JPMorgan Chase on May 20 unveiled its new healthcare company, dubbed Morgan Health, which its top executive told Becker’s Hospital Review can be viewed as a continuation of Haven, an ambitious healthcare venture that recently disbanded.
“We learned a lot from the Haven experience,” Dan Mendelson, CEO of Morgan Health, said. “The Haven experience focused us on primary care, digital medicine and specific populations. … You can see this as a continuation of the work that was started at Haven.”
However, Mr. Mendelson said there are several key differences between Morgan Health and Haven, the healthcare venture launched by Amazon, Berkshire Hathaway and JPMorgan Chase in 2018. For one, it has a much more simplified business structure, as it is a unit of JPMorgan Chase. Second, it has a philosophy of striking partnerships to meet its goals rather than working from the ground up.
“We don’t want to create things from scratch,” Mr. Mendelson said. “We are going to be collaborating with outstanding healthcare organizations nationally to accomplish our objectives. That’s another piece that differentiates this effort from the prior one.”
Morgan Health said its new business is focused on improving employer-sponsored healthcare in the U.S. and bringing meaningful innovation into the industry by targeting insurance and keeping populations healthy.Success for the company will be measured by whether it improves the Triple Aim: quality of care, access to care and cost to deliver care, Mr. Mendelson said. Morgan Health initially will focus its efforts on improving care for JPMorgan Chase employees, but its long-term goals are to become a leader at improving healthcare in the U.S. and to create a successful model other employers can adopt.
“We come at this with the benefit of having 285,000 employees and dependents,” Mr. Mendelson said. “We have a very strong interest in driving quality improvements for them and also creating models that are reproducible across organizations. We are looking to take a leadership role to improve care in the United States.”
Morgan Health said it has three core focus areas at its launch: improving healthcare by investing $250 million into organizations that are improving employer-sponsored healthcare; piloting new benefits for employees; and promoting healthcare equity for its employees and the broader community.
One employee benefit Morgan Health will be piloting is advanced primary care, Mr. Mendelson said. Morgan Health said it is working to create improved primary care capacity to enable employees to better navigate the healthcare system. One example of this is instead of having employees see just a primary care physician, they would be directed to a clinic that leverages more healthcare talent, such as pharmacists and nurses, to improve health outcomes.
Morgan Health said it will work with a range of partners, including provider groups, health plans and other employers. One such organization is CVS Health/Aetna, which is one of JPMorgan Chase’s insurance carriers, Mr. Mendelson said.
“CVS Health has a lot of innovation within the organization that we are not currently tapping into,” Mr. Mendelson said. “It’s a great example of a great American company that is ripe for further partnership and innovation in this effort.”
Morgan Health initially will have 20 dedicated employees, but Mr. Mendelson said the healthcare unit is tapping talent from other existing departments at JPMorgan Chase, including its legal, communications and benefits departments.
“This is a company that is very passionate about leading; there’s a very deep reservoir of support from the organization to accomplish the objectives,” Mr. Mendelson said. “These are objectives that are hard — it will take us time to accomplish and to show meaningful improvement. But there’s a sense that this is so important that there’s going to be a sustained effort in this regard and that we will achieve our objectives together.”
Prior to joining Morgan Health, Mr. Mendelson served as an operating partner at private equity firm Welsh, Carson, Anderson & Stowe. He also is the founder and former CEO of healthcare advisory firm Avalere Health and worked in the White House Office of Management and Budget during the Clinton administration.
Mr. Mendelson said his passion for establishing collaborative partnerships in healthcare will help him succeed in his new role.
CommonSpirit Health and Essentia Health have called off a deal for Essentia to acquire 14 CommonSpirit facilities in North Dakota and Minnesota, the two Catholic systems announced Tuesday.
The deal, nixed just four months after being announced, would have doubled the size of Duluth, Minn.-based Essentia’s hospital network. One of the facilities up for grabs, CHI St. Alexius Medical Center, is a tertiary hospital and the other 13 are critical access hospitals. The deal would also have included associated clinics and living communities.
