Health insurance companies are standing
in the way of many patients receiving affordable, quality healthcare. Insurance
companies have been denying patient claims for medical care, all while increasing
monthly premiums for most Americans. Many of the nation’s largest healthcare payers
are private “for-profit” companies that are focused on generating profits
through the healthcare system. Through a rigorous approval/denial system, health
insurance companies can dictate the type care patients receive. In some cases,
this has resulted in patients foregoing life-saving treatments or procedures.
In 2014, Aetna, one of the nation’s leading healthcare companies, denied coverage to Oklahoma native Orrana Cunningham, who had stage 4 nasopharyngeal cancer near her brain stem. Her doctors suggested she undergo proton beam therapy, which is a targeted form of radiation that can pinpoint tumor cells, resulting in a decrease risk of potential blindness and other radiation side effects. Aetna found the study too experimental and denied coverage, which resulted in Orrana’s death. Aetna was forced to pay the Cunningham family $25.5 million.
In December of 2007, Cigna Healthcare, the largest healthcare payer in Philadelphia, denied coverage for Nataline Sarkisyan’s liver transplant. Natalie was diagnosed with leukemia and had recently received a bone marrow transplant from her brother, which caused complications to her liver. A specialist at UCLA requested she undergo a liver transplant, which is an expensive procedure that would result in a lengthy inpatient hospital stay for recovery. Cigna denied the procedure as they felt it was “too experimental and outside the scope of coverage”. They later reversed the decision, but Nataline passed away hours later at the University of California, Los Angeles Medical Center.
A survey of 200 physicians under the age of 35 showed that 56% reported unhappiness with the current state of medicine. That number didn’t seem surprising to me at first. I was not particularly “happy” at the time of reading this survey either.
I’ve aspired to become an
oncologist for as long as I can remember. In oncology, despite my inability to
cure, I can always try to heal. I form connections with patients and their
families as they embark on a journey that is quite often their last. I learn
from my patients as much as, and at times more than, they learn from me.
But all of this is overshadowed by
a sense of heaviness that I frequently encounter as I enter the clinic room. That
sense of heaviness hits when a patient tells me of the time when they were placed
on a “brief hold” for more than half an hour in order to reach someone to get a
prescription refilled or reschedule an appointment. Or when their insurance refused
to cover the drug that I had prescribed to them. It is when I hear that clinic
visits or treatments are not scheduled due to insurance authorization delays. Or
when I’m asked about the cost of drugs and end up having to explain how nobody
By the time I hear these stories,
the “allotted time” for the clinic visit is coming to an end. The emotional
burden and physical symptoms of my patient’s cancer diagnosis or chemotherapy
side effects often not adequately addressed.
Deven McGraw is one of America’s best known health privacy lawyers, including a stint at HHS running the Office of Civil Rights. But now she’s a cool startup kid living in Silicon Valley and is the Chief Regulatory Officer at Ciitizen. Ciitizen is focusing on helping people collecting, organizing, and securely sharing their personal health data to improve their care, and was founded by Anil Sethi who previously founded Glimpse and sold it to Apple (where it is now the core of Apple’s Health records product).
For more details, watch Matthew’s interview with Deven below.
The Office of the National Coordinator (ONC) and the Centers for Medicare and Medicaid (CMS) have proposed final rules on interoperability, data blocking, and other activities as part of implementing the 21st Century Cures Act. In this series, we will explore the ideas behind the rules, why they are necessary and the expected impact. Given that these are complex and controversial topics open to interpretation, we invite readers to respond with their own ideas, corrections, and opinions. In part five of this series, we look at how competition unlocks innovation, and how the proposed rules may disrupt the balance between innovation, intellectual property (IP), and supporting business models.
The recent publication of proposed rules by ONC and CMS set off a flurry of activity. In anticipation of their implementation, the health care industry is wrestling with many questions around business models. What practices inhibit competition and innovation? How do we balance the need for competition while protecting legitimate intellectual property rights? How can vendors ensure profit growth when pricing is heavily regulated? In this article, we will examine how competition unlocks innovation and the possible disruptions the proposed rules may bring for innovation, intellectual property (IP) and supporting business models.
