The U.S. is in the midst of an ongoing—and still expanding—healthcarecostcrisis. Even among people with health insurance, medical debt has become a persistent problem. Top executives at nearly 90% of large employers believe the cost of providing health benefits to employees will become unsustainable in the next 5-10 years. And the nonpartisan Congressional Budget Office (CBO) is warning that expanding federal debt—driven largely by health expenditures and compounding interest payments—indicates that a major fiscal crisis is looming.
On this last point, it is true that reputable people have been predicting fiscal collapse for many years. In 1988, Benjamin Friedman wrote that we’re facing a Day of Reckoning. Pointing to the rising federal debt, he said: “we are living well by running up our debt and selling off our assets. America has thrown itself a party and billed the tab to the future.”
Peter G. Peterson wrote a book in 1993 called Facing Up: How to Rescue the Economy from Crushing Debt and Restore the American Dream. In it, he said that “runaway medical costs are the single most important reason that federal spending and federal deficits have now become ‘uncontrollable.’”
Not everyone agreed that deficits and debt were problematic. In 2003, as Republicans were pursuing further income tax cuts, Vice President Dick Cheney declared: “Reagan proved that deficits don’t matter.”
David Stockman was Ronald Reagan’s first budget director and one of the chief architects of the Reagan Revolution—a plan to cut taxes and reduce the size and scope of government. He wrote in The Triumph of Politics that the Reagan Revolution failed because the administration had not been able to control spending, leading to massive increases in the federal debt.
In 2013, Stockman wrote a book called The Great Deformation: The Corruption of Capitalism in America. He said that during the Great Recession, the Federal Reserve Bank had carried out “the greatest money-printing spree in world history.” Between 2004 and 2012, 70 percent of rising U.S. debt was absorbed by central banks. He said that “the world’s central banks have morphed into a global chain of monetary roach motels. The bonds went in, but they never came out.” He concluded that it was easy money, which the Federal Reserve System had supplied for decades, that was responsible for “deficits without tears.” “American politicians…had essentially died and gone to fiscal heaven.” They were able to spend money “without the inconvenience of taxing.” Both Democrats and Republicans have taken advantage of this changed reality.
In 2020, Stephanie Kelton wrote a book called The Deficit Myth: Modern Monetary Theory and the Birth of the People’s Economy. In it, she called for a paradigm shift: since the U.S. has the ability to print its own money, we should recognize that federal spending is not financed by tax revenue or borrowed funds. Whenever the need is pressing enough (e.g., warfare), we can and do supply whatever money is needed. The real deficit, she said, is not the fiscal deficit, but societal needs that are going unmet. Regarding health care, “our failure to provide proper insurance and care for every American is not because the government cannot ‘afford’ to cover the cost.” It’s just that we are operating under the wrong budget paradigm.
Importantly, though, Kelton wasn’t saying that there is a free lunch. She wrote, “It is possible for the government to spend too much. Deficits can be too big. But evidence of overspending is inflation, and most of the time deficits are too small, not too big.” This dovetails with David Stockman’s concerns about unsound money. And it mirrors the concerns of the CBO, which has said that a fiscal crisis would involve higher rates of inflation and an erosion of confidence in the U.S. dollar.
Containing Health Care Costs
If the CBO is to be believed, deficits and debt do matter. And although there have been “Cassandras” saying the sky is about to fall for many decades now, there may come a point in time when the need for cost containment becomes immediate and vital. (Some would argue that we’re already there.) Health care is a primary driver of fiscal deficits and, in an emergency, it would become a primary target for budget savings.
In this context, cuts to Medicare and Medicaid become a central focus.
Telehealth has revolutionized health care as we know it, but it may also be contributing to the overuse of antibiotics and antimicrobial resistance.
Antibiotics and the Risks
Antibiotics treat infections caused by bacteria, like strep throat and whooping cough. They do this by either killing or slowing the growth of bacteria. Antibiotics save millions of lives around the world each year, but they can also be overprescribed and overused.
Excessive antibiotic use can lead to antimicrobial resistance (AMR). AMR happens when germs from the initial infection continue to survive, even after a patient completes a course of antibiotics. In other words, the germs are now resilient against that treatment. Resistance to even one type of antibiotic can lead to serious complications and prolonged recovery, requiring additional courses of stronger medicines.
