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

[grow_thumb image=”https://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…)

Melanoma app fined by FTC for deceptive claims (US)

[grow_thumb image=”https://telecareaware.com/wp-content/uploads/2015/04/melapp-screens.jpg” thumb_width=”150″ /]Following on Editor Charles’ reporting since February on two ‘melanoma detection’ apps cited by the US Federal Trade Commission as making unsupported claims on diagnosis of assessment of melanoma risks, one of the two, MelApp, has been fined approximately $18,000, deciding 4-1 in a final consent order. MelApp, an iOS and Android app developed by Health Discovery Corporation and retailing for $1.99, claimed without proof that it could assess skin lesion risk (low, medium, high) through a smartphone photo plus questions about the mark. From the FTC release: “The final order settling the action bars the company from claiming that any device detects or diagnoses melanoma or its risk factors, or increases users’ chances of early detection, unless the representation is not misleading and is supported by competent and reliable scientific evidence. It also prohibits Health Discovery Corporation from making any other deceptive claims about a device’s health benefits or efficacy, or about the scientific support for any product or service….” No word on a final consent order against Mole Detective, but we believe it will follow shortly. FTC press release. Previously in TTA: Action on bad apps, Mole Detective still available, and Mole Detective vanishes. Photo courtesy of the 23 February FTC release

All the sillier then that the VentureBeat article on the FTC action takes the tack that “The fine shows how difficult it will be for future mobile entrepreneurs to launch health apps that go beyond basic fitness and heart rate monitoring.” (more…)

Can State medical boards legally prevent telehealth activity?

This is the question that arises out of a recent ruling by the United States Supreme Court, not on anything related to telehealth but on teeth whitening!

The case was between the North Carolina State Board of Dental Examiners and the Federal Trade Commission. The Board had requested non-dentist teeth whitening practitioners to desist from carrying out these activities and was challenged on the grounds that the Board did not have authority to do so and was acting in an anti-competitive way. The challenge went all the way to the Supreme Court which upheld the lower court decision on the grounds that even though the Board is, in fact, an agency of the State its action must still be supervised by the State in order to enjoy anti-trust immunity. This is analysed by Eric M Fraser in the SCOTUS blog.

It is thought that the State Medical Boards in the United States also have similar rules of governance and therefore do not qualify for immunity from anti-trust law that some State agencies have. This has led to speculation that any restrictions imposed by a State Medical Board on a licensed medical practitioner with regard to the use of telehealth could be considered an anti-competitive action. (more…)