In most markets, innovation is driven forward by competition. Businesses compete on equal footing, and their investment in R&D drives innovation forward. Innovation in health care has been dramatically outpaced by other markets, leading to an urgent need for both disruptive and evolutionary innovation.
What is inhibiting health care innovation? The rules identify a combination of tactics employed in health care that restrict the free flow of clinical data, such as:
These tactics slow innovation by contributing to an
environment where stakeholders resist pushing the boundaries — often because
they are contractually obligated not
to. The legislation and proposed rules are designed to address the ongoing
failure of the market to resolve these conflicts.
As the rules are finalized, we will continue to monitor whether
the ONC defines these practices as innovation stifling and how they will
implement regulations — both carrot and stick — to move the industry forward.
In the 20th century, hospitals completed their
transformation from the hospice-like institutions of the Middle Ages, into
large, gleaming centers of advanced medical expertise and technology that save
and improve lives every day. But an unintended consequence of hospitals’
dazzling capabilities is a staggering cost burden that’s proving toxic to the
Today, hospital care accounts for approximately 33% of the US’ $3.5 trillion annual health care expenditures, according to CMS. The drivers of hospital costs are complex and hard to tackle, including (but not limited to) market consolidation that enables price hikes, heavy administrative burdens, expensive technology and patient usage patterns.
In The Innovator’s Prescription, Clayton Christensen et al. explained another important driver of high hospital care costs: conflation under one roof of business models designed to address very different needs—such as the need for diagnosis of unique, complex conditions and experimental treatments, versus that for highly standardized services (for instance, some surgical procedures). This common phenomenon makes optimization of either business model very difficult, and thus drives up overhead costs.
One solution to this seemingly intractable
problem is to make home and community the default locations for care, where in
many circumstances it can be provided less expensively, more conveniently, and
more effectively than in a hospital. Fortunately, business model innovation
toward this end is gaining traction.
Soeren Mattke (as mentioned in the last installment) and I were quite relentless in trying, quixotically, to get Professor Baicker to explain her results. Its popularity could have landed her many profitable speaking and consulting gigs, but she evinced no interest in cashing in, or even in defending her position. Indeed, the four times she spoke publicly on the topic, she didn’t do herself, or her legions of sycophants in the wellness industry, any favors. In each interview, she distanced herself more and more from her previous conclusion. Here are her four takeaways from her own study “proving” wellness has precisely a 3.27-to-1 ROI:
Individually or in total, these comments sounded an awful lot like retractions, but she (and her co-author and instigator, David Cutler) claimed those comments didn’t constitute retractions. Whatever they were, she wasn’t exactly doubling down on this 3.27-to-1 conclusion.
Let’s climb into the WABAC Machine (and, yes, that’s the way it’s spelled) and set the dial for 2008.
Then-candidate Barack Obama, campaigning on the promise of universal health coverage, enlisted Harvard professor David Cutler as his key adviser on that topic. Business lobbying associations were not thrilled about their members having to cover all their full-time employees and incorrectly assumed, then as now, that the major drivers of healthcare cost were employees smoking, overeating, and not exercising. Prof. Cutler suggested, quite correctly, that one way to assuage that concern would be to allow employers to spend less money covering employees with those three health habits.
Fast-forward to 2009, when it appeared that — with enough concessions to enough vested interests — the Affordable Care Act (ACA) could become a reality. Business lobbying groups were, then as now, powerful entities. Using Prof. Cutler’s suggestion, they were pacified by allowing businesses to tie up to 30% of total premium dollars to employee health (in practice, largely employee weight). Generally, the business lobbying groups engineered this withhold in the shadows. It wasn’t until 2015 that one of those business groups, the Business Roundtable, publicly admitted that the 30% withholdwas the main reason they bought into the ACA.
