Telehealth usage going flat, off by 1/3 and declining: Trilliant Health study

Trilliant Health, a healthcare data analytics and advisory shop based in Tennessee, has run some projections on the US healthcare market and telehealth, and they’re not as bright as many of us–and a lot of investors plus Mr. Market–have believed. It opens up on page 4 of the electronic document (also available in PDF) with this ‘downer’–that the largest sector of the largest global economy is overbuilt and unsustainable. Hospitals and health systems have operated for decades that basic economic factors–demand, supply, and yield–don’t apply, and there are more companies competing with them for the consumer healthcare dollar than they realize–with more proliferating every day. 

Sledding through their 160-page report, we turn to our sweet spot, telehealth, and Trilliant is not delivering cheerful news (pages 32-43). 

  • Unsurprisingly, demand for telehealth is tapering off. Based on claims data for face-to-face video visits, excluding Medicare fee-for-service (Original Medicare) and self-pay visits, they peaked above 12 million in April 2020 and, save for a bump up in December 2020-January 2021, steadily declined to about 9 million by March 2021.
  • Teladoc, the leading provider, is projecting that 2021 volume will only represent 4 percent of the US population–a lot more than before, but not growing as it did in 2020.
  • Telehealth’s growth was astronomical on both coasts–California, Massachusetts, Vermont, Oregon–and Hawaii–but relatively lower in middle and Southern America in places like Wyoming, North Dakota, Mississippi, and Iowa. Telehealth usage is declining sharply in that region as well but across the board in all states including California. In fact, Phoenix and Dallas had higher telehealth utilization pre-pandemic than during it.
  • Mental health drove telehealth growth during the pandemic, representing 35 percent of claims, almost four times the next group of categories at 8 percent. The largest group of diagnoses were for anxiety and depression among women 20-49. With the reopening of the US economy and children heading back to school, will this sustain or decline?
  • Women 30-39 are the largest users of telehealth–pre, during, and post-pandemic

Telehealth is not only proliferating, it is going up against now-open urgent care, retail clinics from Walgreens, Walmart, and CVS, plus tech-enabled providers that blend virtual care with home care, such as Amazon with a full rollout of Amazon Care and other employers. The cost of care is also a negative driver. FierceHealthcare analyzes other parts of the report impacting practices, health systems, and hospitals.

 

Disruption or giveaway: Amazon Care signs on employers, but who? Amazon Pharmacy’s 6 months of meds for $6. (updated)

Is this disruption, a giveaway, or blue smoke requiring IFR? An Amazon Care VP, Babak Parviz, said at the Wall Street Journal’s Tech Health virtual event that all is well with their rollout of virtual primary care (VPC). Washington state is first, with VPC now available nationally to all Amazon employees as well as companies. However, Mr. Parviz did not disclose the signed-up companies, nor a timetable for when in-person Amazon Care practices will be expanding to Washington, DC, Baltimore, and other cities in the coming months.

Mr. Parviz also provided some details of what Amazon Care would ultimately look like:

  • Clinician chat/video connected within 60 seconds
  • If an in-person visit is required, a mobile clinician arrives within 60 minutes, who can perform some diagnostic tests, such as for strep throat, provide vaccinations and draw blood for lab work. For other diagnoses, that clinician is equipped with a kit with devices to monitor vital signs which are live-streamed to remote clinicians.
  • Medication delivery within 120 minutes

FierceHealthcare

The timing of the Amazon Care rollout has not changed since our coverage of their announcement in March. This Editor noted in that article that Credit Suisse in their overview was underwhelmed by Amazon Care as well as other efforts in the complex and crowded healthcare space. Amazon Care also doesn’t integrate with payers. It’s payment upfront, then the patient files a claim with their insurer.

Existing players are already established in large chunks of what Amazon wants to own.

  • Both Amwell’s Ido Schoenberg [TTA 2 April] and Teladoc’s Jason Gorevic (FierceHealthcare 12 May) have opined that they are way ahead of Amazon both in corporate affiliations and comprehensive solutions. Examples: Amwell’s recently announced upgrade of their clinician platform and adding platforms for in-home hospital-grade care [TTA 29 Apr], Teladoc’s moves into mental health with myStrength [TTA 14 May].
  • Even Walmart is getting into telehealth with their purchase of a small player, MeMD [TTA 8 May].
  • CVS has their MinuteClinics affiliated with leading local health systems, and Walgreens is building out 500 free-standing VillageMD locations [TTA 4 Dec 20]. CVS and Walgreens are also fully integrated with payers and pharmacy benefit management plans (PBM).

