May 10, 2019

The Weekly Gist: The Call Your Mother Edition

by Chas Roades and Lisa Bielamowicz MD

Mother’s Day is upon us, just in time for new mother and celebrity royal Meghan Markle to enjoy a Mother’s Day brunch fit for a queen. It’s too soon to expect little Archie Harrison Mountbatten-Windsor to send flowers or a card, but here’s a friendly reminder for the rest of us: don’t forget to let your mom know she’s appreciated this weekend and always.


What happened in healthcare this week—and what we think about it.

Tennessee takes Trump administration up on Medicaid block grants

The Tennessee Legislature passed a bill this week ordering the Governor to submit a waiver application to the Centers for Medicare & Medicaid Services (CMS) to become the first state to convert its Medicaid program to block grant funding. If approved, the waiver would radically change how the state’s Medicaid program is funded. Today, states get open-ended funds from the Federal government that match state spending on Medicaid patients. Block grants would cap Federal spending, providing a single, predetermined lump-sum payment, in return for allowing the state flexibility in benefit and program design. Proponents claim this flexibility can enable novel care and coverage models that enhance states’ ability to deliver efficient care, while critics charge that the proposals endanger Medicaid’s coverage guarantees and are merely a means to reduce enrollment and benefits. Some block grant proposals allow states to redirect any savings to non-healthcare spending priorities, further fueling the argument that they provide a way for states to shift money away from healthcare for the poor. Tennessee’s proposed waiver comes on the heels of a waiver filed by Utah to apply per-capita spending caps to its Medicaid program, which was conditionally approved by CMS in March.

Legal experts question whether 1115 waivers, which provide states flexibility to test new approaches for Medicaid, can be extended to permit block granting. In 2018, the Trump administration removed the requirement that waivers must include the goal of increasing coverage. But experts question whether Tennessee’s proposal meets the intent of the waiver program, which is to advance the Medicaid statute’s purposes, or if new legislation would be required to make this change. University of Michigan law professor Nick Bagley writes, “The whole point of block grants—if we’re being honest—isn’t to run an experiment or make Medicaid work better. The point, instead, is to give states the latitude to cut beneficiaries or benefits. That doesn’t sound to me like it’s consistent with Medicaid’s purposes.” The bill requires the state to submit the waiver to CMS within six months. If approved by the administration, it is certain to trigger legal challenges. Federal courts have already invalidated the use of waivers for some work requirementsBlock grants represent an even more drastic step, making Tennessee’s waiver and legal challenges to it a critical test of the viability of the Trump administration’s efforts to circumvent Congress and use waivers and rulemaking to radically restructure the Medicaid program. 

Saying goodbye to a lion of healthcare journalism 

The country lost one of its greatest healthcare reporters with the passing of Robert Pear, who died this week after complications from a recent stroke. Pear covered healthcare for the New York Times for 40 years and was known for his deep understanding of the industry, scrupulous methodology, and brilliance in explaining complexities to readers with clarity and deep insight. We had the honor of being called by him several times over the years to share our thoughts on topics he was researching, and we always approached those calls with humility. Even if Pear was calling for your expert input, he would undoubtedly know more about the topic, right down to the details in footnotes of articles or the minutiae of a thousand-page piece of legislation—and you’d leave the conversation having been educated by him. His relentless digging into the legislative process exposed internal arguments and meddling by special interests, annoying lawmakers to no end—and perhaps even turning the tide of public perception of the Clinton administration’s healthcare reform efforts in 1993. He took criticism with humor: Pear visited a DC-area sausage factory to understand how sausage is made—concluding that the comparison of lawmaking to sausage-making does a disservice to sausage makers. Pear kept a low profile and was dubbed “the most important reporter in Washington you have never heard of”. His acumen, unparalleled knowledge, authoritative voice, and pursuit of excellence over personal recognition will be deeply missed.