The systems did not provide details as to why they scrapped the deal in their release, and an Essentia representative did not respond to a request for comment by time of publication.
Dive Insight:
CommonSpirit and Essentia signed a letter of intent in January to explore the sale, but talks have now fizzled following months of deliberation.
“While we share a similar mission, vision, values and strong commitment to sustainable rural healthcare, CommonSpirit and Essentia were unable to come to an agreement that would serve the best interests of both organizations, the people we employ and the patients we serve,” a joint statement from the two systems said.
Earlier this month, more than 700 nurses and medical workers filed a petition noting their concern over the deal. In the petition, the Minnesota Nurses Association and employees at Essentia and CommonSpirit said they feared layoffs and restricted access to patient care resulting from the acquisition.
Nurses cited Essentia’s partnership with Mercy Hospital in Moose Lake, Minn., last summer, which they claimed hurt the quality of patient care.
“Ever since the takeover, we’ve lost numerous staff, causing shortages in how we care for patients,” a nurse wrote in a news release about the petition May 4. “We don’t want CHI’s hospitals and clinics to lay off workers, cut the services they offer or close entirely.”
Essentia did not respond to a request for comment about whether workers’ concerns affected the decision to call off the deal.
Hospitals maintain consolidation betters the patient experience and improves care quality, but numerous studies have suggested that’s not the case. One from early last year published in the New England Journal of Medicine found acquired hospitals actually saw moderately worse patient experience, along with no change in 30-day mortality or readmission rates, while another from 2019 found mergers and acquisitions drive up prices for consumers.
Despite that, provider mergers and acquisitions have continued at a rapid clip even during COVID-19, as hospitals look to divest underperforming assets and bulk up market share in more lucrative geographies. The letter of intent CommonSpirit signed with Essentia suggests the roughly 140-hospital system is taking stock of its smaller rural facilities.
Chicago-based CommonSpirit was formed in 2019 by the merger of nonprofit giants Catholic Health Initiatives and Dignity Health. The nonprofit giant was hit hard by the pandemic, losing $550 million in the 2020 fiscal year.
The United States Supreme Court should keep in place a lower court ruling that bars hospitals from receiving higher Medicare reimbursements for outpatient services compared to other providers, according to a brief HHS filed late last week.
The 33-page brief filed with the high court is in response to a petition by the American Hospital Association and the Association of American Medical Colleges to hear the case. The Court of Appeals for the District of Columbia ruled last July that HHS had the right to cut payments to hospital-owned facilities in order to achieve site neutrality, reversing the judgment of a district court.
Hospitals and HHS have been wrangling about the issue since the federal agency moved to cut payments to hospital-owned outpatient sites in 2019. The Supreme Court will have the final say, whether it decides to hear the case or not.
Dive Insight:
Site-neutral payments have been a hot button issue in the healthcare world for the better part of a decade, after many larger hospital systems began buying up physician practices. Hospitals are reimbursed by Medicare for evaluation and management services at a higher rate than standalone physician groups.
They began collecting those higher fees at the outpatient sites they acquired or opened. From 2012 to 2015, E&M encounters per Medicare enrollee grew at outpatient sites by 22%, versus a 1% drop at physician practices, HHS noted in its brief.
That strategy not only drove up costs to the Medicare program but also put more pressure on individual medical practices to merge with one another to better compete with hospital-owned practices, or be bought out. HHS attempted to remedy the issue by moving toward a site-neutral payment scheme beginning in 2019. Acute care providers, led by AHA and AAMC, sued to stop the change. They appealed to the Supreme Court last summer.
The brief filed by HHS attorneys with the high court asked that its new site-neutral payment policy be retained. The department argued that it did not act beyond the powers delegated to it by Congress, and that body would remedy such a disturbing financial trend on its own if it needed to.
The likelihood the high court will hear the case is low. Attorneys note that the Supreme Court only agrees to hear no more than 5% of cases brought to it for review that involve a federal agency. Moreover, they are even less likely to act if there is no conflict on the issue between the appeals court — which HHS noted in its brief.
