Private equity's recipe for hospitals? It's about tech with all the dressing – Politico

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The collision of health care and technology.
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By BEN LEONARD 

Presented by Biogen
A MEDICAL ARMS RACE: Private equity spending in health care is exploding. And one place it’s evident is in hospitals that have supercharged their growth with robotic surgery, digital mammography and other tech tools.
New research in the journal Health Affairs suggests the flood of investment could be pushing hospitals to chase profits. The research showed investments in tech-driven services like cardiac surgery or catheterization rose in hospitals acquired by private equity firms — while delivery of some low-margin services fell.
Researchers from Duke and Rice universities found hospitals were 6.2 percent likelier to offer robotic surgery and 4.1 percent more likely to offer digital mammography after being acquired by private equity firms. Another trend: a shift to freestanding emergency departments from emergency services that are part of health systems — which the authors say could limit access to care in certain areas.
“The key here is that they’re more of these [investments] faster, not necessarily that non-private equity acquired hospitals don’t do it at all," said Marcelo Cerullo, lead author of the paper and resident at Duke University Hospital.
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The research suggested hospital administrators may not be as willing to invest in unprofitable services like adult daycare, birthing rooms and labor and delivery.
Private equity firms generally move quickly to bolster a company’s value before selling it, typically over three to seven years, incentivizing the businesses to adopt strategies that focus heavily on profit, experts say.
“[Private equity] firms go after money like sharks after blood,” said Ge Bai, a professor of health policy and management at Johns Hopkins’ Bloomberg School of Public Health.
Buyouts in the health sector hit $100 billion in 2018 — more than 20 times higher than in 2000, according to one estimate. About one in 10 patients released from hospitals in 2017 were discharged from private-equity held institutions. Some of the biggest players included Bain Capital, GTCR and Cerberus Capital Management.
“There’s just a lot of what we call dry powder that is waiting to be invested,” said Sabrina Howell, an assistant professor of finance at NYU’s Stern School of Business and a research fellow at the Private Equity Research Consortium.
The money is flowing into some of the most profitable, high-tech lines of business, like robotic-assisted surgery, that allows surgeons to perform complex colorectal, gynecological and other procedures in minimally invasive ways, allowing for faster recovery times. Digital mammography captures images of the breast — sometimes 3D — to detect more invasive cancers and, in some cases, reduce the need for biopsies.
A spokesperson for the American Investment Council, a group representing private equity firms, said private equity-acquired facilities improve care and drive innovation that helps reduce Medicare costs, pointing to a MedPAC report from earlier this year.
Critics say the investor-driven race to boost hospital values comes at a price. Rosemary Batt, a professor of women and work at Cornell University, said private equity ownership and the focus on the latest advances can result in understaffing and lower quality equipment.
“There’s mounting evidence about the negative effect on both patients and workers,” Batt said.
The Duke and Rice researchers said a way to address that is to consider regulations ensuring equitable access and delivery of care. Transparency is among the most important things to look into, Cerullo said, because private equity firms aren’t subject to the stringent reporting requirements required of publicly traded companies.
Experts generally agreed that more transparency into these private deals would be a step forward. Anaeze Offodile, an author on the paper and fellow in domestic health policy at Rice’s Baker Institute, said it would drive more accountability.
“Whenever there is a misalignment between profitability and patient well-being, regulatory scrutiny is needed … to prevent the PE firms’ overenthusiasm in very profitable services that might harm patients,” Bai said.
Welcome back to Future Pulse, where we explore the convergence of health care and technology. Share your news and feedback: @dariustahir, @ali_lev, @abettel, @samsabin923, @_BenLeonard.
A message from Biogen:
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Christina Farr @chrissyfarr “Hearing that 2021 was an amazing year for plastic surgeons, in many cases their best ever.
Why?
Zoom effect (people seeing their faces all day long) + WFH making schedules more flexible”
Kaiser Family Foundation
QUESTIONS ON ONLINE MISINFORMATION FOR THE AMA PRESIDENT: The American Medical Association’s House of Delegates last week adopted a policy to address online public health misinformation. The policy focuses on combating false claims made by health professionals about Covid-19 transmission, treatments and public health precautions.
POLITICO’s Darius Tahir spoke with AMA President Gerald Harmon, a South Carolina family physician, about how conspiracy theories and other false claims influence decision-making. The conversation was edited for length and clarity:
The history of misinformation in medicine is, unfortunately, quite long. I think of therapies like laetrile in the 1970s, a so-called miracle cancer cure based on chemicals found in fruit pits. Is the prevalence of it due to technology or some other social change?
