The weekend’s headlines capped an eventful week that reinforced some classic widely held beliefs. Two examples:
- “Kansas City nightclub shooting leaves 3 dead, 2 injured” ABC News May 21, 2023 (Consensus: ‘there’s too many mass shootings; something should be done’)
- “Koepka wins Wanamaker, Block wins over America” PGA of America PGA Head Professional at Arroyo Trabuco Golf Club in Mission Viejo, California (Consensus: ‘everyone loves an underdog like Block’)
Unlike these, a third headline prompts widely divergent views: “Debt-Ceiling Talks Devolve Into Finger Pointing and Frustration as Deal Remains Elusive” (WSJ May 21, 2023) (Differing Beliefs: ‘politics sucks’ or ‘government spending is out of control ‘or ‘for God’s sake, just do something’)
For healthcare, this divergence of views is problematic the proposed debt ceiling compromise includes reducing SNAP benefits (Supplemental Nutrition Assistance Program), imposing work requirements for “able-bodied” Medicaid recipients and cutting community health centers budgets—all hit low-income and underserved populations hardest. In these populations, social determinants of health (SDOH) i.e., food insecurity, unsafe/unhealthy housing, inadequate transportation et al play a central role in their health and its costs, but not much is done.
Social Determinants of Health (SDOH): What’s Happened?
Abundant health services research points to one conclusion: the inadequacy of solutions to the nation’s burgeoning social issues aka ‘social determinants of health’ results in poorer health status and higher health costs. Disparities persist. Structural flaws and divergent views about public health have calcified its neglect. It’s’ a disconnect the health system is prompted to fix.
Consider: In last week’s industry and government reports (noted in today’s post), the importance and complexity of community health and social determinants was underscored:
- Polling by Ipsos/Axios found opinions about public health vary widely: they’re important to those who need them and out of sight, out of mind to others.
- Studies reported in the current issue of Health Affairs about CMS’ Accountable Health Communities Model concluded that navigation support for at-risk populations reduces their use of emergency rooms but overall health status improvement wasn’t noted.
- The Federal Reserve and CDC reported show household debt increasing and concern about Covid decreasing.
- Polling by Harris showed declining confidence in the US health system: the majority grade the system C, D, or F.
- An NIH analysis found the cost of disparity in treating underserved populations is double that of costs usually associated with “medical inflation” and other factors.
The reality is this: The U.S. spends almost 18% of our GDP on its health system: hospitals, physicians, prescription drugs, long-term care et al but less than 4% on its public health programs. Per the CDC, 30-55% of population outcomes are the result of adverse social conditions—food security, housing, transportation et al. The U.S. spends 80% less on these programs compared to other Western systems that deliver health at half the cost with comparable outcomes.
But funding for most of these programs comes through a hodge-podge of federally-authorized programs requiring state or local funding. In many communities, they’re called “welfare programs” and in all, they compete for funding with schools, public transportation and more. Thus, the divergence of beliefs about government effectiveness, personal accountability, the role and performance of the health system and others limits public support for public health increased attention to social determinants though recognized as priorities.
Looking ahead, there are no easy solutions but an obvious conclusion: what being done isn’t working well. It’s also clear that the traditional health system—especially physicians and hospitals—know it. The U.S. health system is primarily geared to serve those who can afford it. The public health system is a safety net for the rest and programs that address social determinants key to their healthiness and its costs. Hospital emergency rooms are the safety nets and EMTALA (Emergency Medical Treatment and Labor Act of 1984) the regulation forcing that bridge connecting the two.
Those tasked with serving community health needs—not-for-profit hospitals—should take the lead in creating a seamless system of health for everyone in their communities. Public health programs, clinics and services should be fully integrated vis a vis systemness models sitting beside, not under, acute and specialized services. And local community health boards and business leaders should become the governing entity by which priorities are set, duplication eliminated, infrastructure built and results measured.
This is not a moonshot: it’s a pragmatic response to critics who say not-for-profit hospitals have abandoned mission and purpose and budget hawks seeking cost containment in healthcare. It’s also a bona fide basis for protecting NFP tax exemptions and restoring public confidence in the system.
