Categories

Author Archives

matthew holt

Managed Care History Part II- HMOs Give Way to Managed Care “Lite”

This is part 2 of Jeff Goldsmith’s history of managed care. If you missed it read Part 1

By JEFF GOLDSMITH

The late 1990s crash of HMOs opened the door to a major consolidation of the health insurance market controlled largely by national and super-regional health plans. While HMOs by no means disappeared post-backlash, the “movement” begun by Ellwood and Nixon fell far short of national reach. HMOs never established a meaningful presence in the most rapidly growing parts of the US- the Southwest, South and Mid-Atlantic regions, as well as the Northeast.

The exemplar, Kaiser Permanente, damaged its financial position with an ill-considered 1990’s (McKinsey-inspired) push to become a “national brand”. Today, over 80% of Kaiser’s 13 million enrollment is still in the West Coast markets where it began 80 years ago! 

HMOs Go Public and Roll Up

Two little noticed developments accelerated the shift in power from providers to payers. One was the movement of provider sponsored health plans into the public markets. PacifiCare, the most significant hospital sponsored health plan owned by the Lutheran Hospital Society of Southern California, was taken public in 1995. A subsequent merger with FHP health plan destabilized the newly public company. 

After PacifiCare crashed post the 1998 Balanced Budget Act cuts, and struggled to refinance its debt, it was acquired by United Healthcare in 2005, bringing with it a huge sophisticated, delegated risk contracting network. United then bought Sierra Health Plan based in Nevada in 2007, including its large captive medical group, its first medical group acquisition. Following these acquisitions, United rolled up PacifiCare’s southern California based at-risk physician groups in the late 00’s, and then capped off with its purchase of HealthCare Partners, the largest of all, 2017 from DaVita in forming the backbone of today’s $110 billion Optum Health.    

United’s buying BOTH sides of the delegated risk networks-plan and docs-in high penetration managed care markets is not fully appreciated by most analysts even today. 

It has meant that as much as 40% of Optum Health’s revenues, including almost $24 billion in capitated health insurance premiums, come from competitors of United’s health insurance business.  

However, of greater strategic significance was Humana’s decision in 1993 to exit the hospital business by spinning its 90 hospitals off as Galen. 

Continue reading…

Sara Ratner, Nomi Health

Sara Ratner is President of integrated Programs at Nomi Health. They work with employers and health plans to connect them to a network of providers (both telehealth and physical) who accept steep discounts in return for immediate payment. The employees in turn get no co-pay/no coinsurance. In addition they have an analytics company called Artemis which recommends care paths and a PBM to lower drug prices. Sara is trying hard to integrate mental health into their program too. Nomi raised $110m in 2022 and also made a decent amount in covid testing earlier in its life before pivoting.

Managed Care History: From HMOs to AI Assisted Claims Management Part 1

By JEFF GOLDSMITH

Healthcare payment in the US has evolved in decades-long sweeps over the past fifty years, as both public programs and employers attempted to contain the rise in health costs. Managed care in the United States has gone through three distinct phases in that time- from physician- and hospital-led HMOs to PPOs and “shadow” capitation via virtual networks like ACOs to machine-governed payment systems, where intelligent agents (AI) using machine learning are managing the flow of  healthcare dollars.  This series will explore the evolution of managed care in 3 phases.  

Phase I- Health Maintenance Organizations and Delegated Risk Capitation

In response to a long run of double-digit health cost inflation following the passage of Medicare in 1965, the Nixon administration launched a bold health policy initiative- the HMO Act of 1973- to attempt to tame health costs. The Nixon Administration intended this Act to provide an alternative to nationalizing healthcare provision under a single payer system, as supported by Senator Ted Kennedy and other Democrats. 

 The goal of this legislation was to restructure healthcare financing in the US into risk-bearing entities modeled on the Kaiser Foundation Health plans- a successful group-model “pre-paid”  health plan founded in the 1940s and based on the Pacific Coast. These plans would accept and manage fixed payments for a defined population of subscribers, and offer an alternative to what was perceived as an inflationary, open-ended fee for service payment system. In varying forms, this has been the central objective of “progressive” health policy for the succeeding fifty years. 

