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Category: The Business of Health Care

Matthew’s health care tidbits: My retina & what it tells us about primary care

Each time I send out the THCB Reader, our newsletter that summarizes the best of THCB (Sign up here!) I include a brief tidbits section. Then I had the brainwave to add them to the blog. They’re short and usually not too sweet! –Matthew Holt

I had a little scare the other night. I was driving home from a weekend in the mountains and I asked my wife if she saw that flashing light. No it wasn’t the cops, and no she hadn’t seen it. Turns out that I had a bright flash if I moved my eye a certain way. Oh, well I assumed I was tired and a good night’s sleep would fix it.

Next morning the flash was still there when I looked quickly to the left and a few weird floaters had appeared. I headed to the Mayo Clinic website and it looked to me like I had a detaching retina. I got on the urgent visit video with One Medical. The NP who answered said it sounded like I might have retina problems and I should get it checked by my ophthalmologist. But my eyesight has always been great (other than me needing reading glasses in my old age) and I haven’t got one. So who, I asked, do you recommend?

Here we fall into the crux of the problem. One Medical is an excellent primary care service. So good that Amazon bought it for $3bn. But it’s not a multi-specialty group nor is it a system like Kaiser. The answer was, “we don’t really recommend anyone–that’s not how it works.” The NP ended up looking up ophthalmologists near me & sent me a name as a referral in their app. But that’s not a link to anything and it wasn’t one chosen through some analytical process of seeking quality excellence.

I looked up MarinHealth (my local hospital)’s website and searched ophthalmology. That referred name was on it. I called. The doctor was out this week. They gave me another name. That doctor’s office gave me another name and that third office could see me that same day. I felt some pressure to see them right away as in the case of a detached retina Mayo says “ Contacting an eye specialist (ophthalmologist) right away can help save your vision”. The good news is having spent a couple of hours at the ophthalmologist’s my retina needs watchful waiting not surgery.

But the bad news is that for me, like 90% of Americans, there’s no easy way to get referred into a trustworthy system for specialty care. This can be even worse. My friend Sarah McDonald explains in her book The Cancer Channel how, after being diagnosed with a rare incurable cancer by a head & neck surgeon, the all encompassing support she received was to be given the number of a specialist at UCSF who couldn’t even talk to her for 3 weeks.

Mike Magee talks about the role of the health care system being to reduce patients’ “fear and worry”. Our lack of a specialty care referral system, especially when potentially serious and urgent care is on the line, is a big reason why there is so much fear and worry. I wish I had a concierge advocacy system like Included Health or Transcarent which could get me to the right place and work with me through the experience. But like most Americans at the time I need reassurance the most I’m calling a list of phone numbers hoping someone can see me.

We have primary care, we have specialty care. But we don’t have a system that cares.

My family’s disastrous experience with a growth-driven long-term care company

by “E-PATIENT” DAVE DEBRONKART

Continuing THCB’s occasional series on actual experiences with the health care system. This is the secondin a short series about a patient and family experience from one of America’s leading ePatients.

I’ve been blogging recently about what happens in American healthcare when predatory investor-driven companies start moving into care industries because of, as Pro Publica puts it, “easy money and a lack of regulation.”  The first two posts were about recent articles in The New Yorker on companies that are more interested in sales and growth than caring.

My mother died in October. What we haven’t disclosed until now is that it happened in horror story #3: she passed after a single week of “respite care” provided by the local outlet of a growing chain of assisted living facilities.

Our mom, a 93 year old cardiac patient, had been in the hospital for ten days, and was discharged to go “home with assistance” because she was steadily improving. The respite facility’s director, an RN, evaluated Mom in the hospital, declared her appropriate for their respite care service, and took payment in full (in advance) for two weeks.

Mom’s primary caregivers were, as usual, the family’s daughters (my sisters), who had been with her throughout the hospitalization (and for countless hours every year). Mom and they discussed the discharge plans at length. Believing that a good respite care facility was an excellent bridge for continued progress between hospital and returning home, they purchased a two week stay after discharge. An important part of the decision was the website’s promise of “Strengthening during physical therapy.”

