Important Industry News
January 2018 Financial Technology, Data, and Analytics
Group of 300 hospitals, and potentially VA, join hands to make generic drugs
Intermountain and Ascension are some of the notable members of this group. VA has also expressed an interest to join in. This is a non-profit arrangement and will mostly focus on generic and off patent drugs. Just as an example, the price of Daraprim has gone from $13.50 to $750 since 2015. No wonder that the industry is fed up. This type of consortium structure will continue. Time to have a reasonable market clearing price for drugs.
AXA, one of the largest multinational insurer and Oscar Health enter into a reinsurance pact
On the heels of its deals with Humana and Cleveland Clinic, Oscar Health is trying to accelerate its growth by ceding a portion of its risk and premiums. Oscar has managed to double its individual market presence in six states.
This is a clever idea, as it could help Oscar minimize its losses but continue to grow. The company posted a $57M loss in the first half of 2017.
Digital health startups raised an all-time high of $11.5B globally in 2017 vs. $8.0B in 2016
The numbers are finally in and the jump is quite impressive. According to StartUp Insight Health, over 462 companies were funded in 2017. Measured by number of deals, seed, Series A and Series B funding kept their percentages roughly the same (29%, 36% and 20% of the total in 2017).
Internationally, China led the pack with close to $650 million funding over only 15 deals, followed by the UK which spent $190 million on 22 deals. There are now 1,203 investors in healthcare globally up from 865 in 2016.
Epic is to release a new slimmed-down EHR called Sonnet
Sonnet will be released in March of this year. The target market is physician practices and smaller hospitals which will surely benefit from the lower price points and shorter implementation times. Epic claims that the implementation for this new system will only take few months, vs. years for its All-Terrain system which is a full Epic EHR.
We are not surprised by the move of course. The mega deals are over and the company needs to “feed the beast” so it can keep growing. Time will tell if this will hurt companies catering to the lower end of the market.
Nike gets out of wearables
Nike’s FuelBand was indeed the pioneer in the wearable market. It is sad to see the leader abandon the business. But then again Fitbit employs hundreds of people in its R&D group just to develop a handful of products. Wearables are not for the faint of heart.