The Centers for Disease Control and Prevention reported that AMR leads to over 2.8 million infections and 35,000 deaths each year in the United States. By 2050, AMR is predicted to cause about 10 million deaths annually, resulting in a global public health crisis.
Increase in Telehealth and Antibiotic Prescriptions
Surprisingly, the growth of telehealth care may be contributing to antibiotic overprescribing and overuse.
Telehealth exploded during the COVID-19 pandemic and, today, 87 percent of physicians use it regularly. Telehealth allows patients to receive health care virtually, through telephone, video, or other forms of technology. It offers increased flexibility, decreased travel time, and less risk of spreading disease for both patients and providers.
Popular platforms like GoodRx and Doctor on Demand market convenient and easy access to health care. Others offer specialized services, like WISP that focuses on women’s health. Despite its benefits, telehealth is not perfect.
It limits physical examinations (by definition) and rapport building, which changes the patient-provider relationship. It’s also unclear whether providers can truly make accurate diagnoses in a virtual setting in some cases.
For instance, physicians were more likely to prescribe antibiotics for urinary tract infections during telehealth appointments (99%) compared to an office visit (49%). In another study, 55 percent of telehealth visits for respiratory tract infections resulted in antibiotic prescriptions, many of these cases were later found to not require them.
Universities are having a hard time lately. They’re beset with protests the like of which we’ve not seen since the Vietnam War days, with animated crowds, sit-ins, violent clashes with police or counter protesters, even storming of administration buildings. Classes and commencements have been cancelled. Presidents of some leading universities seemed unable to clearly denounce antisemitism or calls for genocide when asked to do so in Congressional hearings. Protesters walked out on Jerry Seinfeld’s commencement speech; for heaven’s sake – who walks out on Jerry Seinfeld?
Derek Thompson wrote a great piece for The Atlantic that tries to pinpoint the source problem: No One Knows What Universities Are For. The sub-title sums up his thesis: “Bureaucratic bloat has siphoned power away from instructors and researchers.” As I was nodding along with most of his points, I found myself also thinking: he might as well be talking about healthcare.
Mr. Thompson starts by citing a satirical piece in The Washington Post, in which Gary Smith, an economics professor at Pomona College, argues that, based on historical trends in the growth of administration staff, the college would be best served by gradually eliminating faculty and even students. The college’s endowment could then be used just to pay the administrators.
“And just like that,” Professor Smith says, “the college would be rid of two nuisances at once. Administrators could do what administrators do — hold meetings, codify rules, debate policy, give and attend workshops, and organize social events — without having to deal with whiny students and grumpy professors.”
It’s humorous, and yet it’s not.
The growth in universities’ administrative staff is widespread. Mr. Thompson acknowledges: “As the modern college has become more complex and multifarious, there are simply more jobs to do.” But that’s not always helping universities’ missions. Political scientist Benjamin Ginsberg, who published The Fall of the Faculty: The Rise of the All-Administrative University and Why It Matters in 2014, told Mr. Thompson: “I often ask myself, What do these people actually do? I think they spend much of their day living in an alternate universe called Meeting World.”
Similarly, Professor Smith told Mr., Thompson it’s all about empire building; as Mr. Thompson describes it: “Administrators are emotionally and financially rewarded if they can hire more people beneath them, and those administrators, in time, will want to increase their own status by hiring more people underneath them. Before long, a human pyramid of bureaucrats has formed to take on jobs of dubious utility.”
All of these administrators add to the well-known problem of runaway college tuition inflation, but a more pernicious problem Mr. Thompson points to is that “it siphons power away from instructors and researchers at institutions that are—theoretically—dedicated to instruction and research.”
The result, Mr. Thompson concludes is “goal ambiguity.” Gabriel Rossman, a sociologist at UCLA, told him: “The modern university now has so many different jobs to do that it can be hard to tell what its priorities are.” Mr. Thompson worries: “Any institution that finds itself promoting a thousand priorities at once may find it difficult to promote any one of them effectively. In a crisis, goal ambiguity may look like fecklessness or hypocrisy.”
So it is with healthcare.
Anyone who follows healthcare has seen some version of the chart that shows the growth in the number of administrators versus the number of physicians over the last 50 years; the former has skyrocketed, the latter has plodded along. One can – and I have in other forums – quibble over who is being counted as “administrators” in these charts, but the undeniable fact is that there are a huge number of people working in healthcare whose job isn’t, you know, to help patients.
