When Walmart announced earlier this summer that it was opening an insurance agency to sell Medicare-related products and services plans, I thought, “that’s it?” When Walmart announced later in the summer that it was partnering (first with Microsoft, then with Oracle) in the bid to buy TikTok, I thought, “well, isn’t that interesting?” And when Walmart announced a few days ago that it was partnering with Clover Health to offer Medicare Advantage plans, I thought: “it’s about time.”
And Walmart has been shaking up healthcare for some time. Way back in 2006, it introduced its $4 Prescriptions program that upended pharmacy pricing. In 2008, it started offering in-store retail clinics, initially in partnership with hospitals and now operates on its own.
Today on Health in 2 Point 00, Jess can’t figure out what’s going on with health tech investors. Episode 156 feels like rummaging through a garage sale… First up is mirrors, mirrors, mirrors, with a total of $225 million invested: Tonal gets $110 million, Tempo gets $60 million, and Fiture gets $65 million. Next up is socks; Siren, which makes socks, added $9 million to their B round, which already has $11 million. Our next category is doctors, aka startups from Europe with “doctor” in the name: DrDoctor gets £3 million in an A, HomeDoctor scored €3.7 million, and Your.MD gets $30 million. Finally, we have raccoons! Raccoon.World closes a $900 million seed round to provide physiotherapy in a video game platform.—Matthew Holt
(This is the eighth and final installment in a series of excerpts from Terry’s new book, Physician-Led Healthcare Reform: a New Approach to Medicare for All, published by the American Association for Physician Leadership.)
Medical technologies include drugs, devices, tests, and procedures. Considered as a whole, these technologies are the key driver of growth in health costs, according to Georgetown University professor Gregg Bloche and his associates.
Bloche, et al., view insurance coverage as the chief enabler of these technological innovations. In a 2017 Health Affairs Blog post, they said, “Drug and device developers, clinical researchers, and their financial backers anticipate coverage for new tests and treatments with little concern for whether they add substantial therapeutic value, and they make research and development decisions accordingly.”
In an interview, Bloche further explained, “If you’re a technology developer, you can reasonably anticipate that if your product achieves a low but significant health gain, insurers are going to be under pressure to pay for it.”
Interviewing celebrities can make you a celebrity yourself, and it can make you very rich. So there’s got to be something to it or it would be a commodity. The world of media certainly recognizes the special skill it takes to get people to reveal their true selves.
At the other end of the spectrum of human communication lies our ability to explain and also our ability to influence. These three aspects of what we do—elicit, explain and influence—are far from trivial, and in my opinion quite fundamental aspects of practicing medicine.
Eliciting an accurate patient history or administering standardized depression, anxiety, domestic abuse, smoking and alcohol screenings are commoditized activities in today’s healthcare. There is little time allotted and these tasks are usually delegated to non-clinicians.
A complicated patient’s clinical history seldom lends itself to straightforward, structured EHR formats. It can be more like a novel, where seemingly unrelated subplots converge and suddenly make complete sense in a surprising last chapter.
Even though kids make up 20% of the total national patient population, investments in startups that use tech to improve their care is, at best, a dismal 1% of the total investments made in digital health and health tech each year. Why is there such a lack of innovation (and investment in innovation) in Pediatrics? Omkar Kulkarni, Chief Innovation Officer at Children’s Hospital of Los Angeles, talks us through the challenges that have so-far stymied a health tech takeover of the pediatric care market and how KidsX is out to change all that. Already, Omkar’s recruited several dozen of the world’s leading Children’s Hospitals and Pediatric care units into KidsX, bringing with them supportive payers and investors who want to add to the collaborative consortium’s ability to drive change into this stretch of the healthcare continuum. These “champions” aim to create more targeted opportunities for startups who want to pilot or co-develop peds-focused solutions with the leading pediatric care providers who will ultimately use them, the payers who will ultimately reimburse for them, and the investors who ultimately will fund scaling them. Startups are currently being recruited until October 7, 2020 to participate in the KidsX accelerator’s first cohort and it’s a pretty sweet deal. The bottom line: Lots of support, no equity take; this is NOT just for early-stage startups and it’s NOT just for health tech. Healthcare incumbents in care delivery orgs, health plans, and pharma companies are also invited to join in, along with those healthcare investors who want early-access to emerging pediatric startups and solutions, or a seat at the table as KidsX plans for its own investment fund.
Today on Health in 2 Point 00, Jess and I discuss UnitedHealth Group acquiring DivvyDose for $300 million, which is a knock off of PillPack. Is there anything left for them to buy? We cover many more deals in Episode 155—Noyo raises $12 million in a series A, helping health plans exchange data, Medigate raises $30 million working on cybersecurity for connected devices in hospitals, OnCall raises $6 million helping health systems launch their own virtual care platforms, RapidAI raises $25 million to improve MRI and CT quality using AI to layer those images, and Medefer raises £10 million offering telehealth and referrals to patients within the NHS. —Matthew Holt
It’s the telehealth market reality check you’ve been waiting for! “Rogue” digital health consultant Dr. Lyle Berkowitz unpacks the numbers and the market potential for virtual care from the unique vantage point of a primary-care-physician-turned-health-tech-entrepreneur with nothing to lose. Having been 1) a clinician, 2) the Director of Innovation at Northwestern Medicine, 3) the founder of a health tech startup (Health Finch) that successfully exited to Health Catalyst, and 4) the former Chief Medical Officer at one of telemedicine’s biggest players, MDLive, few can boast such a wide-reaching, deep understanding of the inner workings of both the innovation and incumbent sides of the virtual care market — AND have a willingness to talk about it all with complete candor!
