Welcome back to another riveting installment of Hospitalogy. I can’t wait to see my fellow Hospitalogists tomorrow in New York at Bar Veloce!

If you can’t make it to the happy hour this time around, don’t worry – we’ll run it back soon.

Onward to this week’s healthcare business news!

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Amazon shuts down Amazon Care, Pivots to One Medical

Amazon once again managed to take over many healthcare headlines this week by announcing the end of Amazon Care much to the excitement of the LinkedIn healthcare pundits. “AHA!” They exclaimed in unison from the rooftops. “Healthcare is hard. Amazon should know better.”

From the outside looking in, the headline appears as if Amazon is calling it quits on healthcare. It shut down Haven alongside JPM and Berkshire and now Amazon Care just 3 years later.

In reality, Amazon is just getting started.

Let’s think about it this way. You run a business. You’ve got two analysts doing the exact same work. One analyst has been doing the job for 15 years. She’s already got specialized models for your company built out. Meanwhile, the other analyst, while ambitious and bright-eyed, sits basically where analyst 1 sat 12 years ago.

This is the ballgame that Amazon is playing today. Rather than pursue duplicative services, Amazon is leaning into its acquisition of One Medical and the capabilities that One Medical has painstakingly built out over 15 years. It’s a no-brainer and given the continued acquisition rumors, Amazon is developing a more sophisticated healthcare game plan.

Nursing Homes, Private Equity, and Hospitals

A difficult-to-read but well written essay (soft paywall) dropped in the New Yorker this week related to the Portopiccolo Group (”PG”), a private equity firm, and its activity in the nursing home space under one of its portfolio companies, Accordius Health. The article goes into detail around the before and after of PG management, including cutting staff, curving state inspections, and general patient negligence.

PG’s strategy revolved around buying up struggling nursing homes and I can’t remember how many other articles I’ve read that harp on bad actors in nursing homes specifically. What is it about nursing homes in particular that lend themselves to exploitation? Is it the vulnerable population that can’t defend itself? Is it the lack of regulatory oversight?

My best guess here is given low reimbursement, census troubles, and staffing shortages in addition to COVID-stigma, most nursing homes are in a distressed financial state. Really the only buyers at this point (outside of the state or community) are private equity players who then implement subsequent performance improvement plans (AKA, cutting staffing ratios, reducing other expenses, trying to find higher acuity patients). Although the acquisition keeps the lights on at the facility, different problems pop up.

From a pure business and profitability standpoint, these practices work – with the glaring caveat that these seniors receive less attention and worse care. The biggest problem here is that there’s minimal oversight at nursing homes and little variance in reimbursement for care quality. Ideally, I’d love to see states support independent nursing homes to maximize the availability of discharge destinations for hospitals as well as support the proper level of patient care and give these seniors the dignity they deserve.

So how does the struggling nursing home industry affect hospitals? With fewer nurses and labor shortages in key personnel among post-acute operators, hospitals can’t find appropriate discharge destinations for acute patients. That dynamic leads to higher length of stay in the hospital and patients get stuck in the acute care setting, ultimately leading to higher costs.

Luckily states are taking notice of the dismal state of the nursing home industry. States like Texas, Kentucky, and North Carolina have bumped up Medicaid reimbursement while also implementing staffing ratio requirements and other changes.

Market Movers

Business and Strategy:

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  • VC firm General Catalyst announced a partnership with WellSpan Health in what has been an active influx of activity in 2022 – it launched a $670M fund and snagged Intermountain’s CEO Marc Harrison. GC has also announced similar partnerships with Intermountain, HCA, and Jefferson Health and aims to have several more by year end.
  • Cano Health is getting pushed to consider a sale after recent primary care buyout activity – note that Humana has a right of first refusal on a sale of Cano that exceeds a certain ownership percentage.
  • Elevance, Molina, and Centene were the big winners of California’s managed Medicaid contracts in the state starting in 2024. Medi-Cal is the largest Medicaid program in the country, covering almost 15 million people.
  • ScionHealth, the Kindred and LifePoint Health spinoff, is partnering with Cadence on a remote patient monitoring program for chronic disease management.
  • Encompass Healthcare opened a 40-bed freestanding rehab hospital in Moline, Illinois.
  • Labcorp bought RWJBarnabas Health’s outreach laboratory biz.
  • This was a good overview of Incredible Health from Pitchbook including the broader funding conversation, and why investors are targeting recruiting startups like Incredible and Nomad.
  • CenterWell announced that it’s opening 9 senior primary care clinics in and around Phoenix and is on its way to opening 100+ more MA centers by 2025. Don’t sleep on the WCAS-Humana backed venture.
  • Here are the latest nonprofit financial disclosures for UPMC and Intermountain.
  • Behavioral health M&A dipped in Q2 but autism deals held steady
  • Alma raised $130M at an $800 million valuation in its Series D as an enablement platform for mental health providers.
  • LifePoint acquired a majority interest in Springstone from Medical Properties Trust for $250 million.
  • PopHealthCare and Emcara Health partnered with Martin’s Point Health Care to boost RAF sco- er, deliver comprehensive health assessments and risk adjustment services for more than 58,000 Generations Advantage members.
  • Baptist Health South Florida is moving to Innovaccer’s cloud and analytics platform.

Regulations and Rates:

  • Pennsylvania is removing some red tape around the ability to perform procedures in the outpatient ASC setting
  • Acceptance rate for CMS’ new ACO REACH (direct contracting 2.0 program) was 47%. 142 organizations applied to the program and were not accepted. While 128 organizations were accepted, 18 applicants have withdrawn. Here’s a nice breakdown.
  • This is a great overview of the Inflation Reduction Act for healthcare as well as upcoming regulations to look forward to on the horizon.
  • CMS indefinitely delayed the controversial Radiation Oncology Model
  • Medicare Advantage is set to become the predominant plan among beneficiaries assuming the trend holds in 2023. KFF dove into more MA stats in 2022 here.


  • MGMA released a survey this week related to value-based care benchmarks and the adoption of VBC in physician practices across specialties. Overall, value-based penetration sits between 5.5% to 14.7% of revenue on average.
  • Long COVID might be keeping as many as 4 million people out of work and I have to think this is a major contributor to workforce shortages we’re seeing.
  • The Biden Admin is investing $100M into ACA navigators to assist with enrollment.
  • A federal judge in Texas ruled that EMTALA does not cover abortion services. Meanwhile, a judge in Idaho ruled the exact opposite. Shall we gear up for another Supreme Court case?

Miscellaneous Maddenings

  • So I received some interesting feedback related to my haircut based on the pic I sent out in last week’s newsletter! All I have to say is that I greatly appreciate my readers taking a distinct interest in my silky smooth flow.
  • The Manti Te’o documentary was fantastic and really makes me feel for the guy. I mean the person behind Lennay Kekua was absolutely batsh*t and he probably lost several million dollars because of her antics.
  • House of the Dragon is off to a great start – for all you Game of Thrones fans out there, I highly recommend giving the spin-off a chance!
  • On Wednesday, I’m off to NYC for the Hospitalogy and Healthcare Huddle happy hour that night! I’m staying through the weekend, so if you’re in the area and have some free time, I have a decent chunk of time Thursday to hang out.

Hospitalogy Top Reads

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Blake Madden
Blake Madden
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