It’s well documented that the U.S. healthcare system is by far the world’s most expensive healthcare system, and that we have, again by far, the highest percent spent on administrative expenses. Just as all the college administrators helps keep driving up college tuition, so do all those healthcare administrators keep healthcare spending high.
But, as Mr. Thompson worries about with universities, the bigger problem in healthcare is goal ambiguity.
Given that I ran a health technology conference for many years, I tend to run in a circle of people who have some ambition to get rich in health care. After all, billions of dollars of VC money have been dropped in lots of startups over the last decade, and a few prime examples have done very well. For example Jeff Tangey of Doximity, Glen Tullman of Livongo, Chaim Indig of Phressia and many others did fine when their companies IPOed in the late 2010s. But the truth is that many, many more have either started a health tech business that didn’t make it, or were foot soldiers in others that died along the way (Olive, Babylon, Pear, etc, etc). Which has been leading me lately to thinking about whether that’s the right approach to take if you want to make money in health care. Hint: it’s not.
There’s still tremendously little transparency about which health care organizations have what amount of money and what people earn. There is though one sector that by law has to publish information about revenue, profits, investments and executive compensation. That is the non-profit hospital/health system sector. Nonprofits are required to file Form 990 with the IRS that has that information and more on it. Having said that, most hospitals are frequently late in filing them, and file them in a very confusing way. The wonderful journalism organization ProPublica maintains a database of all 990 filings and it’s instructive to look around in it.
Some health systems make it relatively easy. UPMC, the huge western PA conglomerate files one 990 for the whole group. Others, not so much. I know that Providence, the huge west coast system, has overall revenue of $28bn but only because Fierce Healthcare told me. Had I tried to piece that together from its 990s, I’d have started with its Washington filing ($6bn), moved on to its Oregon filing (~$5bn) and then started getting confused..
Let’s say you wanted to easily figure out Advocate, the system that was the merger of the huge midwestern system with Atrium, the North Carolina-based one. Good luck. You can find Advocate but Atrium’s seems to be missing. Ditto for Carolinas Health, its previous name. There is a page calling itself Financial Information on the Atrium website, but it doesn’t have any, and tells you to go to a website set up for municipal bondholders. In fact I couldn’t find any evidence of the IRS auditing any large system, or fining them for non-compliance in filing.
The good news is that last year the North Carolina State Employees plan, i.e. a pissed off purchaser, dug into all the N. Carolina hospital systems and found out that Atrium’s CEO pay went up nearly five-fold over six years. But even the state had real trouble finding out the truth:
“It is important to understand that these figures are significant underestimates for three reasons. First, a legal loophole denies the public the right to see how much publicly owned hospitals reported paying their top executives on their tax filings. This failure of oversight hides the tax filings of more than three in 10 nonprofit hospitals in North Carolina, including Atrium and UNC Health. UNC Health did not answer a public records request for executive compensation data until February 13, 2023, two days before this report’s publication and almost three months after its receipt of the request. UNC Health’s system wide data is therefore not included in this report.”
So the very top dogs are doing well. At UPMC it turns out that seven made more than $3m including the CEO Jeff Romoff –the same one who forgot on 60 Minutes whether he made $6m or $7m. Turns out he didn’t have to remember that number for long as by 2021 he was making $12m.
But the munificence is spreading down the executive ladder. To demonstrate, let me introduce you to Tracey Beiriger Esq. There’s almost no information about Tracey on Linkedin or anywhere else on Google other than it appears he or she is an IP lawyer at UPMC. So why do I bring them up?
Because in 2021–the last year for which UPMC filed a 990 –Tracey was the 118th highest paid executive at UPMC and had the misfortune to only make $499,446.
Which means that 117 executives working at UPMC made more than $500,000. It’s a little tricky figuring out the similar numbers at Providence because of the multiple 990s in 2021 but there are 38 in Washington (not including CEO Rod Hochman who made $9m in 2020 and then vanished from the 2021 990!), 18 in Oregon and another 21 in Southern California. So call it 80+.
I bring this up because $500,000 is a pretty decent individual income. When I asked ChatGPT it estimated about 1.2 million Americans earned that much or more. Given the workforce is 167m, that puts those several hundred hospital execs way into the top 1%.
Now I have no objection to people earning good money. I’m sure they have all worked very hard for it. But if you look at these organizations, they do not seem to be spreading the wealth very far.
