February 15, 2019

The Weekly Gist: The Ralph Wiggum Edition

by Chas Roades and Lisa Bielamowicz MD

Hope you had a Happy Valentine’s Day yesterday, and that your obligatory dozen red roses stay fresh long enough to be worth the exorbitant amount you paid to have them delivered at the last minute. It’s never been our favorite holiday, though it did produce our all-time favorite Ralph Wiggum episode on The Simpsons, and this year brought an excellent new Valentine’s Day special from the Netflix geniuses that make Big Mouth(Warning, not safe for work! You’ve been warned!)

And now the news we choo-choo-choose to review this week.


THIS WEEK IN HEALTHCARE

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

Moderate Democrats propose a Medicare buy-in option

This week, Democrats in the House and Senate introduced the “Medicare at 50 Act”, which would allow Americans over the age of 50 to buy into Medicare coverage. The legislation, introduced by Senators Debbie Stabenow (D-MI), Sherrod Brown (D-OH), and Tammy Baldwin (D-WI), and Representatives Joe Courtney (D-CT), Brian Higgins (D-NY), and John Larson (D-CT), is the latest entry in a crowded field of Democratic proposals to expand eligibility for Medicare, and provides a more moderate option than those offered by Sen. Bernie Sanders (I-VT) and others that call for “Medicare for All” (M4A). The new legislation is targeted at the 50 to 64 year-old population, a demographic that often faces the highest premiums for health insurance, with enrollees paying large amounts out of pocket for care, often “holding [their] breath” until they become eligible for Medicare, according to Stabenow. Along with other Senate colleagues, Stabenow had previously proposed a “Medicare at 55 Act” but said this week that opening eligibility for the 50-55 cohort would add little additional burden to the program. Those with lower incomes would be able to use Obamacare subsidies to offset the cost of purchasing Medicare coverage under the new legislation.

The proposal from moderate Democrats comes just weeks after Presidential hopeful Sen. Kamala Harris (D-CA) endorsed the idea of eliminating the role of private insurers entirely, a position echoed by progressive lawmakers in the House and Senate. The new buy-in bill would leave private insurers in place but force them to compete with a “public option” of Medicare coverage, an approach that might prove more palatable to voters. In a recent Kaiser Family Foundation survey, 77 percent of Americans expressed support for such a plan, with 56 percent favoring the more aggressive M4A approach. As expected, industry lobbyists reacted negatively to the proposal, with Federation of American Hospitals President and CEO Chip Kahn warning that “expanding the program with hospitals facing the lowest Medicare margins in history will make it more difficult to provide the critical care that all Americans expect and deserve.” As the M4A debate gears up with the start of the 2020 Presidential campaign, however, it’s becoming clear that the “Overton window” has shifted, and a public option like Medicare buy-in is much more feasible politically than it was when the Affordable Care Act was passed in 2010. We continue to believe that “Medicare for More”—and specifically, “Medicare Advantage for More”—is the likeliest outcome of the ongoing debate if Democrats are able to regain control of the White House and Senate. This latest proposal from Congressional Democrats points the way toward that kind of compromise solution.

Testing a new role for ambulance services

On Thursday, the Center for Medicare & Medicaid Innovation (CMMI) announced the launch of a new payment pilot that would pay ambulance providers to deliver an expanded range of care services, and to transport patients to alternative care settings. Expected to launch next year, the Emergency Triage, Treat and Transport Model (ET3) is a five-year, voluntary payment model that would reimburse care such as onsite and telemedicine-enabled assessment, transport to an alternative care site, or treatment in place in response to a 911 call. The model will require ambulance providers and local governments responsible for 911 dispatch to cooperate on triage and care delivery and will provide funds to assist in integrating services. The agency also plans to invite state Medicaid programs and private insurers to collaborate in model adoption.

We’ve long been impressed by programs that use “community paramedics” to provide in-home assessment of homebound patients with complex care needs. As one participant told us, paramedics are ideally suited to assess a home situation; they have “seen everything” so nothing fazes them, and patients who frequently call 911 are comfortable with letting a paramedic in their home and are often willing to engage with them on broader care issues. Yet few of these programs have enjoyed sufficient funding to scale services. At first blush, the ET3 program could be one of the most innovative payment models CMMI has yet proposed, with the potential not only to eliminate thousands of unnecessary ED visits and provide more appropriate care in a lower-cost setting, but also to link at-risk patients with ongoing care management and social resources.

