September 13, 2019

The Weekly Gist: The Podcasts ‘R’ Us Edition

by Chas Roades and Lisa Bielamowicz MD

Happy Friday the 13th! Lucky day—we’ve got more exciting news to announce… We made a podcast! Today we’re proud to launch Gist Healthcare Daily, delivering the top healthcare policy, business, and industry news in under ten minutes. Hosted by veteran radio journalist Alex Olgin, the show will include headlines, interviews, analysis, and our “take” on what’s happening in healthcare—delivered fresh to your feed each weekday morning, in time for your coffee or commute. Here’s an introductory episode to get you started, and you can find Gist Healthcare Daily on your favorite podcast platform (Apple|Google|Spotify)—so subscribe already! We hope you’ll love listening as much as we love making it, and that you’ll give us your feedback and reviews and share it with your friends and colleagues. Enjoy!

THIS WEEK IN HEALTHCARE

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

Another heavyweight bout on healthcare in Houston

The debate field was cut in half, but the discussion of how to reform America’s ailing healthcare system was no less brief last night in Houston, as leading Democratic Presidential candidates met for the third in their series of debates. With frontrunner and former Vice President Joe Biden coming face-to-face for the first time with his two leading rivals, Sens. Elizabeth Warren (D-MA) and Bernie Sanders (I-VT), the moderate-versus-progressive divide between the candidates was on full display. Biden argued that the price tag for the Medicare for All (M4A) proposal favored by Sanders and Warren, at $30T over 10 years, would be impossible to pay for, while Sanders maintained that keeping the existing system would cost more than $50T over the same time period. Other candidates jumped at the opportunity to oppose M4A, with Sen. Amy Klobuchar (D-MN) saying “I don’t think it’s a bold idea, I think it’s a bad idea,” and South Bend, IN Mayor Pete Buttigieg adding his support for a more moderate public option, saying he trusts Americans to “choose what makes the most sense for you.” The debate over coverage expansion has dominated the early months of the Democratic primary campaign and is sure to feature prominently in the next debate on October 15th. We continue to believe that M4A is unlikely no matter who gets elected in 2020—the politics are simply too difficult, let alone the economics. More likely, in the event of a Democratic sweep, is some form of Medicare buy-in, probably built around Medicare Advantage. But whatever the merits of giving Medicare coverage to every American, the idea surely makes more sense than the one floated by businessman Andrew Yang, who announced plans to give ten randomly selected voters $12,000 each, to showcase his proposal for a universal basic income. (Although at least that would cover the estimated $8,200 the average, non-elderly family pays out of pocket for healthcare each year.)

A first-in-a-decade rise in the uninsured

Meanwhile, new data released by the Census Bureau this week show an increase in the percentage of Americans without health insurance—the first overall rise in the uninsured rate since the passage of the Affordable Care Act (ACA) in 2010. In 2018, the number of uninsured Americans rose to 27.5M, or 8.5 percent of the population, up from 25.6M, or 7.9 percent, the year before. Most of the increase appears to be driven by a decline in Medicaid enrollment, as well as a decrease in the percentage of insured children. Several factors likely contributed to the increase, including tighter requirements for Medicaid enrollment in some states, greater scrutiny of eligibility as part of the Trump administration’s effort to crack down on “public charge” coverage, the end of the individual mandate for coverage, and (ironically) the continued growth of the economy. Rising employment and wage levels may have left some Americans ineligible for Medicaid, even though their employers might not provide coverage. The uninsured rate actually decreased in three states (Wyoming, South Carolina and New York), but rose in eight others. Texas continues to have the highest proportion of uninsured residents, at 17.7 percent, while Massachusetts has the lowest rate at 2.8 percent. The overall rise in the uninsured will likely fuel additional interest in coverage expansion efforts, like those being debated in the Presidential campaign, and will probably spur more states that haven’t yet expanded Medicaid eligibility to consider doing so.