Last year UPMC was accused by unions of suppressing staff wages. There is yet to be an outcome from that complaint to the DOJ, but last week there was one from a formal class action complaint about Providence shortchanging employees by rounding down their pay to the nearest half-hour, even though they were clocking on and off by the minute. Providence was fined $200m which probably isn’t much split between 33,000 employees but at least indicates that their senior management acts just like any other aggressive business in terms of cutting costs on the backs of their employees. And it’s not just their employees. They also just got fined $137m for aggressively suing patients.
Which leads me to two final points.
The first is, is it more likely you’ll make that $500K+ in a hospital system or in a tech startup? Blake Madden at Hospitology has been tracking systems that have more than $1bn in revenue. He’s found 113 so far. Second bottom of the list is Atlanticare in NJ, which has 16 execs making more than $500K. Which by my wild guess means that the average system has about 50 employees making $500k+ which rounds up to something like 5,000 hospital execs making at least $500K and many of them are making a whole lot more.
Compare that to a successful health tech startup that actually makes it. Take Phreesia, a VC-backed start-up that went public in 2019 having started way back in 2007. (I know the year because CEO Chaim Indig launched at Health 2.0 in 2008. He was nice enough to let me buy some stock at the IPO and I made a few bucks). Chaim made $300K the year it went public and as CEO of a public company that’s bounced around at being worth between $1Bn and $4Bn, he made $750K last year. No one else made more than $500K. Now yes, he owned 4% of the company at the IPO and got awarded more stock. He is doing very well, but the point is that there were dozens of companies launching at Health 2.0 in 2008 and the vast majority don’t get close to an IPO or making any money for the founders, let alone the staff.
My conclusion is, it’s not a rational bet to go the health tech route if instead you can find a regional hospital chain and brown-nose your way up into the exec ranks!
The second point is more fundamental. Remember UPMC and its 117 execs making $500K+? What would a comparable government agency be paying out? I looked at the state of California salaries.There look to be about 50 state employees making more than $500k a year, almost all working for the state investment fund CALPERS. But the top paying one only makes $1.6m a year. I’m not saying that CALPERS should be paying out that much even if it is competing with Wall Street, after all members of the Senate only make $205,000 a year and the state could just put the whole pension into an S&P index fund. But what I am saying is that we should be thinking about paying our big non-profit systems similarly to government employees because they essentially are government employees.
Beckers posted UPMC’s payor mix last year. I highly suspect you’ll find something similar at almost every big system.
Medicare 48%
Medicaid 17%
UPMC as Insurer 11%–(60% of whom are Medicaid/Medicare patients)
Commercial, Self Pay, Other 24%
More than 70% of the money comes from the government, and the rest from the suckers who have to buy their insurance on the “open market”–which includes those buying via the ACA exchange, receiving government subsidies, and government employees.
So while these huge systems act like Fortune 100 companies and reward their executives accordingly, almost all the money comes from the taxpayer.
I wish I could say we are getting good value for it.
And yes, I didn’t even mention the for-profits and the big insurers, but that will have to wait for another day….
America is crazy about gambling. Once you had to gamble illegally with a bookie, or go to Atlantic City or Las Vegas; now 45 states – plus the District of Columbia, Puerto Rico, and the U.S. Virgin Islands – have state lotteries. Since the Supreme Court struck down PASPA, the federal ban on sports betting, 38 states – plus the D.C. and Puerto Rico – offer legal sports betting. I didn’t think we could get any crazier, until I saw last week that arcade chain Dave & Busters was going to allow betting on some of its games.
Honestly, healthcare may be the only industry upon which you can’t bet, and I’m beginning to think that’s too bad.
Dave & Busters are working with Lucra Sports, a “white-label gamification” technology company. “We’re thrilled to work with Lucra to bring this exciting new gaming platform to our customers,” said Simon Murray, SVP of Entertainment and Attractions at Dave and Buster’s. “This new partnership gives our loyalty members real-time, unrivaled gaming experiences, and reinforces our commitment to continuing to elevate our customer experience through innovative, cutting-edge technology.”
“Friendly competition really is a big fuel for our economy, whether you’re playing golf on Sunday with your buddies, or you’re going to play pickleball or video games or even cornhole at a tailgate. There’s so many ways that you can compete with friends and family, and I think gamifying that and digitizing all this offline stuff that’s happening is a massive opportunity,” Lucra CEO Dylan Robbins told CNN.
