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Healthcare M&A: Keep Calm and Carry On

Jun 14, 2012• 1

By Bijan Salehizadeh

With just a couple of weeks to go until we hear from the Supreme Court on the fate of Health Reform, bankers and the investment community are making grand pronouncements that M&A activity is “on hold” until the Court opines.

This is just not true as you will see below.

Here’s an excerpt with an evocative title from PEHub’s coverage of the annual Jeffries Healthcare Conference just this week (emphasis added):

PE-Backed Healthcare M&A on Hold for Election, Supreme Court Decision on Obamacare

Private equity investing in healthcare is on pause this year, according to executives speaking Wednesday on the panel “Financial Sponsors Perspectives on Healthcare Investing.” The industry is waiting to see whether Mitt Romney succeeds in overtaking President Obama. Also, dealmakers wants some clarity on President Obama’s healthcare reform bill….

Healthcare M&A has slowed this year. So far there have been 1,073 global announced M&A deals, valued at $75.3 billion. This compares to 2,729 deals in all of 2011 which totaled roughly $229.6 billion….

“Once we get clarity, and past Obamacare and the presidential election, we will see more deals,” the exec said.

The problem with this is that it might make for good reading or for an “entertaining” panel discussion at an investment banking conference, but it doesn’t reflect reality.

The Lethal Linkage of Medicaid Costs and Tuition

Jun 14, 2012• 2

By Sen. Lamar Alexander

President Barack Obama has been busy recently traveling to college campuses across the country, talking about student loan debt and pitching his proposal to keep the interest rates on some federal loans at 3.4 percent for another year. His Republican rival, Mitt Romney, also supports a one-year extension.

While I agree with both that we need to make it easier for students to afford college, the president is not telling the whole story about how we got here and how we’re going to pay to fix it.

What the president needs to tell students is that his own health care policies are the principal reason that tuition and student debt are rising.

Medicaid mandates on states are soaking up dollars that would otherwise be spent on state universities and community colleges, forcing up tuition and resulting in more student loans and debt. Even worse, the federal government is trying to make a profit by overcharging students on their current loans and using part of the profit to pay for the new health care law.

According to the Congressional Budget Office, this takeover produced approximately $61 billion for the government — $8.7 billion of which went to pay for the new health care law.

The president’s new student loan proposal would, for one year, keep rates at 3.4 percent on new subsidized Stafford loans (those for which the federal government pays interest until students graduate), rather than increasing to 6.8 percent under current law. These loans account for about 40 percent of all federal student loans. According to the Congressional Research Service, the average student takes out approximately $3,600 in these new loans and will save about $7 a month in interest payments.

Axial Makes a Deal with Mayo Clinic

Jun 14, 2012

Today Axial Exchange acquired mRemedy, a Mayo Clinic company. Axial specializes in creating hospital software that integrates information from different systems in order to help patients move from the hospital to the home.

With the acquisition of mRemedy, Axial adds a patient app called myTality, which helps patients plan for upcoming hospitalizations.

CEO Joanne Rohde founded Axial after working as the director of health IT strategy at open source software company Red Hat. Her company first started out with Axial Provider to help clinicians communicate patient information with each other. Axial later developed an app for patients that gives them relevant information before an upcoming procedure.

With the Mayo deal, Axial acquires myTality’s software and customers and will add four Mayo doctors to its advisory board. For more information, read the article over at Health 2.0 News.

Are Female Physicians Underpaid?

Jun 14, 2012• 2

By Peter Ubel, MD

In a new study published in JAMA, my colleagues and I found that even after accounting for productivity, women working as physician researchers at American Medical Schools are paid $13,000 less per year than their male colleagues, a difference that amounts to hundreds of thousands of dollars over the course of their careers.

But does this difference stand as evidence of discrimination?

Many claims of gender inequity in pay have suffered from an apples vs. oranges problem. For example, consider gender disparities across different careers. Many traditional male careers, like construction work, pay better than traditionally female careers, like nursing and teaching. It’s plausible that these disparities result, at least in part, from societal bias about how relatively important it is for men and women to make enough money to provide for their families. However, these disparities could also result from more justifiable factors. Maybe the physical demands of the work differ in important ways, or perhaps the marketplace is simply responding to supply and demand.