If the Supreme Court declines to hear the case, the appellate court ruling would stand and the site neutral payment rule would remain on the books.
UPDATE: May 21, 2021: Late Thursday, drug manufacturing giant Eli Lilly filed a motion in an Indiana district court to halt 340B-related monetary penalties, scant days after the Biden administration set a June 1 deadline for biopharmaceutical companies to comply with new conditions in the drug discount program and allow hospital contract pharmacies access to discounted drugs.
The suit alleges a Monday letter from Diana Espinosa, acting head of the Health Resources and Services Administration, gives “no legal explanation or justification for the arbitrary June 1 deadline.”
Lilly previously filed an almost identical lawsuit January 2020. The Indianapolis-based biopharma said it expected the government to follow the briefing schedule outlined in that suit before mandating compliance with 340B and forcing it to pay “substantial and irretrievable sums of money.”
“If the Court ultimately decides Lilly was required to extend 340B pricing to contract pharmacies, Lilly will comply with that decision. Conversely, if the Court ultimately decides manufacturers are not required to extend 340B pricing to contract pharmacies, then we surely expect the government will comply with that decision. But there is no explanation or justification for the government’s attempt to make Lilly pay now, other than to evade this Court’s review and leave Lilly without recourse for such payments,” the motion reads.
In the petition, Lilly, which brought in $6.2 billion in profit last year, alleges the shifting terms of the program are due to HHS director Xavier Becerra bending to political pressure to “take action” against drug manufacturers, as pharmaceutical prices continue to climb.
Lilly asked the district court to temporarily block HHS from moving against Lilly until the drugmaker’s request for a preliminary injunction is resolved; and for an accelerated legal schedule to settle its claims before the looming June deadline.
An HRSA spokesperson declined to comment on the suit.
Dive Brief:
HHS’ Health Resources and Services Administration called out six pharmaceutical companies Tuesday for violating rules under the 340B drug discount program, ordering them to repay affected providers for previous overcharges and warning of more penalties if they don’t comply.
In July 2020 some drugmakers stopped giving the 340B ceiling price on their products sold to covered entities and dispensed through contract pharmacies, while others limited sales by requiring specific data or selling products only after a covered entity demonstrated 340B compliance, according to HRSA.
In letters from Diana Espinosa, acting administrator of HRSA, the agency requested AstraZeneca, Eli Lilly, United Therapeutics, Sanofi, Novo Nordisk and Novartis give an update on their plans to restart selling covered outpatient drugs at the 340B price to covered entities that dispense medications through contract pharmacies by June 1.
Dive Insight:
Providers and drugmakers have sparred for years over the 340B drug discount program that requires pharmaceutical companies to give discounts on outpatient drugs for providers serving low-income communities.
AHA along with five other provider groups in December filed a federal lawsuit against HHS, alleging the department failed to enforce 340B program requirements and allowed actions from drug companies that undermined the program. That lawsuit was later dismissed.
But with the change in administrations, providers now seem to have an ally in the fight.
Previously, as California’s Attorney General, newly minted HHS chief Xavier Becerra led a group of states pushing the agency to force drugmakers to comply with the law late last year.
Provider groups cheered the move after raising the alarm last year that an increasing number of drug companies were refusing to offer discounts to such eligible hospitals.
“The denial of these discounts has damaged providers and patients and must stop. It is vital that these companies immediately begin to repay the millions of dollars owed to these providers,” 340B Health CEO Maureen Testoni said in a statement.
In separate letters to drugmakers, HRSA outlines complaints against them and their actions, ultimately saying their policies violated the statute and resulted in overcharges that need to be refunded. The companies must work to ensure all impacted entities are contacted and efforts are made to pursue mutually agreed upon refund arrangements, according to the letters.
Any additional violations will be subject to a $5,000 penalty for each instance of overcharging under the program’s Ceiling Price and Civil Monetary Penalties final rule.