At $2M per patient, the new “Most Expensive Drug in America” 

A new therapy for a devastating degenerative disease will soon be released by Novartis with a potential tag of $2M, making it the highest-priced drug therapy in America, according to a recent piece in the Wall Street Journal.  Zolgensma treats spinal muscular atrophy (SMA), an inherited genetic disorder. SMA is similar to amyotrophic lateral sclerosis, or Lou Gehrig’s disease, but is usually diagnosed in infancy and leads to death by age two. Zolgensma isn’t a drug in the traditional sense, but a gene therapy that uses a virus to replace the defective gene in patients. According to the company, it can be curative in a single dose, justifying its high price. While all 12 infants treated with the drug showed drastic improvement, critics question whether the effects will be lasting. Regardless, Zolgensma is sure to spark debate over how to value—and pay for—a single-dose treatment that provides a potential lifelong improvement. Insurers are accustomed to high-priced treatments for which dosing and payment is spread out over a long course of therapy, but may balk at “holding the bag” for the full price of a curative therapy, highlighting the conflict that can emerge when real innovation, delivered at a very high cost, collides with our complex and rigid third-party payment system.

Kaiser launches online network for social care 

Kaiser Permanente announced the launch of Thrive Local, on online platform to connect healthcare and social services providers to address non-clinical care needs. Kaiser is partnering with technology start-up Unite Us to build the network of community providers, create an interface and communication channel with Kaiser’s electronic health record, and enable Kaiser providers to directly connect patients with resources for housing, food insecurity, transportation and other social needs. Thrive Local is set to launch this summer, with an ambitious rollout goal of reaching the entire system in three years. This initiative is part of a Kaiser’s larger investment in social determinants of health, which also include a $100M investment to address homelessness announced in January. These investments are critical to manage higher-need patients in the system’s Medicare Advantage and Medicaid populations, which are likely to account for a growing portion of Kaiser’s future business. Most health system programs to address social determinants of health have been focused around a single need or partnership, and have been managed locally with little system oversight, making them difficult to scale. Thrive Local is a model worth watching, one that could create a centralized, integrated platform capable of addressing a broad category of social needs across a range of geographies.


A key insight or teaching point from our work with clients, illustrated in infographic form.

Understanding the variability in home healthcare 

Home healthcare spending is expected to grow nearly 7% annually, faster than any other healthcare sector, outpacing growth in skilled nursing, outpatient and even hospital spending. The number of companies providing some form of home care services is expected to reach 46,000 by 2021, spurred by a growing senior population that prefers to receive care at home. But while choice may be expanding, the quality and cost of home health providers is widely variable—both across and within markets. National benchmarks can be instructive, but what is most relevant for creating high-performing networks is understanding local and regional variation among a market’s home healthcare providers. To that goal, our colleagues at Ancore Health have created an interactive visualization to help patients and providers understand the value delivered by home health providers in their markets.

To illustrate the tool’s capabilities, the graphic below provides a snapshot  analysis of home health provider cost and quality across Tennessee. While the state’s providers have, on average, higher quality, (as measured by Star Rating) than the nation as a whole, per-capita costs are also higher. However, those higher costs do not necessarily translate to better care. “We were surprised to find very little correlation between spending or patient volume and CMS’s quality rating,” said Ancore’s CEO, Eric Passon. “Our analysis suggests hospitals, physicians, and patients need to advocate for and use high-quality outcome data. Without it, providers and patients must rely on easily observable—but often misleading—signals such as costs and volume.” Click on the graphic below for the interactive version. Here, you can hover over data points to explore individual metrics and click through to look at the performance of individual providers in a single market (shown here for Nashville). Ancore is developing this tool for states and markets nationwide. If you’re interested in advance access to your local market’s home health analysis and visualization, email the Ancore team at


What we learned this week from our work in the real world.

