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Will Medicare Advantage (MA) Startup Plans Be The Future?

By ANDY MYCHKOVSKY

Would it blow your mind if only five startup health plans interested in Medicare Advantage (MA) have collectively raised over $3.9 billion in private funding to-date? Well, readers, that is the reality. Now I know there are some skeptics out in the healthcare ecosystem, so I’m here to break down some of the investment thesis. Not going to necessarily defend, but explain some reasons why you should love and hate these investments. Let’s start with who raised these mind-boggling sums of money. The five startups are Oscar Health, Bright Health, Clover Health, Devoted Health, and Alignment Healthcare.

  • Oscar Health has raised $1.3 billion
  • Bright Health has raised $1.1 billion
  • Clover Health has raised $925 million
  • Devoted Health has raised $362 million
  • Alignment Healthcare has raised $240 million

I think it’s safe to say that the MA insurance market (also known as Medicare Part C) has captured the imagination of the venture capital and private equity community. The changing demographic trends of an aging baby boomer population, the increased selection of MA plans versus traditional Medicare fee-for-service (FFS), and the opportunity of technology-first MA startup plans to better reduce administrative fees (“Administrative Loss Ratio” or “ALR”) and control medical spend (“Medical Loss Ratio” or “MLR”) seems too good to pass up. If you were going to start a health plan, of all the lines of business you could be focused on, MA has highest profit margins, growing population, and better potential to impact patient spend and manage chronic diseases. It is certainly harder than writing the previous statement, but there are some real benefits versus the traditional commercial or Medicaid managed care.

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Health in 2 Point 00, Episode 105 | JP Morgan 2020: Virta, Arcadia Health, Teladoc & more

Today on Health in 2 Point 00, Jess and I bring you the first ever cliffhanger episode—money was flying everywhere during JP Morgan last week, so stay tuned for more tomorrow. Jumping right in, on Episode 105 we discuss Virta Health raising $93 million for diabetes reversal treatment in a super secret way; Blue Mesa getting acquired by Virgin Pulse for diabetes prevention; population health analytics company Arcadia Health’s $29.5 million raise; Teladoc acquiring InTouch Health for $600 million, and finally Mona Siddiqui leaving the HHS. —Matthew Holt

Leading Innovation in Dermatology | Francesca Wuttke, Chief Digital Officer, Almirall

BY JESSICA DAMASSA, WTF HEALTH

Almirall is a dermatology-focused pharmaceutical company based in Spain, and its investment in R&D for developing new therapeutics leads the way as the largest within the country’s pharma industry. It’s no surprise, then, that Almirall has also adopted a digital therapeutics and digital health strategy to augment it’s molecular innovations with a ‘beyond the pill’ approach. We sat down with Almirall’s first-ever Chief Digital Officer, Francesca Wuttke, to hear about the pharma company’s digital strategy which is centered on laying the framework for advanced analytical platforms that gather more health data about patients and skin health. For help and fresh ideas, Francesca has opened Almirall’s doors to health tech startups, launching a brand-new accelerator program cutely called ‘Almirall’s Digital Garden,’ to ‘seed’ and ‘grow’ innovative solutions. Are there lots of health startups out there that focus on treating psoriasis, acne, and other dermatological conditions? Francesca tells us what she hopes ‘reap’ from the Digital Garden and how she hopes her broader digital strategy will flourish at the boutique pharma company.

Filmed at Barcelona Health Hub Summit in Barcelona, Spain, October 2019.

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Your Wealth is Your Health

By KIM BELLARD

We’ve been spending a lot of time these past few years debating healthcare reform.  First the Affordable Care Act was debated, passed, implemented, and almost continuously litigated since.  Lately the concept of Medicare For All, or variations on it, has been the hot policy debate.  Other smaller but still important issues like high prescription drug prices or surprise billing have also received significant attention.

As worthy as these all are, a new study suggests that focusing on them may be missing the point.  If we’re not addressing wealth disparities, we’re unlikely to address health disparities.  

It has been well documented that there are considerable health disparities in the U.S., attributable to socioeconomic statusrace/ethnicitygender, even geography, among other factors.  Few would deny that they exist.  Many policy experts and politicians seem to believe that if we could simply increase health insurance coverage, we could go a long way to addressing these disparities, since coverage should reduce financial burdens that may be serving as barriers to care that may be contributing to them.

Universal coverage may well be a good goal for many reasons, but we should temper our expectations about what it might achieve in terms of leveling the health playing field.

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Digital Therapeutic for Chronic Condition Management in India | Abhishek Shah, Wellthy Therapeutics

BY JESSICA DAMASSSA, WTF HEALTH

As the adage goes, “health is wealth,” and Wellthy Therapeutics is a startup looking to improve the health of patients with chronic conditions in India by making treatment more accessible. Only 5% of Indians are insured and much of the population is not health literate, so CEO Abhishek Shah hopes the Wellthy app will fill a critical gap in care for those with type II diabetes, hypertension, cardiovascular conditions, and respiratory illnesses. With 15K users, the startup is focused on scaling up to truly capitalize on the potential of India’s enormous population. Learn more about their big plans, including those for a Series-A, to support that expansion.

Filmed at Bayer G4A Signing Day in Berlin, Germany, October 2019.