The American Hospital Association also praised the agency in a release for “taking the decisive action we’ve called for against drug companies that skirt the law by limiting the distribution of certain 340B drugs through community pharmacies.”
Hospitals in the 340B program provide 60% of all uncompensated care in the U.S. and 75% of all hospital care to Medicaid patients, according to 340B Health.
CFOs whose finance and accounting functions are built on legacy computer systems got a stark reminder last week from the Colonial pipeline hacking of what’s at stake if their system is breached.
The hack to Colonial’s system led to widespread gas shortages throughout the East and reportedly forced the company to pay $5 million in ransomware to get the instructions for reclaiming its data.
“For finance departments, the cybersecurity risk is huge,” Samir Jaipati, a finance solutions leader with EY Americas, told CFO Dive in an email. “Something built on outdated technology won’t be able to keep hackers out.”
Security specialists generally agree legacy, on-premises systems starting from about 10 years ago typically have solid cybersecurity features built in, but those that are older might require significant upgrades if they’re going to stand a chance against today’s sophisticated hackers.
The risk for CFOs who must manage their processes on an outdated system is they’ll try to get by with short-term fixes that won’t solve the systemic problems they face.
“These temporary fixes aren’t as dependable and in the long-term may cost more,” said Kaipati.
Best effort
For CFOs who don’t have the time or budget to implement the system overhaul they need or to transfer their processes to a more secure on-premises system or to a cloud-based system, the best step is to do a comprehensive review of their end-to-end finance processes to audit for consistency and reliability, said Steve Adams, Gartner finance director.
He suggested reviewing the organization’s record-to-report process from start to finish to understand where non-secure platforms are used, whether there are audit trails that don’t exist, and if exogenous data is incorporated. By eliminating these and other red flags, CFOs can go a significant way to clean up their processes and reduce risk without making system changes, Adams said.
CFOs taking this approach should first engage their IT business partner and ask for a full audit of the cybersecurity capabilities of the suite of financial applications and to use that review as a starting point to making improvements, he said.
Wider integration
Legacy systems pose a broader problem than just security risk; they can impede company growth because CFOs aren’t generating the data or producing the analytics that can help them identify ways to make more money or reduce costs in the same way they can get from sophisticated cloud-based solutions.
Nor can legacy systems be expected to be as good at integrating data throughout the organization in the same way as cloud systems.
For CFOs who can do it, switching from an old on-premises system to the cloud can be a game-changer, said Manish Sharma, an Accenture operations group executive.
“CFOs that are agile and able to overcome these restrictions by scaling digital and cloud-powered technologies have been able to break down data silos and siloed ways of working to support the ever-evolving business strategy with speed and flexibility,” he said.
The importance of using up-to-date IT was emphasized in a recent Accenture report that found “future-ready” leaders are emerging ahead of the pack with higher efficiency and profitability by scaling digital capabilities in ways to improve operational maturity.
“These leaders use better, more diverse data to inform decision-making as part of a cloud-powered continuous feedback loop,” said Sharma.
Flexible categorization
Another benefit of moving to the cloud or a hybrid cloud-on-premises arrangement is cost flexibility.
On average, the cost of managing an outdated IT system can cost a business around $3.61 per line of code or over $1 million for an application with 300,000 lines of code, said Kevin Shuler, owner and CEO of the Quandary Consulting Group, a Denver-based IT firm.
“It accounts for customizations, maintenance, reporting, server and hardware, etc.,” he said.
While replacing the old with the new might appear to be prohibitively expensive at first glance, Shuler noted what can put a CFO more at ease is the costs are more transparent than maintaining a legacy system.
“Better, they can be categorized as either an operating expense or a capital expense since a lot of software is classified as a service rather than software,” he said.
This gives flexibility to the CFO’s finances and forecasting. It also means more resources can be available for modernized systems.
“That means you can get superior resources at a lower cost than trying to pull from a pool of highly specialized and competitive contractors who work mainly with legacy systems,” he said.
