After a few weeks of high drama, it was mostly quiet on the healthcare policy front. The big question in front of us now is: will POTUS yank the rug from under the health insurance exchanges by withdrawing funding for subsidies, estimated at $10 Bn next year? This uncertainty will nag at insurance companies even while the courts seem to provide them with a legal basis to challenge any effort to eliminate subsidies.

IMT, insurance major Aetna, who is withdrawing from the exchange markets altogether, announced robust profits for the quarter and raised estimates for the year on the back of lower MLR’s and the Medicare Advantage business, despite losing $ 200 m on the exchange business.

IT services major Cognizant announced results this week, indicating a strong performance in healthcare, driven by the life sciences and payer businesses. Their acquisition of TMG health, a BPO services entity, from HCSC, which has a strong presence in the Medicare Advantage markets should boost growth (in contrast to Wipro’s HPS acquisition which is troubled due to its exposure to the exchange markets). We will be covering all this in on our quarterly analysis of healthcare IT services firms later this month.

EHR vendor Allscripts announced its $185 M acquisition of McKesson’s EHR business this week. McKesson’s Paragon product brings hundreds of small hospitals into the Allscripts portfolio, complementing its current book of business which is focused on larger hospitals. Does this deal signal the beginning of consolidation among EHR vendors? If I were to guess, troubled eClinicalworks could be next, or perhaps Meditech. The timing coincides with reports of non-traditional players entering the market: Amazon’s secret 1492 group is reportedly working on a new EHR product. The space could get really interesting soon.

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