By JONATHON S. FEIT

If ideas presented in essays on The Health Care Blog and other healthcare forums are meant to be rhetorical, without intention of turning notions into reality on behalf of patients who need genuine, intimate, desperate help…then feel free to ignore this essay entirely. 

Some among us—the State of Washington’s Co-Responder Outreach Alliance; Lisa Fitzpatrick’s Grapevine Health, which specializes in “street medicine” and advocacy in and around Washington, D.C.; Thorne Ambulance Service, an inspirational ambulance entrepreneur bringing both emergency and nonemergency medical transportation to underserved rural spaces (and more) across South Carolina; and the RightCare Foundation in Phoenix, a firefighter-driven organization dedicated to ensuring that patients’ needs and wishes are honored during critical moments, spring fast to mind—are stretching hands across the care continuum while pounding the table for interoperability at scale because PEOPLE. ARE. FALLING. THROUGH. THE. CRACKS. AND. DYING.  

Thatincludes responders who run toward the crises; into alleys; who risk their own lives, health, psyches, families, and futures because, as Josh Nultemeier—Chief Paramedic and Operations Manager of San Francisco’s King-American Ambulance, and a volunteer firefighter in the Town of Forestville—put it so simply in a social media post: “People could get hurt.” Moral override—that matter-of-fact willingness to risk himself for strangers who lack any other path to save themselves—is what makes Josh (and others who believe as he does) heroic.

Solving problems like substance use disorder—coupled with an increasing awareness of the lack of interoperability with prescription drug monitoring programs (PDMPs), many of which are run by Bamboo Health, which today imports zero data regarding out-of-hospital overdoses—is urgent. If an overdose is reversed in an alley, an abandoned home, a tent or “under the bridge downtown,” by an ambulance, fire, or police service pumping Narcan to get breathing going again, the agency’s lifesaving efforts get zero “credit” in the data. The downstream effects of this information sharing breakdown make it difficult to settle for less-than-bona fide interoperability: there is neither time to waste nor margin of error, yet hospitals and healthcare systems cannot even “see” the tip-of-the-tip-of-the-spear.

A similar emotionality makes it difficult to tolerate lamentations about information sharing when states like California—and the federal Office of EMS, inside the National Highway Traffic Safety Administration—are transforming interoperability into a standard operating procedure. As a listener to the “Health Tech Talk Show” since its start, I have struggled with hearing Lisa Bari and Kat McDavitt deride whether interoperability is “real.” It is real. It is happening, and has been automated for years—for example, with both the Quality Health Network and Contexture (formerly CORHIO) in Colorado—empowering agencies of all sizes to care for patients experiencing healthcare emergencies, and those who have children with Duchenne’s Muscular Dystrophy and other diseases. Such efforts should be celebrated for their meaningful impact on patients who rely on ambulance services to get them the care that they need—and sometimes to get them to the care that they need. 

Yet no panel at the national conference for CIVITAS was dedicated to interoperability to or from ambulances, despite that some of America’s most active health information exchanges—coast to coast—have automated interoperability involving Fire, EMS, Non-Emergency / Interfacility Medical Transport, Critical Care, and Community Paramedicine. No mention highlighted widespread efforts to make POLST forms accessible to Mobile Medical professionals, thanks to prioritization of the ethical treatment of medically frail patients after COVID-19 and a New York Times piece called “Filing Suit for Wrongful Life.”

Critical document registries are now built into several large HIEs but these are generally invisible to Mobile Medical professionals. No less an enabler of interoperability than Amazon Web Services has acknowledged that caring for underserved patients must incorporate Mobile Medicine because the poorest in America get much of their care from ambulance services. Leading medical directors and the executive director of National POLST have cited interoperability as a key to empowering Responders to best care for our loved ones when seconds count. Yet when the “Health Tech Talk Show” hones in on discussions about public insurance and safety net medicine—“I heard ‘Medicaid is hard,’ more times than I can count. Public health? Barely a word…

Individuals on Medicaid and the underserved make up nearly 25% of the country. Public health? SUD is a public health issue. Behavioral health is a public health issue. Maternal health is a public health issue. CANCER Is [sic] a public health issue. Public health is more than covid tests and flinging around vaccines and we should treat it as such.”—ambulances are not mentioned once. 

Fire and ambulance services are successfully closing information sharing gaps, but they remain left out of the advocacy efforts—and worse, they end up as an unintended target. Mobile Medicine could be a case study in the power of sharing clinical insights in real-time to do what is best for the patient and the healthcare ecosystem simultaneously. Instead, advocacy efforts in the name of interoperability have traversed a path—twice, now—that risks blocking Mobile Medical professionals from participating in the modern healthcare ecosystem, to the detriment of patients, families and the agencies themselves.

This first such instance occurred when the “Health Tech Talk Show” fanned the flames of the Health Data Utility (HDU) movement. In America and globally, ambulance services are unique, as the only health care providers that routinely engage Unknown Patients (patients who need care while unconscious, unable to communicate, and/or “altered mental status” so one cannot trust their self-assessment). Mobile Medical professionals routinely engage patients in places like alleyways and in abandoned basements. It is worth noting that none of the above pertains necessarily to emergency care, as Mobile Medical professionals engage the most severely ill and underserved chronic care patients wherever they are, and that frequently is on the streets. 

Estimates of the size of the non-emergency medical transport sector range from par to double that of emergency medical transportation. Yet Mobile Medical professionals are largely shut out of the national healthcare data interoperability discussion because they don’t document in HL7-based data systems; they use a different, essential, standard called the National EMS Information System. 

The Office of the National Coordinator of Healthcare IT (ONC) has focused on bringing Mobile Medical data into the broader health data fold, including most recently by holding the second EMS data summit concurrently with the 2023 ONC annual meeting. The movement toward implementation of Health Data Utilities (HDU) risks undoing this critical progress to date, careening Mobile Medical professionals toward second-class status. The advocates of this approach do not appear to be considering its downstream effects: HDUs risks devolving Mobile Medical professionals into shoppers on Christmas Day who are forced to watch sales happening inside the store, while standing outside in the snow. 

Put another way: “Where the HDUs do not currently consume Mobile Medical data, the ambulance, fire and CP/MIH agencies will stay shut out until outsized pressure forces a change (say, an adverse encounter that could that have avoided if the crew had had real-time access to the more complete information in real-time).”

More recently, the Health Tech Talk Show team has begun advancing the notion that America needs a “Chief Patient Officer” (they even went so far as to propose a candidate). Like the HDU concept, this proposal is risky for Mobile Medicine professionals, which is why this author is speaking up. It obviates the reality that, for many, ambulance-based care is nothing short of a lifeline—an entryway to the healthcare ecosystem where no other exists. In their article for The Health Care Blog, Lisa Bari and Kat McDavitt write that “Because of this lack of access, resources, and representation, and because there is no single senior staff member in the federal government dedicated to ensuring the voice of the patient is represented, the needs and experiences of patients are deprioritized by corporate interests.” What about Americans whose needs and challenges are so basic, fundamental, and neglected over time that they’re utterly irrelevant to corporate interests?

There are many such people, and they deserve attention. 

They receive it from caregivers who work in ambulances.

Put another way: What realistic hope is there for a white, educated, socioeconomically “just fine,” city (or countryside) dwelling caregiver hope to muster sufficient empathy for the reality of being a single parent of color, whose child has a major disability, who lives far away from everything that they need to care for their kid? What does it feel like to be a Black woman, who is pregnant, short of breath, living in a one room apartment that smells of feces, whose doctor is all the way over there while she’s in an ambulance going nowhere in rush hour traffic? (Note: this is no theoretical situation—I did a ridealong with just such a patient in Pittsburgh, Pennsylvania). How can one person purport to represent America’s “So Many Patients”, channeling the challenges of race, lack of access to care, language, disability, religion, understanding of healthcare, fear of maltreatment, and more?