Throughout the COVID-19 pandemic, experts have been warning of the dangers of postponed health care services. In January, the American Cancer Society, the National Comprehensive Cancer Network, and 73 other organizations, including many major health care systems, issued a statement stressing the urgency of preventive care. “We urge people across the country to talk with their health care provider to resume regular primary care checkups, recommended cancer screening, and evidence-based cancer treatment (PDF) to lessen the negative impact the pandemic is having on identifying and treating people with cancer,” the groups said.
That was sound advice not everyone could follow, as ProPublica’s Duaa Eldeib reported last week in a tragic story about Teresa Ruvalcaba. The 48-year-old single mother of three worked for 22 years at a candy factory on Chicago’s West Side. During the pandemic, disaster struck. “For more than six months, the 48-year-old factory worker had tried to ignore the pain and inflammation in her chest. She was afraid of visiting a doctor during the pandemic, afraid of missing work, afraid of losing her job, her home, her ability to take care of her three children,” Eldeib reported.
“Even though her chest felt as if it was on fire, she kept working. She didn’t want to get COVID-19 at a doctor’s office or the emergency room, and she was so busy she didn’t have much time to think about her symptoms,” Eldeib wrote.
Ruvalcaba’s pandemic fears were typical of patients across the nation, surveys revealed. A 2020 CHCF poll of 2,249 California adults revealed that even when people wanted to see a doctor for an urgent health problem, one-third did not receive care. Nearly half of those surveyed didn’t receive care for their nonurgent health problems.
Nationally, more than one in three people delayed or skipped care because they were worried about exposure to Covid-19, or because their doctor limited services, according to an Urban Institute analysis of a September 2020 survey.
The toll of this disruption in care — the forgone cancer screening, the chest pain that isn’t reported — will devastate some patients and families. Ruvalcaba had to face a diagnosis with a terrible prognosis, inflammatory breast cancer. “If she would have come six months earlier, it could have been just surgery, chemo and done,” Ruvalcaba’s doctor told Eldeib. “Now she’s incurable.”
“Unfortunately, we know we’re going to see some tragedies related to the delays,” Wiley Fowler, an oncologist at Dignity Health in Sacramento, told Ibarra.
Consequences of Delayed Care
Public health messages early in the pandemic urged people to avoid public places, including doctor’s offices. In April, as Hayley Smith noted in a Los Angeles Times story, the US Centers for Disease Control and Prevention (CDC) and the Centers for Medicare & Medicaid Services “both published guidelines recommending the postponement of elective and nonurgent procedures, including ‘low-risk cancer’ screenings, amid the first wave of the pandemic.”
Patients and doctors listened. Appointments were canceled. “Nonurgent” procedures encompassing a wide array of treatments and operations, including cancer surgeries, were delayed.
Preventive cancer screenings dropped 94% over the first four months of 2020, Eldeib reported. The National Cancer Institute expects to see 10,000 preventable deaths over the next decade because of pandemic-related delays in diagnosis and treatment of breast and colorectal cancer. Screenings for these cancers, which account for about one in six cancer deaths, are routine features of preventive care.
I know I should get another check soon, but the anxiety of COVID feels like more of a priority than the anxiety of cervical cancer.
—Molly Codner, a Southern Californian who received an abnormal Pap smear last summer
In California, cancer deaths have remained roughly the same as prepandemic rates, but that stability is not expected to last. Based on the National Cancer Institute data, Ibarra calculates that an additional 1,200 Californians will die from breast and colon cancer. The National Cancer Institute estimate is conservative “because it only accounts for a six-month delay in care, and people are postponing care longer than that,” Ibarra reported.
Nationally, death rates from cancer are expected to increase in a year or two. Slow-growing cancers will remain treatable despite a delayed diagnosis, Norman Sharpless, MD, director of the National Cancer Institute, told Eldeib. Yet for conditions like Ruvalcaba’s inflammatory breast cancer, delayed care can be disastrous.