This is an analyst’s perspective on the telehealth market — with a twist of insider expertise — so expect to hear some good rationale behind predictions about how much care will remain virtual once hospitals and doctor’s offices return to normal, how “real” health system enthusiasm is for building out telehealth capacity to execute on the “digital front door” idea, and whether or not all these well-funded telehealth startups will have what it takes to win market share from traditional care providers.
BONUS on Primary Care: Is this the area of medicine that’s going to be the “battleground” where digital health and virtual care companies will be going head-to-head with incumbents for market share? Lyle says 50-plus percent of primary care “can and should be automated, delegated, virtualized, etc.” and boldly predicts that in 10-20 years we won’t even have primary care physicians anymore. Tune in to find out why starting at the 8:00 minute mark, where we shout out Crossover Health, Oak Street Health, Iora Health, and more.
Telehealth die-hards, don’t think for a second I’d miss this chance to also get some input on Teladoc-Livongo, Amwell, Doctor On Demand, SOC Telemed, the impending IPOs there, digital first health plans, virtual primary care, health systems (who Lyle hopes “don’t shoot themselves in the foot” with their opportunity to jump into the space) and, ultimately, who’s really going to ”WIN” in virtual care moving forward. For this, jump in at 17:00 minutes and hold on!
(This is the seventh in a series of excerpts from Terry’s new book, Physician-Led Healthcare Reform: a New Approach to Medicare for All, published by the American Association for Physician Leadership.)
Even in a healthcare system dedicated to value-based care, there would be a few major barriers to the kinds of waste reduction described in this book. First, there’s the ethical challenge: Physicians might be tempted to skimp on care when they have financial incentives to cut costs. Second, there’s a practical obstacle: Clinical guidelines are not infallible, and large parts of medicine have never been subjected to rigorous trials. Third, because of the many gaps in clinical knowledge, it can be difficult for physicians to distinguish between beneficial and non-beneficial care before they provide it.
Regarding the ethical dimension, insurance companies often are criticized when they deny coverage for what doctors and patients view as financial reasons. Physicians encounter this every day when they request prior authorization for a test, a drug, or a procedure that they believe could benefit their patient. But in groups that take financial risk, physicians themselves have incentives to limit the amount and types of care to what they think is necessary. In other words, they must balance their duty to the patient against their role as stewards of scarce healthcare resources.
On the other hand, fee-for-service payment motivates physicians to do more for patients, regardless of whether it’s necessary or not. In some cases, doctors may order tests or do procedures of questionable value to protect themselves against malpractice suits; but studies of defensive medicine have shown that it actually raises health costs by a fairly small percentage. More often, physicians overtreat patients because of individual practice patterns or because they practice in areas where that’s the standard of care. As long as doctors believe there’s a chance that the patient will benefit from low-value care, they can justify their decision to provide that care.
On Episode 154 of Health in 2 Point 00, follow @barkyboy (a dog wearing a Health in 2 Point 00 shirt!) on Twitter! Jess also asks me about Papa getting $18M in a Series B for their matching platform for college students, Optimize.health raising $15.6M in a Series A for their RPM platform, Joint Academy raising $23M for their physical therapy platform, and Maple Corp raising $75M for their Canadian telehealth platform in socialized medicine. Also, Matthew talks about his new piece on THCB where he wrote about what Biden should say to the Supreme Court Justices on the ACA. – Matthew Holt
You may have missed it, but the Association for the Advancement of Artificial Intelligence (AAAI) just announced its first annual Squirrel AI award winner: Regina Barzilay, a professor at MIT’s Computer Science and Artificial Intelligence Laboratory (CSAIL). In fact, if you’re like me, you may have missed that there was a Squirrel AI award. But there is, and it’s kind of a big deal, especially for healthcare – as Professor Barzilay’s work illustrates.
The Squirrel AI Award for Artificial Intelligence for the Benefit of Humanity (Squirrel AI is a Chinese-based AI-powered “adaptive education provider”) “recognizes positive impacts of artificial intelligence to protect, enhance, and improve human life in meaningful ways with long-lived effects.” The award carries a prize of $1,000,000, which is about the same as a Nobel Prize.
Yolanda Gil, a past president of AAAI, explained the rationale for the new award: “What we wanted to do with the award is to put out to the public that if we treat AI with fear, then we may not pursue the benefits that AI is having for people.”
Dr. Barzilay has impressive credentials, including a MacArthur Fellowship. Her expertise is in natural language processing (NLP) and machine learning, and she focused her interests on healthcare following a breast cancer diagnosis. “It was the end of 2014, January 2015, I just came back with a totally new vision about the goals of my research and technology development,” she told The Wall Street Journal. “And from there, I was trying to do something tangible, to change the diagnostics and treatment of breast cancer.”