If one purports to advocate seriously for a Chief Patient Officer…where will they come from? Will they speak English as a second (or third) language? Will they have a child, spouse, or parent with a mortal disability (or must they have already lost one or more of the above)? Will they be straight, gay, intersex, or transgender? Must they have processed an end-of-life medical order for themselves or for a loved one, to know what it’s like to contemplate the ethics of demise? Must they have an implant that failed, or “get” why patients use ambulances as doctor’s offices? 

“We need a Chief Patient Officer” makes a catchy bumper sticker message, just like “QHINs aren’t real” makes a snazzy alien-themed shirt. But in reality, lightheartedness about life-and-death issues can feel disrespectful of the minutes, hours, and lifetimes that are being invested in making such necessities a reality. The varieties of human experience are so diverse that to suggest enough empathy can be found in one person—anywhere but in a committee of Chief Patient Officers—denigrates the struggle that ambulance-based care providers face in their mission to bring care to patients, families, and communities that lack options but face critical needs. 

Worse yet is that Mobile Medical professionals can end up with the short end of the stick: not just kept outside the glass, pining for a seat at Healthcare’s Table at the Future, but indeed, being blamed for the lack of such tools, made to look like Luddites. This author hopes we will collectively adjust our investments of time and passion into spreading ideas that make things easier—more effective in terms of time and medicine—for those who work to deliver care, with fewer resources than they need, to those who lack the basics.

Jonathan Feit is the CEO of Beyond Lucid Technologies

Credits: thehealthcareblog

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Credits: thehealthcareblog

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By MIKE MAGEE

“What exactly does it mean to augment clinical judgement…?”

That’s the question that Stanford Law professor, Michelle Mello, asked in the second paragraph of a May, 2023 article in JAMA exploring the medical legal boundaries of large language model (LLM) generative AI.

This cogent question triggered unease among the nation’s academic and clinical medical leaders who live in constant fear of being financially (and more important, psychically) assaulted for harming patients who have entrusted themselves to their care.

That prescient article came out just one month before news leaked about a revolutionary new generative AI offering from Google called Genesis. And that lit a fire.

Mark Minevich, a “highly regarded and trusted Digital Cognitive Strategist,” writing in a December issue of  Forbes, was knee deep in the issue writing, “Hailed as a potential game-changer across industries, Gemini combines data types like never before to unlock new possibilities in machine learning… Its multimodal nature builds on, yet goes far beyond, predecessors like GPT-3.5 and GPT-4 in its ability to understand our complex world dynamically.”

Health professionals have been negotiating this space (information exchange with their patients) for roughly a half century now. Health consumerism emerged as a force in the late seventies. Within a decade, the patient-physician relationship was rapidly evolving, not just in the United States, but across most democratic societies.

That previous “doctor says – patient does” relationship moved rapidly toward a mutual partnership fueled by health information empowerment. The best patient was now an educated patient. Paternalism must give way to partnership. Teams over individuals, and mutual decision making. Emancipation led to empowerment, which meant information engagement.

In the early days of information exchange, patients literally would appear with clippings from magazines and newspapers (and occasionally the National Inquirer) and present them to their doctors with the open ended question, “What do you think of this?”

But by 2006, when I presented a mega trend analysis to the AMA President’s Forum, the transformative power of the Internet, a globally distributed information system with extraordinary reach and penetration armed now with the capacity to encourage and facilitate personalized research, was fully evident.

Coincident with these new emerging technologies, long hospital length of stays (and with them in-house specialty consults with chart summary reports) were now infrequently-used methods of medical staff continuous education. Instead, “reputable clinical practice guidelines represented evidence-based practice” and these were incorporated into a vast array of “physician-assist” products making smart phones indispensable to the day-to-day provision of care.

At the same time, a several decade struggle to define policy around patient privacy and fund the development of medical records ensued, eventually spawning bureaucratic HIPPA regulations in its wake.

The emergence of generative AI, and new products like Genesis, whose endpoints are remarkably unclear and disputed even among the specialized coding engineers who are unleashing the force, have created a reality where (at best) health professionals are struggling just to keep up with their most motivated (and often mostly complexly ill) patients. Needless to say, the Covid based health crisis and human isolation it provoked, have only made matters worse.

Like clinical practice guidelines, ChatGPT is already finding its “day in court.”  Lawyers for both the prosecution and defense will ask, “whether a reasonable physician would have followed (or departed from the guideline in the circumstances, and about the reliability of the guideline” – whether it exists on paper or smart phone, and whether generated by ChatGPT or Genesis.

Large language models (LLMs), like humans, do make mistakes. These factually incorrect offerings have charmingly been labeled “hallucinations.” But in reality, for health professionals they can feel like an “LSD trip gone bad.” This is because the information is derived from a range of opaque sources, currently non-transparent, with high variability in accuracy.

This is quite different from a physician directed standard Google search where the professional is opening only trusted sources. Instead, Genesis might be equally weighing a NEJM source with the modern day version of the National Inquirer. Generative AI outputs also have been shown to vary depending on day and syntax of the language inquiry.

Supporters of these new technologic applications admit that these tools are currently problematic but expect machine-driven improvement in generative AI to be rapid. They also have the ability to be tailored for individual patients in decision-support and diagnostic settings, and offer real time treatment advice. Finally, they self-updated information in real time, eliminating the troubling lags that accompanied original treatment guidelines.

One thing that is certain is that the field is attracting outsized funding. Experts like Mello predict that specialized applications will flourish. As she writes, “The problem of nontransparent and indiscriminate information sourcing is tractable, and market innovations are already emerging as companies develop LLM products specifically for clinical settings. These models focus on narrower tasks than systems like ChatGPT, making validation easier to perform. Specialized systems can vet LLM outputs against source articles for hallucination, train on electronic health records, or integrate traditional elements of clinical decision support software.”

One serious question remains. In the six-country study I conducted in 2002 (which has yet to be repeated), patients and physicians agreed that the patient-physician relationship was three things – compassion, understanding, and partnership. LLM generative AI products would clearly appear to have a role in informing the last two components. What their impact will be on compassion, which has generally been associated with face to face and flesh to flesh contact, remains to be seen.

Mike Magee MD is a Medical Historian and regular contributor to THCB. He is the author of CODE BLUE: Inside America’s Medical Industrial Complex (Grove/2020).

Credits: thehealthcareblog

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There’s a lot of strum & dangst about the uptick in system utilization that has boosted hospital profits and hit Humana and United’s bottom line (But not so much Elevance’s). Kevin O’ Leary over at Health Tech Nerds brought this up today and I was reminded of this piece I wrote in 2006. And a big issue was, how much understanding and control do insurers have over the utilization in (and out of) their networks. So take a look at this piece and particularly, given the issues at the BUCAHs and at smaller players like Agilon, consider how much insurers actually know about spending? And remember that Wellpoint was the 1990s name for what is now Elevance, via being called Anthem!–Matthew Holt

No one is arguing that Len Schaeffer isn’t a very bright guy, nor that he hasn’t done very well in America’s health care system. He’s also done very well out of America’s health care system. So when McKinsey publishes a fawning interview with the man who saved Blue Cross of California, and turned it into one of the most profitable for-profit health insurance companies, and then merged it with the other for-profit Blues, it’s perhaps appropriate to ask a few more questions.