CVS unveils its new HealthHUB stores

CVS Health announced this week that it has opened three HealthHUB locations in existing Houston-area stores. The HealthHUB pilots are part of a larger strategy outlined by CEO Larry Merlo following the company’s acquisition of insurer Aetna, intended to shift more of CVS’s retail space toward healthcare services. A first glimpse inside the stores reveals a redesigned clinic space with exam rooms that resemble those found in a physicians’ offices. Customers are greeted by a “care concierge” who can provide advice on their insurance or health and wellness devices and guide them to services. Clinics are staffed by advanced practice providers and offer an expanded array of clinical services including blood draws and chronic disease management. HealthHUBs also include “wellness rooms” for fitness and nutrition classes.

The HealthHUBs appear to have required an extensive remodel and large repurposing of CVS store space, building out a suite of new service offerings that analysts had largely anticipated. CVS previously said they would be testing and refining the HealthHUB concept across early 2019, and the company appears to be on pace to roll out, refine and scale a range of expanded clinical offerings, a key part of the company’s transformation from a retailer to a healthcare company. Health systems and physicians should assume that HealthHUBs will quickly become a cornerstone of care for Aetna members and other patients. CVS is pursuing an aggressive timeframe for execution and may have set a new record for time-to-market with a reimagined care offering—traditional providers should take note.


GRAPHIC OF THE WEEK

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

Here come the Millennials!

We spend an awful lot of time in healthcare talking about the Baby Boomers. No surprise, America has spent decades—six-and-a-half of them, to be exact—contending with the impact of this historically large generation on nearly every aspect of our national life. From politics to economics to culture, the Baby Boom reshaped almost every facet of our society, and healthcare has been no exception. The fact that over 10,000 Boomers join the Medicare ranks every day means they’ll have a transformative effect on how healthcare is delivered and paid for—up to and including the sustainability of the Medicare program itself. So it may come as a shock to Boomers to learn that, starting in 2019, it’s no longer All About Them. This year America passes a new milestone: Baby Boomers are now outnumbered by Millennials. As the chart below shows, Boomers (whose average age is now 63), will be surpassed this year by America’s new Largest Generation. Born between 1981 and 1996, the Millennials are now 30 years old on average, and there are 72.5M of them, compared to 72.0M Boomers—a gap that will continue to widen. (Thanks to immigration, we have another 14 years until we hit “peak” Millennial, according to Census Bureau projections.)

This demographic achievement alone ought to earn Millennials a participation trophy—obviously, not their first. (Forgive the sarcasm…we’re Gen X-ers, it’s what we do.) But this changing demographic landscape brings big implications for healthcare. Boomers are just entering their peak “senior care” consumption years now, and we’ll have a quarter-century or more of very expensive care to fund for a generation that is by all indications more riven with chronic disease but more likely to live into very old age than previous cohorts. That creates the imperative for population health approaches that allow care for seniors to be delivered in lower-acuity settings. At the same time, however, Millennials are really just entering the healthcare system. For the next several years, most of their care needs will be driven by having babies and caring for growing families. But just as the last of the Boomers get their Medicare cards in 2029, the Millennials will begin to enter their “upkeep” years—demanding a variety of diagnostics, surgeries, and procedures to keep them thriving. Who will pay for all of that specialty care, and where will it be delivered? Today’s health system planners would do well to begin to look ahead to future capacity needs, and economic models.

The Millennials bring dramatically different service expectations as well. This is a generation raised in the era of Amazon. One-click purchases, same-day delivery, frictionless transactions, personalized offerings, low institutional loyalty—all of that will shape the way this generation thinks about consuming healthcare, with huge implications for providers. This is a high-information generation, whose adult years have seen a pervasive shift from physical to digital commerce, and they’ll expect healthcare to follow that trend. Ask today’s pediatric providers how different the Millennials are as parent-consumers—you’ll quickly get the picture. Even as physicians, hospitals and others scramble to retool care delivery to more efficiently manage the swelling ranks of seniors, they’ll need to keep a close eye on the preferences of Millennials, upon whom their future fortunes will rely, and who won’t tolerate the hurry-up-and-wait ethos that still pervades American medicine.

(Spoiler alert: waiting in the wings is Gen Z, digital natives born in 1997 and after. Guess what? There’s even more of them!)


