Is 2019’s health care deal-making sustainable? Plus, nurses with four-year degrees provide better care and Anthem hires former Apple staffers

It’s been a big year for health care investors. 

Health care IPOs outnumbered other sectors in the second quarter of 2019, raising a total of $5.9 billion. Digital health player Livongo is the latest company expected to go public, according to MobiHealthNews. Consolidation among the industry’s top drugmakers continues, most recently with AbbVie’s proposed $63 billion tie-up with Allergan. That said, the digital health market has stumbled, with the first quarter bringing in lower investment compared to the same period a year ago. 

This week, I sat down with three health care and pharmaceutical investors to talk about industry trends at the Exponent Exchange, an event for women investors, held Thursday in New York City. I later asked them what they see as the biggest change in the health care market over the last 12 months. 

• The emergence of telemedicine is becoming an integral part of the care model, said Lisa Cuesta, principal at NextGen Venture Partners. The shift toward high deductible plans and health savings accounts have been two drivers of telemedicine adoption. “Consumers are focused on spending wisely and care outcomes,” she said. “At the same time, the promise of telemedicine is becoming a reality.” 
• Social determinants of health have become a must-address issue, according to Stacy Guffanti, director of the corporate M&A practice at Cain Brothers. “There [has been] an increasing focus on recognizing the importance of the social determinants of health that can include housing, transportation, access to food, social isolation and education,” she said. 
• Early-stage investing is the way to go right now in biotech, Carolyn Horn, principal of health care equity capital markets for Needham & Company, wrote to me. "About half of [the] biotech IPOs that priced last year and 2019 year-to-date are preclinical or in phase 1," she said. "There continues to be demand for stories with novel approaches to treatment and potentially transformative therapies."

What’s your take? Do you agree with these investors? 

News I’m Watching

1. In hospitals with more nurses with four-year degrees, better cardiac care. A new study found that patients have stronger odds of surviving an in-hospital cardiac arrest if the hospital employs more nurses with bachelor’s degrees. These nurses may be more likely to recognize patient deterioration and provide a more effective response, one researcher told Medscape. The research also examined patient-to-nurse ratios; for every additional patient a nurse has to care for, there was a drop in patient outcomes.  

“Highly skilled, highly trained nurses make a difference. They are irreplaceable.” - Jae Patton, Ascension

2. In reported bid to modernize, Anthem hires former Apple staffers. The health insurer has reportedly hired about half a dozen former Apple employees, flipping the trend of Big Tech companies poaching clinical talent from health care providers, according to CNBC. Many legacy health care companies, including insurers, have been forced by the entrance of startups like Oscar and Warby Parker and technology giants such as Amazon and Apple to rethink how they handle the customer experience for patients. 

“Advice to Anthem senior leadership—protect them, nurture them, educate them on differences in health care, give them a decent sandbox to play in to design new approaches and adequate time to drive change.” - Kevin Noble, Singularity University  

3. Should Medicare cover acupuncture for low-back pain? That question is under debate at the Centers for Medicare and Medicaid Services at a time when providers and payers are trying to find new ways to provide treatments for chronic pain that aren’t opioids. However, views in the U.S. are split on acupuncture. Some insurers, like Blue Cross Blue Shield, cover the Chinese treatment for pain relief, while the Department of Veterans Affairs trains its workers in “battlefield” acupuncture. Other experts argue that acupuncture is simply a placebo. 

“Each medication comes with its own set of side effects and risks, including abuse and addiction. So why not consider non-medicinal therapies? Not to forget the potential for long-term cost savings to the health care system.” - Natalie Johnson, Massachusetts General Hospital 

*Comments have been lightly edited.

What’s your take on this week’s stories? Do you agree with the investors? How will telemedicine and social determinants of health investing fare in 2019? Should more nurses get bachelor’s degrees? Will former technology employees be able to make lasting changes in a slow-to-change health care industry? Is there a case for Medicare to cover acupuncture for pain relief? Share your thoughts in the comments, using #TheCheckup.