The HMO Act of 1973 provided federal start-up loans and grants for HMOs, much of which went to community-based healthcare organizations and multi-hospital systems. It also compelled employers to offer HMOs as an alternative to Blue Cross and indemnity insurance. While a few HMOs either employed physicians directly on salary (staff models like the Group Health Co-Operatives), or contracted on an exclusive basis with an affiliated physician group (like Kaiser’s Permanente Medical Groups), many more delegated capitated risk to special purpose physician networks- Independent Practice Associations (IPAs)- whose physicians continued in private medical practice. 

By 1996, according to the Kaiser/HRET Employee Benefits Survey, HMOs covered 31% of the employer market (roughly 160 million employees and dependents), and the federal government had begun experimenting with opening the Medicare program to HMO coverage. The impact of HMO growth on overall US health spending remains uncertain, because health spending as a percentage of US GDP continued growing aggressively during the next fifteen years,  before levelling off during the mid-1990’s around the Clinton Health Reform debate.

Two things brought the HMO movement to a crashing halt in the late 1990’s. 

Continue reading…

The Next Steps in Parkinson’s Disease Research

By STEVEN ZERCOLA

Steven Zercola is back with his latest insights into research in Parkinson’s disease. You can say previous part of this series here

In its latest report, the National Institute of Health (NIH) references 508 active Parkinson’s disease (PD) projects as the recipients of $243M in grants.

A few caveats are warranted about these numbers:

  1. The information is not as precise as it seems.  The NIH report states that: “NIH does not expressly budget by category”. Rather, it “categorizes diseases, conditions, and other research based on a computerized process that it uses at the end of each fiscal year”.
  2. NIH alludes to $74 million of the overall budget as indirect costs without an explanation of this distinction.
  3. Only about half of the aforementioned research grants are available to review. The NIH report specifies that “{t}he minimum reporting threshold for a specific disease/condition is $500,000”.
  4. NIH isn’t the only federal government agency providing grants for PD research.  For example, the Department of Defense also maintains a budget for PD research, albeit much smaller.

Generally speaking, one can categorize basic research into having exploratory, explanatory or diagnostic objectives.  Given that basic research for PD has gained some important insights over the past several decades, I have added some PD-specific categories to the more general categories of research, as shown in the chart below.

Once these additional categories were identified, I assigned each of the reported studies and associated costs to the corresponding categories as follows:

CategoryNumberCosts ($000)
Explanatory5018,162
Exploratory3213,178
Diagnostic2111,499
Tools74,444
Biomarkers93,541
DBS133,598
Alpha-synuclein3816,642
Physical therapies1718,119
Indirect2718,975
Total214$108,158

As you can see from the activity on explanatory and exploratory research, NIH is still very much in a discovery mode when it comes to PD research.  From my perspective as a patient, only about 25% of these identified grants are in a position to produce game-changing results within the 10-year window of the legislation (namely, tools, biomarkers and alpha-synuclein).

In terms of clinical research, clinicaltrials.gov provides a listing of all trials, broken down into phases, including those that are completed, recruiting or terminated.  However, the inputs are not reviewed by an independent party, and the overall numbers are not reliable and do not reflect the funding status of the trials.

Nevertheless, there are a series of individual trials that show promise.

Continue reading…

A Health Economist to lead the NIH

By SAURABH JHA

Early on in the COVID-19 pandemic a seroprevalence study from Santa Clara indicated that the viral spread was far greater than was believed. The study suggested that the infection fatality rate (IFR) was much lower than the case fatality rate and perhaps even lower than the suspected IFR. The researchers estimated that 2.8% of the county had been infected by April 2020. The virus was contagious and, most importantly, caused many asymptomatic infections.  

