February 16, 2012 by TripleTree Research
According to Levin and Associates, mergers and acquisitions in the healthcare industry totaled over $227 billion, an 11% increase over 2010 and the fourth-largest year of the past decade. Even more interesting, is that the value of healthcare services deals increased 43% while technology decreased 2%. Hospital systems are moving into new communities, integrated health systems are acquiring additional delivery system assets, managed care networks are growing, and specialty care service businesses are expanding their footprint—to be well-positioned for survival in a post-reform world.
This is the type of data we shared with TripleTree’s Health Executive Roundtable–the investment bank’s “think tank” comprised of a diverse group of health industry executives with backgrounds ranging from banking, medical device, education and life sciences; to food services, technology, human capital management, and compliance.
We asked each Roundtable member: “What are the key trends that will emerge from this consolidation?”
Their independent and unique perspectives are published in:
Viewpoint: A Kaleidoscope of Insights Regarding Growth Opportunities amid Consolidation in the Healthcare Industry.
You can view and download the report here.
In addition, you are invited to participate in a webcast on Wednesday, February 29, 2012 from 12-1 pm CST where we will discuss the highlights and key themes from the report. You can register for the webcast at: https://www2.gotomeeting.com/register/771534410. After registering you will receive a confirmation email with information about joining the event.
As a preview. the following are the highlights and key themes from the report:
- Healthcare costs will increase. It’s all about supply and demand. Market consolidation sets the stage for increasing healthcare costs as fewer, large, hospital and healthcare systems leverage their size and strength during unit cost contract negotiations with payors.
- Contraction of the delivery system = expansion of demand for meaningful innovation to combat the pressures of #1. However, the only “new new things” that will survive are those that solve real problems with a scalable, cost-efficient solutions that integrate with the existing healthcare infrastructure.
- B to C solutions require B to B revenue streams. Consumer adoption is critical for demonstrating relevance, but consumers don’t typically fund high growth enterprises.
- “Health and Wellness” will transition to “Life and Well-Being.” Payers and employers will seek innovations that support life and well-being as the distinction between work, home and health become increasing blurred.
- Healthcare gaming will emerge–actually, it will explode. Gaming platforms that integrate entertainment, interaction, and achievement will be a transformational solution for driving consumer engagement and behavior change as well as provider education, training, delivery, research and cost containment.
- Electronic health records will evolve into smart health information technology ecosystems. These ecosystems will (finally) enable the coordination of care and drive shared accountability among healthcare providers.
- Doctors will be loyal to a single system. (Smart) hospitals and health systems will attract and retain doctors with mobile and wireless software applications that enhance personal income and lifestyle.
- The most disruptive solutions are likely to come from outside the traditional healthcare industry. The core assets and capabilities that fuel retail, consumer packaged goods, banking, and telecommunications, for example, can be translated into unique and meaningful healthcare solutions by companies and individuals not trapped in parochial “we’ve always done it that way” thinking.
A “perfect storm” is brewing where science and technology have no boundaries, and the convergence of reform and unsustainable medical costs are generating opportunities for change. I can’t think of a more exciting time to be in healthcare.
I look forward to your feedback via blog post comments, personal email, or during the webcast.
Archelle Georgiou
Archelle is a Senior Advisor and Chair of TripleTree’s Healthcare Executive Roundtable, and focused on creating health through innovation. You can follow Archelle on Twitter, on her blog, or email her at ageorgiou@triple-tree.com.
Posted in Uncommon Clarity | Tagged Accountable Care Organizations, ACO, doctors, EHR, Electronic Health Records, health, Health IT, healthcare, hospitals, innovation, mobile, reform, TripleTree | Leave a Comment »
February 14, 2012 by TripleTree Research
As TripleTree continues to cover the rapidly evolving opportunities associated with health reform, I have remained an optimist about the potential for the many health reform experiments included in the healthcare reform bill to create meaningful healthcare savings in the long term. In particular, I have been hopeful about the various shared savings programs to meaningfully impact cost and quality in the healthcare system, and momentum has continued to build, with CMS naming 32 organizations to the Pioneer ACO program in December.
This is what makes the recent news from CBO disheartening. Last month, they released an analysis showing that ten different demonstration programs – six disease management and four value-based payment approaches – have usually not had any meaningful impact on reducing Medicare spending. One of these value-based demonstrations “allowed large multispecialty physician groups to share in estimated savings if they reduced total Medicare spending for their patients.”
Sound familiar? Troublingly, this program had little to no effect on Medicare expenditures. (The only program of the four that did have an effect on costs used bundled payments for heart bypass surgeries.)
