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Amazon’s Coitus Interruptus: In or out?

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By MATTHEW HOLT

Each week I’ve been adding a brief tidbits section to the THCB Reader, our weekly newsletter that summarizes the best of THCB that week (Sign up here!). Then I had the brainwave to add them to the blog. They’re short and usually not too sweet! –Matthew Holt

Meanwhile, it’s time for Matthew’s tidbits and of course given their recent news-making I am going to focus on Amazon in health care. The news is of course that they are in health care in a big way, buying One Medical. The news is also of course is that they are out–shutting down Amazon Care.

This reminds me of the famous criticism delivered in the British parliament by one MP about another back the last time (in the 1970s) there was a vote about leaving the EU. “The Honourable gentleman can’t make up his mind. First he’s in, then he’s out. In, out. In, out. This is the politics of coitus interruptus.” After a moment a voice from the backbenches shouted “Withdraw.”

So is Amazon in or out?

They are out of their 4 year effort to build a hybrid telehealth-to-home medical group that helps mainstream employers manage their costs. This is despite stating their intent just a few months back to add new clinics and this year adding a decent number of employer clients including Hilton hotels–before that they only really had a few of their own employees as clients. Interestingly enough, it was the development of this platform that convinced Amazon that they didn’t need Haven–their alliance with JP Morgan and Berkshire Hathaway which was developing a similar offering.

They are in to the business of One Medical to the tune of a $3Bn acquisition as well as putting in $300m extra cash so far, and likely a lot more later. Like Amazon Care, One Medical has a hybrid telehealth and clinic approach (though no home visits as yet). When Amazon said they were killing Amazon Care, they suggested that a lack of employer uptake was the biggest problem. One Medical does have employer clients. But these aren’t mainstream low or medium wage employers to whom they are delivering capitated care at a worksite. In One Medical terms that means an employer pays their employees’ $200 per member annual fee, after which the employee can see a One Medical doctor. And curiously enough by far their biggest employer client is Google.

One Medical says that they lower overall costs for their employer clients, but to use another British political line, “they would say that wouldn’t they.” In reality One Medical does very little specialty or hospital care management, and via its relationships with local high-priced health systems is able to charge insurers very high prices for primary care which they seem to actually pay! (And yes I have lots of personal experience here..). Putting aside the fact that One Medical somehow is contriving to still lose loads of money–a big reason why it put itself up for sale–it is not an organization trying to manage costs for employers in value-based care arrangements, unlike say Firefly Health or even Crossover Health (of which Amazon is a big client for its lower paid workers).

You’ll notice that I am conveniently ignoring the Iora Health part of One Medical which they inexplicably bought last year. Iora focuses on capitated services for Medicare Advantage plans, and it is trying to manage costs. Though given the amount it’s losing, that effort isn’t going so well either.

It’s possible that Amazon is going to surprise us and try to turn Iora + One Medical into a capitated giant to work with and steal the margin of the big Medicare Advantage plans. Then later, move that strategy into mainstream employers.

But if they were going to try that it would probably have been easier and more culturally aligned to merge Iora with Amazon Care. My suspicion is that Amazon means what it says and is finding it too hard to manage costs for employers. My guess is it will jettison Iora, keep using Crossover and others to manage costs for its own lower-paid employees, and try to turn One Medical into a Whole Foods-like national brand for the cost- unconscious top 25% of Americans….and somehow make it profitable.

If they manage that it would be great for Amazon’s business. But it would be very disappointing for those of us hoping that Amazon was going to have a serious go at providing a low-cost, innovative service that was trying to lower overall health care costs for employers and make a serious dent in the market power of America’s high priced, under-delivering hospital systems.

“You’ve Gotta Shoot Some Sacred Cows:” MSU Health Care’s CIO On Health Systems & Tech Transformation

By JESSICA DAMASSA

“If I continue to hear how difficult it is for hospitals to make money, I would like for them to see what it’s like to operate a real business. They are overstaffed…they are overpaying…they are not responsible for quality or outcomes…there are no guarantees on their services…they can block competition from entering their markets…they can buy up market share – that’s not a real business.”

