April 23, 2021

The Weekly Gist: The Upside Only Soccer Edition

by Chas Roades and Lisa Bielamowicz MD

Score one for the fans. Those who follow European soccer will know that it was a turbulent week for the top-flight clubs, with the crème de la crème first announcing, and then quickly walking back, plans to break away from their domestic leagues to form a continent-wide Super League. Here’s the thing about soccer, as opposed to most American professional sports: it’s a pyramid—clubs can rise to the top, but they can also fall to the bottom, and be relegated entirely from the top tier of competition. Sure, Chelsea, Manchester United, Liverpool, Real Madrid, Barcelona, and the like are on top today…but there’s always a chance they could fall flat and crash into the equivalent of the minors, which makes the sport interesting. The idea of the Super League was to create a closed competition just for the top teams, with no possibility of relegation. And the fans stood up and said—no way! Red-faced, and confronted with a massive backlash from supporters and national governments, the club owners who hatched the plan turned right around and shelved it this week.

Fans 1, Big Clubs 0. Goodbye, and good riddance, to the soccer equivalent of upside-only risk!


THIS WEEK IN HEALTHCARE

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

Entering a new phase of the vaccine rollout

With more than 222M Americans having received at least one dose of COVID vaccine, and 27.5 percent of the population now fully vaccinated, we are now nearing a point at which vaccine supply will exceed demand, signaling a new phase of the rollout. This week, for the first time since February, the daily rate of vaccinations slowed substantially, down about 11 percent from last week on a seven-day rolling average. Several states and counties are dialing back requests for new vaccine shipments, and the New York Times reported that some local health departments are beginning to shutter mass vaccination sites as appointment slots go unfilled. On Friday, the White House’s COVID response coordinator, Jeff Zients, said that the Biden administration now expects “daily vaccination rates will fluctuate and moderate,” after several weeks of accelerating pace. In every state, everyone over the age of 16 is now eligible to be vaccinated, but experts expect that demand from the “vaccine-eager” population will run out over the next two weeks, necessitating a more aggressive campaign to distribute vaccines in hard-to-reach populations, and to convince vaccine skeptics to get the shot. Vaccine hesitancy, like so many other issues related to the COVID pandemic, has now become starkly politicized—one recent survey found that 43 percent of Republicans “likely will never get” the vaccine, as opposed to only 5 percent of Democrats. Another 12 percent of those surveyed, regardless of party identification, say they plan to “see how it goes” before getting the vaccine, a subset that will surely be unnerved by continued doubts about the safety of the Johnson & Johnson (J&J) vaccine. An expert advisory panel on Friday recommended that use of the J&J shot be resumed, but advised that a warning be included about potential risk of rare blood clots in women under 50. The first three months of the COVID vaccination campaign have been a staggering success—but getting from 27 percent fully vaccinated to the 80 percent needed for “herd immunity” will likely be a much tougher slog.

A Texas-sized showdown on Medicaid expansion

The showdown between the Biden administration and the state of Texas over Medicaid expansion continued to escalate this week. Sen. John Cornyn (R-TX) said he planned to place a hold on the confirmation of Chiquita Brooks-LaSure to become Administrator of the Centers for Medicare & Medicaid Services (CMS), until his concerns over the agency’s move last week to rescind a waiver extension previously granted by the Trump administration were addressed. The so-called “1115 waiver”—worth more than $11B annually—would have extended by a decade Texas’ ability to use Medicaid funds to cover hospital costs for uninsured residents, rather than expanding Medicaid coverage under the Affordable Care Act (ACA). In rescinding the waiver extension, the Biden administration cited the lack of a public notice process before the waiver was granted, and said that the state’s existing waiver would instead expire next year, as previously scheduled. Sources inside the administration told the Washington Post last week that the move was intended to force Texas’ hand on Medicaid expansion; the state is one of 12 that have not expanded Medicaid, leaving it with the largest share of uninsured residents of any state, with eligibility currently limited to pregnant women, children, people with disabilities, and families with monthly incomes under $300 per month, or 13.6 percent of the federal poverty level.

