March 30, 2019

The Weekly Gist: The Sweet Sixteen Edition

by Chas Roades and Lisa Bielamowicz MD

It’s been one of those weeks in Washington, with political drama and healthcare headlines coming fast and furious. With March seeming poised to roar out like a lion (or maybe waddle out like a Duck), we’re thankful for the distractions of the Sweet Sixteen, baseball’s Opening Day, and the gorgeous cherry blossoms (which are about to hit their peak). It’s a great time to visit DC—catch a Nats game, stroll around the monuments, and enjoy our springtime weather. Let us know if you’re planning to be in town—we’d love to see you, and share our favorite places to eat, stay and have fun!

THIS WEEK IN HEALTHCARE

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

A surprising reversal in the bid to overturn the ACA

In a two-sentence letter to the US Court of Appeals for the Fifth Circuit, the Department of Justice (DOJ) kicked off a busy week in healthcare by announcing that it had reversed its position in a key case testing the constitutionality of the Affordable Care Act (ACA), and now urged the court to invalidate the entire health reform law. Previously the Trump administration only partially supported a December ruling by Federal District Court Judge Reed O’Conner, issued in Fort Worth, TX and now set for review by the Fifth Circuit. In that ruling, O’Connor held the ACA to be unconstitutional because Congress had reduced the penalty for not carrying insurance—the so-called “individual mandate”, a key ACA provision—to zero in late 2017. O’Connor argued that because a zero-penalty mandate no longer amounted to a tax, an earlier Supreme Court ruling now meant that the entire provision was unconstitutional, and so, by extension, was the rest of the 2010 law.

The administration’s decision to reverse course on the ACA lawsuit took officials in Washington by surprise, and was evidently made despite objections from Attorney General William Barr and Secretary of Health and Human Services (HHS) Alex Azar. Republicans in Congress, eager to seize political momentum following what they viewed as vindication from the outcome of the Muller investigation, were taken aback by the White House’s decision to renew efforts to dislodge the ACA. Facing concern from GOP senators, and defiance from House Democrats, who this week launched their own initiative to strengthen and expand the Obama-era health law, the White House signaled its intention to work with Congress to craft a replacement to the ACA, with President Trump pledging that “The Republican Party will soon be known as the party of healthcare”. The Texas court ruling, if upheld in the Fifth Circuit (and eventually by the Supreme Court) could prove seriously destabilizing to the entire healthcare industry, which has spent years implementing and adapting to the hundreds of provisions of the ACA. And it would surely energize Democratic voters in the upcoming Presidential elections, in which healthcare is already shaping up to be a key campaign issue. Given that the outcome of the court battle could come right at the height of next year’s election campaign, 2020 is shaping up to be (yet another) “Year of Healthcare” in US politics.

Meanwhile, a tough week in court for Trumpcare

Elsewhere in the judicial system, it was a less auspicious week for the Trump administration’s efforts to overhaul the insurance reforms of the ACA. On Wednesday, US District Court Judge James Boasberg rejected the Administration’s plan to allow Kentucky to implement a work requirement in its Medicaid program, and blocked Arkansas from continuing its Medicaid work requirement as well. Boasberg, an Obama appointee, held that the waivers granted by the Centers for Medicare & Medicaid Services (CMS) to those two states to enable work requirements were “arbitrary and capricious”, and failed to demonstrate how they would result in better health for Medicaid beneficiaries. The Administration favors work requirements as a measure to add an element of “personal responsibility” to the safety-net program, while critics contend that they are primarily a way of curtailing enrollment for low-income citizens. Using waivers to let states make changes to Medicaid eligibility based on work status, drug testing, and individual beneficiary financial accountability has been a key focus of CMS Administrator Seema Verma, and an attractive means for conservative-leaning states to participate in the ACA’s expanded Medicaid funding. Wednesday’s court decision could reverberate nationally; CMS has approved a total of eight states’ requests to implement work requirements, and another seven states have asked for approval. News of the ruling immediately stalled the progress of a similar work requirements bill in the Idaho Senate on Wednesday.

