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Matthew’s health care tidbits: #Does Medicare Advantage Save the Taxpayer Money?

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

For my health care tidbits this week, the controversy about Medicare Advantage is getting louder and louder. There’s no question that it results in lower out of pocket payments for its members than traditional FFS Medicare. Medicare Advantage members use fewer services, and their care appears to be better “managed” –then again FFS Medicare’s “members” are barely managed at all. 

But the big question is, Does Medicare Advantage save the government money? Critics (notably ex CMS veterans Berwick & Gilfillan) claim that risk adjustment games played by the private plans who run Medicare Advantage have cost up to $200bn over 10 years. Medpac (the independent body that advises Congress) estimates that “Medicare spends 4 percent more for MA enrollees than it would have spent if those enrollees remained in FFS Medicare” and go on to say “In aggregate, for the entire duration of their Medicare participation, private plans have never produced savings for Medicare”. However data from the Medicare Trustees and other research from ACHP & the trade group Better Medicare Alliance suggests that Medpac’s analysis is incorrect and that Medicare Advantage saves the government about 9% per enrollee.

THCB ran a long piece (pt 1pt 2) about Medicare Advantage from former Kaiser Permanente CEO George Halvorson earlier this year, and a related one from current Permanente Federation CEO Richard Isaacs. But it’s much more nuanced than that. J Michael McWilliams has long piece on Health Affairs Forefront trying to capture the various strands of the argument. His conclusion? “The substantial subsidies MA receives are largely responsible for the extra benefits and have more than offset savings from any efficiencies, posing a net cost to Medicare and complicating assessments of MA’s added value.”

Meanwhile CMS has just changed the most controversial aspect of risk adjustment (which is the most controversial part of Medicare Advantage) by banning the plans from doing it, and only allowing providers to be involved.

Whether any of this is going to change CMS regulations or wider government policy regarding MA payments is less certain. CMS is currently dealing with its replacement for the even more controversial Direct Contracting (now called ACO REACH). But Medicare Advantage is the most profitable part of private health insurance and has many knock on effects for care services and technology. So I’ll be watching this space and you should too!

Cricket + Fresenius Health Partners + InterWell Health CEO on New Biz & “Take Out Merger” Chatter

BY JESSICA DaMASSA, WTF HEALTH

Matthew Holt categorized the triple-merger between Cricket Health, Fresenius Health Partners, and InterWell Health as a “take out merger” — proposing that Fresenius orchestrated the deal to “take out” rising-star kidney care startup, Cricket Health. Well, Cricket Health’s CEO Bobby Sepucha (who will also be CEO of the newly combined entity) “takes issue” with the health tech curmudgeon’s “take out” call and we find out the reasons why.

Listening to Bobby’s explanation, it sounds like the shrewd move Fresenius might be making here in giving up its value-based care arm, Fresenius Health Partners, and its joint-venture with 600 nephrologists in InterWell Health is one that better positions their core dialysis business for the value-based care future that is headed straight toward specialty medicine.

As Bobby puts it, “when you deliver a healthier patient to kidney failure, you don’t obviate the need for dialysis.” Instead, he says, you open up options for other treatments like transplant or home dialysis along the way, as well as the kinds of patient quality outcomes that satisfy the clinical accountability of providers in value-based arrangements.

The other gain is a move upstream for Fresenius. While there are 600,000 dialysis patients each year, the population of Americans with late-stage kidney disease who remain “wildly unmanaged” is 36 MILLION. And they represent $170 Billion in healthcare costs. If InterWell works the way it’s supposed to – with the first value-based care-designed model for late-stage kidney disease management – the potential to impact that patient population is what this merger is all about. Tune in and tell us what you think!

Contemplating Health Data Rights as Civil Rights

BY ERIC PERAKSLIS ON BEHALF OF THE LIGHT COLLECTIVE

Recently, despite decades of experience in cybersecurity, privacy, and data science, I got sent back to school.  

As a member of the Council of the Wise at the Light Collective, a patient advocacy group with a focus on healthcare technology and privacy, I attended a town hall event entitled “No Aggregation Without Representation,” which featured four eminently qualified leaders of the BIPOC and data advocacy communities: Dr Maya Rockeymore Cummings, Tiah Tomlin-Harris, Jillian Simmons, JD and Valencia Robinson. I was unprepared for the ownership and authority of these four leaders – and unprepared, too, for how they were able to transform professional truisms I’ve often relayed myself into something far more personal, meaningful, urgent, and authentic.