Full disclosure here; in the distant past I’ve worked for several companies that are now part of the Anthem/Wellpoint collosus; and I currently do work for the California Health Care Foundation, which wouldn’t exist were it not for the fact that, when Wellpoint converted to for-profit status, it (and the California Endowment) were endowed with a huge chunk of stock. So you can take my comments in what ever light you like. In addition I’ve only done limited research here and a couple of things are retelling of tales I’ve heard, so if anyone knows more gossip, please email me.

Schaeffer is coming towards the end of his business career, but he started young and fast. He was head of HCFA (the artist now known as CMS) at age 33 in the Carter Administration. Now I call Mark McClellan the boy wonder, but he was 41 when he got the job! After leaving HCFA (before it got really exciting in the early years of the Reagan administration when DRGs were introduced, but being the first to introduce a type of DRG for kidney dialysis), and going via Group Health for a couple of years, he ended up at Blue Cross of California. He got there in the middle of an incredible screw-up.

Blue Cross had set up an HMO to compete with Kaiser called HealthNet. Incredibly enough somehow or other Blue Cross didn’t manage to enforce their formal corporate control over its board members on the board of HealthNet. So the board of HealthNet looked around the room one day, noticed that they might do alright if they were running a for-profit company, and declared independence. More on that story in this court documents. And apparently despite several years in court there was nothing Blue Cross could do. Retroactively Healthnet had to agree to endow a foundation with the state (the California Wellness Foundation) but the amount put into that foundation was a tiny, tiny proportion of HealthNet’s market value.

Schaeffer turned up to steady the ship at Blue Cross in the wake of the Healthnet screwup. In part he did this by turning Blue Cross from a warm and fuzzy non-profit into a pretty avaricious underwriter and a health plan that played very hardball with its providers (and members). More on that in the first section of this document, but it’s a reminder of a tack taken years later by Jack Rowe at Aetna.

But he clearly learned something from the experience.  The first thing he did was to set up a for-profit subsidiary called Wellpoint which started buying health plans and offering services (primarily outside California). Then he tried to put all of Blue Cross’ assets into Wellpoint. It looked like he’d away with this for a while, but then started  negotiations to take the whole thing for-profit. Apparently when the state first asked him the amount with which he would fund the foundation, his first offer was “nothing”.  This eventually got anted-up to $100m. Eventually the state (pressured by consumers’ groups) pointed out that it had quite a bit of control over the Blue Cross plans, and in the end the two Foundations were set up with lots of money and the majority of the stock, which gets spent doing good works in California (and funding some great research!) — not that everyone’s happy with it!

However, what amuses and dismays me is that Schaeffer is lauded for a couple of things, specifically the creation of new insurance plans and the shift to consumer care, and a commitment to IT. I really don’t understand what is so amazing about the new consumer plans, other than the Tonik brand has a lame web sites which look exactly like what a 50 year old thinks a 23yr old thinks is cool.  THCB readers already know that, while selling high deductible plans to youngsters may help a 23 yr old who needs catastrophic insurance, you’re not going to fix the problem of uninsurance by replacing it with under-insurance. But underwritten properly, these plans are very profitable for Wellpoint. And Wellpoint is damn good at underwriting.

So much so that you’d be surprised at what Schaeffer says is the main problem with American health care. Practice variation and lack of information:

The level of variation in our health care system is unbelievable. You could be hospitalized for nine days in New York and for three days in California with the same diagnosis—and those differences would have no impact on outcomes. There is no other industry in the world that uses so many different approaches to the same thing and in which these differences don’t relate to better results

So can’t health plans fix that? Apparently not:

As a health insurer, if you start by telling doctors, “We know what’s best; we’ll pay you for it,” you violate the fundamental principle that doctors want to exercise their own discretion. That’s what killed HMOs—telling the doctors what to do. Doctors don’t like to follow cookbooks, but, clearly, evidence-based medicine would work better for patients.

So because health plans failed at getting doctors to practice better medicine, instead they’re going to give them the information systems that show the doctors all about this variation, and it’ll magically self-correct. Except there’s the odd problem there too, including more cluelessness by health plans.

The Quarterly: WellPoint invested $40 million to encourage its in-network physicians to start using IT and to begin “e-prescribing.” What results have you seen?

Leonard Schaeffer: If you believe in an IT-enabled, evidence-based health care system—which I do—you’ve got to get IT into doctors’ offices. So we offered our in-network doctors, for free, either a desktop or a state-of-the-art “e-prescribing” unit for connecting to the Internet. Our theory was that if we could get a certain number of docs online, we could revisit them later and get rid of paper, which would benefit the physicians and us. That was the theory. But to get doctors to trust us, we had to say “no strings attached.” We had to contact 26,000 doctors to get 19,500 to accept the free gift. Of these 19,500 doctors, 2,700 accepted the e-prescribing package. Unfortunately, only about 150 physicians are using this technology consistently. I was very disappointed that we only moved the needle that much.

Harvey Fineberg, the president of the Institute of Medicine, explained why the doctors were so recalcitrant: “When you’re in private practice, ‘free’ is not cheap enough.” In other words, the doctor thinks,”You’re giving me what looks like a free gift, but you’re really requiring a change in how I work, which costs more and gives me little benefit. So I’m not changing my work process.”

It was a real lesson in life. We were trying to change fundamental behavior, and the doctors don’t want to change unless they see a significant benefit for their patients or themselves.

While Schaeffer is dismayed that the $40m giveaway intended to promote ePrescribing was such a failure, you’d think that the program could have had a little but of brains put behind it first. Basically docs were given the choice of a) either take this subsidized ePrescribing system that we’re going to drop on your practice with little support, or b) have this free Dell computer which you can use to trade stocks and surf porn at home, and later sell on Craigslist. Doctors, not being dumb, took the choice with some value.  This was for Wellpoint the equivalent of throwing mud at a wall to see if it sticks, except the technique used involved blasting the wall with a water cannon at the same time. The dummy was whomever at Wellpoint gave the docs the choice. And these are the geniuses who failed at HMO network medical management, as earlier noted

So why were the dummies in charge of this one?  Well because the smart guys are stuck over in a different part of the company.

But today the most important thing for us is our actuarial data, which helps us price our premiums. As you might guess, pricing is critical. Our analysis showed that the so-called cycle in health insurance—three good years, three bad years—is simply a function of pricing discipline and pricing mistakes. There isn’t any doubt that the companies with the best pricing are less cyclical. In our case, we have no cycles at all.

We found that the most critical information for good pricing wasn’t how many contracts we had but how many people we had—who they were, their age, their gender, and where they lived. Together with regional and local differences in illness types and doctors’ behavior, these characteristics determined what the costs would be. So we gathered more information than anybody else about those things, and this was a huge competitive advantage. Now almost everybody does things that way.

We also make a point of processing claims quickly because we found that faster processing gives you a better idea of your costs and early knowledge about how trends are changing. By monitoring the landscape, we were able to raise or lower our prices before anyone else, which is really important in this business. You never want to sell an underpriced policy.

So there you have it. Being really smart about pricing and risk is how you run a successful insurance company. If you look at Wellpoint’s stock in the last 4 years, it’s evident that in the mission critical part of their business, they’re very very good about this. Stock is up four-fold and profits nearly double in the last 3 years.

Of course that’s not the only thing that’s gone up in the last five years. So have premiums and health care costs. And the two things may per chance be related!