Enticing the dozen remaining holdout states to expand Medicaid is an important policy priority for the new administration. A key component of the recently passed American Rescue Plan Act is a package of enhanced incentives for those states to expand eligibility, offering an extended 90 percent federal match, in addition to increased funding for existing Medicaid populations. Although none of the non-expansion states have budged yet, there has been renewed focus among state lawmakers on Medicaid expansion, including in Texas, where the idea had garnered bipartisan support. However, on Thursday, the Texas legislature voted down a proposal aimed at pushing the state toward expanding coverage for the uninsured, by an 80-68 margin. Meanwhile, the recission of Texas’ waiver has angered the state’s Republican leadership, along with the Texas Hospital Association, whose members have benefitted from the waiver’s use of funds to reimburse them for delivering uncompensated care. While Cornyn’s hold will not ultimately stop the confirmation of the new CMS leader, the escalation on both sides over the past several days surely makes finding a compromise solution less likely. The Biden health policy team is said to be developing a new proposal, as part of an upcoming legislative package, to use the ACA marketplace to offer coverage to people in non-expansion states who might otherwise be eligible for Medicaid—yet another attempt to address one of the longest-standing points of contention stemming from the 2010 health reform law. The Medicaid showdown is far from over.

UVA Health wipes away decades of aggressive collections

Charlottesville-based University of Virginia Health System (UVA Health) announced this week that it will cancel thousands of court judgements and property liens issued across the past several decades against lower-income patients over unpaid medical bills. The cancellations apply to patients at or below 400 percent of the federal poverty level ($106,000 per year for a family of four), accounting for most of the legal actions taken by the system. This move, combined with other reforms UVA Health announced in 2019 in the wake of a Kaiser Health News investigation, is expected to benefit tens of thousands of patients. Taken together, the steps are estimated to cost UVA Health around $12M a year, a small fraction of the system’s annual revenue. While UVA Health’s collection policies will now be among the most generous of health systems nationwide, most families who have already surrendered money to the system via lawsuits or liens will not be reimbursed, and the new policies stop short of steps taken by Virginia Commonwealth University (VCU) Health in Richmond, which pledged to stop suing all patients, and is abolishing all old judgements and liens regardless of patient income. Still, it’s a long-overdue step in the right direction. Health systems have been stuck between a rock and a hard place when it comes to patient collections for years; the proliferation of high- deductible health plans has meant direct payment from patients is an increasing part of overall revenue. But pursuing patients to extract every last penny of payment, especially when it takes the form of chasing after lower-income patients who can often be bankrupted by healthcare bills, is rarely worth the time and money. It can quickly become a public relations nightmare (as in the case of UVA Health), and risks running afoul of the “community benefit” promised by not-for-profit health systems.


GRAPHIC OF THE WEEK

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

Virtual care for mental health is here to stay

The uncertainty and isolation of the pandemic has taken a heavy toll on mental health. Over a third of adults are currently experiencing anxiety or depressionmore than three times as many as early last year. And with access to behavioral health services already challenged before the pandemic, many patients have been turning to telemedicine for support. Health insurer Cigna found that while use of virtual care for both non-behavioral and behavioral healthcare services peaked in spring 2020, consumers have continued to use telemedicine for mental health needs, while demand for other virtual services tapered off. As of December, about 70 percent of behavioral health claims were for care rendered virtually, compared to just 20 percent across all other services.

The recent surge in demand for virtual mental health services has spurred an influx of investment into digital solutions. A recent Rock Health analysis found investments in the space have more than tripled since 2015. The injection of funds extends to both “generalist” companies (focused on a wide range of virtual services, including behavioral health) and “specialist” companies (focused solely on virtual behavioral health solutions). Virtual behavioral health not only provides much needed access to care, but patients also prefer the privacy and ready access offered by telemedicine. Moving forward, telemedicine may become the preferred alternative for patients seeking support for mental health needs. 