The study, released as a preprint within a month of the lockdown, should have been published by the NEJM or Lancet. The specificity of the immunoassay was a whopping 99.5% and could not have been lower than 98.5%. Instead, it was roundly criticized by born-again methodological purists. Noted statistician, Andrew Gelman, known expert at dealing with (very) imperfect statistical methods, wanted an apology from the researchers for wasting everyone’s time by making “avoidable screw ups.”

Around the same time, a similar study published in JAMA came to similar conclusions. Researchers found that the seroprevalence COVID-19 antibodies in LA county was 4.65%, 367 000 adults had SARS-CoV-2 antibodies, substantially greater than the 8430 confirmed infections. They concluded that “contact tracing methods to limit the spread of infection will face considerable challenges.” No one asked the researchers for an apology, presumably because the study had passed anonymous peer review and had escaped the wrath of the medical commentariat.

A few months later, a German study suggested that many infected with COVID-19 had myocarditis. This meant that the asymptomatic were not just reservoirs of viral transmission, but walking tombs of cardiac doom. By many, the researchers, who used cardiac MRI to look for myocarditis, put a figure at nearly 80%. That’s a lot. No virus had ever done that. That number itself should have invited scrutiny. The animated, born-again empiricists, who has been energized by the Santa Clara study into becoming methodological sleuths, went into hibernation after the German myocarditis study. The study was swallowed uncritically by many and was covered by the NY Times.

If the rigor demanded of the Santa Clara study was that of a Pythagorean proof, the German myocarditis study received the scrutiny of a cult prophet. The burden of proof in them days was like shifting sand, which shifted depending on the implications of the research. The Santa Clara study suggested the test – isolate strategy was forlorn, as controlling the viral spread was akin to chasing one’s tail. The German myocarditis study was cautionary, emphasizing that that the virus should not be under estimated, as even asymptomatic infections could be deadly. The Santa Clara study challenged lockdowns, the German study supported lockdowns.

The senior author of the Santa Clara study, Jay Bhattacharya, has been nominated by President Trump to be the next NIH director. His nomination has surprised a few, upset a few, irritated a few, shocked a few and, as befits a polarized country, pleased many. Bhattacharya may well have won the popular vote, though I’m uncertain he will win the institutional vote.

Bhattacharya’s anti-lockdown views rapidly made him a persona non grata in academic circles.

Continue reading…

Kris Engskov, Rippl

Kris Engskov is CEO of Rippl, a General Catalyst-funded company developing a wrap around care model around the primary care doctor for people with dementia. Their process is to help the family caregiver who is looking after the dementia patient and gives a ton of support to those caregivers which helps them be successful taking care of the patient at home. They start with diagnosis and use care navigators to build a care model face to face with patients. They’ve raised $52m and are nearly 2 years into serving a very neglected group of patients and caregivers–Matthew Holt

Colby Takeda, Pear Suite

Colby Takeda is CEO of Pear Suite which has developed a system that helps organizations employing community health workers to track and pay for their work. These community health workers are in multiple social and health organizations. Increasingly states Medicaid and health plans are paying directly to community organizations and Pear Suite is building the capacity for those organizations to contract and bill the plans and states. The community health workers are now out helping engage patients, particularly around preventative services, housing, food access and much more. This includes those people in the health system and is saving health care organizations money, and is improving HEDIA and Star scores. Pear Suite has been doing this since 2023 and has over 100 clients already, and has even built its own network of community health workers. A niche, but a very impactful one-Matthew Holt

Mental Health’s Unfinished Digital Revolution

By TREVOR VAN MIERLO

In 2021, digital mental health and substance use startups attracted a record-breaking $5.1 billion in funding. Despite the surge, the promise of scalable, transformative digital health platforms remains unfulfilled.

Following the surge, investment plummeted. Unlike other industries that have been revolutionized by digital-first solutions, digital health struggles with models that fail to address cost, complexity, and access.

What we’re left with entering into 2025 are a smorgasbord of solutions clamoring to attach themselves to traditional enterprise incumbents (Health Insurance Providers, Electronic Health Records, Hospital Systems). These incumbents have achieved scale – but not the type of scale that digital health needs to flourish.