But this just goes to show that what Schaeffer is good at — running a lean mean ultra-competitive pricing business — has little if anything to do with solving the wider problems of the health care system that he’s so eloquent about. He of course is walking off from the whole deal with some $300m smackers under his belt. All in stock from “converted” non-profit companies, and all such high stock because Wellpoint has (like the rest of the business) been able to stick price increases to its clients, year after year after year.

So why is McKinsey, which is after all supposed to be in the business of helping the Fortune 500 reduce their overall costs, so fawning to Schaeffer? Perhaps it’s just a mutual recognition that when it comes to corporate America, perhaps you can fool all the people all the time — so long as they hang out in the executive suite.

Credits: thehealthcareblog

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By MATTHEW HOLT

I was invited on the Health Tech Talk Show by Kat McDavitt and Lisa Bari and I kinda ranted (go to 37.16 here) about why we don’t have primary care, and where we should find the money to fix it. I finally got around to writing it up. It’s a rant but a rant with a point!

We’re spending way too much money on stuff that is the wrong thing.

30 years ago, I was taught that we were going to have universal health care reform. And then we were going to have capitated at-risk entities. then below that, you have all these tech enabled services, which are going to make all this stuff work and it’s all going to be great, right?  

Go back, read your Advisory Board Company reports from 1994. It says all this.

But (deep breath here) — partly as a consequence of Obamacare & partly as a consequence of inertia in the system, and a lot because most people in health care actually work in public utilities or semi-public utilities because half the money comes from the government — instead of that, what we’ve got is this whole series of massive predominantly non-profit organizations which have made a fortune in the last decades. And they’ve stuck it all in hedge funds and now a bunch of them literally run actual hedge funds.

Ascension runs a hedge fund. They’ve got, depending who you believe, somewhere between 18 billion and 40 billion in their hedge fund. But even teeny guys are at it. There’s a hospital system in New Jersey called RWJ Barnabas. It’s around a 20 hospital system, with about $6 billion in revenue, and more than $2.5 billion in investments. I went and looked at their 990 (the tax form non-profits have to file). In a system like that–not a big player in the national scheme–how many people would you guess make more than a million dollars a year?

They actually put it on their 990 and they hope no one reads it, and no one does. The answer is 28 people – and another 14 make more than $750K a year. I don’t know who the 28^th person is but they must be doing really important stuff to be paid a million dollars a year. Their executive compensation is more than the payroll of the Oakland A’s.

On the one hand, you have these organizations which are professing to be the health system serving the community, with their mission statements and all the worthy people on their boards, and on the other they literally paying millions to their management teams.

Go look at any one of these small regional hospital systems. The 990s are stuffed with people who, if they’re not making a million, they’re making $750,000. The CEOs are all making $2m up to $10 million in some cases more. But it also goes down a long way. It’s like the 1980s scene with Michael Douglas as Gordon Gecko in Wall Street criticizing all the 35 vice presidents in whatever that company was all making $200K a year.

Meanwhile, these are the same organizations that appear in the news frequently for setting debt collectors onto their incredibly poor patients who owe them thousands or sometimes just hundreds of dollars. In one case ProPublica dug up it was their own employees who owed them for hospital bills they couldn’t pay and their employer was docking their wages — from $12 an hour employees.

Now despite the ACA hoping to change American health care, these hospital systems make all their money not by doing primary care, but by running their high intensity services — cardiology, neurology, orthopedics, general surgery and all the rest of it. They recruit superstar surgeons who keep the cash tills running—even if they came from doing quasi-fraudulent care down the street. And they’ve spent the last decade growing.

I used to think – and this was the intent of the ACOs under the ACA –that this would be sorted out by capitation and value-based care, but it just hasn’t happened. Hospital systems spent the last couple of decades growing by buying primary care doctors, running their practices at a loss and capturing all their referrals for the expensive procedural stuff. In fact there’s a term for this—they call it preventing leakage.

I’ve been looking at this for a while, and then the real crowning thing that pissed me off, the cherry on top of the sundae if you will, was the answer as to why do they have all this money in reserves, or in their hedge funds? Why does a small health system have $2 billion plus sitting in the stock market or sitting in cash? You know why? Well, presumably it’s there for a rainy day, right? When something bad happens, they have money and they can sustain themselves, to run their mission.

Well we had a rainy day starting in March, 2020. Inpatient and elective care got shut down under Covid and they all started losing massive amounts. What happened? They said, now we need a bailout. That was a huge part of the CARES Act.

The only two organizations I respected at that time were for-profit chain HCA and Kaiser Permanente who were given bailout money but  gave it back because they said they didn’t need it. But many more were like Commonspirit with 140 hospitals across the country, which got $1.5 billion. Hundreds of millions went to hundreds of these individual systems.

I haven’t done this scientifically, but we know that in their “reserves” Ascension has got $40 billion, UPMC has got $12bn, Kaiser’s got a ton as well. A medium sized systems like that RWJBarnabas in New Jersey’s has $2.5 billion, and one in Minnesota called Essentia, which I’d never heard of until last week, has more than $600 million in its reserves. There is probably $250 to $350 billion sitting out there on the balance sheets of every non-profit hospital in America. And if you chuck in the health plans, it’s probably way more. There’s likely an Apple or Google size cash mountain sitting out there

If you started American health care from scratch what would you do? You would give everybody primary care. If you look at the people who actually have been moving the needle on controlling hypertension and managing diabetes, it’s all people with a primary care approach, who spend a lot more money on primary care than on later stage specialty care for the people who already are sick.

I heard a great talk from Bob Matthews who works with an inner-city medical group with a mostly low income African America population, helping them manage hypertension. The best at doing this in the state of California is of course Kaiser where 70% of people with hypertension are within official guidelines and are “under control”. The state average is below 40%. But with this tough population Matthews’ group was at 94%. We know how to do it properly, but we don’t spend any money on it.

So how much do we spend on FQHCs which are basically primary care for poor people. I asked ChatGPT and the answer is $38 billion.

If my guess is correct there’s $300 plus billion in these hospital reserves sitting there not doing anything other than buying Nvidia stock and yet it costs only $38 billion a year to run the FQHCs. You could add another $38 billion a year for probably ten years just by confiscating all the reserves and the hedge funds of the rich systems–which they don’t seem to be doing anything with!

I understand that this is America. You will see no finer example of regulatory capture than the AHA and every single hospital in every single congressional district making sure that there is no such thing as a real assault on their balance sheet. And if things go in the least wrong, you know, they have all these employees and they’re very important for the local economy and yada, yada. And changing that is unbelievably difficult in America.

Bu at some point it’ll have to change.

Bob Matthews, who I mentioned earlier, is from a company called MediSync, which supports a bunch of primary care groups. They essentially use intelligent machines, telling the doctors which drugs the people with hypertension should be on and how they should be treated, and help the primary care docs match the patients to the guidelines. If you actually do that, you have a much better chance of actually helping people avoid the problems of hypertension, diabetes et al. There’s a bunch of stuff you have to do. It requires proper patient outreach and yada, yada, yada. It’s not easy, but you can do it. And we have failed to do it because more than half the people in this country don’t have access to a primary care doctor.

I remember at Health 2.0 years ago I asked Marcus Osborn why Walmart got into health care delivery. He said that they surveyed Walmart shoppers, asking how many of them had a primary care doctor? And about 60% of them said they have one, 40% said they didn’t have one. Then they asked the 60% what the name of their primary care doctor was, and half of them didn’t know it. So not much of a relationship there! So at that point they said, hang on, perhaps we should be investing in primary care. And that’s why Walmart, Walgreens, CVS et al are now in the primary care business — because they think there’s an opportunity because the current incumbents have done it so poorly.

