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This month’s issue of our newsletter includes some intriguing selections indicating shifts in business strategy in response to the evolving US healthcare economy. Three of the articles highlight applications of “big data”, predictive analytics and data modeling to re-configure healthcare delivery systems. Also included in these stories are ways some hospitals are implementing new budget models based on population health data. One article in this section shows how tech companies are delivering solutions to hospitals in response to Medicare’s new “non-payment policy” on hospital readmissions. Separately, we highlight how faith communities are organizing “healthcare sharing ministries” as an alternative to the typical health plans offered under the Affordable Care Act. Of course, we lead off with some of the policy developments, which are shaping investment opportunities in the US healthcare economy. Enjoy.

Ruben J. King-Shaw Jr., Managing Partner & Chief Investment Officer &

James Renna, Operating Partner and head of the Mansa Operations and Advisory Group



  • HHS passes $1 trillion milestone
    As an aging population rapidly joins the Medicare rolls and younger people secure expanded coverage through the ACA, the Obama administration's budget pushes HHS spending over $1T for the first time. Through Medicare, Medicaid and the new healthcare law's insurance expansion, the HHS provides coverage for about 1 in 3 Americans and represents 2/3 of the federal budget. Proposal highlights include $1.8B to fund the coverage rollout under the healthcare law but does not include a proposed $60B in tax credits to finance private coverage under the ACA, which is in the Treasury Dept.'s budget.
  • Two-year extension seen for cancelled healthcare plans
    The Obama administration will allow a two-year extension for people whose individual health insurance policies don’t comply with requirements of the new healthcare law. The extension would be valid for policies issued up to Oct. 1, 2016. The cancellation of at least 4.7M individual policies was the most politically damaging issue in the transition to a new insurance system under the ACA.
  • HHS, Justice action teams recover $8 for every dollar put into investigations
    In 2013, the Obama Administration recovered $4.3B from fraudsters trying to dupe federal health programs. A record $8.10 for every dollar spent on investigations over the last three years has been recouped. In 2012, the Health Care Fraud & Abuse Control Program recovered $4.2B, and over the last five years has returned to the Medicare Trust Funds and Treasury $19.2B (up $9.4B from the last five-year period).


  • CMS turns to retroactive tax credits as latest HIX triage [Nationwide]
    For still-struggling state exchanges, CMS has extended an exception to the rule of tax credits only available through public health insurance marketplaces. State exchanges that “have had difficulty in providing timely eligibility determinations to applicants and enrolling qualified individuals” now can make premium tax credits and cost-sharing reductions available on a retroactive basis, both for policies purchased (or in the process of being purchased) and those bought through private exchanges, brokers or directly from insurers.
  • Arkansas private option Medicaid expansion stays alive [Arkansas]
    Arkansas' first­in­the­nation plan, which uses Medicaid funds to buy private insurance for the poor has survived an effort to defund it. Lawmakers gave final approval to continue the program that has extended health insurance coverage to nearly 94K people. The House voted 76­24 to reauthorize funding for the private option program approved last year as an alternative to expanding Medicaid under the ACA.
  • Dual “eligibles” project aims to replicate state Medicaid gains [Colorado]
    Colorado is experimenting with a payment system for Medicare-Medicaid "dual-eligibles" that is a variation on the concept of the ACO that's showing promise elsewhere. Colorado will extend its accountable care collaborative program to some 48K dual eligibles in July. Of 11 dual-eligible demos approved by CMS since 2011, Colorado’s is only the second to use a managed fee-for-service reimbursement model.


  • Reform creating budgeting changes
    In light of the reform measures currently impacting the healthcare industry, hospitals are under pressure to revise their budget formats. Healthcare systems are using patient-centric data enabling hospitals to examine the volume of patients treated across various categories and make budget projections for the next year. San Francisco-based Dignity Health, for example, says it will almost certainly implement a budget based on patient population management.
  • Christian alternative to Obamacare growing fast as deadline nears
    With just weeks left to sign up for insurance on HealthCare[dot]gov, a growing number of people are opting to enroll in a Christian alternative to traditional health insurance. Nationwide networks of fellow believers help share each other's major medical bills through what's known as healthcare sharing ministries, which works like health insurance with policy cards, deductibles, and premiums. The nation's three largest ministries have nearly 250K members, spanning all 50 states, who agree to live “biblical” lifestyles—regular church attendance; no drugs, tobacco, or extramarital sex; and limited alcohol consumption.
  • Corporate wellness wearables starting to converge
    Increasingly, advanced digital health and wearable technologies are reaching the American workforce. At least some workers want their bosses to help them access tools to lose weight, exercise more and reduce stress, and businesses are showing interest. Josh Stevens, CEO of wellness company, Keas, thinks the answer lies in apps and wearable tech. Insurers like Aetna, Cigna, Wellpoint, and networks like Kaiser Permanente, are invested in mobile (mHealth) to increase patient engagement in their own health, wellness.
  • Advanced analytics shaping future healthcare
    For decades, hospitals have used practice management systems focused on billing and payment, but advanced analytics can be used to process many kinds of data, including claims, medical, pharmacy and self-reported information. They predict not only future risk, but support the clinician. For example, advanced analytics can identify individuals most likely to be hospitalized or if a current "at risk" lifestyle will likely turn into a chronic condition, and then provide specific actions that care providers can take to improve outcome including disease management, complex care management, wellness programs, or transitional care.
  • Tech companies tackle readmissions
    A key concern for hospitals across the US is federally-mandated financial penalties that can result from not reining in avoidable 30-day readmissions. Several companies have developed analytics technology to help counter this costly problem. ACOMSplus, for example, has developed a system that looks at more than 65 parameters linked to the risk of readmission. The tool can look at factors such as congestive heart failure including CPT and ICD-9 codes, patient demographics, the number of hospital discharges, and other factors like whether a patient has an assigned pharmacy.

