Category: Health Tech

Where’s Our Infrastructure Plan B?

Apr 3, 2024

By KMI BELLARD

I’ve been thinking a lot about infrastructure. In particular, what to do when it fails.

There was, of course, the tragic collapse of Baltimore’s Francis Scott Key Bridge. Watching the video – and, honestly, what were the odds there’d be video? — is like watching a disaster movie, the bridge crumbling slowly but unstoppably. The bridge had been around for almost fifty years, withstanding over 11 million vehicles crossing it each year. All it took to knock it down was one container ship.

Container ships passed under it every day of its existence; the Port of Baltimore is one of the busiest in the country. In retrospect, it seems almost inevitable that the bridge would collapse; certainly one of those ships had to hit it eventually. The thing is, it wasn’t inevitable; it was a reflection of the fact that the world the bridge was designed for is not our world.

Transportation Secretary Pete Buttigieg noted: “What we do know is a bridge like this one, completed in the 1970s, was simply not made to withstand a direct impact on a critical support pier from a vessel that weighs about 200 million pounds—orders of magnitude bigger than cargo ships that were in service in that region at the time that the bridge was first built,”

When the bridge was designed in the early 1970’s, container ships had a capacity of around 3000 TEUs (20-foot equivalent foot units, a measure of shipping containers). The ship that hit the bridge was carrying nearly three times that amount – and there are container ships that can carry over 20,000 TEUs. The New York Times estimated that the force of the ship hitting the bridge was equivalent to a rocket launch.

“It’s at a scale of more energy than you can really get your mind around,” Ben Schafer, a professor of civil and systems engineering at Johns Hopkins, told NYT.

Nii Attoh-Okine, a professor of engineering at the University of Maryland, added: “Depending on the size of the container ship, the bridge doesn’t have any chance,” but Sherif El-Tawil, an engineering professor at the University of Michigan, disagreed, claiming: “If this bridge had been designed to current standards, it would have survived.” The key feature missing were protective systems built around the bases of the bridge, as have been installed on some other bridges.

We shouldn’t expect that this was a freak occurrence, unlikely to be repeated. An analysis by The Wall Street Journal identified at least eight similar bridges also at risk, but pointed out what is always the problem with infrastructure: “The upgrades are expensive.”

Lest anyone forget, America’s latest infrastructure report card rated our overall infrastructure a “C-,” with bridges getting a “C” (in other words, other infrastructure is even worse).

What’s the plan?

——–

Then here’s an infrastructure story that threw me even more.

Optum: Testing Time for an Invisible Empire

Apr 2, 2024

By JEFF GOLDSMITH

Years ago, the largest living thing in the world was thought to be the blue whale. Then someone discovered that the largest living thing in the world was actually the 106 acre, 47 thousand tree Pando aspen grove in central Utah, which genetic testing revealed to be a single organism. With its enormous network of underground roots and symbiotic relationship with a vast ecosystem of fungi, that aspen grove is a great metaphor for UnitedHealth Group. United, whose revenues amount to more than 8% of the US health system, is the largest healthcare enterprise in the world. The root system of UHG is a vast and poorly understood subsidiary called Optum.

At $226 billion annual revenues, Optum is the largest healthcare business in the US that no-one knows anything about. Optum by itself has revenues that are a little less than 5% of total US healthcare spending. An ill-starred Optum subsidiary, Change Healthcare, which suffered a catastrophic $100 billion cyberattack on February 21, 2024 that put most of the US health system on life support, put its parent company Optum in the headlines.

But Change Healthcare is a tiny (less than 2%) piece of this vast new (less than twenty years old) healthcare enterprise. If it were freestanding, Optum would be the 12^th largest company in the US: identical in size to Costco and slightly larger than Microsoft. Optum’s topline revenues are almost four times larger than HCA, the nation’s largest hospital company, one third larger than the entirety of Elevance, United’s most significant health plan competitor, and more than double the size of Kaiser Permanente.

If there really were economies of scale in healthcare, they would mean that care was of demonstrably better value provided by vast enterprises like Optum/United than in more fragmented, smaller, or less integrated alternatives. It is not clear that it is. If value does not reach patients and physicians in ways that matter to them—in better, less expensive, and more responsive care, in improved health or in a less hassled and more fulfilling practice—ultimately the care system as well as United will suffer.

What is Optum?