And why would the current incumbent big health systems bother to do what Bob Matthew’s groups did? Because all they’re interested in is getting the expensive people into their facilities to do expensive stuff to them in order to generate money, which then ends up in their hedge fund.

This is so screwed up.

We’re spending so much more than anybody else. We do need hospital systems. We do need intensive inpatient stuff. We need to figure out how to fix cancer. But we need to do less of it and we need to pay less for all the stuff we’re doing. We’re spending way too much, when we’re paying 10 times what everybody else in the world is paying for drugs. They call it the free market. But there isn’t one. There’s price fixing and price setting.

Every other country does price setting. And we do price fixing by the companies who make Ozempic and Humira, and stents and hospital beds and then of course by the systems that provide all these services.

We shouldn’t be putting up with this. And expecting a free market approach to get it right means that we’re relying on people who haven’t figured it out for years. Like employers.

Healthcare is a regulated market. Our primary payer is the fricking federal government, it’s not the free market. I’m trying to connect the fact we need to spend money in places it’s not being spent while there’s this obvious source of money sitting there being managed by hedge fund guys.

Literally, the former CEO of Ascension actually moved over to the hedge fund and is paying himself like $12 million bucks a year to manage the investment. I mean, good luck to him. No one’s stopping him. But at some point, we’ve got to say, why do we allow this?

Because technically half the money in hospitals comes from the government. At least 50% of their activity is a public utility. If RWJBarnabas was a pure government organization would there be 28 employees making a million bucks a year? I sincerely doubt it.

So let’s have a real evaluation of what money is available and lets take it from the organizations that shouldn’t have it and put it in the place where it’s needed.

Matthew Holt is the publisher of The Health Care Blog

Credits: thehealthcareblog

The post The Money’s in the Wrong Place. How to Fund Primary Care appeared first on girgitnews.

By STEVEN ZECOLA

The U.S. Department of Health and Human Service (“HHS”) is responsible for a wide range of activities relating to medical and public health. It has 60,000 employees and a $1.7 trillion annual budget with approximately $140 billion for discretionary spending. For the past 13 years, HHS has been spearheading a National Plan for addressing Alzheimer’s disease – with some notable successes.

Given its resources, expertise and charter, HHS should launch a National Plan to cure Parkinson’s disease patterned after its approach on Alzheimer’s disease.

Legislation, or Not

The U.S. House of Representatives has passed H.R.2365, the National Plan to Cure Parkinson’s Disease.

The bill would establish HHS as the central point for strategic direction and coordination of PD research.  It would require formation of a broad-based Advisory Panel to provide strategic advice and any on-going course corrections.

There is nothing preventing HHS from putting the structure of H.R. 2365 into effect now, and it should do so without waiting for Senate action or inaction. There is no incremental funding required to implement this National Plan, nor is any Congressional approval necessary.  This approach would mark an important step towards finding a cure for Parkinson’s disease, and is well within HHS’s charter.

A Cross-Section of Policy and PD Research

For those who have studied the application of regulatory policies to Parkinson’s disease research, it does not provide a productive narrative.

Levodopa was first discovered in 1910. In 1975, after 14 years of its “miraculous” treatment of PD symptoms, the FDA approved the drug. Levodopa does not cure or delay the progression of the disease. Yet, it has remained the gold standard of treatment of PD for the past fifty years. That is not to say there has been insufficient research or inadequate FDA approvals.  Rather, it’s a question of where the research dollars have been funneled. It turns out that levodopa becomes less effective over time and eventually produces uncontrolled shaking. Therefore, research dollars have been targeted toward drugs that delayed the need for levodopa or controlled its side effects.

An exception to this approach was Geron, which became a leader in embryonic stem cell research. It had raised $100 million to conduct clinical trials. However, most of that money was consumed by undertaking thousands of experiments on mice under the “guidance” of the FDA. Nevertheless, Congress saw the potential of embryonic stem cells, and passed the Stem Cell Research Enhancement Act.

While Congress cheered, the Evangelical movement viewed embryonic stem cell research as barbaric and akin to murdering a human life. It didn’t matter that embryonic stem cells could not become a living being unless they were implanted in a woman’s womb, and this step wasn’t part of the research efforts.  Notwithstanding, the Evangelicals convinced George W. Bush to veto the legislation, and a promising path for PD research was shut down.

More recently, the House has passed bills for a National Plan to Cure Parkinson’s in its last two sessions, but the Senate has failed to act, despite a myriad of sponsors of a bill with similar provisions.

Building Upon Lessons from the Past

In 2011, Congress passed legislation establishing a National Plan to Address Alzheimer’s disease (“NAPA”).  Thirteen years later, there are many lessons to be learned from that effort that can be applied in a National Plan for PD. Of particular note, the original plan had five objectives including to “Prevent and Effectively Treat AD/ADRD by 2025”. 

The first report by the Advisory Council specified that the current “level of resource commitment falls drastically short of the funding needed to accelerate the pace of research on prevention, cures, and treatments for AD”. It also recommended that the Secretary examine “[h]ow HHS uses existing authorities to reduce drug development barriers and accelerate development of new therapies” and specifically called for recommendations to “accelerate the FDA review process”.

What happened?  While funding was increased substantially and hundreds of potential treatments have been identified, only two drugs have been approved by the FDA under an “accelerated” review process.

While HHS may express pride in the accomplishments from the Alzheimer’s National Plan, it should conclude that the process to get an effective treatment identified and approved takes too long. For example, the FDA provides “guidance” to researchers even before clinical trials are submitted. It also regulates the provision of genetic tests. These actions needlessly slow development and reduce innovation.  

Similarly, the FDA’s regulation of Phase 1 and Phase 2 trials slows down development and does little to benefit the public interest. The FDA points to multiple ways that it has accelerated the drug approval process.  But the reality is that progress from PD research has been lacking.

On the other hand, in 2019, researchers issued a report – based on real-world observations — that Terazosin resulted in a lower incidence of PD and a slower development of the disease when it did occur.  Terazosin has been used for over 35 years to treat other maladies. Yet the drug underwent a 13-person Phase I trial to determine if it is safe. This phase 1 trial took several years to complete. This approach was a distraction that caused unnecessary delay and cost under the FDA’s regulatory regime.

The FDA will say that its rules do not require 3 (or more) trials nor does it mandate a particular trial design. This is disingenuous. Companies spending hundreds of millions of dollars on research cannot afford the risk of shirking the FDA’s standard procedures.

Taken as a whole, the HHS should limit the FDA’s involvement in PD research to approval of Phase 3 trials. Such an approval process will speed development and foster innovation yet maintain adequate safety controls by the FDA. Research organizations would be less constrained in developing their strategies and would be held to more responsibility for their approach to research.

A Multivariate Solution Is Likely to be Required

PD is a complex disease that has different manifestations when looked at from a genetic, diet, exercise, environmental (pesticides/pollution/solvents), vitamin, drug, electronic, radiation and possibly other perspectives. As such, a multivariate solution is likely to be required to successfully treat PD. 

Such a solution will not be well accommodated by the current FDA review process, with each different combination of therapies being subjected to regulatory review and intervention.  The process could drag on for decades.

HHS should recognize the need for a multivariate solution and plan accordingly, as described below.

Data Collection to Identify Multivariate Solutions

In 2010, The Michael J. Fox Foundation launched the Parkinson’s Progression Markers Initiative (PPMI) to find the biological markers of Parkinson’s onset and its progression. That study led to the impressive finding of a tool that can detect pathology not only of people diagnosed with Parkinson’s, but also in individuals that are at a high risk of developing it. However, after ten years, that study has only a few thousand participants. HHS should endorse and expand the scope of that study.

