Category Archives: Hospital

Telehealth could grow to a $250B revenue opportunity post-COVID-19: analysis

Posted on by • Posted in Access, Access & Quality of Healthcare, Chronic Care Management, Clinical Outcomes, College of Healthcare Information Management Executives (CHIME), Consumer Preferences, Consumerism, Coronavirus, Emergency Care, Health System, Home Health, Hospital, Hospital Industry, Medicaid, Medicare, Necessary Care, Office Visit, Outcomes, Pandemic, Patient Satisfaction, Physician, Physician Practice Management, Primary Care, Provider Satisfaction, Telemedicine, Virtual Healthcare, Virtual Visit • Leave a comment

https://www.fiercehealthcare.com/tech/telehealth-could-grow-to-a-250b-revenue-opportunity-post-covid-mckinsey-reports

virtual visit

With the acceleration of consumer and provider adoption of telehealth, a quarter of a trillion dollars in current U.S. healthcare spend could be done virtually, according to a new report.

During the COVID-19 pandemic, consumer adoption of telehealth has skyrocketed, from 11% of U.S. consumers using telehealth in 2019 to 46% of consumers now using telehealth to replace canceled healthcare visit, according to consulting firm McKinsey & Company’s COVID-19 consumer survey conducted in April.

McKinsey’s survey also found that about 76% of consumers say they are highly or moderately likely to use telehealth in the future. Seventy-four percent of people who had used telehealth reported high satisfaction.

Health systems, independent practices, behavioral health providers, and other healthcare organizations rapidly scaled telehealth offerings to fill the gap between need and canceled in-person care. Providers are ready for the shift to virtual care: 57% view telehealth more favorably than they did before COVID-19 and 64% are more comfortable using it, according to McKinsey’s recent provider surveys.

Pre-COVID-19, the total annual revenues of U.S. telehealth players were an estimated $3 billion, with the largest vendors focused on virtual urgent care.

Telehealth is now poised to take a bigger share of the healthcare market as McKinsey estimates that up to $250 billion, or 20% of all Medicare, Medicaid, and commercial outpatient, office, and home health spend could be done virtually.

The consulting firm looked at anonymized claims data representative of commercial, Medicare, and Medicaid utilization.

The company’s claims-based analysis suggests that approximately 20% of all emergency room visits could potentially be avoided via virtual urgent care offerings, 24% of healthcare office visits and outpatient volume could be delivered virtually, and an additional 9% “near-virtually.”

Up to 35% of regular home health attendant services could be virtualized, and 2% of all outpatient volume could be shifted to the home setting, with tech-enabled medication administration.

Many of the dynamics that have helped to expand telehealth adoption are likely to be in place for at least the next 12 to 18 months, as concerns about COVID-19 remain until a vaccine is widely available.

Going forward, telehealth can increase access to necessary care in areas with shortages, such as behavioral health, improve the patient experience, and improve health outcomes, McKinsey reported.

Providers and patients are concerned that recent federal and state policies expanding access to telehealth will be rolled back once the emergency period ends.

Industry groups, including the College of Healthcare Information Management Executives (CHIME), are calling on lawmakers to ensure the changes enacted by Congress and the administration become permanent.

McKinsey’s research indicates providers’ concerns about telehealth include security, workflow integration, effectiveness compared with in-person visits, and the future for reimbursement.

“We call on Medicare and all other insurers to continue to fund telehealth programs and work collaboratively on coverage and coding to lessen provider burden. We cannot go back to pre-COVID telehealth; instead, we must go forward. Patients will demand it and providers will expect it,” CHIME CEO and President Russell Branzell said in a recent statement.

Telehealth also is drawing bipartisan support. Senator Marsha Blackburn, R-Tenn., urged Congress to “continue to support this expansion and codify the administration’s changes to support the health needs of the American people,” in a recent news release.

Rep. Robin Kelly, D-Illinois, is introducing a bill directing HHS Secretary Alex Azar to oversee a telehealth study looking at the technology’s impact on health and costs, Politico reported in its newsletter today.

 

Taking advantage of the telehealth opportunity

Healthcare providers and payers will need to take action to ensure the full potential of telehealth is realized after the crisis has passed, according to McKinsey.

