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Can the US health care system “pull an Italy?”

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By MATTHEW HOLT

There has been a ton of analysis about COVID-19 and how bad it will get. Some like Joon Yun and Jeremy Faust say the panic is worse than the disease. Others have run the infection rate numbers and predicted that the US will run out of hospital capacity in early May and in Washington state much earlier (end of March).

But there’s no doubt that in the last week or so, sentiment has changed. This week I and 45,000 of my best friends are at home, not at HIMSS in Florida. Many big gatherings like SXSW, Comic-Con and Coachella have been cancelled. Most corporations that can are asking employees to work from home. Just this morning my local school district in California called off school plays and any gatherings with more than 100 people.

Part of this is the inevitable response to the ridiculous posing of Trump. He showed up at the CDC wearing a campaign hat and declared that he was a great doctor to be because his uncle was at MIT. The Director of the CDC and later the Surgeon-General made toadying remarks about how amazing he was. And neither Pence, Azar, Carson or anyone else allegedly in charge can give a straight answer to anything.

The nation has realized that there is no help or even basic honesty coming from the Federal government. This is after the CDC screwed up the creation of basic testing kits which put the US in a situation where it just can not know the extent of the outbreak. China denied the outbreak, then had to put Wuhan and much of their economy on lockdown. Iran may be in worse shape.

Meanwhile South Korea, Singapore and Taiwan have managed their outbreaks with very rapid testing, quarantining of those infected, and extremely rapid response. The US is still blundering around. Now the private sector is trying to step in as the Feds misstep again and again.

But a likely scenario is that many regions in the US will become like Northern Italy.

Continue reading…

Understanding #Medicare4All & the Democratic Primaries

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By MATTHEW HOLT

Since Saturday’s Nevada primaries, confusion seems to be reigning about how Bernie Sanders seems to be winning. Time (and not a lot more of it) will tell who actually ends up as the Democratic nominee. But the progressive side (Bernie + Warren) is doing much better than the moderate side (Biden/Butt-edge-edge/Klobuchar) expected, while we wait to see how the  Republican side of the Democratic primary (Bloomberg) does in an actual vote. The key here is the main policy differential between the two sides, Medicare For All.

Don’t get too hung up in the details of the individual plans, especially as revealing said details may have hurt Elizabeth Warren. But do remember that there is one big difference between Sanders/Warren and the moderates. It comes down to whether everyone is in the same state-run single payer system (a modified and expanded version of Medicare) or whether the private employer system is left as it is, with expanded access to something that looks like Medicare (the public option) for everyone else. Note that no Democrat wants to stand pat on Obamacare “as is”. Everyone is way to the left of what Obama ran on in 2008 (or at least what he settled for in early 2009).

Why has this changed? Well there’s been a decade of horror stories. I’m not talking about the BS anti-Obamacare stories from people forced to give up their junk insurance, I’m talking about people with insurance being bankrupted or put through horrendous experiences, like this mother who was put through the ringer by various insurers when her 1 year old son was killed and husband injured in a road accident. Or this health tech CEO, who was an MD & JD and had to put $62,000 on his American Express card to get surgery. 

About 3 years ago as the dust was clearing from the Obamacare implementation, the impact of this started showing up in the polls.Continue reading…

Out of Network? Cigna, RICO and where’s the line?

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By MATTHEW HOLT

Sometimes you wonder where the line is in health care. And perhaps more importantly, whether anyone in the system cares.

The last few months have been dominated by the issue of costs in health care, particularly the costs paid by consumers who thought they had coverage. It turns out that “surprise billing” isn’t that much of a surprise. Over the past few years several large medical groups, notably Team Health owned by Blackstone, have been aggressively opting out of insurers networks. They’ve figured out, probably by reading Elizabeth Rosenthal’s great story about the 2013 $117,000 assistant surgery bill that Aetna actually paid, that if they stay out of network and bill away, the chances are they’ll make more money.

On the surface this doesn’t make a lot of sense. Wouldn’t it be in the interests of the insurers to clamp down on this stuff and never pay up? Well not really. Veteran health insurance observer Robert Laszewski recently wrote that profits in health insurance and hospitals have never been better. Instead, the insurer, which is usually just handling the claims on behalf of the actual buyer, makes more money over time as the cost goes up.

The data is clear. Health care costs overall are going up because the speed at which providers, pharma et al. are increasing prices exceeds the reduction in volume that’s being seen in the use of most health services. Lots more on that is available from HCCI or any random tweet you read about the price of insulin. But the overall message is that as 90% of American health care is still a fee-for-service game, as the CEO of BCBS Arizona said at last year’s HLTH conference, the point of the game is generating as much revenue as possible. My old boss Ian Morrison used to joke about every hospital being in the race for the $1m hysterectomy, but in a world of falling volumes, it isn’t such a joke any more.

