Action This Day, in Churchill’s words. Today’s news of President Trump meeting with the CEOs of US pharmaceutical companies– Novartis, Merck, Johnson & Johnson, Lilly, Celgene, and Amgen–along with the PhRMA association head, indicates the speed of change that this two-week old Administration intends in healthcare. Trump’s points to the Pharma Giants: drug prices need to be brought down, especially for Medicare and Medicaid patients, through competitive bidding not price-fixing; bringing home production to the US; and that there is ‘global freeloading’ on US drugs. This last is a bit vague, and the pricing part may stir some Standard Republican Resistance, but what Trump also came down firmly for is speeding up the drug approval process. In return, the execs asked for tax reform.
Notable here is this quote: “I’ll oppose anything that makes it harder for smaller, younger companies to take the risk of bringing their product to a vibrantly competitive market,” Trump said. “That includes price-fixing by the biggest dog in the market, Medicare, which is what’s happening.” The Hill, Business Insider
Does this mean an open door and encouragement for healthcare technology?
Certainly many startups, early-stage companies, and Grizzled Pioneers are eagerly anticipating a more open healthcare business environment than the many dictates, restrictions and the constant changing of goalposts they have faced for the past eight years. The hope is an openness of the Powers That Be on the Federal side (CMS, HHS, FDA) to innovation, patient-centered care and a change away from hammering constantly on lowering cost through a multitude of controls and top-down diktats on what Healthcare Should Be.
This Editor has seen companies straining to hang in there, playing the niches, moderating their equity raises, merging, projecting profitability sometime in the future. Some have not made it. One is the pioneer telehealth company Viterion Corporation, which was quietly dissolved by its parent company in Japan for various reasons at end of last year. (Editor’s disclaimer: I was marketing director for the company.)
Already innovation is reaching long-neglected areas like home care. Home support for the aging population isn’t buzzy, analytic or sexy, but it’s ready for change. The Financial Times takes a look at this $40 bn US market, focusing on the Hometeam caregiving service presently in New York, New Jersey and Pennsylvania, which has over $43 million in investment after only three years (Crunchbase); Honor, which has over $65 million in funding, operating California and Texas. Their points of difference from traditional home care agencies involve models and technology. Hometeam employs carers who are full employees with benefits and an average of $15/hour pay, double that of the usual minimum wage paid to independent contractors. They equip carers with iPads to track what happens in the home, and to report daily to families. Honor has an algorithm to help it scale up from the 100 or so carers who are the ‘break point’ in matching carers with patient needs. In contrast, the UK is far behind in development. The article looks at Vida which uses a mix of carers and technology for its private pay clients. Now approved by the Care Quality Commission, Vida is already in talks with local councils across London and Brighton. But funding is thin: £400,000 of start-up funding and planning to raise £1 million. Tech start-ups try to fix ailing US elderly care sector. If paywalled, search on the title. Hat tip to Susanne Woodman
Action Next Days? Predictions have been all over the place since the election. Many have been overheated (and highly political), but others explain the complexities of undoing the past six years. A reminder: the PPACA did not go into effect until 2010 and most of the provisions kicked in during 2011. Health tech law firm Epstein Becker Green trotted out its crystal ball right after the election and made a slew of predictions which are so hedged and Washington-like that the major points–the preservation of pre-existing condition coverage and protection for Medicaid state block grants–are a slog to get to. Health Affairs has published a series of articles more to the point on aspects of the transition from ‘Obamacare to Trumpcare’ (the latter a term studiously avoided by this Editor and the Administration).
No one expected that this President and Administration, on Inauguration Day, would act to keep a campaign promise in a carefully worded Executive Order (text) that the policy of this Administration was to repeal the PPACA (Sentence 1), and to use the EO to immediately relieve the ACA’s regulatory burden on insurers, providers, states and patients (Section 2), including the requirement for mandatory coverage. Reading the EO, it firmly places the Administration on the side of ‘maximum options for patients and consumers’. (And he means it.)
Putting aside politics, this statement opens the door to a lot of IT and tech innovation, from FDA to medical devices to care types and models. And since Donald Trump moves fast and will impose his agenda fast on this Congress, the late winter and spring will be thick with legislative and regulation action.
For us in the field, here we go with 104-card pick up again! This Editor writing in 2009-10 knew that Federal restrictions would distort the market and wet-blanket innovation through technology. It took five years to revive, but most companies, even the largest and publicly traded are nowhere near profitability. VC money, VC ‘advice’ and playing Washington politics aren’t always right either–witness Theranos. There’s a new set of rules being written. A way of thinking about the last six years is that we have been wearing a tight girdle or tight/stiletto shoes. You get accustomed to being uncomfortable and having body parts pushed into unnatural places. Now we get to take them off–and it may hurt. Initially. And smart people–and smart companies–will get accustomed to, adjust, and try to influence their path to this new freedom, quickly.