InnovationRx: Health System Quality; Plus, A Yearly Covid Vaccine

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Research has shown that hospital consolidation leads to higher costs for patients, but what about the quality of care? While the majority of doctors and hospitals are part of larger health systems in the U.S., the quality is only modestly higher compared to smaller, independent doctors and hospitals, according to a study published this week in JAMA.

Health systems dominated the market – around 40% of doctors and 84% of hospital beds were part of 580 health systems in 2018, according to the study conducted by researchers from Harvard Medical School and the National Bureau of Economic Research. Health systems scored slightly higher when it came to preventative care, clinical quality and patient experience, but got paid prices that were 12 to 26% higher for doctor services and 31% higher for hospital services. “Small quality differentials combined with large price differentials suggests that health systems have not, on average, realized their potential for better care at equal or lower cost,” the authors write.

One of the main arguments for health system consolidation has been economies of scale – big systems can pool resources and boost purchasing power. But they can also become so big that they develop diseconomies of scale. “In the worst case, we could wind up with a system in which quality is lower and spending higher than need be, but we would never know it because the only possible comparisons would be among large systems,” writes Lawrence Casalino, a professor of population health sciences at Weill Cornell Medicine in an editorial (he was not involved in the research). Casalino argues that’s the reason why we need more research and regulator attention on health system (and health insurer) size and performance.

These Venture Veterans Have Launched A $350 Million Fund Aimed At Digitizing Life Sciences

Dimension founders Zavian Dar, Adam Goulburn and Nan Li.

Dimension

At first glance, it seems like a rough time for venture capital, especially in the healthcare industry. But the founders of Dimension, a new fund focused on the intersection of life and computer sciences, found plenty of people to invest in their vision. Lux Capital alums Zavain Dar and Adam Goulburn have teamed up with Obvious Ventures alum Nan Li to raise $350 million to focus on seed and Series A rounds. Read more here.

Deals Of The Week

Cancer Treatment: Takeda announced it’s acquiring an exclusive worldwide license (except China) for metastatic colorectal cancer treatment fruquintinib from Chinese pharmaceutical company HUTCHMED. The drug, which was approved in China in 2018, will be submitted for regulatory approval in the U.S., E.U. and Japan this year. The deal is worth $400 million upfront, with milestone payments of up to $730 million plus royalties.

Alopecia Treatment: Sun Pharma announced it’s acquiring Concert Pharmaceuticals for an upfront cash payment of about $576 million, plus contingent value to current shareholders based on milestones achieved by Concert’s JAK inhibitor Deuruxolitinib, which is currently in clinical development for the treatment of Alopecia Areata.

Brain-Computer Implants: Precision Neuroscience Corporation announced that it’s raised a $41 million series B from investors including Draper Associations, Alumni Ventures and more. The financing is geared towards development and gearing up for regulatory review of its reversible brain-computer interfaces.

Noteworthy

Amazon launched a new prescription drug program this week, which gives subscribers access to 50 generic medications for $5 a month, as the online retailer looks to lure customers away from drug stores.

Elevance Health (formerly Anthem) reported $949 million in fourth quarter profits driven by Medicaid enrollment. The health insurer also acquired Blue Cross and Blue Shield of Louisiana for an undisclosed sum this week.

Lawsuits filed in North Carolina and West Virginia are asking the states to lift restrictions on abortion pills, arguing that federal rules allowing them should outweigh state bans.

Kansas City Chiefs Quarterback Patrick Mahomes suffered a high ankle sprain during the playoff game with Jacksonville. Here’s what that means.

Coronavirus Updates

On Thursday, an FDA committee will meet to discuss a proposal to change recommendations for Covid-19 vaccination. That proposal is to forego the current vaccine recommendation of an initial two doses followed by a booster to instead resemble something more like seasonal flu shots where adults get the latest formulation of the vaccine to combat the newest variants once per year. Those who are elderly and immunocompromised would be advised to get two shots per year.

This new proposal comes as the country already sees a major challenge in getting people to get booster shots for Covid. Only 15.3% of the country has received a bivalent booster dose of the Covid vaccines, and about 30% haven’t gotten any vaccination at all. Still, if people are getting Covid shots around the same time as their flu shots, that alone might boost the numbers well, as over 50% of Americans get their annual flu shot. That alone could make a difference, as Covid-19 is still causing significant harm to Americans: over 4,000 people are being admitted to hospitals for Covid every day right now, according to the CDC, and nearly 4,000 people died last week from the disease.

Covid Still Killing Hundreds Of Americans Every Day As Pandemic Enters Fourth Year

Hundreds of people are still dying from Covid each day in 2023.

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Vaccines, treatments and other public health measures have helped curb the spread of Covid and keep deaths and hospitalizations down, but as the U.S. enters the fourth year of the pandemic, data shows hundreds of people still dying with the virus every day, an infectious omicron offshoot tearing across the country and dismal appetite for updated booster shots. Read more here.

Other Coronavirus News

mRNA Covid vaccines, such as Pfizer and Moderna shots, are effective at preventing infection and severe illness and have low rates of serious side effects in young children, according to a new study.

A new study has found that Covid infections during pregnancy are associated with placental lesions from vascular malperfusion, which can result in increased rates of fetal growth restriction, pre-labor membrane rupture and miscarriage.

Conspiracy theories about Covid-19 vaccines have been undermining public health, and threaten to undermine responses to future pandemics as well.

Abbott Laboratories reported $1 billion in fourth quarter profits despite an “expected year-over-year decline in Covid-19 testing-related sales,” the company said.

Across Forbes

A Murderer Targeted Pregnant Moms In A Private Facebook Group, Feds Say. Its Moderators Claim No One Told Them.

TikTok’s Secret ‘Heating’ Button Can Make Anyone Go Viral

America’s Most Generous Givers 2023: The Nation’s 25 Top Philanthropists

What Else We are Reading

The Drug Was Meant To Save Children’s Lives. Instead, They’re Dying (Bureau of Investigative Journalism/Stat)

Trying to Stop Long COVID Before It Even Starts (The Atlantic)

How to Be 18 Years Old Again for Only $2 Million a Year (Bloomberg)