There continue to be challenges as providers cite concerns about telehealth include security, workflow integration, effectiveness compared with in-person visits, and the future for reimbursement. There also is a gap between consumers’ interest in telehealth (76%) and actual usage (46%). Factors such as lack of awareness of telehealth offerings and understanding of insurance coverage are some of the drivers of this gap.

“The current crisis has demonstrated the relevance of telehealth and created an opening to modernize the care delivery system,” McKinsey consultants wrote. “Healthcare systems that come out ahead will be those who act decisively, invest to build capabilities at scale, work hard to rewire the care delivery model, and deliver distinctive high-quality care to consumers.”

McKinsey outlined steps industry stakeholders should take to drive the growth of telehealth.

 

Payers: Health plans should look to optimize provider networks and accelerate value-based contracting to incentivize telehealth. Align incentives for using telehealth, particularly for chronic patients, with the shift to risk-based payment models.

Payers also should build virtual health into new product designs to meet changing consumer preferences, This new design may include virtual-first networks, digital front-door features (for example, e-triage), seamless “plug-and-play” capabilities to offer innovative digital solutions, and benefit coverage for at-home diagnostic kits.

 

Health systems: Hospitals and health systems should accelerate the development of an overall consumer-integrated “front door.” Consider what the integrated product will initially cover beyond what currently exists and integrate with what may have been put in place in response to COVID-19, for example, e-triage, scheduling, clinic visits, record access.

Providers also should build the capabilities and incentives of the provider workforce to support virtual care, including, workflow design, centralized scheduling, and continuing education. And, health systems need to take steps to measure the value of virtual care by quantifying clinical outcomes, access improvement, and patient/provider satisfaction. Include the potential value from telehealth when contracting with payers for risk models to manage chronic patients, McKinsey said.

 

Investors and health technology firms: These players also can support the new reality of expanded telehealth services. Technology firms should consider developing scenarios on how virtual health will evolve and when, including how usage evolved post-COVID-19, based on expected consumer preferences, reimbursement, CMS and other regulations.

Investors also should develop potential options and define investment strategies based on the expected virtual health future. For example, combinations of existing players/platforms, linkages between in-person and virtual care offerings and create sustainable value. Investors and technology companies also can identify the assets and capabilities to implement these options, including specific assets or capabilities to best enable the play, and business models that will deliver attractive returns.

 

 

 

 

Healthcare groups call racism a ‘public health’ concern in wake of tensions over police brutality

Posted on by • Posted in 2020 Election Issues, Access, Access & Quality of Healthcare, American Hospital Association (AHA), Association of American Medical Colleges (AAMC), Change, Change Agent, Discrimination, Health Equity, Health Inequity, Health System, Hospital, Hospital Industry, Leadership, Police Brutality, Police Violence, Public Debate, Public Discourse, Public Health, Public Safety, Social Determinants of Health, Society for Healthcare Epidemiology of America (SHEA) • Leave a comment

https://www.fiercehealthcare.com/practices/healthcare-groups-denounce-systemic-racism-wake-tensions-over-police-brutality?mkt_tok=eyJpIjoiWmpobE5XVmlaRGd6T0dFdyIsInQiOiJsQmxnbVNxNVlISVNkczJIZkJXb3ZFZG9tVlpMblZ1XC9oVVB6SlRINzNhOXE4MWQzNk1cL3JTaDlcL2l0MGdhSnk0NUtqY1RzdThCN1wvZ1ZoVUxqOHJwZFJcL1wvK3FtS0o5NFwvSHA0WHhTUnhVNnY3bk5RNmhRQTdxYzYwclhYN3JTRW8ifQ%3D%3D&mrkid=959610

After days of protests across the world against police brutality toward minorities sparked by the killing of George Floyd in Minneapolis, healthcare groups are speaking out against the impact of “systemic racism” on public health.

“These ongoing protests give voice to deep-seated frustration and hurt and the very real need for systemic change. The killings of George Floyd last week, and Ahmaud Arbery and Breonna Taylor earlier this year, among others, are tragic reminders to all Americans of the inequities in our nation,” Rick Pollack, president and CEO of the American Hospital Association (AHA), said in a statement.

