Healthcare Industry Trends  *  ABL Member News  *  January 23, 2018

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  • Vijay Amarshi, PCYNE.

    Vijay is Founder and CEO of PCYNE, a creative agency for healthcare that creates and manages content for digital displays within hospitals and pharmacies, which he founded in 2011. Through digital signage and other mediums, PCYNE's clients can disseminate information to staff and patients in a simple, yet engaging manner. Vijay is concurrently Creative Director of 986 Pharmacy, which he founded in 2014. Early in his career, while still earning his BS in Biochemistry from USC, in 2009, he gravitated to the creative field, first as the President of PKPromotions, then with marcom agencies Deutsch, as a Creative Digital Assistant, and Bayard Advertising, as an Account Executive. Post-graduation, he segued into his serial entrepreneurial career as the Director of Sales for Cyne Media, and Co-Founder and Creative Director of Newjoco. Vijay has joined the Los Angeles Round Table.

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    Hospitals Are Playing Gotcha! with Big Pharma - at Last 

             Everyone from politicians to 80% of consumers have been complaining about high drug prices. But at last, a group of hospitals are actually doing something about it.

             Like a frog in tepid water, generic drug prices have been slowly rising for years. But, in October 2016, the frog jumped when the American Hospital Association and Federation of American Hospitals released a survey that gathered pricing data from 712 U.S. community hospitals and two GPOs with several key findings, including:

    • Inpatient Drug Spending had increased on a per admission basis by 38.7% ($990/patient) between FY2013-15 - due to growth in unit price, not volume

    • Over 90% of Hospital Administrators Reported that Higher Drug Prices had a Moderate or Severe Impact on their Budgets

    • Inpatient Drug Spending Growth Eclipsed Retail Prescription Drug Spending Growth.

             As Scott Knoer, chief pharmacy officer at the Cleveland Clinic, said at the time of the survey's release, "With these drug prices so far outpacing the consumer price index, hospitals are struggling to come up with trade-offs to preserve access to affordable care for our patients."

             Obviously, some key decision makers read the report, took it seriously, and now four nonprofit health systems - Intermountain Healthcare, Ascension, SSM Health, and Trinity Health, which together run over 300 hospitals - are ready to start manufacturing and marketing the generic drugs that have been breaking their budgets. Intermountain, which is known for its clinical cost accounting expertise, is leading the quartet of hospitals in this newco. And, as the person responsible for leading the initiative, Dan Lijenquist, VP of the enterprise initiative office at Intermountain, said: the new nonprofit will set its own prices, and will "understand our production costs really well" - without having to report to Wall Street.

             Already, clients - like the VA and other hospitals around the country - are lining up to purchase the tablets, patches, and sterile injectable medicines the group plans to make. And, hospitals aren't the only ones ready to support this bold move: philanthropists are also expressing their interest, according to Liljenquist, "because they are interested in solving this problem."

             Who isn't?

             Percent Change in Key Pharmaceutical Prices/Unit Used in Hospitals CY2013 to CY2015:





    Single-Payer Debate Resurges in California; Opposition from Health Providers Ramps Up

    The political battle lines over single-payer healthcare in California are growing starker, with an alliance of doctors, dentists, nurse practitioners, and other health providers ramping up their opposition to the proposal. In a letter to legislators, the coalition blasted Senate Bill 562 as a proposal that "would dismantle the healthcare marketplace and destabilize California's economy." The emergence of heavy-hitting healthcare groups such as the California Medical Assn., California Dental Assn. and California Pharmacists Assn. signals an escalation in the opposition to the legislation, under which the state would foot the bill for nearly all medical expenses of its residents. Until now, the measure was primarily opposed by health plans and business groups. One member of the new coalition, Kaiser Permanente, has been vocal in its opposition to the bill for months, but the group's other members have so far been muted in their criticism. They're squaring off against the ardent backers of the legislation, including the progressive flank of the Democratic Party and the California Nurses Assn., the bill's sponsors. (, 1/17/18)

