🏥 $500B under the radar

Why we're all gonna be employed by UnitedHealth Group someday

Good morning,   If you haven't read my latest essay about what's going on with hospital losses, I got some great responses. You can find that here!   Some interesting news this week across healthcare, but more importantly are my takeaways from the Masters which of course...you can find in the Miscellaneous Maddenings.   Please consider a moment of prayer or solitude for the victims involved in the Louisville shooting on Monday. Was this email forwarded to you? Subscribe Here BIG GET BIGGER Everyone learns about Optum's acquisition of Crystal Run 2 months after the fact  Read in Browser Optum has acquired its latest physician practice platform in Crystal Run Healthcare. The practice operates 40+ specialties, 15+ clinic locations, 5+ urgent care centers, a multi-specialty ambulatory surgery center, and 400+ providers. I mean just an absolutely massive get here for Optum.   Here's the thing though. This deal closed two months ago. Bob Herman put it succinctly: "The deal closed in late February. There was no fanfare. Neither company issued a press release. A UnitedHealth spokesperson confirmed the acquisition occurred, but declined to answer questions."   The bigger trend: Given declining reimbursement for physician services under fee-for-service arrangements, an aged physician base looking to cash out and retire, ever-increasing administrative burden, and a high-dollar bidder in Optum, physician services consolidation continues to plod along.   But perhaps adding a little bit more fuel to the fire is New York's recent proposed legislation that would require New York State review of almost all healthcare transactions - a pseudo Certificate of Need. Did Crystal Run rush into a sale? We might see a LOT of activity in New York State over the coming year or so - perhaps even a massive private equity exodus from healthcare in NY.   Madden's Musing: These acquisitions being hidden from the public is a feature, not a bug. It is entirely intentional for Optum to keep these acquisitions under the radar. Also, it's wild to consider that Crystal Run quite literally has a "News/Releases" section of its website that it actively chose not to disclose this news in. They're not beholden to anyone, of course, but at the same time…the silence is deafening.   Pretty soon we'll be looking up in a decade and half of the physicians in the country will work for UnitedHealth Group. Love it or hate it, it's happening. And somehow the acquisitions of a $500B company with 70,000 physicians under its belt are flying under the radar. POST MORTEM Pear Therapeutics files for bankruptcy On April 7, digital therapeutics firm Pear Therapeutics filed for Chapter 11 bankruptcy. After I touched on Pear considering strategic alternatives last week, it turns out that the best path forward was to file for bankruptcy protection, lay off most of the staff, and identify buyers that might want to pay for specific assets or pipelines.   Pear went public via SPAC at a $1.6B valuation in December 2021, and just 16 months later, is selling off for scraps. Regardless, despite the challenges related to distribution difficulty, mindset shift involved with a cutting edge product, and reimbursement challenges, Pear as a whole pushed the envelope forward.   Chris Hogg shared a fantastic post-mortem on Twitter related to digital therapeutics as a whole in a thread linked here. MARKET MOVERS Partnerships and Strategy Updates:   With 94 physicians and 59 mid-levels across four states in the Northeast, Regional Cancer Care Associates affiliated with The US Oncology Network, which is McKesson's nationwide owned network of 2,300+ community oncologists. (Source)   "Seattle-based Zócalo Health, a virtual healthcare service for Latino patients, is collaborating with Mark Cuban Cost Plus Drug Company (MCCPDC) to expand its members' access to lower-cost prescription medication." (Mobi)   Beckers held a good interview with Intermountain's CFO Janie Wade around its future growth & strategy. (Beckers)   This is a good overview of Baptist Health's virtual nursing program. (HITN)   Finance and M&A Updates:   Sparrow Health and the University of Michigan Health systems closed their previously announced $7B, 200 location merger this week. (Source)   Meanwhile, Sanford and Fairview delayed their $14B, 40-hospital merger indefinitely while the Minnesota AG reviews the deal. Color me shocked. (HCD)   After buying DNA sequencing and testing firm Grail for $7B in 2021, Illumina has been ordered by the FTC to divest the company altogether citing antitrust concerns. (HCD)   Digital Health and Startup Updates:   Aetna partnered with virtual GI company Oshi Health which also raised $30M in a Series B. Ha! Two birds with one stone in this blurb. Unsurprisingly, CVS