Another loss leader is pharmacy. Amazon is also offering to Prime members a pharmacy prescription savings benefit: six-month supplies of select medications for $6. The conditions are that members must pay out-of-pocket (no insurance), they must have the six-month prescription from their provider, and the medication must be both available and eligible on Amazon Pharmacy. Medications included are for high blood pressure, diabetes, and more. The timing is interesting as Walmart also announced a few days earlier a similar program for Walmart+ members. Mobihealthnews.

crystal-ballThis Editor’s opinion is that Amazon’s business plans for both entities and in healthcare are really about accumulating data, not user revenue, and are certainly not altruistic no matter what they say. Amazon will accumulate and own national healthcare data on Amazon Care and Pharmacy users far more valuable than whatever is spent on providing care and services. Amazon will not only use it internally for cross-selling, but can monetize the data to pharmaceutical companies, payers, developers, and other commercial third parties in and ex-US. Shouldn’t privacy advocates be concerned, as this isn’t being disclosed? 

News roundup: Ancestry sells 75% to Blackstone, Cornwall NHS partners with Tunstall, most dangerous health IT trends, Slovenski departs from Walmart Health

Ancestry sells 75 percent of the genealogy/genetics company to Blackstone for $4.7 bn. The acquisition by the private equity company buys out other equity holders: Silver Lake, GIC, Spectrum Equity, Permira, and others. Ancestry’s business combines their genealogy database with consumer genomics for both heritage and health. The Blackstone release notes that their goals in the acquisition are to expand data, functionality, and product development across the Ancestry platform as part of their investment in growth businesses. If an acquisition cost of $4.7 bn seems high, Ancestry’s revenue is cited as $1 bn annually.

Once blazingly hot, both Ancestry and 23andMe saw their consumer businesses crater late last year, with layoffs in January and February. It’s an example of a quickly saturated market (one test and you’re done) flogged by annoying TV commercials over the holidays [TTA 13 Feb]. Where the profit is, of course, is not in consumer tests but in selling the genomic data to other companies, something which the market leader, 23andMe, realized early on with half-ownership by GSK ($300 million, a real bargain). 23andMe is also intensively marketing as a premium subscription service updates on health information derived from member testing. Ancestry has followed, but reportedly has not been as proactive in linking genetic information to health outcomes. STAT

 This Editor noted back in August 2018 that it was long past time for a Genomic Data Bill of Rights for consumers to be fully transparent on where their data is going, how it is being used, and to easily keep their data private without jumping through a ridiculous number of hoops. It’s a conclusion now being reached by various privacy groups according to MedCityNews. Also noted is that Ancestry, in its complex and long privacy policy, can use your “personal information to market new products from the company or its business partners, but says it will not share users’ genetic information with insurers, employers or third-party marketers without their express consent.” But when your 75 percent owner has real estate and other healthcare holdings, can you trust them?

Cornwall Partnership NHS Foundation Trust partnered with Tunstall Healthcare UK on a 26-week support program during the pandemic for young people 11+ with a range of eating disorders. The patient group used the myMobile app and the ICP triagemanager software to send in weekly reports on their vital signs and answer symptom-related questions, which are tracked over time via a secure portal to monitor progress. The myMobile app has parameters set for individual patients, where readings outside them generate a system alert that is sent to clinicians. The program was able to ascertain that 32 patients were at high risk and have been referred. Cornwall/Tunstall white paper, ATToday.co.uk

As if COVID Fear weren’t bad enough, now we have to be frightened of Dangerous IT Trends. Becker’s Health IT interviewed eight healthcare executives and came up with a list of what keeps them up at night:

  • The sluggish rate at which healthcare systems embrace new technology
  • We won’t be going back to the pre-pandemic normal and how healthcare deals with that
  • Overlooking data security and medical device vulnerabilities
  • Cutting IT staff and budgets without acknowledging the consequences
  • The consequences of hastily moving workers remote and securing their devices

All of the above are not new, and it’s rather shocking that they haven’t been addressed.