Adding to the bad news, Leavitt Partners released a study late last year showing that of the 164 accountable care organizations (ACOs) they have identified (note that the Leavitt definition of ACO overlaps with – but doesn’t perfectly align with – the CMS definition), were somewhat evenly distributed across 41 of 50 states. However, these same 164 were found in just 144 of the 306 hospital referring regions (HRRs) – a benchmark of regional health care markets where patients are referred for care. While a number of these HRRs had three or more ACOs, large swaths of the country had yet to see even one yet suggesting that perhaps ACOs are springing up largely to compete with each other, rather than focusing on finding geographic areas where a new care delivery model could meaningfully reduce costs. This is one of the issues that skeptics of the model are concerned about, as my colleague highlighted recently.
In any case, critics of the healthcare reform have certainly gotten some new ammunition in the past few weeks – we’ll be keeping an eye out for some good news to highlight in a future post. As before, I still remain optimistic about the change in mentality that CMS’s ACO program seems to have brought in how payers and providers are rethinking the traditional and rigid zero sum game of treatment and reimbursement, allowing new ways for commercial payers and care delivery organizations to partner to deliver quality care.
Let us know what you think.
Conor Green
Conor Green is a Vice President at TripleTree covering the healthcare industry, and specializing in revenue cycle management and tech-enabled business services. You can email Conor at cgreen@triple-tree.com.
Posted in Uncommon Clarity | Tagged Accountable Care Organizations, ACO, bill, care, CBO, Centers for Medicare & Medicaid Services, CMS, cost, delivery, disease management, health, healthcare, hospitals, HRR, Leavitt Partners, Medicare, patients, payers, physician, Pioneer, program, providers, quality, reform, reimbursement, savings, system, TripleTree, value-based purchasing | Leave a Comment »
February 9, 2012 by TripleTree Research
As a host of leading managed care organizations (MCOs) roll out their most recent earnings reports, it is important to analyze some of the key drivers of plan performance. A key driver of success for MCOs recently has been low utilization, which has driven earnings that exceed market expectations.
Utilization: As indicated, utilization has been a primary driver of recent MCO performance upside; in addition to the important role it plays in setting future pricing, capitation rates and earnings expectations. So what exactly drives utilization among managed care plans? In short, utilization refers to the use of services by members or the patterns of rates of use of certain services such as hospital care, physician visits and prescription drugs. Utilization has long been viewed to be driven primarily by the economy, which has benefited MCOs in the near-term. The current economic climate has been beneficial to many of the MCOs in terms of utilization in that people have deferred medical care. For example, given the current economic climate, it is likely that consumers are more than likely to wait it out a few days rather than going to a doctor and incurring a co-pay plus a prescription charge. As people have put off medical care, MCOs have benefited from lower than expected medical expenses. Lower medical expenses relative to premiums collected equal more profitability (all other things like MLR rebates aside).
One of the big questions right now surrounding MCOs has to do with what future utilization will look like. MCOs have benefited greatly from the recent 3-year cycle of lowered utilization rates starting in 2009. Perhaps the biggest question is whether the broader implications of this trend should be accounted for in setting future plan pricing or earning expectations. Is the trend of lowered utilization correlated to the recession, unemployment and economic concerns or is there a fundamental change in how people look at medical care, especially related to consumer-directed health, higher deductible plans and the cost shift to the consumer?
Given the current economic impasse in the United States and abroad, one would expect that trend is expected to continue driving continued earnings upside among MCOs. However, this has not been the case in the guidance provided by many leading MCOs. Several MCOs are predicting higher utilization for 2012. This higher utilization will have a direct impact on the earnings performance among these plans and have been a key topic among analysts and industry commentators. These recent utilization suggestions have been supported by analyst estimates that utilization rates will increase by up to 50-150 basis points in the near-term. As analysts are just now updating their 2012 models to reflect increased utilization, it is likely that model updates will lead to lowered 2012 analyst earnings forecasts and related price downgrades in the MCO sector. The analyst community generally has taken a hard stance on MCO utilization and it is likely that we will witness several MCO downgrades in the near term as analyst work to assess the impact of increased 2012 utilization assumption.
Several counter viewpoints exist that utilization rates will not move increase as much as the carriers are suggesting. The prevailing viewpoint from this camp is that although there might be marginal utilization increases this year, the profit spread will remain as pricing increases will exceed the expected increases in medical cost spending as a result of increased utilization. This stance prevailed in 2011 as utilization last year was below expectations, leading to overall MCO sector public market performance that exceeded other healthcare sectors.