The companies are careful not to describe what they’re doing as gambling; they avoid terms like “bet” or “wager.” Michael Madding, Lucra’s chief operating officer, told The New York Times that the focus was on “skills-based” games, such as Skee-Ball or shooting baskets: i.e., “recreational activities for which the outcome is largely or entirely dependent on the knowledge, ability, strength, speed, endurance, intelligence of the participants and is subject to the control of those participants.”
This falls into a category I had never heard of: “social betting.” With social betting, there is no third party setting the odds, and more head-to-head competition with people you know. You’re not betting against the house; you’re challenging your friends. It is estimated by gaming research firm Eilers & Krejcik to be a $6b market, and its proponents argue that it is not subject to licenses & regulations that other gambling does.
Not everyone agrees. Marc Edelman, a law professor and the director of sports ethics at Baruch College in New York, told NYT:
If two people are competing against one another in Skee-Ball, presuming that there is nothing unusual done in the Skee-Ball game and physical skill is actually going to determine the winner, there is no problem. If I am taking a bet on whether someone else will win a Skee-Ball game, or whether someone else will achieve a particular score in Skee-Ball, if I myself am not engaged in a physical competition, that very likely would be seen as gambling.
Brett Abarbanel, executive director of the University of Nevada, Las Vegas, International Gaming Institute, went further, telling CNBC: “regardless of the legal classification of the activity as ‘not gambling’ vs. ‘gambling,’ this is an activity in which participants are risking something of value on an outcome that is uncertain. Therefore, there should be consumer protection measures in place for players, particularly when the target audience is skewed toward younger participants.”
Both Illinois and Ohio gambling authorities have already expressed concerns; Illinois State Rep. Daniel Didech, chairman of the Illinois House Gaming Committee,, told CNBC: “It is inappropriate for family-friendly arcades to facilitate unregulated gambling on their premises. These businesses simply do not have the ability to oversee gambling activity in a safe and responsible manner.”
There are also numerous “social sportsbooks,” including Flitt, PrizePicks, and Underdog Fantasy, that are blurring the line between online sports gambling and social betting, between fantasy leagues and plain old gambling. And they do it with users as young as 13 and with little or no state oversight. Keith Whyte, executive director of the National Council on Problem Gambling, told The Washington Post: “What a lot of these social gaming — social casinos, social sportsbooks — have found is that the regulators … either don’t feel like they have the jurisdiction or the time or energy to go after every single app that springs up.”
Whether we like it or not, people are going to bet. “People will place a bet on ‘Will we have rainfall?’, or ‘How much snow will a certain place get?’, or ‘What will be the first day of snowfall?’” sports policy expert John Holden, JD/PhD, associate professor at Oklahoma State University, told Fox 5 NY last year.
Demand for GLP-1 medications soared last year and shows no signs of stopping in 2024. Employers and health plans are understandably anxious about how long they should expect to pay for these pricey drugs. They’re itching for an easy off-ramp.
Some solutions are cropping up to pave the way. Many of them claim they can help patients reap the benefits of GLP-1s within a short time frame, and get them off the drugs within 12 months to save costs. But the data doesn’t support that promise. In fact, studies suggest some patients may need to stay on the drugs indefinitely to sustain outcomes while other patients may be able to discontinue the drugs and at least maintain their cardiometabolic risk reduction even if they cannot maintain all of their weight loss.
A better strategy to control costs is to more accurately pinpoint those who really need the drugs—and keep those who don’t off of them from the start. Of course, there will be times when deprescribing is appropriate, and we need to clinically support patients through that process. But one-size-fits-all solutions centered on medication as a silver bullet to obesity are only setting up patients and payers for failure. Similarly, those whose sole promise is to deprescribe, don’t follow the evidence.
Prescribing GLP-1s with the goal to deprescribe is foolhardy
GLP-1s treat obesity, but they don’t cure it. GLP-1 agonists increase the body’s own insulin production and slow the movement of food from the stomach to the small intestine. The drugs help people eat less by curbing cravings and boosting satiety. Studies show that once people go off semaglutide, the cravings come back in full force—and so does much of the weight.
