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
What Scares Healthcare Like EVs Scare Detroit
By KMI BELLARD
I’m thinking about electric vehicles (EVs)…and healthcare.
Now, mind you, I don’t own an EV. I’m not seriously thinking about getting one (although if I’m still driving in the 2030’s I expect it will be in one). To be honest, I’m not really all that interested in EVs. But I am interested in disruption, so when Robinson Meyer warned in The New York Times “China’s Electric Vehicles Are Going to Hit Detroit Like a Wrecking Ball,” he had my attention. And when on the same day I also read that Apple was cancelling its decade-long effort to build an EV, I was definitely paying attention.
Remember when 3 years ago GM’s CEO Mary Barra announced GM was planning for an “all electric future” by 2035, completely phasing out internal combustion engines? Remember how excited we were when the Inflation Reduction Act passed in August 2022 with lots of credits and incentives for EVs? EVs sure seemed like our future.
Well, as Sam Becker wrote for the BBC: “Depending on how you look at it, the state of the US EV market is flourishing – or it’s stuck in neutral.” Ford, for example, had a great February, with huge increases in its EV and hybrid sales, but 90% of its sales remain conventional vehicles. Worse, it recently had to stop shipments of its F-150 Lightning electric pickup truck due to quality concerns. Frankly, EV is a money pit for Ford, costing it $4.7b last year – over $64,000 for every EV it sells.
GM also loses money on every EV it makes, although it hopes to make modest profits on them by 2025. Ms. Barra is still hoping GM will be all electric by 2035, but now hedges: “We will adjust based on where customer demand is. We will be led by the customer.”
In more bad news for EVs, Rivian has had more layoffs due to slow sales, and Fisker announced it is stopping work on EVs for now. Tesla, on the other hand, claims a 38% increase in deliveries for 2023, but more recently its stock has been hit by a decline in sales in China. It shouldn’t be surprising.
As Mr. Meyer points out:
The biggest threat to the Big Three comes from a new crop of Chinese automakers, especially BYD, which specialize in producing plug-in hybrid and fully electric vehicles. BYD’s growth is astounding: It sold three million electrified vehicles last year, more than any other company, and it now has enough production capacity in China to manufacture four million cars a year…A deluge of electric vehicles is coming.
He’s blunt about the threat BYD poses: “BYD’s cars deliver great value at prices that beat anything coming out of the West.”
The Biden Administration is not just sitting idly.
Continue reading…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.
Continue reading…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
- Cut prices
- Cut overall use of services
- Reduce only unnecessary services
- Replace higher priced services with lower priced ones
Number 3 or reducing only unnecessary services is the health policy wonks dream.
Continue reading…The 7 Decade History of ChatGPT
By MIKE MAGEE
Over the past year, the general popularization of AI orArtificial Intelligence has captured the world’s imagination. Of course, academicians often emphasize historical context. But entrepreneurs tend to agree with Thomas Jefferson who said, “I like dreams of the future better than the history of the past.”
This particular dream however is all about language, its standing and significance in human society. Throughout history, language has been a species accelerant, a secret power that has allowed us to dominate and rise quickly (for better or worse) to the position of “masters of the universe.”
Well before ChatGPT became a household phrase, there was LDT or the laryngeal descent theory. It professed that humans unique capacity for speech was the result of a voice box, or larynx, that is lower in the throat than other primates. This permitted the “throat shape, and motor control” to produce vowels that are the cornerstone of human speech. Speech – and therefore language arrival – was pegged to anatomical evolutionary changes dated at between 200,000 and 300,000 years ago.
That theory, as it turns out, had very little scientific evidence. And in 2019, a landmark study set about pushing the date of primate vocalization back to at least 3 to 5 million years ago. As scientists summarized it in three points: “First, even among primates, laryngeal descent is not uniquely human. Second, laryngeal descent is not required to produce contrasting formant patterns in vocalizations. Third, living nonhuman primates produce vocalizations with contrasting formant patterns.”
Language and speech in the academic world are complex fields that go beyond paleoanthropology and primatology. If you want to study speech science, you better have a working knowledge of “phonetics, anatomy, acoustics and human development” say the experts. You could add to this “syntax, lexicon, gesture, phonological representations, syllabic organization, speech perception, and neuromuscular control.”
