Volume 28

Device Manufacturers - TCET

In its ongoing commitment to improve access to emerging technologies for Medicare patients, the Centers for Medicare & Medicaid Services (CMS) has introduced a set of principles to guide its approach. On June 22, 2023, announced its Transitional Coverage for Emerging Technologies (TCET) pathway, which aims to facilitate expedited access to state-of-the-art technologies through implementation of transparent, predictable, and efficient coverage review procedures. By reducing uncertainty surrounding CMS's evidentiary requirements for national coverage of emerging technologies, this initiative aims to foster innovation while ensuring manufacturers have a clear understanding of the criteria for obtaining coverage. As part of the process, CMS is inviting public comments to gather input on the TCET pathway and its potential impact.

So What’s the Big Deal? This regulation could impact device manufacturers, innovators, and ultimately, patients. It introduces a meticulous process to ensure investments made by taxpayers yield tangible results. For investors and medical device innovators, it is time to adopt a holistic approach that encompasses not only product design and market considerations, but also thoughtful study design. This proposed rule underscores a desire for active engagement with stakeholders, fostering a collaborative environment for shaping the future of healthcare innovation.

Envision And Corporate Practice Of Medicine

Envision Healthcare Corp., which is owned by KKR & Co., has asserted in a court filing that its bankruptcy protections should shield the company from being compelled to engage in legal proceedings related to allegations of violating California's ban on the corporate practice of medicine (CPOM). As such, Envision urged the U.S. Bankruptcy Court for the Southern District of Texas to dismiss the request made by the American Academy of Emergency Medicine Physician Group Inc. to proceed with the lawsuit. Envision argued its Chapter 11 bankruptcy status provides it with solid protection against such litigation.

So What’s The Big Deal? CPOM laws safeguard patient interests and regulate the provision of healthcare by specifying who can deliver care, and how. To minimize the impact of CPOM laws, medical practices can adhere to contract terms, communicate contractual limitations to healthcare organizations, include suitable language in physicians' employment contracts, and conduct internal audits to ensure compliance. Generally, medical practices cannot engage in the practice of medicine, but potential conflicts between CPOM laws and other regulations, such as those governing contract management groups, have come to light. The Envision case presents a valuable opportunity to explore these conflicts, which could potentially influence the future use of management services organizations.

M&A Activity Holds Steady

According to a report from PricewaterhouseCoopers, despite the healthcare sector grappling with challenges such as high interest rates, increased regulatory scrutiny, and other macroeconomic concerns, deal volumes for health services remain stable in 2023. While the analysis revealed a 4 percent decline in deal volumes and a 15 percent decline in deal value for the 12-month period ending May 15, 2023 compared to the previous year, PwC expressed optimism regarding healthcare merger and acquisition activity for the remainder of 2023. The firm argued corporate and private equity players have ample funds to invest, while health services companies must adapt and embrace change in response to the current climate.

So What’s The Big Deal? The deal-making frenzy witnessed a significant concentration in services such as contract research organizations, ambulatory surgical centers, and home infusion companies. It is clear the healthcare services landscape is gravitating toward outpatient-focused offerings, with a delightful dash of vertical integration. Brace yourselves: this trend shows no signs of slowing down. Oh, and let's not forget the hospitals themselves are embarking on cross-regional mergers like a game of healthcare chess. Strategy is the name of the game!

Walmart Expands Physician Services

Walmart has demonstrated a significant commitment to enhancing healthcare access by establishing 32 "health centers" across five states since 2019. The company's ambitious plans involve growing this number by more than two-fold by the end of next year, along with expanding into two additional states. And Walmart is not the sole major corporation expanding its healthcare services. Earlier this year, Amazon made a notable move by acquiring One Medical, a concierge practice that operates with a membership fee model and has a widespread presence across many U.S. cities. Just more evidence of the growing trend of prominent companies broadening medical offerings to meet the evolving needs of consumers.

So What’s the Big Deal? Trust and convenience. Retailers are trying to capitalize on the existing relationships they have with consumers. With Walmarts within a 10 mile radius of 90 percent of Americans, retailers’ accessibility is a force to be reckoned with. Meanwhile, healthcare providers are striding towards value-based care arrangements, aiming to enhance access and convenience while curbing overall healthcare consumption. Under this model, doctors are incentivized to keep patients hale and hearty, sharing in the savings if patients diligently take their meds and avoid hospital visits. It's a whole new money-making game, and companies like Walmart want a slice of that lucrative action.

Physicians And Private Equity

In the last eight years, there has been a consistent and noteworthy rise in strategic transactions conducted by physician groups, with an average annual increase exceeding 20 percent. And it is important to note numerous physician consolidation deals are never officially reported, a fact that highlights the extent of activity within the physician group landscape.

So What’s the Big Deal? Physicians are feeling the squeeze as reimbursements from Medicare and commercial payers continue their downward descent, leaving docs to juggle more work for less money and dwindling personal income. To combat this financial crunch, physicians are urged to embrace the world of value-based reimbursement, but adopting this new model comes with a price tag including for investment in cutting-edge EHR systems, advanced data analytics, and expert care management staff. As if that were not enough, private medical practices now face fierce competition from unexpected adversaries: mega specialty practices spanning multiple cities and retail practices. In short, moving to private equity-backed firms is a way to survive.

