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Category: Health Policy

Healthcare ‘quality’ is broken. Here’s how to fix it.

By OWEN TRIPP

For decades, quality in healthcare has been defined on industry terms — not people’s terms. New technology and innovative health plan designs are finally changing that.

People know quality when they see it, and they are definitely not seeing it in healthcare. Fifty-six percent of Americans rate the quality of care as “poor” or “fair,” and 90% believe we’re overpaying for it. Likewise, 80% of employers — collectively the largest purchasers of healthcare in the country — say that higher-quality care is a top priority for their workforce.

And yet, the U.S. healthcare system remains a global leader; a lack of know-how or quality control isn’t the problem. The problem is the wide gap between how the healthcare industry has historically defined quality and how quality is experienced by the people actually receiving and paying for care.

For the past 75 years, healthcare quality has been shaped by a grab bag of federal agencies, accrediting bodies, medical organizations, health insurers, and — more recently — consumer-focused ratings outfits ranging from U.S. News & World Report to Zocdoc. Though many pay lip service to patient experience, none has clearly defined quality — or explained it intuitively enough — to help individuals make smarter healthcare decisions based on their clinical and financial context.

Healthcare needs to move beyond narrow metrics and top doc lists to create a dynamic, value-driven view of quality that consistently connects people to the best care for them, where and when they need it — and ideally, even before they know they need it. Too often, “quality” equates to some numbers on a dashboard, when it needs to be more like a combination of GPS and driver-assist technology: guiding people to their health goals, keeping them in the highest-quality lane, and nudging them if they start to drift.

This was always the vision (for some of us). But we simply haven’t had the right mix of technology and system-wide connectivity to bring it to life. Now we do.

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Officers Eat Last

By KIM BELLARD

A New York Times interview with Rep. Jake Auchincloss (D – Mass) by Bret Stephens caught my attention. I am somewhat familiar with Mr. Stephens from his various pieces in NYT; he is definitely a conservative, but in the old, pre-MAGA sense where it meant you worried about spending but you didn’t hate people who weren’t like you. Rep. Auchincloss, on the other hand, was unfamiliar to me, but the headline of the interview – The Democrat Who Makes Me Listen – proved apt.

For me, the final line the interview summed everything up. Rep. Auchincloss is a Marine veteran, having served in Afghanistan. Mr. Stephens asked: “Final question. If there is one thing you learned in the Marine Corps which every American should know, what is it?” Rep. Auchincloss’s reply was succinct, to the point, and highly instructive: “Officers eat last.”

“Officers eat last” – wow. That’s a philosophy I can buy into. That’s a credo I hope I can live up to. That’s a slogan for a political movement I could get behind.

Of course, I’m not just talking about literally only Marine officers, and I’m not just talking about eating. I’m sure Rep. Auchincloss intended that it was a life lesson that should be applied broadly. I.e., people in authority should make sure the people they are responsible for get taken care of before they take care of themselves. I don’t think that attitude is solely responsible for the esteemed Marine esprit de corps, but it’s got to be part of it.

The trouble is, we don’t see much of that attitude in the rest of America. When Congress failed to pass a budget and millions of federal workers went without paychecks, they (and their staffs) kept getting paid. When the White House went slashing various budgets, it didn’t eliminate White House jobs.

If you want to keep your blood pressure under control, don’t even ask how generous the Congressional retirement package is. Suffice it to say that, if you are one of the few workers who still qualify for a defined benefit pension, it is almost certainly less than theirs. Don’t get me started on how members of Congress seem to get richer – a lot richer – while in office, possibly due to insider trading loopholes.

According to Gallup, only 10% of Americans approve of the job Congress is doing, with 86% disapproving, but they don’t care. They get paid anyway, and most House seats aren’t competitive, so most incumbents are in little danger of getting voted out.

This is no “officers eat last.”

It’s not just politicians.

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New Podcast on Primary Care

This is one of those “Coming Soon” announcements. I spent the weekend with the wonderful gang from what I affectionately call Camp Claudia Cult, a group of mostly Californian policy wonks led by Claudia Williams, who these days is at the UC Berkeley School of public health. As you may have noticed I’ve been spending much of my time writing and talking about the notion of Concierge Care for All. Most of the group at the Health Collab wants to blow up/burn down the current system and replace it with a primary care-driven system. And there’s lots of discussion and planning on how to do that. But there is so much happening in innovation in primary care that I thought we need a dedicated channel to discuss it.

