Policy upheaval, tech giant disruption and megamergers: Healthcare Dive’s 10 best stories of 2018

https://www.healthcaredive.com/news/policy-upheaval-tech-giant-disruption-and-megamergers-healthcare-dives-1/543390/

Mobile health records and nurse protests also grabbed readers this year.

This year in healthcare was marked by sweeping changes, including seemingly constant vertical and horizontal consolidation, led by the $69 billion CVS grab of Aetna and Cigna’s $67 billion acquisition of Express Scripts.

As 2018 wound down, a federal judge took an ax to the Affordable Care Act as the Trump administration kept up its efforts to undermine the law, with CMS expanding short-term health plans many say are built to subvert the ACA. Elimination of the individual mandate penalty, Medicaid expansion and rising premiums all likely contributed to declined enrollment on ACA exchanges as well.

The administration encouraged states to use waivers to expand controversial Medicaid work requirements and proposed site-neutral payments, rattling health systems of all sizes that were already struggling under ferocious operating headwinds. Hospitals cut back on services and invested heavily in lucrative outpatient facilities in an attempt to reclaim volume.

Tech companies Apple and Amazon pushed further into the space, with the former focusing on mobile health apps and the latter focusing on, well, almost everything.

But that’s just scratching the surface. Here is a curated list of Healthcare Dive’s top stories from the last year.

    1. Optum a step ahead in vertical integration frenzy

      After a 2017 marked by failed horizontal mergers, vertical consolidation came into vogue during the year, led by CVS-Aetna, Cigna-Express Scripts and Humana-Kindred.

      Some smart observers saw a predecessor to these unions in UnitedHealth Group’s Optum: a pharmacy benefit manager plus a care services unit that employs over 30,000 physicians, using data analytics to capitalize on consumerism and value-based care.

      Our piece on Optum’s solid foothold in the space, and its likelihood of staying ahead of the nascent competition, was Healthcare Dive’s most-read article in 2018. Read More »

    2. New Medicare Advantage rules hold big potential for pop health

      A novel Medicare Advantage rule giving payers more flexibility to sell supplemental benefits to chronically ill enrollees sparked a fair amount of interest in our readers.

      The rule offered up a slate of new opportunities for insurers such as UnitedHealthcare and Humana that can now work with rideshare companies to provide transportation to medical appointments, air conditioners for beneficiaries with asthma and other measures around issues like food insecurity in a broad shift to recognizing social determinants of health. Read More »

    3. Apple debuts medical records on iPhone

      Outside players such as Apple, Amazon and Google moved forward in their bids to disrupt healthcare in 2018. Apple rang in the New Year with its announcement that customers would now be able to access their medical records on the Health app following months of speculation and buzz.

      The move looks to put access to personal, sensitive data back in the patients’ hands, an objective a lot of the entrenched healthcare ecosystem can get behind as well. Heavy hitters on the EHR side (Epic, Cerner, athenahealth) and the provider side (Johns Hopkins, Cedars-Sinai, Geisinger) are taking place in the initiative. Read More »

    4. At least 14 states have legislation addressing safe staffing currently, but California is the only one to implement a strict ratio at one nurse per every five patients. Looking to 2019, in Pennsylvania voters elected a governor who has voiced support for state legislation. Read More »
    5. More employers go direct to providers, sidestepping payers

      Employers ramped up their cost-containment creativity in 2018. One method? Cutting out the middleman and forging direct relationships with providers themselves, whether it’s contracting with an accountable care organization to manage an entire employee population or a simple advocacy role to fight for payment reform.

      Aside from some correlated CMS interest, big names forging inroads in the arena include General Motors, Walmart, Whole Foods, Boeing, Walt Disney and Intel, all with various levels of investment.

