Healthcare Industry Trends * ABL Member News * March 7, 2018

Angelo Rago is Head of Ophthalmic Diagnostics at Carl Zeiss Meditec, one of the world’s leading medical technology companies. Carl Zeiss Meditec AG (listed on the German stock exchange, TecDAX) supplies innovative technologies and application-oriented solutions designed to help doctors improve the quality of life of their patients. It provides complete packages of solutions for the diagnosis and treatment of eye diseases, including implants and consumable materials, visualization solutions in the field of microsurgery, and promising future technologies such as intraoperative radiation therapy. Angelo joined Zeiss Meditec in Otober 2012, where he has P&L responsibility for their Ophthalmic Diagnostics business, including devices from standard refraction to complex products such as OCT used in the management of chronic eye diseases. Previously, Angelo was Division VP of Equipment Operations & Services for Abbott Medical Optics, and President of Integrated Surgical Solutions, a subsidiary of Abbott Medical Optics. Earlier, he was with Advanced Medical Optics, which was ultimately acquired by Abbott Laboratories, as SVP of Global Distributor Sales & Services; SVP of Global Customer Services; and VP of Global Customer Support, and before that, he was with Siemens Medical Solutions for 17+ years. Angelo has joined the East Bay Area Round Table.


This week, Las Vegas is welcoming HiMMS18 attendees from all over the world to the largest gathering of folks who develop and sell Health IT to those who purchase it for their hospitals, health systems, medical offices, and health plans. Here are a few pictures snapped on Day 1: Read more...

Killing ACA's Coverage Mandate Will Cut Enrollment, But Leave California's Marketplace Stable: Study

California's individual health insurance market will probably see a sharp drop in enrollment but should remain stable after Congress eliminated the requirement for individuals to carry coverage, a Harvard-led study has found. The federal tax reform act in December removed the individual mandate and the financial penalties that consumers faced under the Affordable Care Act, starting in 2019. The California Health Care Foundation provided funding, conducted in partnership with Covered California, for the 2017 survey and data analysis. In surveying California consumers, the researchers found that a larger percentage of people who had lower healthcare costs would not have signed up for individual plans last year without the mandate than those with higher costs, most of whom still would have bought coverage. Overall, the removal of the individual mandate could result in 378,000 fewer Californians with health insurance in the individual market, including about 250,000 people who currently have insurance through Covered California.
         Covered California Executive Director Peter V. Lee said in a statement that he expects the number of people with insurance to fall more than that, including people covered by Medi-Cal. That's because many consumers find out they're eligible for Medi-Cal while shopping for coverage through Covered California. California would continue to have a stable market, he said, partly because so many people in the exchange have their premiums paid or partly paid through subsidies, or premium tax credits. Over the years, 85% to 90% of Covered California consumers have received some level of financial help. But the thousands leaving the marketplace - many of them relatively healthy - would drive up premiums for people who stay in. With the individual market tilted toward less-healthy people, California marketplace plans could see premium increases for 2019 of between 12% and 16%. In California, premiums for people who don't qualify for subsidies have risen an average of almost 9% per year between 2014 and 2018. (, 3/1/18) .

Congress "Races Clock" to Bring Stability to Insurance Market

Congress is running out of time if members want to come up with legislation to stabilize the individual insurance market. A bipartisan group of senators and House members has been working since last summer on measures to keep prices from rising out of control and undermining the individual market where people who don’t get insurance through work or the government buy policies.
     Meanwhile, last week five governors (three Democrats, one Republican, and one Independent) released a blueprint for a health system overhaul that includes several of the stabilization ideas under consideration in Congress. Lawmakers are looking at two primary fixes, although they could be combined. One, pushed by Sens. Susan Collins, R-Maine, and Bill Nelson, D-Fla., is called "reinsurance." It is a way to guarantee the insurance companies do not face large losses. The idea is that if insurers don’t have to worry about covering the expenses for their highest-cost patients, they can keep premiums lower for everyone. The other proposal, negotiated by Sens. Lamar Alexander, R-Tenn., and Patty Murray, D-Wash., would guarantee insurers federal reimbursement for so-called cost-sharing reduction subsidies. Those are discounts that the ACA requires insurers to provide to their lower-income enrollees to help reduce their deductibles and other out-of-pocket costs. President Trump cut off federal reimbursement of those payments in October. More. (, 3/2/18)