It will take time and leadership to make the transition from “health and welfare” to “health and wellbeing”. But its necessity outweighs its risk. Left unattended, the disconnect will metastasize and the entire system will collapse.
PS: Last Thursday, a group of labor unions, led by SEIU Healthcare Pennsylvania and the Strategic Organizing Center,, launched a “groundbreaking antitrust complaint” against UPMC, a 40-hospital system headquartered in Pittsburgh. It’s the latest incidence of union organizing efforts against hospitals that also garner media attention.
In the 56-page complaint: “We believe that UPMC has pursued a series of mergers and subsequent reductions in capacity that harmed competition in both input and output markets. It undertook no fewer than 28 acquisitions between the years 1996 and 2019 – yet during the same period closed four hospitals and downsized three others, eliminating 353 beds and 1,367 full-time and 433 part-time jobs at those closed and downsized facilities.
Then Friday, this report on ABC News and its website: “Billions of pandemic dollars were pocketed by top nonprofit hospitals” citing Adam Andrzejewski, CEO of Open the Books:
“The top 20 nonprofit US hospitals’ net assets increased from 200 billion to $324 billion. I think this is going to wrangle the American people. This profiteering happened during the pandemic years.The 20 largest nonprofit hospitals have made incredible profits since the pandemic. Their combined assets were $124 billion in just three years, which is a rise of 62%.”
“Our healthcare costs continue to rise as the average American family pays over $22,000 worth of health insurance premium costs each year and the prices of health care now are supposed to be transparent. The Trump administration put forth the health care price transparency rule and to their credit, the Biden administration finalized that rule in 2021 but we found that 19 out of the top 20 us nonprofit hospitals racked up these big profits and they were not following federal health care price transparency rules. This is like playing baseball with one side, the patient that’s us, we’re blindfolded, and the other side is the hospitals and their rank there. They’re putting tons of tons of score up on the board ranking, racking up big profit 10 of the $23 billion that were distributed in some of these COVID bailouts only two providers actually partially paid back that money.”
PK Note: The steady beat of disinformation about not-for-profit hospitals is problematic. Example: the conflation of “asset growth” with profitability in this commentary.
Complaint Against University of Pittsburgh Medical Center Regarding Potential Attempted and Actual Monopolization and Monopsonization In Violation of Section 2 of the Sherman Act May 18, 2023 https://thesoc.org/wp-content/uploads/2023/05/COMPLAINT_5.17_redacted.
Adam Andrzejewsk The National Desk: Top Nonprofit Hospitals Pocketed Billions from COVID Relief Funds Open the Books May 19, 2023 www.openthebooks.com;
Joe Ciolli “Big firms are filing for bankruptcy left and right — and it’s just the beginning” Business Insider May 16, 2023 /www.businessinsider.com/credit-crunch-corporate-bankruptcy-trends-risk-increase-debt-interest-rates-2023
What’s in Sanders’ ‘bold’ plan for health care Politico May 17, 2023 /www.politico.com/news/2023/05/17/bernie-sanders-new-health-package
Re: not for profit hospitals: “Our health care costs continue to rise as the average American family pays over $22,000 worth of health insurance premium costs each year and the prices of health care now are supposed to be transparent. The Trump administration put forth the health care price transparency rule and to their credit, the Biden administration finalized that rule in 2021 but we found that 19 out of the top 20 us nonprofit hospitals racked up these big profits and they were not following federal health care price transparency rules. This is like playing baseball with one side, the patient that’s us, we’re blindfolded, and the other side is the hospitals and their rank there. They’re putting tons of tons of score up on the board ranking, racking up big profit 10 of the $23 billion that were distributed in some of these COVID bailouts only two providers actually partially paid back that money.”
ADAM ANDRZEJEWSKI (CEO www.openthebooks.com) Expert says top nonprofit hospitals pocketed billions from COVID relief funds ABC News Channel 9 May 19, 2023 https://www.healthleadersmedia.com/covid-19/expert-says-top-nonprofit-hospitals-pocketed-billions-covid-relief-funds :
Re: hospital price transparency: “According to one estimate, less than 25 percent of hospitals are fully compliant with President Trump’s historic price transparency rules, and those are just the ones reviewed. To date, the Centers for Medicare and Medicaid Services has only fined four hospitals for noncompliance. Four hospitals. There are 6,000 hospitals in the United States.Do we really think that nearly every American hospital is in compliance? We don’t know because CMS doesn’t make compliance reviews and enforcement actions public. We can get more information about a local restaurant from Yelp than you can get about your local hospital from CMS.”
