May 3, 2019

The Weekly Gist: The Jeopardy for Executives Edition

by Chas Roades and Lisa Bielamowicz MD

We’re back! Very sorry for our unplanned absence last week—the unexpected combination of a family emergency, travel snafus, and overextended calendars left us too shorthanded to write. (Boy, are we glad help is on the way!) But we’ve returned to action this week with a new edition, prepared fresh for the 3rd of May, or as it is now known, the 22nd of Holzhauer. We’ve spent much of the past few weeks captivated by the Jeopardy champion’s reign, and we think his strategy has much to teach leaders in healthcare.

To wit, here are our “Holzhauer Lessons for Strategic Success”:

  1. Take on the hardest problems early—The champ goes after the bottom of the board straightaway, looking to take money off the table by answering the difficult questions first.
  2. Bet big on your own success—He’s so confident in his command of the material that he’s willing to bet the farm on Daily Doubles, rather than hedging his bets.
  3. Make decisions faster than your rivals—Holzhauer has the quickest buzzer skills we’ve seen, and the longer he’s on the show, the more comfortable he gets at buzzing in before his opponents.

Is there something to learn here for leaders in a fast-paced and changing environment, faced with uncertainty and the prospect of making risky decisions? We’ll take “Jeopardy for Executives” for $1,000, Alex.


THIS WEEK IN HEALTHCARE

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

Democrats draw up their healthcare battle lines

Now that former Vice President Joe Biden has thrown his hat in the ring for the 2020 Presidential race, the healthcare policy differences between moderate and progressive factions of the Democratic party are becoming clearer. On Monday, Biden revealed the broad outlines of his healthcare platform, coming out in favor of a “public option” that would allow Americans to buy into the Medicare program, but would leave the existing employer-sponsored insurance framework largely intact. “If the insurance company isn’t doing right by you, you should have another choice,” Biden said in a campaign rally in Pittsburgh. Although his campaign did not announce details of the proposal, Biden seems to support the idea of offering a Medicare plan to employers and individuals through the Affordable Care Act (ACA) marketplaces. As the frontrunner in the primary race, Biden’s support for this more moderate approach to coverage expansion will surely make him the favored candidate of healthcare industry interests, who have come out swinging hard against “Medicare for All” (M4A) proposals. But his position earned him a swipe from progressive candidate Sen. Bernie Sanders (I-VT), who’s running second among Democrats in early polling. “It doesn’t go anywhere near far enough,” said Sanders of Biden’s proposal, “it will be expensive, [and] it will not cover a whole lot of people.” Sanders instead favors eliminating private insurance altogether and moving quickly toward a single-payer system built around universal Medicare coverage. As the Presidential race takes shape, expect candidates to orient around one of these two poles: Biden’s moderate approach (O’Rourke, Buttigieg, Klobuchar); and Sanders’s more aggressive position (Warren, Harris, Booker). Either position will present a stark contrast in the general election, as the Trump administration looks to reinvigorate the effort to strike down the ACA entirely. The 2020 elections are shaping up to be a pivotal moment for healthcare.

Digging into the details of single-payer healthcare

Meanwhile, lawmakers on Capitol Hill rolled up their sleeves this week and began to explore what a shift to Bernie Sanders-style “single payer” healthcare would really mean. In a hearing before the House Rules Committee on Tuesday, Congress heard from proponents of M4A and policy experts about the implications of single-payer health coverage, at least as envisioned by a recent bill authored by Rep. Pramila Jayapal (D-WA). Although the committee does not have direct jurisdiction over Medicare, and Jayapal’s bill may never be introduced onto the floor of the House (since it lacks support from the Democratic leadership there), the hearing gave lawmakers their first chance to publicly probe the proposal, with predictable positions staked out by Democrats and Republicans on the committee. More hearings are likely later this year, including by the House Budget Committee, which this week received a report it requested from the Congressional Budget Office (CBO) on the topic of single-payer healthcare. While the report does not address specific details about the cost or tax implications of a shift to single payer, it nonetheless provides an outstanding primer on the key questions that will have to be answered as part of any serious attempt to pursue M4A. The graphic below, taken from the CBO document, poses those questions in a clear and helpful way, and the full report lays out a framework for approaching them. It’s a sober look at the hard problems that need to be faced: provider payment levels, increased wait times, public vs. private financing, access to unproven treatments. Whatever your view on the topic, we’d highly recommend reading the CBO report in full.

