October 18, 2019

The Weekly Gist: The Hopped Up on Meds Edition

by Chas Roades and Lisa Bielamowicz MD

It’s cold and flu season, and here at Gist HQ we’ve assembled our own tasting room with the finest sampling of DayQuil, TheraFlu, Sudafed, and assorted other concoctions. Apologies in advance if this week’s edition reads like it was written under the influence…we’re both hopped up on cold meds. At least there’s baseball to keep our spirits up—at least for a certain Houstonian who’s counting on her hometown club to pay a World Series visit to our nation’s capital. For the other guy, there’s always Mucinex NightShift to ease the pain.

PSA: Get your flu shots!


THIS WEEK IN HEALTHCARE

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

Amazon to send employees to California for destination cancer care

Add Amazon to the growing list of large employers covering employee travel costs to receive care at a national “center of excellence”. This week the company announced a partnership with City of Hope, a Los Angeles-based comprehensive cancer care center. Employees will have the opportunity to visit City of Hope for diagnosis or treatment evaluation for any cancer diagnosis or to meet with the system’s doctors via videoconference. A joint program run by the Pacific Business Group on Health and consultants Health Design Plus, who have worked with Walmart and other employers to design similar arrangements, assisted in creating the offering. Amazon’s decision to launch “destination care” with cancer is a contrast to other employers like Lowe’s and Walmart, which initially targeted conditions like spine, joint replacement and cardiac surgery, focused around a single, time-limited care episode. It remains to be seen whether employees will actually receive treatment at City of Hope, or primarily use the benefit as a “second opinion” service. (City of Hope reports that in another employer arrangement, 84 percent of complex cancer patients had a revision in their diagnosis or treatment plan.) Regardless, the complexity of cancer care ups the ante for Amazon and participating clinicians to invest in coordination with an employee’s local doctors to ensure a seamless care process. Like Amazon’s recently announced primary care offering for Seattle-based employees, the cancer care program is being developed independently of Haven, Amazon’s joint venture with Berkshire Hathaway and JP Morgan Chase, which was founded to lower employer health costs—again raising the question of whether that venture will be a key engine in Amazon’s healthcare strategy, or whether innovation will come from within the company.

UnitedHealth Group is building a new kind of health system

Insurance giant UnitedHealth Group (UHG) reported strong third quarter earnings this week, beating Wall Street expectations for revenue and profits. Third quarter revenue for the company reached $59.9B, fueled in part by growth in its Optum division, which grew revenue by more than 13 percent in the quarter. In a call with investors, UHG executives pointed to OptumHealth, which aggregates the company’s care delivery assets, as a particular driver of growth. Dave Wichmann, UHG’s CEO, said that the company is developing a “next-generation” health system in OptumHealth, and Optum CEO Andrew Witty pointed to the company’s efforts to bring together insurance, physician services, and analytics into an “accountable care platform” in the Southern California market as an example of how it plans to build a lower-cost delivery model aimed at keeping patients out of hospitals and other expensive settings of care.

United isn’t wasting time in executing against this strategy, announcing plans this week to aggressively shift surgeries from hospitals to outpatient surgery centers. Beginning in November, United will expand its surgical prior authorization policy, potentially denying claims for procedures where hospital-level care is deemed unnecessary, unless those cases are moved to an outpatient site. UnitedHealthcare CEO Dirk McMahon said on this week’s earnings call that the company sees an opportunity to shift 20 percent of its medical spend to lower-cost ambulatory settings: “For example, there is a significant opportunity for more hip and knee replacement procedures to be performed in ambulatory centers, with those settings often having a 50 percent cost advantage over traditional settings and with fully comparable if not better, safety and quality.” UnitedHealth Group also owns Surgical Care Affiliates, the nation’s second largest ambulatory surgical center chain—whose sites could stand to benefit from the policy change. Having spent several years aggregating a multitude of care assets, insurance plans, and service offerings at a relentless pace, UHG now seems to be pivoting to integration mode—putting those pieces together to remake American healthcare. Whether the company can pull off integration at scale—which has proven difficult for many other organizations of lesser size—remains a critical unanswered question. To that challenge, we’d add one more: how will patients feel about the country’s largest insurance company taking charge of the delivery of care?

