How basic research leads to future job growth

https://www.axios.com/basic-science-research-fuels-job-growth-fcf7723b-b701-4ed2-8b2b-699d28dd1fbd.html

Illustration of a hand in a medical glove holding a beaker full of liquid

A new report out later today concludes that basic scientific research plays an essential role in creating companies that later produce thousands of jobs and billions in economic value.

Why it mattersThe report uses the pandemic — and especially the rapid development of new mRNA vaccines — to show how basic research funding from the government lays the necessary groundwork for economically valuable companies down the road.

By the numbers: The Science Coalition — a nonprofit group that represents 50 of the nation’s top private and public research universities — identified 53 companies that have spun off from federally funded university research.

  • Those companies — which range from pharmaceutical startups to agriculture firms — have contributed more than $1.3 billion to U.S. GDP between 2015 and 2019, while supporting the creation of more than 100,000 jobs.

What they’re saying: “The COVID-19 pandemic has shown that the need for the federal government to continue investing in fundamental research is far from theoretical,” says John Latini, president of the Science Coalition. “Consistent, sustained, robust federal funding is how science evolves.”

DetailsLatini praised the Biden administration’s first budget proposal to Congress, released last week, which includes what would be a $9 billion funding boost for the National Institutes of Health (NIH) — the country’s single biggest science research funding agency.

  • The National Oceanic and Atmospheric Administration would see its budget rise to a record high of $6.9 billion, including $800 million reserved for climate research.

The catch: The Biden budget proposal is just that, and it will ultimately be up to Congress to decide how much to allocate to research agencies.

Context: Government research funding is vital because private money tends to go to applied research. But without basic research — the lifeblood of science — the U.S. risks missing out on potentially world-changing innovations in the future.

  • The long-term value of that funding can be seen in the story of Katalin Kariko, an obscure biomedical researcher who labored for years on mRNA with little reward — until the pandemic, when her work helped provide the foundation for mRNA COVID-19 vaccines.

The bottom line: Because its ultimate payoff might lay years in the future, it’s easy to see basic research funding as a waste — until the day comes when we need it.

Are new moms really the key to health system loyalty?

https://mailchi.mp/d88637d819ee/the-weekly-gist-march-19-2021?e=d1e747d2d8

Healthcare Marketing Blog for Hospitals and Health Systems | BPD Advertising

It’s long been accepted as a truism that “moms” make most of a family’s healthcare choices. This has led many health systems to invest in high-end women’s services, especially labor and delivery facilities, with the hope of winning the entire family’s long-term healthcare loyalty.

This conventional wisdom has existed since the middle of the last century, when the postwar Baby Boom coincided with the rise of commercial insurance. But it’s hard to find real evidence that these investments deliver on their intent—and we think the argument deserves to be reexamined.

An expectant mother is likely years away from her family’s major healthcare spending events. Giving her a fantastic virtual care experience, or taking great care of her teenager who blows out a knee playing soccer, is likely to engender greater loyalty to the health system when she’s looking for her first mammogram, than her labor and delivery experience from a decade earlier. That’s not to say that top-notch obstetrics isn’t important—but market-leading labor and delivery facilities are likely more critical for wholesale purchasers, such as an employer considering a narrow network, or for physicians choosing where to build an OB practice.

Direct-to-consumer strategies should be built on more sophisticated consumer research that takes into account the preferences of a new generation of consumers, for whom not all healthcare choices are equal—that same consumer will be in different “segments” and make different choices for different problems over time, not all pre-determined by one memorable birthing experience.

Michigan Medicine to start building $920M hospital

A closer look at plans for the new $920M University of Michigan hospital -  mlive.com

Ann Arbor-based Michigan Medicine will start construction on its $920 million hospital in the coming months, after delaying the project last year amid the COVID-19 pandemic, according to a March 8 health system update.

Michigan Medicine said its planning team has resumed design work on the facility.

The 12-story, 690,000-square-foot hospital is expected to house 264 private rooms, 20 operating rooms and three interventional radiology suites.

Citing a financial loss exacerbated by the COVID-19 pandemic, the academic health system delayed the project in May 2020.

With the delay, the new hospital is slated to open in the fall of 2025.

Billionaire unloads $15M of CHS stock

Chinese billionaire with ambitions to reshape investment models | Financial  Times

Chinese investor Tianqiao Chen and his group of companies have a 7.1 percent stake in Franklin, Tenn.-based Community Health Systems after recently selling more than 1.7 million shares of the company, according to a Securities and Exchange Commission filing.