And in Comings and Goings, we have a Notable Going. Sean Slovenski, who for the past two years has been heading up Walmart US’ Health and Wellness initiatives, departed the company last week with a replacement to be named in the coming weeks. Mr. Slovenski had been heading up a variety of healthcare initiatives, including in-store primary and dental care clinics which have opened up in four Arkansas and Georgia locations with an additional eight planned plus Florida. Walmart also opened up 100 COVID testing locations in store parking lots. His efforts were acknowledged in Walmart’s departure statement to staff. Mr. Slovenski “and his team have successfully stood up the strategy we hired him to create,” Walmart’s CEO John Furner said in a memo to staff. Walmart has also laid off over 1,000 corporate employees in a recent restructuring. Mr. Slovenski is most noted in digital health circles as CEO of Care Innovations for 2 1/2 years during the Intel-GE ownership. He was also with Healthways-ShareCare and Humana. Walmart is up against a long list of heavyweight challengers in retail health, including Amazon, CVS Aetna, and Walgreens–and may be deciding that an independent run is not worth it.

Walgreens Boots goes big with billion-dollar medical office deal with VillageMD

Go big or go home. That seems to be Walgreens Boots Alliance’s’ theme in its 8 July announced deal with and investment in primary care provider VillageMD. They will set up 500 to 700 co-located full-service Village Medical offices in more than 30 markets over the next three to five years. The “Village Medical at Walgreens” offices will be staffed by a projected 3,600 primary care providers and fully integrated with Walgreens pharmacists for one-stop shopping. According to the release:

  • Most of the Village Medical medical offices will be approximately 3,330 square feet each, up to 9,000 square feet, and utilize existing store space. “80% will be used by VillageMD to fund the opening of the clinics and build the partnership.”
  • 24/7 care will be available via telehealth and at-home visits
  • Fees will be covered by insurance or for those without, on a sliding scale
  • Over 50 percent will be located in Health Professional Shortage Areas and Medically Underserved Areas/Populations, as designated by HHS. These would reach underserved “older, sicker, and poorer patients” without regular access to care, said VillageMD CEO Tim Barry in an interview with CNBC
  • Capacity would be 100 to 120 patients per day 

This follows on a pilot of five Village Medical clinics at Walgreens locations in Houston, and Village Medical’s eight-state expansion in the Find Care telehealth program announced in April.

Walgreens Boots Alliance will invest $1 billion in equity and convertible debt in VillageMD over the next three years, including a $250 million equity investment to be completed today which will culminate in about 30 percent ownership.

To this Editor, Walgreens is sitting at a giant poker table, stacking the $1,000 chips, and saying to its rivals, ‘see ya and raise ya’. These are full-service offices, not urgent care clinics, and they are investing in their provider. It could be transformative–or flop on executional niceties such as location, medical competition, or even COVID keeping down physical visits. The competition is also daunting on the retail side. Recently Walgreens has pared back hundreds of locations and faces the deep pockets of CVS-Aetna, which plans to open 1,500 HealthHUBs which integrate stores, MinuteClinics with nurse-practitioners, pharmacies, and health data, Amazon with PillPack aimed at its pharmacy business, and Walmart with its toe in the water with clinics. 

Village Medical, formerly Village Family Health, is a multi-state primary care provider which is part of Chicago-based VillageMD. Both include more than 2,800 physicians across nine markets, so the Walgreens deal will more than double their size. Also Forbes (Photo: Walgreens)

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

[grow_thumb image=”https://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

Care Innovations sells off Validation Institute. But is there more to the story? And a side of Walmart Health action.

The Health Value Institute, part of Woburn, Massachusetts-based conference organizer World Congress, announced late last week the acquisition of the Validation Institute from Care Innovations. Terms were not disclosed. The Health Value Institute and the Validation Institute recently partnered to validate the outcomes for the Health Value Award finalists and awards this past April at the 15th Annual World Health Care Congress. According to both parties, the acquisition will help to expand the membership of validated companies, and the present offerings for HR, broker, and benefit executives. Release.

The Validation Institute was launched with fanfare back in June 2014, when GE still had a chunk of the company and during the 2 1/2 year repositioning (revival? resuscitation?) led by Sean Slovenski from the doldrums of the prior Louis Burns regime. Mr. Slovenski departed in early 2016 to be president of population health at Healthways/Sharecare, which lasted a little over a year. However, this week Mr. Slovenski made headlines as the new SVP Health & Wellness of Walmart, reporting directly to the head of their US business.  The hiring of a senior executive with a few years at Humana and a short time at Sharecare, another Walmart partner, coupled with several years in healthcare tech and provider-side is certainly indicative of Walmart’s serious focus on healthcare provision. It’s a fascinating race with Amazon and CVS-Aetna–with the mystery of what Walgreens Boots Alliance will do. Also Healthcare Dive.