More North Carolina doctors look to opt out of hospital employment

Seven primary care physicians announced their intent to leave Gastonia, NC-based CaroMont Medical Group and join Tryon Medical Partners, an independent practice formed when nearly 90 doctors split from Charlotte-based Atrium Health last year. CaroMont Health indicated it would enforce the doctors’ noncompete agreements, leading the seven doctors to file a lawsuit asking the court to declare the agreements unenforceable. Tryon plans to open its first primary care clinic to the west of Charlotte in growing Gaston County, in early December. With the addition of the CaroMont doctors, the group appears to be positioning itself as an aggregator of doctors looking for an alternative to health system employment. This move is just the beginning of Tryon’s expansion, CEO Dr. Dale Owen told Gist Healthcare in an interview today. He said within the next couple years, “We will have progressed outside of Mecklenburg County, probably throughout a good bit of the state.”

Owen said the group is also looking to partner with other practices to expand its direct primary care offering for employers, which started earlier this summer. Doctors from across the country have been reaching out to Tryon, Owen said. And the group is offering ways to work with them that don’t necessarily include formally joining the practice. “We can consult with a single physician entity or multiple physicians,” said Owen. “We can manage them through a managed service organization that we have.” Should the North Carolina lawsuit prove successful, it could spark a new wave of physician “secession” efforts. Health systems that believe integrated care creates value for patients will be forced to navigate the uncomfortable boundaries of physician autonomy and, working with physician leaders, clearly define what it means to be a “member” of the integrated group—or risk losing doctors to payers and independent groups who can provide an established platform for small groups of doctors to quickly plug into, lowering the bar for “going independent”. [Hear more of our interview with Dr. Owen on next Monday’s Gist Healthcare Daily.]


GRAPHIC OF THE WEEK

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

In search of a new kind of payer-provider relationship

We’re working on a fascinating project with one of our members, who’s looking for new ways to collaborate with local payers that allow them to move beyond the annual cycle of tense negotiations over rates, and the zero-sum nature of their payer relationships. Their instinct—which aligns completely with ours—is that by re-orienting the payer-provider relationship around creating value for the end users of healthcare, patients, there will be an opportunity to work together in new ways. As we’ve discussed often, our vision is centered around “member value”—the health system treating every person it touches as though they were a member of the system. But of course, payers also view consumers and patients as “members”. What if both sides built a new set of services for their shared members, rather than working at arm’s length, and often at cross-purposes, to maximize their individual goals? As the graphic below indicates, the focus on “value-based payment” over the past few years—even in more advanced, shared-savings models—only gets us part of the way to this vision. A more durable partnership can be constructed around things that payers and providers both want to achieve for those they serve: better access, best deployment of care delivery to maximize value, an elevated financial experience for consumers, and a focus on the community-level drivers of health that often stand in the way of good outcomes. It remains to be seen whether this shared agenda can be turned into a separate platform offered jointly by the payer and provider, or whether this just provides a framework for deeper collaboration. But the early signs are positive; moving beyond the oppositional posture both sides assume when they only meet each other at the negotiating table has opened up a new space for dialogue. We’ll keep you posted.


THIS WEEK AT GIST—ON THE ROAD

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

A look inside Best Buy Health

Lisa:
I’ll admit being a little puzzled last year when Best Buy shelled out $800M to acquire GreatCall, whose services include home telemonitoring and the senior-friendly Jitterbug cell phones. The company wouldn’t have made my list of healthcare disruptors to watch. But meeting Asheesh Saksena, President of Best Buy Health, at a recent roundtable meeting on healthcare innovation convinced me they should be on it. Saksena described the company’s move from an electronics store to a services provider. Consumers aren’t just buying a television, they’re seeking an entertainment or relaxation experience, which led the company to invest in services like the Geek Squad to assess, customize and support technology in the home. Now Best Buy Health is looking to leverage that workforce as its “last mile” strategy to bring its growing portfolio of remote monitoring, communication and care management technology into seniors’ homes.