The commercial practice of aggregating health and consumer data crosses the borders of healthcare, retail, marketing, communications, transportation, and others. The risks and consequences (including abuse) related to the exploitation and monetization of personal health data are enormous, complex, and largely or entirely borne by the individuals whose data is being collected – whether they know it or not. 

What’s more, none of the current patchworks of 3-letter federal regulatory bodies (FDA, FTC, HHS, FCC) have the remit or resources to encompass the totality of it. Armed with pre-Internet privacy laws from the 1970s or with insurance portability laws from the mid-1990s that have been stretched to cover health and consumer privacy protections, a constellation of advocacy organizations, ethicists, and academics identify problems and offer opinions. All the while, though, data flows like oil to fuel a surveillance economy in which consumers and patients are exploited and harmed. For vulnerable communities including BIPOC and persons with frailties, disabilities, or mental illness, these harms are not only real, but – in light of sad history – they are also unsurprising.

The Deep Roots of Systemic Harm

During the town hall, the panelists describe an ongoing lack of trust that has grown steadily from events such as the Tuskegee syphilis experiments that began in the early 1930s and continued up until the early 1970s, the case of tissues taken without consent or compensation from Henrietta Lacks in the 1950s and used in thousands of experiments, and the continued stigma surrounding diseases such as HIV that are no less potent today than they were in the 1980s. As I listened to the panelists, these events were no longer historical to me, but instead were current events unfolding before my eyes and deeply affecting communities who are well aware that they are being harmed and exploited so that others may profit.  

But just what are those harms, and who feels their effects?  Those who pontificate about the virtues and value of data without boundaries often argue that the benefit to the many outweigh the risks to the few, but it is not “just a few” when we are talking about significant numbers of individuals within minority and underserved communities.  In the last few weeks alone, we have read stories about how data from persons seeking help due to suicidal ideation was captured and monetized by a crisis text line, seen credible evidence of how middleware ad tracking software can track users regardless of stated privacy policies on some health sites, and witnessed another class-action lawsuit against Meta (Facebook’s parent company) for the misuse of personal biometric data. 

Patient populations need rights.  So what?

I once had a mentor who advised me to ask myself, “so what?” at least three times before deciding whether an idea could stick. Let’s play that game using the wisdom shared by these four amazing leaders… 

Dr. Rockeymore Cummings spoke about how she had shared parts of her health journey story online to provide support to others on similar journeys. But the ultimate outcome of this sharing was that her insurance company asserted that because she had advocated for preventative options, the procedures she had undergone were elective, and therefore denied coverage for them.  Where is the internet warning label that advises consumers that the thoughts and experiences they share online may be scraped, scrutinized, and interpreted by their health insurance companies?  Interestingly, when the human genome was first mapped, scientists and ethicists helped ensure the passage of the Genetic Information Nondiscrimination Act (GINA) because they foresaw the potential for abuse when information about individuals’ genetic makeups became available. But over the decades that the internet has been proliferating, no comparable nondiscrimination protections have emerged to cover the myriad other kinds of personal data available online. To surveillance capitalists, this situation is a feature, not a bug.  

Patient populations’ data are owned by companies.  So what?  

Today we live in a world where any given patient population’s collective health data is owned by companies.  And what we share is increasingly part of our permanent public record.  So what?  What if I did say something like that once, and I changed my mind? Or what if I signed up for a service that required some of my data but then decided I was no longer interested, or worse, was worried about things I learned as I became more familiar with the service?  Jillian Simons pointed out that not a single state has passed comprehensive “right to be forgotten” privacy protections, which would grant people the right to have their personal data removed from specific and aggregated datasets. Beyond the obvious assurances, this approach affords to patients and consumers, it’s also an extremely effective way to ensure accountable stewardship of data, even in large, aggregated datasets. The right to be forgotten imposes a duty on the dataset owner/aggregator to know where that individual‘s data resides and where it has been shared; otherwise, their data cannot be found to be erased if they so desire.  As they would say in my hometown of Boston, “wicked smaht.” 

 So what?

If experiencing denial of care or preserving personal autonomy about participating in health websites are not sufficiently compelling issues, let’s get to the tougher stuff. As our preprint article (recently covered by Wired magazine) shows, health sites are using – sometimes without even realizing it – middleware that contains ad trackers. Ad tracking may not seem like something that’s obviously harmful, but such trackers can aggregate strikingly personal information from seemingly benign data. For instance, if you’ve used a ride-sharing app, your physical location might be shared across multiple platforms. Use that ride-sharing platform to visit Planned Parenthood, and various inferences could be drawn. Data from multiple browser windows left open on your phone can be aggregated to know your online purchases, the stores you frequent, the banking tools you use, the restaurants you visit – or when you’re at home waiting for a pizza.  At this point, the question of “so what” should be thoroughly answered. Does all of this still sound benign?  