“As places of healing, hospitals have an important role to play in the wellbeing of their communities. As we’ve seen in the pandemic, communities of color have been disproportionately affected, both in infection rates and economic impact,” Pollack said. “The AHA’s vision is of a society of healthy communities, where all individuals reach their highest potential for health … to achieve that vision, we must address racial, ethnic and cultural inequities, including those in health care, that are everyday realities for far too many individuals. While progress has been made, we have so much more work to do.”

The Society for Healthcare Epidemiology of America (SHEA) also decried the public health inequality highlighted by the dual crises.

“The violent interactions between law enforcement officers and the public, particularly people of color, combined with the disproportionate impact of COVID-19 on these same communities, puts in perspective the overall public health consequences of these actions and overall health inequity in the U.S.,” SHEA said in a statement. Association of American Medical Colleges (AAMC) executives called for health organizations to do more to address inequities. 

“Over the past three months, the coronavirus pandemic has laid bare the racial health inequities harming our black communities, exposing the structures, systems, and policies that create social and economic conditions that lead to health disparities, poor health outcomes, and lower life expectancy,” said David Skorton, M.D., AAMC president and CEO, and David Acosta, M.D., AAMC chief diversity and inclusion officer, in a statement.

“Now, the brutal and shocking deaths of George Floyd, Breonna Taylor, and Ahmaud Arbery have shaken our nation to its core and once again tragically demonstrated the everyday danger of being black in America,” they said. “Police brutality is a striking demonstration of the legacy racism has had in our society over decades.”

They called on health system leaders, faculty researchers and other healthcare staff to take a stronger role in speaking out against forms of racism, discrimination and bias. They also called for health leaders to educate themselves, partner with local agencies to dismantle structural racism and employ anti-racist training.

 

 

 

$5B offer to North Carolina hospital gives it ‘best of both worlds,’ Novant CEO says

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https://www.beckershospitalreview.com/hospital-transactions-and-valuation/5b-offer-to-north-carolina-hospital-gives-it-best-of-both-worlds-novant-ceo-says.html?utm_medium=email

Novant Health: Transforming Revenue Cycle Services in the ...

Novant Health presented its proposal June 10 to partner with New Hanover Regional Medical Center, a county-owned hospital in Wilmington, N.C. The Winston-Salem, N.C.-based health system is one of three organizations interested in securing the deal. 

During the public presentation, Novant Health President and CEO Carl Armato highlighted the system’s financial strength and its potential partnership with Chapel Hill, N.C.-based UNC Health, according to WilmingtonBiz.

In May, Novant, UNC Health and UNC School of Medicine signed a letter of intent to enhance clinical services and medical education at New Hanover Regional if the hospital chooses to form a joint venture with, affiliate with or sell to Novant.  

“We are binging, I believe, the best of both worlds: one of the largest not-for-profit health care systems in the country, that’s financially strong, along with UNC Health Care and UNC medical school to really enhance and grow the economic development of Wilmington,” Mr. Armato said, according to WilmingtonBiz.

The 15-hospital system is offering up to $2 billion to New Hanover County, $50 million to the hospital’s foundation to fund unmet community needs and an investment of $3.1 billion in capital projects over the next decade, according to the report. 

“We actually proposed a very significant financial commitment to New Hanover Regional Medical Center, that local board, that management team, that community — your community,” Mr. Armato said, according to the report. “And we want you to know that we have the resources to back that up.”

Novant made its proposal the day after Durham, N.C.-based Duke Health pitched its deal for New Hanover Regional. Charlotte, N.C.-based Atrium Health, the third health system trying to secure a deal with the hospital, will make its presentation June 11. 

 

 

 

 

HCA seeks nurse backup ahead of potential strike

Posted on by • Posted in Economic Crisis, Economic Stimulus, Employee Bonus, Employee Furlough, Employee Layoffs, Employee Pay Cuts, Employee Protections, For-Profit, Health System, Hospital, Hospital Industry, Infection Control, Infection Control Plan, Infectious Virus, Labor Relations, Labor Spend Management, Labor Strike, Labor Union, Nurses, Nurses Union, Pandemic, Personal Protective Equipment (PPE) • Leave a comment

https://www.healthcaredive.com/news/hca-seeks-nurse-backup-ahead-of-potential-strike/579502/

Dive Brief:

  • HCA is looking for qualified nurses in the event of a job action against its facilities in Los Angeles, such as a strike, according to a job posting from May 29. The giant hospital chain did not respond to multiple requests for comment.
  • The country’s largest nurses union, National Nurses United, has recently disputed with the system over other pandemic-related labor issues. Nurses at 15 HCA hospitals protested in late May over contractually bargained wage increases the hospital says it can’t deliver due to financial strains, asking nurses to give up the increases or face layoffs.
  • Another dispute involves a last-minute change mandating in-person voting for nurses deciding whether to form a union at HCA’s Mission Hospital in Asheville, North Carolina, according to an NNU release.

