EHR Data interoperability: Apple, Google, CMS and FHIR

Data interoperability is the flavor of the month. Everyone is working on it.

Different EHR providers mean ‘proprietary data’ and impact to revenue hence naturally system A can’t talk to system B when patient changes health plan, provider or employer benefits

Apple may be bringing disruption with its consumer play.

Apple launched its Health Records platform with over a dozen partners.

While about 40 health systems are now primed to sharing their medical records with patients through the iPhone Health Records app is impressive, what’s particularly interesting is Apple’s bet that consumers will be empowered to share this data with an ecosystem of digital health apps (developers) on their phones and providers and drive their own insights.

This is particularly a new approach with EHR portability which is usually system led rather than consumer led.

To make this all possible, the industry had to agree to one standard – Fast Healthcare Interoperability Resources (FHIR). This then serves as a connector to read and port data to/from from an EHR. Apple’s partners include top tier systems such as NYU langone Health, Stanford Medicine, The University of Chicago Medicine and John Hopkins hospital.

While Apple is pursing a B2C play, Google continues it’s domination in B2B via acquisitions.

Google’s Apigee (acquired in 2016) has apparently been working with several healthcare companies, including Walgreens, Kaiser Permanente to build links between data streams connecting existing data sets in disparate systems and finding new ways to ingest data from other sources. It’s strategy is to build an ecosystem of developers that are native to Apigee’s API.

There isn’t much data yet on adoption except in the single payer UK NHS where Deepmind (another acquisition) and Google’s AI arm has rolled out a number of limited hospital rollouts of it’s Streams app.

With use of the Apigee API, come storage requirements. Apigee sits under Google’s relatively new Cloud division so naturally it’s aim is to sell cloud services to these organizations to catchup up to Amazon’s Web Services and Microsoft Azure.

Lastly, the government has taken a stand to accelerate interoperability. Championed by White House advisor Jared Kushner, CMS debuted blue button 2.0 in March. The premise is patients should have access to their medical data wherever they go throughout their lifetime. As such it is requiring health plans to share data on Medicare participants. CMS requirements include requiring providers to update their systems to ensure data sharing, allowing patient’s data to follow them after they are discharged from a hospital and streamlined documentation and billing for providers.

As data becomes a commodity, non differentiated EHR incumbent providers such as Epic, Allscripts, Cerner will have to revisit their business models due to competitive new entrants and reduced revenue.

Facebook and the healthcare sector

Considering the launch of a Bayer campaign back in 2016 reported by Fierce Pharma, Facebook has been building teams that sell pharma ads to the health care sector. While still in the early stages, it is no secret that Google built those teams years ago to sell account management and ad targeting for big pharma and life sciences firms.

Google got clever however. It long invested in Google (Cloud), one of the fastest growing business segment in enterprise. With Amazon (Web Services) and Apple (Electronic health records rollout on its devices), Facebook is far behind the GAFA set in the health care industry. The recent Cambridge Analytics data privacy breach is a set back for the company in rollout of any new enterprise platforms (Workplace by Facebook) and patient data analytics experimentation, especially considering HIPAA privacy regulations. Workplace by Facebook reportedly has signed up over 10,000 organizations in a very short time and is possibly the medium to enter the industry. By working with healthcare providers on collaboration and predictive analytics tools, it may be the route to compete in the already crowded telemedicine market.

Time will only tell if the company can build products that expand beyond other people’s data and the advertising model.

Speculation: Pillpack to be acquired by Walmart

Walmart has been busy. Pillpack is getting acquired or so is the news today.

According to the NIH, Medication nonadherence rates range from 25% to 50%. Nearly half of all adults have at least one chronic disease and the percentage of Americans taking at least one prescription drug increased from 38% in the period 1988–1994 to 49% in the period 2007–2010; during the same time the number of adults taking three or more prescription drugs doubled.

It is reported that Walmart may pay up to $1B for the pharmacy mail order logistics startup making it easier for patients to receive the right dosage at the right time in the comfort of their home. As industry consolidation continue, other companies in the medication management space to watch out for are Alto and Capsule.

Walmart and Humana, a merger or joint venture?

According to a WSJ article, the two companies are in talks on a merger.

What a lot of people don’t realize is that both companies already have a relationship.

According to the NY Times, since 2010, they have sold a co-branded prescription drug benefit (PDP) for Medicare recipients, which offers savings on certain drugs bought at Walmart’s pharmacies. The two companies are now discussing how to expand that partnership in ways that would help drive more traffic to Walmart’s 4,700 United States stores, while increasing Humana’s enrollment.

And this strategy makes sense. Consider that Walmart’s demographic skews towards baby boomers and seniors. According to the graphic below, almost 50% of a shopper survey done by Kantar Retail Shopper Scape fit either in the Baby Boomer segment or Senior segment. ALDI in the graph happens to be a Walmart brand as well!

Generation Walmart
Source. Kantar Retail Shopper Scape

That aligns strongly with Humana’s cash cow – Medicare Advantage – as the ranks of baby boomers swell.

To drive enrolment, Humana needs that traffic and continuous enrolment in Medicare Advantage.

According to Modern Healthcare, Humana divested Concentra Clinics – a nationwide urgent care clinic that it previously acquired. At the time of the divesture in 2015, the CEO was quoted “Though Concentra’s operations did not ultimately align with Humana’s strategy as well as we had originally anticipated, we believe Humana and Concentra have gained valuable insights into consumer behavior over the past several years that will serve us both well moving forward,”

Due to demographics, a Walmart partnership may be better than running scores of urgent care clinics AND driving traffic (Medicare Advantage or PDP plan) to them. Evidence may indicate that urgent care clinics skew towards an urban younger population which runs counter to Medicare/PDP Plans and Walmart’s segment population.

Albertsons gets green light to acquire Rite Aid

Grocery chain operator Albertsons has just received the go-ahead from the government to acquire Rite Aid. That deal will combine approximately 2500 Rite Aid stores with Albertson’s 2200 grocery stores which include brands such as Safeways and Jewel Osco.

Of the key offering in the Rite Aid acquisition is – EnvisionRx, a national fully integrated retail, mail-order and specialty pharmacy benefits management (PBM) company.

EnvisionRx, apparently provides full disclosure in the PBM marketplace, promoting a transparent, pass-through business model in which 100% of earned rebates, discounts, and incentives are instantly credited at the point of sale to customers.

Rite Aid only acquired that PBM back in 2015. The consolidation continues the vertical integration in health care where distribution channels (stores) combine with the middle men (benefits administrator) to accelerate sales.

Rite Aid completes transfer of stores to Walgreens

According to a March 2018 press release, 1932 stores and three distribution centers have now been transferred to Walgreens Boot Alliance for an estimated $4B.

However, that doesn’t account for all of Rite Aid’s approximately 4500 drug stores.  Due to a government antitrust Walgreens/Rite Aid merger block, the remaining stores and PBM will instead go to recent acquirer – grocery store chain –  Albertsons.

 

 

GSK diversifies revenue with Consumer Health division

According to the FT, GSK bought out Novartis 36.5% stake in their consumer health joint venture partnership for $13B. That move brings to GSK – sole ownership of products such as OTC tooth paste Sensodyne while enabling GSK to strengthen its consumer health division within its three main revenue drivers.

GSK’s consumer health division make up approximately 25% of sales while the Pharma drug discovery arm make up 50% of sales. The other 25% of sales comes from vaccines.

The company was originally set to acquire Pfizer’s Consumer Health arm for a similar price in a diversification strategy that would have given it the OTC brand – Advil.

Pfizer’s consumer health arm remains on sale.