Well, lesson learned. If you ask Roger Jansen, Michigan State University Health Care’s Chief Innovation & Digital Health Officer, how he think things are going in US health systems when it comes to digital transformation and the integration of technology and value-based business models in hospitals, be prepared for a blunt conversation about how US healthcare model is failing and how the lack of incentive for change is keeping us all stuck in the same-old, same-old.

From digital health and telehealth to EMR and value-based care business models, we cover a lot of health innovation ground in this chat and get a reality check on whether or not things are really evolving inside health systems – and which stakeholders Roger believes hold the key to driving that change. (Hint: He identifies them as those who are already “footing the bill for the lavish lifestyles that healthcare administrators live that are probably well out-of-balance with the value that they actually bring to their corporations.”)

Roger on digital health? There’s better adoption and receptivity when it’s combined with “a service component that doesn’t add additional burden to the clinical component.” On virtual care and telehealth?

Down 70% since the pandemic’s lockdown days and more of a “behavior change problem” at this point than anything else.

When we get to EMRs around the 19-minute mark, things get extra spicy and we take a turn into “all this gibberish about volume versus value” and how value-based care models aren’t gaining meaningful traction either. It’s a big, bold reality check on the state-of-play of health tech, virtual care, and healthcare payment model innovation in health systems… watch now and let us know what you think!

Keycare raises $24m & Dr Lyle thinks he’s found a virtual care niche!

Lyle Berkowitz has been very well known as a techy doc for years. He’s ran an innovation center at Northwestern, written books, been featured at tons of conferences (including Health 2.0), had a stint at MDLive and was founder and Exec Chair at HealthFinch which was bought by Health Catalyst. But instead of lying on the beach drinking MaiTais, Lyle has decided that there’s room for yet another virtual care play, and today his new company Keycare is announcing a $24m round and a deal with Spectrum Health (Michigan). What is it? It’s a virtual medical group that’s going to be supporting traditional health systems with care after-hours, out of state and much more. Is there room in the telehealth market for yet another niche play? You may guess that I asked and Lyle explained why!–Matthew Holt

Particle Health, Complete Patient Records & ‘The Business’ of the Information Blocking Rule

By JESSICA DAMASSA

Particle Health’s CEO Troy Bannister stops by to not only talk about the API platform company’s $25M Series B, but to also explain exactly what’s going on in that patient data ‘exchange-standardize-and-aggregate’ space that, these days, looks poised to pop as the 21st Century Cures Act Information Blocking Rule stands ready to make hospitals share data like never before.

Troy calls Particle a “network of networks” and what that means is that their API pulls patient records from organizations and businesses that are already aggregating them (so aggregating the aggregators) to get all the lab data and medical data a clinician would want to in order to have a more complete picture of their patient. For clients like One Medical or Omada Health, who deliver value-based care and take on risk, having such a robust historic data set on patients – along with a more complete picture of their comorbidities – helps improve decision making and outcomes.

So, how is Particle Health working now – and what will change – as the Information Blocking Rule gets implemented? Troy’s written about this for Forbes, and explains what has him fired up here too. Turns out their model has room to accommodate a big pivot: giving patients access to their own ‘network of networks’ record. Find out what sets Particle off in this new B2B2C direction and how they will be using that Series B funding to build out deeper analytical tools to help everyone make better sense of what the data in all those records can show us.

Link to Troy’s Forbes piece on Anti Information Blocking Rules

Link to Jess’s chat with Micky Tripathi, the National Coordinator for Health Information Technology at HHS, on Anti Information Blocking & TEFCA:

Next-Gen PBM Capital Rx Becomes a Tech Co: Inside New PBA Biz, $106M Series C & Big Plans

by JESSICA DAMASSA

What’s the bigger news coming out of Capital Rx: that the next-gen PBM just closed a $106 million dollar Series C? Or, that the health tech startup’s business model has expanded significantly over the past 18 months, from PBM-only to PBM-plus-PBA, meaning that instead of just servicing the pharmacy benefits management needs of employer groups directly, that now they’re also adding to their business by selling THEIR TECH to other carriers and health systems so they can use it to administrate their benefits plans??