Ventures was included in the Series B along with Flare Capital, Bessemer, and led by Koch Disruptive Technologies. (Mobi)   Healthcare marketplace and scheduling firm Zocdoc added federally qualified health centers to its website & app to increase support for Medicare & Medicaid patients. (MedCity)   Advocate-Aurora is piloting predictive analytics company Kela Health in a 12 month program aimed at improving surgeries across the enterprise. (Fierce)   Policy and Payment Updates:   Recent CMS payment proposal updates: Inpatient rehab facilities: 3.0%; $335M Inpatient Psych: 1.9%; $55M SNFs: 3.7%; $1.2B   A Texas judge invalidated the FDA's approval of the abortion pill; meanwhile, a federal judge in Washington state ruled the opposite. What in the world is going on? (NY Times)   How a lobbying blitz led to weaker Medicare Advantage reforms (The Hill)   Costs, Data, and Other Updates:   Only a mere 6 months after leaving UnitedHealth Group to join CVS as the head of its healthcare services arm, Amar Desai is back at UnitedHealth. (HCD)   Privacy is at risk as HIPAA fails to keep pace with digital health. (Axios)   Whitepapers and Resources:   This was a handy list of FDA cleared AI algorithms. (Health Exec)   Bain released its 2023 healthcare private equity and M&A report, and if there's one thing you read in private equity, this should be it. (Bain)   HOSPITALOGY TOP READS Health Affairs published a provocative, thoughtful piece around CMS payment reform, and how current value-based care efforts are leading to the corporatization of primary care rather than primarily improve care capacity or quality. I'd love to hear readers' opinions on this piece. (Health Affairs) James Leckie wrote a great post around employer-sponsored health insurance and self-funded health plans. (AHCW) David Paul dove into the nursing shortage and the emerging & present venture opportunity in the space, including spaces within it that are more compelling to watch. (Link) Brendan Keeler wrote about the 3 ways to integrate with other healthcare organizations. (HAPIG) JOBS Every newsletter I post an interesting job from the Hospitalogy jobs board. Use this link to submit your role to be featured if you're looking to hire. You can also DM me or reply to the e-mail with your job posting - I want to help!   Featured Job: Head of Employer Solutions at Turquoise Health At Turquoise Health, we are looking for someone to build out our new vertical in the broker and employer benefits space as the Head of Employer Solutions. You will be the face of the company in the market, creating a strategic roadmap, setting and meeting milestones, and market hypotheses to execute and validate.   Featured Job: Manager of Government Programs at Baylor Scott & White Health Baylor Scott & White Health's ACO is hiring for a Manager of Government Programs. This role is open to remote workers in Texas. In this position, you will manage operations and implementations for the Medicare Shared Savings Program, Medicare Advantage, and Marketplace value-based care contracts. Prior knowledge of CMS regulations and health plan operations is beneficial, but not required. View More MISCELLANEOUS MADDENINGS Masters impressions and highlights from me: John Rahm played lights out especially being on the wrong side of the tee time draw for the weather. I'm surprised Brooks played so poorly in the final round. Something something LIV 54 hole tournaments…I feel for Will Zalatoris, who is out for the year with an injury (and who I unfortunately picked in my Masters pool). Also, it seems like the chance for Rory to complete the grand slam is slipping away with every year. Dude just can't get it done at Augusta. Finally, Phil did some major brand repair with his 2nd place performance. As a fellow lefty, it's hard for me not to like him even though he's done some weird stuff over the course of his career. I had one of the sickest golf holes - and shots - ever on Saturday. Heading up to a straightaway par 5, I nailed a nice drive, but got a bad kick into the left fairway directly right behind a tree with no angle to the green. I had to play a low stinger slice around the tree and absolutely nailed a 200 yard, 15-foot apex 4-iron pin high, around 15 feet away. I missed the eagle putt by about an inch (alas), but we take tap-in birdies! It looks less impressive on Arccos, but I promise the 4 iron was one of the filthiest shots I've ever hit: Thanks for the read! Let me know what you thought by replying back to this email.   — Blake   Get your brand in front of 21,000 executives and healthcare decision-makers. Let's Partner The Board Room  I'm building an exclusive community for top healthcare executives. Secure your seat. Workweek Media Inc.  1023 Springdale Road, STE 9E Austin, TX 78721   Want to ruin my day? Unsubscribe.