    CMS Announces New Payment Model for Inpatient and Outpatient Care

    The CMS Center for Medicare and Medicaid Innovation recently announced the launch of a new voluntary bundled payment model, called Bundled Payments for Care Improvement Advanced (BPCI Advanced). Under traditional fee-for-service payment, Medicare pays providers for each individual service they perform. Under this bundled payment model, participants can earn additional payment if all expenditures for a beneficiary's episode of care are under a spending target that factors in quality. Participants may receive payments for performance on 32 different clinical episodes, such as major joint replacement of the lower extremity (inpatient) and percutaneous coronary intervention (inpatient or outpatient). Of note, BPCI Advanced will qualify as an Advanced Alternative Payment Model under the Quality Payment Program. (, 1/9/18)

    New HHS Religious Freedom Office Will Address Provider Concerns

    HHS has announced the creation of the Conscience and Religious Freedom Division within its Office of Civil Rights. The office will protect doctors, nurses, and other clinicians who refuse to perform abortions and other medical procedures, such as sex-reassignment surgery or fertility treatment to lesbian couples. The federal Emergency Medical Treatment and Active Labor Act prevents clinicians and hospitals from turning people away if they're in need of emergency care. But providers, even those who are usually held to high standards in order to receive Medicare or Medicaid payment, can refuse patients as long as they don't discriminate against them based on race, religion, or gender. The Department of Justice has said sexual orientation is not a protected category despite President Barack Obama's moves before leaving office to protect patients under gender identity. (, 1/18/18)

    Trump Administration Clears Way to Force Some Medicaid Enrollees to Work

    The Trump administration has initiated a pivotal change in the Medicaid program, announcing that for the first time the federal government will allow states to test work requirements as a condition for coverage. The announcement came in a 10-page memo with detailed directions about how states can reshape the federal-state health program for low-income people. The document details who should be excluded from the new work requirements - including children and people being treated for opioid abuse - and offers suggestions as to what counts as "work." Besides employment, it can include job training, volunteering, or caring for a close relative. Ten states have applied for a federal waiver to add a work requirement: Arizona, Arkansas, Indiana, Kansas, Kentucky, Maine, New Hampshire, North Carolina, Utah, and Wisconsin. Officials in several other states have said they are interested in the idea. While 74+ million people are enrolled in Medicaid, only a small fraction would be affected by the work requirement. That's because children, who make up nearly half of Medicaid enrollees, are excluded. So are the 10+ million people on Medicaid because they have a disability. More than 4 in 10 adults with Medicaid coverage already work full time, and most others either go to school, take care of a relative, or are too sick to work. (, 1/11/18 Subsequently, CMS approved a Section 1115 demonstration waiver in Kentucky, which includes a work requirement as a condition of eligibility for Medicaid (with eligibility suspended for non-compliance). (, 1/17/18)

    California May Buck Congress with its Own Health Insurance Requirement

    With Congress ending the requirement that all Americans have health insurance, California leaders are preparing to counter that move by securing healthcare for as many residents as possible in a fortified state insurance exchange. State lawmakers say they will present a package of health-related proposals in the coming weeks, before a Feb. 16 deadline for new bill introductions. Details are still developing, but officials and healthcare advocates say discussions focus on ways to maintain the exchange's high enrollment and help still more Californians obtain insurance. The outcome may or may not include a state version of the mandate the federal government repealed, effective next year. Across the country, states that created their own exchanges like California did are similarly engaged. Maryland lawmakers, for example, are trying to adopt a mandate that residents have health insurance or pay a penalty. Alternatively, the equivalent of the penalty could be used as a kind of downpayment on a healthcare plan. (, 1/21/18)


