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Matthew’s health care tidbits, week ending Jun 5

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

In this week’s health care tidbits, I can’t quite leave the $3.5bn Babylon Health SPAC investor document alone. Yes, it’s crazy but not as crazy as you might think. Essentially it’s saying that it’s going to be a better tech enabled version of Oak Street or Agilon. Babylon has put less effort into the medical group management side of the puzzle than Oak Street or Agilon but it hasn’t done nothing. It’s been running GP clinics in the UK for years and now has two Medicare Advantage networks in California w 52k lives. It only did $79m in rev in 2020 but that was presumably mostly in software. They’re aiming for $320m in rev in 2021 (presumably mostly from the medical groups) & $710m in 2022.

In comparison Oak Street’s forecast is $1.3bn in 2021 and $2bn in 2022. So Babylon is shooting to be 25% of its size. Today’s Oak Street market cap is ~$14,5bn, so 25% of that is close to the $3.5bn Babylon is trying to get investors to pay.

Then there’s the story, which is that the bot tech can reduce all types of patient health spend which will increase the margin. Of course their actual mileage may vary. I do love the chart from their investor prez, which not only assumes that they can reduce medical spend abut also that they get to keep those savings long term. I’m not sure the “Partner” in the chart below will be as convinced.

This was the cause of much hilarity on this week’s #THCBGang.

As I said crazy but not completely crazy. And you never know, maybe better care?

Matthew’s health care tidbits

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

In this week’s health care tidbits, we’re discussing hedge funds. Not those small private equity funds that are defunding small safety net hospitals and being exposed by Propublica & PBS Frontline. (Did you catch #TCHBGangster Jeff Goldsmith on the latter?). No, I’m talking about big non-profit hedge funds that also provide some health care services. This week two of them reported results.

Famed regional hedge fund Mayo Clinic’s health services business reported $243m profit on $3.7bn revenue for Q1 2021. Not exactly Apple margins, but a respectable 6.5%. While catholic national hedge fund Ascension eeked a $700m profit on $20bn of revenue in the nine months June 2020 to March 2021. The good news is that Mayo has $15bn in its main trading account while in those nine months Ascension made $4.3 Billion on Wall Street bringing its balance to a healthy $25.6 Bn.

And if you were concerned that these hedge funds were in trouble because of the pandemic, well not only do they avoid property, income tax and more they also got plenty of help from the taxpayer. CMS prepaid $2billion of Medicare payments to Ascension; presumably they made a tad more playing the markets with that. Then there’s the non-refundable CARES Act grants. Yes Ascension has been paid $900m since June 2020 ($1.1billion in all) and Mayo received $356m, although they were nice enough to pay $138m back.

I’m sure those Americans who lost their jobs, their houses and waited for months for government help are glad that–despite the pandemic–these hedge funds weren’t having to dip into their main reserves to keep their health services subsidiaries going…..

Health Tech Deals, on Clubhouse tomorrow (Thursday 8th) at 1 PT/4 ET

Tomorrow we are taking a break from #THCBGang. Don’t worry it’ll be back with a vengeance next week. Instead, Jess DaMassa & I will host a new show “Health Tech Deals” on Clubhouse

So please join Jess and me in The Health Care Blog’s room for “Gossip, analysis & Sh!talking about digital health funding”.

Tomorrow, Apr 8 at 1:00 PM PDT – 4pm ET on @joinClubhouse. Join us! (And if you need an invite to Clubhouse, let me know)

And it’ll be on our podcast channel (Apple/Spotify) from Friday — Matthew Holt

Artificial Intelligence vs. Tuberculosis, Part 1

By SAURABH JHA, MD

Slumdog TB

No one knows who gave Rahul Roy tuberculosis. Roy’s charmed life as a successful trader involved traveling in his Mercedes C class between his apartment on the plush Nepean Sea Road in South Mumbai and offices in Bombay Stock Exchange. He cared little for Mumbai’s weather. He seldom rolled down his car windows – his ambient atmosphere, optimized for his comfort, rarely changed.

Historically TB, or “consumption” as it was known, was a Bohemian malady; the chronic suffering produced a rhapsody which produced fine art. TB was fashionable in Victorian Britain, in part, because consumption, like aristocracy, was thought to be hereditary. Even after Robert Koch discovered that the cause of TB was a rod-shaped bacterium – Mycobacterium Tuberculosis (MTB), TB had a special status denied to its immoral peer, Syphilis, and unaesthetic cousin, leprosy.

TB became egalitarian in the early twentieth century but retained an aristocratic noblesse oblige. George Orwell may have contracted TB when he voluntarily lived with miners in crowded squalor to understand poverty. Unlike Orwell, Roy had no pretentions of solidarity with poor people. For Roy, there was nothing heroic about getting TB. He was embarrassed not because of TB’s infectivity; TB sanitariums are a thing of the past. TB signaled social class decline. He believed rickshawallahs, not traders, got TB.

