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DAILY UPDATE

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June 29, 2016   Download print version

Global Healthcare Exchange announces acquisition of Hap-X 

McKesson and Change Healthcare to form new healthcare IT company

Hacker looks to sell 655,000 alleged patient healthcare records on the dark web

Medtronic to expand heart failure portfolio with acquisition of Heartware International

Zika-related microcephaly case confirmed in Florida 

Why price transparency is a multiyear strategy

How telemedicine is transforming healthcare

What’s killing American babies before their first birthday?

 



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Self Study Series:
July 2016

TCO in the SPD: Forethought can lead to more economical equipment ownership and operation
by Melissa Gonsalves and Sarah Lazzara

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Global Healthcare Exchange announces acquisition of Hap-X 

Global Healthcare Exchange (GHX) announced that it has acquired Omaha, NE-based H-Card, LLC (Hap-X), a company which provides automated payment management solutions. The acquisition, GHX’s second in 19 months, expands the company’s financial products portfolio to deliver even greater payment choice and value. Hap-X will operate as a wholly owned subsidiary.

Both companies are committed to solutions for providers and suppliers in healthcare. The combined product offering gives GHX the ability to extend its healthcare solutions into a complete demand-to-pay portfolio of software and services.

 The Hap-X payment exchange will be an important component to the GHX portfolio by enabling providers and suppliers to select the best value payment type per trading partner through a multi-mode payment platform that delivers mutual benefit to each party. That benefit includes aligning payment, remittance and reconciliation information together to create operational efficiencies for both providers and suppliers.

Visit GHX for the release.

 

McKesson and Change Healthcare to form new healthcare IT company

McKesson Corporation, a healthcare services and information technology company, and Change Healthcare Holdings, Inc., a provider of software and analytics, network solutions and technology-enabled services, have announced the creation of a new healthcare information technology company.

As a separate entity singularly focused on healthcare technology and technology-enabled services, the new organization will be positioned to better respond to customer needs and deliver next-generation innovations.

The new company will offer health plans and providers a comprehensive suite of end-to-end financial and payment solutions and technologies. In addition, customers will benefit from solutions that help them manage administrative and clinical complexity as they navigate the transition to value-based care.

Under the terms of our agreement, McKesson will contribute the majority of its McKesson Technology Solutions businesses to the new company, with the exception of RelayHealth Pharmacy and its Enterprise Information Solutions (EIS) division, which will be retained by McKesson. McKesson separately announced that it will explore strategic alternatives for its EIS division.

Change Healthcare will contribute all of its businesses to the new company, with the exception of its pharmacy switch and prescription routing business, which will be owned separately by the current Change Healthcare stockholders. Change Healthcare is currently majority-owned by Blackstone.

McKesson will own approximately 70% of the new company, with the remaining equity stake held by Change Healthcare stockholders, which includes Blackstone and Hellman & Friedman.

Visit Change Healthcare for the release.

 

Hacker looks to sell 655,000 alleged patient healthcare records on the dark web

A hacker claims to be selling 655,000 alleged patient healthcare records on the dark web, containing information such as social security numbers, addresses, and insurance details.

The news was first reported by Deep Dot Web Saturday. A hacker who goes by the name ‘thedarkoverlord’ gave Deep Dot Web images of purported records. Identifiable information from the records was redacted “so the target company can remain anonymous for now,” the hacker told Deep Dot Web.

The databases are said to be from three different healthcare organizations and are being sold for between around $100,000 and $395,000, Deep Dot Web reports. One database originated in Farmington, MO, and contains 48,000 patient records, according to the report, while another from the Central/Midwest U.S contains 210,000 patient records. A third database from Georgia, U.S., has records on 397,000 patients.

In an encrypted conversation, the hacker told Deep Dot Web that the records were accessed using an exploit for Remote Desktop Protocol (RDP) that gives remote access to devices. A one-off copy of each database is reportedly being sold on TheRealDeal, a shadowy dark web marketplace that provides anonymity to buyers and sellers.

While the authenticity of the healthcare data dump is unclear, website Motherboard received a sample of just under 30 records from the alleged Georgia hack. Motherboard reports that most of the phone numbers went through to the correct person or family home. One person also confirmed the rest of their details, although the physical address was out of date, it added.

Alleged social security numbers, full names, physical addresses, dates of birth and insurance information are included in the dump.

Visit Fox News for the story.

