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Anjalee Khemlani

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Digital health services, which surged during the COVID-19 outbreak as a placeholder to help patients while doctors offices were shuttered and prevented health systems from being overwhelmed, have long been seen as critical in addressing shortages in rural health services.

Before the coronavirus pandemic, virtual health got scarce attention or appreciation. Yet as the world continues to battle the virus — and digital health enjoys its best year as a sector, with companies scaling to meet spiking demand — a debate is emerging over whether the trend is sustainable.

Mega-deals like Teladoc’s (TDOC) $18.5 billion acquisition of Livongo have punctuated a trend of major money flowing into the sector. According to a report from Silicon Valley Bank and EY, health tech deals increased by 18% in the first half of 2020, compared to 2019. And the trend isn’t slowing down, with American Well recently going public, and MDLive reportedly pursuing the same for early 2021.

Still, big questions remain about whether telehealth and other digital platforms are here to stay. As life slowly returns to normal, it’s possible that in-person visits may stage a comeback.

At least a few big employers seem to think the trend is permanent, according to an annual survey by Business Group on Health (BGH). A whopping 80% of those surveyed believe virtual health will play a significant role in how care is delivered in the future — a sharp increase from 64% last year and 52% in 2018. And over half (52%) expect more virtual care options next year, including for mental health, according to the survey.

“Virtual care is here to stay. While employers have been implementing more virtual solutions in recent years, the pandemic caused the pace to accelerate at an astronomical rate. And virtual care is now garnering growing interest and receptivity from both employees and providers who increasingly see its benefit,” said Ellen Kelsay,president and CEO of BGH.

Keeping the money spigot open

But some in the industry itself aren’t so sure. The Kaiser Family Foundation, which has been tracking the telemedicine trend, has observed that many regulatory and practice changes to utilization and reimbursement are temporary. With hopes riding high on a vaccine that could reset public life next year, the gradual lifting of social distancing restrictions may make the boom untenable, the study suggested.

“Overall, it is unclear whether we will continue to see high rates of telehealth utilization once the pandemic is over,” the Kaiser study’s authors wrote.

“Many of the policies enacted for private insurance plans have sunset dates, though several have extended the policies, some through the end of 2020 or until the public emergency is over,” it added.

Teladoc CEO Jason Gorevic recently told Yahoo Finance he believes better reimbursement is likely to continue, and demand for the technology has become mainstream.

“I think all signs indicate that reimbursement is here to stay, and specific to government-based Medicare reimbursement,” he said. “We’re seeing the COVID relief package with waivers through the end of 2021.”

However, Dr. Stephen Klasko, CEO of Jefferson Health, believes there isn’t enough momentum to sustain the telehealth wave — at least not without significant changes to reimbursements.

Insurers are currently “willing to pay $1,500 in for emergency visits and $49 for telehealth,” Klasko said, highlighting the misalignment of incentives for payors and providers.

It’s why when offices had to close in areas where the virus transmission spiked, doctors faced a sudden erosion of their annual revenues — with reports of at least a 40% drop in visit volumes.

Though insurers and the government increased reimbursement to match, or come close to, in-person visits, the lower volume of patients impacted doctors’ bottom lines — especially those who were not prepared to immediately jump into virtual visits and remote monitoring of their patients.

And Klasko believes there will be an immediate return to in-person visits when the pandemic is over— a trend already occurring as the gradual end of restrictions in many areas allow offices to reopen. Though not at the rate most experts would like, since preventative care is being ignored.

On January 1, prior to the pandemic hitting the U.S., Aetna (CVS) changed reimbursement in all 50 states to reflect equivalent pay for in-person or virtual visits. The caveat was that providers in-network would benefit, while out-of-network doctors would see a different reimbursement rate.

If other insurers follow Aetna’s lead, that creates another layer of concern about whether virtual visits will add to the overall spend in health care through redundant visits, or whether it will help avoid costly emergency visits.

Many health experts believe focusing on value-based care — where doctors are paid to care for a patient overall, rather than per visit or service rendered — is the key to avoiding that problem.

Insurers have long pushed the idea of value-based reimbursements because it ensures more control over expenses, rather than having to review and approve or deny each claim, item by item. Humana (HUM) also backs the idea in principle.

“The beauty of this model is that it makes how you’re accessing health services —whether in person or through telehealth — irrelevant because payment is not based on the volume or the service but instead on the overall health outcomes,” spokesperson Kate Marx recently told Yahoo Finance.