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HIMSSanity Preview

By MATTHEW HOLT

It’s time for my favorite busman’s holiday of the year, the HIMSS global conference, held this year in the cultural wasteland of Orlando, Florida (which given its cultural competition is Las Vegas is saying something!). But there are only 2 places in the US with enough hotel rooms to deal with 45,000 hungry and thirsty Health IT people and they’re it!

I think this is my 22nd HIMSS. First was in 1994, but I missed one when I was sick in the 90s, and 2-3 when I was taking a long post-dotcom bust sabbatical in the early 00s. Suffice to say I know my way around and have a decent party invite list. But this year is different. I’m both a HIMSS quasi-staff member, since Health 2.0 is now a HIMSS brand doing VentureConnect this year, AND I’m a vendor client with a booth for my SMACK.health advisory service program, which will be featuring several of our clients and a couple of special guests (or clients in waiting?).

So who will you see in booth #5594 at HIMSS?

First up the incomparable Jessica DaMassa will be interviewing all and sundry for her WTF Health specials. I’ll be stealing her camera for some THCB spotlights and we’ll also be recording segments for our forthcoming podcast HardCore Health. Then there’ll be a whole gang of super exciting tech companies and in no particular order with my (and not their quick summaries) here’s who they are:

  • SurveyorHealth — Super clever AI that optimizes medication management by fixing complex drug regimens, saving $$ and lives
  • BlueStream Health — Revolutionary, always-on telehealth network
  • CaptureProof — A visual medical record changing the game in ortho, derm, + + +
  • SAFE App — an STD lab test system hidden behind the coolest consumer app that will really help bring transparency to “dating” by sharing your STD status
  • Happego — Have you heard of psychological priming to create behavior change? This app does it at scale with no effort on the users part. Mindfulness made easy!
  • Ouchie – An app and community to help patients track, manage & beat chronic pain
  • Dot.Health — The home of the “.health” domain extension (come get yours!)
  • Tag.bio — Putting the power of data science into the hands of clinicians and researchers
  • InPharmD – “Siri for pharmacists,” bringing the most important lit searches to the end user
  • Visolyr — Interoperability-as-a-service for health care organizations

4 of these companies will be demoing at any one given time. Plus we will have the most fun furniture in the exhibit hall, and the only booth featuring a Unicorn Straddling during interviews. Come see us at booth 5594!

If you want to know more, the ringmaster is Zoya Khan.

Matthew is the Founder of The Health Care Blog and is the President of SMACK.health

Social determinants on becoming a physician

By SAURABH JHA

Poverty is known to be an important determinant of a person’s health and longevity. A person’s zip code is more relevant than genetic code. Does a physician’s zip code – that is where they were born and raised – have an effect on where they practice? Specifically, do rural born and raised physicians return to their rural roots? The story of Prashant, a physician raised in rural Bihar, India, is instructive.

When I first met Prashant, he was a second-year medical student in Patna Medical College and Hospital. Patna is the capital of Bihar, and Bihar is one of the poorest states in India.

Prashant brimmed with idealism and vigor. “I’ll practice in Purnea one day and serve the poor villagers,” he told me in broken English.

Prashant comes from a family of Bihari farmers who are also affluent landowners. He grew up near Purnea, a fourth-tier town in Bihar surrounded by villages. Visiting these villages is like stepping into a time machine – you can see people travelling by bullock carts but using mobile phones.

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The Ethics of Keeping Alfie Alive

By SAURABH JHA

Of my time arguing with doctors, 30 % is spent convincing British doctors that their American counterparts aren’t idiots, 30 % convincing American doctors that British doctors aren’t idiots, and 40 % convincing both that I’m not an idiot.

A British doctor once earnestly asked whether American physicians carry credit card reading machines inside their white coats. Myths about the NHS can be equally comical. British doctors don’t prostate every morning in deference to the NHS, like the citizens of Oceania sang to Big Brother in Orwell’s dystopia. Nor, in their daily rounds, do they calculate opportunity costs for keeping patients alive on ventilators.

Conversations such as this are vanishingly rare.

Administrator: “It’s costing an arm and leg keeping this sick baby alive – to balance the annual budget we need to stop dialyzing a granny.”

ICU doctor: “We’ll have to send poor Ethel to her grave. That’s a shame. She was beginning to grow on me.”

Health Ethicist: “Wait, let me check with National Institute of Clinical Excellence, the rationing experts, who should be relieved of intensive care first. Perhaps it should be Winston, not Ethel – because Winston is an alcoholic. We need to make rationing scientific and fair.”

