June 18, 2021

The Weekly Gist: The Father’s Day Footie Fiesta Edition

by Chas Roades and Lisa Bielamowicz MD

It’s Father’s Day this weekend! While the pandemic has robbed us of one tried-and-true gift idea for Dad—neckwear is so Before Times—it’s brought us a unique gift opportunity, at least if the old man is a soccer fan. Because of COVID-related postponements, we’re now smack in the middle of not one, but two major international tournaments being played at the same time: the European Championships and the Copa America. This weekend it will be possible to watch excellent and exciting matches from morning through night (aside from the Switzerland game—their team is boring, but their flag is a big plus). Once you’ve recovered from the awful Dad Joke in that last sentence, pour your dad a cool one, fluff up his favorite easy chair, and plop him blissfully in front of the TV for a full weekend of footie and fun. Goooool!

THIS WEEK IN HEALTHCARE

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

An epic ACA trilogy draws to a close

Ruling by a decisive 7-2 margin, in what dissenting Justice Samuel Alito described as the third in “our epic Affordable Care Act trilogy”, the Supreme Court rejected the latest—and likely the last—effort to overturn the 2010 health reform law. Holding that the states and individuals that brought the latest challenge to the law did not have “standing”—the legal right to sue—the high court effectively closed the book on a decade-long series of challenges to the Affordable Care Act (ACA). Those efforts have included two previous Supreme Court cases, numerous promises to “repeal and replace” Obamacare, and the neutering of the law’s “individual mandate” to buy health insurance, which led to this latest case, Texas v. California. At issue in the case was whether, by zeroing out the penalty for not purchasing insurance, Congress effectively removed the ACA’s status as a taxation measure, which the Court had previously held as central to the constitutionality of the law. In Alito’s dissenting opinion, the full implications of the issue are laid out: in his view, by invalidating the mandate, Congress rendered the entire law unconstitutional, meaning that it should be overturned. But a majority of seven Justices, including Kavanaugh and Barrett (both appointed by President Trump) disagreed, joining Justice Breyer in his opinion that no harm had been done to the states that brought the suit, and ordering that the case be returned to the lower court for dismissal.

More than ten years after the passage of the ACA, it now (finally) seems as though the law is here to stay. Bolstering its central provisions—subsidized individual insurance coverage, expanded Medicaid benefits, protections for those who purchase insurance—is a centerpiece of the Biden administration’s policy program, featured first in the American Rescue Plan Act, and now in the recovery legislation currently being debated. Republicans, who had long opposed the ACA, barely mentioned it during the last presidential campaign, instead turning their focus to thwarting Democrats’ plans to expand coverage by lowering the Medicare eligibility age or implementing a government-run “public option”. Given the evenly split makeup of the Senate, however, we continue to believe the greatest hurdle such proposals will face is not Republican opposition, but reluctance on the part of conservative Democrats, like Sen. Joe Manchin (WV), whose votes will be needed for any legislation to pass. With the Supreme Court calling a third strike against challenges to the ACA, and the new administration eager to advance its other priorities (infrastructure, childcare, jobs), for the first time in over a decade, we might just be in for a period of relative calm on the healthcare policy front.

Michigan systems announce intent to merge

On Thursday, Grand Rapids-based Spectrum Health and Southfield-based Beaumont Health signed a letter of intent to merge, in a combination that would create a 22-hospital, $12B company that would become Michigan’s largest health system. Spectrum CEO Tina Freese Decker will lead the combined company, while Beaumont CEO John Fox will assist with the merger, then depart. The proposed deal would not only create a system spanning much of Michigan, but would also allow for the expansion of Spectrum’s health plan, Priority Health, which accounted for more than $5B of the system’s $8B in revenue, into the Detroit market. This is the third proposed merger since 2019 for Beaumont, which saw its planned combinations with Ohio-based Summa Health fall apart early in the pandemic; the system’s planned merger with Illinois-based Advocate-Aurora Health was called off in 2020 amid pushback from the system’s medical staff. Both deals fell apart due to challenges in communication and cultural compatibility—which will likely also be the greatest potential stumbling blocks for a Spectrum-Beaumont partnership. The recently abandoned combination between NC-based Cone Health and VA-based Sentara Healthcare also appears to have fallen apart due to cultural challenges, as have many other recent health system deals. Yet despite a string of cautionary tales, health system mergers continue apace—a sign of the pressure industry players are under to seek scale in order to contend with the growing ranks of disruptive (and well-funded) competitors.

