🏥 September Recap

Everything you missed in healthcare in the month of September across strategy, finance, M&A, and more.

PARTNERED WITH Happy Tuesday!   Since you guys liked my August recap so much, I've decided to bring it back and make it a more consistent thing.   So this newsletter will be a comprehensive summary of all of the major healthcare activity from September, for your viewing pleasure.   Thanks to Fundrise for sponsoring today's newsletter. Amazing sponsors like them keep the newsletter free for the rest of you! Was this email forwarded to you? Subscribe Here SPONSORED BY FUNDRISE Like healthcare, the world of venture capital is a bit broken.    Crazy high investment minimums and accredited investor requirements prevent basically everyone besides the super-rich from investing in one of the most lucrative asset classes in the world.   That's why I've partnered with Fundrise. With Fundrise, everyday people like you and me can invest directly in some of the top private pre-IPO companies, including those leading the AI revolution. All in five minutes or less. Join over 2 million investors growing their portfolios with Fundrise, and get started today. #fundrisepartner Invest with Fundrise September Healthcare Headlines Read in Browser Walmart-ChenMed Acquisition Rumors Bloomberg reported on September 8 that Walmart is rumored to be eyeing an acquisition of ChenMed, a longstanding family-owned senior, Medicare Advantage (MA) primary care platform.   Pearl Health's Walgreens Win On September 12, Pearl announced a strategic collaboration with Walgreens. While the details surrounding the partnership itself are a bit high level (for now), Pearl just set itself up for potentially a huge win with a national player that owns one of the largest healthcare delivery organizations in the country in VillageMD. Here's the initial scope of the capital-light joint venture: Pearl: will provide its tech and analytics to identify patients that can benefit from Walgreens-led healthcare programs Walgreens: will provide prescription fulfillment, medication adherence, immunizations, care gap closure, diagnostic testing, and discharge transition management to the JV   BrightSpring's IPO Comeback After filing an S-1 in October 2021, then pulling the plug on those IPO plans in late 2022, BrightSpring IPO rumors have re-emerged. The home health and hospice player generated $5.6B in revenue in 2020, and more details to come as it files an updated S-1 assuming IPO plans go through and the healthcare public markets thaw out. BrightSpring's footprint is impressive with 900+ locations across the U.S. and provision of care for complex patient populations (IDD, polypharma) (Link)   FTC Sues USAP The FTC has decided to pick on Welsh Carson's (WCAS) US Anesthesia Partners as its punching bag for all things physician practice roll-ups and market dynamics in healthcare. More details on this to emerge, but for now, the FTC is alleging that USAP may have entered into price setting arrangements or anti-competitive market share alignment with other players. An important one to watch as the FTC tries to meddle in smaller healthcare M&A (Link) (JD Supra analysis)(Full PDF complaint)   CommonSpirit's Struggles & Strategies The nation's second largest nonprofit health system had a memorable week, posting a $1.4B loss while also unveiling a new population health management MSO, shrewdly named Population Health Services Organization (PHSO) so that you'll never forget it. (Financials) (PHSO announcement)   MARKET MOVERS Strategy Updates: Anything affecting decision making in healthcare - notable moves and strategies for healthcare operators to keep on your radar.   Hospitals & Services: Centura Health Breakup: Centura Health's partnership ended due to divergent visions, as expressed by Centura's former CEO. Looking at an article like this about a former joint operating company between two large health systems, I can't help but think that the cross-market mega-mergers may suffer a similar fate as far as strategic direction and governance woes. (Link) Hospital Labor Market Stabilizing? Nonprofit hospitals experienced a deceleration in wage growth, as reported by Fitch. (Link) Health Systems opt for Epic: In recent weeks, Intermountain and UPMC have switched from Cerner to Epic. Rather than lost market share, both moves really moreso exemplify health system consolidation. For instance, UPMC is consolidating nine EHRs into one, while Intermountain internally has decided to bite the bullet and get onto one system by 