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In 2020, the entire U.S. healthcare industry was sucked into the gravitational pull of the coronavirus pandemic. As we survey the damage, the nation’s economic outlook remains grim, its social fabric continues to unravel and 300,000 American lives have been lost to Covid-19.
Though there were precious few bright spots in 2020, a handful of U.S. companies came forth with innovative and essential solutions during the coronavirus crisis. Some were aimed at addressing the virus, itself, while others sought to fix a healthcare system that was broken long before the pandemic. This article, the first in a two-part series, examines the outstanding efforts of four organizations that exceeded even our most unrealistic healthcare expectations in 2020.
With end-of-semester grades traditionally due to the dean’s office in December, here’s a healthcare report card for 2020, featuring the companies that earned top marks for confronting the year’s most pressing medical challenges.
The Vaccinators
Not long after researchers recognized SARS-CoV-2 (severe respirator syndrome coronavirus 2) and sequenced its genetic makeup, America’s leading pharmaceutical companies were off to the races in a worldwide effort to develop a “safe and effective” vaccine. More than 20 U.S. drug makers took part—some spurred on by multibillion-dollar government incentives.
Still, the odds were heavily stacked against any company reaching the finish line in 2020. The fastest a successful vaccine has ever been developed is four years (mumps), and nearly all vaccines take five years or much longer to be created, tested and approved. To speed things up, nearly all drug makers sidestepped the traditional, attenuated-virus approach to vaccine R&D and focused instead on creating one using messenger RNA (mRNA). It was a chancy decision. In more than two decades of research, this method had never produced an FDA-approved vaccination against a viral infection. But the big bet paid off for two U.S. companies.
Pfizer (grade: A)
In March, American drug giant Pfizer announced a joint venture with German-based BioNtech to develop and distribute an mRNA-based COVID-19 vaccine. The two had previously partnered on preventative vaccines for seasonal flu in 2018 and were, this time, propelled by a $1.95 billion U.S. government contract for the first 100 million doses.
By April, their Covid-19 effort had entered clinical testing. By mid-November, the companies had concluded phase three of their study with initial reports indicating their vaccine was 95% effective. Already, the United Kingdom has given the vaccine an emergency authorization and begun immunizations. The FDA followed suit Friday night, with the first doses expected to be doled out within days. Looking ahead, the two companies are expected to manufacture and distribute up to 1.3 billion doses worldwide by the end of 2021.
Both Pfizer and BioNTech earned an “A” in 2020 for their willingness to collaborate across two continents and for assuming a huge financial risk: manufacturing their vaccine while it was still undergoing research testing. Had the companies taken a more prudent approach, we might still be years away from receiving the first round of injections.
Looking ahead, one big hurdle and one “area for improvement” remain. Assuming the vaccine’s high rate of efficacy and low risk hold beyond the recently completed clinical trials, the biggest challenge will be safely distributing an mRNA vaccine that is relatively unstable and must, therefore, be kept at a constant temperature of -70 degrees Celsius. Meanwhile, the greatest criticism Pfizer and other drug makers continue to receive comes from public health experts who worry the company is hiding behind press releases rather than publicly and transparently sharing clinical trial data.
Moderna (grade: A)
Paul Offit, one of the nation’s leading vaccine researchers called it “absolutely remarkable,” describing the results of a trial for Moderna’s Covid-19 vaccine candidate. Having only completed its IPO in 2018, the U.S.-based biotech company was a relative unknown outside of scientific and investing circles. But given its almost exclusive focus on mRNA research, Moderna was well positioned to win the vaccine race. Today, it’s a household name with a vaccine that is reported to be over 94% effective (and 100% effective against severe disease). What’s more, it has a storing temperature requirement of only -20 degrees Celsius.
What earned Moderna an “A” in 2020 was its singular focus on the mRNA method of vaccine development. Going forward, its potential application to other viruses could better equip doctors and hospitals to handle future pandemics. As with Pfizer, Moderna’s reluctance to release actual data (instead of press releases) has heightened the fears of health experts whose jitters won’t be completely calmed until the research findings have been published in a peer-reviewed medical journal.
In less than a year, three companies (including Britain-based AstraZeneca) have not only produced a vaccine but also completed phase three testing, the key step needed for FDA approval. As a result, there is great cause for optimism. Over the next few months, over 100 million vaccine doses (for 50 million people) will be administered. They will be first given to healthcare workers and others most at risk, including elderly people living in nursing homes.