The scenarios Saksena outlined were bold and intriguing. Best Buy could assess the safety of a disabled patient’s home, installing locks, doorbells, communication and lighting operated from an iPad. A senior’s home could be outfitted with sensors in the bedroom, bathroom and kitchen to detect changes in activity. Caregivers could view the information in an app and would be contacted should a monitoring team detect worrisome changes. Seniors could push a “blue button” which connects to a concierge-like care manager via their smart TV. Intrigued by the pitch, I visited a local Best Buy a few days later, and found little actual evidence of these services, apart from a small display about GreatCall. But in talking to a salesperson about whether they could help support my aging parents in Texas, I found him eager to schedule a free in-home assessment. Checking out the company’s website, you can find bits of information—but you have to know what you’re looking for. As you’d expect, Saksena said they’ve received a lot of interest from Medicare Advantage plans. And he’s hoping to work with providers to understand how Best Buy might better connect with patients’ healthcare providers and medical records. Best Buy is still figuring out how to build, scale and profit from their growing healthcare portfolio—but if they pull it off, their evolution from a big-box electronics retailer to an enabler of home healthcare solutions would be one of the more compelling company transformations we’ve witnessed.

What makes a great strategist?

Chas:
A health system Chief Strategy Officer (CSO) who’s new to his role asked me this week how I would describe the keys to success for his position. He’d come from a traditional consulting background and moved over recently to assume the job of his former client executive, who just retired. I’ve worked with lots of CSOs over the years, and as I reflected on what separates the great from the merely good, a few things came to mind. First, the ability to elevate thinking from planning to strategy; a good strategist is less concerned about “dots on the map” and business plans, and spends more of their time on the big questions: whom do we serve, how do we create value, how do we innovate? Second, the ability to think “laterally”, looking for analogies and ideas from beyond the immediate competitive set. While they assess how other health systems are approaching a problem, they more often ask how problems are solved in other industries and by other types of organizations. But most importantly, the great CSOs that I’ve worked with have all built strong partnerships with operators and clinical leaders inside their organizations. They stay joined at the hip with the COO and facility/regional executives, and continually vet their ideas and seek guidance from clinical executives, frontline doctors and other clinicians. The not-so-secret advantage this gives them: a tight feedback loop and reality check on what’s working and what’s not, how strategy is being translated into action, and what’s happening “on the ground”. Those are not always easy habits for professional consultants to bring to the role and are based on years of relationship-building and experience across the organization. I’d be curious to hear from other CSOs: how do you view the critical elements of your role? Let me know.


ON THE GIST TURNTABLE

Give this a spin, you might like it.

There’s a fierce battle playing out right now for the soul of country music, between the bro-country, radio-driven world of six packs, pickups, and (not so) vague misogyny, and a new generation of artists who are trying to break into radio playlists with a more inclusive vision for the genre. We’ve seen how effective the mainstream Nashville scene is at circling the wagons and excluding outsiders—just ask what the Dixie Chicks have been up to since they “went political” at the start of the 2000s. The past year has already seen the likes of Kasey Musgraves and Lil Nas X breakthrough the 10-gallon hat barrier, and now a new female supergroup is taking on the Four Horsemen of trad-country directly. Dubbing themselves The Highwomen, the foursome of Brandi Carlile, Natalie Hemby, Maren Morris, and Amanda Shires have teamed up to deliver a reworking of the legendary Highwaymen project of the mid-80s (Willie Nelson, Johnny Cash, Waylon Jennings, and Kris Kristofferson). The new quartet just released their eponymous debut album, and it’s an instant contender for record of the year—on country charts and beyond. Combining honky-tonk, alt-folk Americana, and classic story-driven ballads, the album is nothing short of a manifesto aimed at expanding country music to a broader audience. Honduran refugees, Salem witches, single mothers and LGBT cowgirls all populate the album’s tracks—a collection that demands attention. This is the long-overdue future of a classic American genre…don’t miss it. Best tracks: “Highwomen”; “If She Ever Leaves Me”; “Redesigning Women


GIST IN THE NEWS

We said it, they quoted it.