    Healthcare Has Become U.S.'s Largest Employer

    In the last quarter, for the first time in history, healthcare has surpassed manufacturing and retail, the most significant job engines of the 20th century, to become the largest source of jobs in the U.S. In 2000, there were 7 million more workers in manufacturing than in healthcare. At the beginning of the Great Recession [~Dec. 2007], there were 2.4 million more workers in retail than healthcare. In 2017, healthcare surpassed both. There are several drivers of the healthcare jobs boom. The first is that Americans, as a group, are getting older. By 2025, one-quarter of the workforce will be older than 55. That share will have doubled in just 30 years. The graying of the nation will have widespread economic and political implications, like declining productivity and electoral showdowns between a young, diverse workforce and an older, whiter retirement bloc. But the most obvious effect of an aging country is that it needs more care - and that means more workers. Second, healthcare is publicly subsidized, in several ways. Most directly, the U.S. spends hundreds of billions of dollars each year on Medicare, Medicaid, and healthcare benefits for government employees and veterans. More subtly, the U.S. subsidizes private insurance in several ways, including through a tax break for employers that sponsor healthcare. This public support makes healthcare employment practically invincible, even during the worst downturns. Incredibly, healthcare employment increased every month during the Great Recession [Dec. 2007 to June 2009].
         Third, the two most destabilizing forces for labor in the last generation have been globalization and automation. Together, they have hurt manufacturing and retail by offshoring factories, replacing human arms with robotic limbs, and dooming fusty department stores. But healthcare is substantially resistant to both. Recently, the growth in healthcare employment is stemming more from administrative jobs than physician jobs. The number of non-doctor workers in the health industry has exploded in the last two decades. The majority of these jobs aren't clinical roles, they are mostly administrative and management jobs. This isn't the end of healthcare's run; it's just the beginning. Of the 10 jobs that the Bureau of Labor Statistics projects will see the fastest percent growth in the next decade, five are in healthcare and elderly assistance. The two fastest-growing occupations - personal-care aides and home-health aides - are projected to account for one in every 10 new jobs in that time. The entire healthcare sector is projected to account for a third of all new employment. (, 1/9/18)

    Hospitals Plan to Produce Generic Drugs in Bid to Fix Troubled Market

    Four major U.S. hospital systems are planning to launch a nonprofit company to produce generic drugs, in what they called a bid to fix a market where soaring prices and shortages have hampered medical care. The nonprofit systems - Intermountain Healthcare, Ascension, SSM Health, and Trinity Health - said their firm will seek FDA approval to manufacture and market generic drugs. Hundreds of hospitals owned by Intermountain and its partners will be possible customers for the new drug company, but it will be open to others, Mr. Liljenquist said. (, 1/18/18) [For additional "back story," see Mimi Grant's blog, "Hospitals are Playing Gotcha! with Big Pharma - at Last," above in this newsletter.]

    California Flu Deaths Rise to 74, a Huge Increase Over a Year Earlier

    The number of Californians who have died from the flu has risen to 74 as of the second week of January - five times the number seen at this point last year, according to figures released by state health officials, including 32 people during the second week of January, more than double the 15 deaths from the previous week. The state tracks flu deaths only among those younger than 65, because health officials say it's a more accurate measure of the severity of a flu season. This is in part because older people generally have weaker immune systems and their vulnerability to illnesses makes it more difficult to pinpoint the flu as the singular cause of death. (, 1/19/18)
          Meanwhile, a study finds that the flu may be spread just by breathing:  Until now, most people thought you caught the flu after being exposed to droplets from an infected person's coughs or sneezes, or by touching contaminated surfaces. But a new study in the Proceedings of the National Academy of Sciences reveals that we may pass the flu to others just by breathing. The study, which included researchers who are now working at San Jose State University and UC Berkeley, offers new evidence on the importance of the flu's airborne qualities and how it can easily be transmitted to others. Researchers found large quantities of infectious viruses in the breath exhaled by those suffering from the flu. The researchers believe that their findings could be used to improve mathematical models about the risk of airborne flu transmission from people with flu symptoms, and may help control and reduce the impact of influenza epidemics and pandemics. Improvements also could be made to ventilation systems to reduce transmission risk in offices, school classrooms, and subway cars, for example, the study said. For now, the researchers and public health experts say everyone should heed the advice to stay home, if possible, when they're starting to come down with the flu to prevent the virus from spreading. (, 1/18/18)

