Sending thoughts and prayers to the city of Asheville as it deals with extensive damage from the hurricane. Very cool to see the rapid response. Here’s how to donate if you feel so inclined.
And special shout out to Paul Keckley, who uploaded his weekly newsletter from Asheville by connecting to a local REI Outfitters wifi hub. What an absolute legend.
CVS’ Struggles Continue as the Firm Considers a Company Breakup
The WSJ reported today (paywall) that CVS is considering a company breakup. More context: Glenview Capital plans to push for changes at CVS.
I wrote about CVS’ struggles here earlier this year. TL;DR –
- CVS’ retail pharmacy business is stagnant and this space has been flat for some time. In general, the pharmacy business was built as an acquisition vehicle for foot traffic retail sales in the classical retail health model;
- The PBM business model is in a relative state of disruption and Caremark in particular lost several customers over the past couple of years;
- CVS doubled down on Medicare Advantage member acquisition, mispricing in a year of market turmoil;
- Given the above, CVS overpaid for Oak Street Health at the worst possible moment, and despite the general success of the model it’s not profitable whatsoever. I would expect to see an impairment charge come through soon.
- You also should know that the FTC has a 0.0001% impact on this decision. What’s happening to CVS is a consequence of their actions above (and I’m sure others) leading up to 2024.
So what’s the end game? You’ve heard rumblings throughout 2024 – CVS is trying to find a financial backer to move Oak Street Health off-balance sheet, and now all options are on the table. Will we see a sale of the retail business? A fire sale of certain assets?
Given the opportunity to use the CVS pharmacist workforce as an extension of its care delivery model and the MA market hitting peak bearishness, this move smells like a ‘panic sell at the bottom’ moment for CVS investors. A little patience in healthcare (and a bit more transparency) would go a long way.
Hinge Health – Going Public?
Hinge is rumored to be near IPO after hiring Morgan Stanley to run the process. Like I touched on with Sword Health’s recent raise and $3B valuation price tag, the MSK market holds rampant demand as all my dad’s friends need help with pain management after years of bad golf swing habits!
Bad golf jokes aside, these companies (Hinge, Sword, Omada) have carved out a great niche, and if this IPO happens it’ll mark the official open of the IPO window for tech-enabled services. I’m looking forward to diving into any future S-1 in the space, so stay tuned for that.
The Largest Children’s Hospitals by 2022 Net Patient Revenue – Correction
A few of you guys were gracious enough to point out that in my previous post on the largest health systems and children’s hospitals, somehow my pivot table combined the Cincinnati Children’s Hospital with Akron Children’s Hospital. And while this would be a very newsworthy merger, here’s the updated table:
The Weekly Executive Summary
Notable moves, policies, and strategies from around healthcare.
- Zing Health raises $140 million to expand access to its integrated Medicare Advantage plans focused on chronic special needs.
- Drug distributors are buying cancer specialists – and McKesson and Cardinal Health face scrutiny over their proposed acquisitions of oncology practice networks.
- McKinsey reimagines healthcare industry service operations in the age of AI.
- CDC publishes a data brief on the current state of obesity in America.
- Guardian Pharmacy prices its upsized IPO at $14.
- Median physician productivity changes vary by specialty area.
- Democrats introduce a bill to make ACA subsidies permanent.
- Private equity-backed healthcare provider outlook remains strong.
- UHS sells an 80-bed hospital to a Texas system.
- Doulas may help with the maternal health crisis but face obstacles to impact.
- Healthcare conferences to put on your calendar for 2024-2025.
- Acadia Healthcare issues a statement regarding a government investigation.
- Kaufman Hall offers guidance on choosing a Medicare Advantage plan.
- UPMC pharmacy leader warns that Cost Plus models threaten PBMs.
- Sentara cuts 200 positions, citing Medicaid redeterminations.
- Dana-Farber Cancer Institute launches the IGNITE Consortium to address health inequities in pediatric cancer care.
- 23andMe faces concerns over DNA data privacy.
