May 22, 2020

The Weekly Gist: The White Shoes Edition

by Chas Roades and Lisa Bielamowicz MD

It’s shaping up to be a very different kind of Memorial Day weekend, at least in states that haven’t opened up yet, or for people trying to observe safe social distancing practices. Missing will be the hours spent at the pool, big barbecue gatherings, or start-of-the-summer concerts. Heading to the beach, if even possible, will be a different experience. And shopping the Memorial Day sales at the mall? Forget about it. Instead, we’ll be pulling out our white shoes (we’re not barbarians, they’ve been in the closet since Labor Day), strapping on our festive summertime masks, and going for long holiday walks…which actually doesn’t sound that bad!

Note to readers: We’ll be taking next week off to celebrate the holiday, and to unwind a bit from the strangest Spring we can remember. The Weekly Gist will return on Friday, June 5th with an all-new edition. In the meantime, Happy Memorial Day, and please stay safe and healthy.


THIS WEEK IN HEALTHCARE

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

Further confusion on the coronavirus testing front

With all 50 states now in the process of reopening, data reported by public health agencies on coronavirus testing is under increased scrutiny. The issue is not how many tests are being conducted—that number has dramatically increased nationwide (although experts still caution that total testing should be about three times higher than the current 300,000 per day). Rather, as reported this week, the issue is what kind of tests are being included in public reporting. It emerged this week that several states—including Georgia, TexasPennsylvania, Vermont, and Virginia—have been combining statistics on polymerase chain reaction (PCR) tests, used to diagnose current infection, with antibody blood tests, used to detect past infection. More troublingly, The Atlantic reported on Wednesday that the Centers for Disease Control and Prevention (CDC) has been doing the same thing, which artificially inflates the number of tests conducted, and makes the numbers difficult to interpret. Among other experts, Dr. Ashish Jha, director of Harvard’s Global Public Health Institute, was stunned: “You’ve got to be kidding me. How could the CDC make that mistake? This is a mess.”

Accurate testing data is critical to determine the pace and scope of reopening, and to monitor for resurgences of the virus that might necessitate future restrictions. It’s important to know who’s infected now for clinical reasons, and it’s essential to understand who’s already been sick for public health purposes. Combining the two datasets is positively unhelpful, and likely only serves a political purpose. Testing problems have proven to be this country’s original sin in the way the coronavirus pandemic has evolved, but it’s not too late to make sure that we have ample, accurate, and well-reported testing to guide critical public health decisions. US coronavirus update: 1.62M cases, 95K+ confirmed deaths, 12.9M tests conducted (of some type).

Insurers continue to pay rebates while providers struggle

Blue Cross Blue Shield of Michigan became the latest health insurer to announce plans to refund money to its enrollees, as reimbursement for healthcare services dropped in the wake of the coronavirus pandemic, with many hospitals and physicians curtailing operations. The company will return $100M to enrollees, in the form of premium discounts and refunds, and said it might increase that amount later in the year depending on how quickly health spending picks up again. UnitedHealthcare (UHC), Cigna, and Humana are among the other insurers who have recently announced similar plans, with UHC alone slated to give back $1.5B to purchasers. Under the Affordable Care Act, plans must spend between 80 and 85 percent of the premiums they collect on medical care, depending on the segment of the market they cover, and must return excess profits to purchasers if they do not. Insurers are getting ahead of this requirement by returning money now to their employer and individual-market customers.

Meanwhile, some industry observers have begun to question why insurers, who have weathered the pandemic in good financial shape, are not spending more to stabilize the operations of struggling hospitals and physicians in their networks. For instance, Harvard researchers Leemore Dafny and Michael McWilliams proposed this week that insurers extend a “primary care boost” of 50 percent to their payments to doctors through the end of this year. Getting plans to act in concert to support providers will prove to be challenging, of course, and the temptation to free-ride on others’ generosity and instead “spend” excess premium dollars to return cash to customers may prove too strong for its public relations and loyalty benefits. Or perhaps there are more Machiavellian motives at play: allowing physician practices to suffer financially could result in lower practice valuations, as insurers set their sights on further “vertical integration” plays in the months to come.