While low healthcare utilization is generally beneficial to MCOs, it generally has the opposite effect on other healthcare sectors, including hospitals and healthcare IT and services companies. These groups generally benefit from the consumption of services, which was the focus of the most recent HCA earnings release. During this release, HCA cited a rise in same-facility admissions to be a key driver of their earnings increase despite a decline in domestic surgery admissions and revenue-per-equivalent admission fell amid Medicaid reduction.
However, it is important to note that role that several other factors play in formulating earnings expectations and guidance. Almost equally important to some MCOs as utilization (particularly those with Medicare enrollment) are factors related to new member enrollment and Medicare Advantage conversion rates. In addition, several MCOs face huge earnings upside related to expansion of Medicare / Medicaid dual eligible enrollment as well.
It appears that the uncertainty that plagued MCOs following PPACA’s passage has been pushed to the back burner as most MCOs have generally benefitted from the legislation. While there is still some fine-tuning on the edges of reform that still present an overhang for MCOs (namely, MLR limitations, administrative cost constraints), that is a topic for another day as the current focus appears to be squarely on near-term medical cost expenses and new opportunity capture (courtesy of dual eligible expansion, state Medicaid RFPs and commercial market pricing pressure).
Let us know what you think.
Joe Long
Joe Long is a Senior Analyst at TripleTree covering the healthcare industry, covering payer-focused healthcare software and service providers. You can email him at jlong@triple-tree.com.
Scott Donahue
Scott Donahue is a Vice President at TripleTree covering infrastructure and application technologies across numerous industries and specializes in assessing the “master brands” of IT and Healthcare. Follow Scott on Twitter or e-mail him at sdonahue@triple-tree.com
Posted in Uncommon Clarity | Tagged care, consumer, consumer directed health, doctors, downgrades, earnings, economy, HCA, health, healthcare, Healthcare IT, hospitals, managed care, managed care organization, MCO, Medicaid, medical care, Medicare, Medicare Advantage, MLR, physicians, PPACA, recession, sector, utilzation | Leave a Comment »
February 2, 2012 by TripleTree Research
Amid the broader – and oftentimes highly opinionated and heated – ACO conversation occurring across Washington and the private sector, The Wall Street Journal published an interesting piece last week highlighting the specific views of three individuals:
- Don Berwick is the former administrator for CMS who just stepped down last December. Don oversaw the creation of the ACO framework under the Medicare Shared Savings Program.
- Tom Scully is currently a General Partner at the New York-based private equity firm Welsh, Carson, Anderson & Stowe. Tom formerly served as the CMS administrator from 2001 to 2004 and CEO of the Federation of American Hospitals.
- Jeff Goldsmith is a president of Health Futures, a healthcare consulting firm out of Charlottesville, VA and an associate professor of public health sciences at the University of Virginia.
What becomes immediately apparent in the three-way dialogue (done via email) is the lens through which various participants view the industry’s efforts to improve healthcare’s fundamental problem of shifting from the traditional fee for service to a value-based approach. There aren’t any quick, silver bullet answers to the debate, but what is evident is the divide among those that represent Washington’s political rhetoric (Don) and those that must figure out ways to make the new framework work within a dynamic, private care delivery system (Tom and Jeff).
Several disagreements bubble to the surface related to:
The role providers will play
- Berwick: “The ACO premise is different. Beneficiaries don’t join an ACO; providers of care do.”
- Scully: “The biggest flaw with ACOs is that they are driving more power to hospitals—not to doctors. Very scary, and I am a hospital guy.” … “If the doctors had the capital to organize comprehensive ACOs to control their own fate and drive us to more efficient care, I would be bullish on ACOs. But doctors are again along for the ride, not driving the bus.”
- Goldsmith: “In practice, however, the ACO is more like asking the hungry horse to guard the granary. The major savings for Medicare are to be found by keeping people out of the hospital, and reducing the incomes of the specialists who dominate hospital politics. To get those savings, hospitals and their specialists have to turn their backs on five decades of making more by doing more.”
Emphasis on the patient
- Berwick: “…the formula for ACO success is clear: keep quality high, save money by improving—not by restricting—care, and remain attractive to beneficiaries, who could go anywhere for care.”
- Scully: “The best models for ACOs are doctor groups like Monarch HealthCare in Los Angeles or JSA HealthCare in Tampa. Give doctors lots of patient data, pay them to see patients more often, follow their drug use and health status more closely to keep them out of hospitals—and give them control of the cash!”
