September 9, 2022

The Weekly Gist: The Goodbye to the Corgis Edition

by Chas Roades and Lisa Bielamowicz MD

We’re no monarchists, but like everyone else we’re feeling a little sad today about the passing of Queen Elizabeth II. It feels as though the world has lost an endearing but eccentric grandmother. Of course, Americans get to enjoy all the fascinating froth and frivolity of the British royals, without any of the nagging questions about their financial support or troubled history. So we appreciate the stories already appearing in the media focused on this important question: what happens to the corgis now? It appears the Queen had two young corgis at the time of her death, as well as a “dorgi”, a cross between a corgi and a dachshund. Evidently, they’ll go to the children. Back in 2015, the Queen called a halt to Windsor Castle’s long-running corgi breeding program, which produced 14 generations of dogs over the years. We’ll miss the corgis, the crazy hats, and the cameos with James Bond and Paddington Bear. Sincere condolences to our British friends, and best wishes to King Charles III.


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

  1. Walmart partners with UnitedHealth Group (UHG) in its continued push into healthcare. The nation’s largest retailer and its largest insurer announced a 10-year partnership to bring together the collective expertise of both companies to provide affordable healthcare to potentially millions of Americans. Set to start next year with 15 Walmart Health locations in Georgia and Florida, the collaboration will initially focus on seniors and Medicare Advantage (MA) beneficiaries, and will include a co-branded MA plan in Georgia. Walmart Health Virtual Care will also be in-network for some UnitedHealthcare beneficiaries. Plans for future years involve expanding the collaboration across commercial and Medicaid plans, as well as including pharmacy, dental, and vision services.

 The Gist: We have long wondered if this powerhouse pairing was in the works, as this kind of partnership makes a lot of sense for both parties. While Walmart has reportedly been considering an insurance company acquisition for years, and more recently been dabbling in its own insurance efforts, partnering with UHG provides the retailer with a share of the upside potential of getting into the insurance market without having to fully commit to entering that complex business. And given that 90 percent of Americans live within 10 miles of a Walmart store, and more than half of Americans visit a store every week, Walmart provides UHG with low-cost healthcare access points all over the country, especially important in markets where United’s own Optum physician network is not (yet) present.

  1. CVS Health acquires Signify Health. CVS Health has emerged as the winner from among a group of interested purchasers, rumored to have included both Amazon and UnitedHealth Group, to acquire the home health and technology services company for $8B. Signify’s nationwide network of 10,000+ clinicians facilitates at-home visits for Medicare Advantage patients, largely focused on providing health risk assessments. Dallas-based Signify went public in February 2021 and acquired accountable care organization builder Caravan Health earlier this year.

 The Gist: Though CVS has been more vocal about its goal to acquire primary care services—and was thought to have been interested in One Medical—it has been angling to expand its in-home presence as well. Signify provides CVS an immediate opportunity to improve risk-scoring operations for Aetna beneficiaries, and can connect beneficiaries to the CVS network of care sites, which includes pharmacies, MinuteClinics, and HealthHUBs. It can also sell Signify’s services to other insurers. In the longer-term, the acquisition offers CVS a critical piece of the healthcare services platform it is assembling, giving the pharmacy retailer a direct line into the burgeoning home care space.

  1. Court ruling threatens Affordable Care Act’s (ACA) no-cost requirement for preventive care services. The same Texas federal judge who ruled the entire ACA unconstitutional in 2018—a decision overturned by the Supreme Court last year—ruled this week that the ACA cannot require a company to fully cover preventive HIV drugs for its employees, on the grounds that doing so violates owners’ religious freedom. He also asserted that the government’s system for deciding what preventive care services should be covered under the ACA is unconstitutional, a broader declaration that potentially jeopardizes a wide swath of no-cost preventive services enshrined in the ACA for millions of Americans, including screening tests for a variety of cancers, sexually transmitted infections, and diabetes. The ruling did not include an injunction and is likely to be appealed.

 The Gist: Fully-covered preventive care services are a cornerstone of the ACA, and have increased access to basic healthcare services for many Americans. While there is still some uncertainty about the scope of this ruling, if it were to stand, millions of Americans would once again have to pay for some of the most common and highest-value healthcare services. That additional financial barrier, along with potential tightening of health plan benefit designs, would create barriers to access that only exacerbate our nation’s already stark healthcare disparities.

Pluswhat we’ve been reading.