Google adds to its all-star healthcare bench

Google confirmed a report by CNBC on Thursday that it had hired Dr. Karen DeSalvo to become the company’s first Chief Health Officer. DeSalvo was previously National Coordinator for Health Information Technology in the Obama administration, in addition to serving as Assistant Secretary of Health from 2014 to 2017. She is currently on the faculty at Dell Medical School at the University of Texas at Austin and serves as president of the Society of General Internal Medicine. At Google, she will oversee the company’s work with hospitals, physicians and other clinicians across its cloud computing unit, and the Verily healthcare subsidiary of parent company Alphabet. DeSalvo will report to former Geisinger Health CEO Dr. David Feinberg, who joined Google last year to lead health strategy. Also this week, Google confirmed the hire of former FDA Commissioner Robert Califf to lead health policy and strategy. Hiring DeSalvo to join an already impressive team of highly regarded healthcare leaders is yet another signal that Google is planning a serious run at becoming a major player in the healthcare industry, one powered by its massive data analytics and artificial intelligence investments. We think Google’s ultimate play is to become the “cloud layer” of healthcare, allowing information to flow freely across a wide array of patients, payers, and provider sites—surely a lucrative posture in an industry that increasingly runs on data. We’re big fans of Karen DeSalvo, having known her and followed her work for many years. Great hire!


GRAPHIC OF THE WEEK

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

Confronting healthcare’s “27 percent problem”

Physician burnout is on everyone’s mind these days, and nearly every health system and physician group we work with is concerned about the sustainability of physician practice. Doctors face myriad demands on their time, and with continued pressure on performance and scrutiny over rising costs, the stress level of the average US physician is palpable. We often tell members, however, that burnout isn’t an issue about work-life balance or doctors not wanting to work long hours—it’s about where a physician spends her time. No doctor chose to practice medicine because they like paperwork or were looking for a career in data entry. Yet as the data here show, doctors spend most of their time engaged in tasks that take them away from their calling. We have a “27 percent problem” in healthcare—and to address physician burnout we need to change the workflow and time allocation of doctors to get them back to delivering care.


THIS WEEK AT GIST—ON THE ROAD

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

Reducing the “cycle time” of clinical practice change

Lisa:
In the wake of new research estimating that a quarter of US healthcare spending may be considered waste, I’ve had two discussions with health system and physician leaders this week who asked how they should be working to reduce low-value care. It struck me that the challenge is not a question of what to do. For nearly a decade, the Choosing Wisely initiative has identified over 500 low-value tests and procedures that should be eliminated. These exchanges reminded me of a conversation I had with a physician executive a few years ago. He described his medical group’s success in creating system-wide standards for managing hypertension and identified the larger problem still to be solved. “We’re diagnosing more disease, managing it better, and saving money,” he relayed, “but the problem is that it took nine months to do it. I have a list of a hundred other care processes that need the same focus. But we don’t have nine months times 100 to get the work done.” The most important challenge for any clinical standardization or high-reliability care program is not understanding how to change a care process or pathway, but figuring out how to do more, faster—reducing the “cycle time” of clinical change.

Keeping an eye on healthcare billboards

Chas:
As the travel gods would have it, I’ve posted a significant amount of “windshield time” lately, driving to far-flung member locations. What’s been keeping me awake on these long drives has been reading billboards at the side of the road. Beyond the most immediate observation, which is that personal injury attorneys seem to have settled on roadside ads as their primary source of client acquisition (better call Saul!), I’ve come to realize that you can learn a lot about what ails American healthcare by looking at billboards. Hospital systems have also seized on this channel to communicate messages about their brands, as have health plans (particularly in this Medicare enrollment season). And the messages conveyed are a pretty good indicator of the extent to which the system has embraced “value”. I’ve seen a lot of not-for-profit system ads touting their focus on health, not just treatment—that’s the centerpiece of Kaiser Permanente’s “Thrive” ads, and there are lots of other examples of hospital billboards encouraging better nutrition, exercise, even reading and literacy. Perhaps more prevalent, in fact, than actual investments in those wellness-related aspects of health. On the flip side, there are still a dismaying number of signs that feature a digital display of current wait times in the local ED (a particular favorite of for-profit providers). If we want people to access care more appropriately, telling them how short the wait is in the ED is not a great strategy. Somewhat more heartening, more and more billboards advertise telemedicine access and patient portals, encouraging more virtual care delivery.

Thinking about these billboard ads, I’m most struck by the fact that they’re really educational channels—billboards are a key mechanism for health providers to teach the public how to think about the role of the health system. Want to generate demand for cutting-edge technology (regardless of the clinical evidence supporting it)? Put up a billboard showing your fancy robotic surgery suite. Want people to come to the hospital ED for urgent care needs? Keep updating that digital wait time indicator. Looking to encourage behaviors that reduce the need for expensive care? Give people tips on how to “thrive”. Of course, billboards are a way to reinforce specific brands, but I suspect most hospital marketers aren’t thinking about the bigger messages that these signposts convey to the public about what the larger healthcare system is for.


THIS WEEK AT GIST—ON THE PODCAST

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

On this Monday’s episode, host Alex Olgin talked to Lisa about her recent field trip to visit one of the new CVS HealthHUBs in Houston. Hear what she saw when she visited the new clinic, and what it says about who CVS is targeting and what they might have planned moving forward.

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


BINGE WATCH ALERT

We would’ve worked harder, but we watched this instead.