CVS/Aetna Merger Received Warmly at House Hearing

The proposed merger of pharmacy giant/PBM CVS with health insurer Aetna could actually bring more business to some primary care providers, a CVS official told a House subcommittee. "62 million Americans don't have access to adequate primary care," Thomas Moriarty, EVP of CVS Health, said at a recent hearing on competition in the pharmaceutical supply chain held by the House Judiciary Subcommittee on Regulatory Reform, Commercial and Antitrust Law. He noted that 50% of those visiting a CVS Minute Clinic urgent care facility don't have a PCP. When a Minute Clinic first goes into an area, "We ask [primary care physicians] if they're taking referrals, and if they are, we put them on a list so if a patient comes into a Minute Clinic and says they don't have a PCP, we emphasize the need to have one" and recommend those on the list. In addition, "50% of visits to Minute Clinics are on nights and weekends when core primary care is not available," Moriarty continued. "The ability to extend out and have available primary care at off-hours is clearly something we can build out even more so with Aetna." That will also reduce ED visits - roughly one-third of which are unnecessary - and reduce costs for patients, since an average Minute Clinic visit is $75-$80 compared with $600-800 out-of-pocket for an ED visit, he said. The chief executives of the two companies spent much of their witness time explaining the benefits of the merger, and most subcommittee members seemed favorably disposed to the plan, which still needs FTC approval. The subcommittee also heard from four outside experts, most of whom praised the merger plan. (,2/28/18)  Meanwhile, unlike its more aggressive stance against health insurance mergers, the American Medical Association has yet to ask Congress and regulatory agencies to block the $69 billion acquisition of Aetna by CVS. (, 2/27/18)

20 States Sue to Eliminate ACA, Citing Provisions of New Tax Law

A coalition of 20 states has filed a lawsuit alleging that the Affordable Care Act is unconstitutional. They’re claiming that since the GOP eliminated the tax penalty associated with the individual mandate, that the ACA itself is no longer constitutional. (, 2/27/18)

Trump: Federal Lawsuit Against Drug Companies Over Opioid Crisis "Will Happen"

President Trump said last week that the federal government will follow the example set by states and cities and begin suing drug companies and distributors for their role in the opioid epidemic. The president said he has already spoken to Attorney General Jeff Sessions about taking such action against the makers of prescription painkillers. If the federal government actually does sue opioid manufacturers, it would be going significantly further than an action announced last Tuesday, when Sessions revealed that the Justice Department would be filing a so-called statement of interest in hundreds of lawsuits that states and municipalities and Native American tribes already have pending against opioid makers. The lawsuits, which claim that drugmakers, distributors, and dispensers misled customers about the risks of addiction from opioids, have been consolidated in an action pending in U.S. District Court in Cleveland. (, 3/1/18)

CMS Should Run a Contest to Improve Risk-Adjustment Model, ala Netflix

In a recent opinion piece in The Wall Street Journal - What Medicare Could Learn From Netflix: The company offered a $1 million prize to improve its algorithm. Why not do that for risk adjustment? - authors Ezekiel J. Emanuel and Bob Kocher describe how risk adjustment currently works, and how it gives doctors and Medicare Advantage insurers incentives to find every possible diagnosis, and then to make the patient’s conditions sound as severe as possible, so as to raise government payments the most. Such "up-coding" diverts providers and insurers from finding ways to improve care and reduce costs. This is reinforced by the ACA’s medical loss ratio rules, which require insurers to spend at least 85% of premiums on clinical care. The only way to increase profits, then, is to raise revenues while keeping administrative costs the same. Gaming risk adjustment is an easy way to do that.
     Emanuel and Kocher suggest: "One way for Medicare to do better would be to emulate Netflix. Beginning in 2006, Netflix ran a world-wide contest to improve Cinematch, its proprietary algorithm for predicting how users would rate films they’d never seen. The grand prize was $1 million. Within a year, 2,000+ separate teams from 150 countries had submitted 13,000+ algorithms. Eventually, the winning team, which included researchers from AT&T Labs, and an Austrian consulting firm, improved the algorithm by 10+%. For a tiny cost, Netflix got a huge amount of computer-science research that even its highly skilled employees could not perform. Medicare should do the same: create a contest open to anyone in the world who can beat its current risk-adjustment model. To ensure fairness and encourage competition, administering it should be outsourced to the X Prize Foundation or a similar group. The winner should be able to use objective patient data to account for at least 45% of the spending variation caused by disease. Medicare could award a $10 million grand prize and several million for second and third place. It also should be required to adopt one of the top methods. (There may be practical reasons not to pick the winner.) To prevent insurers from figuring out how to game this updated risk-adjustment model, Medicare should run a new contest every five to seven years. Tens of millions in prize money could save taxpayers tens of billions a year in up-coding gimmicks." (, 2/20/18)