But back to Care Innovations. Signs of a new direction–and a loss. The case can be made that the Validation Institute, the Jefferson College of Population Health, and validating individuals and companies was no longer core to their business which is centered around their RPM platform Health Harmony (with QuietCare still hanging in there!) However, this Editor notes the prominent addition of  ‘platform-as-a-service’ advisory services for those who are developing health apps, which appears to be a spinoff of their engineering/IT services. Vivify Health, a competitor, already does this. There is a vote of confidence; in June, Roche signed on with a strategic investment (undisclosed) as well as integration of the mySugr integrated diabetes management/app solution (release).

Looking around their recently refreshed website, there is an absence–that of the two or three pages previously dedicated to the Veterans Health Administration (VA) and the press release of the VA award. This tends to lend credence to the rumors that there was a second company that did not pass the Trade Adjustment Act (TAA) requirements that knocked out Iron Bow/Vivify Health from the VA, or for another undisclosed reason CI bowed out of a potentially $258 million five-year contract. If so, that leaves for the VA Medtronic and 1Vision/AMC Health. It’s certainly a limited menu for the supposedly growing numbers of veterans requiring telehealth and a limited choice for their care coordinators–and not quite as presented to the public or the 2015 competitors in the solicitation. Who benefits? Who loses? (Disclosure: This Editor worked for one of the finalists and a VA supplier from 2003, Viterion.)  Hat tip to one of our ‘Industry Insiders’, but the opinions expressed here are her own.

Rock Health’s ‘Another record-breaking first half’ in digital health funding is actually–flat. (With a Soapbox Extra!)

The Breathless Tone was the clue. “It’s déjà vu for digital health, with yet another record breaking half for venture funding.” It was déjà vu, but not of the good sort. This Editor hates to assume, so she checked the year-to-year numbers–and first half 2018 versus 2017 broke no records:

  • 2018:  $3.4 bn invested in 193 digital health deals 
  • 2017: $3.5 bn invested in 188 digital health companies [TTA 11 July 17]

But ‘flat’ doesn’t make for good headlines. Digging into it, there are trends we should be aware of — and Rock Health does a great job of parsing–but a certain wobbliness carried over from 2017 even though the $5.8 bn year finished 32 percent up over 2016, analyzed here [TTA 5 Apr 18]. Their projection for 2018 full year is $6.9 bn and 386 deals.

Let’s take a look at their trends:

  • “The future of healthcare startups is inextricably linked to the strategies of large, enterprise-scale healthcare players—as customers, partners, investors, and even potential acquirers.” It’s no mistake that the big news this week was Amazon acquiring tiny, chronic-conditions specializing prescription supplier PillPack after a bidding war with Walmart for an astounding $1bn, making its 32 year-0ld founder very rich indeed and gaining Amazon pharmacy licenses in 49 states. (Prediction: Walmart will be pleased it lost the war as it will find its own solutions and alliances.) 
    • Enterprise healthcare players are cautious, even by Rock Health’s admission, but the big money is going into deals that vertically integrate and complement, at least for a time–for example, Roche’s purchase of Flatiron Health. And when it doesn’t work, it tends to end in a whimper–this May’s quiet sale by Aetna of Medicity to Health Catalyst for an undisclosed sum. Back in 2011, Aetna bought it for $500 million. (Notably not included in the Rock Health analysis, even though they track Health Catalyst and the HIE/analytics sector.)
  • The market is dependent on big deals getting bigger. If you are well-developed, in the right sector, and mature (as early-stage companies go), you have a better shot at that $100 million B, D, E or Growth funding round. B rounds actually grew a bit, with seed and A rounds dipping below 50 percent for the first time since 2012. 
  • The Theranos Effect is real. Unvalidated, hyped up claims don’t get $900 million anymore. In fact, there’s real concern that there’s a reluctance to fund innovation versus integration. The wise part of this is that large fundings went to companies validating through clinical trial results, FDA clearance (or closing in on it), and CDC blessing.
  • The dabbling investor is rapidly disappearing. 62 percent of investors in first half had made prior investments in digital health including staying with companies in following rounds.
  • Digital health companies, like others, are staying private longer and avoiding public markets. Exits remain on par with 2017 at 60. Speculation is that Health Catalyst and Grand Rounds are the next IPOs, but there hasn’t been one since iRhythm in October 2016. The Digital Health public company index is showing a lot less pink these days as well, which may be an encouraging sign.
  • Behavioral health is finally getting its due. “Behavioral health startups received more funding this half than in any prior six-month period, with a cumulative $273M for 15 unique companies (nearly double the $137M closed in H1 2016, the previous record half for funding of behavioral health companies). Of these 15 companies, more than half have a virtual or on-demand component.”

