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Category: Matthew Holt

Matthew Holt is the founder and publisher of The Health Care Blog and still writes regularly for the site and hosts the #THCBGang and #HealthInTwoPoint00 video shows/podcasts. He was co-founder of the Health 2.0 Conference and now also does advisory work mostly for health tech startups at his consulting firm SMACK.health.

Blue Shield CA, CVS Caremark & the mystery of the extra $116, with 2 UPDATES (at the end)

By MATTHEW HOLT

Today we’re going to have fun with show and tell. I’m going to show you how a little corner of American health care is making my life as a consumer worse and more expensive–hopefully someone can tell me why.

The cast members are: me, my MD, the (sort of) independent pharmacy that delivers, Alto, and my insurer Blue Shield of California and its PBM CVS Caremark, which also owns a mail order pharmacy.

The brief backstory: For some years my doctor has been whining about my high cholesterol, and a few years back I went on a statin called Rosuvastatin Calcium. Older readers may remember Jean Luc Picard himself advertising the branded version Crestor, but it’s been off patent for about a decade. About 50 million Americans now take a statin, almost all of them a generic, including many 60 year old males like me. My cholesterol has come down, but my MD told me it could come down more, so a few months ago we boosted the dose to 40mg from 20mg. 

Until recently I’d been insured by BCBS Massachusetts, and you might recall a little over a year ago I wrote a piece on THCB about the fun and games to be had trying to figure out what their PBM (CVS Caremark) was doing with the pricing of my kid’s ADHD medication. But they’d never messed with my medication as my statins are cheap. At least I thought they were. In fact as recently as April last year, they were free. You can see the price from the delivery from Alto Pharmacy below.

How BCBS Mass came up with $0.00 as the price I pay I don’t know, but presumably they think it’s a good thing to have me on statins in the hope I don’t have an (expensive) heart attack instead.

Then for some reason my price for the statin later the same year went up to $23. No longer $0 but at $8 a month not really worth making a fuss about.

At the end of the year, COBRA expired and I went to buy insurance on the California exchange. And in order to keep access to my family’s doctors at One Medical, I chose the only plan they were in, the Blue Shield of California HMO.

My next 90 day supply was the first one which went from 20mg to 40mg, but it’s still a common generic. Blue Shield of California also uses CVS Caremark (although it’s been talking a good game of ditching CVS Caremark and setting up its own PBM) and the cost at Alto barely budged. Now it was $28.

What happened next: So all was going normally until late last week when my next 90 supply was delivered. Except it wasn’t. Alto delivered me a 30 day supply and charged me $19.

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What Walmart said & What Walmart Did: Not the same thing

Walmart surprised us all and changed its mind about primary care yesterday. It’s out.

Because so few people have seen it I want to show what Walmart‘s head of health care said just 18 months ago (Nov 2022). Today they are finally killing off the 6th different strategy they’ve had (maybe it was 4). I guess (unlike CVS & Walgreens) they don’t have to write down investment in Oak Street or VillageCare, but they never worked out that primary care is only profitable if it’s 1) very low overhead 2) a loss leader for more expensive services (as most hospitals run it) or 3) getting a cut of the $$ for stopping more expensive services (Oak Street, Chenmed, Kaiser).

At HLTH 18 months ago I interviewed Cheryl Pegus who was then running Walmart and I asked why anyone should trust them, given how often they changed. Sachin H. Jain, MD, MBA Jain answered for her and said, “because they have Cheryl!” — Cheryl then said, “at Walmart the commitment to delivering health care is bigger than anywhere I have ever worked”. “Right now I have 35 centers in 3 years I’ll have 100s”  see 11.00 onwards in the video below, although the whole thing is worth a look

Cheryl though left Walmart THE NEXT WEEK!

What’s behind all these assessments of digital health?

By MATTHEW HOLT

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?

And they are out. ICER helped kill the digital therapeutics movement by declaring several solutions for opiod use disorder ineffective, and letting several health plans use that as an excuse to not pay for them. Now Peterson, which is using a framework from ICER, has basically said the same thing about diabetes solutions and is moving on to MSK, with presumably more categories to be debunked on deck.