Apple is Launching New Medical Centers for its Employees

Apple appears to be putting the finishing touches on its latest product: A private network of health clinics for its employees and their families. New job postings suggest AC Wellness will run multiple locations in Silicon Valley and Austin, Texas, and open its doors in the spring. Apple is the latest large company to roll out its own in-house medical centers focused on preventative care, saving money by giving employees regular checkups and suggesting healthier habits - a move designed to prevent more expensive health procedures downstream. Apple employs some 123,000 full-time workers worldwide. The goal at AC Wellness is to “deliver the world’s best healthcare experiences” out of “multiple stunning, state-of-the-art wellness centers,” according to the job listings. AC Wellness is hiring primary care doctors, nurses, exercise and nutrition coaches, and phlebotomists. Apple also plans to use AC Wellness as a testing ground for new health-centric products it’s building, and is working with researchers at Stanford to study whether the Apple Watch can help detect irregular heartbeats. (Silicon Valley Business Journal, 2/27/18)

35.8% of Americans Would Use an Amazon Health Insurance Plan

Amazon has shaken up the healthcare industry by launching a line of over-the-counter healthcare products and partnering with JPMorgan Chase and Berkshire Hathaway to create an independent healthcare company. If Amazon continued its venture into healthcare by launching health plans or providing prescription medications, many consumers would support that move, according to a recent poll by LendEDU of 1,000 consumers who purchased something from Amazon in the past 30 days. The survey revealed 35.8% of consumers would use an Amazon health insurance plan, and 54.7% would trust Amazon to provide them with over-the-counter and prescription medicine. (, 2/27/18)

Collective Health Raises $230 Million in Funding

Enterprise health management startup Collective Health has added another $110 million to the coffers from existing high-profile investors such as Founders Fund and Alphabet’s investment arm GV, bringing the total now raised to $230 million. Collective Health was formed as a way to cut out health insurance and instead offer employers a way to pick and choose which things they want covered for their employees. The hope was this would make for a less expensive and more efficient process. Today, the company caters to the health needs of 120,000+ individuals - up from 30,000 in 2015 - across several high-profile employers, including RH, Palantir, SpaceX, and eBay. Canadian insurer Sun Life Financial Inc. also pitched in on the latest round and there are plans in the works to bundle Collective Health’s services with Sun Life’s insurance coverage for U.S. employers. Meanwhile, Collective Health revealed a new employer healthcare management system that promises to serve up data in a transparent and easy-to-access way to enable employers to make better decisions for those they hire. (, 2/28/18)

Drug That Promises to Kill Flu in a Day Approved in Japan

Japan has approved a drug that its maker says can kill the flu virus in 24 hours, advancing what health experts believe could be a breakthrough in the way the illness is treated. The recent fast-tracked approval from Japan’s health ministry means Shionogi Co. can begin selling the drug, called Xofluza, in the country. But the pill may not be available in Japan before May because the national insurer has yet to set a price, a company spokesman said. A late-stage trial showed Xofluza was faster at killing the flu virus than any other available treatment, including Roche AG’s Tamiflu, one of the best flu-fighting drugs on the market. Xofluza, which works differently from existing flu medicines, requires a single dose. Tamiflu, by comparison, is administered in doses over five days. Osaka-based Shionogi plans to file for U.S. approval this year, but doesn’t expect a decision before 2019. Switzerland’s Roche has already acquired the license to sell Xofluza overseas, including in the U.S. Meanwhile, new regulations from the FDA are raising the standards for diagnostic tests for influenza, and also required manufacturers to stop selling older rapid flu tests that don’t meet the new standards by Janaury 12. The deadline was set in early 2017 - well before the current flu season emerged as the most severe in nearly a decade. The main problem with the older tests: Too many false negatives. The FDA’s new standard for rapid antigen tests is that they can give false negatives in no more than 20% of tests; previously there weren’t established performance criteria for the tests. (, 2/23 & 2/24/18)

