Device Makers Experiment With Risk Contracts
Hospitals are pushing the manufacturers to begin to take on risk for products such as pacemakers and other implantable devices, reports Modern Healthcare. Other stories look at contractors seeking new health law business, how health care has delivered the strongest mutual fund performance of any sector over the past five years and how H&R Block is now bundling tax and health care services.
Devicemakers Explore Risk Contracts With Hospitals
Tiptoeing into the broader accountability movement, some of the largest medical-device manufacturers are negotiating experimental deals with hospitals to take on performance-based financial risk for their implants. While drugmakers have been testing risk-based contracts for several years, devicemakers are just beginning to explore taking on risk for products such as pacemakers and other implantable devices. Experts say cardiac devices are a primary focus of new risk-sharing agreements under discussion, likely because hospitals face potentially lower payment rates for congestive heart failure patients. Experts say each risk-based contract between a hospital and devicemaker is structured differently. Some agreements may stipulate that the manufacturer return a percentage of the device's price if it doesn't meet certain performance goals or fails within a set period of time. Under other agreements, a hospital pays more for a device that fulfills a manufacturer's quality and economic claims. (Lee, 12/6)
Kaiser Health News:
Obamacare Creates Boom For Federal Contractors
Two years ago General Dynamics, one of the biggest federal contractors, reported a quarterly loss of $2 billion. An “eye-watering” result, one analyst called it. Diminishing wars and plunging defense spending had slashed the weapons maker’s revenue and left some subsidiaries worth far less than it had paid for them. But the company was already pushing in a new direction. Soon after Congress passed the landmark Affordable Care Act, the maker of submarines and tanks decided to expand its business related to health care. (Hancock, 12/8).
Check out the related infographic: HHS’s Contracting Bonanza In 8 Charts (Hancock and Cordyack, 12/5)
The Wall Street Journal:
Health And Tech Funds Step Up
Is it time to load up on health-care and technology funds? Or is it too late? Health care has delivered the strongest mutual-fund performance of any U.S.-stock sector over the past five years, with a nearly 22% average annual return, according to Morningstar Inc. data. The tech sector’s annual return of 14.5% over that stretch trails that of several other sectors. But in November, tech’s 3.5% return beat health care’s 2.9% and made tech one of the month’s strongest U.S. sectors. Looking ahead, there’s a case to be made for both sectors. (Hodges, 12/7)
Manufacturers Both Upbeat And Gloomy; Thank Washington
Manufacturers are more upbeat about their own companies’ prospects than at any time in almost a decade. Yet about three-quarters of them also feel the country is on the wrong track. The seeming contradiction is found in the latest National Association of Manufacturers/IndustryWeek quarterly survey to be released Monday, a copy of which was obtained by McClatchy in advance. ... The quarterly survey from the manufacturers’ group, conducted Nov. 13-26 and gauging the next four month of business, pointed to rising health care costs and regulatory burdens as major challenges. (Hall, 12/8)
H&R Block Bundles Taxes And Health Insurance
The tax preparation company H&R Block releases its earnings report on Monday. And this year, the company has broadened its services; it will not only help file your taxes, it’s also offering to help you sign up for health care. This is a direct result of the way that taxes and healthcare have become linked by the Affordable Care Act. (Weinberg, 12/8)