THIS WEEK AT GIST—ON THE ROAD

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

Where population health and consumer value meet

Lisa:

This week I delivered the keynote presentation to kick off the annual Learning Symposium for the New York State Delivery System Reform Incentive Program (DSRIP)—and got a glimpse into one of the largest Medicaid transformation programs in the country. Launched in 2014, New York’s DSRIP program uses a longstanding 1115 waiver to reinvest savings from its Medicaid redesign efforts into ongoing care transformation. Over five years, $8B has been allocated to two dozen Performing Provider Systems (PPS), regionally-organized provider networks who have developed and implemented plans to improve care for local Medicaid beneficiaries—with the ambitious goal of reducing hospitalizations by 25 percent. The symposium brought together PPS providers from across the state to present their care transformation strategies and facilitate collaboration.

My role was to share our thinking on the policy and market forces driving the emergence of a consumer market in healthcare. I’ll admit I was a little worried that some participants might not find our insights on consumer value directly relevant, given that much of their work has focused on care management and social support for patients who don’t have a lot of choice when accessing care. And New York, being one of the bluest of the “blue states”, is unlikely to build consumer financial incentives into their Medicaid program in the way that Indiana and other states have. But seeing these providers from across the state showcase their care management strategies revealed just how much their work to improve outcomes for the Medicaid population is delivering value to consumers. PPS networks have built virtual care and telemedicine solutions, care coordination teams, home-based access and care management programs—exactly the kinds of resources you’d need to make care more affordable, accessible, reliable and personal for any consumer, regardless of income.

We’re often asked whether health systems need to shift their strategies away from population health toward consumerism. This is a false choice. The vast majority of tactics that enable success in “population health”—improving health outcomes while lowering cost of care for a population of patients—dovetail with the goals of delivering value to individual consumers with growing choice and financial responsibility for their healthcare. Readily-available, lower-cost access, seamless care coordination, tailored care plans, and financial models that enable care delivery in the most appropriate setting are just a few of the strategies that are foundational for both. With participants covering the Bronx to New York’s rural North Country, the DSRIP program is large-scale experiment worth watching, one that shows how providers can increase value for low-income residents across very diverse markets, and use this work as a catalyst to improve care for the larger communities they serve.

It’s enough to give you high blood pressure

Chas:
If you’ll indulge me, I’d like to vent for a moment about some recent healthcare experiences that call into contrast the difference between how healthcare usually works and how it ought to work. Last year, approaching the ripe old age of 50, I finally gave into reality and got myself a primary care doctor. Having heard colleagues rave about them for years, I decided to sign up with One Medical, the concierge-lite, consumer-forward practice that promises same-day access to a doctor, telemedicine services, a redesigned clinic experience, and a personalized approach to primary care. For a nominal annual membership fee, it’s been the perfect solution for me, given my heavy travel schedule and limited patience for healthcare’s endless bureaucracy. It’s not for everyone, and your mileage may vary, but I’ve been happy with it. During my annual physical, my doctor put me on a low-dosage ACE inhibitor to treat my borderline hypertension. For the first couple of months, my doc encouraged me to take periodic blood pressure readings, and I was able to enter the data in the One Medical app and send them along to him easily. Once he adjusted the dosage appropriately, I was off and running (literally, three times a week…in case my doctor is reading this). So far, so good.

Enter my insurance company, and specifically, their pharmacy benefits management (PBM) subsidiary. On my first visit to the retail pharmacy to pick up my prescription, I noticed that it was only a 30-day supply of the daily medication. I asked the pharmacist if it was possible to get a larger supply of pills, or if I really had to come back every month to pick up more. Turns out my PBM restricts my refills to 30 days unless I sign up for their in-house mail-order service. I get it, that saves them money. But given travel, that model isn’t convenient for me, so I settled on a monthly routine of refills. Shout out to Walgreens for their excellent app, where I can scan the barcode on my pill bottle and pick up a refill at any Walgreens store, which I’ve done in several cities. I recently needed my prescription renewed, and with One Medical—dead easy. I clicked a button on their app and sent a recent blood pressure reading, and within ten minutes a new prescription was sent to the pharmacy.

Again, enter the PBM. When I went to pick up my next refill, I noticed that my copay had gone up from $1.08 to $6.43. Same plan, same drug, same generic manufacturer. That’s almost a 600% price increase! Look, I can swing the six bucks, but what’s going on? I asked the pharmacist, who replied that my PBM changes their copay amounts all the time, with no explanation. Sure enough, a month later the price had bounced down to $2.30. And it’s been different every month since.

