How UHS’ Alan B. Miller built a successful hospital in the middle of nowhere

Forty years ago, Alan B. Miller founded Universal Health Services with six employees, one telephone and one hospital contract. Today, under Miller’s leadership, UHS operates through its subsidiaries a broad portfolio offering hospital-based and ambulatory care, behavioral health, insurance, a physician network and various related services. UHS employs 87,000 people across the U.S., Puerto Rico and the U.K., serving over 2.6 million patients annually. How the system grew was the result of Miller’s boldest move.

WHAT WAS YOUR RISKIEST DECISION? Buying land and building a hospital in the undeveloped desert of the Las Vegas Valley in the late 1990s. The developer of Summerlin and I shared a vision, and he sold me land right in the center of the future city. While access was available initially only via a dirt road, Summerlin quickly became a thriving master-planned community, consistently ranked No. 1 of its kind in the nation.

WHY WAS THAT MOVE RISKY? Standing in the undeveloped desert near Las Vegas, I saw great possibilities—but as an entrepreneur seeking to build a state-of-the-art hospital and be fiscally responsible, I knew my bet had to pay off. Following the purchase of Valley Hospital in 1979, we identified Las Vegas as a key growth market—and as a company, we have continued to grow our assets there since, most recently with the additions of Henderson Hospital in Henderson, Nev., and the ER at Green Valley Ranch, a free-standing emergency department affiliated with Henderson Hospital delivering superior quality, immediate and convenient emergency care close to where people live and work.

WHAT WAS THE RESPONSE FROM THOSE INVOLVED? At the groundbreaking in 1996, a tumbleweed blew across the desert sand—I heard someone whisper, “Should we really be out here?” While perhaps not evident to some at the time, the investment was one of our smartest business moves. Today, Summerlin Hospital Medical Center is a 485-bed hospital, accredited chest pain center and primary stroke center, on a 40-acre campus that includes two medical office towers that provide a variety of outpatient services. Over the years, we expanded our presence to create what is today our largest system—the Valley Health System—an integrated delivery network comprised of six acute-care hospitals, two behavioral health facilities, several pharmacy locations, free-standing emergency departments, a bariatric-care center, six medical office complexes, a network of 400-plus primary-care physicians and the Prominence Health Plan.

Our strategy is to build or acquire hospitals and related healthcare delivery points in growth markets, invest in the people and equipment needed to allow each state-of-the-art facility to thrive, and become the leading healthcare provider in each community we serve. We have successfully done this in a number of key growth markets including Florida, Southern California and Texas.

ANY ADVICE FOR EXECS IN SIMILAR POSITIONS? Keep healthcare personal. Always put patients (customers) first and at the heart of all the decisions you make. We established the company’s mission in 1979. Forty years later, it remains an essential foundation of our company and guides us in delivering compassionate care to patients and families.

DESCRIBE YOUR LEADERSHIP STYLE: I believe in hard work, perseverance and building the right team. It is important to build trust and to inspire and influence people to accomplish our bold organizational goals.

HOW WOULD OTHERS DESCRIBE IT? I believe they would say that I have a strong commitment to quality, hard work, and that I take the long view and calculated risks in making decisions that drive the company’s future.

https://www.modernhealthcare.com/opinion-editorial/how-uhs-alan-b-miller-built-successful-hospital-middle-nowhere

Tenet, Community Health Systems to release earnings

Aug. 5: Fresh off the announcement that it’s spinning off its revenue cycle subsidiary, Tenet Healthcare Corp. will release its quarterly earnings. Zacks Investment Research is predicting that revenue will be down 0.5% from the same period in 2018, coming in at $4.48 billion. Analysts will surely want to know more about the plan to break Conifer Health Solutions off on its own. Fellow Tennessee-based hospital company Community Health Systems also delivers its results. Similarly, Zacks expects a drop in revenue, although much more sizable—10.1% from the same time last year.

Aug. 6: More earnings with AMN Healthcare and Quorum Health releasing results.

Aug. 8: And even more earnings as Allscripts, Cardinal Health and Navigant Consulting offer up their quarterly numbers.

https://www.modernhealthcare.com/finance/week-ahead-tenet-community-health-systems-release-earnings

California hospitals question 2030 earthquake standards

A Southern California hospital spent $72 million on a building designed to do two things after an earthquake: stay standing and stay open.

But when a pair of strong earthquakes struck the region last month, the hospital couldn’t use it.

Structurally, the building was OK. But some broken pipes flooded a room of mechanical and electrical equipment, and water leaked into operating rooms and elevator shafts. The hospital in Ridgecrest, about 150 miles (240 kilometers) northeast of Los Angeles, had to evacuate the building as a precaution.