Real World Data: Meet the Real-World Hazards

Pharma and digital health companies often tout the benefits of real-world data to improve population health.  These data hold power to create huge advancements in our understanding of disease.  We need real world data.  Yet without proper protections and stewardship, these data hold hazards, and are left unprotected.  All of these data and more are being grabbed by stalker were that is proliferating in epidemic proportions, and vulnerable people are most affected. One study in the European Institute for Gender Equality found that 7 out of 10 women in Europe that had experienced cyberstalking were also victims of intimate partner violence.  According to this report, the digital control exercised by a stalker can be immense: reading anything the surveilled person types, including user names and passwords for services such as banking applications, online shops and social networks; knowing where that person is by tracking their movements in real time with GPS; eavesdropping on or even recording phone calls, or even record them; reading text messages (regardless of whether encryption is used); monitoring social network activity; viewing photos and videos; and even being able to switch on the camera. 

Another survey showed that 85% of domestic violence workers reported having cared for victims whose attacker located them by GPS. Further, the statistics on the adverse effects of internet crime on racial and ethnic minorities show that BIPOC communities face identity theft more often, that the social media accounts of BIPOC communities are attacked more often, and that elderly persons are targeted more often than those under 65. Put simply: the more vulnerable are more vulnerable.

So why do we say “no aggregation without representation?”  It’s not an abstract ethical question about privacy or even autonomy. It is the right to be safe. The right to feel secure.  That makes it no less than a civil right

This concept of collective rights, representation, and stewardship of real-world health data is only getting started.   Those of us in healthcare who hold power, privilege, and influence have a responsibility to listen and act.  So what comes next?  

This incredible group will be meeting again at the National Health Policy Conference in Washington DC April 4th and 5th.  I hope you join them.  Thank you, Dr. Maya, Ms. Tomlin-Harris, Ms. Simmons and Ms. Robinson.  I promise I won’t forget what I’ve learned.

Eric D. Perakslis, PhD (@eperakslis) is a Rubenstein Fellow at Duke University.

#HealthTechDeals Episode 18: Huma, Afterlife, Timedoc Health Avive, Antidote Health

Exciting things are a-happening in the Medicaid space! Two new female CEOs are being announced today in City Block Health and in Centene! In this episode of Health Tech Deals, Jess and I discuss new leadership changes in the health tech space, as well as new deals: Huma buys Astra Zeneca Digital; Afterlife raises $22 million; Timedoc Health raises $48.5 million; Avive raises $22 million; Antidote Health raises $22 million.

THCB Gang Episode 86, Thursday March 24th, 1pm PT 4pm ET

Joining Matthew Holt (@boltyboy) on #THCBGang on March 24 for an hour of topical and sometime combative conversation on what’s happening in health care and beyond were fierce patient activist Casey Quinlan (@MightyCasey); patient safety expert and all around wit Michael Millenson (@MLMillenson); THCB regular writer and ponderer of odd juxtapositions Kim Bellard (@kimbbellard); and back from his travels in Mexico and medical historian Mike Magee (@drmikemagee).

Special guest this week was population health and primary care expert Ines Vigil, who developed that program at Johns Hopkins but now hangs her hat at Clarify Health &is the author of Population Health Analytics. We dived deep into what populations health means. What we need to do to make it work and whether it’s real or not!

You can see the video below live (and later archived) & if you’d rather listen than watch, the audio is preserved as a weekly podcast available on our iTunes & Spotify channels.

Celebrating the 12th Anniversary of the Affordable Care Act in a Pandemic: Where Would We Be Without It?

BY ROSEMARIE DAY

When the Affordable Care Act (ACA) was signed into law twelve years ago today, Joe Biden called it “a big f-ing deal.”  Little did he, or anyone else at that time, realize how big of a deal it was. Just ten years later, America was engulfed in a global pandemic, the magnitude of which hadn’t been seen in a century. Two years after that, the numbers are chilling: over 79 million people were infected, at least 878,613 were hospitalized, and 971,968 have died.