To summarize: my consumer-friendly, digitally-enabled primary care practice makes it super easy to manage my (one, admittedly minor) chronic condition. My pharmacy is making it simple to refill my prescription on my mobile phone, anywhere in America. But the giant middleman PBM wants me to conform to a supply method that’s cheaper for them but inconvenient for me and sets payments in a seemingly irrational and certainly opaque way. Isn’t it in the insurer’s interest to make sure I manage my hypertension, especially given my family history of stroke? And I’m the simplest sort of chronic disease patient. Surely it’s much worse for a lower-information, less-advantaged, polychronic patient who needs several expensive medications. What’s been a minor nuisance for me, multiplied millions of times over, is a symptom of a broken approach to managing health. Let’s hope the future of healthcare is more like One Medical and Walgreens than the PBM—and let’s keep working on fixing this crazy system.


BINGE WATCH ALERT

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

We’ve been waiting to make this recommendation for a couple of weeks, because the last thing we want to do is accidentally reveal a spoiler that might ruin it for you. By this point, you’ve surely heard the buzz about the new Netflix show Russian Doll, 2019’s first Important Show that Launched a Hundred Think Pieces. Let’s just say, the show lives up to the hype—if you haven’t watched it yet, your homework for the weekend is to set aside time to take in all four delightful hours. Released the day before Groundhog Day (get it?), the show tells the story of neurotic New York City resident Nadia, who spends her 36th birthday repeatedly dying and coming back to life at her own birthday party. For the first couple of set-up episodes, the show seems like the same kind of zany, slapstick-y comic piece as the all-time classic Groundhog Day, complete with a bouncy song to greet the time-stuck protagonist as they wake up from yet another looped day—here, the virtuosic Natasha Lyonne (Orange is the New Black) hears Harry Nillson’s “Gotta Get Up”, just as Bill Murray awoke every day to “I Got You, Babe” in the 1993 original.

But the show quickly takes a metaphysical turn, exploring the nature of time, place, relationships, and self. As Nadia digs deeper into the reasons for her purgatorial state, she grapples with the impact of her troubled childhood on the grown-up choices she makes. Not that it ever gets heavy, mind you—the show is propelled forward with a madcap energy, putting Nadia (and a fellow time-traveler) through a Wile E. Coyote-esque set of circumstances as she searches for a way to break the cycle. No more spoilers here, except to encourage you to watch the final episode really, really closely, and to point out that creators Lyonne, Amy Poehler, and Leslye Headland have two more seasons planned. Two more rounds with Russian Doll? As Nadia might have it: that’s to die for.


WHAT WE’RE READING

Stuff we read this week that made us think.

Charting the rise in healthcare spending

This week, the Health Care Cost Institute (HCCI), a leading nonprofit research firm that collects and analyzes claims data from major private insurers and Medicare, released its annual report on cost and utilization trends. The report examines claims from more than 40M Americans covered by employer-sponsored insurance (ESI), decomposing trend data into price, utilization and intensity of services for spending on hospital admissions, outpatient visits, professional services, and pharmacy expenses. While the HCCI dataset is limited to claims from UnitedHealthcare, Humana, Aetna, and Kaiser Permanente, the annual report reliably provides a useful snapshot of key drivers of healthcare spending, and has become a must-read for policy analysts, researchers, and industry observers. HCCI also makes all of the report’s data available for public download and use, providing an invaluable resource. (Sadly, HCCI and UnitedHealthcare recently announced the discontinuation of their partnership, although data from the insurer will be incorporated into the institute’s work until 2022.)

Some of the highlights from this year’s report:

  • Per-capita spending increased by 4.2 percent between 2016 and 2017, slowing somewhat from the 4.9 percent growth of the year before;
  • Spending per person hit an all-time high of $5,641 in 2017, which included $1,097 for inpatient admissions, $1,580 for outpatient visits and procedures, $1,898 for professional procedures, and $1,065 for prescription drugs;
  • Total utilization has remained flat over a five-year period, during which time total per-capita spending has grown by 16.7 percent;
  • Inpatient spending experienced the slowest growth in 2017 (up 2.4 percent), while outpatient visits and procedures grew fastest (up 5.1 percent);
  • Spending on emergency department visits has grown 36 percent over five years, primarily driven by a 24% increase in average prices for emergency care.