Keep in mind that Rock Health tracks deals over $2 million in value from venture capital, excluding government and grant funding. They omit non-US deals, even if heavily US funded. 

Their projection for 2018 full year is $6.9 bn and 386 deals. Will their projection pan out? Only the full year will tell!

A Soapbox Extra!

Rock Health, like most Left Coast companies, believes that Vinod Khosla is a semi-deity. This Editor happens to not be convinced, based on predictions that won’t pan out, like machines replacing 80 percent of doctors; making statements such as VCs have less sexual harassment than other areas, and even banning surfers off his beach. He was at a Rock Health forum recently and made this eye-rolling (at least to this Editor) statement:

Is there one area in the last 30 years where the initial innovation was driven by an institution of any sort? I couldn’t think of a single area where innovation—large innovation—came from a big institution. Retailing wasn’t disrupted by Walmart, it was by Amazon. Media wasn’t changed by CBS or NBC, it was by YouTube and Twitter. Cars weren’t transformed by Volkswagen and GM—and people said you can’t do cars in startups—but then came Tesla.

Other than making a point that Clayton Christensen made a decade or more ago, the real nugget to be gained here is that formerly innovative companies that get big don’t grow innovation (though 3M tends to be an exception, and Motorola didn’t do too badly with the cell phone). They can buy it–and always have. 

Go back a few more decades and all of these companies were disrupters–and bought out (or bankrupted) other disrupters. CBS and NBC transformed entertainment through popularizing radio and then TV. VW created the small car market in the US and saved the German auto industry. GM innovated both horizontally (acquiring car companies, starting other brands) and integrated vertically (buying DELCO which created the first truly workable self-starting ignition system in 1912).

YouTube? Bought by innovator Google. Twitter? Waiting, wanting to be bought. Innovation? Khosla is off the beam again. Without Walmart, there would be no Amazon–and Amazon’s total lifetime profit fits nicely into one year of Walmart’s. Tesla is not innovative–it is a hyped up version of electric car technology in a styled package that occasionally blows up and remains on the borderline of financial disaster. (Model 3, where art thou?)

I’d argue that Geisinger, Mayo Clinic, and Intermountain Healthcare have been pretty innovative over the last 30 years. Mr. Khosla, read Mr. Christensen again!

CVS-Aetna: It’s not integrated healthcare, it’s experiential retail!

[grow_thumb image=”https://telecareaware.com/wp-content/uploads/2017/12/canary-in-the-coal-mine.jpgw595.jpeg” thumb_width=”150″ /]This very interesting take on financial analysis site Seeking Alpha draws another insight from the CVS-Aetna merger–it’s actually part of the rising commercial real estate trend of experiential retail. Here’s the logic. CVS MinuteClinics increase traffic to CVS stores. If they are part of a shopping center, that means those patients might grab a meal, coffee, or shop. Reportedly CVS and Aetna will add nurses and nutritionists, which will further increase attraction, stickiness, and traffic. 

CVS and Walgreens‘ clinics have started, in the new model, to become significant, even anchor, tenants of shopping centers, filling up the empty storefronts left by traditional retail. Doctors’ offices, urgent cares like CityMD, and hospital-run outpatient clinics are filling retail spaces and anchoring new developments. Another part of the experience–fitness clubs, which are also converting vacant office spaces–a line extension increasingly popular with health systems. CVS also bought out department store Target’s drugstores and in-store clinics, which is another model (fill a prescription, buy socks or a TV). Another line extension is partnerships with urgent cares or outpatient clinics, not much of a stretch since CVS already has affiliations with health systems in many areas.

Add telemedicine (Aetna’s partnership with Teladoc) to the above: both MinuteClinics and in-home become 24/7 operations. Not mentioned here is that Aetna can add in-person or kiosk services in CVS stores to file claims, answer questions, or sell coverage.

As this model becomes clearer, big supermarket operators like Ahold (Stop & Shop, Giant), Wegmans, Publix, Shop Rite and others, which have pharmacies in most locations, may ally with or merge with insurers or health systems–or partner with CVS-Aetna. There is also the 9,000 lb. elephant called Walmart, which is 2/3 of the way to an experiential model including nutrition, diet, and fitness (ask any WalMartian). Further insights on how this merger is forcing retailers to adapt are in Drug Store News.

