July 31, 2020

The Weekly Gist: The Unearned Pastimes Edition

by Chas Roades and Lisa Bielamowicz MD

This is why we can’t have nice things. Just a week after the restart of Major League Baseball, games are starting to be postponed left and right, as teams from Miami, Philadelphia, and St. Louis have had multiple players test positive for COVID. However careful the players are being (and let’s remember we’re talking about professional ball players in their early 20s), the harsh reality is that “community spread” affects, well, the whole community. And while it was great to see the NBA restart yesterday, with Utah’s Rudy Gobert (whose positive test in February started the dominos falling on the season’s suspension) scoring the first points and sinking game-winning free throws against New Orleans, we’re not holding our breath for a different outcome in the Disneyworld “bubble” of basketball. Maybe hockey will stand a better chance, with the remaining NHL games relocated to Canada, where the virus is largely under control, beginning this weekend. We’re grateful for the return of professional sports—it’s a welcome distraction. But we can’t help feeling like we just haven’t earned it.

THIS WEEK IN HEALTHCARE

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

July ends on an uncertain note in the pandemic battle

After a week that brought the most disastrous economic data in modern history, the death of a former Presidential candidate from COVID, and signs of an alarming surge in virus cases in the Midwest, Congress left Washington for the weekend without reaching a deal on a new recovery bill. That left millions of unemployed Americans without supplemental benefit payments, business owners wondering whether more financial assistance would be forthcoming, and hospitals facing the requirement to begin repaying billions of dollars of advance payments from Medicare. Also remaining on the table was funding to bolster coronavirus testing, with the top health official in charge of the testing effort testifying on Friday that the system is not currently able to deliver COVID test results to patients in a timely manner. While the surge in cases appears to be shifting to the Midwest, there were early indications of positive news across the Sun Belt, as the daily new case count in Florida, Louisiana, Texas, Arizona and California continued to decline, while daily death counts (a lagging indicator) continued to hit new records. Nationally, the daily case count appears to have reached a new plateau of around 65,000, with daily deaths rising to a 7-day average above 1,150, matching a level last seen in May.

Meanwhile, new clinical findings continued to refine our understanding of how the virus attacks its victims. Reporting in JAMA Cardiology, researchers used cardiac MRI to examine heart function among 100 coronavirus patients, 67 of whom recovered at home without hospitalization, finding that 78 percent demonstrated cardiac involvement and 60 percent had evidence of active heart muscle inflammation—concerning signs pointing to possible long-term complications, even in patients with relatively mild courses of COVID infection. And yesterday in JAMA, investigators reported that while young children are typically less affected by COVID-19 than adults, children under 5 may harbor 100 times as much active virus in their nose and throat as infected adults. While the study does not confirm that kids spread the virus to adults, it is sure to raise concerns about reopening schools, which has generally been considered relatively safer for younger children. US coronavirus update: 4.8M cases; 151K deaths; 52.9M tests conducted.

Oscar offers free virtual primary care amid major market expansion

Start-up insurer Oscar Health announced it will offer family and individual plans in 19 new markets in 2021, expanding to a total of 47 markets across 19 states. The company will also offer enrollees free virtual primary care and urgent care, and will eliminate out-of-pocket costs for many prescriptions, labs, imaging studies, and “first-tier” specialist visits when prescribed by Oscar Primary Care. The plan will also bring care into patients’ homes, including lab draws and monitoring of vital signs. With 420K enrollees, the vast majority in the individual market, Oscar has yet to turn a profit, but hopes to benefit from the expected surge in exchange enrollment brought by the economic downturn. We’ve been very impressed with Oscar’s care coordination platform, outlined here by the company’s chief medical officer, Dr. Dennis Weaver, the goal of which is to create an individualized, consumer-focused experience. Oscar’s dramatic expansion of free virtual and in-home care is yet another sign of an impending battle between health systems and health plans for dominance in virtual and home-based solutions.