Relying on one nonprofit to relieve the debts owed to another

Ballad Health, a not-for-profit health system operating in Virginia and Tennessee, announced this week that it had reached an agreement with RIP Medical Debt, a charity that uses donations to relieve debt created by healthcare bills, to pay off $287M of outstanding debt owed by its patients. According to a report in the Wall Street Journal, the purchase will eliminate the debt of 82,000 low-income patients, many of whom qualified for Ballad’s charity care program but did not take advantage of it. The terms of the purchase were not disclosed, but RIP Medical Debt, which says it has relieved over $4.5B in medical debt nationally, typically pays between one and 1.25 percent of the owed amount for recent debt, and as little as 0.03 percent for older debt. That’s similar to what typical debt-purchasing businesses pay. But unlike those businesses, however, RIP Medical Debt says its debt eradication service has no tax consequences for recipients, effectively wiping away large sums that patients might have owed for years. Since its creation as the result of a 2018 merger, Ballad has faced a mandate to increase the financial aid it provides to low-income patients, but has still come under criticism for aggressive collection practices, including the use of lawsuits against patients who owe the system. The deal with RIP Medical Debt is intended to reduce the amount of debt outstanding—as Ballad CEO Alan Levine told the Journal, “We’re wiping the slate clean.”

As a recent analysis by Axios and Johns Hopkins University showed, most nonprofit hospital systems have tried to reduce aggressive collections in recent years, with just 10 hospitals accounting for 97 percent of court actions against patients between 2018 and 2020. While it’s shocking to hear of a private charity having to step in to relieve patients of crippling medical debt in our nation’s $3.6T healthcare industry, absent larger structural solutions to the broken reimbursement system, it’s at least heartening to know that such services are available. But it’s a Band-Aid solution—more radical treatment remains undelivered.


GRAPHIC OF THE WEEK

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

Transgender patients face increasing obstacles to care

During Pride Month we feel it’s especially important to shine a light on the significant health disparities faced by transgender and gender-nonconforming individuals. Transgender healthcare has been under growing attack in recent months; while the Biden administration formally reinstated Affordable Care Act protections for transgender Americans against discrimination in healthcare, 20 states have introduced anti-trans bills since the start of the year, most featuring provisions that bar physicians from providing trans children with gender-affirming care. The graphic below shows that  transgender individuals are twice as likely as the broader LGBTQ+ population to delay care for fear of discriminationTrans individuals deal with myriad types of medical discrimination, from being misgendered in routine interactions to being denied treatment. And trans people of color report experiencing this mistreatment even more frequently. Transgender people are also more likely to be uninsured or to delay care for financial reasons, in part because their unemployment and uninsured rates are higher than the national average. Even when they do find supportive providers, nearly 40 percent report that their insurance will not cover essential elements of transitional care, such as hormone therapy.

It’s incumbent on doctors and health systems to strengthen their policies for treating trans individuals. Trans-specific training for clinicians and staff is a great place to start. Even simple shifts in operations—like including preferred name and pronouns on patient records and providing equal access to public restrooms—are small but important steps to providing a safer, more inclusive healthcare experience and reducing transgender health disparities.


THIS WEEK AT GIST—ON THE ROAD

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

An “employee diaspora” is complicating network contracting

This week we caught up with a benefits consultant colleague to get her perspective on how employers are thinking about health benefits as they come out of the pandemic. “It seems like employers and health systems have switched places in their enthusiasm for direct contracting,” she shared. Prior to the pandemic, employer interest in working directly with a health system around a narrow network product to deliver coordinated care was growing, but there were few systems offering attractive solutions. Now more health systems are ready, but the number of employees working remotely has created a new obstacle for direct contracting. One chief people officer for a large employer noted that while some employees have relocated permanently, others are still hopping from one Airbnb to another: “It’s at the point where I have no idea where half of our people are living on any given day.” In this new “employee diaspora”, some firms are seeing ten percent or more of their formerly office-based workforce now located outside the market, creating challenges for a geographically concentrated network to meet their needs. How many companies will allow permanent telework, and how many employees will take them up on it, remains to be seen (our colleague suggested we’ll know more in the fall, after the return to school anchors many families in place). But for now, the best employer partners for direct contracting efforts are likely mid-sized regional employers, who are more likely to retain a local workforce, and face fewer obstacles to making benefit design changes.

A “perfect storm” is brewing in the healthcare workforce

A topic that’s come up in almost every discussion we’ve had with health system executive teams and boards recently is workforce strategy. Beyond the immediate political debate about whether temporary unemployment benefits are exacerbating a shortage of workers, there’s a growing recognition that the healthcare workforce is approaching something that looks like a “perfect storm”. The workforce is mentally and physically exhausted from the pandemic, which has taken a toll both professionally and personally. Many workers are rethinking their work-life balance equations in the wake of a difficult year, during which working conditions and family responsibilities shifted dramatically. That, along with broader economic inflation, is driving demands for higher wages and a more robust set of benefits. Meanwhile, many health systems are shifting into cost-cutting mode, due to COVID-related shifts in demand patterns and continued downward pressure on reimbursement rates, forcing a renewed focus on workforce productivity. These combined forces threaten to create a negative spiral, which could lead to even worse shortages and deteriorating workplace engagement. It’s striking how quickly the “hero” narrative has shifted to a “crisis” narrative, and we agree completely with one health system board member who told us recently that workforce strategy is now the number one issue on his agenda. No easy answers here, but we’ll continue to report on innovative approaches to addressing these difficult challenges.