Optum acquires a postacute care company

In a deal reportedly valued at nearly $2.5B, UnitedHealth Group’s Optum division announced this week that it has acquired naviHealth, a Brentwood, TN-based company that manages postacute care for health systems and health plans through delegated, full-risk arrangements. Using local clinical staff and its proprietary decision support technology, naviHealth directs discharged patients to the most appropriate postacute setting, and guides them through their care to reduce readmissions. NaviHealth is also the largest Centers for Medicare and Medicaid Services (CMS) bundled payment convener, working with more than 140 hospitals in the Bundled Payments for Care Improvement Advanced program. In 2015, the company sold a majority stake in its business to Cardinal Health, which subsequently sold its position to a private equity firm in 2018. The acquisition represents a major expansion of Optum’s care delivery portfolio into the postacute space, and provides a proven mechanism to reduce the high cost of care for seniors in its rapidly growing Medicare Advantage plans. Suggesting that the company’s technology and care model might be applicable to other settings, naviHealth CEO Clay Richards said UnitedHealth’s resources will allow the company to expand its focus to the patient’s journey across the entire care continuum. Given that the risk of COVID infection is especially high in postacute and long-term care settings, it’s worth watching whether naviHealth implements network tiering based on demonstrated “COVID-free” safety measures, or pivots to support increasingly popular home-based care options.


GRAPHIC OF THE WEEK

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

Unique partnerships give employers COVID-specific support

Employers will need to adopt new protocols and precautions as the economy opens, to make sure they’re providing a safe workplace for employees and customers. The graphic below highlights some of the recently announced offerings we’re seeing from a range of players trying to help businesses reopen. Solutions offered thus far fall into four key areas: workplace safety, screening, testing, and contact tracing. A interesting cleaning product arms race has emerged: two well-known providers, Cleveland Clinic and Mayo Clinic, entered partnerships with Clorox and Lysol, respectively, to help hospitality and travel industry heavyweights establish new workplace safety and disinfection protocols. United Airlines and Hilton are leveraging those marquee healthcare brands to restore and bolster the trust of employees and customers. In a bid to make travelers feel safer, Montage International, a high-end hotel chain, has partnered with membership-based primary care group One Medical to provide all hotel guests with a 30-day One Medical membership so they can access on-demand medical care should the need arise while traveling. One Medical and others are also supporting testing and contact tracing for employers looking to monitor the health of their employees. It’s worth watching how this new employer market evolves, and whether the solutions being put in place both prevent COVID spread and restore employee and consumer confidence.


THIS WEEK AT GIST—ON THE ROAD PHONE

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

Employers seeking a “source of truth” for coronavirus guidance

As states begin to reopen, employers need guidance to ensure safe, COVID-free operations, and are beginning to call local health systems for advice on how to manage this daunting task. Providing this support is uncharted territory for most systems, and they’re learning on the fly as they bring back shuttered outpatient services and surgery centers themselves. This week we convened leaders from across our Gist Healthcare membership to share ideas on how to assist employers in bringing businesses safely back online—and to discuss whether the pandemic might create broader opportunities for working with the employer community. It’s no surprise some companies are hoping that providers can step in to test their full workforce, but as several systems shared, “Even if we thought that was the right plan, testing supplies and PPE are still too limited for us to deliver on it now.” Better to support businesses in creating comprehensive screening strategies (with some offering their own app-based solutions), coupled with a testing plan for symptomatic employees.

Health systems have been surprised by the hunger for information on COVID-19 among the business community. Hundreds of companies have registered for informational webinars, hosted by systems through their local chambers of commerce. They’re excited to receive distilled information on local COVID-19 impact and response. As one leader said, the system isn’t really creating new educational content, but rather summarizing and synthesizing CDC, state and local guidance. Business leaders are looking for “a source of truth” from their local health system amid conflicting guidelines and media reports. Case in point: employers are asking about the need for antibody testing, having been approached by testing vendors and feeling pressure from employees. Guidance from system doctors provides a plain-spoken interpretation on testing utility (great for looking at a population, meaningless right now for an individual), and helps them make smarter decisions and educate their workforce.