2025. UPMC will be on Epic by 2026, and Epic continues its reign of dominance over large health systems and academic medical centers. Meanwhile, Oracle has questions to answer related to its strategy and growth under Oracle (especially with the bad VA PR). Going global? (Link) (Beckers - why UPMC chose Epic for its EHR) Rural Medicare Rejections: Here's another interesting trend that seems to be coming to a head with the above MA penetration: more rural health systems are going out of network with MA plans. (Link)   Retail Health: Costco's Virtual Offer: Costco introduced $29 virtual health consultations for its members in partnership with Sesame. Jumping headfirst into the healthcare game! Costco has a lot of interesting healthcare offerings and could build something in the space for its members…if it wants to. I mean, if it can keep healthcare costs at a static price in the same way it can a hot dog, there's no telling what Costco could accomplish in healthcare!! (Link) Walgreens' Care Delivery Model: This Fierce article on Walgreens was an interesting little look into what Walgreens is trying to accomplish in healthcare during its company transformation, integrating both care delivery and pharmacy components into its model. (Link) Rosalind Brewer announced her step down as CEO of Walgreens Boots Alliance, Inc. on August 31, 2023, and will be replaced by interim CEO Ginger Graham. Brewer will continue to advise the company during the search for a permanent CEO. In a LinkedIn note, Brewer mentioned her legacy as pivoting Walgreens in a time of transition to a healthcare-centric firm. Amazon Subscriptions: Amazon is evaluating new subscription services in both the grocery and healthcare sectors to latch on to its Prime membership. ( Link) Curai & Amazon Clinic: Curai Health's Neal Khosla penned some thoughts on its launch with Amazon Clinic, targeting the provision of affordable healthcare for all Americans, and the rationale for the partnership. ( Link) Walmart's Pharmacy Issues: Walmart reduced pharmacist compensation and hours, exacerbating the workload. (Link) CVS in Ohio: Serious operational problems were uncovered at Ohio's CVS pharmacies during inspections. ( Link)   Private Equity: PE investment in ASCs: VMG Health published a nice report on private equity investment in ambulatory surgery centers. "Notably, cardiology has become the fastest-growing specialty as ASCs invest in technology and higher acuity procedures continue to move to the ASC setting." (Link) State of Cardiology Report: Speaking of cardiology, a 2023 outlook from Healthcare Appraisers dove nicely into the cardiology industry and current drivers of growth, ASC trends, ancillary activity, observed multiples, notable transactions, and more. (Link) Policy: CMS Announces 10 'Negotiable' Drugs: Comprising around $50 billion in total spending, CMS announced the following drugs for price negotiation through the Inflation Reduction Act. Once negotiations complete, new prices will take effect in 2026 (Link) (Endpoints Analysis) CMS Launches new Payment Model - AHEAD: CMS is implementing a new state-based total cost of care model building upon Vermont's ACO Model and Maryland's Total Cost of Care model (the most successful VBC program to date). Notably, the model is designed for states, hospitals, and primary care practices. It'll provide global capitation for hospitals set against Medicare FFS benchmarks to cover both inpatient and outpatient services. CMS will partner with a max of 8 states on the model. Really interesting stuff and you can see where CMMI wants the puck to move - behavioral health integration, more coordination between primary and specialty care, payor alignment with states, and incentivizing hospital participation as well as increased primary care investment. Will it be enough? (AHEAD Overview) (Factsheet PDF) Medicare in Rural Regions: KFF wrote a nice analysis on trends and growth in Medicare Advantage enrollment in metropolitan, rural, and micropolitan areas, noting that rural MA penetration is increasing most rapidly in the latter two. (Link) Telehealth Regulation Rift: Senators opposed DEA's proposed telehealth guidelines, citing potential adverse impacts on patient care. (Link) ICHRA Adoption Rate: A study revealed that 89% of employers might consider ICHRAs for health benefits within the next three years. (Link) Obamacare's Rebound: An interesting report from Politico dove into how an initially disastrous Obamacare initiative - co-ops - experienced an unexpected recovery in 3 