 

Medtronic to expand heart failure portfolio with acquisition of Heartware International

Medtronic and HeartWare International, Inc. a supplier of less-invasive, miniaturized circulatory support technologies for the treatment of advanced heart failure, announced that the companies have entered into a definitive merger agreement under which Medtronic will acquire HeartWare in a transaction valued at approximately $1.1 billion.

The acquisition is expected to close during Medtronic's second fiscal quarter ending Oct. 28, 2016, subject to the satisfaction of customary closing conditions.

Medtronic's acquisition of HeartWare will expand Medtronic's portfolio of diagnostic tools, therapies and services for patients suffering from heart failure, aligning with Medtronic's Mission of alleviating pain, restoring health and extending life, and is in line with the Company's strategy to surround the physician with innovative products while focusing on patients and disease states.

HeartWare's flagship product, the HVAD System, features the world's smallest full-support ventricular assist device (VAD) and is designed to reduce surgical invasiveness, improve patient recovery times and enhance patient outcomes. In addition, HeartWare has multiple technologies in development designed to offer progressively less-invasive mechanical circulatory support options for patients with end-stage heart failure.

Healthcare expenditures in the U.S. on heart failure are estimated to be approximately $39 billion per year, making it one of the largest expenses to the healthcare system. With the aging of the population, Medtronic estimates that the number of patients with heart failure could exceed eight million by 2030.

Visit Medtronic for the release

 

Zika-related microcephaly case confirmed in Florida 

The Florida Department of Health confirmed the first Zika-related case of microcephaly in a child born in Florida whose mother had a travel-related case of Zika. The mother, a citizen of Haiti, came to Florida to deliver her baby. The department is working with the family to connect the child to services through their Early Steps program.

Microcephaly is a birth defect in which babies are born with abnormally small heads and incomplete brain development. Babies with the defect often have a range of problems including developmental delay, intellectual disability, problems with movement and balance, hearing loss and vision problems.

Visit Florida Health for the release.

Visit Florida Health for the state’s Zika update.

 

Why price transparency is a multiyear strategy

Complicating factors mean that the effort to move toward price transparency is a multiyear process for health systems. A growing number of hospitals and health systems are looking to revise their pricing structures as a necessary component of providing price transparency.

James Sink, managing director at RSM, said Monday at HFMA’s National Institute that hospitals and health systems should be prepared to take three to five years to develop “rational pricing,” which reflects their actual costs.

“They need to acknowledge it’s a multiyear transformation and requires the engagement of many different stakeholders throughout the organization,” Sink said.

Sink noted that HFMA has supported aligning prices, charges, and costs, and that hospitals may be in the best position to educate low-income, uninsured patients about their financial liability. Additionally, employers providing insurance and insurers selling coverage directly to patients have a similar price education responsibility.

Sink was told by executives at Florida Hospital that they wanted to cut prices by 25 percent to 50 percent as part of their price rationalization and transparency push. But such price cuts could significantly impact hospitals in managed care contracts.

“I think there is a lack of realization by executive leadership of the degree of sensitivity that still exists in contracts,” Sink said. Up to 20 percent of hospitals’ charges are still driven by charges from outlier provisions, stop-loss provisions, or pure percentage-based contracts, according to Sink.

Sink warned the hospital that it would lose its profitability if it cut prices by 50 percent and did not restructure its managed care agreements. The complicating factor of needing to restructure such agreements has contributed to Florida Hospital’s lengthy price transparency effort, which began in 2013.

Another complicating factor in price rationalization is the frequently wide price variation among hospitals within the same health system.

Visit HFMA for the article.

 

How telemedicine is transforming healthcare

After years of big promises, telemedicine is finally living up to its potential.

Driven by faster internet connections, smartphones and changing insurance standards, more health providers are turning to electronic communications to do their jobs—and it’s upending the delivery of healthcare.

Doctors are linking up with patients by phone, email and webcam. They’re also consulting with each other electronically—sometimes to make split-second decisions on heart attacks and strokes. Patients, meanwhile, are using new devices to relay their blood pressure, heart rate and other vital signs to their doctors so they can manage chronic conditions at home.

Telemedicine also allows for better care in places where medical expertise is hard to come by. Five to 10 times a day, Doctors Without Borders relays questions about tough cases from its physicians in Niger, South Sudan and elsewhere to its network of 280 experts around the world, and back again via the internet.