Opening Comments by House Ways and Means Committee Chairman Jason Smith (R-MO) May 17, 2023 https://www.youtube.com/watch?v=YpmM8SsiSo4&t=752s
Re: price transparency for hospitals vs. plans: “Hospital price transparency alone provides an incomplete picture. Beyond the uneven compliance by health systems with posting the data, the limited nature of the reported data—300 codes out of ~40,000 items on a typical hospital chargemaster—makes it clearly inadequate to inform consumers or health economy stakeholders. In contrast, the breadth and depth of the health plan rate data provide granular insight into the actual cost of specific healthcare services delivered by specific providers and entities.”
“While Originally Intended for Consumers, Health Plan Price Transparency Will Ultimately Promote Value-Based Competition” Trilliant Compass May 21. 2023 www.trillianthealth.com
Re: weight loss drugs for adolescents: Adolescents with obesity received once-weekly subcutaneous semaglutide 2.4 mg (Ozempic, Wegovy et al) or placebo, plus lifestyle intervention which comprised counseling in healthy nutrition and a goal of 60 minutes of moderate- to high-intensity physical activity per day. Achievement of an improvement in BMI category and attainment of normal weight or overweight BMI category by week 68 were analyzed. Findings:
In the overall population, 44.9% of participants receiving semaglutide achieved normal weight or overweight BMI category versus 12.1% receiving placebo at week 68. The proportion of semaglutide-treated participants in obesity class III decreased from 37.3% to 13.6%, but increased with placebo.
Kelly “Reducing BMI below the obesity threshold in adolescents treated with once-weekly subcutaneous semaglutide 2.4 mg Obesity 17 May 2023 https://onlinelibrary.wiley.com/doi/10.1002/oby.23808
Re: health insurer profitability: “Health insurance companies are highly profitable. In 2020, they generated $31 billion in profit, an increase of more than 40% from 2019. In 2021, they earned a paltry $19 billion in profit. The upward trend returned in 2022, with the six most profitable health insurance companies earning more than $41 billion in profit.”
Sheldon Jacobson “U.S. health care benefits insurance industry, not patients or doctors” Seattle Times May 17, 2023 www.seattletimes.com/opinion/u-s-health-care-benefits-insurance-industry-not-patients-or-doctor
Re: executive compensation: Overall, the median pay package for S&P 500 CEOs declined to $14.5 million in 2022, down from a record $14.7 million the previous year, with median cash compensation of $3.7 million. The decline marks the first time in a decade that compensation for top executives at the biggest U.S. companies didn’t reach new highs.
Performance also declined in 2022, with about two-thirds of companies recording negative shareholder returns, with a median negative 9.2%. Even at the 137 companies that had positive results, performance declined to a median 16.6% return, compared with an overall median of 30% in 2021.
Despite the reduction in overall pay compared with 2021, about half of the CEOs got a raise, with a median 11.4% increase.”
CEO Pay Packages Fell Sharply in 2022, the First Decline in a Decade WSJ May 15, 2023 ttps://www.wsj.com/articles/ceo-pay-packages-fell-sharply-in-2022-as-the-stock-market-sank
Re: Private equity in healthcare: “The volume of PE-led healthcare services deals declined for the fifth straight quarter in Q1 as the industry settles into a new normal.”
Research Pitch Pitchbook May 20, 2023 www.pitchbook.com
Re: physician orientation toward consumers: “The fact that we are still fighting a lot of practices to have evening hours, even to 7 p.m. or Saturday hours is unfortunate. For the 18-to-64-year-olds, for the working population and definitely for the underserved population that do not have the ability to take leave, and often have also transportation difficulties — the appointment alone is not just the inconvenience, it’s also the arrival and departure time and the childcare and the like. We need to think about how we say that we’re patient-centered, but we’re clearly not.”
