Our Take: J&J, Cerner announce shake-ups in top leadership, Google Health splitting up
Johnson and Johnson (J&J) and Cerner will both welcome new CEOs in the months ahead, and Google Health apparently will soon be history. Again.
J&J, pharma’s top firm based on 2020 revenue, announced Thursday that the role of CEO would transition from Alex Gorsky to Joaquin Duato, effective January 3. Gorsky, who also currently serves as chairman, will become the company’s executive chairman.
Duato, who is the vice chairman of J&J’s executive committee and has been with the company for more than 30 years, will join the board of directors when he becomes CEO. Among his current responsibilities, Duato oversees the company’s global supply chain.
Gorsky, who has been with J&J for three decades and has served as CEO since 2012, said the timing for the transition was right for both him and the company, and that he will focus more on his family “due to family health reasons.”
In the time that Gorsky has led the company, J&J’s investments in research and development have risen by more than 60%, with oncology being an area of increased focus. The firm also acquired Actelion for $30 billion, the largest acquisition in J&J’s history.
But the company has also had its share of problems, including lawsuits in which tens of thousands of plaintiffs claim that asbestos in J&J’s talcum powder products caused ovarian and other cancers. Those cases could cost the company billions of dollars, as could thousands of other lawsuits against the firm for its alleged role in fueling the opioid epidemic.
J&J has experienced issues with its COVID-19 vaccine as well, including reported side effects such as rare blood clots that led to a brief pause in dosing and a months-long interruption in production when the FDA halted operations at Emergent BioSolutions’ manufacturing facility in Baltimore because millions of doses had potentially been cross-contaminated with the AstraZeneca vaccine.
And just last week, J&J was on the receiving end of criticism after The New York Times reported that most of the vaccine doses being fill-finished at Aspen Pharmacare’s facility in South Africa were being exported to Europe rather than being used to vaccinate people in Africa.
The Times noted that South Africa’s contract with J&J required the country to waive its rights to impose restrictions on exports of the vaccine. The European Union negotiated with the South African government to import doses after the problems at the Emergent facility led to shortages in several European countries. In response to the backlash that arose from the Times report, a spokesperson for the European Commission said the imports from South Africa are temporary.
Despite the setbacks, J&J could still increase its share of the COVID-19 vaccine market, according to the author of an article published by The Motley Fool. Preliminary study results from a trial of 480,000 health care workers in South Africa suggest that a single dose of J&J’s vaccine is more effective than two doses of Pfizer-BioNTech or Moderna’s vaccines in preventing hospitalizations and deaths among individuals infected with the delta variant.
Another big news story from last week also involved a senior executive stepping down. Insider reported that Dr. David Feinberg is leaving his role as vice president of Google Health, effective September 1, and will take the helm at Cerner.
Cerner confirmed Thursday that Dr. Feinberg, who was president and CEO of Geisinger until he left for Google Health in January 2019, would take on the dual roles of CEO and president at Cerner on October 1 and would also become a board member at that time.
Prior to his tenure at Geisinger, Dr. Feinberg was with UCLA for more than 20 years, the last four of which he served as president and CEO of UCLA Health.
Brent Shafer, Cerner’s current CEO and chairman, announced in May that he would be turning the reins over to a successor but would stay on as a senior adviser for a year after the board had chosen his replacement. Donald Trigg, who became Cerner’s president in February 2020, is leaving the company. William Zollars, who is now Cerner’s lead independent director, will become the company’s chairman.
Like J&J, Cerner has also weathered a few bad news cycles in recent years, mostly because of a series of delays in the company’s $16 billion EHR implementation at the Department of Veterans Affairs. After concluding a 12-week strategic review, the VA said in July that it was pausing the implementation through the end of the year.
As for Google Health, Insider said Google is “dismantling” the unit and spreading its teams and projects across various other areas of Google. Insider cited an internal Google memo as its source.