In the woods outside St. Louis, shifts of doctors and nurses work around the clock in Mercy health system’s new Virtual Care Center—a “hospital without beds” that provides remote support for intensive-care units, emergency rooms and other programs in 38 smaller hospitals from North Carolina to Oklahoma. Many of them don’t have a physician on-site 24/7. In the past year, ICUs monitored by Mercy specialists have seen a 35% decrease in patients’ average length of stay and 30% fewer deaths than anticipated.

As a measure of how rapidly telemedicine is spreading, consider: More than 15 million Americans received some kind of medical care remotely last year, according to the American Telemedicine Association, a trade group, which expects those numbers to grow by 30% this year.

The fastest-growing services in telemedicine connect consumers with clinicians they’ve never met for one-time phone, video or email visits—on-demand, 24/7. Typically, these are for nonemergency issues such as colds, flu, earaches and skin rashes, and they cost around $45, compared with approximately $100 at a doctor’s office, $160 at an urgent-care clinic or $750 and up at an emergency room.

Web companies such as Teladoc, Doctor on Demand and American Well are expected to host some 1.2 million such virtual doctor visits this year, up 20% from last year, according to the American Telemedicine Association.

The American Telemedicine Association and other organizations have started accreditation programs to identify top-quality telemedicine sites; the association also tells consumers to be wary of sites that sell products.

The American Medical Association this month approved new ethical guidelines for telemedicine, calling for participating doctors to recognize the limitations of such services and ensure that they have sufficient information to make clinical recommendations.

Telemedicine is also shaking up traditional relationships between providers and payers and fueling the rise of medical “megabrands” whose experts are increasingly competing for patients in each other’s backyards.

Insurers such as Anthem and UnitedHealth Group are offering their own direct-to-consumer virtual doctor-visit services, rather than simply paying for plan members to use those from web-based vendors.

Johns Hopkins Medicine, Stanford Medical Center, Harvard-affiliated Partners HealthCare and other academic centers are all offering remote consultation services. American Well, which supplies software for many hospitals’ telemedicine programs, hopes to become what CEO Roy Schoenberg calls “the Amazon of health care,” offering a marketplace of branded telemedicine programs from top hospitals.

The Cleveland Clinic is working to create a “Cleveland Clinic in the Cloud” that would allow patients across the country to access its physicians without going to Ohio.

Visit the Wall Street Journal for the full report.

 

What’s killing American babies before their first birthday?

The number of infants who die before their first birthday is an important measure of a nation's health, and the U.S. performs poorly. This isn't just compared with Western Europe. The U.S. ranks below dozens of other countries, including Cuba, Lithuania, and South Korea, by one measure.

Untangling the reasons behind the gap in infant mortality—or even to what extent it’s the full picture—is fraught. Nations measure and report births and deaths in different ways. A death shortly after delivery that is counted toward the tally in the U.S. may be excluded as a stillbirth elsewhere. A new economic paper attempts to explain some of this dissonance.

Differences in reporting methodology do inflate America’s infant mortality rate, compared with those in some countries, economists from Brown University, the University of Southern California, and Massachusetts Institute of Technology found. But that’s not the whole story.

When they compared data on U.S. births with those in Austria and Finland—two countries with similarly detailed reporting—the authors found that America’s mortality rate deviated after the first month of life.

One theory is that European systems provide more social support for new mothers, often including home visits by nurses or other professionals in the first months after birth.

David Olds has spent decades studying just such interventions. A professor of pediatrics at the University of Colorado, he’s led long-term randomized control trials to measure the effect of nurse visits targeted to disadvantaged mothers from pregnancy to age two.

Olds is founder of the Nurse-Family Partnership, which provides such services to about 33,000 families in the U.S. He estimates that the need for them is in the hundreds of thousands. Poverty and troubled circumstances can make it challenging to provide safe environments for children, he said. “If the mother is living in a household where she is essentially homeless, and she’s there couch-surfing with a newborn baby, her ability to protect that child is really limited,” Olds said.

The Affordable Care Act created a federal home visit program, currently funded at about $400 million a year. The program served more than 145,000 parents and children in the 2015 fiscal year, according to the Health Resources Services Administration.

“Most European countries have basically more or less universal home visiting programs,” said Emily Oster, a co-author of the paper and associate professor of economics at Brown University. “It is among the relatively few things that differs in a way that we can see that link.”

In general, the U.S. spends less on social support—and more on medical care—than other developed nations. The case that a stronger safety net could improve the country’s standing on infant mortality and other measures of health seems clear, said Paul E. Jarris, senior vice president for maternal child health at the March of Dimes Foundation.

Visit Bloomberg for the article.