Now, Ridgecrest Regional is joining hospitals across the state in questioning standards designed to keep hospitals open after earthquakes. The rules are set to take effect in 2030.

Most hospitals in earthquake-prone California have met regulations designed to keep buildings from collapsing in an earthquake. But administrators say the standards for keeping the doors open after quakes are pricey and will force some hospitals to raise healthcare costs, cut services or close.

“Just having a building is a very narrow thing of what it takes to have healthcare,” Ridgecrest Regional CEO Jim Suver said. “That’s why I think it makes some sense, personally, for us to look at the 2030 standards. It’s not that they are bad, (but) they are tremendously expensive.”

In the case of Ridgecrest Regional, the standards didn’t help, he said.

Suver said he had assumed the expensive building would be the hospital’s lifeline after an earthquake. But the only way the hospital could stay open was to rely on its undamaged 1960s-era buildings — buildings it had planned to retrofit or replace in the next decade.

Labor unions, meanwhile, are defending the standards, pointing out hospitals have had nearly three decades to comply. Changing them now would be a “multibillion bailout on seismic safety standards,” according to Stephanie Roberson, director of government relations for the California Nurses Association.

“This thing has been on the books since 1974, and they have abdicated their responsibility ever since. The more you delay, the more things cost,” she said.

California has required new hospital buildings to meet earthquake standards since 1974, following a 1971 magnitude 6.5 earthquake in the San Fernando Valley that killed 64 people and collapsed buildings at the Olive View Medical Center and a veterans hospital.

In 1994, after a magnitude 6.7 earthquake near Los Angeles damaged 11 hospitals and forced eight to evacuate, state lawmakers required hospitals to either upgrade their existing buildings to withstand an earthquake or replace them. The original deadline was 2008, but is has been extended to 2020 with some exceptions.

All but 160 of the more than 3,000 hospital buildings in California have met the 2020 standards, according to the Office of Statewide Health Planning and Development. The California Hospital Association, an industry group, says just 23 hospitals have met the 2030 standards, while 395 have not. They estimate it will cost as much as $143 billion for hospitals to comply, according to a study paid for by the industry.

“If we follow through with this standard, we will likely close hospitals,” said Carmela Coyle, president of the California Hospital Association.

Hospitals are proposing some alternatives. Their ideas include having taxpayers help finance construction or requiring only a certain number of hospitals in each region to meet the standards. Another idea is to adopt a cap-and-trade-like system where hospitals could buy permits allowing them to have noncompliant beds.

The California Hospital Association sponsored a bill in the Legislature this year to address the 2030 standards, authored by state Sen. Anthony Portantino, a Democrat from La Canada Flintridge. But they could not get an agreement by a legislative deadline, pushing negotiations to next year. Portantino’s office did not respond to a request for an interview.

Talk of scaling back the standards upsets Tim Thomas, a retired nurse who was thrown to the floor and covered in a pile of books when an earthquake struck near the Watsonville Community Hospital in 1989. The hospital lost power and had to evacuate. Roads were closed, so there was no way out. Thomas assisted as an orthopedic surgeon operated on a patient in the parking lot with nothing but a local anesthetic.

“To not make provisions to have the hospitals keep pace with the rest of the infrastructure doesn’t make any sense to me,” Thomas said. “I haven’t heard anybody suggest the medical industry is not viable and making money.”

Coyle said 38% of California hospitals operate at a loss. Suver said if they have to comply by 2030, they will have to “significantly limit some of the services we offer.”

“The new tower was very expensive for us to build and prospect for us to have to spend more millions of dollars on remediation of older buildings and demolish them is very tough for a small rural hospital like us,” he said.

https://www.modernhealthcare.com/providers/california-hospitals-question-2030-earthquake-standards

Chair who vaulted now-struggling Amneal to top generics, CEO are out

Facing rising pressure to its generics business and plummeting sales, Amneal’s investors have been looking for a shakeup at the top. Ultimately, shareholders looked to the past to lead the drugmaker into the future.

Paul Bisaro, Amneal’s executive chairman, and Rob Stewart, the president and CEO he recruited, will step down from their posts as the drugmaker looks to rework its executive team.

Co-founders Chirag Patel and Chintu Patel will pivot from their roles as co-chairman to take over as co-CEOs, while Paul Meister, a co-founder of Liberty Lane Partners and former president of MacAndrews & Forbes Incorporated, will assume the role of executive chairman. Three independent directors, Robert L. Burr, Janet S. Vergis and Dharmendra Rama have also resigned.