Then on Thursday, in a different decision by the same US District Court in Washington DC, Judge John Bates struck down the Trump administration’s 2018 rule intended to expand the availability of “association health plans”, which would have made it easier for self-employed individuals and small businesses to buy plans that do not comply with the ACA’s insurance coverage requirements. According to the Department of Labor, four million additional people were expected to sign up for association health plans by 2023 under the rule, which was heavily criticized by Democrats as enabling “junk insurance”. Judge Bates, a George W. Bush appointee, held that the rule was an illegal “end run” around the health law. It was not immediately clear whether the Administration planned to appeal the court’s ruling. Even as the Trump administration reinvigorates its campaign to dismantle the ACA after the failed 2017 legislative effort to “repeal and replace” the law, its ability to use regulatory authority and rule-making to refashion the Obama-era law is being stymied by the courts. On all fronts, it seems the battle over the ACA’s future is likely to drag on indefinitely.

Seeing business opportunity in a tumultuous public marketplace

Notwithstanding the week’s political and judicial gyrations regarding the ACA, it was reported that insurer Centene Corp, whose business is heavily weighted toward the Medicaid and Obamacare markets, planned to acquire its smaller rival WellCare Health Plans Inc. The deal, valued at $15.3B, would create a $97B company with 22M members nationwide, and a substantial presence in the government insurance business—particularly Medicaid managed care, in which the companies cover a combined 12.3M beneficiaries. Over the past several years, both companies have grown their memberships rapidly, and the combination is expected to position the new company to compete more aggressively with CVS (which now owns Aetna), Humana, and UnitedHealthcare in the burgeoning market for private Medicaid and Medicare coverage. According to a factsheet released by Centene, the new company would be the market share leader in Medicaid and health insurance marketplace segments, and the fourth-place player in Medicare Advantage. Centene also revealed that it expects to reap $500M in cost savings from the acquisition in the first two years. Even as the politics of Medicare, Medicaid, and the Affordable Care Act become ever more heated, the business opportunities created by the growing proportion of Americans covered by public insurance continue to grow. While policymakers battle over benefit levels and coverage rules, a parallel competition to “own” enrollees continues to take shape.


GRAPHIC OF THE WEEK

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

A closer look healthcare value across the Sweet Sixteen

We got a lot of positive feedback on our Health Value March Madness feature in last week’s edition—apparently it was a welcome diversion from lopsided tournament games and predictable on-court results. Interestingly, despite the top three seeds in each region making it to the Sweet Sixteen, there was only one perfect bracket left across all the major competitions (ESPN, Sports Illustrated, CBS Sports, Fox Sports, Yahoo!, and NCAA.com) before the start of play this week. As tracked by NCAA.com, that bracket belonged to a Veterans Affairs neuropsychologist in Columbus, OH, Gregg Nigl, who beat 1-in-281billion odds with the longest-surviving bracket in the history of the tournament. His streak, however, came to an end on Thursday evening with Purdue’s overtime victory over Tennessee. Sorry, Gregg.

Our Health Value bracket hasn’t fared nearly as well, especially since we had Vermont going to the final game. But never fear, we’re back this week with a new and improved version—one you can use to customize your own healthcare head-to-heads, picking your favorite teams all the way from the Sweet Sixteen to the Championship Game. Thanks to more visualization wizardry from our friends at Ancore Health, you can click on the graphic below to visit our interactive bracket, choose your own winners, and compare health statistics between teams. As you’ll recall, we constructed a Health Value Index (HVI) by combining four domains of health data—access, cost, payment, and population health—and assigned a score to every county in America. (See an interactive map with county-by-county data here.) You can use our latest tool below to compare the HVI in each school’s home county, with additional detail on how the counties compare in each domain.

By coincidence, U.S. News & World Report just released their second annual “Healthiest Communities” report this week. It takes into account a much broader range of data on quality of life, including economic, educational, environmental, nutritional, housing, public safety and equity data, in addition to health statistics. Using that methodology, U.S. News determined that Douglas County, CO is the “healthiest” community in America; by comparison, our national analysis of a more focused set of healthcare data identified Marin County, CA as top of the list. Sadly, neither Arapahoe Community College nor College of Marin sent teams to the NCAA tournament, so you’ll have to make do with our bracket instead. The top contender left in the tournament according to our Health Value Index? The North Carolina Tar Heels, with a score of 1.12 (vs. Marin County’s 1.49). Sure, you could bet on them to win the whole thing, but to be honest, we think that’d be a little…cavalier. Enjoy the games!