The verbal landmine of “physician” vs. “provider”

After a meeting last week with a health system’s physician leadership cabinet, a doctor approached me with a comment. “I loved your discussion, and agreed with everything you said,” he commented, “but one thing bothered me. You kept referring to doctors as ‘providers’.” I explained that I tend to use the term when describing a group of clinical professionals of multiple levels of training, including, but not limited to, physicians. I asked why he disliked it. “We train for a long time to become doctors and have more capabilities. That should be recognized,” he replied, “Plus, it’s confusing for patients.” I agree with the latter point. The term “provider” is unfamiliar to patients. They know nurses and doctors—and the meaning of any new designation needs to be actively explained. (Not impossible: many patients have learned about the role of nurse practitioners, for example.) But the visceral reaction of some doctors toward being called providers feels rooted in something deeper. Becoming a doctor requires years of intense training in a very hierarchical system. We don’t merely “provide” a good or service. We doctors want to be recognized for our distinctive skills, training and professional status. I get that—but we also need a way to describe a group of doctors, advanced practice providers, nurses and other care professionals working together. It’s not just about names. In the future a growing portion of care that was once delivered by doctors will be provided by a range of professionals, requiring governance and decision-making processes that are increasingly inclusive. While my colleague and I agreed that “clinicians” may be a better term, doctors who get hung up on names and status risk missing the broader opportunity to build and lead a truly integrated and comprehensive multidisciplinary care enterprise.

Embracing the challenge of our times

After I finished delivering a talk at a health system board retreat recently, the CEO understandably felt the need to give her board a bit of a pep talk. I had discussed the economic, demographic and clinical drivers of change, and provided our perspective on implications for health system strategy and growth. As is often the case, the reaction was a mixture of gratitude (“Thanks for providing such a clear explanation of what’s really going on in healthcare.”) and dismay (“Why did you have to provide such a clear explanation of what’s really going on in healthcare?”). Sometimes CEOs feel the need to sugar-coat my message, assuring their boards that things are a bit different in their market, moving more slowly, not as turbulent. Not this time. Something the CEO said to her board really caught my attention. “We heard a lot of hard truths about our industry,” she said, “and when I talk to my peers around the country, I often hear them say they’re glad they’re near the end of their careers and don’t have to deal with what comes next. Not me. I think this is the best possible time to be leading a health system.” She then shared her view that periods of rapid change and intense pressure are rare opportunities to come up with new and innovative solutions to old problems, and they should take the initiative to forge a new way forward for a challenged business. Amen! Sure, the good old days were pretty good, and strategy was pretty simple: get bigger, raise prices, and keep the beds full by working the referral chain. Now there are new competitors, new technologies, new consumer expectations, and new payment rules to contend with, and a generation of older, sicker Americans whose care needs are becoming more intense, and at the same time, less profitable for the health system. That’s great news—what better time for engaged, visionary leaders to make a lasting impact on the industry? We need more leaders to embrace the moment, and not just pine for the old days or eagerly look forward to retirement. Dr. King taught us this: “The ultimate measure of a man is not where he stands in moments of comfort and convenience, but where he stands at times of challenge and controversy.”


Give this a spin, you might like it.

In 2017, Rihannon Giddens received a prestigious MacArthur Foundation “Genius” grant, and the latest release from the multi-talented folk singer is further evidence that she’s deserving of that title. Working with jazz musician Francesco Turrisi, who runs deep in the early music of the Middle East, Africa, and Italy, Giddens’s new project, There is No Other, is an exploration of the common threads linking world music with American and European folk songs. It’s an eclectic collection of extraordinary pieces, ranging from a Brazilian forró and a Sicilian pizzica (both traditional folk-dance pieces), to a reworked opera aria and a civil rights anthem. Turrisi brings a range of “other” musical influences to the pieces, but what holds the album together is Giddens’s masterful banjo work and powerful, warm contralto voice. There’s so much to explore here, as always in Giddens’s work. Once you’ve savored this new album, circle back and take in her groundbreaking project for American Folkways from earlier this year, Songs of Our Native Daughters, which highlights African-American women’s contributions to folk music. Or check out her excellent series of opera podcasts for NPR, Aria Code, which gives opera newcomers an accessible way to appreciate some of the masterworks of the genre. But be sure to spend some time with this new album, and savor Giddens’s synthesis of sounds both old and new. Genius, indeed. Best tracks: “I’m On My Way”; “Brown Baby”; “Black Swan”.