I’ve been through this, as a student then and as a clinician for most of my 40-year career. Now, at the end of my runway with the career, I’m still dealing with misinformation. It may not be a quantifiable amount of misinformation out there, but I think the access to it is much easier these days because of social media, the internet.
What can doctors do about it?
We’re asking our profession, our organization, and our board to work with stakeholders, other professional societies, to address and combat disinformation that’s currently being spread by those in health care. I have the why;, I don’t yet have the how. I have the goal ahead of me.
What effects of misinformation have you seen firsthand?
At the front end of medicine where I practice, even two weeks ago I would go see patients in the hospital who had the opportunity to be vaccinated, with what is a free vaccination, and incredibly safe — one of the miracles of the 21st century that we’ve been able to develop — and they still were denying it.
Now they’re sick with Covid, their families were all distraught, their lives are threatened. I would never go in there and say, you were wrong, I don’t understand why you didn’t take the vaccine, in an accusatory format, but they were certainly wishing they’d listened to their trusted family adviser or family doctor about the vaccine.
COVID LOSS OF SMELL QUANTIFIED: Between 700,000 and 1.6 million Americans have suffered a long-term loss of smell because of Covid-19, according to an analysis in JAMA Otolaryngology-Head & Neck Surgery that adds to the growing body of research on the chronic effects of the virus.
Olfactory dysfunction, or OD, lasting six months or longer is linked to appetite loss, diminished social well-being, worries about personal hygiene and depression, which amounts to “an emerging public health concern” that merits more study, write the authors from Washington University School of Medicine. The condition was detected in August 2020 and affects a younger demographic group than the 80 years and older cohort that loses smell mostly for non-Covid reasons.
The researchers say their results may underestimate the problem’s scope because state-reported positive cases of Covid-19 likely don’t reflect all the infected population and estimates of OD are drawn from healthier, ambulatory patients who aren’t hospitalized.
DRUG DECISIONS ON HOLD: The Food and Drug Administration hadn’t made decisions on 52 human drug applications as of Sept. 30 solely because it was unable to conduct inspections or facility assessments, according to an update the agency released this week.
The agency said it conducted 1,139 domestic surveillance inspections of human and animal medical products in fiscal year 2021 — a figure that’s higher than the base-case scenario of 851 surveillance inspections officials predicted in a May inspection roadmap. The agency also conducted 74 foreign inspections of human and animal medical products between April and September.
“FDA is currently developing a plan for resuming prioritized foreign inspections, including surveillance and application-related inspections, starting in February 2022 for all commodities,” the agency said.
CEO TOUTS ASTRAZENECA SHOT FOR OLDER PEOPLE: The head of AstraZeneca has suggested the company’s adenovirus vaccine could provide longer-lasting protection against Covid-19, especially in older people, than the mRNA vaccines from BioNTech-Pfizer and Moderna, POLITICO’s Helen Collis writes.
CEO Pascal Soriot told BBC Radio that could be a reason why the U.K. hasn’t experienced the same high levels of hospitalizations as Europe, where cases have surged in recent months. But he added more data was needed.
“In the U.K., this vaccine was used to vaccinate older people, whereas in Europe initially people thought the vaccine doesn’t work in older people,” he said.The pharma chief suggested this could be because AstraZeneca’s shot provides a better T-cell response than mRNA vaccines.
Pressed on whether increasing hospitalizations in Europe were linked to EU countries not using the adenovirus jab in older people, Soriot said: “There’s no proof of anything. We don’t know. But we need more data to analyze this and get the answer.”
A message from Biogen:
The future continues to look brighter for people living with Alzheimer’s. Biogen scientists are continuing our work to solve the Alzheimer’s puzzle. Our commitment to Alzheimer’s stems from our passion to advance scientific research and understanding for people living with the disease and their families. Like most advancements in medicine, this work is a time-intensive journey requiring significant research and development. Biogen believes innovation is about connecting the dots, from experiments in academic labs to clinical trials. Advancing Alzheimer’s research is about seeing what is possible and striving towards it. Biogen’s team is on an unrelenting mission to help those living with Alzheimer’s. But we can’t do it alone. We learn from those who came before us and listen to patients and caregivers. Learn more about Biogen’s work to transform the future of Alzheimer’s.
Rollbacks in telehealth are a threat to leave patients stranded, The Wall Street Journal reports.
A profile of life in northern Nevada without reliable internet — which affects health care — from National Public Radio.
Technology is fragmenting care, instead of stitching it together, a piece in MedPage Today argues.

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