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

November 21, 2016 | by

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)

July 21, 2016 | by

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

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

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

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

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

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

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

July 1, 2016 | by

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

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

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

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

[grow_thumb image=”https://telecareaware.com/wp-content/uploads/2014/01/Overrun-by-Robots1-183×108.jpg” thumb_width=”150″ /]Dr Eric Topol grooves on ‘The Fourth Industrial Revolution’ of robotics and AI. (more…)

Care Innovations goes East–down home to Kentucky

October 14, 2015 | by

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

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

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

July 28, 2015 | by

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

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

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

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

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

July 3, 2015 | by

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

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

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

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

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

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

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

June 18, 2015 | by

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

Aetna may ‘buy into’ more analytics, digital health

May 20, 2015 | by

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

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

Hackermania running wild, 2015 edition

February 11, 2015 | by
[grow_thumb image=”https://telecareaware.com/wp-content/uploads/2015/02/Hackermania.jpg” thumb_width=”300″ /]

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

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

Aetna’s CarePass passing into history

August 22, 2014 | by

Another Aetna Healthagen initiative is shutting its virtual doors–the much-touted CarePass aggregator for mobile health apps. Available to both Aetna and non-Aetna members, it incorporated leading apps such as Fitbit, Jawbone, Withings, MapMyFitness and BodyMedia. A dimming of its consumer/mobile health star which burned so brightly from late 2012 through last year was evident at this year’s HIMSS. CarePass was nowhere to be seen, and the iTriage patient engagement tool was off in the shadows [TTA 28 Feb]. From its redone website, Healthagen is increasingly concentrated on core areas for payers: ACOs, clinical decision support, data management and health information exchanges. MobiHealthNews broke the exclusive including Aetna’s confirmation and also the quiet departure of two CarePass executives from the company which took place earlier this summer. (more…)

Medtronic and Aetna: the good and bad implications

March 12, 2014 | by

A break in the ‘Perpetual Battle of Stalingrad’ that is also a Pointer to the Big2Big Future

Last week US insurance giant Aetna announced a partnership with medical device Gargantua Medtronic to pilot a program for uncontrolled Type 2 diabetes. Aetna will use claims data to identify 300 members who meet candidate standards for insulin pump therapy, Medtronic will reach out to them through their physicians to enroll them in the Getting2Goal program–as long as the insulin pump is Medtronic’s. The two-year program’s metrics will evaluate overall health outcomes and medical costs such as reduced ER and hospital stays. This is a fairly solid, albeit small N program for both. Other Aetna/Medtronic partnerships are a program for congestive heart failure (CHF) detection announced at HIMSS14, where Aetna plans to monitor device data to track the extra water retention that is usually an indicator of progressing heart failure; and an implanted glucometer program to monitor insulin levels for diabetics to avoid hypoglycemia.

Is this a Pointer to a Limited Future for Small, Innovative Independent Companies? Is this now signalling the US’s Big Payers only want to deal with Big Medical Device? “Value-based arrangements with companies like Medtronic” (release) make it ‘one-stop shopping’ for payers when it comes to physician relationships, IT implementation, data sharing and analysis. Will the end result be that payers stifle the revenue opportunity for small to midsize innovators by saying ‘don’t bother to knock”? Are these financially and technologically the best solution for the patient and for outcomes? (It’s like specifying only one hip or knee implant for all, and may sound familiar to our UK readers who have been following our recent articles on a certain telecare provider.) Aetna release, MassDevice, MedCityNews

Changes afoot at Aetna’s Healthagen?

February 28, 2014 | by

Recent rumors predicted changes at Healthagen, the rebranded ‘Emerging Businesses’ unit of health payer giant Aetna, and that these would be apparent at HIMSS14. Mobihealthnews attempts to ‘Sovietologize’ Aetna chairman Mark Bertolini’s appearance (sponsored by Healthagen, not Aetna) and what products were included in the Healthagen (not Aetna) show floor display. First, the booth: only Accountable Care Solutions and health info exchange Medicity were featured.  Former star iTriage (the original Healthagen product) was relegated to a distant booth. The much-touted CarePass consumer wellness platform? Absent. InvolveCare, the Healthagen caregiver app introduced last fall? Announced to be discontinued 28 April. In the true tradition of Sovietology, omissions are as apparent as inclusions. Second, the keynote: oddly, there are no content points cited from Mr. Bertolini’s speech in Mobihealthnews. We turn then to the Dan Munro in Forbes article, where Mr. Bertolini calls for the ‘creative destruction of healthcare’, a stock rallying point since 2009 (Yes, it doesn’t work. No, it’s not sustainable. It’s an iron triangle. Etc.) The bottom line was his announcing that Aetna’s business going forward would be ACOs and “driving a consumer healthcare experience.” Hopefully that will mean access and quality for the rest of us. Will Healthagen CEO Charles Saunders be part of leading the charge? Not a mention. One could say that the Magic 8 Ball says ‘cloudy’ for the present situation at Healthagen. Perhaps more changes will be revealed in coming weeks. 

Is the ‘last mile’ of app certification efficacy metrics?

December 15, 2013 | by

News and announcements around app certification definitely were hot topics in the past week or so, but are they more heat than light? Do these certifications adequately address efficacy? Stephanie Baum, in her follow-up to the Happtique kerfuffle in MedCityNews, opens up the discussion with the proposition: “It seems like there needs to be some way to prove that apps actually help people.” Bradley Merrill Thompson of Epstein Becker & Green points out “It’s certainly useful to know that an app works from a software perspective reliably, but it is even more valuable to know that the app can actually improve health.” While Happtique certification standards have a gap here, this Editor would point out that they were evolved nearly two years ago when the reporting/analysis needed for this was largely not available. Newer programs such as Johns Hopkins’ mHealth Evidence and the new IMS Health AppScript [TTA 15 Dec] can dip into the ‘big data’ pool far more effectively. Will Happtique be able to address this, or leave the ‘last mile’ to others? And what is the real and quantifiable demand for app certification anyway? Health app prescribing by physicians is a question mark in this Editor’s observation; the larger market may be health plans and programs such as Partners HealthCare’s Wellocracy, Cigna’s GoYou  and Aetna’s CarePass.

Virtual consulter Teladoc acquires Consult A Doctor

September 5, 2013 | by

Dallas, Texas-based telemedicine provider Teladoc yesterday announced their acquisition of Miami Beach, Florida-based Consult A Doctor.  Price was not disclosed nor the future of management and staff at Consult A Doctor. The release portrays the acquisition of small Consult A Doctor (below $1 million in sales, D&B) as reinforcing Teladoc’s 6 million member customer base and an estimated 125,000 annual consults with individuals and employees of small- to medium-size businesses. Teladoc is VC backed: Kleiner Perkins Caufield & Byers (2011) with $18.6 million; $9 million (2009) by HLM Venture Partners, Cardinal Health and Trident Capital. It offers internal medicine, (more…)