THIS WEEK AT GIST—ON THE ROAD

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

Turning to primary care for vaccine distribution

Now that we’ve entered a new phase of the vaccine rollout, with supply beginning to outstrip demand and all adults eligible to get vaccinated, we’re hearing from a number of health systems that their strategy is shifting from a centralized, scheduled approach to a more distributed, access-driven model. They’re recognizing that, in order to get the vaccine to harder-to-reach populations, and to convince reticent individuals to get vaccinated, they’ll need to lean more heavily on walk-in clinics, community settings, and yes—primary care physicians. For some time, the primary care community has been complaining they’ve been overlooked in the national vaccination strategy, with health systems, pharmacy chains, and mass vaccination sites getting the lion’s share of doses. But now that we’re moving beyond the “if you build it, they will come” phase, and into the “please come get a shot” phase, we’ll need to lean much more heavily on primary care doctors, and the trusted relationships they have with their patients. As one chief clinical officer told us this week, that means not just solving the logistical challenges of distributing vaccines to physician offices (which would be greatly aided by single-dose vials of vaccine, among other things), but planning for patient outreach. Simply advertising vaccine availability won’t suffice—now the playbook will have to include reaching out to patients to encourage them to sign up. There will be workflow challenges as well, particularly while we await those single-dose shots—primary care clinics will likely need to schedule blocks of appointments, setting aside specific times of day or days of the week for vaccinations. The more distributed the vaccine rollout, the more operationally complex it will become. Health systems won’t be able to “get out of the vaccine business”, as one health system executive told us, because many have spent the past decade or more buying up primary care practices and rolling out urgent care locations. Now those assets must be enlisted in the service of vaccination rollout. Health systems will have to orchestrate a “pull” strategy for vaccines, rather than the vaccination “push” they’ve been conducting for the past several months. To put it in military terms, the vaccination “air war” is over—now it’s time for what’s likely to be a protracted and difficult “ground campaign”.

Does a chief clinical officer have to be a doctor?

We recently caught up with a colleague who moved from a leadership role in a health system-owned medical group to a primary care start-up, just before the pandemic hit. She was calling with some exciting personal news, having just been promoted to the role of regional medical director for one of the company’s fastest growing markets. With decades of clinical practice and leadership roles under her belt, she was more than deserving of the job—but we were still a little surprised, because this new medical director, overseeing both physicians and advanced practice providers (APPs), is a physician assistant. We’ve long thought that health systems looking to build more integrated clinical care teams should consider tenured and talented APPs and nursing leaders for some clinical leadership roles that have previously been filled exclusively by physicians. We asked her whether this kind of role would have been in reach for her at her former job, where she led the APPs for a mid-sized regional health system. She responded that it was highly unlikely: “The culture here is night-and-day from the health system. It’s completely non-hierarchical…everyone is on a first-name basis. At the health system, we debated for years whether APPs should even be part of physician governance. I can’t imagine doctors there reporting to someone like me.” While most systems will continue to fill their “chief clinical officer” role with a physician leader, it’s worth considering whether a more integrated clinical leadership structure may provide a better foundation for evolving care models, in which an increasing portion of care is directly delivered by nurses and APPs. Regardless, leadership opportunities available at start-ups and disruptors will provide enticing opportunities to woo away up-and-coming clinical talent.


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, Medically Home CEO Rami Karjian and oncology president Patty Brown shared how the company is expanding its hospital-at-home model for cancer patients. Brown told us this supportive oncology care is helping to keep patients out of the hospital.

Coming up on Monday, we’ll be replaying our conversation with Sean Lane, CEO of healthcare artificial intelligence company Olive AI. The company helps healthcare providers automate repetitive, often error-prone processes like claims processing and prior authorizations. Lane compares the artificial intelligence transformation going on in healthcare to the introduction of ATMs in the banking industry.

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


ON THE GIST TURNTABLE

Give this a spin—you might like it.