entities. (Link) PBM Reform Insights: A recent Brookings Institution piece argued that the proposed PBM reforms in Congress might be ineffectual or even counterproductive. (Link) CMMI's New Models: CMMI is looking to unveil two new payment models in behavioral and maternal health later this year, pending a government shutdown. The programs would include heavy-Medicaid involvement. (Link) White Bagging 2023: A good update from Drug Channels discusses white bagging in healthcare, and whether it's saving money or simply shifting costs. (Link) CMS Nursing Home Staffing Ratio Controversy: A CMS study revealed there's no single minimum staffing requirement for nursing homes. The Biden Admin had been hard at work trying to come up with an answer to the staffing ratio requirement in SNFs, but found that "there was no single staffing level that would guarantee quality care, although the report estimated that higher staffing levels would lead to fewer hospitalizations and emergency room visits, faster care, and fewer failures to provide care." Oddly, KFF noted that the 'widely anticipated' study had been published…in error? Lots of controversy and heat surrounding this study, with folks disagreeing with the CMS instructions to the contractors for research methodology and more. (Link)   Other Updates: Oscar Health's New Hires: Oscar Health is opening its doors to ex-Aetna execs to steady the ship. (Link) Humana's Legal Stand: Humana is suing the federal government over backtracking on the fee for service adjuster payment methodology in Medicare Advantage risk adjustment. (Link) Bright Health's Wind-Down: The insurtech provided an update on its ACA wind-down, stating its near completion of claims runout. (Link) Akili's Model Shift: Akili Interactive Labs pivoted away from its prescription model, opting for a DTC route, and also resulting in a 40% workforce reduction. (Link) J&J's Massive Split: J&J undertook a $40 billion spinoff to further its pharmaceutical and medical technology growth. (Link)   Partnership & Product Announcements: HCA expands partnership with Google Cloud: HCA Healthcare partnered with Google Cloud to incorporate Generative AI into hospitals, and Google announced a number of AI and expanded LLM access with its healthcare customers including HCA, Mayo, and others. Lots of stuff going on in the cloud between this and Microsoft-Epic-Nuance and Oracle-Cerner. (Link) Anthem's Virtual Health: Anthem Blue Cross and Blue Shield released the Anthem Link Virtual First Health Plans to enhance members' accessibility to affordable care options. (Link) A Notable Launch: Notable launched Notable Assistant. The goal of Assistant is to provide patients with a single entry point to health system services & info for any scheduling or access needs. (Link) Community Health's Virtual Expansion: Community Health Systems announced the expansion of virtual sitting services to 29 hospitals. (Link) Humana's In-Home Care: Humana introduced an in-home care program for seniors via CenterWell in Georgia and Louisiana. (Link) Oracle's Care Innovation: Oracle introduced some new capabilities in its 'next gen' EHR focused on transforming patient and provider experiences. (Link) Mercy's Home Program: Mercy initiated its inaugural Hospital-at-Home program in St. Louis. (Link) 24/7 Virtual Care: Atrium Health launched a digital front door for patients, now offering around-the-clock virtual primary care services. (Link) Oura partnered with teletherapy platform Talkspace to integrate health tracking with teletherapy services. (Link) UW Health introduced a program where selected patients received hospital-grade care at home. (Link) Headspace teamed up with Intermountain's Castell to enhance access to behavioral health resources. (Link) Covenant Health furthered its hospital-at-home initiative to deliver comprehensive healthcare directly to patients' homes. (Link) Albertsons allied with Bicycle Health to facilitate opioid treatment in 17 states. (Link) KeyCare posted a good update on its progress over the past year, including notching its $28M Series A and a number of partnerships with health systems. (Link). KeyCare also announced a partnership with Parkview Health to provide patients with 24x7 virtual healthcare through its Epic-based platform, a distinct integration advantage over competitors. (Link) In late August, Alo formed a CIN in collaboration with Blue Cross NC (Alo is the physician enablement JV formed in November '21 between BC NC and Deerfield Management). Alo also partnered with Innovaccer on VBC