Health tech unicorn Livongo jumps into Medicare Advantage 

Livongo, a healthcare technology company focused on chronic disease management, announced this week that it has been approved by the Centers for Medicare & Medicaid Services (CMS) as an enrolled provider for Medicare Advantage (MA) plans. Through a partnership with Portland, OR-based payer Cambia Health Solutions, the company’s technology will be available to the health plan’s MA enrollees in June. Mountain View, CA-based Livongo, which began as a diabetes management solution, has rapidly expanded into other chronic diseases, including hypertension and weight management, and earlier this year, mental health, with the acquisition of online behavioral health solution MyStrength. The start-up was also one of the first to develop a HIPAA-compliant app for Amazon’s Alexa, which diabetic patients can now use to track their glucose measurements. This latest move positions Livongo to expand its reach into the rapidly-growing MA space and cements its position as the leading care management technology partner for health plans—and most-watched healthcare IPO of 2019. While other care management technology start-ups have yet to gain traction in ongoing patient management, Livongo, with its expanding clinical reach and large employer and payer customer base, is one to watch. Given that the average MA beneficiary has four chronic diseases, the company will need to integrate its single-condition products into a patient-centered solution and work closely with providers to improve outcomes for this population.


GRAPHIC OF THE WEEK

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

The dire financial impact of M4A on hospitals

With all of the focus on M4A recently, in its many permutations, we’re hearing a growing concern among hospital executives and physician leaders that their economics could be in serious peril. (For more on this, see the below anecdote from “on the road”.) That concern is justified, as you can see from the graphic below. On the left, we show data on payment-to-cost ratio for hospitals since the start of the 2000s. As you can see, hospitals rely heavily on a cross-subsidy model—Medicare and Medicaid reimbursement covers only 86 to 88 percent of the total cost of inpatient care delivery. Hospitals make up this difference, and generate a positive margin, by negotiating rates for commercially-insured patients that cover almost 145 percent of costs. As health systems have consolidated and built negotiating leverage, that percentage has steadily risen over the past several years, more than offsetting losses on publicly-insured patients. The problem? Those lucrative commercial patients only account for a third of admissions, as shown at the bottom right. And across the past decade and a half, commercial admissions have dropped by more than 20 percent. In other words, hospitals have been consolidating and raising commercial rates on a declining book of business in order to compensate for underpayment on a growing volume of government-paid cases. Now imagine that the commercial business disappeared entirely, and you can see what would happen—hospital finances would crater. Under M4A, Medicare rates would have to go up substantially to make up for the lost margin on commercial cases. Even if M4A turned out to be “Medicare Advantage for More”, trading commercial admissions (say, for the 55-65 population) for MA admissions (which are generally paid at Medicare FFS rates), this would create a difficult situation for hospitals. In our view, this economic reality is not getting discussed enough in the current debate over M4A.


THIS WEEK AT GIST—ON THE ROAD

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

Tips for becoming a successful doctor—on Twitter

Lisa:
Turns out Twitter isn’t just for trolls. Follow a dozen of the many healthcare journalists, economists, policy experts and clinical luminaries who tweet regularly, and you’ll not only stay up-to-date on industry happenings, but get a front-row seat to thoughtful analysis and debate, often among experts who may have never met in person. On a recent visit to Texas, I sat down with two physician leaders at Baylor Scott & White Health in Temple, cardiologist and Chair of Internal Medicine John Erwin, MD and Dawn Sears, MD, a gastroenterologist and expert on women’s issues in medicine. Both have amassed thousands of Twitter followers, and I wanted to understand how they use the platform and get their advice for other doctors thinking of tweeting. How to start? A professional meeting can provide a launchpad. Erwin stumbled onto Twitter in 2013 to help a colleague live-tweet his analysis of a cardiovascular conference—and at the end of the meeting had over 5,000 followers. Both suggest posting regularly (at least daily is best), focusing on your specific areas of clinical expertise. But interaction is just as important as posting your own ideasSears found retweeting others’ posts and joining conversations rapidly increased her followers. While the vast majority of their posts are professional, both felt it important to be known personally as well, posting about a handful of personal events and issues important to them. Be responsive to questions and comments, but manage time spent on social media by setting aside a dedicated time daily or weekly to post. Erwin uses the app Hootsuite to queue tweets to be posted at a set time. Use the Twitter community to vet research ideas and find collaborators across disciplines—and continents. Erwin has published papers with co-investigators found on Twitter, whom he’s never met in person. Twitter can be a great tool to collaborate on clinical ideas, but be mindful of privacy issues (this paper, co-authored by Erwin, provides a good primer on social media best practices for doctors). Finally, follow thought leaders outside your specialty, helpful in making connections between your work and other areas of medicine. Toward that goal, all doctors on Twitter should follow @HeartOTexasHeartMD and @GutGirlMD!