Optum is a diversified health services, financing and business intelligence subsidiary of aptly named UnitedHealth Group. It provides health services, purchases drugs on behalf of United’s health plan, and provides consulting, logistical support (e.g. claims management and IT enablement) and business intelligence services to United’s health plan business, as well as to United’s competitors.

Of Optum’s $226 billion topline, $136.4 billion (or 60% of its total revenues) represent clinical and business services provided to United’s Health Insurance business. Corporate UnitedHealth Group, Optum included, generated $29 billion in cashflow in 23, and $118.3 billion since 2019. United channeled almost $52 billion of that cash into buying health-related businesses, nearly all of which end up housed inside Optum.

For most of the past decade, Optum has been driving force of incremental profit growth for United. Optum’s operating profits grew from $6.7 billion in 2017 (34% of UHG total) to $15.9 billion in 2023 (55% of total). However, the two most profitable pieces of Optum by operating margin—Optum Health and Optum Insight—have seen their operating margins fall by one third in just four years. The slowing of Optum’s profitability is a huge challenge for United.

Gaul Had Three Parts, So Does Optum

The largest and least profitable (by percent margin) piece of Optum is its giant Pharmacy Benefit Manager, Optum Rx, the third largest PBM in the US.

Ami Parekh, Included Health

Mar 28, 2024

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

WEBINAR: The How-To of Healthcare Analytics: Implementation to Activation

Mar 28, 2024

Microplastics, Major Problem

Mar 19, 2024

By KIM BELLARD

It’s been almost four years since I first wrote about microplastics; long story short, they’re everywhere. In the ground, in the oceans (even at the very bottom), in the atmosphere. More to the point, they’re in the air you breathe and in the food you eat. They’re in you, and no one thinks that is a good thing. But we’re only starting to understand the harm they cause.

The Washington Post recently reported:

Scientists have found microplastics — or their tinier cousins, nanoplastics — embedded in the human placenta, in blood, in the heart and in the liver and bowels. In one recent study, microplastics were found in every single one of 62 placentas studied; in another, they were found in every artery studied.

One 2019 study estimated “annual microplastics consumption ranges from 39,000 to 52,000 particles depending on age and sex. These estimates increase to 74,000 and 121,000 when inhalation is considered.” A more recent study estimated that a single liter of bottled water may include 370,000 nanoplastic particles. “It’s sobering at the very least, if not very concerning,” Pankaj Pasricha, MD, MBBS, chair of the department of medicine at the Mayo Clinic, who was not involved with the new research, told Health.

But we still don’t have a good sense of exactly what harm they cause. “I hate to say it, but we’re still at the beginning,” Phoebe Stapleton,a professor of pharmacology and toxicology at Rutgers University, told WaPo.

A new study sheds some light – and it is not good. It found that people with microplastics in their heart were at higher risk of heart attack, stroke, and death. The researchers looked at the carotid plaque from patients who were having it removed and found 60% of them had microplastics and/or nanoplastics. They followed patients for three years to determine the impacts on patients’ health and found higher morbidity/mortality.

“We are reasonably sure that the problem comes from a frailty of the plaque itself,” says Giuseppe Paolisso, a professor of internal medicine and geriatrics at the University of Campania Luigi Vanvitelli in Naples, Italy, and one of the study’s authors. “We suppose due to the fact that the plaques with microplastics and nanoplastics have a higher degree of inflammation, this kind of plaque can be broken more easily; and once they are broken, they can go into the blood streams.”

“This is pivotal,” Philip Landrigan, an epidemiologist and professor of biology at Boston College, who was not involved in the study, wrote in an accompanying opinion piece. “For so long, people have been saying these things are in our bodies, but we don’t know what they do.” He went on to add: “If they can get into the heart, why not into the brain, the nervous system? What about the impacts on dementia or other chronic neurological diseases?”

Scary stuff.

If that isn’t scary enough, an article last year in PNAS found: “Indeed, it turns out that a host of potentially infectious disease agents can live on microplastics, including parasites, bacteria, fungi, and viruses.” Even worse: “Beyond their potential for direct delivery of infectious agents, there’s also growing evidence that microplastics can alter the conditions for disease transmission. That could mean exacerbating existing threats by fostering resistant pathogens and modifying immune responses to leave hosts more susceptible.”

However much you’re worrying about microplastics, it’s not enough.

The Latest AI Craze: Ambient Scribing

Mar 18, 2024

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.

Roy Schoenberg, CEO, AmWell

Mar 11, 2024

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

Mar 6, 2024

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.

Fee-For-Service: Predominant, Winning & Stupid

Mar 4, 2024

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.