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Low Value Testing and Unmet Cascades

By ANISH KOKA, MD

Mr. Smith has a problem. 

He can’t see. 

Even this cardiologist knows why.  The not so subtle evidence lies in the cloudy lens in front of his pupils.  He is afflicted with cataracts that obstruct his vision to the point he can’t really do his job refurbishing antique furniture safely.  His other problem is that he hates doctors. He hasn’t had reason to see one for more than a decade.  He’s 68, takes no medications, smokes a pack of cigarettes a day, and is a master of one word answers. He’s in my office because he needs a medical evaluation prior to his cataract procedure. Someone needs to attest to medical safety. I’m it.

He just wants to get out of here.

His annoyance of being in the office is justified.  Cataract surgery is very low risk.  Unless he’s having an acute medical problem, there is little to do.  The problem is that in an age of high volume, super specialized care, the eye doctor can’t attest to this, and the anesthesiologists have little interest in finding out the morning of his procedure that Mr. Smith has been having more frequent episodes of chest pain over the last two weeks.  Perhaps the chest pain is just acid reflux, or maybe it’s because of a pulmonary embolism related to the tobacco induced lung malignancy no one knows about. It’s possible, and highly likely, Mr. Smith will survive his cataract surgery even if he has a pulmonary embolism.  Cataract surgery really is pretty low risk.

But the doctor’s ethos has never been to ‘clear a patient for a cataract’, it is to commit to the health of the patient.  Mr. Smith deserves the opportunity to receive good medical care that isn’t made threadbare just because of the cataract surgery on the horizon.

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The Digital Physical Therapy Startup for Knee, Neck, & Back Pain | Dan Rubenstein, Physera

BY JESSICA DAMASSA

Bum knees, aching backs, and neck pain are literally a pain-in-the-neck for millions of people – making chronic pain one of the largest areas of healthcare spending. Is it time to disrupt the traditional delivery of physical therapy? Physera CEO, Dan Rubenstein, thinks so, and talks to us about how his healthcare startup is revolutionizing the way physical therapy is being delivered by taking it virtual and driving down the cost. With more than $10M in funding (their $6M Series A was led by BlueCross BlueShield’s Venture Fund) and a major contract with a nationwide health plan provider in the works, the health tech startup is on track to help millions of people feel better and avoid the crazy rush to the PT’s office.

Filmed at HLTH 2019 in Las Vegas, October 2019.

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Health Data Outside HIPAA: Simply Extending HIPAA Would Be a #FAIL

Vince Kuraitis
Deven McGraw

By DEVEN McGRAW and VINCE KURAITIS

This piece is part of the series “The Health Data Goldilocks Dilemma: Sharing? Privacy? Both?” which explores whether it’s possible to advance interoperability while maintaining privacy. Check out other pieces in the series here.

Early in 2019 the Office of the National Coordinator for Health IT (ONC) and the Centers for Medicare and Medicaid Services (CMS) proposed rules intended to achieve “interoperability” of health information.

Among other things, these proposed rules would put more data in the hands of patients – in most cases, acting through apps or other online platforms or services the patients hire to collect and manage data on their behalf. Apps engaged by patients are not likely covered by federal privacy and security protections under the Health Insurance Portability and Accountability Act (HIPAA) — consequently, some have called on policymakers to extend HIPAA to cover these apps, a step that would require action from Congress.

In this post we point out why extending HIPAA is not a viable solution and would potentially undermine the purpose of enhancing patients’ ability to access their data more seamlessly:  to give them agency over health information, thereby empowering them to use it and share it to meet their needs.

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Healthcare Might Look Good in Plaid

By KIM BELLARD

I don’t really follow FinTech — I can’t even keep up with HealthTech! — but it caught my eye when Visa announced that it was acquiring FinTech company Plaid for $5.3b; a 2018 funding round valued the company at $2.65b.  A 100% increase in valuation within a year suggests that something important is going on, or at least that people think something is.  

I suspect there may be some lessons for healthcare in there somewhere.  

For those of you who are equally as unfamiliar with FinTech’s terrain, Plaid has been described as the “plumbing” that supports many other FinTech companies.  Launched in 2013, one in four people with a U.S. bank account are now believed to use Plaid to connect with 2,600 FinTech developers connected to more than 11,000 financial institutions.  Its customers include Acorns, Betterment, Chime, Coinbase, Gemini, Robinhood, Transferwise, and Venmo.  Plaid claims it connects with 200 million consumer accounts. 

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THCB Spotlights: Scott Shreeve, CEO of Crossover & Jay Parkinson, Founder of Sherpaa

Today on THCB Spotlights, Matthew chats with a couple of the OGs from the original days of Health 2.0—Scott Shreeve, founder and CEO of Crossover Health, and Jay Parkinson, founder of Sherpaa, who were the first ones doing something different in terms of doctors figuring out this digital health stuff. The two of them ask the question, what would happen if you married the physical world with the online world and created a new care model that exceeds at both? While Scott was putting in onsite primary care clinics to employers like Apple and Facebook, he realized Crossover wasn’t reaching 70% of the people they were contracted with because many employees were geographically remote. Meanwhile, Jay was doing something similar with virtual primary care—which differs from traditional telehealth in that his model enables a true relationship between patient and provider—and the rest is history.

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