Humana invests $100M in home-based primary care company Heal

Humana, the nation’s second-largest Medicare Advantage (MA) insurer, is moving further into home-based care as well, by investing $100M in primary care startup Heal. Founded in 2014, Los Angeles-based Heal offers on-demand primary care physician house calls, virtual visits, and patient monitoring in seven states and Washington, DC, through a network of 150 physicians and nurse practitioners. Humana’s investment will enable Heal’s expansion into new markets, including Chicago, Charlotte, and Houston, where the insurer has a strong MA presence. Heal adds to Humana’s growing primary care delivery portfolio, including the recent private equity-backed expansion of its senior-focused subsidiary medical group, Partners in Primary Care and last fall’s partnership expansion with Iora Health. The insurer has also built a formidable set of home-based care services, focused on managing care for high-risk seniors and patients at the end of life, including a partnership with home-based care company Landmark Health, acquisition of home-hospice provider Curo Health Services, and investment in Kindred Healthcare’s home care division. Heal shifted to a “virtual first” model at the start of the pandemic, and has seen telehealth visits increase by 800 percent, and physician house calls increase by 35 percent. Combined, the assets provide Humana a foundation for comprehensive, cross-continuum management of the company’s Medicare Advantage population—and the ability to field a broader a virtual care solution for its consumer base.


GRAPHIC OF THE WEEK

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

Envisioning the future of health system strategy

We’ve spent the past five months working with our health system members to develop a perspective on the impact of the coronavirus pandemic on strategy, discussing what’s changed and what hasn’t, and where leaders should focus moving forward. The below graphic provides an overview of that perspective. We think about the future across three time periods: the “near future”, which will largely be dominated by concerns about reopening and recovering clinical operations and financial stability; the “next future”, which we view as a period of strategic realignment during which we’ll see a “land grab” for advantage among payers, providers, and disruptors; and the “far future”, in which the fundamental structure of the industry—how healthcare is organized, delivered, and paid for—will see more dramatic changes based on the evolution of economic and policy drivers.

Over time, “market uncertainty” caused by the uncertain course of the disease itself, along with societal and political shifts, will give way to “industry uncertainty”, under which a new competitive landscape will begin to develop. Across those time horizons, health system strategy should focus on agile and decisive actions to respond to the environment—ensuring a safe and reliable return to normal clinical operations, taking best advantage of the opportunity to play new roles in the delivery of care (e.g., virtual and home-based services), and over time, building a full-scale, consumer-centric care ecosystem. That’s a lot of rhetoric, but the hard work lies beneath—requiring systems to execute on several key fronts, from ensuring efficient, “systematized” operations, to building sustainable payment and pricing approaches, to adopting a relentless focus on services that earn and maintain consumer loyalty over time. We’ll have more to share on all of these ideas across the coming months, as our work with members continues. What’s clear now is that we’re not going back to the old way of doing things—we’re heading toward a “brave new world” of healthcare delivery.


THIS WEEK AT GIST—ON THE ROAD PHONE

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

Beware of the backslide

Every health system and medical group we work with has experienced unprecedented change during the pandemic. The combination of lower regulatory and payment barriers and the need to rapidly innovate care delivery for unprecedented circumstances caused telemedicine visits to grow from dozens to thousands in just a few weeks. Doctors and executives came together to add capacity and redesign care. Eliminating bureaucracy and making big decisions quickly was energizing. But hardwiring this agility is proving to be difficult for many systems, and we’re seeing doctors and administrators begin to backslide into old ways of working. Blending in-person and telemedicine visits is proving challenging, and for many systems, virtual visit volumes are again falling below targets. It’s easy to slip back into old decision-making patterns when the pressure of the immediate crisis wanes. And despite evidence that systems which had a greater proportion of risk-based payment fared better during the pandemic, it’s proven hard to resist the instinct to capture every bit of fee-for-service revenue when margins are down. Everyone in healthcare, especially clinicians, is tired—and it’s understandable to seek comfort in returning to familiar ways of doing things. But if we allow ourselves to backslide, we risk losing the progress we’ve made. Maintaining momentum will require being intentional about creating new, hardwired ways of doing work for clinicians and staff, focused on delivering an outstanding patient experience that’s sustainable for the long-term.