While GLP-1 medications produce nearly miraculous outcomes in some people, they’re no quick fix. Obesity is a complex chronic disease. Drugs alone can’t solve for genetic predisposition, behaviors, mental and emotional components, social determinants of health, and other compounding elements that contribute to obesity. In the right circumstances, drugs can give people a solid leg up in better managing those contributing factors—but they’re not for everyone.
Keto is not a sustainable replacement for GLP-1s
Highly restrictive diets like the keto diet aren’t for everyone either. Keto requires a drastic reduction in carbohydrate intake, which can be difficult to maintain long-term. Not to mention, the high-fat content of keto diets can also lead to other health issues and isn’t conducive to tapering off of GLP-1 medications. Side effects from the drugs can make a high-fat diet difficult to tolerate.
It’s good to be wary of solutions that promise an off-ramp by way of highly restrictive diets. While a keto diet may help people lose weight in the short term, studies show that weight loss is rarely sustained over the long run and may be detrimental to overhaul health. The diet is associated with many complications that often lead to hospital admissions for dehydration, electrolyte disturbances, and hypoglycemia.
Triage the right care to the right people at the right time
Obesity’s complex nature requires a personalized approach to treatment that delivers the right care to the right people at the right time. That takes a whole care team of specialized providers—like registered dietitians, health coaches, and prescribing physicians to help people at various stages of the disease. And since obesity often occurs alongside other cardiometabolic conditions like hypertension, diabetes, COPD, and more, patients need the help of specialists who understand how those different conditions interact.
A decent amount of time in recent weeks has been spent hashing out the conflict over data. Who can access it? Who can use it for what? What do the new AI tools and analytics capabilities allow us to do? Of course the idea is that this is all about using data to improve patient care. Anyone who is anybody, from John Halamka at the Mayo Clinic down to the two guys with a dog in a garage building clinical workflows on ChatGPT, thinks they can improve the patient experience and improve outcomes at lower cost using AI.
But if we look at the recent changes to patient care, especially those brought on by digital health companies founded over the past decade and a half, the answer isn’t so clear. Several of those companies, whether they are trying to reinvent primary care (Oak, Iora, One Medical) or change the nature of diabetes care (Livongo, Vida, Virta et al) have now had decent numbers of users, and their impact is starting to be assessed.
There’s becoming a cottage industry of organizations looking at these interventions. Of course the companies concerned have their own studies, In some cases, several years worth. Their logic always goes something like “XY% of patients used our solution, most of them like it, and after they use it hospital admissions and ER visits go down, and clinical metrics get better”. But organizations like the Validation Institute, ICER, RAND and more recently the Peterson Health Technology Institute, have declared themselves neutral arbiters, and started conducting studies or meta-analyses of their own. (FD: I was for a brief period on the advisory board of the Validation Institute). In general the answers are that digital health solutions ain’t all they’re cracked up to be.
There is of course a longer history here. Since the 1970s policy wonks have been trying to figure out if new technologies in health care were cost effective. The discipline is called health technology assessment and even has its own journal and society, at a meeting of which in 1996 I gave a keynote about the impact of the internet on health care. I finished my talk by telling them that the internet would have little impact on health care and was mostly used for downloading clips of color videos and that I was going to show them one. I think the audience was relieved when I pulled up a video of Alan Shearer scoring for England against the Netherlands in Euro 96 rather than certain other videos the Internet was used for then (and now)!
But the point is that, particularly in the US, assessment of the cost effectiveness of new tech in health care has been a sideline. So much so that when the Congressional Office of Technology Assessment was closed by Gingrich’s Republicans in 1995, barely anyone noticed. In general, we’ve done clinical trials that were supposed to show if drugs worked, but we have never really bothered figuring out if they worked any better than drugs we already had, or if they were worth the vast increase in costs that tended to come with them. That doesn’t seem to be stopping Ozempic making Denmark rich.
Likewise, new surgical procedures get introduced and trialed long before anyone figures out if systematically we should be doing them or not. My favorite tale here is of general surgeon Eddie Jo Riddick who discovered some French surgeons doing laparoscopic gallbladder removal in the 1980s, and imported it to the US. He traveled around the country charging a pretty penny to teach other surgeons how to do it (and how to bill more for it than the standard open surgery technique). It’s not like there was some big NIH funded study behind this. Instead an entrepreneurial surgeon changed an entire very common procedure in under five years. The end of the story was that Riddick made so much money teaching surgeons how to do the “lap chole” that he retired and became a country & western singer.