Questions remain about how long antibodies will last and whether the leading vaccines will remain as effective (over 90%) in general use as they seemed to be in the phase three testing. But without question, these companies have helped change the course of the coronavirus pandemic and should be commended for their aggressive sprint toward success.
Healthcare-Delivery Innovators
Throughout 2020, the coronavirus devastated our nation’s complex adaptive systems—political, educational, economic and social—disrupting human existence in ways most living Americans have never experienced. Perhaps no system has been hit harder or more intensely than healthcare. Hospitals overflowed and protective equipment grew frighteningly scarce while healthcare workers have undergone months-long intervals of extreme duress.
But the coronavirus did not accomplish any this alone. It was abetted by long-standing failures in a U.S. healthcare system that States has long been a worldwide leader in several unfortunate categories. More than any other nation’s citizens, Americans have struggled to avoid or effectively manage chronic illnesses like hypertension, diabetes and heart disease. These same diseases greatly increase a person’s likelihood of dying from Covid-19.
Although vaccines are an essential weapon in the fight against the coronavirus, two companies have been working hard at solutions that will improve overall patient health and medical care delivery, both now and after the pandemic.
Teladoc (grade: A)
As hospitals canceled their non-elective surgeries and private practices lost revenue like never before, one company seized an opportunity to solve many of the problems plaguing American medicine. The virtual care company Teladoc uses telemedicine to treat the types of medical issues that would otherwise send its 40 million users to urgent care centers or primary care doctors.
At the end of October, Teladoc finalized a $18.5 billion merger with Livongo, a company known for working with businesses to help employees effectively treat diabetes. The merger creates a powerful synergy, bringing together two aspects of healthcare once seen as distinct lines of business.
The move puts the merged company in direct competition with fee-for-service community providers, multispecialty medical groups and even insurance companies. Now, there’s one virtual solution for patients, regardless of whether they are relatively healthy (and need simple, straightforward care) or relatively sick (and need help managing a broad range of chronic diseases). And with its high market capitalization, the company has all the pieces in place to attract millions more patients, broaden its disease treatments, and disrupt traditional healthcare providers.
The merged entity can provide 24/7 expertise and treat complex patients in urban or rural settings, something no other model can accomplish. Teladoc gets an “A” because its Livongo merger introduces a unique healthcare solution to patients, regardless of their specific medical issues or geographic location. Its probability for long-term success will grow if the U.S. government maintains its rollback of telehealth restrictions once the pandemic is over.
Oak Street Health (grade: B+)
Primary care company Oak Street Health offers a more hands-on approach to patient treatment than its digital counterparts. Similar to companies like ChenMed and Iora Health, Oak Street uses a value-based primary care model to address the medical needs of patients insured through Medicare.
Its fundamental strategy aims to reduce the high costs of ER care and hospitalization by providing patients ages 65+ with more effective, on-the-ground primary care and disease management services. And by focusing on the broader needs of seniors, including transportation and food security, Oak Street’s solution begins to address the social determinants of health, which have been shown to negatively impact people’s wellbeing and drive up healthcare spending.
A central element to Oak Street’s model is its focus on minimizing hospital visits. U.S. hospitals rely heavily on high-priced interventions and multimillion-dollar medical machinery, which is why they account for nearly a third of the nation’s $3.6 trillion annual healthcare expenditures. By contrast, Oak Street invests in expanded outpatient care, a value-based solution that’s less sexy and less pricy than what you’ll find in a hospital, but no-less-effective.
The B+ on its report card reflects the gap between Oak Street’s tremendous potential and its relatively modest impact on American healthcare so far. With just over 70 clinics nationwide, Oak Street has an undersized membership of just 90,000 patients. It’s losing money and will need to capitalize on opportunities to increase its reach and revenue—opportunities could surface soon. The company is coming off a $328 million dollar IPO in August and a recently announced partnership with Walmart. These could represent Oak Street’s best chances to grow membership quickly, round the profitability corner and turn the outdated care-delivery model on its head.
Part two in this series will be published January 4, 2021. It will examine the companies that fell far short of expectations in 2020 and spotlight their potential to advance the healthcare industry and improve American health in the year ahead.