Meister, who was appointed to the board by Amneal’s former ownership group, will stay on until a replacement is elected at the company’s 2020 meeting, according to an SEC filing.

The drugmaker’s stock was trading down 7% to $3.08 after the news Monday and is down a whopping 86.7% from a high of $24.25 per share in August 2018.

The replacement of Bisaro marks a remarkable fall from grace for the executive who engineered Amneal’s $6.4 billion buyout of Impax Labs in 2017, making it the fifth-largest generics player at the time.

Bisaro, who helmed Impax and later Amneal after stepping down as CEO and chairman at Allergan in December 2017, was known for a long M&A winning streak after building Actavis into a top-tier generics maker through aggressive buyouts. One of those blockbusters was Actavis’ $70.5 billion purchase of Allergan—which took the name of the newly merged company—in March 2015.

Bisaro vacated his chairman post at Allergan in October 2016 and later resigned his board position in late 2018.

During his time as chairman at Amneal, Bisaro was instrumental in arranging the poaching of Allergan COO Stewart in December 2017 after the Impax merger. Stewart served alongside Bisaro during his Actavis tenure.

The leadership upset follows another rough quarter for Amneal; the drugmaker posted a 12.5% drop in combined net revenue in the second quarter over the previous year, down to $404.6 million. The company’s generics and specialty drug businesses both declined.

“Recent industry headwinds and increased competition continue to put pressure on the company,” independent director Ted Nark said in a statement. “To succeed in today’s environment, Amneal must move decisively and prioritize its key strategic initiatives that will drive value for our shareholders. Chirag and Chintu possess both the leadership skills and the requisite strategic, operational, manufacturing and R&D expertise to execute on these efforts.”

On the heels of Monday’s news, analysts said even more trouble could be brewing for Amneal, which is facing industrywide pricing pressure that is pinching larger competitors like Mylan and Teva.

Cantor analyst Louise Chen said Amneal’s stock could continue to dwindle, especially as Wall Street gets familiar with the Patels as co-executives and see what they will do with their stock holdings after the shakeup.

https://www.fiercepharma.com/pharma/amneal-chairman-bisaro-ceo-will-resign-leadership-shakeup-for-struggling-drugmaker

Canada Urges Industry to Prepare for U.S. Drug Import Changes

Last week, the Trump administration announced it was evaluating proposals to allow consumers to buy drugs legally from Canada. HHS Secretary Alex Azar said that the Trump administration will consider new rules that would allow states, pharmacies and other parties to bring drugs from Canada as part of pilot projects. In addition, the U.S. Food and Drug Administration (FDA) might allow manufacturers to import the U.S. version of their drugs that they sell internationally.

Canada, however, is opposed to this policy. An April briefing for Canadian officials stated, “Canada does not support actions that could adversely affect the supply of prescription drugs in Canada and potentially raise costs of prescription drugs for Canadians.” The briefing was prepared by the Canadian foreign ministry to be used by Canadian officials speaking with U.S. officials.

In a follow-up with Canadian ministry officials at Health Canada, the ministry told Reuters they had “made Canada’s position clear” to federal and state officials in the U.S. and was prepared to “take action to ensure Canadians have uninterrupted access to the prescription drugs they need.”

Today, Canada’s primary pharmaceutical lobby group, Innovative Medicines Canada (IMC), urged the Canadian government to respond to the U.S. plans before it caused drug shortages in Canada. An earlier version of its briefing called for a government ban of all drug exports “unless otherwise permitted by regulation.”

A May Canadian talking points document stated, “Wholesalers should not be permitted to export drugs in bulk from Canada, and there should be strict and significant penalties for exporting drugs where their export is prohibited by law.”

IMC’s members include major biopharma companies based in the U.S. and internationally. It works closely with PhRMA, the Pharmaceutical Research and Manufacturers of America, the industry’s lobbying group in the U.S.

“Our government’s priority is ensuring that all Canadians can get and afford the medications they need,” stated Alexander Cohen, a spokesman for Canada’s health minister. “All statements and decisions surrounding Canada’s drug supply are made based in the best interest of Canadians, and we are examining all options to ensure it remains secure.”

At this time there appears to be no timeline for the United States’ rules changes and not all drugs would qualify. For example, insulin for diabetes, which has drawn recent criticism over its high price, would not be eligible for importation under at least one of the outlined proposals. And even if the rules did change to allow it, it might not be available for years because of a lengthy rulemaking process.