THIS WEEK AT GIST—ON THE ROAD

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

Talking to people who like asking for money

Lisa:
I love speaking to large audiences and leading group discussions, but I’m actually a little introverted at heart. This week I found myself in front of possibly the most extroverted group of leaders in healthcare when I delivered the keynote address at the Association for Healthcare Philanthropy’s annual Leading Forward Summit. The meeting brought together over 150 Chief Development Officers (CDOs) and other philanthropy executives from across the country. Conversations with them are like riding a wave, effortless and engaging, but also efficient—these people know how to build and communicate their case. And they asked me to make their case to their health system leaders about what they need to be successful. Several CDOs were concerned about staff cuts as part of their systems’ cost reduction efforts. One mentioned that for every dollar invested in philanthropy, the health system sees a $4 return in additional revenue: “I understand that cost pressures are real, but to close the gap, I’d rather the system increase our goals and hold us accountable, rather than cut our resources.” Development efforts are most effective when CDOs are highly integrated into a system’s strategy-setting process: “When I joined our system strategy table, I was not only able to have more lead time to find donors, but I could give feedback on how the system’s vision was resonating in the community well in advance of launching a service.” As systems grow and consolidate, they feel a need for better messaging to donors and the community about how being part of a larger system creates local value: “Donors want to see their gifts have a local impact. We need to be able to tell a better story about why we chose to be part of a national system, and how it will improve patient care.” And they are concerned about the image painted by recent media coverage of hospital price growth: “The people we talk to read the Wall Street Journal. I’m having to answer more questions about why we need a major gift if our prices are so high, and why we’re giving patients huge bills for out-of-network care.”

I was most encouraged by the group’s enthusiasm to engage donors in the vision for different kind of health system. One CDO shared her excitement about our concept of Member Health: “If we create a system that builds loyalty among thousands of mostly healthy consumers, it gives us a whole new universe of potential donors, large and small, to engage in the mission of the system.” Many are already supporting community-based care efforts in telemedicine, senior care, and even bringing primary care physicians to underserved areas. “Donors are ready to invest in a health system that is centered in the community rather than the hospital. We just need to provide the vision and roadmap for creating it.

Viewing healthcare from the employer’s perspective

Chas:
I’ve been working with a health system recently to help them develop a direct-to-employer contracting strategy, and as part of that effort I’ve had the chance to talk to a handful of employers who might be potential partners for the system. It’s been a fascinating, outside-in look at the challenges facing providers who want to pursue risk strategies that move beyond traditional third-party payment. I’ve been struck by several things as I’ve talked to CEOs and HR leaders at these (mostly) medium-sized businesses, none of whom are in the healthcare business themselves. First, and least surprising, there’s a real knowledge gap about just how the business of healthcare delivery works—what the business drivers are, how decisions are made, how organizations and sites of care are related to each other. Second, and perhaps more troubling, there’s a data gap as well—many of these employers don’t really have a good sense of what’s driving their employees’ health spending (beyond anecdotally), let alone how variability in provider cost and efficiency might be linked to those costs. And almost universally, there’s a heavy reliance on brokers and consultants to shape healthcare purchasing and inform decision-making. It would require a level of sophistication well beyond that of most employers to be able to contract directly with local health systems in “accountable care” arrangements. If we think consumers lack the information to make smart choices in healthcare, well, the average employer isn’t in much better shape.

One conversation with an employer executive this week really hit home with me. Discussing the potential of working directly with our client, he began asking questions about how the health system’s employees receive care. He wanted to know if the health system was using the same care management and care coordination approaches with its own employees that it was proposing to offer to his workers. In truth, the answer was no. Because of sensitivities around organized labor, as well as concerns about the health status of their own employees, the system has been hesitant to require their own employees to use their accountable care organization. This did not sit well with the employer I was talking to. “If they’re not willing to eat their own cooking, why should I ask my employees to do it?”He went on to ask about access, convenience, and service quality at the health system, and shared his opinion that he would expect an A+ level of service for his employees as patients. In his view, the choice of a health system partner sends a signal to employees about how valued they are by their employer—and he was as concerned about employee engagement as he was about employee health when choosing a healthcare network partner. We often overlook this aspect of healthcare purchasing—healthcare providers aren’t just another “vendor” for employers, they’re entrusted with caring for most employers’ most valuable asset—their people.