The “second version” of PPMI should be an overlay study designed with the end game in mind. That is, it should produce a mapping of individual people’s PD “score” over time against all relevant explanatory variables that could possibly impact PD for each individual. Such an approach is superior for identifying multivariate solutions.

To accomplish this objective, each participant would establish and maintain a unique portal for his/her own explanatory PD variables. The portal would include a series of hard-coded entry requirements covering scores of inputs. The initial set-up could be completed in piece-part (with the availability of outside assistance) and would auto-populate with each quarterly update (allowing for input of any changes that occurred after the initial set-up). The portal would interface with the growing number of portals of individual healthcare providers and would collect the diagnostic information from those systems. Personal “meters” of this sort are now actively being deployed in the field of Alzheimer’s disease given that certain therapies and drugs have shown progress against that disease.

As the above information from participants is collected over time, artificial intelligence software would be used to identify combinations of diet, exercise, supplements, genetics, sleep habits, therapies, electronics, radiation and drugs that point towards promising results. New treatments such as those undertaken in clinical trials would be added to the participant’s portal as they as are pursued by those individuals. All of the patient’s existing drugs would be analyzed in the context of all other relevant explanatory variables for that participant – over time.

As importantly, a comparative, quantifiable measurement of PD over time for each individual is required. The PPMI was originally focused on identifying a marker for PD and therefore uses a series of qualitative questions to gauge the patient’s development of PD symptoms over time. In contrast, the emphasis for this data collection effort should shift to the explanatory variables affecting PD progression over time.

In terms of the participant’s PD score, I believe a modified version of the Fitness program currently designed for the computer game “Wii” (which provides a quantitative estimate of an adult’s age based on how that person performed on certain activities) would provide more reliable results. Each participant would provide his/her own age estimator from the computer program on a quarterly basis as well as provide any updates for the various explanatory variables.

Once this revised format is established, the HHS should establish a goal of enrolling 100,000 PD participants into the study within two years.

A Better Approach for PD Research Is Available Now

HHS can – on its own accord – dramatically improve the efficiency and effectiveness of Parkinson’s research by: 1) adopting the industry-wide structure it utilized for Alzheimer’s disease, 2) embracing and expanding upon the current PPMI study and 3) limiting the FDA’s involvement in research to the approval of Phase 3 clinical trials.

Steve Zecola sold his web application and hosting business when he was diagnosed with Parkinson’s disease twenty three years ago.  Since then, he has run a consulting practice, taught in graduate business school, and exercised extensively

Credits: thehealthcareblog

The post A New Day for Parkinson’s Disease Research Is Near appeared first on girgitnews.

By GEORGE HALVORSON

Medicare made $83.4 billion very real dollars in 2022. The 17% discounts below the average cost of fee-for-service Medicare, that happen in every county for Medicare Advantage, have been very real and extremely successful in paying for Medicare coverage — in a way that now makes the program a profit center for the US Government.

You can see the actual financial report page from the 2023 Medicare trustee report below. It shows that the Medicare trust fund grew in 2022 for the first time in decades. More than half of the Medicare members are now enrolled in Medicare Advantage plans. Those members cost significantly less than their equivalent fee-for-service Medicare patients.

These are the actual numbers from the trustee report.

The Medicare trustee report says that the total Medicare program grows per member by 6.7% every year. They project in that report that they expect that rate of increase to be consistent over the next decade. The enrollees in the Medicare Part A and Part B programs have expenses that increase slightly above that number every year. That’s been true for a couple of decades.

Medicare loses money on every Part A and Part B member when expenses for those programs are higher than the 6.7% average.

Medicare Advantage costs for Medicare Part C are increasing at a lower rate than that number. That means that Medicare makes money and creates a surplus with the Medicare Advantage patients.

The Medicare Advantage programs that function as Medicare Part C now have expenses that increase, on average, about 4% each year. A 4% cost increase is a profitable number for the Medicare program. That lower level of cost increase is highly beneficial to Medicare. It helped create an $83.4 billion profit and surplus for Medicare as a total program in 2022.

Because Medicare Advantage is a capitation program and not a fee-based payment model, the capitation determines what the payment levels will be. CMS has determined to set the capitation increases at levels below the 6.7% number. We don’t need to guess about their process or number. They announced it publicly to the world early in the year.

CMS set the limit for those increases per member in 2024 at 4.3% for the year.

Their number guarantees that Medicare will be profitable. It also means that the trust fund is now secure from the long-term deficits and financial deterioration levels that most Medicare policy people have been predicting for decades for the Medicare program.

Critics of the Medicare Advantage program create some fantastical, misleading, unfounded, and completely wrong numbers about the relative cost of Medicare Advantage in several reports that have been written about the program. Those numbers have been published in some reputable publications in ways that have confused some people who are trying to evaluate Medicare Advantage as a program.

The critics say that the 17% discounts from fee-for-service Medicare, that are clearly paid every month, are not real. The critics say the plans somehow do some kind of coding magic that they say adds 12% to the cost of Medicare Advantage members every year, rather than the lower costs that seem to exist in the bids.

Critics and enemies of the program — with no understanding of how care actually functions at cost levels for care — completely invent and then assert that 12% “real costs” number to be the number we should use to measure the program. And they do this with no back up measurements or calculations of any kind to support that purely opinion-based number.

The critics who attack the program believe that number to be somehow inherently true. They use it with no actual measurements or calculations every year, which causes people to think that what seems to be an extremely good price for Medicare Advantage plans, is actually a bad and excessively high price for Medicare members, when you adjust it by that purely invented factor.

The 17% average discounts from fee-for-service Medicare for the Medicare Advantage plans are very real. And because they are real, the trust fund made an $83.4 billion surplus in real and actual dollars for 2022.

The $83.4 billion surplus shows that the critics are using fake news. It shows that they’re writing about, and using, completely wrong numbers for their evaluation of the relative costs of the programs.

Unfortunately, those critics have managed to damage the credibility of the program with those attacks. They should be completely ignored and rejected by everyone who looks at the real numbers and understands how the programs actually work.

The 17% lower costs are very real.

How does Medicare Advantage bid 17% below the cost of fee-for-service Medicare in every county?

They deliver much better care.

Fee-for-service Medicare has some very poor and weak care for too many low-income members. Fortunately, two out of three very low-income members have now joined plans, but the ones who aren’t in plans receive very bad care.

Amputations are a good example.

Far too many low-income Medicare patients have their legs amputated. They actually lose their limbs and they have an extremely high mortality rate after that happens.

That creates billions in revenue for those fee-for-service care programs in those communities.

That’s very bad and very expensive care for too many people.

The plans get paid a capitation for each patient rather than a fee for each piece of care.

The plans all know that foot ulcers in patients cause 90% of the amputations. And they all know that you can reduce foot ulcers by over 60% with dry feet and clean socks for patients.

Billions of dollars are saved when the plans have a much lower level of amputations — as opposed to the more than 20% of patients with foot ulcers and amputations that the Shameful Metric piece describes.

The most recent data (from the best current electronic database in care) says that the plans now have about 1.3% of patients with amputations.

Plans save billions of dollars with those lower amputation rates. The plans can bid 17% lower costs than fee-for-service Medicare, because those amputations don’t happen for their members.

We need to understand what just happened for Medicare.

The plans have a five-star quality plan that focuses on issues like low blood sugar levels for their patients. The Medicare Advantage care sites have multiple public meetings where they celebrate both the better culture of care that results from those programs and the best practices on team care, data-supported care, and patient-focused care that allows the plans to bid 17% below the average cost of fee-for-service Medicare.

