|THIS WEEK IN HEALTHCARE
What happened in healthcare this week—and what we think about it.
- UnitedHealthcare to require prior authorization for some colonoscopies. Starting June 1, UnitedHealthcare will require physicians to submit prior authorization requests for certain types of colonoscopies. While routine screening colonoscopies will remain exempt, United beneficiaries requiring surveillance or diagnostic colonoscopies—which are performed on patients at greater risk of developing colon cancer or those already exhibiting worrisome symptoms—will need advance approval for the procedures to be covered by the payer. A UnitedHealthcare spokesperson said that this policy change is due to concerns that colonoscopy overutilization generates unnecessary medical risks and higher healthcare spending for patients. The American College of Gastroenterology released a statement criticizing the new policy on the grounds that prior authorization requirements create harmful delays for patients and are a significant source of provider burnout.
The Gist: So much for the planned rollback of prior authorizations that UnitedHealthcare recently touted. While the insurer is not wrong in saying that some studies have documented overutilization of colonoscopies, prior authorization is a blunt tool that takes care decision making out of practicing providers’ hands, redirecting that power (along with more profit) to the payer. To process prior authorization requests in a timely manner, insurers now commonly rely on AI algorithms, which are an imperfect solution. For patients exhibiting signs of colon cancer, improper denials and delayed approvals for colonoscopies could have life-threatening implications.
- CVS Health exits the clinical trials business. On Wednesday, CVS revealed plans to phase out its clinical trials unit by December 2024. The company launched the business line in 2021, building off its successful participation engaging CVS patrons in COVID vaccine and treatment studies. With 40 percent of Americans living near a CVS pharmacy, the company had hoped to facilitate the decentralization of the clinical trials business, recruiting patients who lived in markets without academic medical centers, with goals to engage 10M patients across 150 research sites. However, to date it has only enrolled 33K participants, just over 10 percent of its COVID vaccine volunteer patient cohort.
The Gist: While CVS appears to be focusing on its faster-growing Medicare Advantage and provider businesses, following its expensive acquisitions of Oak Street Health and Signify Health, the promise for decentralized clinical research remains. Traditional clinical trials often suffer from low participation; recruiting from more diverse populations would improve enrollment and could enhance the quality of research conducted. Decentralization is also a win for patients, providing access to clinical trials for lower-income patients who may have difficulty regularly traveling to academic centers. Other players, ranging from startups to retail giants like Walmart and Walgreens, remain active in this space. While we hope they may bring new models to market, they will likely evaluate their programs against similar business decisions and profit objectives.
- Biden selects new National Institutes of Health (NIH) Director. On Monday, President Biden announced his intent to nominate Dr. Monica Bertagnolli, a cancer surgeon who currently heads the National Cancer Institute, to be the NIH’s next director. The NIH has operated under an acting director since December 2021, when former Director Dr. Francis Collins stepped down after 12 years of service. Dr. Bertagnolli’s nomination, which was reported last month to be in the works, is now subject to Senate approval.
The Gist: This nomination comes in the midst of an overhaul in the Biden administration’s scientific leadership. The White House has received criticism for the time that it has taken to fill the NIH director role, which has been vacant for over a year. The rising political and public criticism faced by public health and research leaders in the wake of the pandemic has likely given some potential candidates pause as to whether they want to take on contentious confirmation hearings. The administration now faces the impending departures of Centers for Disease Control and Prevention director Dr. Rochelle Walensky, and White House COVID response team coordinator Dr. Ashish Jha (whose exit coincides with the end of the federal public health emergency). The ability to fill these vacancies quickly will be an important test of the administration’s action plan to address current and future public health challenges—and whether strong candidates will be willing to serve in a divisive, politicized environment.
Plus—what we’ve been reading.
- The rise and fall of Babylon Health in the United Kingdom. Published last Sunday in The Times of London, this article traces how the once-darling Babylon Health became an “unmitigated disaster”, for which the UK’s National Health Services (NHS)has paid a significant price. Babylon used its vision for a privatized NHS with slashed wait times and AI-powered treatment to boost its public offering, via a special-purpose acquisition company, with a $4.2B valuation in June 2021. Many of its promises have been revealed to be overly ambitious, if not doomed from the start, with its AI-powered diagnostics and funding model proving especially flawed. A pivot to managed care in the US failed to stem a tide of mounting losses, and the company announced plans to go private last week.
The Gist: There are myriad lessons from the demise of Babylon, a marquis example of a “digital-first” healthcare startup that burned through capital and crashed with the end of the era of cheap money: virtual care isn’t a magic wand to reduce wait times, and healthcare startups (and their investors) should think as much about the path to profitability as they do about rapid growth. While Babylon did have its finger on the pulse of promising technologies, it applied them irresponsibly: for patients, inaccurate AI diagnoses could be worse than no care at all. Amid the current AI frenzy, healthcare would benefit from more “slow AI”, developed with clinical and scientific collaboration and rigorous academic study design and testing, over “fast AI”, with pressure to generate returns for private investors pushing entrepreneurs to rapidly develop and deploy technology.