There’s much more data to be gleaned from the full analysis; we’d recommend anyone interested in understanding what’s driving spending growth in the commercial population download the report. Look for upcoming infographics in the Weekly Gist that analyze the HCCI data in greater detail.

Asking the wrong question about physician consolidation 

A paper out this week from Rice University healthcare economist Vivian Ho is the latest analysis to posit that vertical integration of doctors and hospitals does little to improve care quality. Researchers evaluated 29 primarily hospital-focused quality and patient satisfaction measures and found that higher levels of vertical integration were associated with improved performance on just a small number of metrics—and increased market concentration was associated with lower scores on all patient satisfaction measures.

Before concluding that vertical integration generates little improvement in quality, it’s worth looking a little deeper at the methodology of this study, as well as the larger drivers of hospital-physician integration. Researchers used a blunt measure of vertical integration, combining health systems’ self-reported physician alignment model with a standard index of hospital market concentration (on the theory that lower hospital-to-hospital competition indicates greater vertical integration). The performance measures examined are hospital-focused, ignoring outpatient care quality, as well as the nuance of whether the “integrated” physicians in any market are responsible for the outcomes measured (employing primary care doctors and orthopedic surgeons would have little impact on measures of hospital treatment of heart attacks).

In a press release, the author notes: “If patient welfare doesn’t improve after integration, there may be other reasons why physicians and hospitals are forming closer relationships—perhaps to raise profits.” That’s right: there are many motives for vertical integration. Surely profitability has been a driver, as well as the rising complexity and deteriorating economics of running an independent practice. In the real world, physician alignment strategies are rarely driven by the primary goal of improved quality. However, many health systems have begun to recognize that closer financial alignment is a necessary (but far from sufficient) requirement to enable real progress on quality improvement. Regardless of alignment approach, though, quality improvement results from the hard work of care process redesign and cultural change, not as the inevitable result of vertical integration. Success stories are still too few and far between, but we believe there is value in leveraging vertical integration to make this work easier. Condemning vertical integration seems a harsh verdict; a more appropriate criticism would be that much of the heavy lifting of care redesign is yet to begin.

Anticipating the future promise of AI in medicine

A group of American and Chinese researchers published data this week showing that artificial intelligence (AI) is as accurate as physicians in diagnosing common clinical conditions in children. Scientists built an AI model using neural networks to process patient history, physical exam and lab data, clinical symptoms and other information to automatically generate a diagnosis. Using that model to evaluate the records of over 600,000 Chinese pediatric patients, the diagnostic accuracy of the AI-driven model was largely equivalent to that of physicians. Looser privacy standards in China make it easier to aggregate the data for AI-driven diagnosis, presenting a potential roadblock for replicating the results in the US. However, researchers cite the potential for AI to complement physician diagnosis, as algorithms recognize patterns that are often missed by doctors.

The scale of this study is impressive, but it’s hardly the first to illustrate the promise of AI in improving diagnosis and even substituting for high-cost clinical labor. However, few AI technologies have been able to make the leap from promising algorithm to real clinical application. Writing in Nature Medicine, digital-medicine guru Dr. Eric Topol recently reviewed the science and application of AI across clinical care, and found that while he “couldn’t find one discipline in medicine that doesn’t have significant AI potential impact”, there is an “AI chasm” between the developing science and real clinical impact. Most AI research is retrospective, and Topol identifies the need for true gold-standard, prospective studies. But he says that real impact, likely in visual diagnosis, could be imminent, with studies demonstrating AI analysis of radiographic images, retinal scans and skin lesions that is equal to or better than a doctor’s read. Topol doesn’t cite one key barrier of AI implementation: professional guilds, who have vested interest in keeping the diagnostic business in the hands of their members. Regardless, AI represents a promising path to reducing reliance on expensive human labor, one that is sure to be adopted as cost pressures mount. While we’d predict the first impact will come from automating “back-office” functions, doctors who resist AI are fighting a losing battle. Successful physicians will ascertain how to use AI to augment their practice—and the ones who blindly resist its use may be most in danger of being rendered obsolete.


Thanks for taking the time to read the Weekly Gist! We hope you have as much fun reading it as we have putting it together each week. Let us know! We’d love to hear your feedback and tips for future stories. And if you’ve found this worthwhile, please consider forwarding it to a friend or colleague and encouraging them to subscribe.

As always, what we like most is when you to let us know how we can be of assistance in your daily 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