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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.

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Too much fawning over Len Schaeffer?

By MATTHEW HOLT

There’s a lot of strum & dangst about the uptick in system utilization that has boosted hospital profits and hit Humana and United’s bottom line (But not so much Elevance’s). Kevin O’ Leary over at Health Tech Nerds brought this up today and I was reminded of this piece I wrote in 2006. And a big issue was, how much understanding and control do insurers have over the utilization in (and out of) their networks. So take a look at this piece and particularly, given the issues at the BUCAHs and at smaller players like Agilon, consider how much insurers actually know about spending? And remember that Wellpoint was the 1990s name for what is now Elevance, via being called Anthem!–Matthew Holt

No one is arguing that Len Schaeffer isn’t a very bright guy, nor that he hasn’t done very well in America’s health care system. He’s also done very well out of America’s health care system. So when McKinsey publishes a fawning interview with the man who saved Blue Cross of California, and turned it into one of the most profitable for-profit health insurance companies, and then merged it with the other for-profit Blues, it’s perhaps appropriate to ask a few more questions.

Full disclosure here; in the distant past I’ve worked for several companies that are now part of the Anthem/Wellpoint collosus; and I currently do work for the California Health Care Foundation, which wouldn’t exist were it not for the fact that, when Wellpoint converted to for-profit status, it (and the California Endowment) were endowed with a huge chunk of stock. So you can take my comments in what ever light you like. In addition I’ve only done limited research here and a couple of things are retelling of tales I’ve heard, so if anyone knows more gossip, please email me.

Schaeffer is coming towards the end of his business career, but he started young and fast. He was head of HCFA (the artist now known as CMS) at age 33 in the Carter Administration. Now I call Mark McClellan the boy wonder, but he was 41 when he got the job! After leaving HCFA (before it got really exciting in the early years of the Reagan administration when DRGs were introduced, but being the first to introduce a type of DRG for kidney dialysis), and going via Group Health for a couple of years, he ended up at Blue Cross of California. He got there in the middle of an incredible screw-up.

Blue Cross had set up an HMO to compete with Kaiser called HealthNet. Incredibly enough somehow or other Blue Cross didn’t manage to enforce their formal corporate control over its board members on the board of HealthNet. So the board of HealthNet looked around the room one day, noticed that they might do alright if they were running a for-profit company, and declared independence. More on that story in this court documents. And apparently despite several years in court there was nothing Blue Cross could do. Retroactively Healthnet had to agree to endow a foundation with the state (the California Wellness Foundation) but the amount put into that foundation was a tiny, tiny proportion of HealthNet’s market value.

Schaeffer turned up to steady the ship at Blue Cross in the wake of the Healthnet screwup. In part he did this by turning Blue Cross from a warm and fuzzy non-profit into a pretty avaricious underwriter and a health plan that played very hardball with its providers (and members). More on that in the first section of this document, but it’s a reminder of a tack taken years later by Jack Rowe at Aetna.

But he clearly learned something from the experience.  The first thing he did was to set up a for-profit subsidiary called Wellpoint which started buying health plans and offering services (primarily outside California). Then he tried to put all of Blue Cross’ assets into Wellpoint. It looked like he’d away with this for a while, but then started  negotiations to take the whole thing for-profit. Apparently when the state first asked him the amount with which he would fund the foundation, his first offer was “nothing”.  This eventually got anted-up to $100m. Eventually the state (pressured by consumers’ groups) pointed out that it had quite a bit of control over the Blue Cross plans, and in the end the two Foundations were set up with lots of money and the majority of the stock, which gets spent doing good works in California (and funding some great research!) — not that everyone’s happy with it!

However, what amuses and dismays me is that Schaeffer is lauded for a couple of things, specifically the creation of new insurance plans and the shift to consumer care, and a commitment to IT. I really don’t understand what is so amazing about the new consumer plans, other than the Tonik brand has a lame web sites which look exactly like what a 50 year old thinks a 23yr old thinks is cool.  THCB readers already know that, while selling high deductible plans to youngsters may help a 23 yr old who needs catastrophic insurance, you’re not going to fix the problem of uninsurance by replacing it with under-insurance. But underwritten properly, these plans are very profitable for Wellpoint. And Wellpoint is damn good at underwriting.

So much so that you’d be surprised at what Schaeffer says is the main problem with American health care. Practice variation and lack of information:

The level of variation in our health care system is unbelievable. You could be hospitalized for nine days in New York and for three days in California with the same diagnosis—and those differences would have no impact on outcomes. There is no other industry in the world that uses so many different approaches to the same thing and in which these differences don’t relate to better results

So can’t health plans fix that? Apparently not:

As a health insurer, if you start by telling doctors, “We know what’s best; we’ll pay you for it,” you violate the fundamental principle that doctors want to exercise their own discretion. That’s what killed HMOs—telling the doctors what to do. Doctors don’t like to follow cookbooks, but, clearly, evidence-based medicine would work better for patients.