Today, we’ve got another episode of Health in 2 Point 00—airport edition. On Episode 78, Jess is spending the last few moments before her vacation interviewing me from the airport. She asks me about lots of big raises: Redox raised $33 million for their interoperability platform; EverlyWell, which offers direct-to-consumer lab testing, raised $50 million, and Ro raised another $85 million just a year after raising $88 million. In other news, SureScripts is getting sued by the FDIC for monopolizing the e-prescriptions market and the FBI just raided uBiome for double-billing insurers. —Matthew Holt
Fifteen years ago, as a medical student, I learned a
terrifying lesson about blindly using race-based medicine. I was taking care of
Mr. Smith, a thin man in his late 60s, who entered the hospital with severe
back pain and a fever. As the student on the hospital team, I spent over an
hour interviewing him, asking relevant questions about his medical and social history,
the medications he took, and the details of his symptoms. I learned Mr. Smith
was a veteran who ran into tough times that left him chronically homeless,
uninsured, and suffering from hypertension and diabetes. I performed a complete
physical exam, paying particularly close attention to his back. Upon reviewing
his blood tests and kidney function, I read the computer’s report: “normal.”
I felt confident as I presented Mr. Smith’s treatment plan
to my attending physician: I recommended a CT scan, ibuprofen for pain, blood
pressure lowering medication, and an antibiotic. My attending listened quietly,
reviewed the labs herself, and then firmly corrected every aspect of my
treatment proposal. “His kidney function is NOT
normal. What you want to do for him can further damage his kidneys. The lab
reported his creatinine as ‘normal’ because it has an algorithm that makes
faulty assumptions based on race.” Mr. Smith, according to the medical record,
was African American.
I almost harmed Mr. Smith because I hadn’t realized that the exact same creatinine level (the key metric for kidney function) yields two different reports based on whether you’re African American or not. The logic goes that because black people supposedly have higher muscle mass on average, healthy creatinine levels for those who check the “black” box is different from those who check other boxes. Physicians around the country continue to rely on this metric even when the black patient is thin, like Mr. Smith. This example of race-based creatinine levels to determine kidney function is a symptom of race-based medicine in general: (poorly defined) racial categories are often used as proxies to explain discrepancies in health outcomes by race, which is a potentially dangerous analysis. Mr. Smith’s case forced me to consider why race-based medicine is problematic and where our attention as healthcare providers should be directed instead.
What is certain is that health inequities persist along racial lines. African Americans and Hispanics have higher rates of diabetes, hypertension, and heart disease than other groups (Figure 1). American Indians and Alaskan Natives are 2.1 times as likely to be diagnosed with diabetes as white individuals and the prevalence of obesity in this population is higher than any other group. While it would be convenient to attribute these disparities to genetic difference, this is simply not the case.
In my mid-twenties, I was twice prescribed the common antihistamine
Benadryl for allergies. However, my body’s reaction to the drug was anything
but common. Instead of my hives fading, they erupted all over my body and my
arms filled with extra fluid until they were almost twice normal size. I subsequently
described my experience to a new allergist, who dismissed it as “coincidence.”
When I later became a nurse, I learned that seemingly “harmless” medications often cause harm, and older adults are particularly vulnerable. Every year, Americans over age 65 have preventable “adverse drug events” (ADEs) that lead to 280,000 hospital stays and nearly 5 million outpatient visits. The Lown Institute in Boston draws attention to this underrecognized problem in their recent report, Medication Overload: America’s Other Drug Problem. Policymakers, patients, and health professionals must act, because over the next decade, medication overload is predicted to cause 4.6 million hospitalizations of older Americans and 150,000 premature deaths.
Nearly half of all older adults take at least five
prescription drugs, a 300 percent increase from 25 years ago. The
more drugs we take, the likelier it is that one of them, or some combination,
will cause serious harm. When you add in non-prescription medications,
including over-the-counter drugs like ibuprofen and Tylenol, as well as
vitamins and herbal supplements, the potential for harm only goes up.
I’ve seen this in my
work. It is not unusual for elderly, very ill patients on hospice to have
prescriptions for 20 to 30 drugs. Several of their medications may treat the
same problem, amplifying any serious side effects. Blood pressure medications provide
a good example. As older patients become more debilitated, lose weight, and are
taxed by other health issues, the effect of these medications can intensify,
severely lowering blood pressure, and causing the patients to fall. Indeed, if
I am following up with a hospice patient who has fallen, the first thing I
check is their prescription medications for hypertension.