As bad as these numbers are, things would have been much worse if the ACA hadn’t come to pass. The ACA created an essential safety net that protected us from even more devastation. Covering over 20 million more people, it is the single largest health care program created since the passage of Medicare and Medicaid in 1965. Thanks to the ACA:

  • The estimated 9.6 million people who lost their jobs during the pandemic didn’t have to worry as much about finding health care coverage if they got sick from Covid (or anything else) – they could shop for subsidized insurance on the public exchanges or apply for Medicaid. This helped millions of people to stay covered, which saved thousands of lives. In fact, the overall rate of uninsured people has not increased significantly during the pandemic, thanks to the safety net of these public health care programs.
  • The 79 million people who got Covid didn’t have to worry about whether their infection’s aftermath would result in acquiring a pre-existing condition that would prohibit them from buying health insurance in the future (if they couldn’t get coverage through their jobs).
  • Those who were burnt out from the pandemic and joined the Great Resignation did not have to worry that they would be locked out of health insurance coverage while they took a break or looked for a new job. According to the Harvard Business Review, resignation rates are highest among mid-career employees (those between 30 and 45 years old), a stage of life when health insurance is critical, given the formation of families and the emerging health issues that come with age. 

The ACA’s remarkable safety net framework made it far easier for policy makers to deploy federal funds during this unprecedented emergency. The American Rescue Plan Act , a $1.9 trillion coronavirus relief bill signed by President Biden on March 11, 2021, included provisions that built on the ACA, including more generous premium tax credit subsidies. Its predecessor, the Families First Coronavirus Response Act (FFCRA) of 2020 enhanced Medicaid funding and required states to provide continuous Medicaid coverage.

  • For working- and middle-class people, the health insurance exchanges (both state and federal) provided one-stop shopping with enhanced federal subsidies which made health insurance more accessible for people who lost their employer-sponsored insurance. Many Americans who needed health insurance turned to the ACA marketplaces to find a plan. Amid the recent surge in resignations, the Biden administration announced that sign ups hit an all-time high of 14.5 million when open enrollment ended in January 2022.
  • For lower income people, the Medicaid program was there, stronger than ever, thanks to 38 states opting into the ACA’s expansion of the program. An increased federal matching contribution helped states to finance Medicaid enrollment during the worst of the economic downturn and prevented Medicaid disenrollments.
  • Additional benefits from these measures included reducing health disparities, ensuring mental health coverage, and helping new moms with more robust coverage.

Despite the ACA’s strong foundation and the many good things worth celebrating on its twelfth anniversary, there are difficulties ahead. The expanded premium subsidies and enhanced Medicaid funding are only temporary – both are set to expire this year. With that will come a loss of insurance coverage as people struggle to afford what’s on offer. On top of this, the public health emergency will be unwinding which will bring continuous Medicaid coverage to an end. And there are still too many uninsured people in this country (27.4 million). Retaining the expanded ACA benefits and finding other ways to build upon the ACA’s foundation are critical issues for the mid-term elections this fall.  

A recent study shows that support for the ACA and universal health care has increased during the pandemic. We shouldn’t “let a good crisis go to waste.” We need to make our voices heard and commit to building the future. We’ve had to expend far too much energy over the past decade defending the ACA and protecting it from repeal. The pain we’ve endured during this pandemic should not be for naught. Now is the time to assume an expansive posture of building toward universal health care. Retaining the expanded ACA benefits is an important incremental step. As difficult as the pandemic has been, it is providing a once-in-a-century opportunity to address America’s unfinished business in health care. The ACA is an excellent foundation. Let’s build on that so that we have a lasting cause for celebration.

Rosemarie Day is the Founder & CEO of Day Health Strategies and author of Marching Toward Coverage:  How Women Can Lead the Fight for Universal Healthcare (Beacon Press, 2020).  Follow her on Twitter:  @Rosemarie_Day1

Livongo’s Former CEO Zane Burke on New Gig Leading Healthcare Navigator Biz Quantum Health

By JESS DAMASSA

Livongo Alumni Updates from ViVE 2022 continue! Former CEO Zane Burke drops in to talk about his new gig as CEO of Quantum Health, the “original” healthcare navigator biz, and how he’s bullish on the notion that navigators aren’t going anywhere any time soon.

Now, for those who’ve followed Livongo’s founder Glen Tullman as he’s launched his new business Transcarent – and a whole lot of “navigators aren’t working” rhetoric to position it – one might find it very interesting to hear Zane’s take, particularly how what he learned at Livongo has led him to adopt a viewpoint so opposite Glen’s.

Is the market large enough for both approaches to employer benefits optimization – and all the other permutations with and without primary care in between – to win? And for those of you who remember when Zane and Glen ran opposing EMR companies…is this Cerner versus Allscripts all over again?? And speaking of, I get a GREAT candid take on what IS happening in the EMR market today and whether or not Zane thinks challenger tech co’s will finally be able to win over health systems and unseat the EMR incumbents.