Dive Insight:

Nashville-based HCA Healthcare, the largest among for-profit hospital operators, has received the most among for-profits in Coronavirus Aid, Relief and Economic Security Act funding so far, about $1 billion. The amount is about 2% of HCA’s total 2019 revenue.

The 184-hospital system said it has not had to furlough any employees like other systems have, though some employees have been redeployed or seen their hours and pay decrease. HCA implemented a program providing seven weeks paid time off at 70% of base pay that was scheduled to expire May 16, but extended through June 27.

An NNU spokesperson told Healthcare Dive the program isn’t technically a furlough because some HCA nurses participating said they must remain on call or work rotating shifts.

The union spokesperson also confirmed that an email was sent to HCA nurses referring them to the strike-nurse job posting, which would offer more pay than their current roles.

“This really is a threat to nurses, and particularly insulting when you already have layoffs or cuts, if you don’t accept further concessions,” a union spokesperson told Healthcare Dive.

Nurses in California joined those in five other states at the end of May to protest HCA’s proposal to cut wage increases or impose layoffs.

At HCA’s Regional Medical Center in San Jose, California, NNU filed a suit to block the closure of the maternal-child care center, which it said is in violation of laws to protect the health and safety of the community. The closure proceeded anyway on May 30, followed by an announcement from Santa Clara County that the move may be jeopardizing the facility’s Level II Trauma designation agreement.

Across the country, frontline caregivers continue noting a lack of adequate personal protective equipment. The union’s executive director, Bonnie Castillo, will testify before Congress on Wednesday on protecting nurses during the pandemic and the dire need for optimal PPE.

 

 

 

After criticism, HHS directs $25B in CARES funding to Medicaid providers, safety net hospitals

Posted on by • Posted in American Hospital Association (AHA), Coronavirus, Crisis, Crisis Management, Dept of Health and Human Services (HHS), Economic Crisis, Economic Stimulus, Financially Distressed, Hospital, Medicaid, Medicaid Childrens Health Insurance Program (CHIP), Rural Hospital, Safety Net Hospitals, Safety-Net Providers, The CARES Act • Leave a comment

https://www.healthcaredive.com/news/after-criticism-hhs-directs-25b-in-cares-funding-to-medicaid-providers-s/579496/

Dive Brief:

  • HHS announced Tuesday it will deliver $25 billion to providers and hospitals that serve the nation’s most vulnerable patients, or those with Medicaid and Children’s Health Insurance Program coverage. Of that, $15 billion will go to providers that primarily serve Medicaid and CHIP patients while the other $10 billion is reserved for safety net hospitals that usually operate on razor-thin margins. A total of 758 safety net hospitals will receive direct deposits, and the administration noted that many of these facilities are operating in the red with an average profit margin of -7%.
  • Not all Medicaid providers received Coronavirus Aid, Relief, and Economic Security funding from the initial general distribution. This targeted allocation is designed to make up for that by distributing money to the remaining 38% of Medicaid and CHIP providers who were left out of the first tranche.
  • These Medicaid providers will receive at least 2% of reported gross patient revenue, but could receive more depending on how many patients they serve. HHS will make a final determination once providers start submitting data to the relief portal.

Dive Insight:

The industry has been clamoring for HHS to target funding to Medicaid providers amid the COVID-19 pandemic and the downturn in business, noting these organizations are already on fragile ground.

Last week the American Hospital Association pleaded for the administration to release $50 billion more for all hospitals, with $10 billion reserved for providers with a heavy caseload of Medicaid patients.

HHS answered the hospital lobby’s call — in part. HHS will distribute funds to safety net providers — more than AHA asked for — but disclosed no plans Tuesday to broaden that funding to all hospitals. America’s Essential Hospitals, which represents safety net providers, had also called for the quick release of targeted funding.