Kameron Matthews, MD, JD, chief health officer of Cityblock Health How Can Primary Care Be Improved in the U.S.? MedPage Today May 19, 2023 www.medpagetoday.com/primarycare/generalprimarycare
NY Fed Report: debt, inflation problematic for household finances: among US 18 to 29-year-olds,.31% of credit-card debt transitioned to serious delinquency — which means 90 days or more past due — between January and March of this year, up from 5.12% over the prior year period–the highest level since the delinquency transition rate was between 8% and 10% for four consecutive quarters between 2019 and 2020. Prior to that, the rate hadn’t been this high since 2010. Inflation and near record high credit card interest rates are two big factors weighing on consumers. If young Americans are struggling to pay down their credit-card debt now, things could get even tougher when student-debt payments resume later this year after an over-three-year pause. As of June 2022, 36% of Gen Zers had student debt, holding an average balance of $20,900.. Among all age groups, 4.57% of credit-card debt transitioned to serious delinquency, up from 3.04% the year prior. Total US credit-card balances were largely flat compared to year end at $986 billion, a sign that Americans are struggling to get a handle on their debts.
Gen Z is way behind on credit-card payments. It could get even worse when student-debt payments restart. Business Insider May 16, 2023 https://www.businessinsider.com/gen-z-behind-credit-card-payments-student-debt-payments-restart-2023
Public Health, Social Determinants
CDC: uninsured rate down in pandemic: The number of Americans lacking health insurance during the COVID-19 pandemic dropped by 5.6 million people, or 18%, from 2019 to 2022, according to a report released Tuesday by the Centers for Disease Control and Prevention’s National Center for Health Statistics. In 2022, 4% or 27.6 million Americans lacked health insurance compared with 10.3% or 33.2 million people in 2019. “More people also sought health insurance on Affordable Care Act exchanges last year compared with before the pandemic.”
CDC May 16, 2023 www.cdc.gov
Study: Mixed results for Accountable Health Communities Model: RTI researchers analyzed data for the initial phase of the ACH model. Conclusion: “The AHC Model, sponsored by the Centers for Medicare and Medicaid Services, screened Medicare and Medicaid beneficiaries for health-related social needs and offered eligible beneficiaries assistance in connecting with community services. This study used data from the period 2015–21 to test whether the model had impacts on health care spending and use. Findings show statistically significant reductions in emergency department visits for both Medicaid and fee-for-service Medicare beneficiaries. Impacts on other outcomes were not statistically significant, but low statistical power may have limited our ability to detect model effects. Interviews with AHC Model participants who were offered navigation services to help them find community-based resources suggested that navigation services could have directly affected the way in which beneficiaries engage with the health care system, leading them to be more proactive in seeking appropriate care. Collectively, findings provide mixed evidence that engaging with beneficiaries who have health-related social needs can affect health care outcomes.”
Parish et al “Health Care Impacts Of Resource Navigation For Health-Related Social Needs In The Accountable Health Communities Model” Health Affairs May 17, 2023 https://doi.org/10.1377/hlthaff.2022.01502
Related: “The AHC Model evaluation is the largest US study to date examining the impacts of health-related social needs screening and referral programs. The Center for Medicare and Medicaid Innovation launched the Accountable Health Communities (AHC) Model in 2017 to assess whether identifying and addressing Medicare and Medicaid beneficiaries’ health-related social needs reduced health care use and spending. Survey findings indicated that navigation—connecting eligible patients with community services—did not significantly increase the rate of community service provider connections or the rate of needs resolution, relative to a randomized control group.
These findings underscore continuing interest in more integrated social and medical care delivery and support investments by CMS in initiatives aimed at encouraging efforts by accountable care organizations, hospitals, and managed care plans to assess and address beneficiaries’ health-related social needs.
The study’s null findings in the assistance track may reflect insufficient social services capacity and infrastructure. Rates of community service provider connection and health-related social needs resolution in the alignment track were similar to those in the assistance track, even though the alignment track was designed to support intersectoral coalitions with clinical delivery sites and community service providers. AHC navigators in both tracks often reported a lack of capacity among social service organizations to meet beneficiaries’ needs.
There is still much to learn about health care’s role in addressing social adversity, including the resources needed to improve intersectoral coordination and service delivery and the multiple pathways through which screening and referral programs may influence health and health care use.