- Goldsmith: “The biggest problem with the ACO, however, isn’t the faulty business proposition, but the patient’s role.” … “In the ACO, providers are accountable to Medicare. Patients won’t get a dime of the savings, and no choice whether to participate or not.” “Despite all the rhetoric about ACOs being patient-centered, it is a paternalistic, “we’ll decide what you need” kind of model.”
Prospects for care improvements and financial success of ACOs
- Berwick: “Knowing full well the results of the PGP demonstration, the CMS office of the actuary estimated base-case Medicare savings of over $400 million in the first three years of the ACO program.” … The “32 physician groups and health-care systems selected for the pioneer program, covering 860,000 Medicare beneficiaries, [are] projected to save $1.1 billion in health-care costs over the first five years.”
- Scully: “In the system we have, ACOs are conceptually right, in that the concept inches toward differential pricing for quality, and Don should be congratulated. But we need to step back out of the trees, look at the forest and question the financing system we have created.”
- Goldsmith: “Having each community, large or small, set up its own ACO is like setting up a backyard steel mill.” … “It is the incredibly heterogeneous 5% of the population that generates 47% of all costs that you need to focus on, and if you don’t have enough of them in your “attributed” population, you cannot concentrate the resources to change their care and lives.”
Startup costs of an ACO
- Scully: “The start-up cost of a real ACO is probably $30 million and up in a midsize market.”
- Berwick: “The actual barriers to entry appear a lot lower than the $30 million cost that Tom Scully mentions; CMS estimates are only a fraction of that.” “… the CMS Innovation Center has proposed a program of advance payment to provide front-end capital and extra operating funds for care coordination, information systems and the like.”
- Goldsmith: “A more credible estimate of setup costs for a provider system with no prior managed-care experience to participate in the shared savings program: $10 million to $15 million per health system (consulting, IT systems conversions, new staff, etc.).”
Prospects for success
- Berwick: “Smart entrants, focused on seamless care, outcomes and beneficiary satisfaction, will both reduce Medicare’s expenditures and reap financial rewards for themselves.” … “I hope and expect that ACOs will honor the trust they have been given by doing the job—lower cost through care improvements. If they violate that trust, the costs to them and to the future of seamless, coordinated care in America will be high indeed.”
- Scully: “Don’s vision is great, and who can’t like what he has tried to do with ACOs… Except that the incentives are very small, the change will be slow, and we are just nibbling at real system reform.”
- Goldsmith: “There were a lot of good ideas in the Affordable Care Act for saving money and improving quality. Unfortunately, the ACO wasn’t one of them.” … “By pushing this edgy idea from the policy world and ignoring the real-world evidence of its own trials, CMS picked the wrong horse.”
In a final from Jeff Goldsmith: “One of the most serious problems with the health-care world just now is the gap between the policy world and the real world. The ACO is Exhibit A in this yawning disconnect.” Jeff is right to point out that there’s a divide between the public and private domains, yet progress, however small, has arguably been made.
The real question is whether “the vision” put forth by Don Berwick will ultimately evolve into a pervasive performance-based delivery model in which quality, efficiency, and choice are the driving factors behind private sector reimbursement and profitability. To those outside of Washington, there certainly seems to be a long way to go – let us know what you think.
Seth Kneller
Seth Kneller is a Vice President at TripleTree covering the healthcare industry, specializing in revenue cycle management, clinical software solutions, geriatric care and healthcare analytics. Follow Seth on Twitter or e-mail him at skneller@triple-tree.com.
Posted in Uncommon Clarity | Tagged Accountable Care Organizations, ACO, Anderson & Stowe, Carson, Centers for Medicare & Medicaid Services, CMS, delivery model, doctors, Don Berwick, fee-for-service, Health Futures, healthcare, hospitals, Jeff Goldsmith, JSA Healthcare, Medicare, Monarch Healthcare, patient, Patient Protection and Affordable Care Act, physician, policy, politics, private sector, providers, reimbursement, rhetoric, startup, Tom Scully, University of Virginia, value-based purchasing, Wall Street Journal, Washington, Welsh | 1 Comment »
January 27, 2012 by TripleTree Research
It’s hard to believe that HIMSS 2012 is just around the corner. As we look ahead amid the consolidation and investment opportunities in healthcare, if you are at HIMSS this year and would like to exchange perspectives on the industry or bring us up to speed on your progress for the year, please let us know.
Here is what’s on our radar related to our research and advisor agenda for the year.