      Although only 6% of employers are doing so currently, 22% are considering solidifying some sort of provider relationship for next year according to a Willis Towers Watson survey. It’s also likely the Amazon-J.P. Morgan-Berkshire Hathaway venture will look at direct contracting in its (still vague) mission to lower employer costs. Read More »

    6. Amazon Business’ medical supply chain ambitions: 4 things to know

      Amazon’s B2B purchasing arm reached out and grabbed the healthcare supply chain this year, shaking a once-predictable business model.

      Under intense operating headwinds, supply chain professionals looked to trim the fat from traditional distribution and supplier models in 2018. Some looked to Amazon Business, which generated more than a billion dollars in sales its first year alone by relying on its marketplace model, streamlined ordering and a “tail spend” strategy.

      1. Healthcare Dive discussed this and more with global healthcare leader at Amazon Chris Holt in an exclusive interview that drove a lot of interest. Read More »

GE, Medtronic among those linking with hospitals for value-based care

Value-based care was a buzzword over the past year, with providers, payers and healthcare execs across the board looking (or saying they’re looking) for ways to cut costs and improve quality.

Although legal barriers stemming from the Anti-Kickback Statute and Stark Law persist, medical technology companies jumped on the bandwagon, with big names like GE, Philips and Medtronic coupling with hospitals to promote VBC initiatives. Read More »

  1. How Amazon, JPM, Berkshire Hathaway could disrupt healthcare (or not)

The combination of the e-commerce giant, a 200-year-old multinational investment bank and Warren Buffet’s redoubtable holding company joining forces to take on healthcare costs spooked investors in traditional industry players. The venture added a slew of big names to its C-suite, including Atul Gawande and Jack Stoddard for CEO and COO, respectively. Read More »

 

 

 

Beating Amazon to the punch: Zipline launches drone to deliver medical supplies at 79 mph

https://www.beckershospitalreview.com/supply-chain/beating-amazon-to-the-punch-zipline-launches-drone-to-deliver-medical-supplies-at-79-mph.html

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Zipline, a startup based in California that focuses on delivering medical supplies via drone, created a new drone that can travel up to 79 mph and carry 3.85 pounds of cargo, reports CNBC.

Established in 2011, the California-based startup beat Amazon, Fed-Ex and UPS to the punch when it established drone-based logistics for delivering medical supplies in 2016.

The startup initially focused on delivering life-saving medical supplies, such as blood, to rural areas in Rwanda. However, Zipline plans to expand into more markets this year — including the U.S.

Zipline investor and former aerodynamics engineer Paul Willard told CNBC the startup’s new drone — dubbed Zip 2 — can be scaled globally because of its speed and battery life.

Zipline will begin making medical supply deliveries in the U.S. later this year as part of a Federal Aviation Administration pilot program. Once the company establishes a service area in the U.S. for its drones, it would be able to make deliveries within 30 minutes to people in its service area.

A service area would be 99 miles in diameter and would encompass a population of around 10 million people, according to CNBC.

 

 

Healthcare’s Consolidation Landscape

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Market and regulatory factors have unleashed a wave of merger, acquisition, and partnership activity that is changing the delivery of healthcare services.

Consolidation in the healthcare-provider sector has accelerated in recent years, reshaping the relationships between health systems, hospitals, and independent physicians across the country.

In the Buckeye State, healthcare consolidation activity has been a transformational force at OhioHealth, says Michael Louge, CPA, who serves as executive vice president and chief operating officer at the 11-hospital health system based in Columbus.

“When you look at OhioHealth, and you go back two or three decades, it was a much different organization. The reason it is different today is because of philosophy and the way we approach regional partnerships—how we have worked with physicians and hospitals in the region. Our whole organization’s evolution has been through successful partnerships and consolidations with regional players.”

Over the past year, statistics have been gathered on the pace of healthcare-provider consolidation.

In a recent HealthLeaders Media survey, 159 healthcare executives—mainly from health systems, hospitals, and physician practices—were asked about their merger, acquisition, and partnership (MAP) deals.

