Saturday, June 23, 2018
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India’s Health Insurance Experiment. Who will be the winners?

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By SAURABH JHA

Though the exact cost of Modicare, the government’s extension of health insurance for poor people, estimated at one lakh crore (a trillion U.S. dollars), is open for debate, what is not disputable is that the cost of insuring India’s poor won’t fall with time. A sure way of accelerating healthcare inflation, that is speeding the rate of increase of healthcare costs, is by subsidizing or paying for health insurance. Insurance is like Newton’s Second Law of Motion – the velocity keeps increasing as long as the force is applied.

Healthcare is a peculiar industry. Cars get cheaper but medical care doesn’t. The Maruti eventually became cheaper than the Ambassador, and more aesthetically pleasing than its Neanderthalic predecessor. Medical care doesn’t get cheaper because a life saved from cancer is a life waiting to be killed by another disease, which needs treating, too. Survivors of cancer get heart attacks and survivors of heart attacks get cancer, and survivors of both get dementia.

It’s like a restaurant where you can’t just pay for lunch – if you pay for lunch you have to pay for breakfast and dinner and may be a few samosas in between the meals. But unlike eating, consumption of medical care is not guarded by satiety. The insatiable medical sciences keep delivering even more expensive ways death can marginally be deferred. For example, the once dreaded stroke which leads to paralysis is now treatable. However, the treatment is not cheap and comprises clot busters, dangerous drugs with fatal side effects. Further, to treat stroke you need rapid diagnosis by modern imaging – that is you need CAT scans and radiologists. If penicillin for pneumonia is like eating at a roadside dhaba, treatment for acute stroke is fine dining at the Taj.

Health in 2 Point 00, Episode 34

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I’m back. After the takeover editions, I’m answering Jessica DaMassa about Atul Gawande as the CEO of the ABC new venture, the demise of Caresync, Ooda Health and its demand for a female VC, and whole bunch more blather! — Matthew Holt

Adjusting for Risk Adjustment

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Risk adjustment in health insurance is at first glance, and second, among the driest and most arcane of subjects. And yet, like the fine print on a variable-rate mortgage, it can matter enormously. It may make the difference between a healthy market and a sick one.

The market for individual health insurance has had major challenges both before and after the Affordable Care Act’s (ACA’s) risk adjustment program came along. Given recent changes from Washington, like the removal of the individual mandate, the market now needs all the help it can get. Unfortunately, risk adjustment under the ACA has been an example of a well-meaning regulation that has had destructive impacts directly contrary to its intent. It has caused insurer collapses and market exits that reduced competition. It has also led to upstarts, small plans and unprofitable ones paying billions of dollars to larger, more established and profitable insurers.

Many of these transfers since the ACA rules took effect in 2014 have gone from locally-based non-profit health plans to multi-state for-profit organizations. The payments have hampered competition not just in the individual market, which has never worked very well in the U.S., but in the small group market, which arguably didn’t need “help” from risk adjustment in many states.

The sense of urgency to fix these problems may be dissipating now that the initial rush for market share under the ACA is over and plans have enough actuarial data to predict costs better. There has been an overall shift to profitability. But it would be a serious mistake to think that just because fewer plans are under water, the current approach to risk adjustment isn’t distorting markets and harming competition.

Defining Engagement in an Age of Patient Monitoring and Data Collection

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SPONSORED POST

If you have an innovative solution that addresses Patient Engagement and Remote Monitoring, Bayer’s Dealmaker Challenge wants to hear from you! Apply here for a shot at collaborating with the Bayer G4A Digital Health Team and participating in Dealmaker Day, an exclusive matchmaking event, October 9th in Berlin.

What is healthcare without patients? For decades physicians have been a one-stop shop for diagnosis and treatment, a trusted source. And yet it’s only been in recent years that the entire healthcare industry has woken up to the notion that patients can and should have an active role in their healthcare and the decision making process. Patients may not have a medical education or clinical experience, but they do have a strong asset going for them: intimate knowledge of their bodies and access to information only they can provide. The rise of wearable technologies over the past decade has only increased patients ability to quantify their experiences, health and otherwise. Diet, exercise, daily habits, stress levels, family life, physical environment all contribute to an overall picture of health. Yet too often, clinicians only see a slice of their patients health picture – the picture that is presented during office visits. The increased importance of tracking lifestyle data has clinicians and technologists asking themselves, How do we unlock more information in order to make better decisions and deliver better care?

The field is called Patient Engagement. And while the industry has mutually agreed upon it’s critical importance, the question remains as to what it looks like.