- Why ‘consumerism’ is impacting healthcare delivery models at an unprecedented pace
- How mobile applications are key tools for navigating a ‘B2C shift’ in healthcare
- Where innovations are evolving quickly to meet the demographic shift of seniors
- How productivity tied to health is a growing focus for employers
- Why compliance-centric issues ranging from payment integrity to improved patient outcomes are dominating many health care cost debates
- How the shift toward ACOs and Medical homes is radically altering care delivery models
- The impacts of ‘life beyond the EMR’ as more granular clinical documentation will substantially increase risks associated with reimbursement, compliance, and productivity.
- How healthcare is being driven by data and analytics to build a more complete picture of a patient
- Where the pharma market is shifting away from paper-based systems and processes and calling for innovations that reduce cost across the clinical development landscape
Let us know what you’re thinking about…see you at HIMSS in a few weeks!
Chris Hoffmann
Chris Hoffmann is a Senior Director at TripleTree covering ‘consumerism’ and where legacy and edge technologies are impacting healthcare. Follow Chris on Twitter or e-mail him at choffmann@triple-tree.com.
Posted in Uncommon Clarity | Tagged Accountable Care Organizations, ACO, analytics, applications, B2C, Compliance, consumerism, delivery model, Electronic Medical Records, employers, EMR, health, healthcare, HIMSS, HIMSS12, innovation, market, mobile, paper-based, pharmaceutical | Leave a Comment »
January 19, 2012 by TripleTree Research
Healthcare can no longer deny nor ignore the importance of social media. As a communication platform, it’s being used to educate, engage and empower consumers about topics ranging from legislation, hospital rankings, and ER wait times, to patient satisfaction, chronic illness management and health improvement. Collaborative applications around seeking, sorting, assessing and ranking health information and experience have become part of our connected culture.
As “consumerism” increasingly impacts the healthcare landscape – payers, providers and other healthcare stakeholders are investing in technologies ranging from collaboration and contact center tools, to next generation video and self service platforms. Consumerism is forcing these organizations to change their cultural barriers to how customer interactions need to be supported, and the pace of legislative mandates is exposing the healthcare information systems that can’t nimbly react to creating new products, or support online conversations.
Blogger Ed Bennet tracks 1,188 hospitals which are proving their seriousness about social media usage as they update:
- 548 YouTube Channels
- 1018 Facebook pages
- 788 Twitter Accounts
- 458 LinkedIn Accounts
- 913 Foursquare
- 137 Blogs
The impact of social media in healthcare goes beyond just an inexpensive channel that targets consumers. Social media is fundamentally changing how payers, providers, and healthcare stakeholders manage their brand and influence purchasing decisions.
- For payers its managing customer service touch points through insurance exchanges, one of the few ways for them to maintain loyalty.
- For providers its connecting care providers with patients and is no longer about a gadget or app, but for measurable opportunities to share knowledge, build loyalty and improve processes that can influence how they manage care and patient relationships.
- For other healthcare stakeholders it’s supporting their brand and customer interactions with thoughtful, engaged support allowing for the ability to listen in on conversations already occurring about the industry, products, news, issues, etc.
Social media is a powerful source of information for consumers, and an equally powerful communication channel for providers of health information and support services. For payers, providers and other healthcare stakeholders, TripleTree considers social media the lowest cost enabler of consumerism with a technical heritage linking it to cloud-based CRM and collaboration platforms. In addition, social media is a cornerstone for marketing and branding initiatives in many industries. With social media in healthcare, the old models for marketing, sales and service have been transformed.
Let us know what you think.
Chris Hoffmann
Chris Hoffmann is a Senior Director at TripleTree covering Cloud, SaaS and enterprise applications and specializes in CRM, loyalty and collaboration solutions across numerous industries. Follow Chris on Twitter or e-mail him at choffmann@triple-tree.com.
Posted in Uncommon Clarity | Tagged blog, Cloud, communication, consumer directed health, consumerism, consumers, CRM, customer relationship management, customer service, Ed Bennet, Facebook, Foursquare, health information, health insurance exchanges, healthcare, HIX, hospitals, LinkedIn, mandate, patients, payers, platform, providers, social media, support services, sys, system, TripleTree, twitter, YouTube | 1 Comment »
January 16, 2012 by TripleTree Research
Whether it’s paying a cable bill, mortgage, cell phone bill or other monthly recurring payment, consumers have been increasingly replacing paper check payments with online bill pay technologies for the past decade. Healthcare, often dubbed as being ten years behind other industries technologically, had a recent breakthrough in the adoption of electronic payments. The Department of Health and Human Services (HHS) recently released new rules on the electronic fund transfer (EFT) standards, a move that is projected to save the system billions of dollars and pounds of paper.