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Donald Trump’s Healthcare Problem

Screen Shot 2016-02-23 at 12.05.28 PMWhether you are elated, appalled, or just plain amazed that Donald Trump is the Republican primary front runner by a considerable margin, one thing should be clear: he’s not a policy guy.

So far, The Donald’s lack of policy specifics seems not to have hurt him. He’s successfully deflected the more searching debate questions, provided vague generalizations or given incomprehensible responses, and—when all else failed—insulted the debate moderators or his fellow Republican candidates.

So far, so good, for the Trump campaign. But is it time to change tactics?

As the number of competing candidates dwindles(So long, Jeb!),the focus in debates and interviews becomes sharper. With the original crowded field winnowed to just a handful,interviewers and debate moderators have time to probe a lot more deeply.And even if the questioners are relatively gentle, every other surviving candidate will be eager to pour scorn on policy statements that lack either substance or rationality.

Like Donald Trump’s healthcare proposals so far.

He’s said he wants the government to negotiate Medicare drug prices, he likes health savings accounts, he wants to be able to buy insurance across state lines, and he wouldn’t cut Medicare. And that’s pretty much it, except for one very big thing: he would “repeal and replace” Obamacare. But by what? “Something terrific” he says.

It’s easy to mock, but all of us – liberals and conservatives — should worry that we might just find ourselves with an incoming president trying to impose such an incoherent healthcare vision that our present system would look like a paragon of rationality.

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The Stanford Lectures: So, Is Software Really Eating the World?

Here at THCB  we really can’t think of many lectures we’d rather sit in on than Peter Thiel’s Stanford course on entrepreneurship. And we can’t think of a better guest to catch than Netscape co-founder Marc Andreeson.  In this talk, Andreeson talks about how healthcare IT is changing in the Facebook and Big Data Era era, the privacy issue and how the cloud may or not be eating software.

Is Software Eating the World?

Marc Andreessen’s most famous thesis is that software is eating the world. Certainly there are a number of sectors that have already been eaten. Telephone directories, journalism, and accounting brokerages are a few examples. Arguably music has been eaten too, now that distribution has largely gone online. Industry players don’t always see it coming or admit it when it arrives. The New York Times declared in 2002 that the Internet was over and, that distraction aside, we could all go back to enjoying newspapers. The record industry cheered when it took down Napster. Those celebrations were premature.

If it’s true that software is eating the world, the obvious question is what else is getting or will soon get eaten? There are a few compelling candidates. Healthcare has a lot going on. There have been dramatic improvements in EMR technology, healthcare analytics, and overall transparency. But there are lots of regulatory issues and bureaucracy to cut through.

Education is another sector that software might consume. People are trying all sorts of ways to computerize and automate learning processes. Then there’s the labor sector, where startups like Uber and Taskrabbit are circumventing the traditional, regulated models. Another promising sector is law. Computers may well end up replacing a lot of legal services currently provided by humans. There’s a sense in which things remain inefficient because people—very oddly—trust lawyers more than computers.

It’s hard to say when these sectors will get eaten. Suffice it to say that people should not bet against computers in these spheres. It may not be the best idea to go be the kind of doctor or lawyer that technology might render obsolete.

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The Fall of Berwick?

When President Obama named Dr. Donald Berwick to head the Centers for Medicare and Medicaid (CMS) last March, I wrote this:

“Most who know Berwick describe him a ‘visionary’ and a ‘healer,’ a man able to survey the fragments of a broken health care system and imagine how they could be made whole.  He’s a revolutionary, but he doesn’t rattle cages. He’s not arrogant, and he’s not advocating a government takeover of U.S. health care.”

To understand what I meant, view these clips from the film, Money-Driven Medicine, where Berwick speaks about the need for healthcare reform. Soft-spoken and charismatic, Berwick is as passionate as he is original. His style is colloquial, intimate, and ultimately absolutely riveting. He draws you into his vision, moving your mind from where it was to where it could be.

And now, it appears that we are going to lose him. Thursday, 42 Senators delivered a letter to President Obama demanding that he withdraw his support for Berwick to head CMS. The Boston pediatrician and co-founder of the Institute for Health Care Improvement (IHI) had received a temporary appointment in July while Congress was on vacation. President Obama re-nominated him in January. But Berwick still needs to be confirmed by the Senate, or he will have to leave his post at the end of this year.

With 42 out of 100 Senators firmly opposed to him, it appears that Berwick’s supporters won’t be able to muster the 60 votes needed to clear the Senate floor. Reportedly, Senate liberals already have given up. According to Politico.com’s Brett Coughlin: “At a meeting with Senate staffers Friday, health care lobbyists and advocates were told that there will be no confirmation hearing and that they’ll soon be discussing ‘next steps’ for CMS.”    If this is true, Berwick is now a lame-duck CMS director without power—as of today.Continue reading…

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