  1. Private equity (PE)-backed physician practices increase healthcare spending and utilization. A recent JAMA study of 578 US dermatology, gastroenterology, and ophthalmology practices acquired by PE firms from 2016 to 2020 found a steady rise in spending in the two years after acquisition, indicating that the average charge per commercial claim increased 20 percent, and the average allowed amount per claim rose 11 percent. It also found that, compared to a large control group with similar patient risk scores, PE-acquired practices saw new patient visits increase by 38 percent and total visit volume increase by 16 percent.

 The Gist: While the study’s authors note that these findings could be explained by changes in practice operations or management, they point out they could also be caused by an overutilization of profitable services not tied to an increase in value or benefit to the patient. We think the latter is likely the case here, and that this study provides evidence of PE-induced overutilization aimed at meeting aggressive growth targets. But this is just the latest wave of ownership-induced overutilization: 20 years ago the same spotlight was on physician-owned imaging, cardiac, and other outpatient diagnostics, with several studies then documenting higher utilization in these facilities. Nonetheless, this latest trend is an important one to document and quantify, as the number of physicians working in PE-backed organizations continues to rise.


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

ED patient acuity largely unchanged by COVID (at least so far)

Many health systems are wondering if consumers are now leveraging new access points, including telemedicine, for low-acuity urgent care instead of going to the emergency department (ED), something which many experts are forecasting. For the graphic below, we partnered with healthcare software and analytics firm Strata Decision Technology to try to answer this question. Using their national StrataSphere dataset for short-term acute care hospitals, we found that ED patient acuity levels in July 2022 were virtually identical to those in July 2019, though 2022 volumes were down by four percent. Admission and observation decisions across the two groups were also largely the same. We’ll be keeping our eye on the data to see if the story changes, as individuals who have delayed care over the last two and a half years now return, presenting to the ED with more advanced disease. While current ED patients may not be more acute than before, the ongoing shortage of clinical labor may explain why some hospitals tell us that their EDs feel busier than ever. Measured by total worked hours of ED employees per adjusted patient day, the amount of labor dedicated to each patient requiring an overnight ED stay is down around forty percent from 2019 across hospital EDs of all staffing levels. With fewer labor hours to go around, each team member on the floor now has more to do.


A recommendation from our weekly diet of music, movies, TV, and other good stuff.

Kleo (Netflix)—For fans of retro Cold War shows like Deutchland 83 and The Americans, here’s a new German language show set in early 1990s Berlin that adds in the dark energy of Killing Eve. It’s a traditional revenge thriller centered on a former East German assassin, with a stylish and sometimes madcap feel—an energetic, escapist treat.


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

The strategic importance of finding a place to park

We’re fortunate to be privy to many of the big, complex strategic issues being discussed in health system boardrooms and executive meetings these days: care model innovations, new investments in technology, the digital revolution in care, market-shaping partnerships, the future of the healthcare workforce, and on and on. It’s a precarious and strategically critical moment for incumbent systems in many ways. But we’re often reminded that the nuts and bolts of running hospital facilities still demands attention, even at a board level. Case in point: the perennial discussion about what otherwise seems like a minor issue—parking. You’d be shocked how often parking comes up in board-level discussions (partly because many board members are older, active users of hospital services, who spend significant time looking for a place to park). We’ve been witness to knock-down, drag-out arguments about whether to charge for parking, and why more parking isn’t available for patients, physicians, and others. At first it seems like a trivial issue, but of course it isn’t. In reality, it’s a tangible example of how much patient experience matters in the design and operation of healthcare delivery. We’ve also found it’s a useful analogy in explaining to leaders why “frictionless access” should be at the heart of digital patient experience as well—a poorly-designed digital “front door” can be just as frustrating as not being able to find an inexpensive and convenient place to park before a medical appointment. Delivering reliable, affordable, high-quality care is critical, but getting the small experiential details (like parking) right can be incredibly impactful. Next time you visit a medical facility, think about what the parking experience is telling you about how “patient-centered” your provider really is.

That’s all for this week. We’ll be away next week thanks to a packed travel schedule, but back after that for more healthcare news and commentary. In the meantime, let us know what you think! We’d love to hear your feedback and suggestions, and as always we’d appreciate you sharing the Weekly Gist with friends and colleagues, and encouraging them to subscribe.

Please let us know if there’s anything we can do to be of assistance in your work. You’re making healthcare better—we want to help!

Best regards,

Chas Roades
Co-Founder and CEO

Lisa Bielamowicz, MD
Co-Founder and President