Renaud et al “Addressing Health-Related Social Needs Via Community Resources: Lessons From Accountable Health Communities” Health Affairs May 17, 2023 https://doi.org/10.1377/hlthaff.2022.01507
Study: Disparity level remains high: “New research shows that the economic burden of health disparities in the United States remains unacceptably high. The study, funded by the National Institute on Minority Health and Health Disparities (NIMHD), part of the National Institutes of Health, revealed that in 2018, racial and ethnic health disparities cost the U.S. economy $451 billion, a 41% increase from the previous estimate of $320 billion in 2014. The study also finds that the total burden of education-related health disparities for persons with less than a college degree in 2018 reached $978 billion, about two times greater than the annual growth rate of the U.S. economy in 2018.” Select excerpts:
NIH-funded study highlights the financial toll of health disparities in the United States NIH May 16, 2023 https://www.nih.gov/news-events/news-releases/nih-funded-study-highlights-financial-toll-health-disparities-united-states
Study: mortality rate disparity remains high: “Over a recent 22-year period, the Black population in the US experienced more than 1.63 million excess deaths and more than 80 million excess years of life lost when compared with the White population. After a period of progress in reducing disparities, improvements stalled, and differences between the Black population and the White population worsened in 2020.”
Carabello et al Excess Mortality and Years of Potential Life Lost Among the Black Population in the US, 1999-2020 JAMA May 16, 2023 ;329(19):1662-1670. doi:10.1001/jama.2023.7022
Public Health, Covid
Study: economic impact of Covid: Shaefer Center analysts assessed the total costs of the pandemic from January 2020 to December 2023. Findings:
“At the height of the pandemic, in the second quarter of 2020, our survey indicates that international and domestic airline travel fell by nearly 60%, indoor dining by 65% and in-store shopping by 43%.
We found that the three sectors that lost the most ground during the first 30 months of the pandemic were air travel, dining, and health and social services, which contracted by 57.5%, 26.5% and 29.16%, respectively.
From 2020 to 2023, the cumulative net economic output of the United States will amount to about $103 trillion. Without the pandemic, the total of GDP over those four years would have been $117 trillion – nearly 14% higher in inflation-adjusted 2020 dollars, according to our analysis.
The direct health expenses, driven mostly by hospitalization costs in these scenarios, would have totaled $20 billion in a best-case scenario in which 65,000 Americans would have died from January 2020 to June 2022. In the worst-case scenario, about 2 million would have died during that period, with $365 billion in direct health-related expenses.
The COVID-19 pandemic cost the U.S. economy $14 trillion, new research finds Fortune May 16, 2023 https://fortune.com/well/2023/05/16/how-much-did-covid-19-pandemic-coronavirus-cost-economy-14-trillion
CDC: Overdose deaths increase: The Centers for Disease Control and Prevention on Wednesday released a provisional count of overdose deaths last year that indicated the toll of the fentanyl crisis leveling off after two years of surges during the Covid-19 pandemic. The CDC counted 109,680 overdose deaths in 2022 compared with 109,179 deaths from a similar 2021 projection.
The count includes a mix of overdose deaths counted thus far—105,452 as of Wednesday—and other projected deaths. Overdose deaths tend to be counted slowly while coroners and medical examiners await toxicology results. The CDC will reduce the number in a later count for the year, removing deaths that ultimately weren’t verified and those among non-U.S. residents. The revised count for 2021 was 106,699.
Public Opinion, Polling
Axios: public divided about public health priorities: In the Axios/Ipsos American Health Index released last week, “When it comes to public health priorities, Americans look to their pocketbooks.
- When asked what the government should prioritize for public health, half of Americans say reducing the cost of healthcare and prescription drugs.
- The next closest priorities are research into breakthrough cures to major diseases and reducing gun deaths, both distantly behind reducing healthcare costs, at 14%.
The American public is pessimistic about the institutions of America looking out for their health and well-being.
- Three-quarters of Americans disagree that either American businesses or the government make the health and well-being of consumers or citizens a priority.
- Only three in ten (28%) Americans think that the country is adequately prepared to deal with another pandemic.