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Ami Parekh, Included Health

Ami Parekh is the Chief Health Officer of Included Health. It provides navigation services & expert medical opinions (the original Grand Rounds) and virtual care (the old Doctors on Demand) and it then bought a smaller company called Included Health. Ami explains why navigation exists (clue: health plans have been terrible at it) and how it works, and what money it saves on trend (about 2%). They’re also reaching out asking about people’s “Healthy days” and are tracking that metric, and giving people more healthy days–Matthew Holt

The Latest AI Craze: Ambient Scribing

By MATTHEW HOLT

Okay, I can’t do it any longer. As much as I tried to resist, it is time to write about ambient scribing. But I’m going to do it in a slightly odd way

If you have met me, you know that I have a strange English-American accent, and I speak in a garbled manner. Yet I’m using the inbuilt voice recognition that Google supplies to write this story now.

Side note: I dictated this whole thing on my phone while watching my kids water polo game, which has a fair amount of background noise. And I think you’ll be modestly amused about how terrible the original transcript was. But then I put that entire mess of a text  into ChatGPT and told it to fix the mistakes. it did an incredible job and the output required surprisingly little editing.

Now, it’s not perfect, but it’s a lot better than it used to be, and that is due to a couple of things. One is the vast improvement in acoustic recording, and the second is the combination of Natural Language Processing and artificial intelligence.

Which brings us to ambient listening now. It’s very common in all the applications we use in business, like Zoom and others like transcript creation from videos on Youtube. Of course, we have had something similar in the medical business for many years, particularly in terms of radiology and voice recognition. It has only been in the last few years that transcribing the toughest job of all–the clinical encounter–has gotten easier.

The problem is that doctors and other professionals are forced to write up the notes and history of all that has happened with their patients. The introduction of electronic medical records made this a major pain point. Doctors used to take notes mostly in shorthand, leaving the abstraction of these notes for coding and billing purposes to be done by some poor sap in the basement of the hospital.

Alternatively in the past, doctors used to dictate and then send tapes or voice files off to parts unknown, but then would have to get those notes back and put them into the record. Since the 2010s, when most American health care moved towards using  electronic records, most clinicians have had to type their notes. And this was a big problem for many of them. It has led to a lot of grumpy doctors not only typing in the exam room and ignoring their patients, but also having to type up their notes later in the day. And of course, that’s a major contributor to burnout.

To some extent, the issue of having to type has been mitigated by medical scribes–actual human beings wandering around behind doctors pushing a laptop on wheels and typing up everything that was said by doctors and their patients. And there have been other experiments. Augmedix started off using Google Glass, allowing scribes in remote locations like Bangladesh to listen and type directly into the EMR.

But the real breakthrough has been in the last few years. Companies like Suki, Abridge, and the late Robin started to promise doctors that they could capture the ambient conversation and turn it into proper SOAP notes. The biggest splash was made by the biggest dictation company, Nuance, which in the middle of this transformation got bought by one of the tech titans, Microsoft. Six years ago, they had a demonstration at HIMSS showing that ambient scribing technology was viable. I attended it, and I’m pretty sure that it was faked. Five years ago, I also used Abridge’s tool to try to capture a conversation I had with my doctor — at that time, they were offering a consumer-facing tool – and it was pretty dreadful.

Fast forward to today, and there are a bunch of companies with what seem to be really very good products.

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Roy Schoenberg, CEO, AmWell

AmWell is a now veteran telehealth platform. It used its IPO money to re-architect its entire platform and add companies like Conversa AI chat service and mental health service Silvercloud, as well as integrating deeply with EMRs & more. That change hit its earnings….so can they recover? Roy Schoenberg, CEO, tells you why this is good for AmWell and what happens next.-Matthew Holt

Fee-For-Service: Predominant, Winning & Stupid

By MATTHEW HOLT

In recent days and weeks, there have been three stories that have really brought home to me the inanity of how we run our health care system. Spoiler alert, they have the commonality that they all are made problematic by payment per individual transaction—better known as fee-for-service.