We need to plot a future for Medicare that has much lower costs for their members and that lets us focus on continuously improving care, within the new culture and infrastructure of care, that’s created by having Medicare become a profit center for the country.

That’s a slam-dunk win for the country.

It means that the much higher level of benefits that exist for Medicare Advantage members are now the new normal for the Medicare program. Dental, vision, and hearing benefits — along with a wide range of in-home support benefits — are now paid for by Medicare for the majority of the members.

Some Medicare Advantage programs take the surplus that they earn from the 17% discounts and actually buy Part D drug benefits for their members. The plans who choose that path provide the Part D coverage for less than the cost of standard benefits, which is easily the most intelligent and high-value use of the Medicare dollar.

The people who don’t understand that the bulk of the new benefits are basically free money to Medicare should learn and remember that the point of the Medicare Advantage inclusion and provision in the Affordable Care Act and Obamacare was actually to save the Medicare program financially and to create far better benefits for the members.

It’s a slam dunk win for both of those goals now. That $83.4 billion surplus for 2022 is very nice icing for that cake.

The critics who hate insurance companies at an ideological level are still trying hard to cut benefits. That makes absolutely no sense when you see what the benefits do, who they serve, and how important they are to people’s lives.

The pressure on those points should be diminished by the plans saving the trust fund.

George Halvorson is Chair and CEO of the Institute for InterGroup Understanding and was CEO of Kaiser Permanente from 2002-14.

Credits: thehealthcareblog

The post Medicare Is Now Profitable as a Total Program Because of Medicare Advantage appeared first on girgitnews.

How the Search for Perfect Markets has Damaged Health Policy

Sometimes ideas in healthcare are so powerful that they haunt us for generations even though their link to the real world we all live in is tenuous. The idea of “moral hazard” is one of these ideas. In 1963, future Nobel Laureate economist Kenneth Arrow wrote an influential essay about the applicability of market principles to medicine entitled “Uncertainty and the Welfare Economics of Medical Care”.    

One problem Arrow mentioned in this essay was “moral hazard”- the enhancement of demand for something people use to buy for themselves that is financed through third party insurance. Arrow described two varieties of moral hazard: the patient version, where insurance lowers the final cost and inhibitions, raising the demand for a product, and the physician version–what happens when insurance pays for something the physician controls by virtue of a steep asymmetry of knowledge between them and the patient and more care is provided than actually needed. The physician-patient relationship is “ground zero” in the health system.

Moral hazard was only one of several factors Arrow felt would made it difficult to apply rational economic principles to medicine. The highly variable and uniquely threatening character of illness was a more important factor, as was the limited scope of market forces, because government provision of care for large numbers of poor folk was required.  

One key to the durability of Arrow’s thesis was timing: it was published just two years before the enactment of Medicare and Medicaid in 1965, which dramatically expanded the government’s role in financing healthcare for the elderly and the categorically needy. In 1960, US health spending was just 5% of GDP, and a remarkable 48% of health spending was out of pocket by individual patients. 

After 1966, when the laws were enacted, health spending took off like the proverbial scalded dog. For the next seven years, Medicare spending rose nearly 29% per year and explosive growth in health spending rose to the top of the federal policy stack. By 2003, health spending had reached 15% of GDP! Arrow’s  moral hazard thesis quickly morphed into a “blame the patient” narrative that became a central tenet of an emerging field of health economics, as well as in the conservative critique of the US health cost problem.  

Fuel was added to the fire by Joseph Newhouse’s RAND Health Insurance Experiment in the 1980s,  which found that patients that bore a significant portion of the cost of care used less care and were apparently no sicker at the end of the eight-year study period. An important and widely ignored coda to the RAND study was that patients with higher cost shares were incapable of distinguishing between useful and useless medical care, and thus stinted on life-saving medications that diminished their longer term health prospects. A substantial body of consumer research has since demonstrated that patients are in fact terrible at making “rational” economic choices regarding their health benefits. 

The RAND study provided justification for ending so-called first dollar health  coverage and, later, high-deductible health plans. Today more than half of all Americans have high deductible health coverage. Not surprisingly, half of all Americans also report foregoing care because they do not have the money to pay their share of the cost!   

However, a different moral hazard narrative took hold in liberal/progressive circles, which blamed the physician, rather than the patient, for the health cost crisis.  

The Somers (Anne and Herman) argued that physicians had target incomes, and would exploit their power over patients to increase clinical volume regardless of actual patient needs to meet their target income. John Wennberg and colleagues at Dartmouth later indicted  excessive supply of specialty physicians for high health costs. Wennberg’s classic analysis of New Haven vs. Boston’s healthcare use was later shredded by Buz Cooper for ignoring the role of poverty in Boston’s much higher use rates.

The durable “blame the physician” moral hazard thesis has led American health policy on a  futile five-decade long quest for the perfect payment framework that would damp down health cost growth–first capitation and HMOs, then, during the Obama years, “value-based care”–a muddy term for incentives to providers that will eliminate waste and unnecessary care. Value-based care advocates assume that  physicians are helpless pawns of whatever schedule of financial rewards is offered them, like rats in a Skinner box. If policymakers can just get the “operant condition schedule” right, waste will come tumbling out of the system. 

The end result of this narrative: thanks in no small part to the festival of technocratic enthusiasm that accompanied ObamaCare, (HiTECH, MACRA, etc), physicians and nurses now spend as much time typing and fiddling with their electronic health records to justify their decisions as they do caring for us. Controlling physician moral hazard thru AI driven claims management algorithms has become a multi-billion business. The biggest “moral hazard mitigation” company, UnitedHealth Group, has a $500 billion market cap.

Thus the poisonous legacy of Arrow’s “moral hazard” thesis has been two warring policy narratives that blame one side or the other of the doctor-patient relationship for rising health costs. It has given us a policy conversation steeped in mistrust and cynicism. You can tell if someone is a progressive or conservative merely by asking who they blame for rising health costs! 

There were credible alternative explanations for the post-Medicare cost explosion. Recall that the point of expanding health coverage in the first place was that better access to care DOES in fact improve health.  Medicare lifted tens of millions of seniors out of poverty, improving both their nutrition and living conditions. Medicaid dramatically broadened access to care for tens of millions in poverty. This expansion of coverage, and the added costs, deserve much credit for the almost nine year improvement in Americans’ life expectancy from 1965 to 2015. 

It is also worth recalling that the two most explosive periods of inflation in the post-WWII US economy were the late 1960’s, the so-called Guns and Butter economy that financed the Vietnam War, and the mid 1970’s to 1981, fueled by the Arab oil embargo. These periods of hyperinflation coincided with the coverage expansion, amplifying their cost impact.

And of course, the 1980’s also saw a flood of optimistic, high energy baby boomer physicians, the result of a dramatic federally funded expansion of physician supply begun by Congress during the 1970’s. The reason for this surge: we did not have enough physicians to meet the demands of the newly enfranchised Medicare and Medicaid populations. 

This surge in aggressive young physicians coincided with dramatic expansion in the capabilities of our care system. Non-invasive imaging technologies such as MR, CT and ultrasound, ambulatory surgery dramatically lowered both the risks and costs of surgical care. The advent of effective cancer treatments, cut the cancer death rate by one-third from its 1991 peak. The advent of statins, and less invasive heart treatment has reduced mortality from heart disease by 4% per year since 1990, despite the rise in obesity!

Medicine today is of an different order of magnitude of clinical effectiveness, technical complexity and, yes, cost, than that on offer in 1965. No one would trade that health system for the one we have today.    

