Weekly Health Tech Reads | 4/5/20

Reads for the week of 3/29 - 4/4

An update: As of this week I’m attempting to use Substack to send this newsletter out instead of Mailchimp. The newsletter hit 2k subscribers this week (hooray!!), which means Mailchimp won’t let me send it out for free (boo!!), so I’ve switched to Substack. Hopefully the switch doesn’t cause any problems, and may even have a few benefits like being able to add your comments at the end of each newsletter… which you should feel free to try out if you’re so inclined :).

News:

• Olive, a startup building robotic process automation tools to help health systems automate back office (rev cycle, supply chain, etc) processes, raised $51 million led by General Catalyst. Given the cost issues health systems are facing today, it seems like a pretty straight forward play… Health systems are looking to cut $50 - $100 million of back office costs each year (the former CEO of Mission Health said as much in this LinkedIn post on why he’s joining the Board of Olive as part of this round). The standard approach has been to throw staff at those problems, and theoretically it should be less costly and more efficient to use little imaginary AI robots instead of humans. Link.

• The financial situation of hospitals has been in the news again this week as the federal government agreed to give hospitals $100 billion as part of the CARES act, with very little detail on how that $100 billion will be distributed. This KFF article highlights some of the many questions this invites around how the funds will be distributed and used. Some of the articles linked immediately below also provide examples of what’s happening at hospitals across the country because of the financial crunch. Link.

  • Intermountain made headlines for cutting provider and nurse pay in order to deal with its financial challenges, but at the same time they kept pay for administrators the same. Pretty sure you’d get an ‘F’ in a crisis response management class for this. Link.

  • The state of Pennsylvania had to pay $8 million to one of Steward Healthcare’s hospitals to keep it open for four more weeks, as opposed to it closing starting April 1st. Steward, mind you, is a for-profit entity owned by the private equity firm Cerberus. Insert question here about whether for-profit healthcare is really the best concept. Link.

  • A number of health systems, including Bon Secours and Boston Medical have started furloughing workers. Link.

  • Rural hospitals, many of which were already struggling financially, are particularly at risk in these times as this Chrissy Farr article explores. Link.

• CMS appears to be doing a nice job responding quickly to regulatory issues as they arise in this COVID-19 world. CMS issued some major additional rule changes this week - i.e. paying for 80 additional types of visits via telehealth and loosening other requirements around where hospitals can treat patients, adding staff, and paperwork. Nice. Link.

• The FCC created a $200 million initiative to support healthcare providers in adopting telehealth tools. Link.

• Doctor Anywhere, a telehealth startup based in Singapore, raised $27 million. Link.

• AristaMD, a second opinion e-consult platform, raised $18 million from a number of strategic investors. Link.

• PatientPay, a startup attempting to help with provider billing, raised $6.15 million. Link.

• SteadyMD, a virtual primary care platform, raised $6 million. Link.

• RelayOne, a communication platform for managing the operating room, raised $1 million in funding. Link.

Opinions:

• The BCBS NC team has continued their streak of publishing super cool work, this time posting an article exploring the financial challenges facing high touch primary care models. Challenge #2 in particular touches on what seems to be the elephant in the room with these approaches - that even though these models may look like they’re saving money, they may in fact increase costs in aggregate due to some risk adjustment logistics. Check out Exhibit 3 which highlights this well - payors, providers, and consumers can all be better off, while at the same time Medicare is still spending more money. Squeeze one end of the balloon and its gonna expand somewhere else. Link.

• Actuaries are going to have a heck of a time pricing health insurance products for the ACA exchanges (well, any insurance product really) for 2021 insurance coverage. Keep in mind that insurance companies need to have the prices for their 2021 ACA exchange products submitted to various regulatory agencies in the next month or so. The challenge is that given the uncertainty around COVID-19, it’s quite challenging to predict what medical costs in 2021 will look like at this point. I’m not sure how the next cycle is any better, either, so it would seem we’re looking at insurance market upheaval into at least 2023. This post does a good job exploring some of these dynamics. Link.

  • As an aside, I also have no idea what happens to risk-based contracts generally in this period. Baselines that were calculated in non-COVID-19 times seem irrelevant at this point. Is this a new normal? Does spending revert back? What’s the right baseline to use? What happens to shared savings / risk calculations in the interim? It’s hard for me to see a scenario in which this isn’t a huge step back for the implementation of value based care models in this country.

• Here’s a very good read from former FDA Commissioner Scott Gottlieb and others outlining a playbook on how to get the US reopened safely moving forward. Seems like a very thoughtful approach to balancing the health and economic issues at hand. It’s a must read if you’re looking for coherent thoughts on COVID-19. Link.

• McKinsey posted a bunch of solid content on the economic impacts of COVID-19 this week. I found this piece to be particularly interesting on the impact on spending on consumer healthcare items. They break it down into four different types of consumer healthcare items (treatment mainstays, prevention arsenal, lockdown essentials, and premium discretionaries); and how companies should be thinking about helping consumers through these times. Link.

• The Weekly Gist folks posed a very interesting question this week in their blog: “where are all the heart attacks?” It seems to be a common theme, as they noted, that hospital leaders are seeing a drop in Emergency Department visits from things that you wouldn’t think would be related to a pandemic - i.e. visits related to heart attacks and strokes seem to be down. It seems to indicate that people just aren’t seeking care at the moment (you wouldn’t think that the number of strokes are going down during this time). What’s that going to mean for utilization moving forward? As I mentioned above… the actuaries are going to have a tough job moving forward. Link.

• This is a rather fun read from Nikhil Krishnan on the merits and drawbacks of randomized control trials, sparked by a rather epic Twitter debate that started in the context of how quickly this country can get COVID-19 treatments into the hands of individuals. Link.

• Here’s a good summary of the explosion in funding the mental health space saw in Q1 2020 - 30 startups raised over $462 million collectively. Link.

Data:

• This is a really good report on the current state of Medicare Advantage enrollment, which grew 2 million people to 24 million over the past year. It’s super interesting to see the list of the top 10 largest MA plans, as well as the top 10 MA plans by membership growth (in number of members; not percentages) - neither of which include any of the big name MA insurance startups. Link.

• Here’s the experience of four primary care practices over the past few weeks highlighting the impact of COVID-19 and how quickly those practices are moving to virtual visits. It is insane to look at the first chart on this and see a practice go overnight to 70%+ of its visits being virtual. Link.

• A JAMA Study suggests that physicians are increasingly open to patients reading their clinical notes. Oh, the audacity of patients! How dare an individual want to see what a doctor wrote about them in an experience that was likely a few minutes long and cost a few hundred or thousand dollars. Glad to see more folks coming around to this. Link.

• Accenture released the results of their annual digital health consumer survey this week, suggesting consumer adoption of digital health is stalling. Feels like a look back into a different lifetime at this point. Link.

• This is a very detailed playbook for how primary care docs can do COVID-19 screenings virtually. Link.