ON THE GIST TURNTABLE

Give this a spin, you might like it.

Jenny Lewis is the member of the indie rock royal family you never think about but can’t ignore once you hear her—the singer-songwriter equivalent of a “writer’s writer”. Turning to music in 1998 after an early career as a child actor, she fronted the influential band Rilo Kiley through several successful releases, only to be drawn into the orbit of Bright Eyes’s Conor Oberst, who encouraged her to forge ahead as a solo act even as her band was hitting the height of its success. Her fourth solo studio release, On the Line, out last week, finds Lewis holding court with a star-studded group of collaborators—Beck (vocals and production), Don Was (guitar), the now-disgraced Ryan Adams (guitar and production), and even Ringo Starr (a drummer you have probably heard of). This supporting cast provides the backing for Lewis’s most assured, powerful performance to date, writing and delivering a set of songs bathed in California nostalgia and melancholic Americana, with a vocal maturity and storytelling depth that puts her in a class with Stevie Nicks, Joni Mitchell, and the rest of the Laurel Canyon pantheon. “Heads Gonna Roll”, the opener, is a break-up song that finds Lewis looking back on a tortured love affair, singing over Adams’s guitar and Starr’s drums about a “little trip up North” in a Porsche convertible with a “narcoleptic poet from Duluth/And we disagreed about everything/…He fell asleep and I put up the roof.” On the album’s first single, “Red Bull and Hennessy”, Lewis channels Kate Bush in her frantic urgency to connect with another lover. And on “Little White Dove”, the album’s emotional center, Lewis relives the recent death of her mother from cancer over a Beck-produced track that creates a rhythmic tension that’s never fully resolved. On the Line is full of moments like that: layered, complex, and crafted to deliver an emotional punch. If Lewis is indie royalty, then this latest release is another shimmering jewel in her crown.


WHAT WE’RE READING

Stuff we read this week that made us think.

Artificial intelligence roundup: What healthcare needs is “slow AI”

Artificial intelligence (AI) was back in the spotlight this week, with CMS announcing the launch of the AI Health Outcomes Challenge, creating a contest for the development of AI-driven applications to predict adverse events and patient outcomes. Co-sponsored by the American Academy of Family Physicians and the Laura and John Arnold Foundation, the initiative will reward $1.65M in prize money to organizations who devise AI methodologies that use Medicare Part A and Part B claims data to accurately predict unplanned hospital and skilled nursing facility admissions and adverse events, with the goal of putting a tool in the hands of frontline physicians. The timeline for the program is tight, with initial submissions due on June 18. CMS will select first-stage finalists in July, who will gain access to broader data sets and can continue to develop their products across the year, with final awards to be announced in April 2020.

The CMS initiative comes amid a growing debate about how and when AI will make a definitive impact on healthcare. We read two pieces this week that illustrate radically different approaches to developing AI tools, and the implications for patient outcomes. Many AI tools to date have been developed by the private sector, fueled by investor capital hoping to profit from a transformative blockbuster application. Wired magazine profiled the work of Babylon Health, a consumer-directed telemedicine and triage platform that has expanded rapidly in England’s National Health System (NHS), despite growing concerns about its accuracy. Founded by a healthcare entrepreneur and “app-maker”, Babylon is a technology platform integrated into a novel London-based primary care offering, GP at Hand. GP at Hand is a general practice (GP) “surgery”, akin to an American primary care practice, that offers virtual care as well as in-person visits. Patients in the NHS are required to register with a GP as their main source of care. Taking advantage of an NHS rule change allowing patients to register with practices outside of their local area, GP at Hand marketed their virtual care offering to attract thousands of new patients—mostly healthy young adults—from across London.