Health in 2 Point 00, Episode 33, (another!) Takeover Edition

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Jessica DaMassa hosts this edition of Health in 2 Point 00 on the Italian leg of her Grand Tour of Europe. This time it’s another takeover with Roberto Ascione, CEO of Healthware dishing on innovation on the Almafi Coast, the impact of GDPR on digital health in Europe and the Frontiers Health Conference in Berlin this November. And yeah, that’s not my office in the backgroundMatthew Holt

Can Medicaid Expansion Survive?

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Amid fresh political rancor and legal machinations in the ongoing war over the Affordable Care Act (ACA), there’s a bright spot: Medicaid. At least for now.

This matters. True to predictions made by Obama and supporters when the ACA became law (2010), it has taken years and a lot of blood, sweat and tears to get to this moment.

As a reminder, the U.S. Supreme Court in 2012 ruled that states could opt out of the ACA’s Medicaid expansion—leaving each state’s decision to participate in the hands of governors and state lawmakers.

On June 7, after a 4-year pitched political battle, Virginia became the 33rd state (plus DC) to expand Medicaid under the ACA. The Virginia expansion is projected to encompass 400,000 low-income Virginians.

The state swung in favor of expansion after Democrats gained the governorship and more seats in the legislature in 2016. But, importantly, key moderate Republicans relented.

Four other non-expansion states could join Virginia over the next year or two. They are Maine, Idaho, Utah, and Nebraska.

WTF Health | Self-Reported Patient Monitoring Startup from Finland, Kaiku Health

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WTF Health – ‘What’s the Future’ Health? is a new interview series about the future of the health industry and how we love to hate WTF is wrong with it right now. Can’t get enough? Check out more interviews at www.wtf.health

Central to the ‘WTF Health’ ethos is the idea that around the world, there is a shared passion for creating a new future for healthcare — and that the less-positive ‘WTF moment’ is a shared experience, regardless of which country’s health system one is standing in.

So, I’m going around the world this year — to 17 different health innovation conferences in 11 different countries — to find out what innovators abroad are doing to tackle the problems in their health systems and what we can learn from one another.

Driving down the cost of care, managing chronic conditions, helping people achieve better health, improving care delivery and patient experience — these goals know no borders. What’s different is the framework around them. So, what if the payment model were different? What if there was a single electronic patient record? What if certain laws and regulations didn’t exist?

Different constraints breed different solutions. What a hopeful and inspiring idea. And, with any luck, food for your thoughts and innovative thinking.

So here is the first interview I’d like to share from abroad! Everyone meet Finnish startup Kaiku Health, fresh off closing a €4.4M Euro series A. Their patient monitoring monitoring platform lets cancer patients (and others with chronic diseases) self-report on how they’re doing, using their hospital’s existing patient portal. Stick around until the end: Bonus insight on the strengths of the health tech startup scene in the Nordics for those who want to go explore.

Filmed at Upgraded Life Festival in Helsinki, early June.  

Misdiagnosis: Obamacare Tried to Fix the Wrong Things and Prescribed the Wrong Treatments

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Today THCB is happy to publish a piece reflecting the learnings from Charles Silver and David Hyman’s forthcoming book Overcharged: Why Americans Pay Too Much For Health Care, shortly to be published by the libertarian leaning Cato Institute. In subsequent weeks we’ll feature commentary from the right radical libertarian zone on the political game board (Michael Cannon) and from the left (Andy Slavitt) about the book and its proposals. For now please give your views in the comments–Matthew Holt

There are many reasons why the United States is “the most expensive place in the world to get sick.” In Part 1 of Overcharged: Why Americans Pay Too Much For Health Care, we show that the main reason is that we pay for medical treatments the wrong way. Instead of having consumers purchase these treatments directly, we route trillions of dollars through third-parties payers – both government and private insurers.

Relying on third party payers has many consequences — few of them good. To start with, this arrangement removes the budgetary constraint that would otherwise cap the amount consumers are willing to spend. By minimizing the direct cost of treatments at the point of sale, third party payment arrangements alter everyone’s incentives fundamentally. Consumers no longer need worry about balancing marginal costs against marginal benefits; instead, they have an incentive to use all treatments that have any potential to help, regardless of their prices. When millions of consumers act on these incentives, total spending skyrockets and consumers collectively wind up worse off, because their fixed costs spiral upward too. Heavy reliance on third party payers creates a classic failure of collective action.