Mr. Chen and his Shanda Group company affiliates sold 1.73 million shares of CHS from March 4-5 for between $8.70 and $8.73 per share, bringing in a total of $15.1 million. The move comes after he sold more than 16 million shares of CHS between Nov. 10 and Jan. 15. 

Mr. Chen, a pioneer in China’s online gaming industry, began buying up shares of CHS in 2016. The last public comment the investor made about CHS was in 2018, when Shanda Group said it had a “good relationship” with CHS and supported the company’s strategy and management team.  

Healthcare AI investment will shift to these 5 areas in the next 2 years: survey

The COVID-19 pandemic has accelerated the pace of artificial intelligence adoption, and healthcare leaders are confident AI can help solve some of today’s toughest challenges, including COVID-19 tracking and vaccines.

The majority of healthcare and life sciences executives (82%) want to see their organizations more aggressively adopt AI technology, according to a new survey from KPMG, an audit, tax and advisory services firm.

Healthcare and life sciences (56%) business leaders report that AI initiatives have delivered more value than expected for their organizations. However, life sciences companies seem to be struggling to select the best AI technologies, according to 73% of executives.

As the U.S. continues to navigate the pandemic, life sciences business leaders are overwhelmingly confident in AI’s ability to monitor the spread of COVID-19 cases (94%), help with vaccine development (90%) and aid vaccine distribution (90%).

KPMG’s AI survey is based on feedback from 950 business or IT decision-makers across seven industries, with 100 respondents each from healthcare and life sciences companies.

Despite the optimism about the potential for AI, executives across industries believe more controls are needed and overwhelmingly believe the government has a role to play in regulating AI technology. The majority of life sciences (86%) and healthcare (84%) executives say the government should be involved in regulating AI technology.

And executives across industries are optimistic about the new administration in Washington, D.C., with the majority believing the Biden administration will do more to help advance the adoption of AI in the enterprise.

“We are seeing very high levels of support this year across all industries for more AI regulation. One reason for this may be that, as the technology advances very quickly, insiders want to avoid AI becoming the ‘Wild Wild West.’ Additionally, a more robust regulatory environment may help facilitate commerce. It can help remove unintended barriers that may be the result of other laws or regulations, or due to lack of maturity of legal and technical standards,” said Rob Dwyer, principal, advisory at KPMG, specializing in technology in government.

Healthcare and pharma companies seem to be more bullish on AI than other industries are.

The survey found half of business leaders in industrial manufacturing, retail and tech say AI is moving faster than it should in their industry. Concerns about the speed of AI adoption are particularly pronounced among small companies (63%), business leaders with high AI knowledge (51%) and Gen Z and millennial business leaders (51%).

“Leaders are experiencing COVID-19 whiplash, with AI adoption skyrocketing as a result of the pandemic. But many say it’s moving too fast. That’s probably because of current debate surrounding the ethics, governance and regulation of AI.  Many business leaders do not have a view into what their organizations are doing to control and govern AI and may fear risks are developing,” Traci Gusher, principal of artificial intelligence at KPMG, said in a statement.

Future AI investment

Healthcare organizations are ramping up their investments in AI in response to the COVID-19 pandemic. In a Deloitte survey, nearly 3 in 4 healthcare organizations said they expect to increase their AI funding, with executives citing making processes more efficient as the top outcome they are trying to achieve with AI.

Healthcare executives say current AI investments at their organizations have focused on electronic health record (EHR) management and diagnosis.

To date, the technology has proved its value in reducing errors and improving medical outcomes for patients, according to executives. Around 40% of healthcare executives said AI technology has helped with patient engagement and also to improve clinical quality. About a third of executives said AI has improved administrative efficiency. Only 18% said the technology helped uncover new revenue opportunities.

But AI investments will shift over the next two years to prioritize telemedicine (38%), robotic tasks such as process automation (37%) and delivery of patient care (36%), the survey found. Clinical trials and diagnosis rounded out the top five investment areas.

At life sciences companies, AI is primarily deployed during the drug development process to improve record-keeping and the application process, the survey found. Companies also have leveraged AI to help with clinical trial site selection.

Moving forward, pharmaceutical companies will likely focus their AI investments on discovering new revenue opportunities in the next two years, a pivot from their current strategy focusing on increasing profitability of existing products, according to the survey. About half of life sciences executives say their organizations plan to leverage AI to reduce administrative costs, analyze patient data and accelerate clinical trials.

Industry stakeholders are taking steps to advance the use of AI and machine learning in healthcare.

The Consumer Technology Association (CTA) created a working group two years ago to develop some standardization on definitions and characteristics of healthcare AI. Last year, the CTA working group developed a standard that creates a common language so industry stakeholders can better understand AI technologies. A group also recently developed a new standard to advance trust in AI solutions.