Continue reading…

The Lynne Chou O’Keefe Fallacy

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By MATTHEW HOLT

Rob Coppedge and Bryony Winn wrote an interesting article in Xconomy yesterday. I told Rob (& the world) on Twitter yesterday that it was good but wrong. Why was it wrong? Well it encompasses something I’m going to call the Lynne Chou O’Keefe Fallacy. And yes, I’ll get to that in a minute. But first. What did Rob and Bryony say?

Having walked the halls and corridors and been deafened by the DJs at HLTH, Rob & Bryony determined why many digital health companies have failed (or will fail) and a few have succeeded. They’ve dubbed the winners “Digital Health Survivors.” And they go on to say that many of the failures have been backed by VCs who don’t know health care while the companies they’ve invested in have “product-market fit problems, sales traction hiccups, or lack of credible proof points.”

What did the ” Survivors” do? They have:  

“hired health care experts, partnered effectively, and have even co-developed their models alongside legacy players. Many raised venture capital from strategic corporate investors who have helped them refine their product, accelerate channel access, and get past the risk of “death by pilot.”

Now it won’t totally shock you to discover that Rob heads Echo Health Ventures, the joint VC fund from Cambia Heath Solutions (Blues of Oregon) & BCBS of N. Carolina, and Bryony runs innovation at BCBS of N. Carolina. So they may be a tad biased towards the strategic venture = success model. But they do have a point. Many but not all of their portfolio are selling tools and services to the incumbents in health care, which mostly includes health plans, hospitals and pharma.

And now we get to the Lynne Chou O’Keefe fallacy. (You might argue that fallacy is the wrong term, but bear with me).

Continue reading…

Consumerism, washing machines, big data & health care

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“all your stuff works together” Really!

By MATTHEW HOLT

Those of you who remember my BestBuy washer & dryer installation saga from a couple of weeks back may want to gird your loins. Because the saga continues. And it has even more relevance for consumerism in health care. So catch up on the prequel and come back.

When you left the story your hero had just arranged for Best Buy to attempt delivery on Tuesday afternoon last week. I was in SF for the “can’t miss” Rock Health Summit. I was waiting at the apartment when I got about 4 calls from the same random number in 3 minutes but when I answered no one was there. I called back, no answer. Then I got a voicemail saying the delivery team was outside. I ran outside! No they weren’t! At that point I gave up and had lunch. But then for now the 5th time I called Best Buy and lined up a new delivery. I stressed about 10 times that the delivery team could NOT leave next time without seeing me. There may have been some shouting…..

Monday was the next available day for delivery and it was day that Best Buy was going to finally get it right. I got an email saying they’d be there at 1.30pm

I was across town in a meeting at 12.30 and noticed 4 missed calls from the same number. Being of a very suspicious nature, I called the number, and yes it’s the delivery team. They were outside the apartment, and they were 60 mins early!  Thankfully the delivery crew agreed to wait, and I went over to meet them. So at 6th time of asking, the crew was there, the equipment was there, I was there, and we all went into the apartment.

What could possibly go wrong!?

Continue reading…

Consumerism is the answer to health care? Maybe not

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By MATTHEW HOLT

After 3 days at the Health 2.0 conference, everyone is agreed with Jane Sarasohn-Kahn that more consumer choice and better transparency and an “Amazon like shopping experience” would improve health care. In fact in her wonderful book, HealthConsuming, Jane talks a lot about the dark side of putting this much pressure on consumers, but I just had an experience that revealed what might go wrong. Bear with me, this does get back to health care…

The short answer is that BestBuy‘s home appliance service delivery and fulfillment seriously sucks. It has gone off the rails in a massively bad way. You’d think they’d have a multi-platform CRM that worked but it’s a disaster

The story. The washer in an apartment I used to live in but now rent out broke after 9 years–fair enough. And I spent a long time on a customer IM chat with Best Buy figuring out if there was an available washer that would stack under the still working dryer (which was stacked on top of it). But the answer was no.

So in the same IM chat the Best Buy agent suggests a replacement washer and dryer, and all the stuff required to put it in, and added installation and delivery. And he gets me a page where I can fill in my details, credit card and buy it all, then return to the chat to set a delivery date. Pretty snazzy BUT apparently the agent forgot to add removing the old ones to the order (even though most of the conversation was about the old ones!) Remember that for later…

Continue reading…

Those Digital Health IPOs—Flipping the Stack & Filling the Gap

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By MATTHEW HOLT

I’ve been driven steadily nuts by a series of recent articles that are sort of describing what’s happening in health tech or (because the term won’t die) digital health, so I thought it was time for the definitive explanation. Yeah, yeah, humility ain’t my strong suit.

It won’t have escaped your attention that, after five years during which Castlight Health more or less single-handedly killed the IPO market for new health tech companies, suddenly in the middle of July 2019 we have three digital health companies going public. While Livongo, (FD-a THCB sponsor) Phreesia and Health Catalyst are all a little bit different, I’m going to use them to explain what the last decade of health tech evolution has meant.