It isn’t just consumers. Providers love third party payment as well. And why not? Once providers have access to the enormous bank accounts of third party payers, the sky is the limit, at least until third party payers start setting limits on the amounts they will pay and saying no to unproven and/or cost-ineffective treatments that doctors want to provide and patients want to receive.

Not surprisingly, it has turned out to be extraordinarily difficult and politically unpopular for third party payers to set such limits. Obamacare’s appeal derives largely from two requirements: health insurance plans must accept all comers, including applicants with preexisting conditions that require expensive medical treatments; and health plans must provide unlimited benefits (i.e., no annual or lifetime spending caps). From an individual consumer’s perspective, what could be better than having access to unlimited amounts of money to spend on medical needs? From society’s point of view, though, this combination is a recipe for disaster.

WTF Health | Oscar’s Schlosser on Consumerizing Health Plans, post-ACA & pre-Amazon/JPM/BH

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WTF Health – ‘What’s the Future’ Health? is a new interview series about the future of the health industry and how we love to hate WTF is wrong with it right now. Can’t get enough? Check out more interviews at www.wtf.health

Having formerly worked for a health plan, I geek out over health plan innovation as IMO it’s the underpinning of the true disruption of health care. When the incentives change, everything else will change too…

So when I met Mario Schlosser, co-founder & CEO of Oscar Health at Health Datapalooza, I may or may not have asked him to sign my Oscar insurance card. (Yep, I’m a member.)

Our chat focused his push to continue driving health plan innovation amid the deterioration of the ACA and his plans for Oscar’s latest $165M round. His goal: make the payer “an interface and enabler of new kinds of technologies.” Is that even possible?!

Around 4:15 minute mark we find out if he’s been tapped for advice from the Berkshire Hathaway/Amazon/JP Morgan health alliance as they take on their own challenges disrupting health insurance.

The EBM Wars: When Evidence has a Price – The ECMO Trials (Part 2)

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By ANISH KOKA

The year was 1965, the place was Boston Children’s and a surgery resident named Robert Bartlett took his turn at the bedside of a just born baby unable to breathe.  This particular baby couldn’t breathe because of a hole in the diaphragm that had allowed the intestines to travel up into the thoracic cage, and prevent normal development of the lungs.  In 1965, Robert Bartlett was engaged in the cutting edge treatment of the time – squeeze a bag that forced oxygenated air into tiny lungs and hope there was enough functioning lung tissue to participate in gas exchange to allow the body to get the oxygen it needed.  Bartlett persisted in ‘bagging’ the child for 2 days.  As was frequently the case, the treatments proved futile and the baby died.

The strange part of the syndrome that had come to be known as congenital diaphragmatic hernia was that repairing the defect and putting the intestines back where they belonged was not necessarily curative.  The clues to what was happening lay in autopsy studies that demonstrated arrested maturation of lung tissue in both compressed and uncompressed lung.  Some systemic process beyond simple compression of one lung must be operative.  It turns out that these little babies were blue because their bodies were shunting blood away from the immature lungs through vascular connections that normally close off after birth.  Add abnormally high pressures in the lungs and you have a perfect physiologic storm that was not compatible with life.

Pondering the problem, Bartlett wondered if there was a way to artificially do what the lungs were supposed to do – oxygenate.  Twelve years later in 1977, while most pediatric intensive care units were still figuring out how to ventilate babies, a team lead by Bartlett was using jerry rigged chest tube catheters to bypass the lungs of babies failing the standard treatments of the day.  In a series of reports that followed, Bartlett described the technique his team used in babies that heretofore had a mortality rate of 90%.  A home made catheter was placed in the internal jugular vein and pumped across an artificial membrane that oxygenated blood before it was returned via a catheter to the carotid artery.  The usual hiccups ensued.  The animal models didn’t adequately model the challenges of placing babies on what has come to be known as ECMO (Extra Corporeal Membrane Oxygenation).

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Patient 1 developed a severely low platelet count, hemorrhaged into the brain and died. Patient 2 survived but was on a ventilator for 7 weeks.  Patient 3 developed progressive pulmonary hypertension and died.  Patient 4 died because of misplacement of one of the ECMO catheters.

The team improved, and mortality in this moribund population improved to 20%.  The pediatric journals of the day refused to publish the data because they felt ECMO for neonates was irresponsible.  Once published, the neonatology community came out in force against ECMO, and some penned editorials implying the children only became supremely ill because Bartlett’s team was incompetent.  The team persisted, as is anyone that is driven by the desperate need of patients.  None of this should be surprising.  The constant battle between skeptics and proponents is a recurring theme known to anyone with even a limited understanding of  medical history.  But this is where the story goes off the rails.