Since the sunsetting of the THCB gang, I’ve been doing lots of tech interviews, but not many about how care works. So now I will. If you want to get involved or be interviewed, please email me — Matthew Holt

CRUSHing Lab Fraud: Three Myths that Derail Real Reform

Leeza Osipenko
Ekaterina Cleary
Julie Egginton

By JULIE EGGINGTON, EKATERINA CLEARY & LEEZA OSIPENKO

When CMS issued its Request for Information under the Comprehensive Regulations to Uncover Suspicious Healthcare (CRUSH) initiative in February, it zeroed in on a long-festering problem: fraud, waste, and abuse in laboratory testing, especially in genetic and molecular diagnostics.

The laboratory industry will respond. And when it does, its arguments will sound polished, familiar, and deeply reassuring. They will also be either disingenuous or unproven.

If policymakers want this effort to succeed, they should be prepared to handle three claims that have long shielded problematic practices from meaningful oversight.

Claim 1: Fraud, waste and abuse is limited to a few bad actors

Expect labs to argue that fraud, waste, and abuse is rare, isolated, and already addressed through enforcement actions. The narrative will feature a handful of egregious cases, presented as outliers in an otherwise trustworthy ecosystem.

But the problem is not a few rotten apples. It is the orchard’s design.

Take “code stacking” for example, in which laboratories bill multiple individual genetic test codes rather than a single panel code, often inflating reimbursement. In one analysis, laboratories used between 1 and 12 billing codes for hereditary cancer panels with the same indications for testing, with estimated average charges ranging from $679 to $8,589 for ostensibly comparable tests. The repetition of these behaviors across companies suggests systemic incentives, not isolated misconduct.

Ample Medicare billing data, whistleblower cases, and Department of Justice settlements point to patterns, not anomalies: high-volume genetic panels ordered with little clinical justification, molecular pathology tests billed under grab bag and overly permissive billing codes, and aggressive marketing and patient harvesting practices targeting vulnerable populations.

A key driver is opacity. Many laboratory-developed tests (LDTs) are marketed under similar or identical names despite meaningful differences in design, accuracy, and intended use. To a clinician or payer, they appear interchangeable. In reality, they are not.

This naming ambiguity allows lower-quality tests to ride the coattails of better-validated ones, while still commanding reimbursement. Fraud, in this context, is not always a dramatic act. It is often embedded in routine billing.

Claim 2: Precision medicine advanced by genetics is worth the cost due to improved patient outcomes

The second argument will appeal to aspiration. Labs will emphasize that genetic testing is the backbone of precision medicine and therefore a worthwhile investment for CMS, despite the ballooning costs.

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Bribery, Corruption and the American Health Care Way

By MATTHEW HOLT

These days you just have to wonder about the greed and corruption that is going on all around. Senator Dick Blumenthal is one of many who’ve been pointing out the naked corruption in the Trump family–Qatari jets, memecoins, Trump’s son being on the board of so many defense and prediction market companies you can’t keep it straight. Issac Saul has tried to detail it all, but reading just the cryptocurrency part of his piece has me spinning. And we’re nowhere near assessing the naked corruption of so many others in the administration. Kristi Noem, despite being fired, is still living in her government house, and has not had to answer for routing some of a totally unnecessary $220m ad campaign to a company that her friends own. The company was incidentally established a whole 8 days before it got the contract.

So it’s a little absurd to be worrying about fraud and corruption in health care. But apparently HHS is. At least Oz and RFK Jr are going on about Somalis defrauding Medicaid and Armenians running fake hospices in California. (Let’s not even consider the optics of a Turkish citizen with close ties to the Erdogan regime criticizing Armenians–I mean the genocide was over a century ago!)

But of course, fraud and corruption in health care has been going on forever. Back in 2011 a Florida man was convicted of Medicare fraud to the tune of tens of millions and got a 50 year sentence. Don’t be surprised that Trump commuted his sentence. And that’s just one of thousands and thousands of cases, mostly by providers inventing fake patients to defraud Medicare or Medicaid.

But the ones who get convicted and go to jail are the amateurs.

