OUR BLOG

Recon takes an analytical look behind select developments in healthcare

From bleeding edge to basics: an opinionated take on NEJM highlights for August and September 2021

The weird world of synthetic biology In biology 101, one learns about the alphabet that translates DNA/RNA code into amino acids sequences ultimately resulting in proteins. Given that there are 64 possible triplet codons and 20 amino acids, multiple codons can map to the same amino acids. But this mapping can be reassigned including incorporating new amino acids – it has been done in E. coli with the promise of generating biologics with novel properties, although applications are not yet clear. A more practical application is to create strains of

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Summer catch-up: an opinionated take on NEJM highlights for May-July 2021

Cancer and mutational complexity Probably the biggest news in cancer treatment this year is the approval of sotorasib (Lumkras, Amgen) which received accelerated approval in lung cancer with mutated KRAS (G12C) and has potential for use in other cancers (see here). Mirati is hot on the trail with adagrasib, but unusually for a drug in the approval process, their paper in the NEJM is a deep dive into the mechanisms of resistance to KRAS G12C inhibition that lead to treatment failure. They present very detailed in vitro studies in which

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Iora Agonistes: High-touch primary care in Medicare Advantage is no sure bet after all

Iora Health was one of the original primary care transformers offering a clinically capable, engagement-focused, and accountability-grounded care model.  After an initial foray into commercial, Iora pivoted in 2014 to Medicare Advantage (MA), an alliance with HUM and a global capitation-oriented strategy broadly similar to Oak Street or ChenMed. MA – whose members often have chronic conditions that respond to management and with a payment model that rewards quality (via stars) and patient intimacy (via risk coding) – is fertile ground for Iora’s high touch primary care.  And that terrain

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Four plausible rationales for incumbent hospitals to embrace hospital@home despite the potential to divert “heads from beds”

We identify four different business strategy rationales for hospital@home depending on each hospital’s specific market situation and each with clear predictive implications for local markets.  These are: on-demand capacity expansion, bed capacity rationalization, competitive matching and system consistency.  Almost all participants in CMS’s current Hospital@home program could find one of these four rationales applicable.  If these rationales become compelling business cases, the future of hospital@home is bright and it is time to start the healthcare ecosystem to prepare for its disruptive consequences. The cannibalization challenge Hospital@home uses innovative protocols, technology,

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WMT’s MeMD acquisition: too small a play to make the difference

Last week, WMT acquired MeMD, a virtual provider in Arizona. Per the press release, MeMD will “allow Walmart Health to provide access to virtual care across the nation including urgent, behavioral and primary care, complementing our in-person Walmart Health centers.”  Can MeMD rescue Walmart’s struggling clinic strategy?  I am skeptical. Virtual is a great complement to the clinics Adding virtual to the clinics could be a very good idea: Walmart’s clinics had the extraordinarily bad luck of rolling out during a pandemic.  More importantly, they are weighed down with unresolved

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Clinicaltrials.gov and AI-related studies: a brief status check in April 2021

Healthcare is by nature conservative; despite a huge level of interest for artificial intelligence (AI) and machine learning (ML) techniques, significant penetration in standard workflows of care will depend on demonstrations of safety and efficacy. As a result, it is today’s pipeline of clinical studies using AI/ML that will determine mainstream usage tomorrow.  In order to better understand this pipeline, we have mined clinicaltrials.gov for characteristics and trends of registered studies making use of AI/ML. Unsurprisingly we see strong growth, but starting from a very small baseline. Although most of

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Remodel, rewire, repopulate: an opinionated take on NEJM highlights for April 2021

Remodeling to health? Chronic disease progression is often due to a maladaptive tissue response which leads to remodeling – such as cardiac hypertrophy with hypertension.  While most therapeutics focus on tamping down the injury, sotatercept (Acceleron Pharma) in pulmonary arterial hypertension (PAH) breaks new ground by focusing on the remodeling. This modulator of the TGF-beta superfamily looks to inhibit the remodeling of the pulmonary vasculature that worsens the PAH over time, and eventually leads to the demise of most patients. In a 24-week placebo-controlled phase 2 trial (N=106), the pulmonary

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Balancing the humors: an opinionated take on NEJM highlights for March 2021

A new approach to schizophrenia Antipsychotic agents treat schizophrenia by manipulating the dopaminergic system. While they are effective at treating psychosis, they can have major side effects and they lack the ability to address so called negative symptoms e.g. apathy, lack of social connection, poverty of thought.  Enter the muscarinic cholinergic system which is tricky to manipulate in the CNS without untoward systemic effects as Lilly found out with their M1/4 agonist xanomeline.  Karuna Therapeutics has now licensed the molecule and cleverly combined with it with trospium, an antagonist with

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How much are Humana’s value-based care models really taking out of utilization?