So because health plans failed at getting doctors to practice better medicine, instead they’re going to give them the information systems that show the doctors all about this variation, and it’ll magically self-correct. Except there’s the odd problem there too, including more cluelessness by health plans.

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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.

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Raj Singh, Accolade

Earlier this month I caught up with Raj Singh, the CEO of Accolade. The “navigation” company is publicly traded and now offering its own telehealth, primary care & second opinions as well as helping patients access both digital health services and brick & mortar health systems. How is Accolade dealing by both offering primary care and helping patients manage through complex care situations? And why isn’t this available to everyone, yet? Raj told me how it works and what the likely future will be, including work with health plans, and how Accolade is on a path to a $1b in revenue in 5 years.–Matthew Holt

Who Could (Possibly) Be the Ideal “Chief Patient Officer”?  (And Other Ideas that Sound Better on Paper than in Practice)

By JONATHON S. FEIT

If ideas presented in essays on The Health Care Blog and other healthcare forums are meant to be rhetorical, without intention of turning notions into reality on behalf of patients who need genuine, intimate, desperate help…then feel free to ignore this essay entirely. 

Some among us—the State of Washington’s Co-Responder Outreach Alliance; Lisa Fitzpatrick’s Grapevine Health, which specializes in “street medicine” and advocacy in and around Washington, D.C.; Thorne Ambulance Service, an inspirational ambulance entrepreneur bringing both emergency and nonemergency medical transportation to underserved rural spaces (and more) across South Carolina; and the RightCare Foundation in Phoenix, a firefighter-driven organization dedicated to ensuring that patients’ needs and wishes are honored during critical moments, spring fast to mind—are stretching hands across the care continuum while pounding the table for interoperability at scale because PEOPLE. ARE. FALLING. THROUGH. THE. CRACKS. AND. DYING.  

Thatincludes responders who run toward the crises; into alleys; who risk their own lives, health, psyches, families, and futures because, as Josh Nultemeier—Chief Paramedic and Operations Manager of San Francisco’s King-American Ambulance, and a volunteer firefighter in the Town of Forestville—put it so simply in a social media post: “People could get hurt.” Moral override—that matter-of-fact willingness to risk himself for strangers who lack any other path to save themselves—is what makes Josh (and others who believe as he does) heroic.

Solving problems like substance use disorder—coupled with an increasing awareness of the lack of interoperability with prescription drug monitoring programs (PDMPs), many of which are run by Bamboo Health, which today imports zero data regarding out-of-hospital overdoses—is urgent. If an overdose is reversed in an alley, an abandoned home, a tent or “under the bridge downtown,” by an ambulance, fire, or police service pumping Narcan to get breathing going again, the agency’s lifesaving efforts get zero “credit” in the data. The downstream effects of this information sharing breakdown make it difficult to settle for less-than-bona fide interoperability: there is neither time to waste nor margin of error, yet hospitals and healthcare systems cannot even “see” the tip-of-the-tip-of-the-spear.

A similar emotionality makes it difficult to tolerate lamentations about information sharing when states like California—and the federal Office of EMS, inside the National Highway Traffic Safety Administration—are transforming interoperability into a standard operating procedure. As a listener to the “Health Tech Talk Show” since its start, I have struggled with hearing Lisa Bari and Kat McDavitt deride whether interoperability is “real.” It is real. It is happening, and has been automated for years—for example, with both the Quality Health Network and Contexture (formerly CORHIO) in Colorado—empowering agencies of all sizes to care for patients experiencing healthcare emergencies, and those who have children with Duchenne’s Muscular Dystrophy and other diseases. Such efforts should be celebrated for their meaningful impact on patients who rely on ambulance services to get them the care that they need—and sometimes to get them to the care that they need. 

Yet no panel at the national conference for CIVITAS was dedicated to interoperability to or from ambulances, despite that some of America’s most active health information exchanges—coast to coast—have automated interoperability involving Fire, EMS, Non-Emergency / Interfacility Medical Transport, Critical Care, and Community Paramedicine. No mention highlighted widespread efforts to make POLST forms accessible to Mobile Medical professionals, thanks to prioritization of the ethical treatment of medically frail patients after COVID-19 and a New York Times piece called “Filing Suit for Wrongful Life.”

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Zombie Viruses of the Permafrost

By KIM BELLARD

We’ve had some cold weather here lately, as has much of the nation. Not necessarily record-breaking, but uncomfortable for millions of people. It’s the kind of weather that causes climate change skeptics to sneer “where’s the global warming now?” This despite 2023 being the warmest year on record — “by far” — and the fact that the ten warmest years since 1850 have all been in the last decade, according to NOAA.

One of the parts of the globe warming the fastest is the Arctic, which is warming four times as fast as the rest of the planet. That sounds like good news if you run a shipping company looking for shorter routes (or to avoid the troubled Red Sea area), but may be bad news for everyone else.  If you don’t know why, I have two words for you: zombie viruses.