Getting distracted by the politics of healthcare

Chas:
A number of interactions over the past two weeks have convinced me that the political debate over M4A in Congress, amplified by Presidential candidates jockeying for favor with primary voters, is beginning to seriously spook executives across healthcare. At a health system board meeting in the Southwest last week, a number of physician leaders and board members peppered me with questions about the possible timing and dimensions of a shift to “single payer”, clearly convinced that M4A is an inevitability if Democrats take over in 2020. And two separate inbound calls this week, one from the CEO of a regional health system, and the other from a health plan executive, were both sparked by the hearings on M4A in Congress. Again, the implicit assumption in their questions about timing and impact was the same: M4A, or something like it, is sure to happen if the 2020 elections favors Democrats. My response to all of them: keep an eye on the politics, but don’t get overly distracted. There’s little chance that “single payer” healthcare will come to the US—industry lobbies are simply too powerful to let that happen. Even if Democrats do win the Senate and the White House in 2020, they’ll have to “govern to the center” to hold onto their majorities, and any major policy shifts will have to be negotiated across the various interests involved. Most likely: measures to strengthen provisions of the ACA, and perhaps a “public option” in the ACA exchanges. As to Medicare expansion, I believe the most we’d see in a Democratic administration would be a compromise allowing 55- to 65-year-olds to buy into Medicare Advantage plans. But for now, M4A’s biggest risk to hospitals and doctors is that it becomes a paralyzing distraction, keeping provider organizations from making the strategic and operational changes needed to re-orient care delivery around value. Regardless of the politics, a focus on delivering value to the consumers of care will prove to be a no-regrets position for providers.


ON THE GIST TURNTABLE

Give this a spin, you might like it.

So much good music in the last couple of weeks! High on the list of things to check out: the new Local Natives album Violet Street (easily their best); Lizzo’s new release Cuz I Love You (iconic and groundbreaking R&B/hip hop); and the return of Vampire Weekend with Father of the Bride (good as ever). But the record that’s held its place at the top of the rotation for weeks now is Titanic Rising, the third studio release from Weyes Blood, Natalie Merling’s solo project. Out last month on the Sub Pop label, the album is a lush, gorgeous throwback to the 70s-era sound of Karen Carpenter and Joni Mitchell, layered with dreamy electronica that perfectly offsets Merling’s incredible vocal talents. Her songs are personal and introspective, but with a maturity of vision that lifts her well above the bedroom mopes cluttering today’s indie scene. This is grownup music for grownup people, with sweeping themes, rich harmonies, and a sumptuous sound. No accident that the moniker Merling chose for her work, Weyes Blood, borrowing from the title of a 1950s Flannery O’Connor novel, is a play on “Wise Blood”—that’s exactly what she brings to the project. Best tracksMoviesMirror Forever; A Lot’s Gonna Change.


WHAT WE’RE READING

Stuff we read this week that made us think.