The first iteration of Google Health was a service that allowed users to store their medical records online, Insider noted. Google called it quits on that project in 2012.
What else you need to know
Patients can expect to start paying more of the cost for COVID-19 treatment. Health System Tracker, a partnership of the Peterson Center on Healthcare and the Kaiser Family Foundation, just released a research brief indicating that 72% of the largest health plans in the U.S. are no longer waiving their cost-sharing requirements for COVID-19 treatment (does not include testing or vaccinations). Another 22% of the plans surveyed intend to stop waiving members’ out-of-pocket costs for treatment between now and the end of the year. This could pose a substantial problem for hospitals and health systems, especially if a large percentage of patients who receive treatment cannot pay their plan deductible. The analysis included 102 health plans — the two largest in each state plus Washington, D.C.
Tampa General Hospital and the University of South Florida (USF) Health are partnering to establish one of Florida’s largest academic medical groups, the Business Observer reported. The two organizations will combine their medical practices beneath the same administrative umbrella, which they will control together. The new entity, which will be called University of South Florida Tampa General Physicians, will officially launch in October and will include approximately 1,400 physicians, nurses, and employees. The report stated that physicians affiliated with USF will still be employees of the university but will work for the new organization. The move will reduce costs for both organizations, limit USF’s financial exposure, and increase revenue over time, according to the report.
CareMax, in collaboration with Anthem, will open an estimated 50 medical centers in eight states, CareMax said in a press statement. The two businesses signed a collaboration agreement under which CareMax will build the new senior-focused medical centers “in areas where Anthem will offer a value-based care model to improve patient outcomes.” They will focus their efforts on areas in Connecticut, Georgia, Indiana, Kentucky, Texas, Virginia, and Wisconsin, “among others.” In addition, Anthem will collaborate with CareMax and other providers to bring members who have coverage under New York City’s group Medicare Advantage retiree contract into value-based arrangements. Empire Blue Cross Blue Shield (an Anthem company) was awarded the contract in July in partnership with insurer EmblemHealth.
As the COVID-19 surge in Texas continues, Baylor Scott & White Health facilities are postponing elective procedures, Becker’s Hospital Review reported. The Dallas-based health system said the postponements will vary daily by facility as individual cases undergo review. “While we will always make emergency care available, if the current surge continues, and our intensive care unit occupancy rate continues to increase, our hospitals may not be able to meet the critical health care needs of our community,” the health system told Becker’s.
The academic health system formed when Atrium Health combined with Winston-Salem, North Carolina-based Wake Forest Baptist Health last fall has a new name: Atrium Health Wake Forest Baptist. In announcing the change, CEO Julie Ann Freischlag, M.D., said, “This is another milestone in our journey to come together for the benefit of our patients and the communities we serve.” The new name will be assumed by former Wake Forest Baptist Health facilities and practices.
SSM Health and Medica have formed a partnership to “drive innovative value-driven health care solutions” for the communities they serve. Based in Madison, Wisconsin, SSM Health comprises 23 hospitals, 290+ physician offices and other outpatient/virtual care services, 10 post-acute facilities, a health insurance company, an ACO, a PBM, and other services. Medica, a nonprofit health plan headquartered in Minnetonka, Minnesota, serves members in nine Midwestern states. As part of their agreement, Medica will invest in SSM Health subsidiary Dean Health Plan, with a focus on operations, technology, and areas that will enable value-based care. SSM Health and Medica said they expect to finalize the agreement in the fourth quarter, pending regulatory approvals.
Improving mental health: An interview with One Mind’s Garen Staglin. McKinsey & Company, 8.16.21
Accelerated Approval—An Unexpected Pathway To Value-Based Pricing? Health Affairs, 8.18.21
Setting the Stage for the Next 10 Years of Health Care Payment Innovation. JAMA Viewpoint, 8.16.21
The Paradox of Choice: Why More Is Less, by Barry Schwartz