Stuff we read this week that made us think.

Why Medicare ACOs drop out of the program

Nearly a third of the 624 participating accountable care organizations (ACOs) have dropped out of the Medicare Shared Savings Program, or MSSP. A new study in Health Affairs examines program results, ACO surveys and demographic data to elucidate what factors make an ACO more likely to stay or leave. Many of the results are intuitive. Winning creates stickiness: earning a single bonus anytime during participation made an organization 75 percent less likely to drop out. ACOs who stick with the program for three years or longer are also less likely to drop. ACOs with higher benchmarks are more likely to stay in, as are those in markets with higher cost growth, and those with sicker patients (as measured by risk scores) are more likely to drop. Other factors raise more questions. ACOs who take downside risk are more likely to drop, but the study doesn’t answer why: are they retreating from risk, or looking to move more aggressively, perhaps choosing to instead focus on Medicare Advantage (MA)? There was no correlation with ACO demographics (for instance, rural vs. urban, physician- vs. hospital-sponsored), but we would anticipate other market factors, like the availability of commercial risk opportunities, may influence an ACO’s strategy.

The authors caution that CMS’s revamp of the ACO program, which pushes participants more quickly to downside risk, may push more to drop out. But we’d argue that this is by design: Medicare is better off with fewer ACOs that are willing to accept more risk and truly change business and care models, rather than a larger roster happy to linger in “upside only” models for the better part of a decade. CMS’s recently announced Direct Contracting payment models are a further step forward for ACOs seeking a faster path to risk, providing incentives closer to those of Medicare Advantage, as well as options for primary care practices, who have the potential to greatly inflect outcomes but only directly control a small portion of total spending. All of these new models, however, remain voluntary. But their breadth and depth should provide CMS with the information it needs to ascertain whether opt-in transformation can generate real savings, or if mandatory participation, combined with the continued growth of MA, will prove a more effective and faster solution.

Landmark study shows antiretrovirals can fully prevent HIV transmission

study published in Lancet demonstrated that antiretroviral treatment can fully prevent sexual transmission of HIV, raising hope that the virus could someday be eliminated. Conducted from 2010 to 2018, the PARTNER study prospectively followed nearly 1,000 gay male couples where one partner was infected with HIV. In over 76,000 unprotected sex acts, not a single transmission of HIV was observed when the infected partner was effectively treated with antiretroviral drugs. Advances in medical therapy have turned HIV from a deadly to a chronic disease for many patients, with an expected additional life expectancy of over 40 years for otherwise healthy young people diagnosed with the disease. These results demonstrate conclusively that early and aggressive diagnosis and treatment of all patients with HIV could theoretically eliminate the virus from the human population. The study lends support to President Trump’s challenge earlier this year to eliminate HIV in the US within a decade—but reaching that goal will require more far intensive resources to aggressively educate, diagnose and treat at-risk patients than those currently budgeted by the administration.

Thanks again for joining us this week and taking the time to read our thoughts on what’s going on in healthcare. We always love your feedback, comments and suggestions, so please keep in touch! And if you’ve found this edition of the Weekly Gist worthwhile, why not forward it to a friend or colleague and encourage them to subscribe?

And above all, if there’s anything we can do to be of assistance in your work, we hope you’ll let us know. You’re making healthcare better—we want to help!

Best regards,

Chas Roades
Co-Founder and CEO

Lisa Bielamowicz, MD
Co-Founder and President