If you’re a big company in health care, you fight with lawyers and you settle. For example, every big pharma company has settled for things like off-label promotion of their drugs. GSK paid $3bn, Pfizer over $2bn, J&J over $2bn. In fact back in the 2000s THCB had a regular correspondent called The Industry Veteran who basically suggested that whistleblowing in qui tam suits inside big pharma was the way to wealth and fame.  And of course HCA in its days when it was run by Rick Scott – now (somehow not a) convicted felon as well as Florida senator – settled for $1.7bn. This was all back in the 1990s and early 2000s, but it’s all still going on.

The venue though may have moved. Risk adjustment in Medicare Advantage has become one of the biggest venues for fraud. The key here is that the DOJ and HHS found that while Medicare Advantage plans were upcoding their patients, and therefore getting paid more for them, they weren’t actually delivering more services.

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Come help save democracy!

Tuesday, May 5 | 8-9 pm ET, 5-6 pm PT 

Protecting Healthcare and Our Democracy: A conversation with Mandy Cohen, Former Director, Centers for Disease Control and Prevention PLUS former NC Governor Roy Cooper & Dr. Donald Berwick, IHI founder/former president

REGISTER & DONATE

A matching fund of $70,000 is in effect for this event!

This supports the Movement Voter Project which makes grassroot investments to organize to support democracy at the local level.

I’m a co-host–Matthew Holt

A Unified Sense of Self

By MIKE MAGEE

Stanford neuroscientist, David Eagleman, reminded us this week that “A coherent explanation of consciousness eludes modern science.” That was his opening line in the New York Times book review of Michael Pollan’s latest effort, “A World Appears.” In it, Pollan asks innocently, “How does the brain generate a unified sense of self?”

According to Eagleman, “Pollan is not able to furnish the answers (no one can, yet), but he presents a captivating exploration, one that is highly personal and sensitive.” In this, he is not alone. Other fields are engaged in the same pursuit.

To begin with, there are the epigeneticists. They study “how our environment influences our genes by changing the chemicals attached to them.” In the hands of these scientists, genes are not “set in stone and (fully) predetermined.” Of late, these investigators have been unraveling how various chemicals, working on the surface and inside cells are constantly altering and adjusting how our genes work. Thus the title, since “epi” is Greek for “over, outside of, around.”

Other investigators like Professor Eddy Keming Chen in the department of Philosophy at University of California San Diego come at the problem from a different direction. She bolstered her PhD in Philosophy with a Masters in Mathematical Physics, and a graduate certificate in Cognitive Science. She teaches the PHIL 130 course on Metaphysics.

In the UCSD college syllabus, she tees up the question, “Why study metaphysics?” She promises enrollees that if they sign up, they’ll find a bit of magic in exploring tough questions, like: “Do we have free will? Is it compatible with causal determinism? What is the place of the mind and of the consciousness in a physical world?”

In the Jesuit world that I came from, such courses were mandatory as part of the core curriculum. In my own alma mater, they no longer carry the same mandate, but still remain alive and well.

Consider, for example PHL 365 – a 3 credit course at LeMoyne College titled Philosophy of Mind. Once again, there is magic in the air for inquiring minds.

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Concierge Care for All: Yes, It Really Is That Simple

By MATTHEW HOLT & CLAUDE

You’ll recall that a few weeks back I gave Claude some prompts and my entire corpus of work on THCB and asked it to write a piece. It was about 70% my ideas and 50% my writing tone. I’m back trying it again. This time I gave it a lot of prompts from some Linkedin pieces and comments I wrote and then I spent about 20 minutes editing it. This one is about 85% my idea and maybe 70% my tone? I have rewritten something in every paragraph. But it’s a hell of a lot faster than me writing from scratch. So I am going to keep experimenting like this for a while.

This started as a LinkedIn post about Merril Goozner’s plan to cut health care costs. He pointed out that the Center for American Progress’s new 10-point health reform plan is just more incrementalism and worse too boring for anyone to pay attention. Goozner’s own proposal, capping out-of-pocket expenses, isn’t much better. We’ve spent nearly a century proving that incremental reform in American health care doesn’t work — we still have tens of millions uninsured, patients going bankrupt, and outcomes that trail most of the developed world. And of course it enables profiteers to massively extract wealth from the system. In other words, from us.