We soon found out that the facilities and understaffing were so precarious and stress-inducing, and so many things went wrong, that we didn’t dare leave her alone. To the contrary, after just one week, our mom said she was so stressed that she wanted to get out of there, and two days later she passed away.

Mom loved to sit in this gazebo, along a tributary of the Chesapeake. Photo by my sister.

Our complaint letter and management’s response

Much has been written in healthcare and other industries about how to document and report a service problem and how management should respond.

My sisters carefully composed a detailed seven page letter to management, listing everything that went wrong, from a wrong-height toilet seat, to a shower chair with missing handrail (perfect for assisted living, not!), to the Bluetooth room key that kept failing, to staff that couldn’t recognize the on/off switch on her oxygen, to stress-inducing fire alarms with nobody coming to help. That’s only a few items; their entire letter was published yesterday on The Health Care Blog (thank you THCB!).

And the facility’s response? After walking through the whole letter with my sisters on a call, their emailed bottom line was, verbatim:

“The services listed for respite program were available to your mother.”

Well, their marketing people need to talk to their facility managers.

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One family’s disastrous experience with a growth-driven long-term care company

by “E-PATIENT” DAVE DEBRONKART

Continuing THCB’s occasional series on actual experiences with the health care system. This is the first in a short series about a patient and family experience from one of America’s leading ePatients.

I’ve been blogging recently about what happens in American healthcare when predatory investor-driven companies start moving into care industries because the money’s good and enforcement is lax. The first two posts were about recent articles in The New Yorker on companies that are more interested in sales and growth than caring. I now have permission to share the details of one family’s disastrous encounter with such a company’s “respite care” service.

The National Institute of Health says respite care “provides short term relief for primary caregivers.” It’s not medical care or memory care or assisted living; it’s not paid for by health insurance and it’s not regulated by the Federal government. It just replaces, for a while, the ordinary duties provided by family caregivers, so they can get a break.

The family’s mother was discharged from hospital to home. The primary caregivers were, as usual, the family’s daughters, who had been with their mother throughout the hospitalization. Believing that a good respite care facility was an excellent bridge for continued progress between hospital and returning home, they purchased a two week stay before taking their mother home.

It did not go well: ten days later their mother was dead.

The memorial tree planted by the family at their mother’s favorite park. Photo by Sarah.

The company’s website and lobby are gorgeous, of course. The reality was not. Media coverage talks about management’s desire to climb the rankings of biggest companies in the industry, as they acquire some facilities and build new ones. I believe the public needs to be alerted to such companies, in which management’s attention and achievements are much more on further growth than on delivering what they’ve already sold.

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Netflix for Drugs?

By KIM BELLARD

A relative — obviously overestimating my healthcare expertise — asked my thoughts on The New York Times article Can a Federally Funded ‘Netflix Model’ Fix the Broken Market for Antibiotics? I had previously skimmed the article and was vaguely aware of the Pasteur Act that it discusses, but, honestly, my immediate reaction to the article was, gosh, that may not be a great analogy: do people realize what a tough year Netflix has had?

I have to admit that I tend to stay away from writing about Big Pharma and prescription drugs, mainly because, in a US healthcare system that seems to pride itself on being opaque, frustrating, and yet outrageously expensive, the prescription drug industry takes the cake. It’s too much of a mess.

But a “Netflix model” for drug development? Consider me intrigued.

It’s easy to understand why market forces might not do well with rare diseases that need an “orphan drug,” but the “subscription model” approach that the Pasteur Act seeks to address is something that most of us need: antibiotics. Antibiotic resistance has made many of our front-line antibiotics less effective, but discovering new antibiotics is a slow, expensive process, and many pharmaceutical companies are reluctant to take the risk. The Pasteur Act would essentially pay for their development in return for “free” use of subsequently invented drugs.