Dr Greg Gulbransen takes part in a telemedicine call with a patient while maintaining visits with both his regular patients and those confirmed to have the coronavirus disease (COVID-19) at his pediatric practice in Oyster Bay, New York, U.S., April 13, 2020. Picture taken April 13, 2020. REUTERS/Lucas Jackson

How doctors see it

Dr. Wyatt Decker, CEO of OptumHealth, the provider arm of United Health Group (UNH), believes the landscape will be “forever…changed” by outcome-based payments, which he believes will make provides and patients more comfortable.

And while telehealth usage has waned compared to the sudden spike over late spring and early summer when the pandemic surged throughout the U.S., Decker told Yahoo Finance there is room to keep the momentum going.

“As we get more scientific data around the value virtual care provides, that should guide the level of reimbursement,” Decker said.

However, virtual health may be “at a crossroads,” according to Aledade chief administrative officer Sean Cavanaugh, warning that the industry should not become “another piston in the fee-for-service engine.”

The former deputy administrator at the Centers for Medicare and Medicaid Services (CMS) told Yahoo Finance that an area where telehealth can be beneficial in a post-pandemic world is transition care. When a patient is discharged from a hospital, they can be monitored remotely instead of in person.

SIOUX FALLS, SD- OCTOBER 17: Hannah Schulte, RN has a quiet moment after a patient had passed away on October 17, 2019. As hospitals and physicians continue to disappear from rural America there is an attempt to fill the void: a telemedicine center run by Avera Health that provides remote emergency care for more than 175 understaffed hospitals across thirty states. (Photo by Michael S. Williamson/The Washington Post via Getty Images)

Different trends for different technologies

Meanwhile, technology is helping the industry adapt to changes in demand. The need to monitor chronic or vulnerable patients from a distance provides a perfect use case for remote monitoring, communication and wearable devices. For instance K Health, a service co-branded by insurer Anthem (ANTM), allows unlimited chat messages with a primary care doctor.

It has also increased sales for traditional medical device companies like Abbott, and interest in smaller players like Current Health and Tomorrow Health, which are focused on remote monitoring devices.

Abbott saw interest spike in its remote glucose monitoring devices at hospitals to allow diabetic patients to be monitored without excess interactions with nurses. Similarly, devices like heart rate monitors, blood pressure cuffs and weighing scales are also picking up.

Separately, mental health providers like Hazel Health — which recently got backing from Centene (CNC) — has seen a spike in usage as well. Meanwhile, as the focus on diversity grows, so too do companies like Hoy Health, which has focused on multi-lingual patients. Both provide services to the uninsured populations, with varying levels of out-of-pocket costs.

How usage trends behave for the remainder of the year, and into next year, will determine how overall health spend in the U.S. is impacted. Kaiser’s analysis found that telemedicine could impact other areas of health spending and outcomes.

“On one hand, if providers are reimbursed at lower rates, telehealth could offer savings. On the other hand, there may be concerns that these services could be additive (increasing health utilization overall) rather than just replacing in-person visits,” the study said.

“Another important question for researchers and policymakers to continue monitoring is whether telehealth services are providing care that can truly replace in-person visits,” it added.

Yet its clear that digital health has at least something to offer, even if demand tapers off.

“I’m bullish because people are coming to us, payors, vendors, doctors— that tells you the supply side is looking. They think there’s a business there. The demand side we experienced through [COVID-19],“ Privia Health CEO Shawn Morris told Yahoo Finance.

Author: Anjalee Khemlani

Source: Finance. Yahoo: The coronavirus has sparked a boom in digital health, but some say it may not last

The gradual relaxation of coronavirus restrictions is stoking hopes for an economic rebound, with the biotechnology industry riding a wave of expectations in the hunt for an effective COVID-19 treatment.

Vaccines are perceived as key to ending the restraints on work and life that have decimated the global economy, and returning to some sense of normalcy. Worldwide, there are nearly 5 million positive cases and over 300,000 have been killed by the virus.

With so much at stake, the global pipeline has become an intense space race for the new era. Nations are locked in an intense effort to demonstrate their biotech capabilities in the worldwide fight against COVID-19.

In collaboration with branches of the U.S. Health and Human Services (HHS) and National Institute of Health (NIH), small and large drug companies have been working on vaccines.

