Cant you sue the F&B company for fraud if they said they paid you money but never did?
Monday Morning Update 1/27/25
Top News
UnitedHealth Group increases its estimate of individuals impacted by a February 2024 ransomware attack on its Change Healthcare division from 100 million to 190 million, affecting nearly half of all Americans.
The company says that it has no evidence of the stolen data being misused, but is offering two years of free credit monitoring to those who are concerned about potential exposure.
UnitedHealth disclosed this month that the cyberattack has resulted in direct and indirect costs exceeding $3 billion.
UnitedHealth Group acquired Change Healthcare for $13 billion in October 2022 after overcoming a Department of Justice legal challenge. UHG CEO Andrew Witty told the Senate Finance Committee last May that Change Healthcare’s outdated technology, which UHG was in the process of updating, made the breach possible.
HIStalk Announcements and Requests
Last week’s poll yielded predictable results, but it got me thinking. The challenge with PE-owned healthcare providers is spotting them in the first place, assuming that you have an option to take your business elsewhere if that bothers you. These are often high-profit specialty medical practices and dental offices that were already for-profit, but were at least operated locally with less-aggressive financial motives. To private equity firms, healthcare is just another widget factory that can be squeezed harder to enrich investors. It’s no surprise, then, that even the doctors who benefited financially from PE acquisitions often don’t want to stay under their ownership. The result is a contentious middle ground, caught between the mission of healing and the relentless drive to maximize shareholder value. It’s naïve to design a healthcare system that prioritizes profit and then lament when individuals and corporations pursue it over doing the ill-defined “right thing.”
New poll to your right or here: What is your 12-month satisfaction with chain drugstores? I’ve been pretty happy with my occasional visits to Walgreens, though it’s more for their non-clinical services than anything else. Example: not only can you send FedEx and UPS packages from their stores, but you can also have your incoming packages shipped directly to them at no extra cost and then pick them up at your convenience. This is especially handy for shipments that require a signature or are at risk of porch piracy, such as wine or electronics. It’s free because getting you in the door tempts you to grab an impulse pack of smokes, a Justin Bieber singing toothbrush, or a COVID vaccination.
If you’ve sent email to an histalk.com email address lately and didn’t hear back, please resend. The webhost had to throttle back an overly aggressive spam filter yet again.
I tried the news-dominating, China-developed AI chatbot DeepSeek. For now, I’m using it more than my paid ChatGPT account because it gives thoughtful answers quickly. It’s free and open source, was built in two months, cost only $5 million to train, and runs on cheaper chips, causing Silicon Valley to wet themselves and attempt to reverse engineer DeepSeek. I asked the LLM which health tech companies are at risk for 2025 and received thoughtful, detailed answers that it broke out into public versus private companies.
Five Minutes = Grateful Classroom
Health system executives, technologists, and radiologists — Volpara Health will make a significant donation to Donors Choose for your response to this quick survey. I also have access to matching funds that will probably triple their donation, and you’ll be helping a cancer technology company understand how providers are approaching AI. Disclosure: shameless grifting abounds, but there’s no personal gain here — Volpara isn’t giving me anything, nor are they an HIStalk sponsor, and Donors Choose is 99% rated for financial efficiency, modestly-paid leadership, and transparency. Afterward, I will list the classroom projects that I funded with Volpara’s donation.
Sponsored Events and Resources
Note: I’ve updated the title of this section to better reflect increasingly common alternatives to live webinars, such as on-demand presentations.
Instant Access Webinar: “Healthcare Data Security: Aligning Processes with Evolving Threats & Regulations.” Sponsor: Inovalon. Presenters: Anthony Houston, MBA, senior director of security, risk, and compliance, Inovalon; Paul Wilder, MBA, executive director, CommonWell Health Alliance; Luke McNamara, MPA, deputy chief analyst, Google Cloud; Michael Quinn, VP of strategic partner development, Inovalon. Hear leaders in healthcare data security discuss some of the top recent threat evolutions and how organizations can proactively respond by making ongoing improvements to security protocols.
Contact Lorre to have your resource listed.
Acquisitions, Funding, Business, and Stock
Leidos selects transplant software vendor CareDx to fulfill its $235 million federal contract to modernize the Organ Procurement and Transplantation Network. United Network for Organ Sharing (UNOS) is being replaced after 40 years due to outdated technology and the company’s conflicting role as both a transplant policy organization and a software vendor.
Rad AI, which offers AI-powered workflow tools for radiologists, raises $73 million in a Series C funding round that values the company at $525 million. Fun fact: Rad AI’s co-founder Jeff Chang became the youngest radiologist in US history after starting medical school straight out of junior high at 16 and completing his radiology residency at 26.