Dr. Lonnie Smith is not a doctor, he just thought the honorific sounded cool. And he doesn’t identify as a member of the Sikh faith, though his trademark turban and long beard have long been part of his mystique. But nearing 80 years old, Smith has earned his reputation as a jazz legend, and master of the Hammond B3 organ—easily the grooviest instrument in music. On his latest album, Breathe, otherwise comprised of tracks from a 2017 live date in celebration of his 75th birthday, Smith teams up with another self-created legend, fellow septuagenarian, “Godfather of Punk,” and founder of The Stooges, Iggy Pop. The two iconic—and iconoclastic—masters are a perfect match, Pop’s gravely, understated voice weaving perfectly with Smith’s soulful sound, covering the 1973 R&B track, “Why Can’t We Live Together”, and the classic 1967 Donovan hit, “Sunshine Superman”. The two cuts alone make the new record, Smith’s 30th as bandleader, worth checking out. The remaining tracks, featuring a veteran horn section on top of Smith’s usual trio of organ, drums, and guitar, are the high-energy filling to the Iggy Pop collabs on either end. In addition to several originals by the good Doctor, there’s an intriguing new arrangement of a Thelonious Monk tune, and a gospel-driven vocal number featuring the opera performer Alicia Olatuja. Smith’s been cranking out soul-jazz classics since he was introduced to the Hammond B3 in the early 60s, first with the George Benson Quartet and with Lou Donaldson’s groups, and then as frontman. As he approaches his 80th year, he shows no signs of slowing down—as funky today as on his classic run of albums in the early 70s. Feel the groove. Best tracks: “Bright Eyes”; “Track 9”; “Sunshine Superman”.


WHAT WE’RE READING

Stuff we read this week that made us think.

Asking the wrong questions about telemedicine’s impact

A new study out this week revived an old argument about whether telehealth visits spur more downstream care utilization compared to in-person visits, potentially raising the total cost of care. Researchers evaluated three years of claims data from Blue Cross Blue Shield of Michigan to compare patients treated for an acute upper respiratory infection via telemedicine versus an in-person visit, finding that patients who used telemedicine were almost twice as likely to have a related downstream visit (10.3 percent vs. 5.9 percent, respectively). They concluded that these increased rates of follow-up likely negate any cost savings from replacing an in-person encounter with a less costly telemedicine visit. Our take: so what? The study failed to address the question of whether a telemedicine visit was easier to access, or more timely than an in-person visit. Further, it evaluated data from 2016-2019, so the results should be caveated as pertaining to the “pre-COVID era”, before last year’s explosion in virtual care. Moreover, it’s unsurprising that patients who have a telemedicine visit may need more follow-up care (or that providers who deliver care virtually may be more aggressive about suggesting follow-up if symptoms change). This focus on increased downstream care as a prima facie failure also ignores the fact that telemedicine services likely tap into pent-up, unmet demand for access to care. More access is a good thing for patients—and policymakers should consider that limiting reimbursement for virtual access to primary care (which accounts for less than 6 percent of total health spending) is unlikely to deliver the system-wide reduction in healthcare spending we need.

Private equity rolls up veterinary practices, with predictable results

Given regulatory barriers and structural differences in practice, private equity firms have been slow to acquire and roll up physician practices and other care assets in other countries in the same way they’ve done here in the US. But according a fascinating piece in the Financial Timesinvestors have targeted a different healthcare segment, one ripe for the “efficiencies” that roll-ups can bring—small veterinary practices in the UK and Ireland. British investment firm IVC bought up hundreds of small vet practices across the UK, only to be acquired itself by Swedish firm Evidensia, which is now the largest owner of veterinary care sites, with more than 1,500 across Europe. Vets describe the deals as too good to refuse: one who sold his practice to IVC said “he ‘almost fell off his chair’ on hearing how much it was offering. The vet, who requested anonymity, says IVC mistook his shock for hesitation—and increased its offer.” (Physician executives in the US, take note.) IVC claims that its model provides more flexible options, especially for female veterinarians seeking more work-life balance than offered by the typical “cottage” veterinary practice. But consumers have complained of decreased access to care as some local clinics have been shuttered as a result of roll-ups. Meanwhile prices, particularly for pet medications like painkillers or feline insulin, have risen as much as 40 percent—and vets aren’t given leeway to offer the discounts they previously extended to low-income customers. And with IVC attaining significant market share in some communities (for instance, owning 17 of 32 vet practices in Birmingham), questions have arisen about diminished competition and even price fixing. The playbook for private equity is consistent across human and animal healthcare: increase leverage, raise prices for care, and slash practice costs, all with little obvious value for consumers. It remains to be seen whether and how consumers will push back—either on behalf of their beloved pets, or for the sake of their own health. 


That’s all for this week! Thanks for taking the time to read the Weekly Gist, and for getting in touch with your feedback and suggestions. It’s always great to hear from you! If you have a moment, please remember to share this with a friend or colleague, and encourage them to subscribe, and to listen to our daily podcast.

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