Walmart is opening health clinics, but that’s just the start.
Business Insider; September 11, 2019

“‘Walmart is a sleeping giant, and they’re putting together all the pieces to be able to move big in healthcare when they want to,’ Dr. Lisa Bielamowicz, the cofounder of consulting firm Gist Healthcare, said.

[…] Bielamowicz, the healthcare consultant, said Walmart’s healthcare moves raised new questions for her about whether the company would acquire or closely partner with a health insurer. That’s because Walmart’s plans to lower the cost of healthcare and provide a wide variety of care to people will be very beneficial to health insurers, which will spend less on medical care as a result. Owning a health insurer would let Walmart capture more of those profits.”


WHAT WE’RE READING

Stuff we read this week that made us think.

More details emerge on Walmart’s new clinic concept

Walmart’s president of health and wellness, Sean Slovenski, revealed details about the company’s new comprehensive, standalone primary care clinic concept in an interview this week with Business Insider. The first “prototype” health center begins seeing patients today in Dallas, GA for an array of services including acute primary care, chronic disease management, dental, vision and behavioral health. Slovenski painted a bold vision for the clinics in the context of the company’s broader goal of serving a family’s healthcare needs. He said Walmart will begin to offer telemedicine and in-home care, which will be integrated with home grocery and prescription drug delivery. The health centers may also expand into specialty services like dermatology and women’s health via occasional visits from a “mobile clinic”. Slovenski said the company plans to open more stores in the area, with the second clinic slated to open in more rural Calhoun, GA in the next few months, offering that the expansion could quickly position Walmart as the largest provider of “basic” healthcare in northern Georgia. It’s an audacious goal, but we’d hesitate to bet against Walmart. In combining food, prescription and retail healthcare spend with an expanded clinical care offering, Walmart is clearly aiming to capture a large share of the consumer’s healthcare wallet—and also lower total cost of care. To profit from that, they will need a risk model to support it. We’d guess that acquiring a health plan like Humana—Slovenski’s former employer—is still very much on the table. Once that happens, all bets are off: Walmart could effectively become the “copper plan” for many Americans. Stay tuned.

Do insurance companies care about fraud?

Another interesting piece of investigative reporting from the team at ProPublica this week. The topic this time: healthcare fraud. We hear no end of politicians on both sides of the aisle crowing about cracking down on fraud and abuse in Medicare and Medicaid, and indeed both states and the Federal government aggressively pursue hundreds of cases of fraud in the public insurance programs every year. But as the ProPublica investigation uncovered, commercial insurance companies have been much less interested in fighting fraud. Why? Because they can just pass the cost of fraud and abuse along to their purchasers in the form of higher premiums. Plus, most Americans with commercial insurance are covered under self-funded employer plans, which are regulated by the Department of Labor, historically much less experienced with fighting healthcare fraud. And state regulators have largely turned a blind eye as well: in California, for example, the state Medicaid program prosecuted more than 300 cases of fraud in 2017 and 2018. Over the same time period, the state only filed charges in 22 cases of commercial health insurance fraud. Despite being legally required to report fraud to regulators, it turns out that commercial insurers are reluctant to draw attention to the problem (which is no less widespread than in the public programs), for fear of garnering negative publicity that might jeopardize sales. Easier just to price the problem into (ever rising) premiums. Next time you hear someone mention “fraud and abuse” as a major source of healthcare costs, just realize that you’re probably only hearing half the story.


That’s it for this week. Thanks for reading—and for checking out Gist Healthcare Daily in your podcast feed! We write the Weekly Gist because it’s the kind of thing we always wanted to read, and that’s just why we launched the new podcast. Hope you’ll enjoy it! And as always, we want to hear your feedback and suggestions. Don’t forget to let your friends and colleagues know about us as well and encourage them to subscribe!

Most importantly, if there’s anything we can do to be of assistance in your work, please let us know. 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