The Health Care Checkup is a weekly rundown of the state’s top health care headlines.
Checking the Pulse
Express Scripts lays off 400 employees
A week after its third quarter report announced a net income growth of 36 percent, Express Scripts, the St. Louis-based pharmacy benefits manager, is laying off 400 employees nationwide, including 90 in the St. Louis area. It’s the company’s second round of layoffs this year following 1,890 jobs cut from the payroll in May.
The cuts are not a surprise, analysts say, and two major factors appear to be driving them. First, although profits grew last quarter, Express Scripts reported stagnant revenue year over year caused in part by fewer filled prescriptions. The other reason is the continued integration of operations from Express Scripts’ $29.1 billion acquisition of Medco in 2012.
Cigna strikes a deal with BJC and Washington University
Connecticut-based insurer Cigna is a newcomer to Missouri’s health care exchange for the coming year, and it already has achieved a bit of a coup in its new marketplace. The company announced partnerships with BJC Healthcare and Washington University Physicians as part of Cigna’s network of providers when enrollment begins Nov. 15. Neither St. Louis-based health system was part of 2014 coverage plans from Cigna’s biggest competitor in the state, Anthem Blue Cross Blue Shield, and neither has reached agreements with Anthem for the year ahead, either. The other two insurers confirmed for Missouri’s exchange ahead of enrollment, Coventry Healthcare and UntiedHealthCare, have not said whether BJC Healthcare or Washington University Physicians would be part of their respective networks.
The announcement is great news for patients in the St. Louis area, as BJC and Washington University are two of the area’s biggest health care providers. The most recent data for the two systems (2013 for BJC, 2012 for Washington University) shows they received more than 209,000 combined hospital visits, though some of those numbers overlap as Barnes Jewish Hospital counts toward both. The exclusion of the two systems in the past raised major concerns for people wanting to visit their hospitals, particularly those in need of child care.
Short ACA enrollment window draws concern from advocates
With just days to go before this year’s round of Affordable Care Act enrollment begins on Healthcare.gov, advocates for the program are expressing growing concern about the shorter enrollment period for 2015 coverage. The new enrollment period will run from Nov. 15 to Feb. 15, or about half as long as last year’s six-month window. In spite of the shorter enrollment period, the Congressional Budget Office projects the number of enrollees to jump from 7.3 million people this year to about 13 million in 2015. The Obama administration’s newest forecast lowers that projection to between 9 million and 9.9 million people.
Advocates say the biggest hurdle will be getting word out to hard-to-reach segments of the population about the enrollment time frame. An October poll by the Kaiser Family Foundation says 89 percent of respondents who are currently uninsured don’t know the open enrollment period begins Nov. 15, and many know little to nothing about the insurance exchanges and what they offer.
Shots in the Arm
The biggest fundraising news comes not from a Missouri company so much as one benefiting from Missouri knowledge. San Francisco-based Prostate Management Diagnostics Inc., founded through a partnership between the Peter Michael Foundation and The Genome Institute at Washington University School of Medicine, raised $1.1 million in Series A funds. Among the contributors was St. Louis’ BioGenerator, which contributed $100,000. Prostate Management Diagnostics says it will use the money to develop a test that will help with diagnosing prostate cancer.
Reading the Chart
Robotic cardiology instrument maker Stereotaxis got a diagnosis of health for its third quarter, in which it reported a profit of $22,670, compared to a $56.9 million loss in Q3 2013. Not all the news was good, though: Revenue was down 18 percent year over year, but that was still a 10 percent increase from the second quarter of this year.
Quote of the Week I
“It would basically be a door-closer.”
— Keith Ratcliff, a physician in Washington, Mo., on the effect losing a reimbursement boost for treating Medicaid patients would have on primary care doctors with private practices. Doctors are compensated separately for Medicare and Medicaid patients, and before the Affordable Care Act Medicaid paid significantly less. As the St. Louis Post-Dispatch explained, doctors would be compensated $54.74 by Medicare for a comprehensive patient visit including exam and medical history before ACA; after, the rate for the same visit jumped to $105.16. The federal boost is set to expire for next year, though, and unless the state steps in to cover it doctors could be faced with the prospect of losing money on caring for Medicaid patients or not taking them in at all.
Quote of the Week II
“Fundamental M&A should accelerate in the U.S., especially in respect of mid-cap biotechnology and specialty pharmaceutical companies.”
— Michael Meyers, head of investment banking at T.R. Winston & Co. in Los Angeles. Translation: What’s old is new again in the world of pharmaceutical and biotechnology mergers and acquisitions. Companies in those industries used to look for smaller, innovating companies to purchase in order to acquire new drugs, procedures or equipment in development. However, the last few years have seen U.S. companies looking to snap up small foreign businesses in order to move their headquarters offshore and reap the benefits of lower taxes. Mallinckrodt Pharmaceuticals, for example, calls Dublin its home thanks to its former owner Covidien, though it still operates out of Hazelwood. However, after the Treasury Department took steps in September to shut down those tax benefits for inverting companies, many of them are again looking for small domestic innovators to buy.
Tweet of the Week
— Mo Health Alliance (@MOHealthVoices) November 11, 2014
In this week of remembrance for Veterans Day, this could be something to keep in mind if Sen. Ryan Silvey’s plan to put Medicaid expansion back on the negotiating table comes to fruition.
The Pressing Question
All eyes are on Saturday’s return of open enrollment in health insurance exchanges for 2015. Missouri’s recent sneak preview of Healthcare.gov was smooth, though more costly. How will early enrollment numbers measure up to the government’s (lowered) projections?