A Kaufman Hall analysis notes that the anticipated slowdown in healthcare M&As has not materialized.
Hospital volumes and revenues are slumping amid the coronavirus pandemic, but the public health emergency hasn’t slowed the pace of mergers and acquisitions, a new analysis shows.
"With 19 transactions announced in Q3, activity for the quarter was largely on par with historical third-quarter activity and was significantly above the 14 transactions announced in Q2 2020," an analysis released Tuesday by Kaufman Hall said.
The report noted that "four transformational transactions" in Q3 2020 "ties the highest number of transformational transactions that we have seen in a single calendar quarter," while the average size of seller by annual revenues was historically high, at just under $400 million.
Kaufman Hall analysis notes that the anticipated decline in healthcare M&As has not materialized, either in Q2 or Q3, and suggests that "the pandemic might strengthen the rationale for strategic partnerships, leading to a potential uptick in M&A activity as the industry continues with its repositioning."
The average price per unit across all types of insulin in the U.S. was $98.70. Other countries pay a fraction as much.
Insulin prices in the United States are more than eight times higher in the than in 32 high-income nations, a new RAND Corporation studyshows.
The average price per unit across all types of insulin in the U.S. was $98.70, higher than each of the 32 comparison countries, from 3.8 times higher than Chile to 27.7 times higher than Turkey.
U.S. prices were 6.3 times higher than Canada, 5.9 times higher than Japan and 8.9 times higher than in the United Kingdom, according to the study, which was commissioned by the Department of Health and Human Services.
The researchers relied on manufacturers' prices in the analysis, and acknowledged that the final, net prices paid by consumers are lower than manufacturer prices in the U.S. because of rebates and other discounts.
However, even when rebates and discounts cut prices in half, U.S. consumer are still likely to pay four times the average paid in other high-income nations, the study found.
"This analysis provides the best available evidence about how much more expensive insulin is in the U.S. than in other nations around the world," said study lead author Andrew Mulcahy, a senior policy researcher at RAND.
"Prices in the U.S. are always much higher than other nations, even if you assume steep discounts to manufacturer prices in the United States," he said.
A federal review of insulin price hikes found that the average U.S. wholesale price for rapid-acting, long-acting, and short-acting insulin increased by 15% to 17% per year from 2012 to 2016.
Another study found that insulin spending per person among adults with employer-sponsored health insurance doubled between 2012 and 2016, from $1,432 to $2,853 even with a 50% rebate.
It's not just consumers who are stuck paying higher prices. Medicare paid $8 billion for insulin in 2017 and one study found that the Department of Veterans Affairs could save about $4.4 billion a year if it was allowed to negotiate lower prices on insulin.
U.S. insulin is made mostly by Eli Lilly and Co, Novo Nordisk A/S, and Sanofi SA.
The study found that U.S. prices were higher for analog versus human insulins and for rapid-acting rather than short or long-acting insulins.
U.S. prices were even higher when researchers compared pooling similar insulin products together, which the researcher said indicates that the U.S. uses a more-expensive mix of insulins.
The board of directors at ARA unanimously approved the deal, which is expected to close in the first quarter of 2021.
Private equity firm Nautic Partners, LLC has announced that it will acquire outpatient dialysis provider American Renal Associates Holdings, Inc. in an all-cash deal valued at $853 million.
Under the terms, ARA shareholders will get $11.50 per share in cash, which represents a 66% premiumon to Beverly, Massachusetts-based company's closing price on October 1.
"This transaction recognizes the value of the Company and delivers a meaningful premium to shareholders," ARA Chairman and CEO Joe Carlucci said in a media release.
Carlucci said he will delay his previously announced retirement "in order to guide the company through this transaction and into its next stage."
Nautic Principal Dan Killeen said the acquisition combines "ARA management and IRC's complementary team of executives as we look to support the Company in executing against its strategic plan built on a differentiated, patient-centric approach to the renal care market."
The board of directors at ARA unanimously approved the deal, which is expected to close in the first quarter of 2021.
The agreement includes a 40-day "go-shop" period, which permits an independent board at ARA to solicit and negotiate offers from other interested buyers, with the right to nullify the deal with Providence, Rhode Island-based Nautic if they get a better offer elsewhere
One of the largest outpatient dialysis providers in the United States, ARA operates 251 clinics in 27 States and the District of Columbia serving more than 17,300 patients with end-stage renal disease.
ARA mostly relies on a business model that partners with local nephrologists to develop, own and operate clinics.
Revenues and EBITDA rose to $29.58 billion and $1.44 billion, respectively, including $826 million in CARES Act grants that were recognized as revenues across CommonSpirit's 137 hospitals in 21 states.