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Sylvana Sinha, CEO, Praava Health

Sylvana Sinha is CEO of Praava Health, a primary & specialty care network based in Dhaka, Bangladesh. While the average American may only think about Bangladesh when there’s some disaster on the news it’s a country of 165m+ people with a GDP per capita exceeding India’s. It lacks excellent health services for its growing middle class, and that’s the gap Praava Health is filling. I learned a lot about Sylvana, Bangladesh, and Praava in this quick interview —Matthew Holt

Health Care Execs Behaving Badly

BY KIM BELLARD

In the midst of a pandemic during which health care workers proved themselves to be very bit the heroes we like to think of them as being, it’s sobering to be reminded that the system they work in is filled with perverse incentives that work against patients’ best interests.  Four pieces of excellent journalism – two from The New York Times, and two from Kaiser Health News — this week brought that front and center.  

If you haven’t read them yet, I urge you to do so, but, while you might enjoy the writing, don’t expect to enjoy their content.

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Quickbite Interviews: IXLayer

I was at the AHIP conference in Vegas late last month and caught up with a number of CEOs & execs for some quick bite interviews — around 5 mins getting (I hope) to the gist of what they & their companies are up to. I am going to dribble them out this week–Matthew Holt

First up is Pouria Sanae, CEO of IXLayer.

Dara’s “Hero Quest”: How About Embracing Universal Health Care in America?

By MIKE MAGEE

Joseph Campbell, who died in 1987 at the age 83, was a professor of literature and comparative mythology at Sarah Lawrence College. His famous 1949 book, “The Hero With a Thousand Faces” made the case that, despite varying cultures and religions, the hero’s story of departure, initiation, and return, is remarkably consistent and defines “the hero’s quest.” Bottom line: Refusing the call is a bad idea.

George Lucas was a close friend and has said that Star Wars was largely influenced by Campbell’s scholarship. On June 21, 1988, Bill Moyers interviewed Campbell and began with a clip from Star Wars where Darth Vader says to Luke, “Join me, and I will complete your training.” And Luke replies, “I’ll never join you!” Darth Vader then laments, “If you only knew the power of the dark side.”

Asked to comment, Campbell said, “He (Darth Vader) isn’t thinking, or living in terms of humanity, he’s living in terms of a system. And this is the threat to our lives; we all face it, we all operate in our society in relation to a system. Now, is the system going to eat you up and relieve you of your humanity, or are you going to be able to use the system to human purposes.”

Systems gone awry? Think Putinesque Russia, or Psycho-pernicious Trumpism, or Ultra-predatory Capitalism.

Dara Kharowshaki, the CEO at Uber, who took over the company from uber-bro, Travis Kalanick, is a fan of Campbell’s and understands the journey of a hero – departure, initiation, return. Perhaps that is why he defines “movement” as fundamental to life…adding deliberately the qualifier “movement in the right direction.” In an interview in December, 2021, with Brian Nowak, Equity Analyst, U.S. Internet Industry, for Morgan Stanley, he pushed for corporate engagement in a range of issues including “sustainability, safety, equity, and anti-racism – these are all issues that go to the core of who we are, and our identity.”

How did health care escape that list, especially considering the companies investment in “Uber Health” – a health care delivery service promoting speed, care coordination, privacy, and cost-effective and reliable transport to and from care-giving brick and mortar?

It may have something to do with the fact that Uber has fought tooth and nail to avoid providing health care as a benefit to its drivers. In 2020, the company joined Lyft, DoorDash and other gig companies in throwing $205 million into a lobbying effort in California titled “Yes on 22”.

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Breaking down Optum’s $6.4 Billion Acquisition of LHC Group

I’m delighted to have a new contributor on THCB today. Blake Madden writes an excellent health care business newsletter called The Healthy Muse, which I highly suggest you subscribe to. Recently he gave his take on Optum’s latest big acquisition and it’s the first of I hope many pieces of his we’ll run on THCB–Matthew Holt

by BLAKE MADDEN

On March 29, UnitedHealthcare’s Optum announced its acquisition of LHC Group for $170/share. The transaction values LHC at about $6.4 billion including debt.

I know we all joke about working for UnitedHealthcare one day, but it’s terrifying when you think about their sheer scale. Even scarier when you look at Optum’s growth:

  • Optum Revenue in 2012: $29.4 billion
  • Optum Revenue in 2021: $155.6 billion. Like. What.