Investment in Digital Mental Health (2010-2023)
Digital Mental Health Investment (2010-2023)

Incumbents Build Deep, Startups Go Wide

Incumbent scale is infrastructure-heavy, slow, and linear, and focuses on deep integration within their established markets.

In contrast, startups aim for technology-driven, exponential, and global scale, leveraging digital platforms to serve millions of users quickly. While startups have the speed advantage, achieving scale similar to incumbents requires win-win partnerships and fundamental shifts away from established business models.

Incubent Scale vs. Startup Scale
Incumbent Scale vs. Startup Scale

The investment market does see the tremendous opportunity: a massive, growing global customer-base proactively demanding help as social stigma decreases. And as time passes, this customer-base grows exponentially with technology pervasiveness.

What investors see is unmet demand for mental health and substance use treatment, and a historic opportunity for digital health to step up and deliver solutions that are scalable, accessible, and affordable.

However, the delivery mechanism to these populations, though digital, is obfuscated through the blurred lens of incumbent purchasing power. We can’t get past incumbents’ size, their reach, and their connection to patients. In this common view, incumbents are the customer. This view is promoted by both industry and academia.

Continue reading…

Shama Rathi, Co-Founder, LunaJoy

Shama Rathi MD is the co-founder of LunaJoy, a mental health company that works exclusively for women. It started with pregnancy (pre- and post- partum) and now is working with women in midlife for nearly a third of its cases. Shama believes that women have been ignored and LunaJoy has built out specific care pathways for women. They are moving into the market starting with Medicaid, the payer responsible for a large number of births, mostly doing it in conjunction with OBGYN clinics. It’s an interesting and necessary niche play for a large underserved group–Matthew Holt

Ten Shadowy Figures Who Shaped Our Health Care System

By MIKE MAGEE

The incoming Trump Administration nominees for positions in Health and Human Services (like RFK Jr. to direct the department and Mehmet Oz to head Medicare and Medicaid Services) are names you know and apparently many trust? In this morning’s New York Times, Dr. Ashish Jha, President Biden’s Covid lead, thinks he knows why. He says, “You have a large swath of the population facing a health crisis, and they feel like medicine and public health isn’t delivering…They’re much more open to people saying, ‘The whole system is corrupt and we have to blow the whole thing up.’”  As Ashish knows better than most, we didn’t arrive here out of the blue. Over the years, many of the players who had the greatest impact on America’s health care system as we know it, remain hidden in the historic shadows. Here (in no particular order) are 10 of the least known but most influential figures in shaping health policy in our lifetime.

Sam Massengill

In spring 1937, the head of sales for S.E. Massengill Company in Bristol, Tennessee, went to the company head, Samuel Evans Massengill, with an idea generated by customer feedback. Massengill salesmen were passing along reports from doctors that there was demand among parents of young children suffering from strep throat for a liquid version of their new sulfa drug.

Massengill, charged the company’s chief chemist, Harold Cole Watkins, to find an effective solvent in which powdered sulfanilamide (an anti-biotic) could be dissolved. His choice was diethylene glycol, which smoothly dissolved sulfanilamide powder and led to a concoction that was 10 percent sulfanilamide, 72 percent diethylene glycol, and 16 percent water. Flavored with raspberry extract, saccharine, and caramel, it passed the taste and smell tests, but in keeping with then current federal regulations—or lack thereof—there was no test for safety. In fact, no one did even a rudimentary check of the literature on diethylene glycol, which would have quickly revealed that it was a highly toxic component of brake fluid, wallpaper stripper, and antifreeze that had caused a fatality in 1930.

Instead, perhaps sensing that its competition would be right behind, Massengill rushed its “Elixir Sulfanilamide” into production, then shipped 240 gallons of the red liquid to 31 states through a network of small distributors in early September 1937.

Within two weeks, children began to die. In all, more than 100 children died, but only after going through 7 to 21 days of wrenchingly painful illness including “stoppage of urine, severe abdominal pain, nausea, vomiting, stupor, and convulsions.”