Similarly in his very entertaining video, Eric Bricker points out that we do more than double the amount of imaging than is common in European countries. Back in 2008 Shannon Brownlee spent a good bit of her great book Overtreated explaining how the rate of imaging skyrocketed while there was no improvement in our diagnosis or outcomes rates. Shannon by the way declared defeat and also got out of health care, although she’s a potter not a country singer.
You can look at virtually any aspect of health care and find ineffective uses of technology that don’t appear to be cost effective, and yet they are widespread and paid for.
So why are the knives out for digital health specifically?
What if digital innovations could be the key to reducing the burden of cancer? CancerX was founded in 2023 as part of the Cancer Moonshot to achieve this goal. By uniting leading minds across industries such as technology, healthcare, science, and government, we are breaking down silos and leveraging digital innovation in the fight against cancer. With ambitious goals to cut the death rate from cancer by at least 50% and to improve the experience of people who are affected by cancer, digital innovation is critical.
As a public-private partnership co-hosted by Moffitt Cancer Center and the Digital Medicine Society, CancerX has created a unique ecosystem and community of public and private innovators. We are focused on fostering innovation and collaboration to accelerate the pace of digital tools to help patients across their entire cancer journey. We unite experts across industries and the government, leveraging the success of the Department for Health and Human Services’ InnovationX model; a public-private partnership approach that has driven breakthroughs in kidney care, Lyme disease and COVID-19. In collaboration with the Office of the National Coordinator for Health Information Technology (ONC) and the Office of the Assistant Secretary for Health (OASH), CancerX is in sync with the US government in our common Cancer Moonshot goals to boost government-wide engagement with industry muscle. This type of multidisciplinary partnership is necessary to change the landscape of cancer treatment and care.
At the one year anniversary of CancerX, we look back on a very fast pace in building up our three pillars of work, demonstrating the ways that digital innovation is contributing to fighting cancer:
Pre-Competitive Evidence Generation – A rolling series of multi-stakeholder initiatives to develop evidence, best practices, toolkits, and value models to drive the success of the mission.
Demonstration Projects – These implementation projects pilot novel, mission-aligned approaches to demonstrate their value and sustainability for scale to drive broad adoption.
Startup Accelerator – This program provides mentorship, education, and exposure to funding and clinical partnership opportunities to a start-up cohort aligned with the mission.
And we are already deeply underway with efforts across each of the three pillars.
The most interesting story I read in the past week doesn’t come from the more usual worlds of health and/or technology, but from sports. It’s not even really news, since it was announced last fall; it’s just that it wasn’t until last week that a U.S. publication (The New York Times) reported on it. In a nutshell, a Paris football (a.k.a. soccer) club is not charging its fans admission during the current season.
Since last week I wrote about medical debt in the U.S. healthcare system, you might guess where this is going. The club is Paris FC. Last November it announced:
For the first time in history, Paris FC is offering free tickets for all home matches at the Stade Charléty, starting from the 11 November until the end of the 2023-2024 season from its Bastia reception, in a bid to offer a new and innovative vision of football by welcoming as many people as possible.
The policy includes the men’s second division team and the woman’s first division team. The NYT article clarifies that fans supporting the visiting team might be charged a “nominal” fee, and that hospitality suites still pay market rates.
Pierre Ferracci, Chairman of Paris FC, said: “We are proud to support this ambitious and pioneering project, which goes beyond the simple framework of sport in terms of the values it conveys. We want to bring people together around our club and our teams, while committing ourselves with strength and conviction. In a context of difficult purchasing power, we are confident that a club can be an ideal tool for bringing together people of goodwill and engage with societal issues.”
Fabrice Herrault, Paris FC’s general manager told NYT: “It was a kind of marketing strategy. We have to be different to stand out in Greater Paris. It was a good opportunity to talk about Paris F.C.” The club estimates it might cost them $1 million.
It seems to be working. The NYT reports:
Months later, most metrics suggest the gambit has worked. Crowds are up by more than a third. Games held at times appealing for school-age children have been the best attended, indicating that the club is succeeding in attracting a younger demographic.
The idea is not entirely de novo; last spring Fortuna Düsseldorf, a German second division football club, announced it would offer free admission for at least three matches this season, with the intent that eventually all home matches. “We open up football for all. We will have free entry for league games in this stadium,” Alexander Jobst, the club’s chief executive, said at the time. “We call it ‘Fortuna for all’ which can and will lead us to a successful future.”