All that effort for only 0.4% savings Since 2014, HUM has reported on the performance of primary care in value-based arrangements (“VBA”) vs. traditional contracts (“non-VBA”)[1] in Medicare Advantage (MA).  One statistic regarding total medical expenditures (TME) is, at first blush, a stunner.  The most recent data (2019) shows PMPM TME of VBA members measured only 0.4% less than for non-VBA members.  Given HUM’s long-standing strategic commitment to value-based care, commentators are puzzled: is the whole value-based enterprise in vain? does healthcare transformation require quasi-geologic timeframes to deliver meaningful cost

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All immunity: an opinionated take on NEJM highlights for February 2021

We can cure Hep C but not immunize against it Sovaldi and other drugs have made curing chronic Hepatitis C a routine, if expensive, proposition. Still, given how common Hep C infection is, and how it can irreversibly damage the liver without overt signs, a vaccine would be highly valuable. Unfortunately, an NIH sponsored trial with a GSK vaccine in 548 IV drug users at high risk of contracting the disease failed to show any protection: 28 participants developed chronic Hep C evenly divided between the placebo and treatment groups. 

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Walmart Health: Will the fifth attempt at clinics be the charm?

Eighteen months ago, WMT opened its first Walmart Health clinic attached to a supercenter in Dallas, GA.  The operation combined multiple services – primary/urgent care, dentistry, behavioral health, optometry, and audiology – with WMT’s Every Day Low Price philosophy (for example, $30 total for a primary care check-up, $40 for a sick visit) in one ~11K sq. ft. site. Boosted by typical supercenter traffic (~5K visits a day is our estimate), and a scarcity of primary and dental care in the local area[1], the clinic got to 2.3K visits-per-month within

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While we wait for our shot(s); an opinionated take on NEJM highlights for January 2021

Incremental progress in the fight to treat heart failure After a decade or more of relative quiescence in the 2000s, a volley of new therapies have come to the forefront in the pages of the NEJM: sacubitril valsartan (2014 – Novartis’ Entresto), various SGLT2 inhibitors such as dapagliflozin (2019, AstraZeneca’s Farxiga), vericiguat (2020 – Merck’s Verquvo), and now a 2021 entry from Amgen in the form of the cardiac myosin activator omecamtiv mecarbil. None of those are a panacea, and of the four listed, omecamtiv has the lowest efficacy profile

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Closing a tough year: An opinionated take on NEJM highlights for December 2020

Cardiovascular health – go big or go narrow? A follow up on the development of evinacumab (Regeneron), an inhibitor of ANGPLT3 (see this opinionated take from 2017), confirming the safety and LDL reduction effect in a population of individuals with cholesterol levels refractory to other therapies (including PCSK9 inhibitors).  Given the history of PCSK9 inhibitors, the development path of this asset will be interesting to follow. Of the 6 trials listed on clinicaltrials.gov not one has anything close to a clinical endpoint – it’s all biomarker based. That will probably

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We are back and catching-up: An opinionated take on NEJM highlights for Sep, Oct, and Nov 2020

Small but real progress in ALS: Despite enormous public attention and significant effort, ALS remains a disease for which the development of new therapies has been challenging. Animal models showed potential activity against ALS by sodium phenylbutyrate and taurursodiol, both old (generic) molecules. Now, their effect in combination therapy has been confirmed in a randomized controlled trial.  What’s especially interesting is that the effect at 24 weeks (the original duration of the trial) was a modest though statistically significant improvement in functional scores. However, the trial was extended with all

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How does OptumCare manage its physician staffing once the big deals are done?

OptumCare’s acquisitions usually make headlines.  But what happens when the reporters leave? How is clinical capacity managed? What role do micro-acquisitions, recruiting and retirements play in advancing OptumCare capabilities?  This is important because OptumCare is a risk-taking engine.  Perhaps by understanding post-acquisition moves, we can reverse engineer United’s view on how clinician capacity and specialty mix can maximize value.   We looked at two mature OptumCare geographies, Nevada and Texas with large physician presence and healthy United Medicare Advantage market share (just below 50%).  Our analysis primarily uses the Medicare

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