My alternative: go to the barricades and blow the whole thing up. We need revolution because modest evolution cannot work.

My proposal, which you should go and read is to give everyone a voucher for primary care, but make it Concierge care for all.

The post got some pushback, and some of the objections reveal something important. My idea isn’t too complicated, but so many of us are so imbued in our broken system that  we can’t see beyond it. And to be fair, it’s only after 35 years looking at it, that I’ve got the “burn it all down” religion.

My Basic Idea

My proposal is Concierge Care for All. Every American gets a voucher worth somewhere between $2,000 and $3,000 a year, which they have to spend with a primary care physician (or primary care organization) of their choice. Each PCP or equivalent takes on a panel of around 600 patients — roughly 1/3 to 1/4 what a typical fee-for-service PCP practice manages today, and the same as most current direct primary care practices. 

That’s $1.2 to $1.8 million in annual revenue per physician; enough to pay the doctor $500,000 to $600,000 a year and still leave $600,000 to $1.3 million for clinical staff, technology, and overhead. This is basically the MDVIP model. It works. People who use it love it. And the latest studies show that it saves a lot (31%) on hospital emergency room use and inpatient costs.  That alone saves a significant fraction of what this transition would cost.

The bulk of what a PCP does in this model is managing chronic illness — diabetes, hypertension, heart disease, COPD. These are the conditions that drive the majority of health care spending but which our current system sucks at managing. A well-resourced primary care practice, freed from the hamster wheel of volume-based billing, can do this proactively and can deploy the technology to do it at scale. Remote patient monitoring, AI-assisted care management, continuous data from wearables and home devices — the tools that many digital health companies have shown working well — all of that gets directly integrated into primary care where it belongs. The PCP organization is the purchaser of those technology services. This is basically the logic behind CMS’s new ACCESS program, except that ACCESS tries to bolt these capabilities onto the system from the outside. In this model they’re baked into primary care practice because the PCP wants to manage their patients and has the professional ethics and responsibility to do so.

I’d include a lot of mental health and dental care in the definition of primary care, as well as minor urgent care. Plenty of primary care groups in the US and elsewhere do that now, even though we’ve historically pretended that the head isn’t connected to the body and the teeth are outside it.

What isn’t there is equally important.  No co-pays, no coinsurance, no deductibles, no claims. No staff managing all that bureaucratic crap. Your PCP manages your care, knows you, and when you need a specialist or a scan or a surgery, they refer you.

What About Specialty Care?

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Give That 1337 a Job!

By KIM BELLARD

Chances are someone in your family is a gamer. Maybe you are a gamer yourself. After all, somewhere between two-thirds and three-fourths of Americans play video games, and if you just looked at young men, it’d be closer to 100%. Grumpy older people don’t get it, complaining that gaming is just a waste of time, but gamers believe it helps with their problem solving (although at a cost of sleep).

Well, the good news is that if you are, indeed, a gamer, the Federal Aviation Authority (F.A.A.) is looking for you.

Last Friday Transportation Secretary Sean P. Duffy announced the F.A.A.’s campaign to attract “the next generation of air traffic controllers,” It is looking for people “who possess useful skills that are transferable to a career in air traffic control, including:

  • Demonstrated high cognitive functions
  • Multitasking
  • Spatial awareness
  • Strategy and problem-solving”

By all that, they mean gamers. The announcement goes on to add: “…this effort is focused on reaching talented young people pursuing alternative career paths, many of whom are active in gaming. Feedback from controller exit interviews reinforces this, with several controllers pointing to gaming as an influence on their ability to think quickly, stay focused, and manage complexity.”

There’s a slick YouTube ad too.

“When you bring on someone who has gaming experience, particularly with air traffic control, they have an edge up,” Michael O’Donnell, an aerospace consultant who previously worked as a senior F.A.A. official focused on air traffic safety, told Karoun Demirjian of The New York Times. “They’re coming in with a skill set. But it doesn’t replace aptitude, or discipline, or decision making under pressure.”

Surprisingly, the National Air Traffic Controllers Association supports the effort, with its president Nick Daniels telling BBC:: “Our union welcomes innovative approaches to expanding the candidate pool, including outreach to individuals with high-level aptitude skills such as gamers, so long as all pathways maintain the rigorous standards required of this safety-critical profession.”

