Author: Robert Moghim, M.D.

In one of the biggest business announcements of the year, Google announced that it would reorganize its diverse tech ventures under a holding company entitled Alphabet. Among the many companies that Google would oversee are its healthcare entities which include Life Sciences and Calico. This restructuring is primarily driven by Google’s desire to clearly differentiate companies and clarify ventures, enabling investors to more easily devote funds to projects they feel are more aligned with their interests. The creation of Alphabet will also likely produce ripple effects in numerous tech related industries. The healthcare sector is expected to benefit considerably from Alphabet, as Google has invested a considerable amount in this field.  In 2014, Google expended almost $153 million on life sciences or almost one third of its available funds. Under…

While the latest employment report from the U.S. Department of Labor was upbeat with 173,000 jobs added and national unemployment rate at 5.1 percent, the latest figures for the healthcare industry are more ambiguous. Hiring in the healthcare sector was robust in July with 27,900 total jobs added and 15,700 jobs added by hospitals, but this is down from the 40,200 jobs added in June, 47,500 added in May, and 48,000 total jobs created in April earlier this year.  Up until July, each of the previous ten months had seen an increase in the number of hospital jobs. However, there is some evidence that medical organizations are hiring physicians and advanced practice providers at a diminished pace. Merrit Hawkins reported that the search for doctors, nurse practitioners and physician assistants by hospitals…

Physical therapists have long been recognized as critical members of medical recovery teams, but until now they have not enjoyed a privilege that physicians, dentist, chiropractors and optometrists possess: the ability to serve in locum tenens assignments.  A new bill entitled the Prevent Interruptions in Physical Therapy Act was recently introduced in the U.S. Senate and House of Representatives. If passed, this law would enable physical therapists to temporarily replace a colleague and treat Medicare patients with expectation of compensation from Medicare. Physical therapists are essential for the restoration of optimal physical function following an injury, illness or surgical procedure.  Without continuing physical therapy during the recuperative phase, a patient could lose some or all of their functionality, dramatically diminishing their quality of life.  Physical therapists that must take time…

Blue Cross Blue Shield Association, a conglomerate of 36 health insurance companies providing policies to more than 100 million Americans, is currently facing two major class action lawsuits alleging antitrust law violations.  The plaintiffs include policyholders and medical practitioners from a number of states who are alleging that Blue Cross Blue Shield is stifling competition to drive up premiums and diminish remuneration to medical professionals. Due to the size of Blue Cross Blue Shield and its immense market share, the outcome of these lawsuits could be immensely costly and impact the insurance industry throughout the country. The Blue Cross Blue Shield Association licenses independent insurers in virtually every state in the nation. Most licensees are nonprofit and operate in markets without competition from other BCBSA licensees; some larger markets like…

Claims of malpractice have been leveled at physicians for millennia, but it was not until the 1970’s that insurance companies began offering policies to protect medical practitioners from litigation.  In the almost five decades since medical malpractice has become a necessity for physicians and other clinicians, but the importance of this coverage has varied due to major changes in the healthcare and insurance industries as well as governmental regulatory regime. Despite a decline in the number of malpractice lawsuits against physicians in recent years and a decline in malpractice insurance premiums, these legal actions have helped push healthcare costs up considerably.  In 2003, there were almost 17,000 paid malpractice claims totaling almost $4.5 billion.  By 2011, the number of claims dropped to less than 10,000 and producing almost $3.2 billion…

In a six to three decision, the U.S. Supreme Court upheld a key component of the Patient Protection and Affordable Care Act in King v. Burwell. The majority of the court, led by Chief Justice John Roberts, determined that tax subsidies could be utilized by individuals who purchased health insurance through federally established or funded marketplaces.  This is the second PPACA case to reach the nation's highest court, with the first National Federation of Independent Business v. Sebellius, also decided in favor of the Obama administration. With the latest Supreme Court victory, it appears that President Barack Obama's legacy is secure for the foreseeable future. In NFIB v. Sebellius, the court upheld the individual mandate of PPACA allowing the government to penalize taxpayers who do not obtain health insurance.  Combined…

How Governmental Intrusion is Eroding Healthcare Throughout modern times, the government has regulated commerce, sometimes to the benefit to consumers, but more often, to the detriment of business operators.  This unrelenting need to interfere in the mechanisms of industry has also compelled government to pass a long list of laws that undermine patient care.  Lawmakers inevitably hear criticisms like healthcare is too expensive and manufacture one poorly conceived stopgap solution after another.  In recent times, these include the Affordable Care Act (ACA) and the Health Insurance Portability and Accountability Act (HIPAA) which have imposed horrendously onerous responsibilities upon physicians in an effort to “improve” patient care and are driving them out of the profession en masse. A key example of how misguided public policy is hampering physicians from performing their…

Few governmental policies have been as intrusive and disruptive as the 2014 Health Information Technology for Economic and Clinical Health Act (HITECH) which mandated the adoption of interoperable electronic health records (EHRs).  HITECH incentivized the integration of EHRs by rewarding adopters with $63,750 in maximum Medicaid payments, and penalized organizations between one and three percent of Medicare payments for refusal. According to a 2014 Health Affairs study almost 78% of physician practices used some form of EHRs in 2013, while 48% utilized EHRs with advanced functionality. Hospitals are lagging behind with 59% using some form of EHRs with advanced capabilities. While the statistics appear to indicate widespread adoption by physicians and healthcare organizations, there is a hidden component to the changing medical landscape.  A study by Accenture found that almost…

For decades, the medical community has argued that serious action must be taken to mitigate the litigious environment in which they operate.  The New England Journal of Medicine reports that one in 14 physicians are sued for malpractice each year.  This figure virtually ensures that almost all physicians will face a malpractice suit at some point in an extended career.  While attorneys argue that they are merely protecting their clients from negligent medical professionals, the rampant litigation against virtually the entire medical industry suggests that there are an enormous number of baseless claims. There are a number of parties that benefit from the enormous number of malpractice claims.  The most obvious, of course, are the attorneys that bring these cases on behalf of patients and families.  In 2013, the total…

Recently, new events have warranted an update of the state of the health insurance industry.  The first involves two companies that many industry experts expected to merge. Humana was seen as an attractive target for acquisition, and the company had presented itself for sale by other insurers. Aetna had been in talks with Humana and announced that it had struck a tentative deal to purchase Humana for $37 billion. The other major takeover involves the purchase of Health Net Inc. by Centene Corp. for almost $6.3 billion. The blockbuster merger of Aetna and Humana is expected to conclude next year when shareholders approve the deal.  This is the first of several potential insurer mergers that the industry has been expecting, and would produce a monolithic insurance entity out of the…