Professor Paul Pettitt, who makes a living at the University of Oxford interpreting ancient rock paintings in Africa and beyond, sees the birth of civilization in multimodal language terms. He says, “There is now a great deal of support for the notion that symbolic creativity was part of our cognitive repertoire as we began dispersing from Africa. Google chair, Sundar Pichai, maintains a similarly expansive view when it comes to language. In his December 6, 2023, introduction of their ground breaking LLM (large language model), Gemini (a competitor of ChatGPT), he described the new product as “our largest and most capable AI model with natural image, audio and video understanding and mathematical reasoning.”
Continue reading…The 2024 Word of the Year: Missense
By MIKE MAGEE
Not surprisingly, my nominee for “word of the year” involves AI, and specifically “the language of human biology.”
As Eliezer Yudkowski, the founder of the Machine Intelligence Research Institute and coiner of the term “friendly AI” stated in Forbes:
“Anything that could give rise to smarter-than-human intelligence—in the form of Artificial Intelligence, brain-computer interfaces, or neuroscience-based human intelligence enhancement – wins hands down beyond contest as doing the most to change the world. Nothing else is even in the same league.”
Perhaps the simplest way to begin is to say that “missense” is a form of misspeak or expressing oneself in words “incorrectly or imperfectly.” But in the case of “missense”, the language is not made of words, where (for example) the meaning of a sentence would be disrupted by misspelling or choosing the wrong word.
Continue reading…The Optimism of Digital Health
By JONATHON FEIT
Journalists like being salty. Like many venture investors, we who are no longer “green” have finely tuned BS meters that like to rip off the sheen of a press release to reach the truthiness underneath. We ask, is this thing real? If I write about XYZ, will I be embarrassed next year to learn that it was the next Theranos?
Yet journalists must also be optimistic—a delicate balance: not so jaded that one becomes boooring, not so optimistic that one gets giddy at each flash of potential; and still enamored of the belief that every so often, something great will remake the present paradigm.
This delicately balanced worldview is equally endemic to entrepreneurs that stick around: Intel founder Andy Grove’s famously said “only the paranoid survive,” a view that is inherently nefarious since it points out that failure is always lurking nearby. Nevertheless, to venture is to look past the risk, as in, “Someone has to reach that tall summit someday—it may as well be our team!” Pragmatic entrepreneurs seek to do something else, too: deliver value for one’s clients / customers / partners / users in excess of what they pay—which makes they willing to pay in excess of what the thing or service costs to produce. We call that metric “profit,” and over the past several years, too many young companies, far afield of technology and healthcare, forgot about it.
Once upon a time, not too many years ago, during the very first year that my company (Beyond Lucid Technologies) turned a profit, I presented to a room of investors in San Francisco, and received a stunning reply when told that people were willing to pay us for our work. “But don’t you want to grow?” the investor asked.
Continue reading…The Money’s in the Wrong Place. How to Fund Primary Care
By MATTHEW HOLT
I was invited on the Health Tech Talk Show by Kat McDavitt and Lisa Bari and I kinda ranted (go to 37.16 here) about why we don’t have primary care, and where we should find the money to fix it. I finally got around to writing it up. It’s a rant but a rant with a point!
We’re spending way too much money on stuff that is the wrong thing.
30 years ago, I was taught that we were going to have universal health care reform. And then we were going to have capitated at-risk entities. then below that, you have all these tech enabled services, which are going to make all this stuff work and it’s all going to be great, right?
Go back, read your Advisory Board Company reports from 1994. It says all this.
But (deep breath here) — partly as a consequence of Obamacare & partly as a consequence of inertia in the system, and a lot because most people in health care actually work in public utilities or semi-public utilities because half the money comes from the government — instead of that, what we’ve got is this whole series of massive predominantly non-profit organizations which have made a fortune in the last decades. And they’ve stuck it all in hedge funds and now a bunch of them literally run actual hedge funds.