Health systems are hopeful that helping employers through the coronavirus crisis will lay the foundation for longer-term partnerships with employers, allowing them to continue to provide benefits through lower cost, coordinated care and network options. Timing is critical, and it may be smaller businesses that have the ability to change more quickly. Large companies have mostly locked in their benefits for 2021, whereas many mid-market businesses are looking for alternative options now. Worksite health, telemedicine, and direct primary care arrangements are all on the table. One system surveyed local brokers and employers and found that 20 percent of mid-market employers are open to narrow-network partnerships. “The number seems low,” they reported, “but it’s up from five percent last year, a huge jump.” For systems seeking direct partnerships with employers, there’s a window of opportunity right now to find those businesses committed to continuing to offer benefits, who are looking for a creative, local alternative—and to get that first Zoom meeting on the calendar.

Is it time for hospital at home?

We’ve long been intrigued by “hospital at home” care models, which deliver hospital-level care for acute conditions, supported by caregivers and technology, in a patient’s home. Stymied by the lack of payment, however, few health systems have pursued the approach. But as COVID-19 has made patients fearful of entering hospitals, we’ve had a flurry of health system leaders ask us whether they should consider launching a program now. We think the answer is yes—with some caveats. A growing body of evidence supports its use. Cost of care is lower compared to a traditional inpatient stay. Patient satisfaction with care is high. And from a clinical perspective, hospital at home is well-established, capable of managing a number of mild- and moderate-acuity medical conditions, including exacerbations of chronic diseases like heart failure and diabetes, as well as infections like pneumonia and cellulitis, often better than a traditional hospital stay. Some programs are now using hospital at home for management of COVID-19 patients as well. Physician leaders we’ve spoken with are also interested in using the approach to manage post-operative recovery. “Over half of our joint replacement patients spend time in skilled nursing or inpatient rehab,” one doctor told us. “People think those places are death traps now, and those cases aren’t coming back until we can find another way for them to recover.”

For patients averse to facility-based care, and systems wanting to offer an alternative, hospital at home sounds like a panacea. But experts recommend approaching it with a clear eye to the economics and ramp-up time, which can easily take 12 to 18 months. With emergency regulations released last month, Medicare will now provide payment for hospital care provided in an alternate setting, including the patient’s home—although it’s unclear whether that will continue once the COVID emergency ends. Commercial payer coverage usually requires a separate negotiation. According to one leader, “Grass roots support of doctors is not enough. The CEO and CFO have to be on board with changing the care and payment model if it’s ever going to be more than a pilot.” But with patients and doctors becoming more comfortable with virtual care and open to new options, there is a a window of opportunity for expanding home-based care—and the longer the COVID-19 crisis lasts, the more hospital at home could provide a competitive advantage over being admitted to a busy, crowded inpatient hospital.


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 Mayo Clinic’s Director of Business Integrity and Continuity, Dr. Erich Heneke. As the system resumes elective procedures, Heneke is leading efforts to source personal protective gear and striking partnerships with nontraditional suppliers, all while keeping an eye out for counterfeit materials.

Coming up next week, we’ll hear from Dr. Jeremy Gabrysch, founder and CEO of Remedy. The immediate care and telemedicine startup was well positioned to deliver access in the wake of COVID-19, providing care digitally or in patients’ homes. As primary care practices have scrambled to care for patients remotely, Remedy partners with them to provide technical support and provider coverage on nights and weekends. Make sure to tune in!

Gist Healthcare Daily will return with new episodes next Wednesday, May 27th. Thank you so much for listening—we’re excited to celebrate the holiday with more than 100,000 downloads under our belts!

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


ON THE GIST TURNTABLE

Give this a spin—you might like it.

“Isolation comes from insula, which means island.” So begins græ, the sophomore album from Moses Sumney, a Ghanaian-American singer-songwriter who burst onto the scene in 2017 with his Aromanticism to widespread acclaim as a top R&B record of the year. That categorization didn’t sit well with Sumney, a musical auteur whose work defies genre, so he left Los Angeles for Asheville, NC, and spent the next two years making an audacious, concept-driven double album, released in two parts this year. Græ is a sprawling manifesto of “multiplicity”, a celebration of not being labeled, an exploration of the space between black and white, and a rejection of “islanding”—Sumney’s term for the isolating habit of forcing identity into single categories. Interesting in concept, astonishing in execution. Marshalling the full power of his vocal instrument, often delivered in a shimmering falsetto, Sumney comes at the idea of multiplicity from different angles—love, death, self, memory, race—in collaboration with a diverse array of artists (Shabaka Hutchings on saxophone, Thundercat on bass, spoken word pieces from Nigerian author Taiye Selasi, lyrics by novelist Michael Chabon and singer James Blake). There’s R&B and soul here for sure, but also art rock, jazz-electronica, classical guitar, and even industrial noise. Sumney’s art is visual, and it’s worth watching some of his video interpretations of the music, like the love song “Polly”, which lets us watch him experience a lover’s range of emotions from grief to joy. The album isn’t easy listening, or brief—you’ll need to sit with it a while to fully appreciate what Sumney is doing here. An ambitious second album, and a chance to hear a rising artist explore the possibilities of his vision. Best tracks: “Virile”; “Neither/Nor”; “Cut Me”.