Eighty-seven percent of the respondents said their organizations were expected to both explore potential deals and complete deals that were underway in the next 12–18 months. Only 13% of the respondents said their organizations were not planning MAP deals in that same time period.

From the passage of the Patient Protection and Affordable Care Act (PPACA) in 2010 through the end of last year, merger and acquisition transactions involving acute-care hospitals increased 55% from 66 announced deals to 102, according to Skokie, Illinois–based Kaufman Hall. Last year, the operating revenue of acquired organizations was more than $22 billion, according to the consultancy.

Kit Kamholz, managing director at Kaufman Hall, says two sets of drivers are propelling consolidation activity among health systems and hospitals.

“There are transactions that are driven by financial rationale. This is driven by a level of distress at the smaller organization, either from a historical-financial standpoint, an access-to-capital standpoint, or they are experiencing some significant clinical deficiencies. … The second bucket is in the category of strategic rationale. These are organizations that tend to be relatively strong financially, that are considered to be strong community-based providers in their marketplaces; but they are looking at the landscape of the evolving healthcare environment and saying, ‘Do we have the skills and capabilities to be successful in this new era of value-based care?’ ”

Healthcare consolidation activity is impacting the country’s physician practices and physician-employment trends.

Why supply chain is a healthcare leader’s most strategic asset

http://www.beckershospitalreview.com/supply-chain/why-supply-chain-is-a-healthcare-leader-s-most-strategic-asset.html

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Healthcare’s movement toward value-based care is not only underscoring the importance of an efficient healthcare supply chain, but also redefining the supply chain leader role.

Once a very transactional process, the supply chain is now considered a core competency for hospitals to reduce waste and lower costs, while supporting patient care initiatives. More and more, supply chain leaders are also taking a seat in C-suite discussions to help executives mitigate potential financial penalties and make more informed decisions under the ever-changing value-based care programs.

To ensure they’re using devices and medical supplies in the most efficient ways possible, hospitals must turn to data, according to Peter Mallow, PhD, program director of health economics, market access and reimbursement for Dublin, Ohio-based Cardinal Health.

Dr. Mallow and Steve Thompson, director of strategic solutions for Cardinal Health, recently spoke with Becker’s Hospital Review about the evolving role of supply chain leaders and shared strategies for using data to better inform patient care and reduce supply chain inefficiencies.

6 things keeping supply chain leaders up at night

http://www.beckershospitalreview.com/supply-chain/6-things-keeping-supply-chain-leaders-up-at-night.html

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East Lansing-based Michigan State University partnered with the APICS Supply Chain Council to identify critical issues on the minds of supply chain leaders.

To compile the report, the groups interviewed leaders from more than 50 firms across the globe and asked them: “What keeps you awake at night?”

Here are the six most common issues on supply chain leaders’ minds, as identified in the report.

1. Capacity or resource availability. Many companies expecting market growth cited managing capacity issues as a main priority. They often wanted to avoid outsourcing and identified challenges to maximize their facilities’ capacity by replacing old equipment, among other activities.

“We’ve implemented a supply chain for a point in time,” one leader said, according to the report. “However, a supply chain is a living, breathing thing, and one needs to think about it as dynamic and impermanent. Is there a point where the supply chain becomes inappropriate for where we’re going, and we need to build a different kind of supply chain?”

2. Talent. Participating companies also described the struggle to find and keep good supply chain talent.

“The competition for talent is much higher [than it’s ever been],” said another participant in the report. “You go out to the market, and it’s one of those ironies. Right now, you put a job description out there, and you hear about 8 percent unemployment. However, I can’t find an industrial engineer worth his salt — you know, someone who can really think about strategy and think about [profit and loss statements] and drive change.”

3. Complexity. Some firms faced issues with their products becoming more complex and found it difficult to manage the increasing amount of stock keeping units.

“We’ve started building different types of products, completely new types of products. Whether it’s low or high volume, it creates another level of complexity,” said one leader in an interview.