    New Blood Test Can Detect Early Signs of 8 Kinds of Cancer

    Scientists have developed a noninvasive blood test that can detect signs of eight types of cancer long before any symptoms of the disease arise. The test, which can also help doctors determine where in a person's body the cancer is located, is called CancerSEEK. Its genesis is described in a paper published recently in the journal Science. The authors said the new work represents the first noninvasive blood test that can screen for a range of cancers all at once: cancer of the ovary, liver, stomach, pancreas, esophagus, colon, lung, and breast. Together, these eight forms of cancer are responsible for more than 60% of cancer deaths in the U.S., the authors said. In addition, five of them - ovarian, liver, stomach, pancreatic, and esophageal cancers - currently have no screening tests.
         CancerSEEK, which builds on 30 years of research, relies on two signals that a person might be harboring cancer. First, it looks for 16 telltale genetic mutations in bits of free-floating DNA that have been deposited in the bloodstream by cancerous cells. In addition, CancerSEEK also screens for eight proteins that are frequently found in higher quantities in the blood samples of people who have cancer. By measuring these two signals in tandem, CancerSEEK was able to detect cancer in 70% of blood samples pulled from 1,005 patients who had already been diagnosed with one of eight forms of the disease. Finally, the researchers used machine learning to determine how different combination of proteins and mutations could provide clues to where in the body the cancer might be. The authors found they could narrow down the location of a tumor to just a few anatomic sites in 83% of patients. (, 1/18/18)


    Alvaka Provides Insights on Power Management & Meltdown/Spectre Cyber Threats

    On January 30, Alvaka Networks will host a Lunch & Learn session - Power Management: Don't lose money to bad power!, from 11:30 a.m. to 1 p.m., in Irvine. Dan Coffman, CEO of UPS Protection, will discuss how protecting the infrastructure that your business relies on can help prevent excessive costs due to unforeseen power interruptions. With outages being an unavoidable occurrence, it's critical that companies get protection for their systems. By being proactive in their power protection needs, companies can save money that would otherwise be spent on the effects of power disturbances.  Meanwhile, Alvaka has published two blog posts: Meltdown & Spectre: How to avoid the biggest cyber threat in modern computing and "Are the risks from Meltdown and Spectre overblown?" asks an IT professional. (Oli Thordarson, Orange County)

    Cigna Announces Agreement with Catasys for OnTrak

    Catasys, Inc., a provider of proprietary predictive analytics and integrated treatment solutions to health plans, has entered into an agreement with Cigna Corporation for Catasys' OnTrak solution for certain members with anxiety, depression, or substance use disorders - behavioral health conditions that exacerbate co-existing medical conditions. The first market is expected to launch in Q1 2018. The agreement with Cigna marks the sixth national health plan that has signed a contract to provide Catasys' OnTrak solution to its members. The program is currently available in 19 states through six of the eight largest health plans in the nation. (from Catasys: Rick Anderson, West Los Angeles Technology; from Cigna: Chris De Rosa, Orange County)

    ElderConsult Geriatric Medicine's CEO to Discuss Pain's Impact on Seniors

    On the evening of February 1, Elizabeth Landsverk MD, of ElderConsult Geriatric Medicine, will lead a presentation, entitled Elders and Pain: Making Life Worth Living, as part of the Medical Doctor Lecture Series, in Foster City. (Elizabeth Landsverk MD, Bay Area)

    GeBBS' Services Selected by Guam Regional Medical City

    Guam Regional Medical City (GRMC), a 136-bed acute care hospital located in the U.S. territory of Guam, has selected GeBBS Healthcare Solutions' outsourced Medical Coding Services to help them enhance their revenue stream, improve productivity, and enhance their coding activities. GRMC offers world-class medical care to the residents of Micronesia. (Nitin Thakor, Los Angeles)