To be fair, both the F.A.A. and the NATCA probably would welcome anything that might drive people to apply. The F.A.A. only has about 75% of the target number of controllers, leaving it several thousand short. Individual airports may be staffed even lower, as might certain times of day. It’s not a new problem and it is not a problem that is going to be quickly fixed; it is not as though today you can play a video game and tomorrow you can be an air traffic controller. There is definitely a learning curve.

It also doesn’t help that air traffic controllers aren’t usually paid during government shutdowns, which Congress seems to increasingly allow. “The failure to pay air traffic controllers for 44 days created uncertainty, drove many experienced controllers out of the profession and harmed the recruitment pipeline,” a spokesperson from the Department of Transportation told CBS News in November.    

Nor does it help that air traffic controllers rely on technology that is likely to be older than they are. The F.A.A. is trying, for example, to replace its outdated radar system, but NBC reports: “The FAA has been spending most of its $3 billion equipment budget just maintaining the fragile old system that still relies on floppy discs in places. Some of the equipment is old and isn’t manufactured anymore, so the FAA sometimes has to search for spare parts on eBay.”

The National Transportation Safety Board (NTSB) Chair Jennifer Homendy complained: “This is 2026. The secretary talks about upgrading our air traffic control system. We have an old air traffic control system. This is why he talks about that. We need to upgrade.” 

I was surprised to learn that gaming might not just be an asset to become an air traffic controller, but also an asset for air traffic controllers. Josh Jennings, a supervisor at the F.A.A.’s air traffic command center in Virginia, told Ms. Demirjian that gaming is both a way for controllers to stay sharp, and as a form of “social currency” among them. “I would say it’s probably tenfold on how fast this new generation is able to pick up on our physical tech, our radar scopes,” he said. Controllers apparently often play video games on their breaks.

In similar approaches to look for unconventional backgrounds, the Marines are looking at dirt bikers to become drone pilots, while Russia is looking at university students for its drone pilots.     

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Massively Better Healthcare, a review

By MATTHEW HOLT

This is a very brief review of Rock Health founder Halle Tecco’s Massively Better Healthcare. Halle is trying to do something quite complicated in this book. It’s really a three-part attempt to help somebody who is relatively new to health care entrepreneurship understand what the hell they are getting into. 

The first part is a brief assessment of the current US healthcare system. If you’ve been working in health care for a long time you can probably skip this but if you’re an entrepreneur coming into American healthcare for the first time, it’s a good introduction. It may though not be enough given how messed up and complex the American system is. There are of course plenty of other great books to read about that. It’s not really Halle’s aim to do more than warn you about the mess the system is here.

The second part is essentially a guide to how to do innovation and how to build a company. This is very valuable. I wish Halle had written more in this part and included more of the work she’s done with the many companies she has stewarded and invested in because there’s another book to be dragged out of her about this. ( I’m sure she would hate me for saying this having just finished this one!). But I wanted to know more about all the boardrooms and strategy sessions she’d been in and the conversation she had about company building. For me this was the best part of the book because it has a lot of great nuggets about innovation. I just wish there’d been more here and that the examples were longer and deeper.

The last section of the book is four good rules for what works and what doesn’t and that’s a lot of useful stuff in there as well. She ends the book with an impassioned plea for people to come and fix the health care system, by working on individual problems within it by taking what she calls Smart Shots. 

To me this appeal is overly optimistic but it’s also probably the only way that people can actually fix anything in health care given the current state of the system. She actually references the cranky old guard (which I think I include myself in) but I think she’s specifically talking about people who have spent a long time in big hospital systems or health plans and feel that nothing can be changed from within. Because those organizations are so rich and powerful I personally think the only way to really change health care is to have a “meteor hitting the Earth” extinction event for them, but I’ve written enough about that elsewhere. 

So all in all I think Massively Better Healthcare is a very valuable read especially for somebody coming into healthcare with intention to fix the system. But I think it will help those people make health care better incrementally rather than massively.

I think I will actually prefer the sequel, so long as what happens in that is that we get more out of Halle about the experiences she’s had and the companies she’s worked with. There is probably nobody better to deliver a real tell-all about the “warts and all” of building health tech startup companies and although we got a good flavor from her in this first book, I think that there is actually a lot more to come from her.

Matthew Holt is the publisher of THCB

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