The whole disaster was vigorously reported in the press, and drug safety soon inched its way up the list of New Deal priorities. By June 11, 1938, bills from the Senate and House of Representatives had been reconciled, and on June 25, 1938, President Roosevelt signed into law the 1938 Federal Food, Drug, and Cosmetic Act.

Samuel Massengill belatedly issued a statement on behalf of his company: “My chemists and I deeply regret the fatal results, but there was no error in the manufacture of the product. . . . I do not feel there was any responsibility on our part.” Unfortunately, Massengill’s morally blind position reflected the letter of the law at that time. In short, the absence of effective legal sanctions meant that a company or an individual could indeed sell a deadly medication and get away with it.

Mary Lasker

Born in 1900, Mary Lasker was the daughter of Frank Elwin Woodard, the head of the local bank in Watertown, Wisconsin, and a shrewd businessman with Chicago connections. By her own account, she was a campaigner almost from birth, and she traced her interest in promoting medical research back to an event she experienced at the age of three or four. Her mother, a local community supporter and civic activist, took Mary to see their ailing servant, a Mrs. Belter, who had undergone a double mastectomy as treatment for breast cancer. “I thought, this shouldn’t happen to anybody,” Mary Lasker later wrote.

As a young adult, she began to focus on health policy issues and became a devotee to Margaret Sanger. Mary sought out financial support for the organization, turning to a dynamic advertising man, Albert Lasker, who had launched some of America’s most recognizable consumer brands, including Lucky Strike cigarettes. Known as the “father of modern advertising,” Lasker is credited for suggesting that the Control Federation of America be renamed the Planned Parenthood Federation.

When Albert asked Mary what she wanted to accomplish, she listed reforms in health insurance, cancer research, and research against tuberculosis. Albert responded, “Well, for that you don’t need my kind of money. You need federal money, and I will show you how to get it.”

When Mary and Albert married in 1940, the world was preparing for war.

Beginning in 1942, the Laskers began to cultivate science luminaries who shared their commitment to maximizing government funding of applied research. The Laskers realized early that they would need a credible health-related national organization to anchor and launch their campaign and set their sights on the American Society for the Control of Cancer, an organization created in 1913 by 10 physicians meeting at the Harvard Club in New York City. The leadership was more than happy to grant the Laskers easy entry to their Board of Trustees in return for financial support. By 1944, the Laskers had seized control of the Board, largely dumped the doctors, and renamed the group the American Cancer Society (ACS). Its leadership was now composed of name-brand corporate heads, entertainment giants, and advertising executives.

To add further glory to the idea of Big Science, Mary and Albert created the annual Lasker Awards, with the somewhat self-serving tagline “Sometimes called ‘America’s Nobels.’” She then began to collect academic researchers, promote their careers, injecting publicity and special placement on government bodies. Over a decade she was at the center of creating seventeen specialty Institutes within the new NIH, most built around her favored scientists.

Mary Lasker died in 1994, a controversial figure.In the assessment of author and political journalist Elizabeth Drew, “Mrs. Lasker has been considered an able woman who has done good things but is too covetous of power, too insistent on her pursuits, too confident of her own expertise in the minutiae of medicine.”

William Menninger

During the first major WW II battle in North Africa, a startling number of soldiers were incapacitated with “Shell Shock.” One neurologist in North Africa, Frederick R. Hanson, discovered that a bit of kindness in the form of a hot shower and a warm meal, combined with sedation-induced rest, was remarkably successful in rehabilitating the majority of the “mentally incapacitated” men under his care.

Hanson’s success did not go unnoticed by the Army’s chief of the division of neuropsychiatry in the Office of the Surgeon General, William C. Menninger. After studying his results, he decided that if psychiatric casualties in a standard unit exceeded one mental casualty for every four wounded in action, this was a harbinger of broader problems—like a breakdown in morale, leadership issues, prolonged combat fatigue, or a policy breakdown in the evacuation scheme.

Continue reading…
assetto corsa mods