On the regulatory front, the U.S. Food and Drug Administration (FDA) last month released its first AI and machine learning action plan, a multistep approach designed to advance the agency’s management of advanced medical software. The action plan aims to force manufacturers to be more rigorous in their evaluations, according to the FDA.

Chicago’s Mercy Hospital has a potential buyer

Mercy Hospital, denied approval to close in Bronzeville, files for  bankruptcy. Mayor Lightfoot calls it 'devastating for that community.' -  Chicago Tribune

Mercy Hospital & Medical Center in Chicago has secured a nonbinding purchase agreement with Insight Chicago just months before it is slated to close its doors, according to the Chicago Tribune.

Under terms of the deal, still being negotiated, Insight Chicago would operate Mercy Hospital as a full-service, acute care facility. Insight Chicago is a nonprofit affiliated with a Flint, Mich.-based biomedical technology company.

The deal is subject to regulatory approval, but if it goes through, it would keep the 170-year-old safety-net hospital open. 

Securing a potential buyer is the latest in a series of events related to the Chicago hospital.

On Feb. 10, Mercy filed for bankruptcy protection, citing mounting financial losses and losses of staff that challenged its ability to provide safe patient care. 

The bankruptcy filing came just a few weeks after the Illinois Health Facilities and Services Review Board rejected a plan from Mercy’s owner, Trinity Health, to build an outpatient center in the neighborhood where it planned to close Mercy. The same board unanimously rejected Livonia, Mich.-based Trinity’s plan to close the hospital in December.

The December vote from the review board came after months of protests from physicians, healthcare advocates and community organizers, who said that closing the hospital would create a healthcare desert on Chicago’s South Side. 

Mercy said that until the pending deal with Insight Chicago is signed and approved by regulators, it still plans to close the facility. If the agreement is reached before the May 31 closure, Mercy will help transition services to Insight Chicago, according to the Chicago Sun-Times. 

Insight Chicago told local NPR affiliate WBEZ that it has a difficult task ahead to build community trust and address the financial issues that have plagued the Chicago hospital.

“I think the big main point we want to understand between now and then is the community needs to build trust with the community, and I think to build trust we have to tell the truth and be sincere,” Atif Bawahab, chief strategy officer at Insight, told WBEZ. “And there’s a reality of the situation as to why [the hospital] is going bankrupt and why several safety net hospitals are struggling.”

In its bankruptcy filing, Mercy said its losses have averaged about $5 million per month and reached $30.2 million for the first six months of fiscal year 2021. The hospital also said it has accumulated debt of more than $303.2 million over the last seven years, and the hospital needs more than $100 million in upgrades and modernizations.

Blue Cross Blue Shield sues AllianzGI over investment strategies

https://www.pionline.com/courts/blue-cross-blue-shield-sues-allianzgi-over-investment-strategies

Blue Cross Blue Shield’s national employee benefits committee filed a lawsuit against Allianz Global Investors and its investment consultant Aon Investments USA, charging both with breaches of fiduciary responsibilities and breach of contract regarding more than $2 billion in losses in the insurer’s defined benefit plan trust.

The lawsuit, filed Wednesday in U.S. District Court in New York, alleges that AllianzGI took “reckless actions” in the management of three funds the manager had said offered downside protection against market declines and volatility, according to the court filing.

As of Jan. 31, the National Retirement Trust of the Blue Cross and Blue Shield Association had a total of $2.9 billion invested in the AllianzGI Structured Alpha Multi-Beta Series LLC I, AllianzGI Structured Alpha Emerging Markets Equity 350 LLC, and the AllianzGI Structured Alpha 1000 LLC, according to the filing.

The numerical values in the strategy names correspond to the amount of alpha in basis points above a corresponding index the strategy is expected to achieve.

After the funds experienced heavy losses in February and March, the investments were liquidated and redeemed, and the committee received about $540 million, according to the filing.

As of Dec. 31, 2018, the Blue Cross and Blue Shield Association National Retirement Trust had $4.6 billion in assets, according to its most recent Form 5500 filing.

The lawsuit, which includes claims breach of fiduciary duty and breach of contract against both AllianzGI and Aon, alleges that AllianzGI “caused the (benefits) committee to believe that structured alpha’s risk profile was consistent with Allianz’s stated investment strategy rather than the actual risk profile, either by making false or misleading representations about structured alpha or failing to disclose information necessary to correct prior representations that were inconsistent with how Allianz was actually managing the strategy.”

The suit alleges Aon breached its obligations by “failing to monitor and inform the committee of breakdowns in Allianz’s risk management protocols, learning only after the catastrophic events of March 2020 that Allianz had inadequate risk management in place.”