analytics and its data platform. "The Alo CIN currently has more than 30 participating independent practices and provider groups that share a passion for delivering high-quality care and better value to more than 100,000 covered lives throughout North Carolina." (Link) Geisinger expanded its partnership with Best Buy Health and Geek Squad to bolster tech-driven care at home. (Link) Navina and Privia Health collaborated to empower physicians using transformative AI technology. (Link) CHS collaborated with Mindoula to introduce virtual behavioral health services to its 700 affiliated PCP offices. (Link) GE HealthCare partnered with Mayo Clinic to speed up advancements in imaging and AI. (Link) Mark Cuban Cost Plus Drug Company partnered with COPD Foundation to expand access to Tiotropium Bromide Inhalation Powder for chronic obstructive pulmonary disease patients in the U.S. (Link) GoodRx joined forces with Walgreens to reduce prices for 200 medications. (Link). GoodRx also formed a partnership with MedImpact for prescription drug discounts. (Link) Dana-Farber and Beth Israel Deaconess announced plans to open a standalone cancer center. (Link) Kroger Health partnered with Performance Kitchen in a food-as-medicine play to provide medically tailored meals for chronic conditions. (Link) Carrum Health announced its affiliation with the White House CancerX Initiative to expedite innovative cancer care solutions. (Link) ShiftMed partnered with Hennepin Healthcare for on-demand, W-2 workforce solutions. (Link) Tampa General Hospital adopted the ThinkAndor Virtual Hospital system. (Link) Intermountain's Select Health partnered with Mark Cuban Cost Plus Drugs to increase transparency and provide lower prices for members. (Link) Dock Health partnered with DPC player Hint Health to bring its task management and workflow automation tool to Hint. (Link) Ophelia partnered with MSK provider Vori Health to help address pain without use of opioids. (Link) SCAN Group invested in Guaranteed's hospice technology services that prioritize inclusivity. "The decision to join forces with SCAN Group marks a strategic step forward in Guaranteed's goals of expanding end-of-life care delivery among vulnerable underserved aging adults, according to McGlory." (Link)   Fundraising Updates Ibex raised $55 Million (Link) Integral raised $7M (Link) Scala Biodesign raised $5.5M (Link) Arialys raised $58M (Link) Bold raised $17M (Link) Sempre Health raised $20 Million (Link) Carenostics raised $5 Million (Link) AWAK raised $20M (Link) Summus raised $19.5M (Link) CardioOne raised $8M (Link) Awell raised $5M (Link) Take Command raised $25M (Link) Corti raised $60 Million (Link) Vivante Health raised $31M (Link) Allina Health raised $30M (Link) Amenities Health raised $10M (Link) Mural Health raised $8M (Link) Corti raised $60M (Link) Inbound Health raised $30 Million (Link) Intuition Robotics raised $25M. (Link) QuantHealth secured $15M. (Link) Kyros raised $10.5M. (Link) TapestryHealth announced a $25M credit investment. (Link) HOSPITALOGY TOP SEPTEMBER READS My favorite healthcare essays from the week   Value in Risk: Lumeris wrote a nice article on how two-sided risk models need to be the norm for the future of value-based care. I wholeheartedly agree, considering it's called risk for a reason! "two-sided risk Accountable Care Organizations (ACOs) generated savings over double the amount per beneficiary compared to their one-sided counterparts." (Link)   Orthopedic Care Evolution: McKinsey wrote a nice analysis on enhancing U.S. orthopedic care through identification of patient-centric pathways. (Link)   Carbon Health's Ayokunle Omojola penned a great analysis and thought-provoking piece on How to build sustainably differentiated tech enabled healthcare services businesses: "My hypothesis is that innovations in reimbursement, operations, or patient acquisition correlate more highly with success, than clinical innovations do. Even if you discover an approach with better clinical outcomes for patients, unless you also have figured out the economics in advance, you'll likely be out of business before payors adopt it (because there's no actual urgency for them to adopt it)." (Link)   A Bain & Company's survey revealing that 80% of US healthcare providers have accelerated IT and software expenditure, with AI as a primary focus. (Link) Thanks for the read! Let me know what you thought by replying back to this email.   — Blake   Get your brand in front of 22,000 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.