Medical experts have long noticed gender disparities in physician pay. Traditionally male fields like neurosurgery pay substantially more than fields preferred by more women, such as general pediatrics. If women are voluntarily choosing lower paying fields—perhaps for lifestyle reasons or maybe because they don’t value money as much as men do—then it’s arguable that we should not fret over pay disparities. It’s America, after all, where people have the right to choose.

A Funny Thing Happened on the Way to Meaningful Use

Jun 13, 2012• 22

By Rob Lamberts, MD

This July will mark the 16th anniversary of the installation of our electronic medical record.

Yup. I am that weird.

Over the first 10-14 years of my run as doctor uber-nerd, I believed that widespread adoption of EHR would be one of main things to drive efficiency in health care. I told anyone I could corner about our drive to improve the quality of our care, while keeping our cash-flow out of the red. I preached the fact that it is possible for a small, privately owned practice to successfully adopt EHR while increasing revenue. I heard people say it was only possible within a large hospital system, but saw many of those installations decrease office efficiency and quality of care. I heard people say primary care doctors couldn’t afford EHR, while we had not only done well with our installation, but did so with one of the more expensive products at the time. To me, it was just a matter of time before everyone finally saw that I was right.

The passage of the EHR incentive program (aka “meaningful use” criteria) was a huge validation for me: EHR was so good that the government would pay doctors to adopt it. I figured that once docs finally could implement an EHR without threatening their financial solvency, they would all become believers like me.

But something funny happened on the way to meaningful use: I changed my mind. No, I didn’t stop thinking that EHR was a very powerful tool that could transform care. I didn’t pine for the days of paper charts (whatever they are). I certainly didn’t mind it when I got the check from the government for doing something I had already done without any incentive. What changed was my belief that government incentives could make things better. They haven’t. In fact, they’ve made things much worse.

The NFL Concussion Crisis & The Doctor-Patient Relationship

Jun 12, 2012• 8

By Andrew Blecher, MD

If you are reading this then you are already well aware of the current concussion crisis in the NFL. No matter where on the spectrum your opinions lie regarding this topic, there is one question that still remains: How did we get here? Surely if something has gone wrong then there must be someone to blame for it. Was it the league’s fault? The coaches? The players? The doctors? Maybe it is the injury itself that’s to blame? Perhaps it was just the perfect storm of a number of factors that put us in this situation? To truly get to the bottom of this, it is important to have a better understanding of the doctor-patient relationship. Not just in general, but specifically as it applies to concussed athletes in the NFL. Ultimately we may not find blame here, but we should at least shed some light on the realities of the situation.

As a sports medicine physician, I have taken care of thousands of concussed athletes at all levels. Eight year old hockey players, high school soccer players, collegiate football players, professional moto-cross racers and skaters, you name it. For all of them, the doctor-patient dynamic is similar. However, for the NFL players, that dynamic is entirely different. Let’s begin by looking at the usual non-NFL doctor-patient relationship.

Why Doctors Interrupt

Jun 12, 2012• 10

By Juliet Mavromatis

A few weeks ago I called a neurosurgeon to discuss a patient’s recent headaches. My patient had been seen in the emergency room several days prior with the worst headache of his life. A complete work-up had not revealed a cause for the headache. Although he was found to have a small aneurysm on CT angiogram, there was no evidence of bleeding by lumbar puncture. The story, however, was slightly more complex than this. There had been several other findings that remained unexplained. One of the findings led me to discuss the patient’s case with a cardiologist. My patient had also undergone cervical spine decompression surgery several months prior to treat cervical myelopathy. I wanted to engage the neurosurgeon and get his professional opinion about my patient’s headache, which had now recurred several days after his ER visit.

The surgeon was cordial, but about 5 seconds into my story he seemed inpatient and interrupted me. “I heard about this guy,” he said, “What he needs is to be seen by one of our neurovascular specialists.” I had more I wanted to say, but the doctor did not seem to want to listen. I raised my voice slightly, interrupted him before he had a chance to end the conversation, and bulldozed through, telling the rest of the story in about two minutes. “Now we’re talking,” he said, as I explained further about a family history of clotting and my concern about a dural thrombus as a potential etiology. Together we formulated a plan that I was satisfied with–though the interaction left me with a feeling of unease.

