Andy Chu is the SVP of Product and Technology at Providence’s innovation unit. They have launched four companies in recent years (Wildlfower, Xealth, Dexcare and just this week Praia). Andy talked a little about Praia, and more about both how Providence comes up with solutions and gets them through their process, and also the inverse, how his group helps new companies get into Providence (not easy!). I also asked him about how big the impact of those hospital innovation groups actually is. And how AI will roll out. Also not easy!–Matthew Holt
Where’s Our Infrastructure Plan B?
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.
Continue reading…Optum: Testing Time for an Invisible Empire
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 12th 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.
Continue reading…Bevey Miner, Consensus Cloud Solutions
Bevey Miner runs health care for Consensus Cloud Solutions. I’ve known Bevey since she was at Allscripts in the 2000s where she was one of the first building online prescribing. She’s been at lots of places and is now at Consensus which is taking unstructured data via cloud fax and assessing it, structuring it and delivering it–especially to places like skilled nursing facilities. Bevey calls that data at the “outer circles” and we were talking at a time when a lot of electronic communication was down because of the Change Healthcare hack when a lot of it wasn’t flowing. Bevey tells us about what all that non electronic data is, and how to convert it–Matthew Holt
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
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Microplastics, Major Problem
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.
Continue reading…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.
Continue reading…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
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…