Most people are at least vaguely aware of permafrost, which covers vast portions of Siberia, Alaska, and Canada. Historically, it’s been literally frozen, not just seasonally but for years, decades, centuries, millennia, or even longer. Well, it’s starting to thaw.

Now, maybe its kind of cool that we’re finding bodies of extinct species like the woolly mammoth (which some geniuses want to revive). But also buried in the permafrost are lots of microorganisms, many of which are not, in fact, dead but are in kind of a statis. As geneticist Jean-Michel Claverie of Aix-Marseille University, recently explained to The Observer: “The crucial point about permafrost is that it is cold, dark and lacks oxygen, which is perfect for preserving biological material. You could put a yoghurt in permafrost and it might still be edible 50,000 years later.”

Dr. Claverie and his team first revived such a virus – some 30,000 years old — in 2014 and last year did the same for some that were 48,000 years old. There are believed to be organisms that ae perhaps a million years old, far older than we’ve been around. Scientists prefer to call them Methuselah microbes, although “zombie viruses” is more likely to get people’s attention.

He’s worried about the risks they pose.

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Kota Kubo, Ubie

Kota Kubo is the CEO of Ubie, a Japan-based symptom-checking company. Ubie has raised over $75m including a $45m round in 2022. They were focusing on the Japanese market but have been available in the US since 2022, and are expanding their presence there dramatically in 2024. It’s a direct to consumer product with a business model of helping pharma companies understand their patients better–while of course not letting them have patients’ private or identifiable information. This is a little different than most symptom checkers who tend to work with providers or plans, and I met Kota in Tokyo late last year to discuss the business and get a little demo–Matthew Holt

Au Contraire

By KIM BELLARD

Last week HHS announced the appointment of its first Chief Competition Officer. I probably would have normally skipped it, except that also last week, writing in The Health Care Blog, Kat McDavitt and Lisa Bari called for HHS to name a Chief Patient Officer. I’ll touch on each of those shortly, but it made me think about all the Chiefs healthcare is getting, such as Chief Innovation Officer or Chief Customer Experience Officer.  

But what healthcare may need even more than those is a Chief Contrarian. 

The new HHS role “is responsible for coordinating, identifying, and elevating opportunities across the Department to promote competition in health care markets,” and “will play a leading role in working with the Federal Trade Commission and Department of Justice to address concentration in health care markets through data-sharing, reciprocal training programs, and the further development of additional health care competition policy initiatives.” All good stuff, to be sure.

Similarly., Ms. McDevitt and Ms, Bari point out that large healthcare organizations have the staff, time, and financial resources to ensure their points of view are heard by HHS and the rest of the federal government, whereas: “Patients do not have the resources to hire lobbyists or high-profile legal teams, nor do they have a large and well-funded trade association to represent their interests.” They go on to lament: “Because of this lack of access, resources, and representation, and because there is no single senior staff member in the federal government dedicated to ensuring the voice of the patient is represented, the needs and experiences of patients are deprioritized by corporate interests.” Thus the need for a Chief Patient Officer. Again, bravo.

The need for a Chief Contrarian – and not just at HHS – came to me from an article in The Conversation by Dana Brakman Reiser, a Professor of Law at Brooklyn Law School. She and colleague Claire Hill, a University of Minnesota law professor, argue that non-profit boards need to have “designated contrarians.”

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Nicola Tessler, CEO, BeMe Health

Nikki Tessler is the CEO of BeMe Health. She is a psychologist who has built a relatively new company with a self service tool and coaching service for teens. It’s essentially trying to convert teens’ social media time to good use with support, affirmations, coaching and safety–and much more.. I interviewed Nikki and got a full demo over the holiday break. There’s a lot of information here about the teen mental health question (yes it’s bad!), about the company funding & strategy, and great understanding of the product…which is pretty unusual and growing fast!Matthew Holt

25th Amendment Still Not the Right Response to a Mentally Ill Trump

By MIKE MAGEE

On May 16, 2017 New York Times conservative columnist, Russ Douthat, wrote “The 25th Amendment Solution for Removing Trump.” 

That column was the starting point for a Spring course I taught on the 25th Amendment at the President’s College in Hartford, CT. I will not summarize the entire course here, but would like to emphasize four points:

  1. The American public was adequately warned (now 7 years ago) of the risk that Trump represented to our nation and our democracy.
  2. Douthat’s piece triggered a journalistic debate which I summarize below with four slides drawn from my lectures.
  3. Had Pence and the cabinet chosen to activate the 25th Amendment, as it is written, Trump would have had the right to appeal “his inability”, forcing the Congress to decide whether there was cause to remove the President.
  4. Judging from the later impeachment of Trump in the House, but failure to convict in the Senate, it is unlikely a courageous Pence and Cabinet would have been backed by their own party.

Let’s look at four archived slides from the 2017 lecture, and then discuss our current options in the case of 2024 Trump against Democracy. 

Slide 1. Russ Douthat

        Slide 2. Jamal Greene (in response)

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