Aledade Makes Bank

Aledade, a notable public benefit corporation, has successfully secured more than $380 million in venture capital funding over the course of the past year. The company's series F funding round contributed $260 million, serving as a catalyst for its ongoing expansion efforts and network enhancement. Building upon its previous achievements, Aledade secured $123 million in a series E round last June, followed by an additional $100 million raised in January 2021. According to sources familiar with the matter, the latest funding agreement has resulted in a valuation of $3.5 billion for the company. This substantial influx of capital not only solidifies Aledade's financial position, but also underscores the market's recognition of its significant potential and continued growth trajectory.

So What’s The Big Deal? Aledade is making waves with more than 150 value-based care contracts, providing care to a whopping 2 million patients and managing a staggering $20 billion in healthcare spending. With a million patients under the Medicare Shared Savings Program and a quarter-million patients under Medicare Advantage contracts, Aledade's success is no surprise. As payers flock toward Medicare Advantage, it is clear companies like Aledade, which enable the transition to value-based care, are poised to thrive. After all, where there is value, there is growth!

Ethics In AI

The emergence of ChatGPT has ushered in a new era in healthcare, blurring the boundaries between science fiction and reality, and prompting the healthcare industry to contemplate the convergence of medicine and machine. In an exciting development, Stanford Medicine and Stanford Institute for Human-Centered Artificial Intelligence (HAI) have unveiled a groundbreaking initiative, Responsible AI for Safe and Equitable Health (RAISE-Health), which will tackle ethical and safety considerations associated with this transformative technology.

So What’s The Big Deal? Generative AI is a bold leap forward, but there are risks. Rapid deployment without proper regulation and oversight raises ethical concerns, shining a spotlight on trust and privacy. Without careful implementation, AI can erode trust, reinforce biases, and worsen inequality, inadvertently harming the very consumers it intends to assist. This initiative could help ensure those guardrails are firmly in place to navigate this transformative terrain.

Preventable Deaths Rise

Findings from the Commonwealth Fund's 2023 Scorecard on State Health System Performance paint a concerning picture regarding preventable deaths in several states. From 2019 to 2021, Louisiana, Mississippi, Texas, and New Mexico witnessed an alarming 35 percent surge in preventable fatalities, while Arizona experienced a staggering increase of 45 percent. The report attributes this distressing trend to the ongoing impact of COVID-19. Particularly disheartening is the revelation that women in their reproductive years (aged 15 to 44) faced a nearly 40 percent rise in mortality rates, which can be attributed to a combination of maternal deaths, COVID-19-related complications, and substance misuse. These findings underscore the urgent need for focused interventions and enhanced healthcare strategies to mitigate the adverse effects of the pandemic and address the complex factors influencing mortality outcomes.

So What’s The Big Deal? The current state of healthcare outcomes, particularly in women's health, is disheartening and it is evident that underfunding women's health services and public health measures have contributed to these worsening outcomes. This analysis is frustrating as the solutions seem clear: prioritizing adequate funding, enhancing incentives and reimbursements, and prioritizing truthful public education instead of engaging in political gamesmanship. It is imperative that we address these issues urgently to improve healthcare outcomes and ensure the well-being of women and the general public.

Congress Focuses On MACRA

After an eight-year journey since its enactment, the Medicare Access and CHIP Reauthorization Act (MACRA) is now undergoing a comprehensive evaluation. A U.S. House of Representative Energy and Commerce subcommittee is conducting hearings to assess the impact of this pivotal 2015 legislation, which replaced the Sustainable Growth Rate formula and revolutionized the determination of Medicare payments. MACRA introduced the groundbreaking Quality Payment Program, empowering physicians to select between two reimbursement pathways: the Merit-based Incentive Payment Program (MIPS) or participation in Advanced Alternative Payment Models (APMs). By enacting this law, Congress aimed to accomplish two fundamental objectives: enhancing the stability of Medicare reimbursements and incentivizing healthcare providers and practices to embrace payment models aligned with quality and care outcomes, moving away from traditional fee-for-service arrangements.

So What’s the Big Deal? It has become increasingly clear that MACRA’s goals are not being met. If we truly want pay-for-performance initiatives like MACRA to thrive, we must bridge the gap and align incentives between Medicare Advantage (MA) and Alternative Payment Models (APMs) in traditional Medicare. Additionally, it is time to ease the administrative burden, clearing a smooth path for the successful implementation of innovative payment models crafted by the Centers for Medicare and Medicaid Services Innovation Center. Together, we can unlock the true potential of healthcare payment transformation.

Opioid Addiction Treatment Disparities

The grim toll of opioid overdoses claimed the lives of approximately 82,998 U.S. residents last year. Disturbingly, a study published in JAMA Health Forum has found limited access to life-saving medications may contribute to these preventable deaths. By analyzing a vast dataset encompassing 76 million patient records from 2016 to 2018, the study reveals Medicaid patients are four times more likely to suffer an opioid overdose than those with commercial insurance. Consequently, Medicaid emerges as a primary payer for opioid addiction treatment, shouldering the responsibility for nearly 40 percent of adults under 65. It is time we address these disparities and prioritize accessible solutions to combat this pressing public health crisis.

So What’s the Big Deal? When it comes to public health, we are missing huge opportunities to save lives and curb opioid-related deaths. It is time we face the music: our failure to provide life-saving treatments is costing us dearly. The study reveals a no-brainer: people with access to opioid treatment options experienced better outcomes and lower mortality rates. Limited funding, political inertia, and deep-rooted disparities in housing, education, and economic opportunity all contribute to this crisis, but opioid treatment offers a clear-cut advantage. Medicaid plans must step up, mandating coverage for opioid treatment.

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Adam Brown

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