For now, the furthest along are Moderna (MRNA) and Pfizer (PFE), both of which are using messenger RNA technology— a newer technology that doesn’t exist in the current drug market. Both have entered human clinical trials. Abroad, all eyes are on China’s CanSino, and a project underway at Oxford University in the U.K.

Currently, “there are at least a hundred horses in the race, and we’ve got some leaders up front,” Marc Poznansky, the director of the Vaccine and Immunotherapy Center at Massachusetts General Hospital, told Yahoo Finance recently.

He added that it was “unprecedented to have that many platforms at play putting a product into testing to try to get to first in human” trials.

The World Health Organization is tracking the growing field, where less than a dozen of which have entered clinical trials. Some are being developed in coordination with governments, while others are through industry or academic collaboration.

The expectations have placed an unprecedented demand on a “pandemic market” that could eventually be valued anywhere between $10 to $30 billion, analysts at Morgan Stanley said last week. But an effective treatment is unlikely until the first half of 2021 at the earliest, with many health experts cautioning that aggressive development timelines are “aspirational” at best.

Still, pharmaceutical companies are repurposing existing drugs and trying to find treatments for those currently sick with the virus, with investors trying to determine the winners and losers of this high stakes race.

A ‘Warp Speed’ race

There are over 1.5 million coronavirus cases in the U.S. (Graphic: David Foster/Yahoo Finance)

The world’s two largest economies are engaged in fierce competition to find a vaccine. China is moving to bolster its nascent biotech industry and expand its reach globally, while the U.S. is fighting to balance urgency with safety and serving the needs at home first.

In order to winnow down the widening field of vaccine candidates, the U.S. has rolled out Operation Warp Speed, using $3 billion appropriated by Congress to fund vaccine development. Meanwhile, the U.S. Food and Drug Administration is working closely with drug companies to follow expedited timelines for clinical trials, as drug companies aim to produce billions of doses as soon as a candidate is viable.

Global collaborations through the WHO, and a concerted effort in the European Union are also at play. WHO officials also recently said they are working with both the public and private sector in India, which has a massive capacity for vaccine production, to produce the vaccines for the world.

Private institutions, like the Bill & Melinda Gates Foundation and the Coalition for Epidemic Preparedness (CEPI), are also pursuing candidates.

In the U.S., Moderna has received $483 million in funding from HHS’s Biomedical Advanced Research and Development Authority (BARDA), and is developing its treatment in collaboration with the National Institute of Allergy and Infectious Diseases, the agency led by Dr. Anthony Fauci.

Recently, Moderna has tapped the capital market in an effort to produce a billion vaccine doses per year, which it is doing in partnership with Swiss manufacturer Lonza Group.

Separately, Pfizer has partnered with German biotech BioNTech to develop its own vaccine, pivoting from their work together on a flu treatment.

Sanofi (SNY) and GlaxoSmithKline (GSK) are engaged in a joint effort in the race; meanwhile, Johnson & Johnson (JNJ) are among the larger pharmaceutical contenders, and have also gotten BARDA backing.

Two smaller biotechs, Inovio (INO) and Novavax (NVAX), have received funding from CEPI and are also working on vaccines. Inovio, which had previously worked on another coronavirus vaccine, was the second company in the U.S. to enter into clinical trials with its candidate. While data on the clinical trials are pending, pre-clinical data showed positive results in animal studies.

China and the world

China has a young biotech industry, growing significantly in the last few years with government support, that is aggressively trying to prove itself to the world. That includes committing to supporting WHO and plans to share its vaccine with the world.

CanSino Biologics, along with partner Beijing Institute of Biotechnology, are leading the world with a vaccine to be approved by fall 2020 in China. The company recently hired a former Sanofi executive to run its international business operations.

Two other leading contenders are Sinopharm — which is working on clinical trials with both the Wuhan Institute of Biological Products and the Beijing Institute of Biological Products — and another from Sinovac.

Meanwhile, the U.K. has also invested in a vaccine candidate coming out of Oxford University, which also plans to supply its treatment globally. The university is partnering with the pharmaceutical giant AstraZeneca and the Serum Institute in India to distribute its potential vaccine.

The U.K. government is also investing a new production plant to ensure mass-production by next summer.

Author: Anjalee Khemlani

Source: Finance. Yahoo: An ‘unprecedented’ effort to find a coronavirus vaccine has over 100 horses in the race

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