CommonSpirit Health on Friday reported an overall operating loss of $550 million in fiscal year 2020, which the Chicago-based health system attributed to low volumes and higher costs during the coronavirus pandemic.
"Our mission has driven our response to this pandemic and our path to recovery every step of the way," CommonSpirit CEO Lloyd H. Dean said in amedia release.
"This year has been challenging, but also deeply inspiring as we saw the resolve and courage from our healthcare workers and our patients," Dean said. "This experience has only strengthened our organization as we seize the chance to rethink how we can best deliver care and thrive long after this health crisis has passed."
Despite the pandemic, the nonprofit Catholic health system posted a modest increase in operating revenue and earnings before interest, taxes, depreciation and amortization (EBITDA) for the fiscal year ended June 30, 2020, when compared to FY 2019.
Revenues and EBITDA rose to $29.58 billion and $1.44 billion, respectively, including $826 million in CARES Act grants that were recognized as revenues across CommonSpirit's 137 hospitals in 21 states.
Dean said the CARES Act aid was critical in stabilizing CommonSpirit's financial losses during the pandemic's peak, and covered 60% of pandemic-related losses.
Adjusted admissions were down 6.2% compared to FY 2019, with volumes falling as much as 40% at many care sites in April when scheduled procedures were cancelled.
Volumes improved significantly in June, July and August, and are now only about 8% below pre-pandemic levels across all care settings, the health system said.
The health system mitigated some of the financially losses with cost-saving measures such as executive pay deductions and freezes on discretionary spending and capital projects. The system still is applying a stringent review process for new projects.
Five months after signing a non-binding letter of intent, the two health systems said the decision to stop the merger was by mutual agreement.
Advocate Aurora Health and Beaumont Health have ended merger talks, the two health systems announced jointly on Friday morning.
"We continue to have a very high regard for Advocate Aurora Health," John Fox, president and CEO of Beaumont Health, said in a media release. "But at this time, we want to focus on our local market priorities and the physicians, nurses and staff who provide compassionate, extraordinary care every day."
The merger talks began in late 2019 but were put on hold earlier this year as COVID-19 accelerated across the Midwest. Had the deal be finalized, the merged system would have included 35 hospitals, more than 650 care venues, 108,000 employees and $17 billion in annual revenues, with a presence in three states.
"We have great respect for Beaumont Health, and we continue to believe scale will play a critical role in advancing quality, accelerating transformation and reducing cost in the healthcare world of tomorrow." Advocate Aurora Health CEO and President Jim Skogsbergh said.
The proposed merger was met with growing resistance from physicians and community stakeholders and that opposition appeared to be intensifying. On Thursday, U.S. Rep. Andy Levin, D-MI, whose district includes Beaumont's Royal Oak campus, told Deadline Detroit that he would work to stop the merger.
"I simply do not accept this merger as it is currently proposed and unless I hear some facts to change my mind, I expect to make it stop happening," Levin told the news site.
Friday marks the third time in seven years that Beaumont has entered merger talks, only to see them collapse.
In 2013, a proposed merger with Henry Ford Health System was called off after Henry Ford CEO Nancy Schlichting cited "two very different perspectives (that) had emerged for the new organization between Henry Ford and Beaumont."
In May, Beaumont and Summa Health walked away from merger talks at the height of the coronavirus pandemic, but no reason was given by either health system.
Overall, the healthcare sector job growth continued to rebound in September, as the nation slowly emerges from the coronavirus pandemic shutdown, but the pace has continued to slow,
The September gains included 18,000 jobs in physician offices, 14,000 jobs in other healthcare practitioner care venues, and 16,000 jobs in home health services.
Healthcare employment is down 631,000 jobs in 2020, including 285,000 job losses in the ambulatory sector, and 116,000 jobs losses in hospitals. The healthcare sector accounted for 15.8 million jobs in September, BLS data show.
September marks the fifth consecutive month of job growth for the healthcare sector, which suffered epic job losses in the spring owing to the coronavirus pandemic. In May, the sector saw 312,000 payroll additions, mostly in outpatient care venues.
The September job report largely reflects the state of the economy in mid-month and is considered preliminary and subject to considerable revision.
In the overall economy, BLS reported that payroll employment grew by 661,000 in September, down from 1.4 million in in August, and 1.8 million in July. The nation's unemployment rate fell to 7.9%, mostly because many people had stopped looking for work.
The overall U.S. economy has shed 10.4 million jobs in 2020.