Google AI Can Predict Heart Disease Risk From Eye Scans

A new study by Google and its health-focused Alphabet-sibling, Verily Life Sciences, has shown that deep-learning algorithms can accurately predict heart disease by analyzing photographs of an individual's retina. The retinal fundus image includes blood vessels of the eye, which can be used to accurately predict cardiovascular risk factors, including whether a person smokes or has had a heart attack. The retinal image scans could offer a quick, cheap, and non-invasive way of generating signals for heart disease. Given that the algorithm could accurately predict risk factors, the scientists also trained the algorithm to predict the onset of a major cardiovascular event, such as a heart attack within five years. It could pick out the patient who had the CV event 70% of the time, approaching the accuracy of other CV risk calculators that require a blood draw to measure cholesterol. (, 2/20/18)

Zuckerbergs to Fund Scientists with New Ideas to Fight Alzheimer's

Mark Zuckerberg and his wife, Priscilla Chan, launched the Chan Zuckerberg Initiative with the goal of curing all diseases before the end of the century. Now, the Initiative is setting its sights on neurodegenerative diseases like Alzheimer’s and Parkinson’s. Over the next five years, it plans to hand out $2.5 million in funding to early career scientists in the field of neurodegenerative disease research to jumpstart their work. In addition, it plans to give $1 million over three years to scientists in different fields that want to apply their work to neurodegeneration. Much of the Initiative’s funding efforts have focused on basic research, which can often have trouble getting funding despite the critical importance of such research in solving problems of disease further down the road. The same goes for the new neurodegenerative research grants, for which the Chan Zuckerberg Initiative is now accepting applications. An influx of funding is crucial in this field, as drug companies struggle to come up with effective treatments. In January, Pfizer announced it would end its investment into Alzheimer’s and Parkinson’s after years of unsuccessful R&D efforts. (, 2/21/18)

Carl Zeiss Meditec Launches VERACITY Surgical

Carl Zeiss Meditec (ZEISS) recently introduced VERACITY Surgical to the U.S. market, a powerful, intuitive, cloud-based platform for cataract surgery planning, logistics, treatment, risk management, and analysis. The VERACITY cataract surgery platform is the first application being introduced by the Medical Technology business group of ZEISS since the company’s acquisition of Veracity Innovations LLC. VERACITY Surgical generates comprehensive surgery plans by seamlessly integrating with EMR systems and diagnostic devices. It synthesizes critical data and presents the data that's needed at each step of the procedure, helping cataract surgeons work more efficiently, reduce risks, and improve outcomes for their patients. (Angelo Rago, Bay Area)

ElderConsult Prepares for Dementia Conference 2018

On April 13 and 14, ElderConsult Geriatric Medicine will present Living In the Moment Dementia Conference 2018, in Campbell, CA, featuring two half-days of experts in their fields discussing many issues common to dementia. Elizabeth Landsverk MD will make the keynote presentation both days. The event is appropriate for both elder care professionals and families with loved ones living with dementia. Along with the conference will be a Resource Fair, with trusted companies and agencies providing information and services to attendees, including Alegre Home Care. (from ElderConsult: Elizabeth Landsverk MD; from Alegre: Charles Symes; both Bay Area).