In a NYT interview last spring, Mr. Jobst added: “We think it is completely new. We were trying to think about how we could do the soccer business completely different from before.”
I’m always a sucker for efforts to think about a business completely different than before.
Fortuna has now had two of its three free matches, and Mr. Jobst told NYT last week: “Our average attendance has gone from 27,000 to 33,000. Our merchandise sales are up by 50 percent. Our sponsorship revenue is up 50 percent. We have reached a record number of club members.”
I am dipping into two rumbling controversies that probably only data nerds and chronic care management nerds care about, but as ever they reveal quite a bit about who has power and how the truth can get obfuscated in American health care.
This piece is about the data nerds but hopefully will help non-nerds understand why this matters. (You’ll have to wait for the one about diabetes & chronic care).
Think about data as a precious resource that drives economies, and then you’ll understand why there’s conflict.
A little history. Back in 1996 a law was passed that was supposed to make it easy to move your health insurance from employer to employer. It was called HIPAA (the first 3 letters stand for Health Insurance Portability–you didn’t know that, did you!). And no it didn’t help make insurance portable.
The “Accountability” (the 1st A, the second one stands for “Act”) part was basically a bunch of admin simplification standards for electronic forms insurers had been asking for. A bunch of privacy legislation got jammed in there too. One part of the “privacy” idea was that you, the patient, were supposed to be able to get a copy of your health data when you asked. As Regina Holliday pointed out in her art and story (73 cents), decades later you couldn’t.
Meanwhile, over the last 30 years America’s venerable community and parochial hospitals merged into large health systems, mostly to be able to stick it to insurers and employers on price. Blake Madden put out a chart of 91 health systems with more than $1bn in revenue this week and there are about 22 with over $10bn in revenue and a bunch more above $5bn. You don’t need me to remind you that many of those systems are guilty with extreme prejudice of monopolistic price gouging, screwing over their clinicians, suing poor people, managing huge hedge funds, and paying dozens of executives like they’re playing for the soon to be ex-Oakland A’s. A few got LA Dodgers’ style money. More than 15 years since Regina picked up her paintbrush to complain about her husband Fred’s treatment and the lack of access to his records, suffice it to say that many big health systems don’t engender much in the way of trust.
Meanwhile almost all of those systems, which already get 55-65% of their revenue from the taxpayer, received additional huge public subsidies to install electronic medical records which both pissed off their physicians and made several EMR vendors rich. One vendor, Epic Systems, became so wealthy that it has an office complex modeled after a theme park, including an 11,000 seat underground theater that looks like something from a 70’s sci-fi movie. Epic has also been criticized for monopolistic practices and related behavior, in particular limiting what its ex-employees could do and what its users could publicly complain about. Fortune’s Seth Joseph has been hammering away at them, to little avail as its software now manages 45%+ of all encounters with that number still increasing. (Northwell, Intermountain & UPMC are three huge health systems that recently tossed previous vendors to get on Epic).
Meanwhile some regulations did get passed about what was required from those who got those huge public subsidies and they have actually had some effect. The money from the 2009 HITECH act was spent mostly in the 2011-14 period and by the mid teens most hospitals and doctors had EMRs. There was a lot of talk about data exchange between providers but not much action. However, there were three major national networks set up, one mostly working with Epic and its clients called Carequality. Epic meanwhile had pretty successfully set up a client to client exchange called Care Everywhere (remember that).
Then, mostly driven by Joe Biden when he was VP, in 2016 Congress passed the 21st Century Cures Act which among many other things basically said that providers had to make data available in a modern format (i.e. via API). ONC, the bit of HHS that manages this stuff, eventually came up with some regulations and by the early 2020’s data access became real across a series of national networks. However, the access was restricted to data needed for “treatment” even though the law promised several other reasons to get health data.
As you might guess, a bunch of things then happened. First a series of VC-backed tech companies got created that basically extract data from hospital APIs in part via those national networks. These are commonly called “on-ramp” companies. Second, a bunch of companies started trying to use that data for a number of purposes, most ostensibly to deliver services to patients and play with their data outside those 91 big hospital systems.
Which brings us to the last couple of weeks. It became publicly known among the health data nerd crowd that one of the onramp companies, Particle Health, had been cut off from the Carequality Network and thus couldn’t provide its clients with data.