The new rules establish common interchange standards to streamline the format and data content of a transaction from a health plan (or payer) to a provider’s bank for claim payment and issuance of an electronic remittance advice (ERA). The ERA is a notice of payment sent to providers to help reconcile electronic payments with the associated claim(s). Historically, with minimal EFT volume, providers struggled with the reconciliation function, but the new regulations will require the use of a trace number that automatically matches the two.
Why has EFT payment adoption been slow to date and how does future adoption increase? Despite the majority of payers possessing EFT capabilities today, providers have been slow on the uptake because payments are submitted in varying data formats making the processing and reconciliation very difficult. With the new HHS rules, a standard data set will allow providers to rely on one system and/or format to take in and reconcile payments. Payers are motivated to implement electronic payments for a variety of reasons, but most predicated on the associated cost savings. I believe we will increasingly see payers forcing the transition within their provider network – perhaps even charging providers fees to cut a check.
Benefits of transitioning to electronic payments:
- Faster revenue cycle, reduced AR, and improved collection metrics for providers
- Increased productivity – more claims with less staff
- Reduced potential manual errors
- Increased business intelligence opportunities
Perhaps the most important benefit is increased business intelligence. Traditional paper checks limit payers (and providers) ability to mine data as there really isn’t much data associated with a paper check or image. However, EFT payments create new and unique opportunities to layer business intelligence and analytic solutions on the payment data sets. Some of the obvious low hanging fruit is Fraud, Waste and Abuse analytics which is a huge issue in healthcare with large opportunities for savings.
The healthcare system is finally closing the payment technology gap which will save billions of dollars, increase efficiency, and create new business opportunities to make healthcare smarter. Let me know what you think.
Judd Stevens
Judd Stevens is an associate at TripleTree covering the healthcare industry, specializing in the impacts and transformation of health plans in a post-reform world. Follow Judd on Twitter or e-mail him at jstevens@triple-tree.com.
Posted in Uncommon Clarity | Tagged analytics, bank, business intelligence, consumers, Department of Health and Human Services, EFT, electronic funds transfer, electronic payments, electronic remittance advice, ERA, fraud, green, Health Plan, healthcare, HHS, online bill pay, payers, providers, revenue cycle management | Leave a Comment »
January 9, 2012 by TripleTree Research
Nominations open next week for the 2012 TripleTree I Award, our annual recognition of innovations in wireless health. Messaging from new market entrants to physicians, payers, and most notably consumers is fueling a strong venture capital appetite, and looking back at the I Award finalists since 2009, we thought it was useful to list a few notable accomplishments.
Public Markets
- Epocrates – The first mobile healthcare company to successfully go public in early 2011 raising $86m
Funding
- Airstrip Technologies – Received an undisclosed amount of funding from Sequoia Capital
- IntelliDOT – Raised $30m+ from leading investors including Psilos Group, TPG Growth, Camden Partners, Integral Capital Partners, J.F. Shea Ventures, Menlo Ventures and American River Ventures
- Proteus Biomedical – Raised $25m from Medtronic, Novartis, and ON Semiconductor Corp
- TelaDoc – Raised $18m from Cardinal Partners, HLM Venture Partners, Kleiner, Perkins, Caufield & Byers, New Capital Partners, and Trident Capital
FDA Approval
- Calgary Scientific – ResolutionMDTM after 23 months received 510(k) clearance from the FDA
- Telcare – Wireless blood glucose meter received 510(k) clearance from the FDA for its device, Telcare BGM
Acquisition
- CellTrak Technologies – Expanded into Canada through its acquisition of MedShare mobile technology for home health care
- Healthagen – Patient access software to providers acquired by Aetna
Since TripleTree’s I Award inception in 2009, one company has gone public, one has been acquired, numerous rounds of funding have been raised, multiple FDA approvals granted, and some businesses have scaled nicely. As the market continues to mature and awareness and user adoption grow, questions loom…
- Is “connected health” on the verge of a breakout?
- Are wireless health solutions the answer for reduced healthcare costs and improved quality of care?
- Will innovation be driven by non-traditional healthcare vendors (ie device vendors and mobile service providers)?
- How are the ramifications of reform influencing innovation?
As we consider these questions, a few key indicators are influencing the market:
- Four out of five physicians use smartphones, computer tablets, and other mobile devices (Jackson & Coker industry report)
- More than $600m has been invested in the wireless health space since January 2010
- 89% of healthcare decision makers believe telehealth will transform healthcare in the next 10 years (Penn Schoen Berland Study)
Below is the honor roll of past I Award finalists. Look for more information from TripleTree in the coming weeks as the nomination process commences and we plan for the WLSA Wireless Health Convergence Summit scheduled for May 22-24 in San Diego.