Gorman Health Group Analyzes New MA Supplemental Benefits

In The New Medicare Advantage Supplemental Benefits Policy Is the Biggest News in Years, Dave Sayen, of the Gorman Health Group (GHG), reports that the draft 2019 Call Letter for Medicare Advantage included new flexibility for plans around supplemental benefits. It offers a whole new toolbox for plans to address social determinants of health.  Also, GHG has published its Analysis of the 2019 Advance Notice and Draft Call Letter.   Meanwhile, the Gorman Health Group 2018 Forum will take place April 25-26, in Las Vegas, providing an intensive cross-functional examination of the state of government healthcare programs to support health plans, providers, and their business partners. (Dave Sayen, Bay Area)

IIC to Take Part in Susan G. Komen's "Race for the Cure" Event

Brad Schmidt, CEO of Inglewood Imaging Center (IIC), and a member of the Board of Directors for Susan G. Komen LA County, shares that the “Race for the Cure” Breast 5K Run/Walk event will take place on March 10, beginning at Dodger Stadium. If you would like to participate, Brad invites you to join IIC's Pink 42 Party Time team. The event attracts 5,000+ participants and, in 2017, donated over $240,000 and provided care access to 1,700+ patients. (Brad Schmidt, Los Angeles)

Kaiser Chosen by Hospital Leaders as Top Organization

Hospital leaders identified Kaiser Permanente (KP) as a top healthcare organization in thought leadership, innovation, and cost of high-quality care, according to a survey by Reaction Data, which spoke with 285 hospital leaders. Among the survey results, interviewees said KP offered the best model for delivering high-quality care at a sustainable cost, and across the combined three categories, they ranked KP No. 1.  Meanwhile, KP awarded a $3.1 million grant to the Alliance for a Healthier Generation to expand the Healthy Schools Program in Northern and Southern California, Oregon, Mid-Atlantic states, Colorado, and Washington state. The program helps districts and schools determine their individual health needs, implement new health policies and practices, and continuously improve the schools' culture of health. (Walt Meyers, Bay Area)

King & Spalding Earns Strong Results in Chambers Global Guide

King & Spalding (K&S) has again been recognized as one of the leading international law firms in the latest Chambers Global guide, which ranks the firm’s practice areas in 56 categories in jurisdictions around the globe. In addition, K&S lawyers earned 116 individual rankings in the guide.  Meanwhile, the recent issue of K&S Health Headlines includes: *MedPAC Considers Recommendation to Cut Payment to Off-Campus Emergency Departments, Shift Payments to Rural Facilities; and *Escobar Pleading Standard Narrows Scope of FCA Allegations Against UnitedHealth Group. And, on March 19, in Atlanta, K&S will present its 27th Annual King & Spalding Health Law & Policy Forum, a one-day conference focusing on the latest legal and political developments impacting the healthcare industry. (Marcia Augsburger, Sacramento, & Travis Jackson, Los Angeles)

Mazzetti to Present in "Reimagining Childbirth Facilities" Workshop

On April 30 and May 1, Mazzetti will team with the Facility Guidelines Institute to present the second Clinicians + Designers Workshop, designed to reimagine and improve critical healthcare spaces. This time, the two-day event, which will take place in Austin, TX, will focus on childbirth facilities. Participants will help inform future fundamental guidelines, and earn 14 AIA HSW LUs. Additional hosts include the American College of Obstetricians and Gynecologists and Catalysis. (Walt Vernon, Bay Area)

Royal Ambulance Announces New Values

"Driven, Empathetic, Engaging, and Adaptable" are Royal Ambulance's newly announced values. In this video, the Royal team celebrates these motivators. (Steve Grau, Silicon Valley)

SCU's Breakthrough Opioid Study Highlighted in Industry Journal

The work of a Southern California University of Health Sciences researcher is featured in Chiropractic Economics, in an article entitled, Breakthrough study: Chiropractic can address the opioid crisis. Many studies over the years have shown the benefits of chiropractic as a proven, cost-effective approach to musculoskeletal pain, but where does chiropractic fall in the fight against the opioid epidemic? In 2016, Dr. James Whedon's research found a 55% reduction in the likelihood of people filling prescriptions for opioids in those who received chiropractic care as compared to those who did not. Furthermore, the charges for filling opioid prescriptions and providing clinical services for chiropractic recipients were 74% and 78% lower, respectively. Whedon’s second study, currently underway, is exploring the same question as the first, but on a much larger scale - expanding the number of subjects from 12,000+ to over a million, and diving deeper into the data. (John Scaringe, Orange County)