“Our goal for all these distributions has been to get the money to the providers who need it most as soon as possible,” Eric Hargan, HHS deputy secretary, said Tuesday during a call with reporters.

However, some have been critical of how the administration decided to allocate the first few waves of funding.

Congress has earmarked a total of $175 billion in funding for providers through two pieces of legislation, including the CARES Act.

To get the money out the door quickly, the first tranche was sent to providers based on the Medicare fee-for-service business, and later on the net patient service revenue.

These formulas put certain providers at an advantage, which tend to be for-profit hospitals with higher-margins, or those who were already well off heading into the pandemic, according to a recent Kaiser Family Foundation analysis.

This targeted funding was not swift, one reason for the delay was the challenge in getting a list of Medicaid providers from the states to validate and authenticate those who came to the portal to apply for funds, according to a senior HHS official.​

Still, providers that have already received funds have noted that it comes with its own set of headaches. Some have decided to return the funds as navigating the legal and compliance issues may not be worth the hassle.

Though, that’s likely not the case for these safety net hospitals and providers.

 

 

 

 

Pennsylvania orders stricter COVID-19 protections for all hospital workers

Posted on by • Posted in Coronavirus, Employee Protections, Health Policy, Health System, Hospital, Hospital Industry, Pandemic, Personal Protective Equipment (PPE), Public Health, Public Safety, Quarantine, Social Distancing, Worker Protection • Leave a comment

https://www.beckershospitalreview.com/workforce/pennsylvania-orders-stricter-covid-19-protections-for-all-hospital-workers.html?utm_medium=email

8,420 infected, 102 dead from COVID-19 in Pennsylvania to date | ABC27

Pennsylvania’s state health secretary issued an order June 9 requiring all hospitals to better protect staff from COVID-19. 

“I have heard from nurses and staff, and this order responds directly to many of their safety concerns,” said Secretary of Health Rachel Levine, MD.

The order requires hospitals to develop, implement and adhere to the following measures by June 15: 

  • Notify staff who have been in close contact with a confirmed or probable COVID-19 case within 24 hours of the known contact; provide instruction for quarantine and work exclusion
  • Provide testing for symptomatic and asymptomatic hospital staff members who have received notice of a close contact with a confirmed or probable COVID-19 case upon request
  • Equip staff with nationally approved respirators when staff determine the mask is soiled, damaged or otherwise ineffective
  • Require universal masking for all individuals entering the hospital facility, except for people for whom wearing a mask would create a further health risk, or individuals under age 2

In addition to medical staff, the measures apply to staff members in therapeutic services, social services, housekeeping services, dietary services and maintenance.

 

 

 

 

Duke Health pitches $3B deal for North Carolina hospital

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https://www.beckershospitalreview.com/hospital-transactions-and-valuation/duke-health-pitches-3b-deal-for-north-carolina-hospital.html?utm_medium=email

Duke Clinic... - Duke University Health System Office Photo ...

Duke Health presented its proposal on June 9 to purchase New Hanover Regional Medical Center in Wilmington, N.C. The Durham, N.C.-based system is one of three organizations trying to secure the deal.  

During the presentation, Duke Health officials proposed purchasing the hospital for $1.4 billion and investing $1.9 billion in capital improvements over the next five years, according to TV station WWAY. The health system would also bring its graduate medical school programs to New Hanover Regional and keep all hospital employees on staff for at least one year, according to the report.

The other two health systems interested in acquiring the hospital — Winston-Salem, N.C.-based Novant Health and Charlotte, N.C.-based Atrium Health — will present their proposals on June 10 and June 11. 

Access the full WWAY article here.

 

 

 

 

ThedaCare physicians, advanced practice clinicians take pay cuts

Posted on by • Posted in Coronavirus, Crisis, Crisis Management, Economic Crisis, Elective Procedures, Elective Surgery, Employee Benefits, Employee Furlough, Employee Hiring Freeze, Employee Layoffs, Employee Pay Cuts, Employee Protections, Executive Compensation, Health System, Hospital, Hospital Industry, Labor Spend Management, Leadership, Operating Expenses, Operating Income, Operating Margin, Operating Performance, Operating Revenue, Pandemic, Turnaround • Leave a comment

https://www.beckershospitalreview.com/compensation-issues/thedacare-physicians-advanced-practice-clinicians-take-pay-cuts.html?utm_medium=email

ThedaCare pay cuts: Doctors, advanced practice clinicians affected

ThedaCare physicians and advanced practice clinicians will take a 10 percent pay cut to help reduce the Appleton, Wis.-based health system’s financial hit due to the COVID-19 pandemic, the organization confirmed to The Post-Crescent.

