Morning Briefing
Summaries of health policy coverage from major news organizations
Hospice Care Has Become Booming Multibillion-Dollar Industry — And More And More Companies Want In
Death has always been lucrative enterprise, whether it involves mahogany caskets or teams of estate and tax lawyers. But hospice, the business of caring for those who are nearing death, has become a booming multibillion-dollar industry that is attracting more and more for-profit companies, including one of the nation’s major insurers. That insurer, Humana, is making an unusual bet beyond the current strategy of health insurers to merge with pharmacies or buy up doctors’ practices. In teaming up with two investment firms, Humana plans to buy two hospice chains that together would create the industry’s biggest operator with hundreds of locations in dozens of states. (Abelson, 6/22)
Not-for-profit health systems—no strangers to paying top dollar for talented executives—are using sophisticated methods to avoid the penalties on high employee compensation. Effective tax year 2018, the Tax Cuts and Jobs Act imposes a 21% excise tax on not-for-profit compensation that exceeds $1 million, a threshold that encompasses just about all major not-for-profit health systems. (Bannow, 6/23)
And in news on the billionaires' health care initiative —
The health venture established by Amazon.com Inc., Berkshire Hathaway Inc. and JPMorgan Chase & Co. will take aim at intermediaries in the health-care system as a part of a broad effort to reduce wasteful spending, the venture’s newly named chief executive officer said. The still-unnamed business will initially seek to develop ways to improve care for the more than 1 million individuals who get health insurance from the three firms. Over time, the venture will make those innovations available freely to other companies, meaning that if it’s successful, its effects could be felt more broadly among the more than 150 million people in the U.S. who get their health insurance through work. (Tracer, 6/24)
The health care venture being launched by Jeff Bezos, Warren Buffett, and Jamie Dimon will start off modest in scale, if its real estate needs are any guide. The newly formed entity, to be based in Boston and led by Brigham and Women’s Hospital surgeon and well-known medical writer Atul Gawande, is looking for about 20,000 square feet of office space in the city, according to local real estate brokers. (Logan, 6/22)
It’s hard to imagine having to endure a more exacting executive search committee than the triad of corporate chieftains atop Amazon, JPMorgan Chase, and Berkshire Hathaway. But Dr. Atul Gawande’s selection last week by Jeff Bezos, Jamie Dimon, and Warren Buffett to run a venture with the extraordinary yet seemingly futile goal of disrupting the health care industry didn’t stem from any longstanding relationship he had with any of them. Its genesis was an article he wrote for The New Yorker nine years ago. (Berke, 6/26)