If you’re like us, you’re mourning the end of the second season of Succession, HBO’s satirical drama depicting a fictionalized version of the Murdoch family and its boardroom machinations—easily the best show on TV right now. If you’re craving a substitute, complete with its own hyper-competent criminal boss and his dysfunctional family, look no further than Peaky Blinders. The BBC-produced show returned this month to Netflix for its fifth, six-episode season, each better than the last. Set in Birmingham, England in the post-World War I era, the show follows the exploits of the titular crime gang that once operated in that grimy industrial town, led by Tommy Shelby (Cillian Murphy), who returns disillusioned from the trenches of France to take the reins of his Gypsy family’s illegal activities. It’s a meticulously constructed period piece (along the lines of Boardwalk Empire), which first gained notice for its hyper-violent ethos and goth-rock soundtrack but has blossomed into a top-shelf prestige drama. Each season pits the enterprising Shelby family against a new nemesis—the IRA, the Italian mafia, Russian anarchists, and (this season) Oswald Mosely and the British Union of Fascists. If you can tune your ear to the Brummie accents and recall a bit of your early 20th century history, it’s a fantastic window into a slice of society and a time period we don’t often get to see on TV—as well as a crime family show worthy of mention in the same breath as The Sopranos or The Wire. 30 episodes are available to stream—a perfect opportunity to binge your way through chilly autumn nights.


WHAT WE’RE READING

Stuff we read this week that made us think.

A useful new study on Medicare for All

Coming on the heels of Tuesday’s Democratic primary debate, in which “Medicare for All” (M4A) again featured prominently, the center-left think tank Urban Institute is out with a new analysis this week that answers the question on the minds of many voters—what will it cost? Democratic candidates have touted various coverage expansion proposals, from the single-payer plans supported by Sens. Bernie Sanders and Elizabeth Warren, to the “Medicare for All Who Want It” plan of South Bend, IN mayor Pete Buttigieg, to former Vice President Joe Biden’s position of bolstering the Affordable Care Act (ACA). The Urban Institute study analyzes eight different flavors of coverage expansion ranging from increased ACA marketplace subsidies to a full, mandatory single-payer plan that includes long-term care coverage. The report is full of detailed analysis, but here’s the bottom line: single-payer coverage would require substantial additional Federal spending and would cost about $34T over ten years. That said, nearly universal coverage is possible with much lower levels of government spending, and presumably, without significant additional tax revenues. The scaled-back version of coverage expansion favored by Biden and Buttigieg would cost closer to $1.5T over 10 years. As the Urban Institute study makes clear, the actual impact of any plan on total spending depends critically on several key assumptions, including how much providers would be paid, who would be eligible for expanded coverage, and how much of that coverage would be subsidized by the government. Notably, the study does indicate that a “single-payer lite” version of M4A would actually cause total health spending to decrease (by eliminating premiums, deductibles, and copays), although full-bore M4A would result in increased overall spending, in addition to much greater Federal spending on care. Until the candidates are more forthcoming on details of their proposals, the Urban study is a handy reference guide to what’s quickly become the centerpiece issue of the 2020 Presidential campaign.

“Vigilante justice” for medical debt collections in Kansas

A investigative report from the journalists at ProPublica provides another angle on the medical debt challenges facing patients who can’t pay their bills. The piece—well worth a read—recounts the heartbreaking stories of low-income patients in rural Kansas who have been arrested and tried in court multiple times in a “government-sanctioned shakedown of the uninsured and underinsured”. At the center of the crisis in Coffeyville, KS is an aggressive plaintiff’s attorney, Michael Hassenplug, who uses permissive state regulations and loose oversight from a presiding judge (who is not required to have a law degree by Kansas law). Hassenplug calls the same defendants to court every three months, performing a “debtor’s exam” to see if they have new wages to be garnished or assets to be confiscated. Should debtors fail to appear, they are held in contempt, and the judge issues a bench warrant, often leading to their arrest. They are then forced to post bail, some of which is then applied to their debt—and the attorney takes a cut. The judge issues the warrants at the lawyer’s request with little question or evaluation: “It’s the only way you can get them into court.” Patients, like the husband managing treatment for his son’s lymphoma and his wife’s Lyme disease-induced seizures, or the pregnant woman hauled into court for a $380 radiology bill, are thrust into a cycle of vigilante-style collections that is difficult to escape. Most of the stories told in coverage of the medical debt crisis have focused on collections practices of hospitals. While Coffeyville Regional Medical Center is not without blame, this situation highlights the role of an entire industry of collections agencies, attorneys, and others who stand to benefit from aggressive practices.


That’s it! We’ve coughed and sneezed our way through another edition of the Weekly Gist. Thanks for taking time to read our work, and for sharing your feedback—we love hearing from you! Don’t forget to pass this along to a friend or colleague and encourage them to subscribe as well—and check out our podcast!

As ever, 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
chas@gisthealthcare.com

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