4. Threats or challenges. A lot of supply chain leaders are worried about managing supply chain risk, and many mentioned the importance of continuity planning.

“I worry about supply risks in general, whether it’s from natural disasters or things like … a troubled supplier or a variety of issues with the whole supply chain risk piece,” one participant told researchers. “Partly that’s because that stuff is hard to control. You can try to proactively mitigate the downsides, but that’s just hard to control.”

5. Compliance. Participants cited numerous compliance issues like product regulation, trade controls and continually changing regulations, according to the report. Many leaders said they were struggling to keep up with both the high volume of regulations and how much they constantly changed.

“[The changes] are really causing us to spend a lot of money and a lot of our time. It is sucking up a huge amount of our information technology dollars and resources to be able to be compliant with those regulations,” said one study participant.

6. Cost or purchasing issues. While pressure to rein in costs is a focus for companies in every industry, it’s a top priority for healthcare and drug companies amid the shift toward value-based care, according to the report.

“Everything in healthcare is submitted through insurance for reimbursement,” one leader said. “The government won’t pay you any more to treat your patients, so you better get [the payout from] your suppliers. Well, we’re the supplier they’re coming after.”

To view the complete report, click here.

50 healthcare organizations dubbed best in supply chain by GHX

http://www.healthcarefinancenews.com/news/50-healthcare-organizations-dubbed-best-supply-chain-ghx?mkt_tok=eyJpIjoiWmpKaE5ETXhZVGc0TkdJNSIsInQiOiJjWXBGUGRYOWwySVVDRnRsdjhpOTJEK09yNSt1dzcyN1d0TmNucCtzN1A4cWlVcGl2NmM3M1wvR0lYQjRUa3ZQdzd2b2g4ZnFQWFRlYVhBMFwvY3I2VFlJaEVkdXhlODhNSGk4VUpVempaVUloZVBmRjRtekZXQ1ZGYVdjNFRJdkZRIn0%3D

Systems recognized for their work in improving operational performance and driving down costs through automation.

Global Healthcare Exchange has announced its annual list of the healthcare provider organizations being recognized as the 2016 GHX “Best 50” Supply Chains in North America.

The supply chains are being recognized for their work in improving operational performance and driving down costs through automation. The recipients will be honored at the 17th annual Healthcare Supply Chain Summit from April 24-26 at the Gaylord National Resort in National Harbor, Maryland.

The list, alphabetically, is as follows:

What’s eating up cardiovascular service line margins: My ‘top 5’ list

http://www.beckershospitalreview.com/finance/what-s-eating-up-cardiovascular-service-line-margins-my-top-5-list.html

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Supplier marketing tactics continue to artificially prop up physician and patient demand for high-end products, including some with unintended negative consequences from both a financial and quality standpoint. This has been the situation for decades, but is fast becoming an untenable situation for hospitals—especially those that have failed to calculate the true cost of ownership.

I recently unearthed a reference sheet I penned in 2003, when drug-eluting stents first hit the market, offering steps healthcare providers could take to prepare for the financial impact of the then-new technology. It could just as easily been written about bioresorbable stents now taking hospital finances by storm. My suggestions, in short:

• Do a deep-dive analysis of how supplies are currently being utilized for stent procedures
• Determine the expense of treating patients impacted by the new stent (based on conversion estimates)
• Share the results with your finance team and negotiate carve-outs with payers
• Perform a supply expense projection
• Share the analysis with your physicians
• Combine intelligence gained from physician discussions with expense projection to estimate proportion of patients who will receive the new stent
• Share projections with hospital board of directors
• Develop and implement guidelines for use with medical staff, based on approved uses and clinical studies

But planning for the impact and actually limiting it are two different things entirely. The challenges in preserving cardiovascular service line margins have barely budged over the years, even as the consequences of inaction have grown exponentially. Year after year, a handful of high-end products make headlines with the only certainty being that costs will ramp up 5 to 10 percent. Below are what I see as the five perennial culprits.