#HealthTechDeals Episode 17: Cricket Health, Embold Health, Canopy, Vira Health, and Woebot

We’ve reViVEd from ViVE and the HIMMSanity is over! Jess and I are back to discuss more multimillion-dollar deals: Fresenius/Interwell/Cricket Health is merging to 2.4 billion valuation; Embold Health gets $26 million; Canopy gets $13 million; Vira Health gets $12 million; and Woebot gets $9 million.

-Matthew Holt

Jess DaMassa:

While we revived from Vive and the HIMSS-sanity is over and all that’s left is boring old Matthew Holt and I to pick up the pieces. It can only be the March 22nd episode of Health Tech Deals.

Matthew Holt:

So Jess, I had massive HIMSS FOMO. First time hadn’t been in like 428 years and everyone else was there. And did you care? No?

Jess DaMassa:

I’m two hours away and I’m like, “Nope. Not for me. Not right now.”

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ARPHA-H Needs to Think Bigger

BY KIM BELLARD

Everyone loves DARPA, the Defense Advanced Research Projects Agency that is credited with such hits as the internet and GPS, but is also responsible for things like the Boston Dynamics back-flipping robots and even Siri.  DARPA’s mission is to make “pivotal investments in breakthrough technologies for national security,” but, as the previous examples illustrate, we can’t always tell how those breakthrough technologies are going to get used.  

Healthcare is, at long last, getting its own DARPA, with ARPA-H (Advanced Research Project Agency for Health).  It’s been discussed for years, but just last week was finally funded; a billion dollars over three years.  But I fear it is already off on the wrong foot, even ignoring the fact that President Biden had requested $6.5b.  

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Hospital Systems: A Framework for Maximizing Social Benefit

By JEFF GOLDSMITH and IAN MORRISON

Hospital consolidation has risen to the top of the health policy stack. David Dranove and Lawton Burns argued in their recent Big Med:  Megaproviders and the High Cost of Health Care in America (Univ of Chicago Press, 2021) that hospital consolidation has produced neither cost savings from “economies of scale” nor measurable quality improvements expected from better care co-ordination. As a consequence, the Biden administration has targeted the health care industry for enhanced and more vigilant anti-trust enforcement.

However, as we discussed in a 2021 posting in Health Affairs, these large, complex health enterprises played a vital role in the societal response to the once-in-a-century COVID crisis. Multi-hospital health systems were one of the only pieces of societal infrastructure that actually exceeded expectations in the COVID crisis. These systems demonstrated that they are capable of producing, rapidly and on demand, demonstrable social benefit.

Exemplary health system performance during COVID begs an important question: how do we maximize the social benefits of these complex enterprises once the stubborn foe of COVID has been vanquished? How do we think conceptually about how systems produce those benefits and how should they fully achieve their potential for the society as a whole?

Origins of Hospital Consolidation

In 1980, the US hospital industry (excluding federal, psych and rehab facilities) was a $77 billion business comprised of roughly 5,900 community hospitals. It was already significantly consolidated at that time; roughly a third of hospitals were owned or managed by health systems, perhaps a half of those by investor-owned chains. Forty years later, there were 700 fewer facilities generating about $1.2 trillion in revenues (roughly a fourfold growth in real dollar revenues since 1980), and more than 70% of hospitals were part of systems. 

It is important to acknowledge here that hundreds more hospitals, many in rural health shortage areas or in inner cities, would have closed had they not been rescued by larger systems. Given that a large fraction of the hospitals that remain independent are tiny critical access facilities that are marginal candidates for mergers with larger enterprises, the bulk of hospital consolidation is likely behind us. Future consolidation is likely not to be of individual hospitals, but of smaller systems that are not certain they can remain independent. 

Today’s multi-billion dollar health systems like Intermountain Healthcare, Geisinger, Penn Medicine and Sentara are far more than merely roll-ups of formerly independent hospitals. They also employ directly or indirectly more than 40% of the nation’s practicing physicians, according to the AMA Physician Practice Benchmark Survey. They have also deployed 179 provider-sponsored health plans enrolling more than 13 million people (Milliman Torch Insight, personal communication 23 Sept, 2021). They operate extensive ambulatory facilities ranging from emergency and urgent care to surgical facilities to rehabilitation and physical therapy, in addition to psychiatric and long-term care facilities and programs.

Health Systems Didn’t Just “Happen”; Federal Health Policy Actively Catalyzed their Formation

Though many in the health policy world attribute hospital consolidation and integration to empire-building and positioning relative to health insurers, federal health policy played a catalytic role in fostering hospital consolidation and integration of physician practices and health insurance. In the fifty years since the HMO Act of 1973, hospitals and other providers have been actively encouraged by federal health policy to assume economic responsibility for the total cost of care, something they cannot do as isolated single hospitals.

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