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WALMART IN TALKS TO ACQUIRE HUMANA TO FORTIFY MARKET POSITION: Walmart is reportedly in preliminary acquisition talks with health insurance company Humana, according to The Wall Street Journal. The two companies already have a relationship, having co-branded a Medicare drug plan and worked together on a healthy food rewards program. An official deal to buy Humana would turn Walmart into a formidable health system, controlling the pharmacy, health insurance, and pharmacy benefit managers (PBM). PBMs are the middlemen of the pharmaceutical industry, responsible for negotiating the costs of drugs for health plans.
Joining forces with Humana would help turn Walmart into a one-stop shop for their customers' healthcare services. Humana is the second-biggest provider of private Medicare plans, known as Medicare Advantage, according to WSJ. These plans are expected to grow as more baby boomers become eligible. Walmart is targeting this age group by adding more primary-care clinics, which some locations already have. This is particularly valuable to elderly consumers on Medicare and Medicaid benefits that are less willing or able to travel. That's because they can run multiple errands at the same location. For example, they can also pick up their prescriptions and shop for groceries and households items.
This is just the latest instance of healthcare companies participating in vertical integration to fortify their market positions. As healthcare costs continue to balloon, margins are being compressed, leading healthcare organizations to look for new ways to generate revenue. Expanding their offerings is one way to achieve this. For example, in December 2017, CVS inked a deal to acquire Aetna. And in March 2018 Cigna set in motion plans to buy Express Scripts, the largest PBM in the US.
The recent acquisition activity may serve as a bolster against Amazon's myriad moves into the healthcare industry. The online retailer appears to be building out a full healthcare ecosystem. In the past year alone the firm has introduced HIPAA-compliant cloud features, entered into a cloud partnership with health tech giant Cerner, launched a challenge to third-party companies to develop Alexa skills to help people with diabetes manage their condition, and in January announced the creation of a healthcare company with JPMorgan Chase and Berkshire Hathaway. If Amazon continues on this trajectory it could become a dominant one-stop shop for providers and patients.
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13 COUNTRIES SIGN UP TO GLOBAL DIGITAL HEALTH PARTNERSHIP: As the digitization of healthcare gains steam globally, the need for integrative and shared policies between not only national but international health systems grows in kind. Thirteen countries, led by Australia and including Sweden, Saudi Arabia, the US, and the UK, have formed the Global Digital Health Partnership (GDHP). The aim of the partnership is to share policy and research on digital health services in order to come up with best practices. The group will have the advantage of shaping how the overall industry evolves. Over the course of 2018, the GDHP plans to collaborate around concepts such as the interoperability of healthcare, cybersecurity, digital health outcomes policies, clinician and consumer engagement, and evidence and evaluation of digital health. The complete list of countries in the group is Austria, Australia, Canada, India, Indonesia, Italy, New Zealand, Saudi Arabia, Singapore, South Korea, Sweden, the US, and the UK.
OPTUM, UNITEDHEALTHCARE, HUMANA, OTHERS PARTNER TO LAUNCH BLOCKCHAIN EFFORT: A group of leading healthcare organizations are joining forces to launch a pilot program to test how blockchain technology can improve data quality and reduce admin costs associated with retrieving electronic health records (EHR). The five healthcare organizations include Humana, MultiPlan, Quest Diagnostics, and UnitedHealth Group's Optum and UnitedHealthcare. The group hopes the technology will make it easier to access healthcare data in a timely fashion, while also cutting down on the need to "reconcile" differences in EHR systems. Industry estimates indicate that $2.1 billion is spent annually by healthcare systems on finding and maintaining provider data. Distributed ledger technology could also help to increase transparency around who has access to a patient's data and how they're using it, which would help to improve data security.
150 MILLION FITNESS AND NUTRITION APP ACCOUNTS HACKED: MyFitnessPal, Under Armour's nutrition-tracking fitness app, was hacked in February this year, affecting around 150 million users' accounts, Under Armour announced last week. The news highlights the damage that can be caused from a breach of a single app - the breach is the largest yet in 2018 and includes usernames, passwords, and email addresses. This information is valuable given that 80% of global smartphone users recycle the same password-email combination across multiple services, according to Keeper Security, potentially leading to further user data vulnerabilities down the line. At the same time, damaging reports like this one could negatively impact the broader mHealth app market. Adoption of mHealth apps has grown rapidly, up 330% between 2014 and 2017, according to Flurry. If consumers become fearful of their data being access by nefarious players, it could mute the health app market's growth. Because of this, mHealth app publishers need to ensure that users are working to protect their information. This could be done by sending reminders to change passwords regularly or offering two-factor authentication, for example.
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IN OTHER NEWS
- US Secretary of Veteran Affairs (VA) David Shulkin's dismissal last week could impact the department's impending $16 billion electronic health records (EHR) deal with Cerner, POLITICO reports. Although specific details remain uncertain, the consensus among industry experts is that the deal will likely be delayed because of the shuffling, but will ultimately go ahead.