Central to GP at Hand’s platform is a “chatbot” diagnostic engine powered by Babylon Health. Patients input symptoms and are led through an AI-driven diagnostic tree of questions that determine a likely diagnosis and risk level for the patient’s condition, giving a recommendation on whether the patient should go to the hospital, see their GP, or monitor their symptoms at home. Clinicians from GP at Home, as well as doctors who used the platform as a patient might, have questioned the diagnostic accuracy of the Babylon engine. Concerned GP at Hand doctors performed an internal audit of the system, finding that Babylon missed warning signs of a serious condition or was “flat out wrong” 10 to 15 percent of the time.

A look at Babylon’s development process revealed serious questions about whether the tool has been properly tested and vetted. At a simple level, Babylon’s methodology was created by physicians who took a hypothetical symptom and developed the probability of a range of underlying diagnoses, creating guiding questions to triage among the options. While this may be a decent start to an algorithm, Babylon has not worked to refine the tool using feedback from actual patient outcomes. Nor has the company submitted its data for peer review, with Babylon’s head doctor saying that “the methods for peer review are quite limiting”, and it would take “several months or a year to produce”. Despite these concerns, Babylon’s reach continues to expand. The NHS contracted with Babylon to supplement its phone-based advice line, and earlier this month the company launched a partnership to bring the chatbot to Canada, where patients in British Columbia will now have access.

While Babylon is focused on direct-to-consumer AI technology, a study in Nature Digital Medicine evaluated the efficacy of an AI application to measure the activity level of critically ill ICU patients. Researchers from Stanford University and Intermountain LDS Hospital in Salt Lake City, UT used “machine vision” to continuously monitor ICU patients during day-to-day tasks. To maintain privacy, researchers used depth sensors to collect 3-D silhouette data of patients and staff and developed algorithms to analyze the footage to determine whether patients were moving, and how many staff were involved in supporting them. The technology accurately characterized patient activity 87 percent of the time. Accuracy in determining number of medical personnel in the room was lower (68 percent), but investigators felt this could easily be improved by increasing the number of sensors. Healthcare AI experts hail these results as groundbreaking, potentially laying the foundation for refining patient care in the ICU, and furthering automated analysis and optimization of patient activity and staff workflow in other settings.

The Stanford-Intermountain study is also notable for its comprehensive approach and design. Researchers worked with clinicians in advance to analyze the complex ICU environment and get input on workflow challenges. The process was thorough and slow, but critical to design a system able to scale safely and effectively. This pace of development might not be tolerated by the culture and financial model of private-sector AI research. Babylon’s developers, by contrast, espoused a Silicon Valley-like ethic of (to paraphrase Facebook founder Mark Zuckerberg) “moving fast and breaking things”. Releasing partially-tested technology and later refining it based on user feedback may be a fine development process for a shopping or social media app, but putting forth technology that hasn’t been thoroughly vetted to give clinical guidance carries huge risks for patients.

With industry interest in AI growing, healthcare would benefit from more “slow AI”, developed with clinical and scientific collaboration and rigorous academic study design and testing, over “fast AI”, with pressure to generate returns for private investors pushing entrepreneurs to rapidly develop and deploy technology. We are also convinced that the greatest early impact from AI in healthcare will come not in aiding clinical diagnosis or producing whiz-bang consumer apps, but in improving staff workflow and non-clinical processes. We spent time recently with a group of experts in robotic process automation and came away optimistic that large portions of back-office tasks like claims processing, pre-authorization, and revenue cycle could be performed using machine-based algorithms. Another recent example: voice-activated technology like Amazon’s Alexa can replace a nurse call button with faster response times that both lower staffing burden and increase patient satisfaction.

Even with a $1M top prize, the new CMS AI Challenge provides a payoff that’s meager compared to the lofty aspirations of many healthcare entrepreneurs. But we’re hopeful that the initiative will support the development of vetted frameworks that distill predictive insight from Medicare claims data (although it would be much better if this information could be combined with actual clinical data). That approach, like projects to study patient movement in the ICU or automate claims processing, may seem dull in comparison to AI-driven technology that purports to replace doctors or helps consumers diagnose themselves—but we believe healthcare should prioritize slow over sexy in the path to integrate AI into care delivery.


Thanks for joining us for this week’s edition. We’re so thankful for your time and readership, and your willingness to share the Weekly Gist with a friend or colleague and encourage them to subscribe. We’d love to hear your feedback and comments, and any guidance you might have for future writing.

As always, what we’d like most is for you to let us know if we can be of any 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