Women, People of Color Disproportionately Affected
For women across Southern California, appointments have been delayed, exams canceled, and screenings postponed during the pandemic, Smith reported in the Los Angeles Times. “Some are voluntarily opting out for fear of encountering the virus,” Smith wrote, “while others have had their appointments canceled by health care providers rerouting resources to COVID-19 patients.”
Before Pap smears became part of routine American health care, cervical cancer was one of the deadliest cancers for women. Today, as many as 93% of cervical cancer cases are preventable, according to the CDC, and screenings are a crucial component of preventive care. Yet during the first phase of California’s stay-at-home orders, cervical cancer screenings dropped 80% among the 1.5 million women in Kaiser Permanente’s regional network, Smith wrote.
The effects of the pandemic shutdown extended beyond delayed Pap smears. Women who spoke to Smith said that “mammograms, fertility treatments and even pain prevention procedures have been waylaid by the pandemic.”
Sometimes, obstacles other than the pandemic are continuing to interfere with access to care. One woman had an appointment delayed and then lost her job and her health insurance, Smith reported.
“Molly Codner, 30, has needed a checkup ever since she received an abnormal Pap smear last summer,” Smith wrote, “but like many Southern Californians, the trauma of the last year still weighs heavily on her mind: Nearly a dozen people she knows have had COVID-19.” Codner told Smith that “I know I should get another check soon, but the anxiety of COVID feels like more of a priority than the anxiety of cervical cancer.”
People who face disparities in treatment and care are most likely to be hard hit by pandemic delays. That includes Black people, who were already more likely to die from cancer than any other racial group. Cancer also is the leading cause of death among Latinx people. Breast cancer is the most common cancer diagnosis for Latinx women. Overall, more Americans die of heart disease.
Black adults are more likely than White or Latinx adults to delay or forgo care, according to researchers from the Urban Institute.
Telehealth Solved Access Issues for Some, Not All
Telehealth was a boon for patients during the pandemic year. Yet, as Ibarra notes, “there’s only so much that doctors and nurses can do through a screen.” Dental visits, mammograms, and annual wellness checks were also put on hold by the pandemic.
Unequal access is another challenge for telehealth. The benefits of the telehealth boom were not shared equally, according to a statewide survey conducted last month by the University of Southern California and the California Emerging Technology Fund.
Latinx, Asian, and Black respondents did not use telehealth as often as White respondents. USC researchers attribute these differences to “disparities in income, education and access to any kind of health care.”
Researchers at the Urban Institute report similar findings: “Black and Latinx adults were more likely than White adults to report having wanted a telehealth visit but not receiving one since the pandemic began, and that difficulties getting a telehealth visit were also more common among adults who were in poorer health or had chronic health conditions.”
After controlling for socioeconomic factors and health status, patients with limited English were half as likely to use telehealth compared to fluent English-speaking patients, the Urban Institute said. “Much work remains to ensure all patients have equitable access to remote care during and after the pandemic,” the researchers wrote.
Whether telehealth is conducted by video or phone may be crucial to ensuring access to care. A study of telehealth use at Federally Qualified Health Centers in California in 2020 found that “more primary care visits among health centers in the study occurred via audio-only visits (49%) than in-person (48%) or via video (3%). Audio-only visits comprised more than 90% of all telemedicine visits.”
“For many Californians with low incomes, the ability to connect with a doctor or their care team by phone or video is much more than a convenience,” Chris Perrone, director of CHCF’s Improving Access team, explained on The CHCF Blog. “It’s really the difference between canceling a visit because the barriers are too great or getting the timely care that they or their child needs.”
Pandemic Health Effects Will Outlast COVID-19
Public health efforts might need to focus on two goals at the same time as the US recovers from the pandemic: increasing vaccine uptake to keep COVID-19 in check and proactively managing the fallout from delayed care.
“As we focus on recovery, we have to ensure that we get vaccinated,” Efrain Talamantes, a primary care physician in East Los Angeles, told Ibarra. “But also that we have a concerted effort to manage the chronic diseases that haven’t received the attention required to avoid complications.”
HENRY KOTULA 