The GOP typically is opposed to the importation of drugs from other countries. President Trump has placed decreasing drug prices a priority for his administration, although at two-and-a-half years into his term, no significant changes have been made, but with the 2020 election heating up, he’s making another effort.

In fact, Azar has traditionally been opposed to importation, once calling it a “gimmick.” Now, Azar said, “What we’re saying today is we’re open,” referring to a proposed rule, which needs to be finalized. “There is a pathway. We can be convinced.”

A minimum of 10 U.S. states, including Florida, have passed or proposed legislation that would allow these types of imports, but actual shipments are illegal without federal approval.

Reuters reviewed IMC position papers and found that the organization says it might not be possible for biopharma companies to enforce contract terms with Canadian buyers that forbid the re-export of medicines.
“Although purchasing agreements with suppliers may contain clauses that would prevent bulk export to the U.S., many Canadian pharmaceutical companies are subsidiaries of U.S. corporations and may become obliged to do so through U.S. legislation,” the IMC warned in July.

The IMC suggested a first step would be for the Canadian government to publicly address the issue and state it would protect drugs intended for the Canadian market. And it did.

“We recognized the new situation brought on by American announcements, and Health Canada will continue to ensure that our priority is always ensuring that Canadians have access to the medication they need at affordable prices,” Canadian Prime Minister Justin Trudeau stated last week.

https://www.biospace.com/article/canada-urges-industry-to-prepare-for-us-drug-import-changes/

Guardant Blood Test Could Replace Biopsy for Certain Types of Cancer

In 2017, the U.S. Food and Drug Administration (FDA) approved Merck’s Keytruda (pembrolizumab) for tumors that can show up anywhere in the body but are distinct because of what is called MSI-High, or microsatellite instability-high. To identify this marker, a tumor biopsy was required.

Now it looks like those types of tumors can be identified by a blood test. Redwood City, California-based Guardant Health, along with researchers with MD Anderson Cancer Center, the Samsung Medical Center and others, conducted a large study that showed the Guardant360 assay can accurately detect MSI.

MSI is a good predictor of response to checkpoint inhibitors in multiple cancer types. It shows up in about 1% of cancers and patients with advanced cancer who are MSI-High are typically eligible for immunotherapy. It is most common in colorectal, endometrial, and gastroesophageal cancers.

“Unfortunately, less than half of all advanced colon cancer patients are tested for this important biomarker,” stated Jeeyun Lee, associate professor, Division of Hematology/Oncology, Samsung Medical Center. “And across all solid tumors, we suspect the testing rate is far lower, in part due to challenges of working with tissue samples. By incorporating these results into a simple blood test, we should be able to increase the number of patients who get this information and benefit from appropriate immunotherapy.”

The research group compared the data from 1,145 Guardant360 samples to MSI status that was found in standard-of-care tissue biopsies taken from medical records. What they found was the results from Guardant360 were the same as standard-of-care biopsy results in 98.4% of cases.

The research also analyzed the outcomes of checkpoint inhibitors in plasma MSI-High patients. In a group of 16 MSI-High gastric cancer patients receiving treatment with checkpoint inhibitors, the objective response rate was 63% and disease control rate was 81%.

“Millions of microsatellites exist throughout the genome, but most of them are poorly suited for blood-based clinical genomic analysis,” stated Scott Kopetz, associate professor of Gastrointestinal Medical Oncology at The University of Texas and co-author of the study, which was published in the journal Clinical Cancer Research. “These results show that a carefully designed panel, combined with efficient DNA-capture biochemistry and sophisticated bioinformatics tools, allow for accurate, sensitive MSI detection.”

It’s also a validation for so-called liquid biopsies. These are comparable to solid tumor biopsy but are performed on blood to look for cancer cells or DNA from a tumor circulating in the blood. They are also used to detect other diseases.

Other companies working in the liquid-biopsy space include Karius, which developed a liquid biopsy for infection disease; Verily Life Sciences, which invested in Freenome; Apostle; Grail Bio; Thrive Earlier Detection Corp, which launched out of Johns Hopkins earlier this year; and others.

“We are proud to be able to bring this innovation to Guardant360 ordering physicians and the patients they treat,” stated AmirAli Talasaz, co-founder and president of Guardant Health. “We remain committed to improving the performance and utility of our products as our lab and the broader oncology field achieve advances in technology and breakthroughs in treatment.”

https://www.biospace.com/article/guardant-health-s-blood-test-could-replace-biopsy-for-certain-types-of-cancer/

MediWound started at Buy by Wainwright

Target $5.50

https://www.benzinga.com/stock/MDWD/ratings