    King & Spalding Honored in Five "Practice Group of the Year" Categories

    Law360 has named King & Spalding (K&S) among its Practice Groups of the Year for 2017 in five categories: Health, Life Sciences, Employment, International Arbitration, and Product Liability. The firm was among only nine globally to win across five or more categories.  Also, Travis Jackson wrote an article - How to make health care more efficient, effective - for Chain Drug Review, where he discusses alleviating the regulatory burden on providers, expanding value-based care in Medicare Advantage, enhancing state flexibility for health coverage reforms, and more.  Meanwhile, on January 29, from 10-11:15 a.m. Pacific, K&S will hold a webinar - Insurance Coverage for False Claims Act Investigations and Healthcare Regulatory Matters, which will arm attorneys involved in representing providers with information to help them spot coverage issues.  And, on March 19, in Atlanta, K&S will present its 27th Annual King & Spalding Health Law & Policy Forum, a one-day conference focusing on the latest legal and political developments impacting the healthcare industry. (Marcia Augsburger, Sacramento, & Travis Jackson, Los Angeles)


    Mazzetti Merges with Engineering Firm in Atlanta

    Mazzetti Inc. has merged with Atlanta-based PerryCrabb, a group of progressive engineers who serve the Southeast U.S. The resultant company will retain the Mazzetti Inc. name. "With the increasing nationalization of healthcare systems, facility owners need national design providers that can respond to their evolving needs," said Walt Vernon, Mazzetti CEO. "The merger unites the market leader in healthcare engineering and technology consulting with a nationally recognized engineering and strategic energy management firm." The combined firm will have a staff of 200 and 11 locations: Irvine, Sacramento, and San Francisco, CA; Denver, CO; Atlanta, GA; Portland, OR; two offices in Nashville, TN; Dallas, TX; Seattle, WA; and Bengaluru, India.  Meanwhile, Walt has written U.S. Healthcare Funding - Is this what we want for our country? - in which he shares his insights from reading the book, The Healing of America, by T.R. Reid. (Walt Vernon, Bay Area)

    NorthBay Healthcare Urgent Care Opens in Vacaville

    NorthBay Urgent Care, Solano County's first retail-based urgent care clinic, opened January 10 in the Nut Tree Plaza, as an affordable and convenient alternative to the hospital ER. For the clinic, NorthBay Healthcare has partnered with Direct Urgent Care, a pioneer in operating high-tech, patient-centric urgent care centers in the San Francisco Bay Area. The 4,000-square-foot center features onsite x-ray, laboratory, some pharmacy services, and accelerated test results within minutes. Expectations are 30 to 40 patients per day will be seen for low-acute illnesses. (Elnora Cameron, Bay Area)

    Oscar Health Expects to Generate $1 Billion & Sign Up 250,000 Members in 2018

    A recent article on reports that Oscar Health expects to pull in nearly $1 billion in revenue and enroll a quarter of a million members in 2018. The prediction is based on open enrollment numbers so far [as of the December 21, 2017 article] - Oscar said it has seen a 150% uptick in enrollments for 2018, compared to the previous year, and expects to hit that 250,000 number if it stays on track. Earlier this year, Oscar Health started expanding beyond individual plans by rolling out a product for small businesses called Oscar for Business. Regarding the $1 billion revenue target, Oscar said it's a combination of membership growth in existing markets, expansion into new markets, and premium revenue growth. The projected $1 billion is up from over $300 million in 2017 premium revenue. (John Puente, Sacramento)

    Select Data Examines CoPs Breakdown on New QAPI Regulations

    A new article from Select Data provides updates on CMS's Medicare and Medicaid Conditions of Participation (CoPs), which are the minimum health and safety standards a home health agency must meet in order to participate in the programs. CoPs Breakdown on the New QAPI Regulations reports that on January 13, the rules for the Quality Assessment and Performance Improvement (QAPI) regulations changed - the new section highlights the responsibilities of the agency's executive team and expects the governing bodies to focus on technology concepts like data-driven indicators to identify, track, and measure quality initiatives for high-risk, high-volume, or safety issues. Select Data's article discusses the program's five standards: scope, data, activities, performance improvement projects, and executive responsibilities. (Ed Buckley, Orange County, & Ted Schulte, Los Angeles)