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2011 Finalists
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BodyMedia*
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Wearable body monitoring device
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Cambridge Temp Con*
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Wireless physiological monitor for infertility
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Cardiocom -
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Clinical telehealth services
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Cellnovo
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Mobile diabetes management system
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Healthagen
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Patient access software to providers
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Mobisante
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Mobile ultrasound imaging system
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Palomar Pomerado Health
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Real-time mobile software patient electronic health information
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Phreesia*
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Touch-screen mobile tablet
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TelaDoc
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On-demand patient access solution to ERs and urgent care
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Telcare
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Wireless bloodglucose meter
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Vitality
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Mobile medication adherence
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Wound Technology Network
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Telehealth- based wound services
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2010 Finalists
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AirStrip Technologies
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Mobile patient information
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Calgary Scientific*
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Medical imaging
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CellTrak Technologies*
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Homecare with GPS cell phones
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Corticare
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Critical care patient monitoring
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Great Connection
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Mobile imaging communications
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Hopskipconnect
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Motivational self management tools
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InnerWireless
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In-building wireless solutions
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Ocutronics
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Retinal camera
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PerfectServe
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Physician and patient care communication
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PharmaSecure
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Pharmacy brand protection solutions
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Zeo, Inc.*
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Sleep monitoring
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ZMQ Software Systems
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Sustainable development
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2009 Finalists
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BeWell Mobile
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Disease management applications via text messaging on cell phone
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CellTrak Technologies
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Homecare automation with GPS cell phones
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Diversinet
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Health information transparency in partnership with AllOne Mobile
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Epocrates
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Rx Drug and formulary reference
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GreatCall*
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Jitterbug; simple cell phone with 24-hour live service
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IntelliDOT*
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Workflow manager connecting caregivers with information systems
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MedApps
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Mobile wireless health monitoring
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MicroCHIPS
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Continuous glucose management system
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PhiloMetron
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Passive weight management platform
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Proteus Biomedical*
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Electronically observed therapy platform
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Tagnos
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Patient flow management applications
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Triage Wireless
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Wireless telemetry/vital signs monitoring
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*Denotes I Award Winner
Joanna Roth
Joanna Roth is a Senior Analyst at TripleTree covering the healthcare and technology industry, specializing in education solutions. Follow Joanna on Twitter or e-mail her at jroth@triple-tree.com.
Posted in Uncommon Clarity | Tagged Acquisitions, Airstrip Technologies, Calgary Scientific, care, CellTrak Technologies, consumers, Epocrates, FDA, health, Healthagen, healthcare, I Award, innovation, IntelliDOT, M&A, mobile, payers, physicians, Proteus, San Diego, smartphones, tablets, TelaDoc, Telcare, Telehealth, TripleTree, wireless, Wireless Life Sciences Alliance, WLSA | Leave a Comment »
December 29, 2011 by TripleTree Research
With the New Year fast approaching, and the start of the Centers for Medicare & Medicaid Services’ (CMS) fiscal year shortly behind us (it began October 1, 2011), it seems appropriate to evaluate the major initiatives implemented by CMS in FY 2012. When doing so, one program stood out more than many others—the implementation of the hospital readmission reduction program. In short, CMS has implemented a program—consistent with its value-based purchasing program—designed to improve the quality of medical treatment provided to patients by penalizing hospitals that are deemed to have an excessive number of Medicare inpatient readmissions.
CMS’ program to curb readmissions, which began in 2009 when it started publicly reporting 30-day readmissions, is part of its overall effort to reduce costs and improve the quality and coordination of patient care. The premise of the campaign against readmissions is to punish and dissuade providers from releasing patients that will likely need follow-up care for the same ailment as they were just treated, which, theoretically, will cause providers to make sure patients are provided with the necessary treatment the first time they are treated and, as a result, reduce the number of expensive follow-up trips to emergency rooms. The program, which currently only covers readmissions for pneumonia, acute myocardial infraction (AMI) and heart failure, takes a step forward in FY 2012 from being a program that is intended to “shame” providers by making the 30-day readmission information publically available, as was done until now with CMS’ pay-for-reporting program, to being a true “penalty” program.
