Healthcare’s biggest stories, week of June 24, 2019 | The Healthy Muse

Men might be in luck. There is now a libido drug for women ON THE MARKETS. But does it even work?

Trump just issued an executive order on price transparency

He just did that.

Toda, Trump issued an executive order all about healthcare price transparency.

All bark, no bite…for now

The mandate doesn’t really do anything…yet. More or less, it just asks Health & Human Services to propose ways to increase price transparency in healthcare, specifically around the prices that insurers and providers negotiate for services rendered along with the prices that patients would pay out of pocket.

The backlash.

As you can imagine, there’s plenty of back and forth among industry players regarding the transparency push (you can read about that and my brief thoughts here), and some legal battles that are bound to take place.

Legal questions to consider: does HHS have the authority to push this type of issue? Is the forced disclosure of prices constitutional? There’s more to come — that’s for certain. Isn’t healthcare fun?

You can read all about the executive order here (paywall).

UnitedHealth: the Dealmaker.

Pac-Man Optum gobbles up more physicians.

UnitedHealth is the deal making machine in this week’s Muse after buying/closing DaVita Medical Group for $4.3 billion, healthcare payments firm Equian for $3.2 billion, (remember, JP Morgan just bought one too), and PatientsLikeMe over the past 7 days.

Tell me more about DaVita Medical Group.

The healthcare behemoth finally received FTC approval for the $4.3 billion purchase of DaVita Medical Group, with a few conditions:

UnitedHealth has to sell off DaVita’s Vegas operations (no craps for you) to Intermountain, who I’m sure is stoked about that development, and must give up a few exclusive managed care contracts in Colorado (not even a scratch).

As a reminder, DaVita Medical Group’s operations include primary care and specialist physicians, urgent care centers, and surgery centers across quite a few states. I’m sure this acquisition will be pivotal in OptumCare’s push for $100 billion in revenue by 2028.

Vertical Integration: Good, or Bad?

Bear with me, but I thought Colorado’s state attorney general’s office had some REALLY interesting comments about vertical integration in healthcare.

Since UnitedHealth-Optum is a payer (really morphing into a payer-provider at this point), and DaVita Medical Group is a provider, the two firms will integrate vertically. UnitedHealth seeks to benefit from the acquisition by directing patients to its newly acquired providers for the sake of lowering costs to its insurance plans.

Think of vertical integration almost as a completely siloed supply chain, where one company controls all inputs and outputs to the same product. This effect works especially well in healthcare, where insurance plans direct patients to specific providers and services.

So what did Colorado have to say?

Colorado was asked after the fact as to why the state didn’t further press the issue given the size of the transaction and the ever growing presence of UnitedHealthcare. The state attorney general responded with the following intriguing comments:

“We do not rule out the possibility that vertical mergers can harm competition under a RRC theory. We both voted to issue the complaint, which alleges a similar vertical theory of harm in Nevada. And given both substantially stronger facts and the significant horizontal overlap in that state, that was the right call.

“But vertical mergers often generate procompetitive benefits that must also factor into the antitrust analysis.

“A major source of these benefits is the elimination of double-marginalization, which places downward pressure on prices in the output market. We conclude that the evidence in Colorado, quantitative and qualitative, reflected both dynamics, with mixed results.

“In our view, taken together, the evidence would not have convinced a judge that the proposed acquisition was likely, on balance, to harm consumers in Colorado.

“As our colleagues note, a lawsuit based upon this evidence posed significant litigation risk. Among other things, the law on vertical mergers is relatively underdeveloped, and an adverse decision can impact enforcement in later cases that present clearer harm.

“Of course, all litigation presents risks, and sometimes the risks are worth taking. But, faced with a body of evidence of harm that was ambiguous in the first place, we cannot agree with our colleagues that this was a case on which to roll the dice.”

Final Point.

It’s interesting to note that horizontal mergers, especially in healthcare, are much more obvious and are scrutinized much more heavily than are vertical acquisitions, where there exists less precedent.

The quotes above indicate that the jury is probably still out as to whether or not vertical consolidation is good OR bad for consumers. That, or the state attorneys are looking for bigger fish to fry than a relatively small $4.3 billion deal.

TL;DR — UnitedHealthcare is everywhere.

People still don’t really understand what Medicare for All is

Who trusts survey data anyway?

Good ‘ole Kaiser Health just released the results of a Medicare for All survey, and it turns out that a lot of people in the US on both sides of the aisle really have no idea what Medicare for All is, or what the probable consequences will be from the policy.

Most new proposed policies from Democratic candidates seem to get improperly lumped under the ‘Medicare for All’ reform umbrella in one way or another. Don’t forget that #feelthebern Bernie Sanders is the original brainchild of Medicare for All.

Everything in moderation.

Moral of the story is that since healthcare is confusing, and Medicare for All is confusing, maybe a more moderate, stepwise option would make more sense — like Biden’s proposed Medicare buy-ins, or state public options run by private payers, similar to the one that just passed in Washington.

Amazon’s master PBM takedown plan was just…partially revealed

Remember when we caught a glimpse into Haven’s covert operations after UnitedHealth took the Amazon-Berkshire-JP Morgan healthcare venture to court?

Well, we just learned a little bit more about Pillpack and Amazon’s potential strategy to disrupt the PBM industry through its litigation with CVS over a former employee non-compete.

Thanks to Stat, who dug through plenty of court documents (truly saints), it looks like Amazon is aiming to cut out these gigantic middle men altogether by contracting directly with health plans and employers.

Not so fast.

It’s probably gonna take Amazon a little while to make its way into the industry.

Quick Hits

State Hits

Texas joins the state surprise billing legislation fold

Business Hits

In other deal news, Centene and WellCare just received a glowing endorsement from Institutional Shareholder Services in favor of their proposed merger. Their shareholders overwhelmingly support the deal, too.

In the IPO category, it looks like Change Healthcare is shooting for a $1 billion capital raise. If I were a betting man, I think they achieve that goal.

Tenet and Aetna just buttoned up a new 4 year deal, with an option to renew for a 5th year if the going’s good. In the northeast, CityMD and Summit Medical Group just announced their plans to merge in a pretty big partnership between a large urgent care player and provider organization. And Intermountain Healthcare and deCODE have ambitious plans to undergo the largest DNA mapping project in the U.S.

Policy/Other Hits

Another surprise billing plan was announced this week. They just keep pouring in, don’t they? And mental health looks to be a larger campaign issue during the 2020 election cycle.

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Originally published at on June 28, 2019.




I write about healthcare. Policy, business, digital health, & more. Written in plain English. Here to connect, learn, and continue the healthcare convo.

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Blake Madden

Blake Madden

I write about healthcare. Policy, business, digital health, & more. Written in plain English. Here to connect, learn, and continue the healthcare convo.

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