Ascension runs a hedge fund. They’ve got, depending who you believe, somewhere between 18 billion and 40 billion in their hedge fund. But even teeny guys are at it. There’s a hospital system in New Jersey called RWJ Barnabas. It’s around a 20 hospital system, with about $6 billion in revenue, and more than $2.5 billion in investments. I went and looked at their 990 (the tax form non-profits have to file). In a system like that–not a big player in the national scheme–how many people would you guess make more than a million dollars a year?
They actually put it on their 990 and they hope no one reads it, and no one does. The answer is 28 people – and another 14 make more than $750K a year. I don’t know who the 28th person is but they must be doing really important stuff to be paid a million dollars a year. Their executive compensation is more than the payroll of the Oakland A’s.
On the one hand, you have these organizations which are professing to be the health system serving the community, with their mission statements and all the worthy people on their boards, and on the other they literally paying millions to their management teams.
Go look at any one of these small regional hospital systems. The 990s are stuffed with people who, if they’re not making a million, they’re making $750,000. The CEOs are all making $2m up to $10 million in some cases more. But it also goes down a long way. It’s like the 1980s scene with Michael Douglas as Gordon Gecko in Wall Street criticizing all the 35 vice presidents in whatever that company was all making $200K a year.
Meanwhile, these are the same organizations that appear in the news frequently for setting debt collectors onto their incredibly poor patients who owe them thousands or sometimes just hundreds of dollars. In one case ProPublica dug up it was their own employees who owed them for hospital bills they couldn’t pay and their employer was docking their wages — from $12 an hour employees.
Continue reading…Can Generative AI Improve Health Care Relationships?
By MIKE MAGEE
“What exactly does it mean to augment clinical judgement…?”
That’s the question that Stanford Law professor, Michelle Mello, asked in the second paragraph of a May, 2023 article in JAMA exploring the medical legal boundaries of large language model (LLM) generative AI.
This cogent question triggered unease among the nation’s academic and clinical medical leaders who live in constant fear of being financially (and more important, psychically) assaulted for harming patients who have entrusted themselves to their care.
That prescient article came out just one month before news leaked about a revolutionary new generative AI offering from Google called Genesis. And that lit a fire.
Mark Minevich, a “highly regarded and trusted Digital Cognitive Strategist,” writing in a December issue of Forbes, was knee deep in the issue writing, “Hailed as a potential game-changer across industries, Gemini combines data types like never before to unlock new possibilities in machine learning… Its multimodal nature builds on, yet goes far beyond, predecessors like GPT-3.5 and GPT-4 in its ability to understand our complex world dynamically.”
Health professionals have been negotiating this space (information exchange with their patients) for roughly a half century now. Health consumerism emerged as a force in the late seventies. Within a decade, the patient-physician relationship was rapidly evolving, not just in the United States, but across most democratic societies.
That previous “doctor says – patient does” relationship moved rapidly toward a mutual partnership fueled by health information empowerment. The best patient was now an educated patient. Paternalism must give way to partnership. Teams over individuals, and mutual decision making. Emancipation led to empowerment, which meant information engagement.
In the early days of information exchange, patients literally would appear with clippings from magazines and newspapers (and occasionally the National Inquirer) and present them to their doctors with the open ended question, “What do you think of this?”
But by 2006, when I presented a mega trend analysis to the AMA President’s Forum, the transformative power of the Internet, a globally distributed information system with extraordinary reach and penetration armed now with the capacity to encourage and facilitate personalized research, was fully evident.
Coincident with these new emerging technologies, long hospital length of stays (and with them in-house specialty consults with chart summary reports) were now infrequently-used methods of medical staff continuous education. Instead, “reputable clinical practice guidelines represented evidence-based practice” and these were incorporated into a vast array of “physician-assist” products making smart phones indispensable to the day-to-day provision of care.
At the same time, a several decade struggle to define policy around patient privacy and fund the development of medical records ensued, eventually spawning bureaucratic HIPPA regulations in its wake.
The emergence of generative AI, and new products like Genesis, whose endpoints are remarkably unclear and disputed even among the specialized coding engineers who are unleashing the force, have created a reality where (at best) health professionals are struggling just to keep up with their most motivated (and often mostly complexly ill) patients. Needless to say, the Covid based health crisis and human isolation it provoked, have only made matters worse.
Continue reading…