Tokyo-based digital healthcare vendor Doctors will launch its US business in the first half of 2025.
AI startup Retro Biosciences is reportedly raising a $1 billion funding round. OpenAI CEO Sam Altman provided the company’s initial funding of $180 million and will participate in the latest round. The company’s goal is to add 10 years to the healthy human lifespan by using AI to target and reengineer the cellular drivers of aging.
People
Providence restructures its leadership team, moving Chief Digital Officer Sara Vaezy, MPH, MPA to chief transformation officer, which covers AI, innovation, and digital care and marketing.
LeanTaaS promotes industry long-timer Harwant Sethi to VP of sales.
Health Catalyst promotes Lynne Dossey, MPH to SVP/GM of North America.
Announcements and Implementations
Samsung is working on a non-invasive optically-based continuous glucose monitor for its Galaxy Watch, a feature that Apple is also reportedly trying to develop.
Black Book Research publishes its free “2025 Black Book of Healthcare Cybersecurity.”
Kaleida Health will partner with Olean General Hospital and Bertrand Chaffee Hospital and also replace Oracle Health with Epic, as a reader predicted here a couple of months ago.
Other
A newborn’s mom who is live-streaming TikTok video from an unnamed hospital’s NICU draws heat from followers who watch her unplug her baby’s monitor to summon a nurse to bring her a sandwich. She claims nurses told her to unplug any time she needs something and that viewers who express astonishment are “annoying.”
SNL hilariously roasts men aged 20 to 45 with Medcast, a visit to One Medical that looks like a podcast where they can “be honest in a way they never would with a normal doctor” and instead “just vibe.”
I haven’t seen this term in a while.
Sponsor Updates
- Capital Rx’s marketing team wins AVA Awards from AMCP for the company’s LinkedIn page and M3P digital marketing campaign.
- Optimum Healthcare IT announces that it is the first ServiceNow partner globally to receive the Validated Practice designation for its Healthcare and Life Science product line.
- Tegria will sponsor the Future of Health Care Conference February 20 in St. Paul, MN.
- Prominence Advisors publishes “ROI in the Fast Lane – Data Harmonization.”
- Black Book Research lists the top 100 healthcare IT advisory services projected to experience the highest demand in 2025, with the following HIStalk sponsors ranking among the top firms: Impact Advisors (enterprise IT infrastructure planning and HIT 0perations), Nordic (EHR implementation and optimization for Epic, Oracle Health, Altera Digital Health, Athenahealth, Veradigm, ModMed systems), Tegria (Meditech EHR implementation and optimization), Optimum Healthcare IT (go-live consultants and staffing), and Clearwater (medical device security strategy, and patient and consumer data privacy and security advisory).
Blog Posts
- How to Protect Provider Endpoints, the Critical Edge of your Network (Med Tech Solutions)
- Caregiver Engagement: 3 Key Takeaways from the IDD Leadership Summit (Netsmart)
- Making the most of your EPR for greater efficiency (Nordic)
- How your TV can support family caregivers (Sonifi Health)
- Cybersecurity in Healthcare Starts with 1 Question (Surescripts)
- 3 top AI + GenAI advancements transforming RCM, denials + more (Waystar)
Contacts
Mr. H, Lorre, Jenn, Dr. Jayne.
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hmmm HIStalk is curiously quiet on the gorilla, if not elephant, in the healthcare room about UnitedHealthcare/Optum. Why?
What might that be?
[per Dr. Wolfgang Klietmann a former clinical pathologist and medical microbiologist at Harvard Medical School]
As Congress continues to investigate Change and UnitedHealth, members should take the damage wrought by those exclusivity agreements as an opening to inquire more deeply into UnitedHealth’s troubling and tightening grip over healthcare. In fact, there are enough shady dealings amongst the vast web of interlocking entities that form UnitedHealth Group to keep lawmakers busy for the rest of the term. The vast scope of its enterprises has long since passed the point of harming patient welfare.
· For decades, UnitedHealth has crept through the U.S. healthcare system as a monopolizing force. The group emerged under the name Charter Medical in 1974, a time when U.S. lawmakers sought a new health care model amidst public demand to tame the rising costs of care.
· UnitedHealth, and other “health maintenance organizations” were the middlemen who would take advantage of this new model, vertically integrating within it. By the turn of the century, the group had acquired 19 other major insurance, management, and consulting companies — and these acquisitions grew exponentially in the early 2000’s.