Big brother, now in pill format 

It’s incredibly frustrating for doctors when patients forget to take their medications. Start-up Proteus Digital Health offers one solution, placing a digital sensor inside the medication that sends a signal when the pill is digested in the patient’s stomach. A new piece in the Washington Post takes a skeptical view of whether the company’s $1,650 digital pill is the most cost-effective method to drive medication adherence. Proteus partnered with Otsuka Pharmaceutical to create Abilify MyCite, a version of a generic antipsychotic drug that includes Proteus’ digital sensor. The drug received FDA market clearance but has largely remained off the market due to insurer and physician reservations. Last month, Virginia’s Medicaid program became the first to cover the therapy. Doctors question whether the added benefits are worth the cost (roughly 30 times the cost of Abilify without the sensor), and whether the pill, which sends its signal to a patch worn on the patient’s torso, which then transmits it to a smartphone, is an invasion of patient privacy and autonomy. (Not to mention the potential skepticism of some schizophrenic patients, who may be prone to delusions and hallucinations). Moreover, we wonder whether the high-cost Proteus technology addresses the real root causes of medication noncompliance. Most often patients fail to take their medications because they can’t afford them or simply forget, problems not solved by a costly solution that simply measures whether a pill is swallowed. $1,650 a month could provide a patient with home health support or housing assistance—investments likely to make an even greater improvement in the health status of at-risk Medicaid patients.

Start-ups under scrutiny for referral practices 

Two start-ups promising consumers easier access to medications and new diagnostic tests came under scrutiny this week for questionable billing and referral practices. Testing start-up uBiome, one of the earliest entrants into the field of microbiome testing, offers patients the ability to sequence the DNA of the bacteria and other organisms that inhabit their digestive tracts, tapping into the exploding (pardon the term) amount of research linking the gut microbiome to diseases ranging from obesity to depression. Patients can access the sequencing by filling out a questionnaire on the company’s website. A doctor on contract then approves the test, and the patient’s insurance is billed. As reported in the Wall Street Journal, the FBI is investigating uBiome’s billing practices and relationships with prescribing doctors. Also this week, Nurx, an online women’s health company that has dubbed itself the “Uber for birth control”, came under scrutiny for its efforts to loosen prescribing standards and pressure put on doctors to increase approval rates. Experts worry that the prescribing methods of both companies may leave patients at risk, missing or ignoring symptoms that could indicate a serious underlying condition, and failing to connect patients to follow-up. Both Nurx and uBiome have received millions of dollars of outside investment. As direct-to-consumer healthcare technologies circumvent traditional provider relationships and safeguards, more oversight may be needed to ensure that start-up culture and investor-driven growth expectations don’t put patients at risk. 

Sink your teeth into this unsettling article

Do you dread going to the dentist? We do too. If you find yourself in the waiting room nervously anticipating your turn in “the chair”, here’s a piece of advice—do not pick up the latest issue of The Atlantic from the magazine rack. Inside, a long and disturbing article explores “The Truth About Dentistry”, telling the story of one California practitioner whose record of unnecessary and expensive overtreatment reveals everything that’s wrong with the practice of dentistry today. As the article highlights, dentistry has largely diverged from mainstream medicine over the past century, missing almost entirely the shift toward greater academic rigor, lengthy apprenticeship, peer oversight, and evidence-based practice. Instead, most dentists work in solo or small practice, untethered from oversight or peer scrutiny, and able to wield significant sway over their (often) frightened patients. Only in the last few years has a move toward clinical best practice taken hold in the profession, and with it a growing recognition that dental health and overall physical health are deeply related. What’s shocking is just how pervasive overtreatment, driven by the profit motive, has become—rather than universally recommending sealants for children’s teeth (a low-margin but highly-effective prophylactic measure), we over-rely on filling cavities. The twice-yearly checkup and cleaning? That’s a mid-20th century invention of toothpaste companies, not an evidence-based practice. (The same is true of regular flossing.) Extracting wisdom teeth, conducting root canals, performing expensive gum procedures—all big revenue drivers for dental practices based on limited clinical evidence. Dental-phobes, beware: there’s a lot of worrying information in this article, but it’s a thought-provoking piece on the urgent need to re-integrate dentistry and modern medicine.


Thanks for joining us for this week’s edition—we’re so glad to be back! We really appreciated all the inquiries last week during our unplanned outage…it’s nice to be missed! Please keep the feedback and suggestions coming, and don’t forget to pass this along to a friend or colleague if you’ve found it worthwhile, and encourage them to subscribe, too.

Most importantly, 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