LHC Group is an important acquisition for Optum. Payors are continuing to morph into ‘payviders’ and UHG / Optum has a huge competitive advantage given its 60k aligned physician base. Acquiring LHC Group accelerates this payvider trend but also allows UHG to catch up to Humana, who now owns all of Kindred, in the post-acute sphere.

Meanwhile, Optum is deploying its grand vision of integrated care delivery right before our eyes. It’s happening whether you like it or not.

Even though I provided a first-impressions breakdown on Twitter related to the deal, I had to break this deal down into more detail and give you guys my thoughts on why the LHC acquisition is so significant.

Let’s dive in.


Investment and Deal Thesis.

LHC Group is well-positioned on a few fronts in the fast-growing home health sector:

  • They’re partnered with 435 health systems, giving Optum access to hundreds of hospital joint ventures.
  • Home health and at-home care is a MUCH more desirable care setting for Medicare beneficiaries. Comfort and patient experience is a huge factor.
  • Of all post-acute care settings, home health is the most cost-effective. Home health costs way less than skilled nursing. Lower costs = lower medical loss ratio for United. By keeping patients out of SNFs and hospitals, these programs could disrupt facility-based care delivery in the coming years.
  • From a demographics standpoint, home health benefits from an aging baby boomer population. Medicare will cover 79 million people by 2030 a major secular trend for healthcare. I’m sure you’re all WELL aware of that!
  • PDGM and other headwinds for smaller agencies will run out of relief funding, resulting in consolidation. This consolidation will benefit larger home health platforms.

In summary, LHC Group is a great operator in a high-growth industry: Home Health.

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MedPAC Got It Wrong (pt 3)

By GEORGE HALVORSON

This is the third part of former Kaiser Permanente CEO George Halvorson’s critique of Medpac’s new analysis of Medicare Advantage. Part 1 is here. Part 2 is here. Eventually I’ll be doing a summary article about all the back and forth about what Medicare Advantage really costs!-Matthew Holt

Risk status and RAF

What is on the MedPac radar screen and what keeps their attention and what actually takes up several long portions of the annual report this year is the other factor that changes the payment levels to the plans — the risk status of their enrollees.

The capitation levels that are paid to the plans are affected very directly by the health status levels of the actual enrollees.

Risk levels for the members set and change the payment levels for the plans. The very first capitation programs didn’t factor in relative risk status for the members, and it was possible for some care sites to make major profits on capitation just by enrolling healthier than average people and by being paid an average cost level for each area for the people they enrolled.

That initial payment process has evolved very intentionally into having diagnosis-based cost factors that attempt to link the health status of the members and a fair payment level for the plans. The plans identify for the risk filing process the diagnosis levels for the members and their payment levels as plans are directly affected by the risk levels they report for their members.

People have had some concern about whether some parts of that coding process have been done badly, incorrectly or with purely avaricious intent.

There have been significant levels of concern expressed about whether the plans might be able and willing to produce and present inaccurate and distorted information in the process. That alarm was triggered in part by the fact that some of the plans made getting that information into their annual filings a high priority and some were more successful than others in that process.

It is good to have accurate diagnosis information.

We actually should as a nation and a health care macro system want to see an expansion of our data base and our medical records on basic levels of diagnostic information.

As a nation and as a macro care system we should definitely want to have full diagnosis information for each patient. Care can be better when caregivers have the right diagnosis for all of their patients.

How CMS  has changed Risk Adjustment

CMS just did a brilliant thing and completely eliminated the filing system and process for risk coding and data.

The CMS Hierarchical Conditions Categories Risk Adjustment Model was just killed. CMS just took the system that has created the vast majority of concerns and churn about the issues of coding intensity and shut it down.

It no longer is a factor for any risk scores. CMS will still look at the relative risk levels of patients but will get that information completely from patient encounter filings and direct patient information and not from any plan filings or reports.

An entire industry of organizations working to enhance risk scores just became obsolete and irrelevant.

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