Just 41% say they trust the information on health topics they get from their state’s governor either a great deal or a fair amount.”
“Americans ready for end of COVID-19 as a public health emergency” Axios/Ipsos American Health Index May 18, 2023 www.ipsos.com/en-us/axios-ipsos-american-health-index
Harris Poll: majority dissatisfied with health system: with The Harris surveyed 2500 adults in February-March, 2023. Findings:
- When asked how they would grade the nation’s healthcare system, 34% of people said “C,” 18 % said “D” and 8% said “F.”
- 70% feel the nation’s healthcare system fails to meet their needs in some way vs. 27 % who said the U.S. medical system does meet all of their needs.
- Affordability was the most commonly selected barrier to accessing healthcare, followed by a focus on profit and access to insurance.
- 44% of people said they skipped or delayed needed care in the past two years.
”Exclusive: More Than 70% of Americans Feel Failed by the Health Care System” Harris Poll May 16, 2023 https://time.com/6279937/us-health-care-system-attitudes
Health Insurers, Employers
Study: relationship between insurer market power and hospital reimbursement: “We examined the association between insurer market share and hospital prices, using a new source of data obtained through the federal Hospital Price Transparency initiative. We found that the market-leading insurer in the least competitive (most concentrated) insurance markets pays 15% less to hospitals than the market-leading insurer in the most competitive (least concentrated) markets…… When we explored differences by hospital ownership type, we observed nontrivial differences across ownership types in the relationship between the market share of the dominant insurer and negotiated prices. For-profit hospitals appeared to have substantially lower negotiated prices when the market-leading insurer held a high market share: In states in which the market share of the dominant health insurer exceeded 71%, the dominant insurer payer, on average, paid 32% less to for-profit hospitals than market-leading insurers in more competitive (low market share tercile) insurance markets. Public hospitals also experienced lower negotiated prices from the market-leading insurer in high-concentration states. Not-for-profit hospitals had only modestly lower negotiated prices (in the range of 6–7% less) when the market-leading insurer held a high market share…
Our results suggest that insurer market power is associated with lower prices paid for services nationally. Previous work has found that greater insurance market concentration is associated with lower negotiated hospital prices. Using new data and a different methodology, our results confirm It remains to be seen whether price transparency will unleash a true, consumer-driven revolution in health care.
It is also possible that price transparency itself will change the nature of negotiations between insurers and hospitals. Hospitals have now been given a window into what their competitors receive from insurers for the same services. Such information could be extremely valuable to hospitals. “
LoSasso et al “Insurer Market Power and Hospital Prices in the US” Health Affairs May 2023 https://doi.org/10.1377/hlthaff.2022.01184
Study: payment withhold by payers: “Providers expect 15% of every dollar billed to be challenged and scrutinized and to expend labor-intensive and costly procedures to ultimately get paid. Eight cents of every dollar provider bill to commercial payors will never be received or will be taken back once received. One-third of the AR that is aging over three months is from the payor category that providers rely on most to drive their financial performance. This is the bleak reality from 45% of a typical hospital’s business.”
- Commercial payors initially denied 15.1% of inpatient and outpatient claims compared with 3.9% for Medicare in 1Q 2023
- $18,156.50 is paid by commercial payors compared with $14,887.10 paid by Medicare
in average net revenue per inpatient case.
- $1,606.86 is paid by commercial payors compared with $707.30 paid by Medicare in average net revenue per outpatient case
“KPI benchmarking report: Time for a commercial break” Crowe May 16, 2023 www.crowe.com/insights/asset/k/kpi-benchmarking-report-time-for-a-commercial-break
NAHPC survey: anticipated changes in employee preventive health benefits: The National Alliance of Healthcare Purchaser Coalitions surveyed 29 employers in April-May 2023 on their approach and thinking on health benefits with the public health emergency now over.
Though 72% of employers said they expect to continue covering preventive services, 22% revealed they do not know whether they will provide coverage and 6% said they’ll be more selective.
Report: Million-dollar EBI claims up 15% in the past year: Per the Sun Life analysis:
- Million-dollar claims on a per million covered employees basis rose 15% in the
past year and 45% over the past four years.