Industry Activity

  • M&A deals fewer but costlier in 2013
    According to Irving Levin Associates’ Healthcare M&A News, early figures indicate that there were fewer merger and acquisition deals in the healthcare sector in 2013 than in 2012, but those deals cost more. Per the report, 1,002 deals were announced in 2013, down 8% (1,091) from the previous year. Total deal value in 2013 is approximately $163.5B, compared to $143.7B in 2012. Among sector categories with gains in the number of deals in Q4 were long-term care (10%); home health and hospice (100%); and rehabilitation (50%). Irving Levin Associates expects M&A to be strong in 2014, with the biggest influencers being regulatory changes, and the inflow of newly-insured.
  • Aetna pilots diabetic pump therapy with Medtronic
    Aetna has partnered with Medtronic, one of the largest medical device makers. The two are experimenting in a two-year pilot program aimed at improving care for diabetics and their doctors. The program will study 300 fully-insured Aetna members with uncontrolled type 2 diabetes deemed likely to benefit. The ultimate goal of the pilot is to help the participating Aetna Members better control glucose levels and thus avoid complications and unnecessary ER visits.
  • New workspace, hub for healthcare technology startups heading to Chicago
    This fall, Chicago's Merchandise Mart will be the home to a new collaborative workspace and hub for startup healthcare tech companies. Announced by Illinois Gov. Pat Quinn, the new center known as Matter is designed to bring entrepreneurs, academics and investors together to collaborate on companies and projects related to healthcare IT, medical devices, medical diagnostics and biopharmaceuticals. Matter is being funded through a $2.5M state investment and a loan of $1.5M. The group’s board expects to raise additional funding from corporate sources.


  • mHealth market scales to new heights
    According to research conducted by San Francisco-based market analysis and consulting firm, Grand View Research, over the next six years, the global mHealth (mobile health) industry is poised to exceed $49.1B by 2020. Mobile monitoring services are projected to remain the dominant and most rapidly growing market segment, with revenue topping $1.2B in 2012. Just in the U.S. last year, some 95M Americans were using mHealth technologies, up 27 percent from the year before, according to another recent study from Manhattan Research Cybercitizen Health.
  • Employers of doctors changing pay models
    As more focus is put on value over volume in healthcare, employers of physicians are changing their compensation models. According to SullivanCotter’s 2013 Physician Compensation and Productivity Survey Report, one-third (484 orgs covering 91+K providers) are shifting from clinical productivity to metrics such as quality and patient satisfaction. The survey found that overall median amount paid for quality in 2013 was $15K, which varied widely from $7K median quality payments for primary care to $20K for medical/surgical specialties.
  • Communication key to strong HCAHPS
    Since 2008 when the CMS first implemented the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) survey for U.S. hospitals, the scores have become increasingly important to hospital executives as a measurement of quality care and patient experience. Indeed, they are now used to determine 30% of the total incentive offered to hospitals under the Hospital Value Based Purchasing program (HVBP). Bill Fera, MD, from EY’s Health Care Advisory practice, explained that the most successful hospitals—at least when it comes to having strong HCAHPS scores—are organizations that are geared toward engaging the entire hospital community in transforming itself into a customer service-oriented, patient-centered enterprise.


About Mansa Capital:
Mansa Capital is a healthcare private equity investment firm specializing in high growth companies in the healthcare services and healthcare technology sectors. Mansa focuses on companies as they prepare for expansion, acquisition, privatization or IPO. We integrate strong expertise in healthcare policy, regulation, and reimbursement with vast experience in healthcare operations, marketing, finance, and medical administration. Mansa makes equity investments in operating companies with enterprise values up to $150 million. We build shareholder value by working with management to implement strategic initiatives that grow top-line revenues. Mansa's Managing Partner and CIO, Ruben J. King-Shaw Jr., directs the firm's investment activities, in addition to managing the firm's equity portfolio. The firm has offices in Boston, MA, New York, NY, and Miami, FL.

This newsletter is provided for information purposes only. The information is believed to be reliable and is based on publicly available information, but Mansa Capital does not warrant its completeness or accuracy. Opinions, estimates, and assumptions constitute our judgment as of the date hereof and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. 2013 Mansa Capital©

Mansa Partner