AllianzGI’s structured alpha strategies have historically been designed to be both long and short volatility, according to a September 2016 presentation: Taking range-bound spread positions, to sell options that were most likely to expire worthless (short volatility); hedged positions designed to protect against market crashes (long volatility); and directional spread positions designed to generate returns when equity indexes rise or fall more than usual during multiweek periods (long/short volatility).

The lawsuit alleges that “when equity markets declined, volatility spiked and the funds’ option positions were exposed to a heightened risk of loss in February and March 2020, those promised protections were absent.”

The lawsuit seeks relief including restoration of all losses, actual damages and accounting and disgorgement of fees and profits.

John Wallace, AllianzGI spokesman, said in an email: “While the losses sustained by the Structured Alpha portfolio during the market downturn in late February and March were disappointing, AllianzGI believes the allegations made by Blue Cross Blue Shield are legally and factually flawed. We will defend ourselves vigorously against these claims. Blue Cross Blue Shield was advised by a sophisticated investment consultant to evaluate the Structured Alpha strategy. These funds sought to deliver substantial returns of as much as 10% above, net of fees, the returns of the fund’s benchmark, an index like the S&P 500. As was fully disclosed to Blue Cross Blue Shield, the Structured Alpha strategy involved risks commensurate with those higher returns. Blue Cross Blue Shield and their consultant determined that the Structured Alpha Portfolio fit with their overall investment goals and risk tolerances.”

The $15.3 billion Arkansas Teacher Retirement System, Little Rock, filed its own lawsuit against Allianz Global Investors and subsidiaries in July, regarding its own losses in structured alpha strategies.

Robert Elfinger, Aon spokesman, said the company does not comment on pending litigation.

Sean W. Gallagher, Adam L. Hoeflich, Nicolas L. Martinez, Abby M. Mollen and Mark S. Ouweleen, partners at Bartlit Beck, attorney for the plaintiffs, could also not be immediately reached for comment.

 

 

 

 

Decision-making amid COVID-19: 6 takeaways from health system CEOs and CFOs

https://www.beckershospitalreview.com/hospital-management-administration/decision-making-amid-covid-19-6-takeaways-from-health-system-ceos-and-cfos.html?utm_medium=email

Alignment between CEOs and CFOs has become even more essential during the pandemic.

Many health systems halted elective surgeries earlier this year at the height of the pandemic to conserve resources while caring for COVID-19 patients. Now, in many areas, those procedures are returning and hospitals are slowly resuming more normal operations. But damage has been done to the hospital’s bottom line. Moving forward, the relationship between top executives will be crucial to make the right decisions for patients and the overall health of their organizations.

During the Becker’s Healthcare CEO+CFO Virtual Forum on Aug. 11, CEOs and CFOs for top hospitals and health systems gathered virtually to share insights and strategies as well as discuss the biggest challenges ahead for their institutions. Click here to view the panels on-demand.

Here are six takeaways from the event:

1. The three keys to a strong CEO and CFO partnership are trust, transparency and communication.

2. It’s common for a health system CEO and CFO to have different priorities and different opinions about where investments should be made. To help come to an agreement, they should look at every decision as if it’s a decision being made by the organization as a whole and not an individual executive. For example, there are no decisions by the CFO. There are only decisions by the health system. The CFOs said it’s important to remember that the patient comes first and that health systems don’t exist to make money.

3. Technology has of course been paramount during the pandemic in terms of telehealth. But so are nontraditional partnerships with other health systems that have allowed providers to share research and education.

4. When it comes to evaluating technology, there’s a difference between being on the cutting edge versus the bleeding edge. Investing in new technology requires firm exit strategies. If warning signs show an investment is not going to give the return a health system hoped for, they need to let go of ideals and stick to the exit strategy.

5. Communication and transparency with staff and the public is key while making challenging decisions. Many hard decisions, including furloughs or personnel reductions, were made this spring to protect the financial viability of healthcare organizations. These decisions, which were not made lightly, were critiqued highly by the public. One of the best ways to ensure the message was not getting lost in translation and to help navigate the criticism included creating a communication plan and sharing that with employees, physicians and the public.

6. The pandemic required hospitals to think on their feet and innovate quickly. Many of the usual ways to solve a problem could not be used during that time. For example, large systems had to rethink how to acquire personal protective gear. Typically, in a large health system amid a disaster, when a supply item is running low, organizations can call up another hospital in the network and ask them to send some supplies. However, everyone in the pandemic was running low on the same items, which required innovation and problem-solving that is outside of the norm.