Don’t get carried away by the precise details of the IPOs. Phressia is already out with a market cap of $845m. Yes, it’s true that none of the three are profitable yet, but they are all showing decent revenue growth at an annual run rate of $100m+ and Livongo in particular has been on a client acquisition and annual triple digit revenue growth tear. It’s also the newest of these companies, founded only in 2014, albeit by buying another company (EosHealth) founded in 2008 that had some of the tech they launched with. Going public doesn’t really mean that the health care market will swoon for them, nor that they are guaranteed to change the world. After all, as I pointed out in my recent somewhat (ok, very) cynical 12 rules for health tech startups, UnitedHealth Group has $250 Billion in revenue and doesn’t seem to be able to change the system. And anyone who remembers the eHealth bust of 2000-2002 knows that just because you get to the IPO, it’s no guarantee of success or even survival.

But just by virtue of making it this far and being around the 1/10th of 1% of health tech startups to make it to IPO, we can call all three a success. But what do they do?

They are all using new technologies to tackle longstanding health care problems.

Continue reading…

Surveyor Health demystifies clinical pharmacy

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By MATTHEW HOLT

In some interesting news this week, Inland Empire Health plan (IEHP), a major Medicaid health insurer in southern California with about 1.2 million members, and its contractor Preveon Health announced that they were “extending a pilot” with Surveyor Health, for their MedRiskMaps product.

This is interesting for a bunch of reasons. First it’s a good example of how technology is now being applied to help with the almost absurd complexity of modern medicine–complexity that technology has both added to and may yet cure. Secondly, Surveyor Health has been building its technology for several years and (FD) I’ve been advising them off and on since 2009 and know the principals well. Thirdly, and this is mostly for grins, it represents some of the absurd language used to describe our crazy health care system.

What does the tech do? Surveyor Health’s technology is very complex optimization technology that examines the incredible number of symptoms and interactions undergone by patients taking multiple medications. As you know most chronically ill patients are on upwards of half a dozen medications and some are on many more. The more medications, the more the potential for serious and sometimes fatal drug-drug interactions, side effects and more. You only have to think of the litany of celebrity drug deaths (Michael Jackson, Prince, Anna Nicole Smith, Health Ledger, Tom Petty, to name a few) to understand the seriousness of the issue. Erick von Schweber, a real theoretical physicist and CEO of Surveyor Health tells me that when you get above 11 drugs the calculations involved are more complex than what Google has to do to index the web. (And yes, he now is allowing me to call it AI!)

Continue reading…

SCOOP: Facebook enters EMR business

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by MATTHEW HOLT

Big news out of Mountain View, California today as Facebook COO Sheryl Sandberg announced that the social networking giant was going to formally enter the EMR business. Sandberg explained that Facebook already has all Americans and most of the world’s population on its system and that adding a little bit of information about their health would be trivial given that it’s easy with AR to abstract that information from their profiles, not to mention that everyone’s phone is already sending data back to Facebook.

In particular, Sandberg highlighted the fact that Facebook has already captured almost all the personal health information of many people with cancer and plenty of other rare diseases in the thousands of health communities that it has been pushing hard over the past few years. Not only have those individuals not known what Facebook is allowing third parties to do with that data, or which hackers have already stolen it in a SICGRL hack, but they have also found it impossible to extract themselves or their data from those groups. As Sandberg says “We already have the EMR business model down, now we just have to provide the products”

When it was pointed out to Sandberg that Facebook didn’t actually have any professional EMR tools that could be used by clinicians or doctors, a scruffily dressed guy hiding his bad haircut under a hoodie grabbed the mike and shouted “We’ve seen the schlock that Epic, Cerner and the rest put out–my wife has to use it and she spends every evening catching up on her data entry. Shouldn’t be too hard for our engineers to knock that off–just ask those guys at Snapchat.” Sandberg commented that while EMR vendors move slowly and break things, Facebook has shown over the years that it can do that much faster. “Have you seen what we did to American democracy or the EU?”

Later today Cerner stock was trading off 25%. When asked, an Epic spokesperson commented that even if you added their ages together, Sandberg and Zuckerberg were far too young to run a proper EMR company.

Matthew Holt is the Publisher of THCB

New THCB site coming MONDAY! (It’ll be down this weekend)

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I’m thrilled to tell you that after a lot of work by Zoya Khan, Dan Kogan and his tech whizzes, there’ll be a new THCB site up on Monday. Hopefully you’ll notice the changes and think it’s an improvement!

But while we do the switch (to a new server, template, host, et al) the site will be down this weekend starting Friday night PT.  So go outside and enjoy some fresh air and we’ll be back Monday morning!  Thanks!  — Matthew Holt