The physicians and advanced practice clinicians — which include physician assistants and nurse practitioners — will see their pay reduced beginning in June, Cassandra Wallace, a ThedaCare spokesperson, told the newspaper.

ThedaCare is projecting a $70 million loss this year after temporarily postponing revenue-generating elective surgeries and nonurgent clinic visits due to the COVID-19 pandemic. The health system began a phased approach to reinstate services last month, but the recommended suspension and the costs associated with COVID-19 preparation resulted in net revenue dropping 40 percent in April, ThedaCare said in a June 4 news release.

The salary reductions are part of the health system’s plan to narrow its projected loss to $30 million, said Imran A. Andrabi, MD, ThedaCare president and CEO.

Dr. Andrabi has also agreed to take a 50 percent pay cut, and other executive leaders will take a 40 percent cut to improve the health system’s financial picture.

Additionally, ThedaCare leaders will not be eligible for incentive compensation for 2020, the health system said.

The health system’s plan does not include mass layoffs.

 

 

 

 

Health system financial results for Q1

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https://www.beckershospitalreview.com/finance/health-system-financial-results-for-q1-2020.html?utm_medium=email

The health systems listed below recently released financial results for the quarter ended March 31. 

Health system Revenue Operating income Net income
Indiana University Health $1.6 billion $77.6 million -$631.3 million
Allina Health $1 billion -$67.5 million -$342.5 million
Kaiser Permanente $22.6 billion $1.3 billion -$1.1 billion
Beaumont Health $1.1 billion -$54.1 million -$278.4 million
BayCare  $1.1 billion $50 million -$656.4 million
CommonSpirit Health $7.8 billion -$145 million -$1.4 billion
Mayo Clinic $3.2 billion $29 million -$623 million
Henry Ford Health System $1.5 billion -$36.2 million -$234.5 million
Intermountain Healthcare  $2.3 billion $115 million -$1 billion
Advocate Aurora Health $3.1 billion -$85.6 million -$1.3 billion
Texas Health Resources $1.1 billion -$13.8 million -$802.9 million
Banner Health $2.4 billion $30.6 million -$683.5 million
Ascension $6.1 billion -$429.4 million -$2.7 billion
AdventHealth $2.9 billion $35.7 million -$578.5 million
Ochsner Health $965 million -$32.8 million -$143.6 million
Providence  $6.3 billion -$276 million -$1.1 billion
Cleveland Clinic $2.6 billion -$39.9 million -$830.6 million
Sutter Health  $3.2 billion -$236 million -$1.1 billion
Dartmouth-Hitchcock Health $563 million -$59.3 million -$150.3 million
UPMC $5.5 billion -$41 million -$653 million
Montefiore Health System $1.5 billion -$116.1 million -$96.7 million
Allegheny Health Network $891 million -$59.5 million -$98.5 million
SSM Health $1.9 billion -$78 million -$471.1 million
Northwell Health $3.1 billion -$141 million -$710 million
MedStar Health $1.5 billion $32.2 million -$246.8 million
Scripps Health $899.6 million $47.1 million -$296 million
NewYork-Presbyterian $2.2 billion -$128.5 million -$569.4 million

 

 

 

