated its 7,200 square foot space at Brown & Williamson Tower and pulled its operations from the city. Reporters from the publication were unable to obtain a statement from Care Innovations, which is now in Folsom, California, closer to majority owner Intel. At the time of their Louisville expansion in April 2017 (still on their website), Care Innovations received a $500,000 KBI tax incentive to create 24 high-paying jobs, which now are departed. It is ironic as Louisville is a health hub dominated by insurer Humana but has successfully campaigned for health tech. Last July [TTA 17 July], CI sold its Validation Institute and their VA win disappeared from their website. Of late, there has been no news from the one-time Intel-GE partnership.

News roundup: Walmart and Microsoft AI, are derm apps endangering public with 88% skin cancer diagnosis?

[grow_thumb image=”http://telecareaware.com/wp-content/uploads/2017/12/Lasso.jpg” thumb_width=”150″ /]Walmart and Microsoft partner to change the retail experience via AI. The five-year agreement will switch over applications to the cloud and will affect shipping and supply chain. It’s projected in Healthcare Dive that the impact will be in healthcare as well. Microsoft announced last month that it is forming a unit to advance AI and cloud-based healthcare tools. The landscape is under extreme pressure in retail and healthcare delivery, and Walmart needs to ready for future moves which will certainly happen. Walmart is rumored to be interested in acquiring Humana and is currently working with Emory Healthcare in Atlanta. Then there is CVS-Aetna, Cigna-Express Scripts, Google, and (looming above all) Amazon. (Though you can tuck all the years of Amazon’s profits into one year of Walmart’s.)

The ITV News headline grabs attention — but are dermatology apps really endangering the public when teledermatology can help diagnose 88 percent of people with skin cancer and 97 percent of those with benign lesions? A University of Birmingham-led research team did a metastudy of the literature and found three failings: “a lack of rigorous published trials to show they work and are safe, a lack of input during the app development from specialists to identify which lesions are suspicious and flaws in how the technology analyses photos” particularly for scaly or non-pigmented melanomas. But did access to these apps encourage early diagnosis which can lead to up to 100 percent five-year survival? Of course review is required as recommended by the study, but this last factor was not really examined at the British Association of Dermatologists’ annual meeting in Edinburgh. University of Birmingham release with study abstract

Department of Justice won’t challenge CVS-Aetna merger: report

DOJ, stay away from our doors! The $69 bn CVS Health and Aetna mega-merger looks like it will go sailing down that river, if Mr. Market is right. Shares in both companies enjoyed a nice bump on today’s report that the DOJ won’t challenge this merger. The local Hartford Courant is relieved that Aetna plans to stay in their longtime HQ city (since 1853), conveniently omitting their long-standing plan to set up a big shop in NYC. CNBC

What a difference from a year ago when two mega-mega-mergers, Aetna-Humana and Anthem-Cigna, were shot d0wn–nay, riddled with bullets–in the Senate and in two courts [TTA 9 Feb 17]. Cigna is still living with the hangover of their bad breakup with Anthem, with a fight over a nearly $1.9 bn breakup fee [TTA 17 May 17] continuing in the Delaware Chancery Court in 2019.  Cigna nixed any other insurers in a horizontal merger and sought out Express Scripts, a pharmacy benefits manager (PBM) which was reeling a bit after its largest client (coincidentally) Anthem departed. Anthem sued its PBM, Express Scripts, for $15 billion, alleging the PBM overcharged it by $3 billion annually The merger will cost them over $550 million in transaction cost and that is just the beginning. That $1.9 bn would sure come in handy. Modern Healthcare 

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

[grow_thumb image=”http://telecareaware.com/wp-content/uploads/2017/12/canary-in-the-coal-mine.jpgw595.jpeg” thumb_width=”150″ /]The 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.

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

[grow_thumb image=”http://telecareaware.com/wp-content/uploads/2017/12/canary-in-the-coal-mine.jpgw595.jpeg” thumb_width=”150″ /]This 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)

[grow_thumb image=”http://telecareaware.com/wp-content/uploads/2017/05/The-End-Pic-typewriter.jpg” thumb_width=”175″ /]Updated. 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

[grow_thumb image=”http://telecareaware.com/wp-content/uploads/2016/04/Yak_52__G-CBSS_FLAT_SPIN.jpg” thumb_width=”150″ /]The 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.

[grow_thumb image=”http://telecareaware.com/wp-content/uploads/2017/02/aetna-tweet.jpg” thumb_width=”250″ /]Consistent 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)

[grow_thumb image=”http://telecareaware.com/wp-content/uploads/2014/04/Thomas.jpg” thumb_width=”150″ /] 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.