Adopting a (virtual) tool of the trade

Like everyone else, we’ve had to rethink the way we do our work because of the pandemic. In addition to transitioning from a nonstop parade of planes, hotels, and hospital conference rooms to a life lived in Zoom’s “Hollywood Squares”, we’ve also had to figure out a replacement for one of the most critical tools of the consulting trade—the flip chart. Only once we were grounded did we realize how reliant we’d become on grabbing a marker and scribbling down ideas or sketching graphics on a chart. Even more challenging has been finding a way to facilitate larger member brainstorming sessions—but this week we stumbled on a solution worth sharing. As part of a two-day series of “ideation” meetings with one of our members, we used a virtual whiteboarding tool called Miro, and now we’re hooked. (We’re not getting paid for this recommendation, but in case you work at Miro and are reading this, all checks are welcome.) The tool allows you to create an unlimited number of “boards” using a wide range of standard templates. Or you can start with something completely customized and allow multiple users to add “sticky notes”, comments, annotations, and other graphics in a real-time, shared environment. It’s not rocket science, and surely there are other solutions out there, but we found Miro to be dead-easy to use, elegantly designed, and quite reasonably priced. The feedback from our member executives was great—we were even able to assign them “homework” in the tool, which allowed us to do asynchronous brainstorming in a way that was even more effective that what you can do in an in-person meeting. So now Miro has become part of our arsenal of virtual doodads powering our business (along with Zoom, Slack, Asana, and a raft of others). If you’re in need of such a thing, we’d highly recommend checking it out—and we hope you’ll let us know about other virtual tools we should consider as we settle in for the long haul as “online” advisors.


THIS WEEK AT GIST—ON THE PODCAST

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

On last Monday’s episode, we heard from Dr. Rahul Rajkumar, Chief Medical Officer of Blue Cross Blue Shield of North Carolina, about the insurer’s efforts to help independent primary care doctors survive COVID-19. Charlotte-based Dr. Tagbo Ekwonu plans to enroll, and hopes the predictable monthly, per-patient payments from BCBS-NC will help him get through the pandemic.

Coming up next Monday, we’ll visit Missouri, where voters are about to decide whether or not to expand Medicaid. Missouri is the second state to put the expansion question to voters during the COVID-19 pandemic. Hospitals across the state including, St. Joseph-based Mosaic Life Care, have been advocating expansion of the program for years. Make sure to tune in, and watch for the results of the vote next Tuesday.

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


ON THE GIST TURNTABLE

Give this a spin, you might like it.

It’s a big day for card-carrying members of the Pretty in Pink generation. A full 29 years since dropping their last album and fading into 1980s mixtape memory, the Psychedelic Furs are back with Made of Rain, out today. One of the progenitors of the first wave of British post-punk, the Furs were known for their swirling, double guitars and wailing horns, and for frontman Richard Butler’s cynical rasp. The band hasn’t lost a step, and across 12 tracks they sound every bit as angsty and poetic as on their classic 1981 record Talk Talk Talk, long before director John Hughes turned them into a teenage touchstone. Butler and his brother are in their 60s now, and they’ve fully earned the right to deliver lyrics like “Don’t be surprised when your dreams all fade away/Don’t be surprised when every dog has had its day”. It’s a dark album, with nary a trace of bubblegum to be found on tracks like “Come All Ye Faithful” or “Don’t Believe”. So good.

In the time they’ve been gone, the Furs have missed two waves of post-punk revival—the first at the start of the Millennium with bands like Interpol and Franz Ferdinand, and a second happening now. Also out today is A Hero’s Death, the sophomore album from one of the most promising new bands working in the tradition, Dublin, Ireland’s Fontaines D.C. Drawing on influences like Gang of Four and The Fall, the Fontaines are shoutier and more jagged than the Furs, but their music is no less powerful and no less post-punkily personal. In a strange coincidence that would have had early-80s me broodily staring at the albums in my bedroom for hours on end, the cover art for both new releases feature mysterious, doom-shrouded statuary. That gives me an idea for a mixtape… Best tracks: “A Hero’s Death” (Fontaines D.C.); “I Don’t Belong” (Fontaines D.C.); “You’ll Be Mine” (The Psychedelic freaking Furs!)