WHAT WE’RE READING

Stuff we read this week that made us think.

Charting the rebound of physician office visits

As patients begin to return to doctors’ offices, we were intrigued to read an analysis out this week from the Commonwealth Fund that provides a first glimpse into the pace of the recovery. Researchers from Harvard University and healthcare technology company Phreesia analyzed data from 12M visits at over 50,000 physician practices, finding that in-person visits had declined nearly 70 percent by mid-April, compared to pre-pandemic levels. Behavioral health providers, medical specialists and primary care practices maintained the most volume, and procedural specialists were the hardest hit. Many practices deployed telemedicine quickly, but even with those added encounters, total visits were still down by nearly 60 percent. While visits are starting to return, it’s likely that physician practices are in for a long, slow rebound. Telemedicine as a percentage of all visits peaked in late April, and by mid-May, in-person visits had reached 55 percent of pre-pandemic levels. Even if virtual volumes pull back from their COVID high, we’re likely to see telemedicine play a much more expansive role moving forward. Dr. Rushika Fernandopulle, CEO of Iora Health, shared his company’s learnings from their COVID-19 response, predicting that ultimately 70-80 percent of physician encounters could be virtual, necessitating a need to reorganize care delivery around populations, instead of practices. Expect the next year to be a reckoning as changes in payment and regulations, combined with a heated marketplace for virtual care, continue to shift the balance between in-person and virtual care.

A deeper look at a new(ish) model of primary care delivery

Cometh the moment, cometh the care model. That’s one way of interpreting a new study commissioned by the Society of Actuaries, and performed by Milliman researchers, that evaluates the direct primary care (DPC) model. Often touted by advocates as a way to “cut out the middleman” and allow for greater patient-physician engagement, DPC is membership-model primary care, with a monthly or annual fee paid by the patient (or their employer) for unlimited access to a range of services for no additional out-of-pocket payment, and without billing insurance for care delivery. In the study, Milliman reviewed existing literature, conducted a survey of nearly 200 DPC practices, and performed an in-depth analysis of one employer’s DPC offering. Their findings: higher physician satisfaction; smaller panel sizes (on average 445 patients per practice); and statistically significant decreases in overall demand for services (down 12.6 percent) and ED utilization (down 40.5 percent). All that for a monthly fee of between $65 and $85 per adult patient—resulting in a slight net increase in employer benefit costs (1.3 percent) but higher enrollee satisfaction.

The Milliman study is one of the first detailed analyses of the potential benefits of this newish care model, and the results suggest that there is promise for the approach. Critics rightly raise some doubts: could there could ever be enough physician supply to make this model work at national scale? And does the model encourage cherry-picking of more affluent, lower-utilizing patients, making the remaining risk pool more costly to cover? But in a post-COVID world, with primary care doctors increasingly concerned about revenue stability, and employers looking to control spend (and searching for sweeteners to offset a potential shift to narrower referral networks), the model has the potential to play a greater role in future benefit design. Especially if coupled with a (potentially lower-cost) virtual-first approach, DPC could prove an attractive option for physicians and patients to move away from the fee-for-service, productivity-driven primary care model.


That’s it for this week! Here’s hoping you’re able to enjoy a relaxing holiday weekend, filled with as much fun, family, and food as can safely be managed. Thanks so much for reading our work, and for taking the time to share your thoughts and feedback. We love hearing from you! If you’re so inclined, please share this with a friend or colleague, and encourage them to subscribe, and check out our daily podcast.

Once you’re back to work, we hope you’ll let us know if there’s anything we can do to be of assistance. You’re making healthcare better—we want to help!

Happy Memorial Day!

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

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