Anthem disclosed in February 2015 that hackers had infiltrated its systems beginning in February 2014 using malware installed through a phishing email.
Anthem Inc. on Wednesday announced that it had reached a multistate settlement that resolves a months-long 2015 data breach that exposed the personal information of 78.8 million customers nationwide.
Calling itself "a victim of a sophisticated state-sponsored criminal attack group," the Indianapolis-based health insurer said it had cooperated with state attorneys general throughout the investigation before agreeing to the settlement.
Anthem disclosed in February 2015 that the hackers had infiltrated its systems beginning in February 2014 using malware installed through a phishing email.
"The company is pleased to have resolved this matter, which is the last open investigation related to the 2015 cyber-attack," Anthem said in a media release. "Anthem does not believe it violated the law in connection with its data security and is not admitting to any such violations in this settlement with the state attorneys general."
The breach gave hackers access to Anthem's data warehouse, where they stole names, dates of birth, Social Security numbers, healthcare identification numbers, home addresses, email addresses, phone numbers, and employment information.
Anthem will also adhere to more stringent data security and good governance provisions designed to strengthen its practices going forward.
The settlement already cost Anthem $115 million to establish a class action settlement fund for credit monitoring and payments of up to $50 for customers.
Stakeholders say legislation to support coverage parity is needed for continued post-pandemic access to telehealth services.
A coalition of Illinois healthcare providers and patient advocates want the state's general assembly to make permanent the temporary regulatory "flexibilities" that were authorized for telehealth services during the COVID-19 pandemic.
In a letter this week to every member of the Illinois General Assembly, the Coalition to Protect of Telehealth praised Gov. J.B. Pritzker and the state's Department of Healthcare and Family Services for a March 19 executive order that "temporarily lifted longstanding barriers to service access via telehealth for commercial health plans and Medicaid."
Among other things, the executive order expanded the definition of telehealth services and access points for consumers, loosed restrictions on physician licensing, and barred private insurers from charging copays and deductibles for in-network telehealth visits.
"In response," the stakeholders wrote, "healthcare providers rapidly invested in new technology, adjusted clinical workflows and educated staff, patients, and clinicians on telehealth delivery."
However, unless state lawmakers make the executive order permanent, the coalition wrote that "providers and professionals will not have the certainty they need to continue to invest in and utilize new care delivery tools, and Illinois residents will abruptly lose access to the telehealth services they have relied on during the pandemic."
Thirty-six states had coverage parity policies in place before the pandemic, and 16 states payment parity for commercial health plans. Illinois requires neither.
For Medicaid, 21 states have coverage parity policies and 28 states had payment parity. Illinois offers limited Medicaid coverage for telehealth services and has no laws that direct the Medicaid program to treat telehealth and in-person services the same.
A federal report this summer found that 47% of Medicare fee-for-service primary care visits in Illinois were provided via telehealth in April, compared with an average of less than 1% before the COVID-19 public health emergency.
Medicare Advantage plans reported that telehealth use among beneficiaries rose by 52% this spring, and that 91% of seniors reported a favorable experience with telehealth. As in-person visits have since resumed, and while telehealth use has tapered somewhat, it still accounted for 20% of all visits by the start of June.
The stakeholders also laid out for lawmakers a 10-point plan that they said should be model telehealth reform legislation that would guarantee coverage and payment parity with in-patient services.
The Coalition to Protect Our Telehealth includes: AARP Illinois; American Nurses Association-Illinois; Association of Community Mental Health Authorities of Illinois; Health Care Council of Illinois; Illinois Association for Behavioral Health; Illinois Critical Access Hospital Network; Illinois Health and Hospital Association; Illinois Health Care Association; Illinois Occupational Therapy Association; Illinois Primary Health Care Association; Illinois Psychiatric Society; Illinois Society of Advanced Practice Nursing; Illinois State Medical Society; The Kennedy Forum; and LeadingAge.
A new study found that 27% of U.S. personal healthcare expenses were attributable to risk factors such as obesity and smoking.
Modifiable health risks such as smoking, obesity and high blood pressure have been associated with more than $730 billion in U.S. healthcare spending, according to a study published Wednesday in The Lancet Public Health.
The study, conducted by researchers from theInstitute for Health Metrics and Evaluationat the University of Washington School of Medicine, and wellness advisors Vitality Group, looked at the $2.7 trillion spent on U.S. healthcare in 2016, and determined that 27% of the spending was attributable to five modifiable risk factors, including; overweight and obesity, $238.5 billion; high blood pressure, $179.9 billion; high fasting plasma glucose, $171.9 billion; dietary risks, $143.6 billion; and tobacco smoke, $130.0 billion.