- 71% of all stop-loss claims came from the top 10 conditions. While cancer continues to be the largest driver of high-cost claims, cardiovascular disease rose one spot to the #2 claim condition in 2022, with $142.4M in reimbursements for over 2,300 members.
20% of employers had at least one member with over $1M in claims during
the four-year benefit period from 2018 through 2021
2023 EDITION: High-cost claims and injectable drug trends analysis Sun Life May 16, 2023 https://sunlife.showpad.com/share/qn4HBwhB34l6lpfgmz2Qd
Regulators, Court Actions
FTC lawsuit to block Amgen acquisition: Last Tuesday, the FTC on filed a lawsuit to block Amgen’s proposed $28 billion buyout of Horizon Therapeutics on the grounds that Amgen will be able to “bundle” rebates with insurers and get better coverage for Horizon drugs. While Wall Street analysts warned the suit could dull M&A enthusiasm across the sector, Regeneron CEO Leonard Schleifer backed the FTC’s argument. Still, Amgen CEO Bob Bradway said he’s ‘confident’ the deal will go through, and according to the company, the deal will close in September if there’s no court ruling by then.
Related: The Supreme Court ruled unanimously in favor of Sanofi and Regeneron in a closely fought patent battle between the partners and their PCSK9 rival Amgen, deciding that Amgen cannot monopolize the market for any and every antibody that binds to areas of the sweet spot of PCSK9
FTC sues to block $28B Amgen-Horizon deal, in move that will send shockwaves through biopharma EndPoints May 16, 2023 M&A https://endpts.com/ftc-sues-to-block-amgen-horizon-deal
Walgreens agrees to San Fran opioid penalty: In a court filing last Wednesday, Walgreens agreed to pay the city of San Francisco $230 million over the next 15 years for its role in the city’s opioid crisis including a $57 million year-one payment. Walgreens has had to pay up in other opioid cases: $4.79 billion on its own as part of a $12 billion settlement with CVS and Walmart announced late last year. In 2022, Teva and Allergan agreed to pay a combined $54 million to exit a lawsuit: Teva, in its statement, agreed to pay $24.8 million over a 13-year period and provide $20 million of Narcan over the course of 10 years.
Walgreens to pay San Francisco $230M in opioid settlement EndPoints May 16, 2023 https://endpts.com/walgreens-to-pay-san-francisco-230m-in-opioid-settlement/
CVS reports mixed results: Health reported an 8.7% decline in net income to $2.1 billion during the first quarter. Revenue rose 11% but costs related to its acquisitions of Signify Health and Oak Street Health dinged quarterly profits, and the company revised down its profit projections for the full year. CVS Health shares opened at $68.58 on the New York Stock Exchange on Monday, down 36% from the $107.26 52-week high on Aug 16, 2022
Mayo reports strong 1Q 2023 financial results, wins waiver from state legislators: Thursday, Rochester, Minnesota-based Mayo Clinic reported its 1Q 2023 results: $420 million in net income vs. $177 million in 1Q2022. Operating income increased 4.9% to $149 million. Revenue rose 8.8% to $4.27 billion. Expenses grew 9% to $4.12 billion, including 7.7% more for salaries and benefits and 11.3% more for supplies and services. Cash and investments totaled $17.65 billion, a 2% increase from the fourth quarter, largely due to investment gains.
Related “The debate over Minnesota’s proposed nurse staffing bill (SF1384) is heating up, but as most of the state’s health systems attempt to gut the legislation, Rochester-based Mayo Clinic has successfully passed through a loophole.
The Keeping Nurses at the Bedside Act, if passed, would require hospitals to form staffing committees of equal parts direct care workers and hospital leaders. The state would require hospitals to abide by the nurse-to-patient staffing ratios established by their committee.
Caroline Hudson “Mayo Clinic’s strong quarter signals possible rebound” May 19, 2023
HCA reports strong profits in 1Q 2023: HCA Healthcare beat expectations in the first quarter and raised its profit guidance for the year. Net income increased 7.1% to $1.4 billion, or $4.85 per share. Revenue rose 4.3% to $15.6 billion, and expenses grew 4.1% to $13.7 billion. In tandem, it also announced its acquisition of 41 urgent care centers in TX from FastMed.
HCA Healthcare www.hcahealthcare.com