CVS-Aetna could very well be a major mover in experiential retail, which may save all those strip malls. But this article points out, as this Editor has already, that the full shape of what could be experiential healthcare will take years to work and shake out, assuming the merger is approved. Our prior coverage is here.

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

[grow_thumb image=”https://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.

Can Big Pharmas hiring of digital execs actually ‘reimagine medicine’?

Reimagination or hallucination? In recent weeks, both Glaxo Smith Kline and now Novartis have hired digital analytics and marketing executives out of non-healthcare businesses to lead their digital transformation. For GSK, Karenann Terrell joined in the new position of chief digital and technology officer from six years as chief information officer for Walmart and CIO for pharma Baxter International. From Sainsbury’s Argos, Bertrand Bodson will be assuming the chief digital officer title at Novartis without any previous healthcare experience.

Both are expected to be transformative, disruptive, and ‘reimagine medicine’. Ms. Terrell’s experience and accomplishments appear to be the closest fit to her GSK’s job expectations of integrating digital, data, and analytics strategy with enhancing clinical trials and drug discovery, as well as improving professional and consumer interactions. Novartis’ mission for Mr. Bodson aims even higher. In addition to these, he will be ‘transforming our business model using digital technologies’, ‘reimagine (sic) medicine by leveraging digital on behalf of millions of patients and practitioners’, and ‘leading cultural change’.

Both companies have good starts in advanced technologies–GSK in AI, sensor technologies for managing COPD, and a medical device mobile app; Novartis with ‘smart pill’ Proteus, a pilot with heart medication Entresto tied to monitoring and coaching, and through its Alcon subsidiary with Google, a wired-up contact lens that detects blood glucose [TTA 17 July 14]. However, this last appears to be stalled in trials and Alcon on the block. According to the FT, Novartis is feeling the pressure to develop more digital partnerships, such as Novo Nordisk’s teaming with Glooko and Sanofi with Verily Life, all in diabetic management. Acquisitions may also be the way forward.

A significant impediment to all this integration is consumer and professional trust. If too closely tied to a pharmaceutical company or appearing to be too self-serving, remote monitoring and counseling may not be trusted to be in the patient’s (or doctor’s) best interest or objective as to better approaches. The overuse of analytics, for instance in counseling or patient direction, may be perceived as violating patient privacy–creeping out the patient isn’t helpful. The bottom line: will these digital technologies serve the patient and maintain medical best practices–or best serve the pharmaceutical company’s interests?

This Editor doesn’t question these individuals’ ability, but the organizations’ capability for change. But count this Editor as a skeptic on whether one or two digital execs can marshal the bandwidth and the internal credibility to transform these lumbering, complex, regulated, and long cycle businesses. Big Retail is fast moving by comparison. PMLive 31 July (GSK), 13 Sept (Novartis)  Hat tip to TTA alumna Toni Bunting

Soapbox: How healthcare disruption can be sidetracked

[grow_thumb image=”https://telecareaware.com/wp-content/uploads/2014/04/Thomas.jpg” thumb_width=”170″ /]Ron Hammerle’s comment on Disruptive innovation in healthcare hasn’t begun yet: Christensen (TTA 31 Mar), posted on LinkedIn’s Healthcare Innovation by Design group, made the excellent point that a potentially disruptive and decentralizing healthcare service–retail clinics–has been sidetracked, at least in the US, leaving an open question on their reason for being. This Editor thought it was worthy of a Soapbox. Mr. Hammerle knows of what he speaks because his Tampa, Florida-based company, Health Resources Ltd., works with retail and employer-based clinics to connect them via telemedicine/telehealth systems with medical centers.

When Clayton Christensen first anticipated that retail clinics would be disruptive to the established healthcare industry, their business model was potentially disruptive. What has subsequently happened, however, is a prime example of how potentially disruptive movements can be sidetracked.

After acquiring MinuteClinic and laying the foundation for taking retail clinics national, CVS Caremark chose to make deals with hospitals, which could easily afford to rent, open and operate such clinics without making money on the front end or facing real disruption. Retail clinics were a loss leader to hospitals in exchange for large, downstream revenues, and slightly-enhanced market share for the retailer’s pharmacy.

After CVS shocked Walgreens with one-two punches involving MinuteClinic and Caremark acquisitions, Walgreens came back with three counter-punches of its own:

1. They doubled the number of their clinics (to 700) in less than two years, thwarted AMA opposition, leapfrogged ahead of CVS in clinic count and totally changed the retail clinic model by setting up politically-invisible, broader service, make-your-profit-up-front, employer-based clinics. (more…)