WHAT WE’RE READING

Stuff we read this week that made us think.

A contentious debate about physician income

paper from the National Bureau of Economic Research sparked controversy on Twitter about the question of whether doctors get paid too much. Setting out to evaluate connections between physician salaries and health policy, researchers used population-wide tax data linked to administrative physician registries to provide the most comprehensive survey to date of physician income. The data show that the average doctor is 50 years old and makes around $344K annually, about $100K more than average salaries usually reported through survey data. The difference is likely due to the fact that that doctors derive a third of their income from “business” income, which is not reflected in W-2 data. Unsurprisingly, the study found a substantial link between government payment changes and physician income, with about half of those changes directly flowing to doctors’ income—a much more significant driver of income change than changes in the tax law.

Discussions of physician income relative to the rest of the workforce have proven more contentious. Half of doctors are finding themselves in the top two percent of earners nationwide, and 75 percent of them are in the top five percent, pointing to the (unsurprising) fact that as a profession, doctors are wealthy. They also compare favorably with lawyers: doctors work 19 percent more hours but earn 25 percent more over their lifetimes. (Educational costs were similar). Reaction to the analysis among doctors was sharp (the replies in this Twitter feed provide a sampling), ranging from justifications for high salaries (the very real concerns of years of training, importance of the work and ongoing danger of COVID exposure) to indignation that the question of physician income is being raised at all. Researchers emphasized their study was observational, and while the finding that doctors are wealthy compared to the general population is indisputable, that doesn’t necessarily imply that they’re overpaid. The paper delves into other areas (specialty comparisons, analysis of physician income versus healthcare spending) as well, and it’s worth checking out. But the immediate reaction it sparked reveals just how tense future discussions of physician compensation will be, especially as the ongoing recession continues to put pressure on the healthcare industry to lower the cost of care.

Flagging the tension between clinical practice and business profits

Few voices could be more respected in providing commentary on the conflicts between investor, physician and patient interests in the business of healthcare than Dr. Sachin Jain, Harvard-trained physician and CEO of SCAN Health Plan, and former CEO of CareMore Health. Writing in Forbes, the always-thoughtful Jain calls attention to a growing conflict in which the “code of professionalism taught in medical schools butts up against the fiduciary responsibility taught in business schools”, citing examples where these two forces are contradictory. Just a couple of instances he cites, in which business interests outweighed clinical best practice: a publicly traded clinical care company implements a hiring freeze despite a clear need for clinician manpower. Or, patients are brought back for follow-up visits ahead of recommended schedules, to boost revenue in advance of a provider’s funding round.

Absent regulatory intervention, Jain proposes a defensible framework of new board obligations, elevated clinical governance, and incentive redesign, to ensure ethical decision-making focused around the patient’s interests. These changes could lower short-term profits, but they lay the foundation for long-term strength for companies built on a solid clinical footing. While these kinds of conflicts are pervasive in the investor-funded sphere, nonprofit healthcare companies are not immune—all healthcare delivery organizations would benefit from a close examination of whether their decisions are as clinically-sound and patient-focused as they can be.


Another month of our pandemic year in the books. Thanks for continuing to read the Weekly Gist, as we discover together what twists and turns lie in store for healthcare. We appreciate your time, and we’d love to hear your comments and suggestions—let us hear from you! And if you’re so inclined, please share this with a friend or colleague and encourage them to subscribe as well, and listen to our daily podcast. New readers and listeners welcome!

Most importantly, please let us know if there’s anything we can do to be of assistance in your work. You’re making healthcare better—we want to help!

Best regards,

Chas Roades
Co-Founder and CEO
chas@gisthealthcare.com

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