Share Our Selves Promises a Wild & Crazy Taco Night

On the evening of April 12, Share Our Selves (SOS) will present its 25th Annual Wild & Crazy Taco Night, in Costa Mesa. The fun and festive evening gathers a group of Orange County’s finest chefs and restaurants, each preparing an unusual and unique taco. All tacos are conceived exclusively for this event and can’t be found anywhere else. Event proceeds benefit the SOS Food Pantry, feeding more than 235 OC families each day. (Karen McGlinn, Orange County)

Surgery One to Host Seminar on Robotics-Assisted Knee Surgery

On the evening of March 13, Surgery One and Outpatient Surgery Center of La Jolla will present a free knee pain seminar on the latest robotics-assisted surgical techniques, for both outpatient partial knee replacement and total knee replacement - the only program of its kind in San Diego. In knee replacement, robotic assistance offers a high degree of precision and can be done using minimally invasive surgical techniques. (Scott Leggett, Orange County)

You're Invited to OC FOCUS Strategic View: "Forging Our Common Future"

Longtime tech entrepreneur and ABL Member Marshall Toplansky is also a Clinical Assistant Professor of Management Science and Research Fellow at the C. Larry Hoag Center for Real Estate, Argyros School of Business and Economics, at Chapman University. Recently, Marshall and author Joel Kotkin completed extensive research on the future of Orange County, which they will present as OC FOCUS Strategic View: "Forging Our Common Future" on March 29th, at the Pacific Club. All interested ABL Members are invited as Marshall's guests, with RSVPs going to Aulton Kohn ( at Chapman.

Catasys Launches Enrollment with National Health Insurer

Catasys, Inc. has commenced enrollment for its OnTrak-Ci program under the previously announced contract with a top 10 health insurer. The program is starting with eligible Medicare Advantage members in Tennessee who suffer from anxiety, depression, and substance use disorders, and represents the second national plan that has partnered with Catasys in the state of Tennessee. Enrollment is expected to ramp throughout 2018. Catasys looks forward to bringing its advanced proprietary solutions for identifying, engaging, and treating behavioral health conditions to more members through this partnership. (Rick Anderson, West Los Angeles).

Express Analytics on:  Health Data Analysis

In Set The Ball Rolling In Healthcare By Outsourcing Analytics, Express Analytics reports that the global healthcare industry, more than any other, suffers from  the "data rich but information poor" syndrome. One problem is that health organizations are still very confused over whether to set up an in-house team of analysts or to outsource the job. Meanwhile, a McKinsey report has estimated that as much as 30% of the globe's stored data is generated in the healthcare industry. For now, a single patient is said to generate about 80 megabytes a year as imaging and electronic medical record data. The value unleashed could bring down healthcare costs by about $300 billion annually. (Hemant Warudkar, Orange County)

PeopleG2's Chris Dyer Writes a Bestseller on Company Culture

The new book by PeopleG2 CEO Chris Dyer - The Power of Company Culture - was named a Business Bestseller on the first day it shipped, by The book debunks the myth that a remarkable company culture is something that a business either has or hasn't, and shows how any company of any size can implement and maintain a world-class culture for business success. (Chris Dyer, Downtown Los Angeles)

Tanner CEO to Present Nutrition Science Workshops in March

On the evening of March 7, and again on March 22, John Tanner, Ph.D., CEO of Tanner Research, will present a Nutrition Science workshop, where he will share his story about how he suffered a near-fatal cardiac arrest in 2009. Since then, he has studied intensely the causes of heart disease, and found that it can be completely avoided through a proper diet - and cancer, stroke, diabetes, high blood pressure, and about 30 other diseases can be reduced, avoided, or reversed by this same diet. John will field questions and participants will continue nutrition discussions in small groups. The free workshop, to be held at Tanner Research in Monrovia, includes a meal and your choice of one of the top books on nutrition science. (John Tanner, Downtown Los Angeles)

207 East Memory Lane
Santa Ana, CA 92705

Phone: 714-245-2400 | Fax: (714) 245-1428

Copyright © 2018 Adaptive Business Leaders Organization. All Rights Reserved.