Beginning October 1, 2011, providers’ 30-readmission data will be collected and used to generate an overall score for each hospital for FY 2012. This score will then be used to determine if a hospital’s readmission rate is higher than the Medicare-calculated “baseline” readmission rate (which was calculated by CMS using reported readmission information from July 1, 2008 through June 30, 2011). If so, the total operating payments due to the hospital will be reduced by CMS, with the maximum reductions being as follows: FY 2013 =1%, FY 2014 = 2%, and FY 2015 = 3%. In addition, beginning in FY 2015, CMS can expand the list of covered conditions to broaden the impact of the program.
While the reimbursement risk associated with this program may seem insignificant to some, many providers are operating under very thin margins, which will make even a 1% reduction in Medicare reimbursement meaningful. For example, if a hospital’s total inpatient operating payments for FY 2012 were $25mm, that hospital will have $250k at risk for reimbursement reduction pursuant to this program. With the maximum penalty increasing 1% per year until FY 2015, the penalty and dollars at risk will undoubtedly heighten providers’ focus on their readmission rates. It stands to reason that many will also look to new solutions, technologies, and programs to help them avoid being penalized. New solutions aimed at patient engagement as well as remote-patient monitoring are areas of opportunity that we think will continue to be instrumental in addressing the readmission dilemma providers are facing.
Have a great week.
Jamie Lockhart
Jamie Lockhart is a Vice President with TripleTree covering healthcare software and service providers with a focus on consumer directed healthcare. You can contact him at jlockhart@triple-tree.com
Posted in Uncommon Clarity | Tagged acute myocardial infraction, AMI, care, Centers for Medicare & Medicaid Services, CMS, health, healthcare, heart failure, hospitals, Medicaid, Medicare, patient care, pneumonia, providers, readmission, reduction, reimbursement, remote patient monitoring, Risk Adjustment, treatment, value-based purchasing | Leave a Comment »
December 27, 2011 by TripleTree Research
As government’s role in the provisioning of health care and welfare benefits continues to increase, the number of participants in state administered benefit programs and the burden of supporting those programs is also growing. Anti-poverty spending as shown in the graph below, has reached 4% of GDP, of which healthcare entitlement programs represent more than 1.5% (and is speculated to be the largest risk of runaway spending). Given the demographics of the low-income population served by these programs, a high level of duplicative efforts are taking place on a state administrative level in order to manage and administer these benefits.
Below are a few more details -
What types of state funded programs potentially have significant overlap in addressable market?
- Medicaid
- Medicaid Transportation Payments
- Low Income Energy Assistance Program Payments
- SNAP (Supplemental Nutrition Assistance Program)
- WIC (Women, Infant & Children Program)
- TANF (Temporary Assistance for Needy Families)
- Child Care Time and Attendance
- SCHIP – State Children’s Health Insurance Program
The tip of the iceberg
In most states, individuals qualifying for food stamps, welfare, Medicaid, etc., must separately apply to different state agencies for these programs. An individual enrolling in multiple programs is just the beginning, as separate departmental processes, eligibility compliance checks and inevitable movement in and out of various programs compound the issue.
Finding an efficient path
As with any inefficient system, waste evokes opportunity. The ability to bundle benefits and combine or transfer the management of those benefits across state agencies will be extremely important in the lowering of administration costs and streamlining the benefits distribution across the states. As states realize the efficiencies gained from this exercise, they will likely invest in solutions that help manage multiple benefit plans and technology that is able to track eligibility and even auto-enroll the appropriate individuals to the appropriate programs. Unfortunately, this is much easier said than done.
Clearing hurdles
The main obstacle in this situation is the lack of administrative and payment capabilities to enable the states to provide the benefits to the eligible consumer (enroll and administer the programs), track usage/transactions, and appropriately distribute the funds. While this will not happen right away, once the public health insurance exchanges are established, it would make a lot of sense to use that exchange infrastructure to allow people to enroll in not only Medicaid, but other government benefits.
This area of compliance in health care is a focus for our team and is rife with opportunities – let us know what you think.
Have a great week.
Emma Daugherty
Emma Daugherty is a Senior Analyst at TripleTree covering the life sciences sector with a focus on provider technologies and patient safety. You can contact her at edaugherty@triple-tree.com.
Posted in Uncommon Clarity | Tagged administer, administrative, anti-poverty, benefits, care, Compliance, distribute, federal, food stamps, GDP, government, health, health insurance exchanges, healthcare, HIX, Medicaid, plans, public, SCHIP, SNAP, state, TANF, technology, transactions, welfare, wellness, WIC | 3 Comments »
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Archelle is a Senior Advisor and Chair of TripleTree’s Healthcare Executive Roundtable, and focused on creating health through innovation. You can follow Archelle on Twitter, on her blog, or email her at ageorgiou@triple-tree.com.