Capital Rx’s CEO AJ Loiacono takes those questions in stride, lets us in on which “side” of the business fueled their 200% year-over-year growth in 2021, and gives us the details on that tech that his business developed and why its standout compared to the inefficient infrastructure that currently exists to administrate and process pharmacy claims.

The big deal here is that AJ and team are tackling one of the biggest friction points in the cost of pharmacy benefits: the cost to administer a plan. They reduce that cost, and the “net cost” of every drug is reduced. AJ says its in this way that Capital Rx operates at one-seventh the cost of his competitors, the “Big Three PBMs” (CVS’s Caremark, Express Scripts, and UnitedHealth’s OptumRx) and saves its customers an average 27% on their prescription drug spend.

Now that Capital Rx has their slick enterprise software, will the business continue to operate a dual PBM-plus-PBA model, or will they double-down on the PBA side? AJ lets us know what’s next and (spoiler alert) it sounds like things might go in a surprising direction. If Capital Rx’s software is so effective at doing all the things it takes to manage pharmacy claims — underwriting sequences, implementation management and onboarding, communication, patient portals, network management, reimbursement networks, eligibility checks, etc. – what stops Capital Rx from processing other kinds of healthcare claims? Is a step into the medical claims processing side of the healthcare world on the roadmap? Tune in and find out!

Jenny Schneider on Homeward’s $50M Series B, 30K-Patient Partnership with Priority Health

By JESSICA DaMASSA, WTF HEALTH

Just FIVE MONTHS after launch, rural health startup Homeward is proving its potential for growth with MORE funding – today announcing its $50 million Series B (that’s $70 million total for the folks keeping score at home) – AND a huge 30,000-patient partnership with Priority Health. Co-founder & CEO Dr. Jennifer Schneider is here to breakdown both bits of news and give us some context about what they indicate about the rural healthcare market.

There are a couple surprising facts in this one that add up to why investors like ARCH Venture Partners and Human Capital (co-leads), General Catalyst (which led the Series A), and Lee Shapiro and Glen Tullman (old buddies and former Livongo colleagues who went in on this with personal funds outside of their fund 7wireVentures) were excited to jump into a quick Series B.

Surprising Fact 1: 90% of all rural Medicare beneficiaries are covered by just 7 payers, which makes the Priority Health deal a bigger deal than even that massive 30K patient population might indicate.

Surprising Fact 2: Homeward’s market of rural Americans is actually TWICE as large as the diabetes market that spurred the investment and growth of Livongo.

For all the math, the details on how the business actually works five months in, and how Homeward is actually going to market as a ‘healthcare infrastructure’ provider rather than just a next-gen medical group, you’re going to have to give this one a watch!

The Impact of COVID-19 on Shared Priorities for International Cooperation in Active and Healthy Aging

By ELIZABETH BROWN, CATALYST @ HEALTH 2.0

IN THIS MINI-SERIES, WE WILL BE TAKING A LOOK BACK AT THE IDIH WEEK 2022 USA REGIONAL WORKSHOP, TITLED THE IMPACT OF COVID-19 ON THE SHARED PRIORITIES FOR INTERNATIONAL COOPERATION IN ACTIVE AND HEALTHY AGING, WITH A DIFFERENT BLOG POST DEVOTED TO EACH OF THE THREE COMMON PRIORITIES THAT WERE REFINED THROUGHOUT THE IDIH PROJECT: INTEROPERABILITY BY DESIGN, DATA GOVERNANCE, AND DIGITAL INCLUSION.

INTRODUCTION: THE REGIONAL WORKSHOP PANELISTS AND BACKGROUND OF THE PANEL

For the past three years, Catalyst has been involved in the IDIH Project, which has recently concluded (you can read more about the overall project findings here). IDIH (International Digital Health Cooperation for Preventive, Integrated, Independent and Inclusive Living) – funded under the European Union Horizon 2020 Research and Innovation Program – was aimed at fostering cooperation in the field of Digital Health for Active and Healthy Aging (AHA) between the European Union and five Strategic Partner Countries (Canada, China, Japan, South Korea, and USA), especially focusing on four key areas that embrace common priorities of all countries/regions involved: Preventive Care, Integrated Care, Inclusive Living, and Independent and Connected Living. 