- Stem cells reverse diabetes in a world first.
- Humana faces a compliance audit for Medicare Advantage diagnosis codes.
- Marathon Health expands its Open Access primary care network.
- ER overcrowding remains a challenge.
- Health systems continue to partner with Big Tech for innovative solutions.
- CommonSpirit makes six executive moves in September.
- UAB Health earmarks $380M for its Epic EHR system switch.
- OHSU files notice to become one public university health system.
- Community Health Systems announces the sale of three Pennsylvania hospitals to WoodBridge Healthcare.
- Provider compensation increases, highlighted in three charts.
- CMS finalizes a catheter rule to ease ACO concerns and provide more clarity to MSSP.
- Fertility investors turn to ancillary services as platforms remain scarce.
- Diversified Healthcare Trust announces the sale of 18 senior living communities to Brookdale.
- Ossium Health secures a BARDA contract to advance its bone marrow bank for emergencies.
- California governor vetoes a bill that would have allowed the state to ban private equity deals in healthcare.
- Wisconsin blocks the sale of SSM Health nursing homes to a New Jersey company.
- Hospital labor trends show improvement in the latest reports.
- Pediatricians linked to the peanut allergy epidemic.
- Marty Makary’s book examines how medicine can get it wrong and its implications for health.
- Trinity Health plans to grow outpatient care services.
- Hospitals in Wake County, NC expand to meet growing demand.
Recent Notable Fundraising
- Centivo raises $75 million to fix America’s broken healthcare model.
- Arya Health secures $4.0 million in seed funding led by Twelve Below to transform healthcare human capital management with AI.
- Nvidia’s venture arm backs a $17M investment in Hippocratic AI to build generative AI healthcare agents.
- Qure.AI snags $65M to expand its presence in the U.S. market.
- Luminate raises $15M to revolutionize cancer care with a hair-saving chemo helmet and home treatment solutions.
- VALD secures a significant growth equity investment from FTV Capital.
- Hippocratic AI receives investment from NVentures to build generative AI healthcare agents.
- Praia Health funds its Series A to bring an ecommerce experience to patient engagement.
Partnerships & Products
Collaborations, launches, and other tidbits to keep on your radar.
- Mount Sinai Health System partners with Noom to help patients achieve healthy weight loss outcomes using an on-demand digital health platform.
- Suki adds 12 partners as rural hospitals increasingly adopt AI technology.
- MVHC expands to offer whole-person specialty care and specialty pharmacy through a partnership with AndHealth.
- Vatica Health earns the highest score among risk adjustment vendors.
- Nebraska Medicine and Palantir announce a pioneering partnership to use AI technology to advance healthcare.
- Summit Health opens two new multispecialty healthcare facilities in Fair Lawn and Bridgewater, N.J.
- Komodo Health unveils new generative AI offerings to provide real-time insights across 330 million patient journeys.
- Hims & Hers offers access to compounded GLP-1 injections for as low as $99/month to U.S. military, veterans, teachers, nurses, and first responders.
- August Health launches a new billing and payments platform.
- Truveris collaborates with Mark Cuban Cost Plus Drug Company to reduce pharmacy benefits spending.
- Rula Health expands its virtual therapy services, now available in all 50 states.
- Next Health announces proactive healthcare and longevity centers coming to Tampa and St. Petersburg.
- Reimagine Care and Moffitt Cancer Center announce a strategic partnership to provide on-demand cancer care.
- Meridian partners with Mae to improve maternal outcomes and reduce disparities across Michigan.
- Surescripts partners with CLEAR to enhance its identity verification technology infrastructure.
Hospitalogy Top Reads
My favorite healthcare essays from the week
- The Epic origin story – a classic tale told by Brendan Keeler.
- Brightline goes direct with a candid memo on its strategic pivot. Much respect.
- Done’s Adderall production moves to China – a shocking development.
- Trilliant Health releases its annual Trends Shaping the Health Economy report
- A patient vanishes after seeking mental health care in the ER.