    The Health Trust Taking Part in "Food is Medicine" Initiative in California

    A recent Bay Area Reporter article highlighted a pilot program to feed low-income people with chronic illnesses after they have been discharged from the hospital. The "Food is Medicine" initiative launches statewide in California this month, with a goal to keep enrolled patients from being readmitted to the hospital, while saving the state money on the cost of providing healthcare to the individuals. The Health Trust is participating in the program, officially known as the Medi-Cal Medically Tailored Meal Pilot Project. State lawmakers have approved $6 million to launch the pilot, which will target 1,000 Medi-Cal patients who have chronic diseases. The Health Trust expects to sign up 150 people in Santa Clara County over the coming months for the program. (Todd Hansen, Silicon Valley)

    VivaLNK Announces Developers Program for New eSkin Technology

    VivaLNK has announced Vital Scout, a wellness assessment patch for medical-grade accuracy not seen before with wrist-worn devices. The patch, worn over the chest with adhesives, is about the size of a band-aid and uses electrocardiography and 3D accelerometer sensors to monitor Heart Rate, Respiration Rate, and Heart Rate Variability with specialized algorithms to determine the user's level of stress, recovery, duration and quality of sleep, and activity/ exercise intensity. Notably, Vital Scout includes a lifestyle management application, which provides actionable insights. Due to the great interest for reliable biometric data, VivaLNK is open to connecting with businesses in the health and wellness space, and has created a program so that developers can interact with Vital Scout data in their own applications, products, and services: Click here to learn more. (Jiang Li, Silicon Valley)


    Eckert & Ziegler Buys Manufacturer of X-Ray Devices

    Eckert & Ziegler BEBIG GmbH is acquiring WOLF-Medizintechnik GmbH (WOMED), a Thuringia (Germany)-based manufacturer of X-ray devices for the treatment of superficial skin tumors and joint diseases. WOMED has approximately 15 employees and anticipates sales of almost $3.6 million in the current fiscal year. Aside from existing revenue from WOMED, additional sales and profits are expected through the expansion of the product portfolio, including the launch of a device for intraoperative radiotherapy. X-ray therapy is a radiation therapy treatment method that is used for the treatment of cancerous diseases, as well as in the therapy of benign diseases, primarily inflammatory and degenerative diseases such as arthritis, polyarthritis, and tennis elbow. (Frank Yeager, Downtown Los Angeles Technology)

    PeopleG2 CEO Offers Rewards for Purchase of New Book on Company Culture

    The pre-order event is now underway for The Power of Company Culture, the new book by Chris Dyer, CEO of PeopleG2. During the month of January, for those who pre-order at least 10 copies of the book, Chris has curated fabulous giveaways, promotions, webinars, coaching, and discounts as a reward for their purchase. More information. (Chris Dyer, Downtown Los Angeles Technology)

    Tanner Research CEO to Present Nutrition Science Workshop in February

    On February 8, at 6 p.m., John Tanner, Ph.D., CEO of Tanner Research, will present a Nutrition Science workshop, where he will share his story about how he suffered a near-fatal cardiac arrest in 2009. Since then, he has studied intensely the causes of heart disease, and found that it can be completely avoided through a proper diet - and cancer, stroke, diabetes, high blood pressure, and about 30 other diseases can be reduced, avoided, or reversed by this same diet. John will field questions and participants will continue nutrition discussions in small groups. The free workshop, to be held at Tanner Research in Monrovia, includes a meal and your choice of one of the top books on nutrition science. (John Tanner, Downtown Los Angeles Technology)

    Intellect on: Software Compliance in Highly Regulated Industries

    In Software Compliance in Life Science Product Industries, Intellect's Romeo Elias notes that for companies that operate in the hyper-regulated scope of the FDA, software compliance is a top priority that must meet rigorously enforced standards. There is no room for error in either medical or pharmaceutical software applications, and the greatest concerns in each area focus on electronic recordkeeping and signatures. (Romeo Elias, West Los Angeles Technology)

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