· Since then, UnitedHealth’s reach has spiraled increasingly out of control. From 2010 to 2022, the conglomerate, including its pharmacy benefit manager (PBM) subsidiary, OptumRx, acquired more than 40 different companies on all levels — insurers, pharmacies, provider networks — culminating in the group’s ownership of 90,000 physician practices, about 10% of the total throughout the United States.
The increasing control over doctor’s offices, in particular, is concerning.
In recent decades, the majority of U.S. physicians have transitioned from working in doctor-owned practices to being employees in a larger system, where they inescapably face pressure from administrators who are concerned more about profits than patients. This profit-directed transformation of the medical profession frequently conflicts with the Hippocratic oath — and is one of the forces driving the exodus of physicians and nurses from the medical profession in many states.
Everyone knows market dominance at this scale invites abuse. In health care, however, such vertical integration can be deadly — significantly worsening patient health outcomes with every single merger and acquisition.
According to a 2023 study by researchers from Harvard University, Massachusetts General Hospital, and University College London, excessive vertical integration within health care inflates costs and leads to adverse health effects for patients. The study, which analyzed more than 2.6 million patient visits, found that after integrating with larger companies, doctors change the way they approach patient care, resulting in significant increases in post-procedure complications.
Monopolistic healthcare practices also heighten the influence of pharmacy benefit managers within the complicated supply chain, further inflating costs for providers and patients.
While prices for health care remain unreasonable for most American patients, PBM profits continue to skyrocket, estimated to have doubled from $3.8 billion in 2018 to almost $8 billion in 2022. PBMs pocket the difference of drug discounts and other transactions behind the scenes, taking advantage of the complex system and costing patients millions of dollars.
United Health’s OptumRx, for example, now accounts for 22% of the PBM market. Its corporate superior, Optum, continues to buy out independent practices and providers across the country. And despite claims from the company that they do not give preferential treatment to UnitedHealth provider plans, vertical integration certainly allows them to do exactly that.
In other words, the more healthcare companies consolidate, the more patients suffer. And for decades, UnitedHealth has been the biggest perpetrator.
The U.S. government shouldn’t buy efforts to portray cyberattacks like the one on Change Healthcare as standalone mistakes. They open a window to the danger of consolidation.
Too much power in our healthcare system is now in the hands of too few. The UHG conglomerate is the most egregious example of vertical integration and consolidation. But it’s hardly the only one where patient interests now come a distant second to maximizing profits.
I agree with many of these points and take away those that are most relevant to my health tech audience. Broader debates around health policy and the capitalism that it fuels are discussed all the time elsewhere, with little result. I don’t have the expertise or platform to do much more than serve as yet another echo chamber. My takeaways:
Consolidation creates a cybersecurity risk. A massive data pipeline controlled by a highly profitable organization like UHG ($22 million ransom paid in this case) is a magnet for cybercriminals. If you’re going to hack a company, you might as well make it a data-loaded, rich one.
A clear business case now exists, if it didn’t already, for performing thorough pre-acquisition cybersecurity risk analysis. UHG admitted it was aware of Change’s cybersecurity vulnerabilities and was working on them. Surely UHG could have afforded better analysis and speedier remediation, although that’s assuming that it is being honest in blaming Change. I don’t think we’ve seen hard evidence that Change’s technology alone was the issue. We might also want to know whether they used outside experts or consulting firms who are paid to prevent situations like this.
This incident could draw lawmaker interest in healthcare cybersecurity, but the likelihood of meaningful action seems slim, and about the only recourse the federal government has is to retroactively fine a company for allowing a breach to occur. The cyberincident has already cost UHG $3 billion, so additional fines aren’t likely to improve the situation for anyone.
$22 million is chump change for these guys. Govt better do better than that when they announce the fine for privacy violations. Does anyone know how much UHC donated to Trump campaign?
AMEN!!!!
Regarding the chain Drugstore poll, would be interested in how many report actually using their pharmacy? I find the Rx costs cheaper almost anywhere else.
Also, does Walgreens still actually sell “a pack of smokes”?
I believe they do still sell tobacco products (CVS doesn’t), at least in some areas. I used the term “pack of smokes” because I like its cadence, the fact that I’ve only ever heard it in old movies, and it’s an attention grabber.
You are correct that chain drugstores often have higher prescription prices and lower service quality compared to the few independent drugstores still out there that are battling the perception that they must be more expensive and less capable. Always check GoodRx, where you will likely find that a chain grocery store’s pharmacy beats them on price. And you can get packs of smokes there, too.