Optum says payers should keep a close eye on these 3 drugs. Here’s why

Posted on by • Posted in Antibody-Drug Conjugate (ADC) Therapy, Clinical Research, Duchenne Muscular Dystrophy (DMD), Food and Drug Administration (FDA), Health Policy, Health System, Hospital, Hospital Industry, Non-Orphan Drugs, Orphan Drugs, Pharmaceutical Industry, Pharmacy Benefits Management, Risdiplam, Spinal Muscular Atrophy (SMA), Trodelvy, Viltolarsen • Leave a comment

https://www.fiercehealthcare.com/payer/optum-says-payers-should-keep-a-close-eye-these-3-drugs-here-s-why?mkt_tok=eyJpIjoiTXpReVptRTBOemxoWW1OaCIsInQiOiJcL0FZVXVvVmhwQWpxdFBoV1VKRjhON29CaWhLY3g2bXFhT0doXC9tWVFpWTd0blh3TEY3MTN0M3lsZEs3K002d0hLS25BNld4dlk0b3NhWDBYaUhWYkNTUGc5SVRlRjBEMERoS01kWlZER1hVMmhFTkczdTAzMDhxWWpIaWxORk1mIn0%3D&mrkid=959610

The outside of Optum's headquarters

OptumRx researchers are highlighting three more drug products that payers should be keeping an eye on in 2020. 

Experts said in the pharmacy benefit manager’s second-quarter drug pipeline report echoed expectations from the first quarter that orphan drugs will be a major trend to watch as the year continues. Sumit Dutta, M.D., chief medical officer at OptumRx, wrote in the report these drugs will likely account for close to 40% of Food and Drug Administration approvals this year. 

Dutta said Optum is seeing more drug manufacturers jump into developing orphan drug products, which are generally considered less appealing as their market—and thus financial value—is more limited. 

“What is new is that we now are starting to see the development of orphan drugs become more competitive, increasing the potential for reduced costs and broader patient accessibility,” he wrote.

In 2018, the FDA approved more orphan drugs than non-orphan drugs for the first time. Optum’s first-quarter report also noted that these products are often pricey, as they target specific conditions. On average, orphan drugs cost $147,000 or more per year.

Of the three products highlighted in the second-quarter report, two are orphan drugs. Here’s more on what Optum’s analysts think payers need to know:

1. Risdiplam

If the FDA gives risdiplam a thumbs-up, it would become the first oral therapy for spinal muscular atrophy (SMA), a rare group of severe neuromuscular disorders. SMA is one of the most common genetic causes for infant mortality and affects about 1 in 11,000 babies.

There are only two treatments for SMA that are currently approved by the FDA, meaning there’s a significant unmet need for therapies, particularly oral medications, Optum said. The other treatments available are Spinraza, which requires repeated spinal injections, and gene therapy Zolgensma, the world’s most expensive drug.

Risdiplam would be administered orally once a day, which would likely draw significant interest from patients and their families, according to the report.

“Practically speaking, the competitive advantage for risdiplam will rest mainly in its oral route of administration, and perhaps, a lower cost,” according to the report. 

The analysts did caution that risdiplam is still in clinical trials and while results are promising, long-term outcomes associated with the drug are unclear. 

2. Viltolarsen

Viltolarsen is in development to treat Duchenne muscular dystrophy (DMD), a rare genetic disease that impacts young boys. There is a large unmet need for drugs to treat DMD, Optum said in the report, as it’s linked with significant sickness and death.

About 6,000 people in the U.S. have this disease, according to the report.

Vitolarsen is an “exon-skipping” drug that “short circuits” the genetic mutations that cause DMD. If approved, it would be the third such drug for the disease, and the second targeting a specific mutation that affects about 8% of those with DMD.

The drug has only been tested in small sample sizes, and there are limited safety data available, according to the report. 

3. Trodelvy

Trodelvy, the brand name of an antibody-drug conjugate (ADC) therapy aimed at metastatic triple-negative breast cancer, was approved in April.  

Triple-negative breast cancers test negative for the three most common causes of cancer and are thus untreatable by many front-line therapies, though they are treatable by chemotherapy, according to the report. ADC products like Trodelvy combine genetically engineered antibodies and traditional chemotherapy drugs into one intravenous therapy.

Optum is highlighting Trodelvy as it expects ADC medications to be a trend to monitor in the near future, because they could be applied to conditions outside of oncology, according to the report.

“We can think of ADCs as a refinement or extension of precision medicine, which aims at maximizing therapeutic benefits while minimizing undesired side effects for an individual patient,” the researchers wrote. “As the field advances, we can look for new conjugate ‘payloads’ that will go far beyond hunting cancer cells.”

“Various manufacturers are exploring how to leverage the ADC approach to produce vaccines, radiological treatments, immunosuppressive, cardiovascular and more,” they wrote.