First, several health insurers who sold their reputation to Wall Street as being wizards at understanding how doctors and patients behave had the curtain pulled back to reveal the man pulling the levers was missing a dashboard or dial or three. It happened to United, Humana and more, but I’ll focus on Agilon because of this lovely quote:

“During 2023, agilon health experienced an increase in medical expenses attributable to higher-than-expected specialist visits, Part B drugs, outpatient surgeries, and supplemental benefits, partially offset by lower hospital medical admissions. While a number of programs have been launched to improve visibility, balance risk-sharing and enhance predictability of results, management has assumed higher costs will continue into 2024,” the company said in a statement

Translation: we pay our providers after the fact on a per transaction basis and we have no real idea what the patients we cover are going to get. You may have thought that these sharp as tacks Medicare Advantage plans had pushed all the risk of increased utilization down to their provider groups, but as I’ve be saying for a long time, even the most advanced only have about 30% of their lives in capitation or full risk groups, and the rest of the time they are whistling it in. They don’t really know much about what is happening out in fee-for-service land. Yet it is what they have decided to deal with.

The second story is a particularly unpleasant tale of provider greed and bad behavior, which I was alerted to by the wonderful sleuthing of former New Jersey state assistant director of heath benefits Chris Deacon, who is one of the best follows there is on Linkedin.

The bad actor is quasi-state owned UCHealth, a big Colorado “non-profit” health system. They have managed to hide their 990s very well so it’s a little hard to decipher how much money they have or how many of their employees make millions a year, but it made an operating profit last year of $350m, it has $5 BILLION in its hedge fund, and its CEO (I think) made $8m. It hasn’t filed a 990 for years as far as I can tell. Which is probably illegal. The only one on Propublica is from a teeny subsidiary with $5m in revenue.

So what have they been doing? Some excellent reporting from John Ingold and Chris Vanderveen at the Colorado Sun revealed that UC has been getting collection agencies to sue patients who owe them trivial amounts of money, and hiding the fact that UC is the actor behind the suit. So they are transparent on how much very poor people allegedly owe them, and come after them very aggressively, but not too transparent on how their “charity care” works. The tales here are awful. Little old ladies being forced to sell their engagement rings, and uninsured immigrants being taken to the ER against their will and given a total runaround on costs until they end up in court. Plenty more stories like it in a Reddit group reacting to the article.

What’s the end story here? UC Health gets a measly $5m (or a share of it) a year from all these lawsuits which is less than the CEO makes (according to a Reddit group—with no 990 it’s a little hard to tell).

Yes, all these patients are being billed or misbilled for individual procedures and visits. It makes people terrified of going to the doctor or hospital, and no rational health services researcher thinks that charging people a fee to use health care encourages appropriate use of care. Last month Jeff Goldsmith had an excellent article on THCB explaining why not.

Of course it goes without saying that if these patients were covered by some kind of a capitation, subscription or annual payment none of this cruelty or waste motion would be happening.

The final example is still going on.

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Lucienne Ide, Rimidi

Lucie Ide is a physician running Rimidi, a company helping health systems manage patients with chronic conditions. They extract data from EMRs and transfer this into workflow for care teams, predominantly at ACOs and other risk bearing organizations, but also increasingly with FFS groups using RPM to manage those patients. Their current moves are to continue to extend from their first patient group (diabetes) to all types of chronic patients. We chatted about her company, but also about the wider move (or lack of it) to better manage patients in the US system–Matthew Holt

So what can we do about health care costs?

By MATTHEW HOLT

Last week Jeff Goldsmith wrote a great article in part explaining why health care costs in the US went up so much between 1965 and 2010. He also pointed out that health care has been the same portion of GDP for more than a decade (although we haven’t had a major recession in that time other than the Covid 2020 blip when it went up to 19%). However, it’s worth remembering that we are spending 17.3% of GDP while the other main OECD countries are spending 11-12%. Now it’s true that the US has lots of social problems that show up in heath spending and also that those other countries probably spend more on social services, but it’s also clear that we don’t actually deliver a lot more in services. In fact probably the most famous health economics paper of the last 50 years was Anderson & Rienhardt’s “It’s the Prices, Stupid”, which shows we just pay more for the same things. Anyone who’s looked at the price of Ozempic in the US versus in Denmark knows that’s true.

But suspend disbelief and say we actually wanted to do something about health care costs, what would we do?

There are 4 ways to cut health care costs

  1. Cut prices
  2. Cut overall use of services
  3. Reduce only unnecessary services
  4. Replace higher priced services with lower priced ones

Number 3 or reducing only unnecessary services is the health policy wonks dream.

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