THIS WEEK AT GIST—ON THE PODCAST

All the headlines in healthcare policy, business, and more, in ten minutes or less every weekday morning.

Last Monday, we heard from Dr. Farzad Mostashari, CEO and co-founder of Aledade, about his take on physician quality reporting, and how it could be simplified. He recommends narrowing focus to just five key metrics. Check out the episode to hear more.

Last month we reported on the Lown Institute’s ranking of which hospitals deliver the greatest amount of “low value” care. On Monday’s episode we talk to president of the nonpartisan think tank, Dr. Vikas Saini, about the methodology it used in constructing that analysis.

[Subscribe on Apple, Spotify, Google, or wherever fine podcasts are available.]


ON THE GIST TURNTABLE

Give this a spin—you might like it.

When 2021 draws to a close, one of the unlikeliest entrants on the list of the year’s best albums is sure to be a new collection of psych-rock jams from Mdou Moctar, a Tuareg guitarist from northern Niger. Afrique Victime, released last month by the Portland, OR label Sahel Sounds, is an electrifying evolution of the assouf, or desert blues, style first pioneered by the late legends Ali Farka Touré and Abdallah Ag Oumbadougou, which combines the traditional rhythms and melodies of the Sahara with the high-voltage funk of Jimi Hendrix and Prince. It’s not Moctar’s first album; he’s been releasing recordings since 2008, first via cellphone-based music trading networks, and eventually on the specialty Sahel Sounds label. 2018 saw him break through on the US and European indie scenes with the album Ilana (The Creator), which received high critical praise. Now Moctar has reached a whole new level of creative success, and begun to connect with a wider audience (even being featured as part of NPR’s Tiny Desk Concert series). His lyrics, mostly sung in the Tamasheq language, combine the universal themes of love and longing with more direct political messages that address the violence and poverty plaguing his home country. But it’s Moctar’s unique playing style, featuring expert fretwork and complicated riffs, that propels the music forward. You’ll hear nothing else like it this year—because there is nothing like it. Mdou Moctar has drawn from local tradition and global influences to produce a sound all his own, reaching to us from the distant deserts of Northern Africa. Not to be missed. Best tracks: “Chismiten”; “Tala Tannam”; “Afrique Victime”.


WHAT WE’RE READING

Stuff we read this week that made us think.

Apple discovers that healthcare is hard

In 2019, Apple CEO Tim Cook made the bold prediction that the company’s “greatest contribution to mankind…will be about health”. Two years later, the company’s efforts have stalled, hampered by internal conflict and questions about data and direction, according to a recent Wall Street Journal piece. Apple approached healthcare with the bold ambition to disrupt the “363” model of care, which was how COO John Williams referred to the current system, in which patients only see a doctor a couple of times per year and are on their own the rest of the time (the other 363 days). Apple aspired to move into direct care delivery, creating a primary care platform staffed by Apple-employed doctors, armed with data from a range of Apple continuous health monitoring devices. The company planned to test the model on its own employees, and took over their employee clinics to build it—with the goal of “franchising” the model to health systems. That work has been stymied by lack of employee engagement in the platform. Case in point: few employees activated or engaged with Apple’s “HealthHabit” app, which offers common care management support like goal setting and connection to a virtual health coach. According to the article, Apple’s health strategy has now pivoted to a narrower goal, more in their sweet spot: selling more devices. Thus far, the company has learned the same lessons encountered by doctors and health systems for the past decade: building a primary care system is complex, and engaging patients in care management is hard. But despite these stumbles, Apple has the resources, talent, and consumer insight to disrupt healthcare through care innovation—if they can learn from their early struggles.


That’s what we’ve got for you this week. Before we close, we want to wish everyone a Happy Juneteenth—we’re grateful that this important date will now be recognized as an official holiday, especially after the events of the past year, and we’re looking forward to celebrating it with service and reflection in years to come.

Thanks for taking the time to read the Weekly Gist, and for sharing your comments and suggestions with us each week—we love hearing from you! Please take a moment to share this with friends and colleagues, and encourage them to subscribe, and to listen to our daily podcast.

And don’t forget to let us know if we can be of assistance in your work. You’re making healthcare better—we want to help!

Best regards,

Chas Roades
Co-Founder and CEO
chas@gisthealthcare.com

Lisa Bielamowicz, MD
Co-Founder and President
lisa@gisthealthcare.com