#43 - Another Brick in the Wal

Humana picks greens over the mart, Verily lost its contact lens, and more from the last two weeks in healthcare

Things That Happened

Another Brick in the Wal. Earlier this year Walmart and Humana seemed locked in an acquisition dance. Now Humana appears to have found greener pastures. WSJ reported this week Humana and Walgreens are talking about exchanging equity stakes in each other, tying their fates together and settling the question of just how Humana will position itself in the new world of vertical insurance integration. 

Maybe Walmart got everything they wanted from Humana when they hired Sean Slovenski, Humana’s head of innovation, to come to Bentonville to lead their health unit. 

Screen time. reSET, the digital therapeutic application from Pear Therapeutics and Sandoz, is now commercially available. The mobile app is approved to treat substance abuse and addiction, and requires a physician’s prescription to download and use. 

Lost contact. Verily and Novartis announced they’ll be stopping work on their glucose-monitoring contact lens after finding the technological challenges too great to warrant continued attention, especially given the other potential applications for their contact lens technologies. Some have snickered at the announcement as an example of big tech’s hubris and inability to find continued success in healthcare. But that’s a shortsighted view. Failure is inherent in innovation. Nevertheless, Alphabet, Amazon, Microsoft, and Apple are the four most valuable companies in the world right now, and they’ve all stated their intentions to get into the industry in one way or another. It’s only a matter of time. 

OK Google. Google’s health unit is bulking up. After luring Geisinger’s David Feinberg to lead the charge, Google is amassing his troops. DeepMind, the UK-based Google acquisition focused on deep learning, has split off its health team to report directly to Feinberg. It’s further evidence that Google wants to start getting serious, and less experimental, about its efforts in healthcare. 

HIPAAWS Amazon Web Services has expanded the number of machine learning services they offer that are HIPAA compliant. These include speech-to-text transcription, translation, and text analytics. 

Twelve leads? Hold my beer. AliveCor’s two-lead EKG device was found to be similar in efficacy to a standard 12-lead EKG in a trial. Yes, this trial was partially sponsored by AliveCor, and it was bounded to treating patients with a type of myocardial infarction, but it’s still interesting that a device I can purchase for $99 (retail) and run with my phone is competing with a legitimate medical device. This sort of innovation, where devices are made vastly less expensive and more portable, is the sort of technological change that begets process overhaul. 

Between this EKG and Butterfly’s portable ultrasound, the number of diagnostics physicians can quickly perform with tech carried in their lab coats is expanding. 

Things To Read

“Health care requires 770 full-time workers per $1 billion of revenue collected, compared with 100 workers in other industries.” This is just one of the many interesting nuggets surfaced in an Econofact report examining the role of administrative costs in the healthcare system. 

Up and to the right. Austin Frakt unraveled the various factors at play in determining why America spends vastly more on prescription drugs than other wealthy nations last week in the NY Times. Hint: It’s the prices. Read his piece to understand exactly why, and how it got this way. 

“We have done over 50,000 sessions of data collection which is almost 100,000 hours of data being collected.” That’s Apple's fitness director Jay Blahnik quoted in Axios. They got a look at Apple’s extensive and expensive health lab where they’re doing lots of secret stuff to develop better fitness and health products. 

“The analysis showed that the price of an average hospital stay soared, with prices in most areas going up between 11 percent and 54 percent in the years afterward” This comes from Reed Abelson’s latest look at hospital prices in the wake of consolidation in the NY Times. 

It makes perfect economic sense that consolidation of supply would increase prices. It’s compounded in its effect by the fact that insurance companies - the aggregated purchasing power that should combat increased supplier power - aren’t terribly interested in actually reining in costs

Amazon's Basic Care over-the-counter drug offerings grew 19% month over month.” The basic care line includes the same generic store-branded OTC drugs like acetaminophen and omeprazole that you’d find in any Walgreens or CVS. Meg Bryant summarizes the analysis on this and Amazon’s other moves in the OTC and prescription drug space. 

Rest Unassured. In his latest disturbing inquiry into standard insurance industry practices, Marshall Allen looks into the duplicitous reimbursement protocols for CPAP machines. Patients are monitored for usage and denied payment for failing to achieve arbitrary metrics, and are forced into rental agreements that value devices at multiples of the retail price. 

This environment where value is out of whack with pricing, and where every player in the value chain points the finger up or down to explain predatory practices, is sadly widespread in American healthcare. It makes it that much easier for reporters like Allen - he could point his investigative energies at almost any condition or treatment and find similarly misleading and flawed payment practices at play. 


Thanks for reading The Healthcare Handout, a bi-weekly update on tech and business in healthcare from Isaac Krasny. Criticize, praise, hire, or otherwise get in touch with Isaac via isaac@healthcarehandout.com, or on twitter @isaackrasny

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