"Given that U.S. healthcare expenses are almost double that of other developed nations, we set out to understand how much of these expenses could be attributed to modifiable risk factors," said study author Francois Millard, chief actuarial officer at Vitality.
"While the relationship between lifestyle risks and medical conditions is understood, this is the first study to offer a comprehensive analysis of health spending related to such risks," he said. "This can help inform how we as a society invest our resources and why health should be part of all policy discussions, not just those related to sickness."
Researchers used IHME's Disease Expenditure Study 2016to estimate U.S. personal healthcare spending by condition, age, and sex and merged these estimates with population attributable fraction estimates for 84 modifiable risk factors from the Global Burden of Diseases, Injuries, and Risk Factors Study 2017to produce estimates of spending by condition attributable to these risk factors.
Modifiable, treatable risks were strongly linked to costly medical conditions – including cardiovascular disease, cancers, diabetes, and chronic respiratory diseases. That spending increased significantly with age, with the greatest proportion of spending associated with people aged 65 years and older (44.8%).
"Looking at risks allows U.S. to better understand where these costs start, since unmanaged risk factors often lead to more serious health conditions later in life," said study senior author Joseph Dieleman, a health economist and associate professor at IHME.
"While we can't draw conclusions about possible reductions in spending from this research, the findings illustrate the huge costs tied to poor diets, high blood pressure, smoking, and obesity," Dieleman said.
"Moving forward, it's crucial to focus on preventing and managing these key risks before they turn into costly diseases, so that more people have the chance to live a long and healthy life."
Private buyers of healthcare say they're open to government reforms and new payment strategies.
A solid majority (71%) of the nation's employers are holding firm or accelerating health benefit strategies for their workers, even as the coronavirus pandemic and the ensuing economic downturn disrupts business as usual, according to a new poll from the National Alliance of Healthcare Purchaser Coalitions
Employers are even more receptive to healthcare reforms on a variety of issues including drug price regulation (94%), hospital price transparency (90%), surprise billing regulation (81%) and hospital rate regulation (79%).
Half of employers (50%) said a Medicare public option could be very or somewhat helpful, while 21% felt it could be very or somewhat harmful. When asked about Medicare for All, 46% of employers indicated that would be very or somewhat harmful," the survey found.
The online poll was conducted in August and September with 165 employers that are members of coalitions affiliated with the National Alliance.
"Employers are maxed out as to what they and their employees and family members can shoulder for healthcare costs and they continue to be concerned about the sustainability of privately-sponsored healthcare," said National Alliance President and CEO Michael Thompson.
"Looking forward, they are working to shift market dynamics to get better value for their healthcare dollars through delivery-based strategies such as advanced primary care and centers of excellence, and there is also an increasing openness to government action," he said.
The survey also found that:
Caregiving benefits such as leave (30%) and protected time to support employee caregiving (28%) have tripled since the start of the COVID-19 pandemic.
Some employers are considering expanding allowances for emergency day care (13%) and home tutoring or teachers (12%).
Respondents said these market forces present a significant threat: drug prices (90%), lack of transparency (73%), hospital prices (71%), surprise medical bills (58%), and overuse of low-value services/waste (53%).
The top delivery and payment reform strategies employers include reducing waste and inappropriate care (61%) and narrow networks (47%).
Strategies over the next two years include hospital quality transparency (44%), hospital pricing transparency (43%), regional centers of excellence (39%), and advanced primary care (36%).
The most prevalent medical and pharmacy drug strategy employers now use is medication therapy management (49%). One in three will be considering strategies in medical and pharmaceutical drug transparency and pass through pricing (33%) the next two years.
Health and wellbeing strategies now being implemented include flexible work week (65%), total person health and wellbeing (63%), navigation and advocacy services (55%), and enhanced mental health support (49%).
Most employers are encouraging community volunteerism (71%) and engagement in community improvement (70%), and 58% said they are offering anti-racism education and cultural competency training (52%).
Over the next two years, 40% said they are considering programs for transparency and education for healthcare disparities, and access to aggregate health data by race/ethnicity.
Elizabeth Mitchell, president and CEO of Pacific Business Group on Health, said the survey illustrates that "rising healthcare costs continue to burden our businesses and employees, and they are crowding out jobs, wages, and in the age of COVID, our economic recovery."
"The results of this survey reinforce employers' justified concerns about how high drug and hospital prices, surprise medical bills and continued overuse of low-value healthcare services threaten the health and economic security of American businesses and workers," Mitchell said.
"Employers well understand that healthcare is broken and that they can no longer wait for the system to fix itself."