Calculating Risk

Jun 12, 2012• 1

By Linnea Duff

Thursday I traversed the frozen surface of the pond for perhaps the last time this season. The ice is thinning quickly. I had on my rubber boots and stayed what I felt to be a safe distance from shore: should I break through, the water would not be over my head. I got some fantastic photos and considered the little adventure a success. However, over dinner that evening when I mentioned that I’d been on the pond earlier, David and Peter were furious. Peter wouldn’t calm down until I promised I wouldn’t go out again.

I have always considered fear the enemy; something to conquer and overcome and I’ve had a lot of practice. Being risk adverse and scrappy has been an asset now that I have lung cancer. As a participant in a phase I clinical trial, there is the potential for unforeseen and possibly life threatening side effects of treatment itself. Before you are given your first dose of an experimental drug, you must read through and sign consent forms which acknowledge this risk. It is something most healthy persons would never do. When you have a terminal illness, it is similar to coming to the edge of a ravine with a tiger on your trail. Between you and safety is a rickety bridge that may or may not support your weight. However, even chancy passage is an easy decision when the alternative is certain death.

What The Emergence of an EMR Giant Means For the Future of Healthcare Innovation

Jun 11, 2012• 12

By David Shaywitz, MD

(Note: the following commentary was co-authored with Tory Wolff, a founding partner of Recon Strategy, a healthcare strategy consulting firm in Boston; Tory and I gratefully acknowledge the insightful feedback provided by Jay Chyung of Recon Strategy.)

Medicine has been notoriously slow to embrace the electronic medical record (EMR), but, spurred by tax incentives and the prospect of cost and outcomes accountability, the use of electronic medical records (EMRs) is finally catching on.

There are a large number of EMR vendors, who offer systems that are either the traditional client server model (where the medical center hosts the system) or a product which can be delivered via Software as a Service (SaaS) architecture, similar to what salesforce.com did for customer relationship management (CRM).

Historically, the lack of extensive standards have allowed hospital idiosyncrasies to be hard-coded into systems. Any one company’s EMR system isn’t particularly compatible with the EMR system from another company, resulting in – or, more fairly, perpetuating – the Tower of Babel that effectively exists as medical practices often lack the ability to share basic information easily with one another.

There’s widespread recognition that information exchange must improve – the challenge is how to get there.

One much-discussed approach are health information exchanges (HIE’s), defined by the Department of Health and Human Services as “Efforts to rapidly build capacity for exchanging health information across the health care system both within and across states.”

With some public funding and local contributions, public HIE’s can point to some successes (the Indiana Health Information Exchange, IHIE, is a leading example, as described here). The Direct Project – a national effort to coordinate health information exchange spearheaded by the Office of the National Coordinator for Health IT – also seems to be making progress. But the public HIEs are a long way from providing robust, rich and sustainable data exchange.

Why the Public’s Growing Disdain for the Supreme Court May Help Obamacare

Jun 11, 2012• 3

By Robert Reich

The public’s growing disdain of the Supreme Court increases the odds that a majority will uphold the constitutionality of Obamacare.

The latest New York Times CBS Poll shows just 44 percent of Americans approve the job the Supreme Court is doing. Fully three-quarters say justices’ decisions are sometimes influenced by their personal political views.

The trend is clearly downward. Approval of the Court reached 66 percent in the late 1980s, and by 2000 had slipped to around 50 percent.

As the Times points out, the decline may stem in part from Americans’ growing distrust in recent years of major institutions in general and the government in particular.

But it’s just as likely to reflect a sense that the Court is more political, especially after it divided in such partisan ways in the 5-4 decisions Bush v. Gore (which decided the 2000 presidential race) and Citizen’s United (which in 2010 opened the floodgates to unlimited campaign spending).

Americans’ diminishing respect for the Court can be heard on the right and left of our increasingly polarized political spectrum.

A few months ago, while a candidate for the Republican presidential nomination, Newt Gingrich stated that the political branches were “not bound” by the Supreme Court. Gingrich is known for making bizarre claims. The remarkable thing about this one was the silence with which it was greeted, not only by other Republican hopefuls but also by Democrats.

Last week I was on a left-leaning radio talk show whose host suddenly went on a riff about how the Constitution doesn’t really give the Supreme Court the power to overturn laws for being unconstitutional, and it shouldn’t have that power.