Thursday, November 14, 2013

Murthy Water Around Surgeon General Nominee

President Barak Obama will nominate Vivek Murthy, M.D. for Surgeon General, America's medical bully pulpit.  Besides being a talented hospitalist at Boston's Brigham & Women's, Murthy is chair of Doctors for America.

Doctors for America's first campaign occurred in February 2009, one month after President Obama was sworn into office.  Their website lists nearly 70 campaigns conducted by the group.   The following disclosure is on their donation page:

Doctors for America is a project of the Center for American Progress, which has been incorporated and is operated as a public charity. The Center for American Progress has received official IRS recognition of its tax exempt status under sections 501(c)(3) and 509(a)(1) of the Internal Revenue Code. Our federal ID number is 30-0126510. With the exception of conference registration fees and donor gifts ($40 per fleece, $5 per USB), donations will be tax deductible and may be disclosed to the IRS.
Dr. Murthy's Doctors for America is wedded to PPACA, in both design and implementation.

John Podesta, founder of the Center for American Progress, served as the head of President-elect Obama's transition team.  CAP's current President served as senior advisor for health reform at HHS and worked with the White House's Nancy-Ann DeParle on health reform.  DeParle since left the White House to found a health-oriented private equity firm, Consonance Capital Partners.  The Consonance team is made of former JP Morgan Partners members.  They describe their investment strategy as:

The firm targets growth equity, leveraged buyouts, and recapitalization transactions in the lower middle market. Target companies generally have between $20 million and $150 million in revenues. The sources of these opportunities are typically derived from private/family-owned businesses seeking liquidity, growth capital, or both – and large corporations seeking to divest non-core assets. The principals build value for the firm's investors by leveraging their relationships and resources to drive internal growth initiatives, operational improvements, and mergers & acquisitions.
With over 25 years of health care investing, across numerous economic cycles, the team has broad experience across multiple sub-sectors, including:
  • Providers (specialty providers, inpatient and outpatient facilities)
  • Payors (commercial, Medicare, Medicaid, and carve outs)
  • Distribution (pharmaceuticals, products, and specialty)
  • Devices (commercialized products)
  • Specialty pharmaceuticals (commercialized and later-stage development products)
  • Outsourced services (servicing managed care, pharma, and providers)
  • Healthcare information technology

Dr. Murthy may need capital from firms like Consonance Capital going forward.

He (Murthy) also helped found two technology companies related to medicine: Trial Networks, a cloud-based platform for pharmaceutical and biotechnology trials; and Epernicus LLC, a networking site for research scientists.

Time will show how Nancy-Ann DeParle and Dr. Murthy play their political/business hands to their advantage.   President Obama's first Surgeon General had a heart for caring for people regardless of their insurance status.  Dr. Murthy looks like a pure political appointment, a reward for a loyal follower. 

PPACA sets the stage for employers to shed that pesky health insurance benefit, in part or in whole.  Retirees are finding themselves jettisoned into an into individual exchanges by companies wishing to cap the amount of money they pay for retiree healthcare.  With their group health policies eliminated, elderly retirees have to navigate a complex sign up procedure, one that takes hours by phone for each person covered under the plan.

Similarly, PPACA's complexity ensures many Americans will not be able to navigate the signup process.  I couldn't imagine individual high-deductible health plans as the solution to America's legions of uninsureds, but that's exactly what PPACA provides. 

If approved by the U.S. Senate, America will have two years of Dr. Vivek Murthy as Surgeon General.  Watch what happens to employer sponsored health insurance over that period and pay attention to private equity underwriters with ex-politicians making hay over the unique features of PPACA.  Those who set up the field know how to profit from it.

In the immortal words of Vice President Joe Biden, "This is a big fucking deal!" --Biden caught on an open mic congratulating President Barack Obama during the health care signing ceremony, Washington, D.C., March 23, 2010

Watch the deals and decide who's getting screwed.