Following an expert-driven approach, experienced and renowned experts, executives, and advocacy groups from the six regions (Europe, China, Canada, Japan, South Korea and USA) were brought together by IDIH in a Digital Health Transformation Forum working to define more specific priorities in Digital Health and Ageing, and identifying opportunities for mutual benefit and priorities for international cooperation.  

During IDIH Week 2022, Catalyst ran a Regional Workshop aiming to explore the impacts of COVID-19 on AHA.

Continue reading…

US Cardiac electrophysiologists meet reimbursement reality and don’t like it.

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By ANISH KOKA

It’s been a while but Anish Koka, a one time regular writer on THCB and occasional THCB Gang member, is back publishing up a storm on his Substack channel. You may recall that his political and clinical views don’t always mesh with some of the wooly liberals we feature on THCB (cough, cough, me), but we are delighted to be back publishing some of his pieces–this one is on reimbursement.–Matthew Holt

The subspecialty of Cardiology known as electrophysiology has seen explosive growth over the last few decades in large part because of a massive expansion in the suite of procedures now offered to patients. It used to be that electrophysiologists would spend the majority of their careers implanting pacemakers and defibrillators, but the last 2 decades saw an explosion in electrophysiology procedures known as ablations. Ablations essentially involve burning cardiac tissue in a strategic manner to get rid of arrhythmias that may be afflicting a particular patient. The path humans took from first taking an electrical picture of the heart with a surface ECG to putting catheters into the heart to map and treat dangerous arrhythmias is one of the great achievements of the modern era.

Giants of the field like the recently deceased Mark Josephson essentially created a field by going where no humans had gone before. Dr. Josephson did much of his work in Philadelphia at the University of Pennsylvania publishing seminal papers that lead to a greater understanding and eventual treatment of previously incurable malignant arrhythmias. As is true of all trailblazing work in medicine , there were no reimbursement codes in the beginning , just desperate patients with no place to turn.

The procedures being embarked on were rare and the patients were very complex. The renumeration that was awarded from Medicare was reflective of this. But two things almost always happen once a highly reimbursed procedure code comes on line – technological advances makes the procedure easier, and the population that the procedure is intended for massively balloons.

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Dr. Topol’s comment on LongCOVID and the heart is misleading/lacking context

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By ANISH KOKA

It’s been a while but Anish Koka, a one time regular writer on THCB and occasional THCB Gang member, is back publishing up a storm on his Substack channel. You may recall that his political and clinical views don’t always mesh with some of the wooly liberals we feature on THCB (cough, cough, me), but we are delighted to be back publishing some of his pieces–starting with a look at a tweet from one of America’s most prominent cardiologists.–Matthew Holt

Given Twitter’s commitment to the truth in Medicine, I thought I would try to give them a hand by analyzing a semi-viral tweet about COVID and the heart.

Earlier this year (April 2022), the most influential cardiologist in the world tweeted about a study on the long term cardiac effects of COVID (LongCOVID).

Medical trainees who trained in the early 2000s like I did know Dr. Topol as an absolute legend in the field of Cardiology. He was responsible for seminal work in Cardiology in the 1980’s on the use of clot busting drugs for patients having heart attacks, and became head of cardiology for the famed Cleveland Clinic at the age of 36! (I vaguely recall feeling like I was starting to understand Cardiology at the age of 36.) He’s since moved on to do many other things, and is a potent voice that may have been instrumental in the FDA delaying approval of the mrna vaccines until after the 2020 election.

Nonetheless, this paper that he is giving his significant stamp of approval to has significant issues. As far as I can tell individuals with LongCOVID were recruited by advertising in LongCOVID support groups. No independent assessment carried out as far as I can tell clinically. If you say you have it—> you’re in.

Continue reading…
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