However, the biggest problem with the moral hazard theses–both of them–was the assumption that the physician and the patient are primarily motivated by “maximizing their utility” in the healthcare transaction. Arrow knew better. He emphasized the role that fear and existential risk played in their interaction, given that illness, particularly serious illness, is, as he put it, “an assault on personal integrity”. Given the level of personal risk, it is easy to understand why both patients and physicians will not be obsessing about the risk/benefit relationship of every single medical decision.

By reducing the physician-patient interaction to a morally fraught mutual quest of the proverbial free lunch, economists have not only insulted both parties, but grossly oversimplified this complex interaction. Is a sick person really “consuming” medical care, like an ice cream bar or a movie? Is the physician really “selling” solutions regardless of their effectiveness, unconstrained by pesky professional ethics, or rather groping through fraught uncertainty to apply their knowledge to helping their patient recover? 

In contrast to virtually every other Western country, American health policy has been obsessed for nearly sixty years with fighting moral hazard and, in the process, saddling almost 100 million Americans with $195 billion in medical debts (the vast majority of which are uncollectible). Isn’t it ironic that those other wealthy countries that provide their citizens care free at the point of service spend between 30-50% less per capita on healthcare than we do?  And that both physician visits and hospitalization rates are far lower in the US than most of these countries.   

There is no question that healthcare in the US today is very expensive. But health costs have been dead flat as a percentage of US GDP for the past thirteen years. The explosive growth in health costs is over. Increasingly, attention is turning to the real culprit–socially determined causes of illness, and the inadequacy of our policies toward nutrition, shelter, mental health, gun violence and investment in public health. It’s time for the economists to eat some humble pie, and acknowledge that medicine will probably never fit in their cartoon universe of “Pareto optimality in perfect markets”.

Jeff Goldsmith is a veteran health care futurist, President of Health Futures Inc and regular THCB Contributor. This comes from his personal substack

Credits: thehealthcareblog

The post Who to Blame for Health Costs: The Poisoned Chalice of “Moral Hazard” appeared first on girgitnews.

By JONATHON FEIT

Journalists like being salty.  Like many venture investors, we who are no longer “green” have finely tuned BS meters that like to rip off the sheen of a press release to reach the truthiness underneath. We ask, is this thing real? If I write about XYZ, will I be embarrassed next year to learn that it was the next Theranos?

Yet journalists must also be optimistic—a delicate balance: not so jaded that one becomes boooring, not so optimistic that one gets giddy at each flash of potential; and still enamored of the belief that every so often, something great will remake the present paradigm.

This delicately balanced worldview is equally endemic to entrepreneurs that stick around: Intel founder Andy Grove’s famously said “only the paranoid survive,” a view that is inherently nefarious since it points out that failure is always lurking nearby. Nevertheless, to venture is to look past the risk, as in, “Someone has to reach that tall summit someday—it may as well be our team!” Pragmatic entrepreneurs seek to do something else, too: deliver value for one’s clients / customers / partners / users in excess of what they pay—which makes they willing to pay in excess of what the thing or service costs to produce. We call that metric “profit,” and over the past several years, too many young companies, far afield of technology and healthcare, forgot about it.

Once upon a time, not too many years ago, during the very first year that my company (Beyond Lucid Technologies) turned a profit, I presented to a room of investors in San Francisco, and received a stunning reply when told that people were willing to pay us for our work.  “But don’t you want to grow?” the investor asked. 

Flabbergasted, I replied that we felt it was more important to deliver enough value that people were willing to pay enough that we could operate in the black, whereas the typical “growth at all costs” model is essentially about subsidizing enough adoption using outside capital that winning a market becomes a game of chicken with one’s competitors: the one who can lose the most for longest wins…and when the other guy is dead and desiccated, having used up all its venture money driving prices and margins to zero, the winner gets to raise prices. Like a victorious seal, lion, or bison, the winner controls the beach, the savannah, the prairie.

According to Business Insider, Matthew Wansley, a professor at Yeshiva University’s Cardozo School of Law said, “Progressive economists had long understood that tech companies, backed by gobs of venture capital, were effectively subsidizing the price of their products until users couldn’t live without them. Think Amazon: Offer stuff cheaper than anyone else, even though you lose money for years, until you scale to unimaginable proportions. Then, once you’ve crushed the competition and become the only game in town, you can raise prices and make your money back. It’s called predatory pricing, and it’s supposed to be illegal.”

Happily, cynical ways of doing business don’t work forever or in all contexts. Once interest rates rise, every contender has a handicap—but it is the biggest, strongest, most willing to go to the mat who find themselves vulnerable in a new and unhappy way. Profitable companies have both hands free to fight, and their weapons of choice are real metrics to show value and efficiency. By contrast, firms whose growth was fueled by “free” money are fighting with their hands chained to cement that is getting heavier. Using the language of the Great Recession, the teaser rate on their mortgage just skyrocketed, and those payments…yeesh.

But profit is more than just a financial metric—it is also a powerful and pragmatic signal. The renewed, overdue focus on profit’s second, more esoteric importance was on full-peacock display during the first day of the Digital Health Innovation Summit (DHIS) West earlier this week, where the main takeaway from seemingly every presenter was: Can you prove your value, and convince me that I cannot go another day without you?

Hospital and health insurance executives—whose names I do not need to recite here; you can find the agenda online—speaking frankly and alongside firms whose services they have hired, addressed questions about how to break through the noise of too many emails, too polished emails, too little focus on building real relationships. Then they acknowledged that they are slammed-busy and lack the time to build them while also traveling to conferences to talk about relationship-building…which means finding another way through the noise. That is the entrepreneur’s mission, and trick. One executive basically said, “Don’t call us, we’ll call you” if we want what you have to offer (Remember people, this is San Diego, not Hollywood!).

Another confessed that so many young companies are coached about the “right” way to phrase an opening salvo that the pitches begin running together, filled with plenty of heart and dripping with mission but still lacking individuality. In other words, a bit of roughness-around-the-edges may not be a bad thing when some organizational leaders highlighted their interest in building collaboratively.  Because I would be remiss not to, I asked how Mobile Medical services can engage with hospitals to expand their role and showcase all the good they can do beyond transport—for example, Community Paramedicine. The advice was to sit down with the agency’s emergency department contact and straightforwardly say, “We’d like to help out more.” No fluff. No pussyfooting. Tactic #1: have a discussion. The worse anyone can say is “No.” Here’s something telling: I had a chance to explain some of the good that Community Paramedicine programs already do, and some of the interoperability wins that Mobile Medical services have already notched. Some of these executives did not even know about them—which just goes to highlight the noise. Both ventures and those who use them to do great things need to sing more about success….but, it seems, not necessarily more loudly.  Rather, in a more targeted fashion that all the willing, listening ears can hear.

Which goes back to profit: More than raising another round of funding, or winning an award, or stacking a slide deck with logos, being able to say “people are willing to pay for this work—presumably more than once—more than it costs to make, and you should consider it to, and here is why” is curious to those who may not have yet been aware that such a solution exists.

One hospital executive here described their employer’s new ethos: “We don’t need to do everything ourselves.” But with the willingness to look beyond the walls of the institution is a Monkey’s Paw kind of change: careful what you wish for. The price for such willingness is a focus on accountability—those rising interest rates put on pressure everywhere, which means investments have to perform. Now they cost money in excess of people’s time (which they are getting paid for anyway). As every minute becomes more expensive, the last thing these executives asked for is more waste.

I arrived at the DHIS West prepared to meet old friends and hear old tropes.  Perhaps I would even have been able to confirm that—as CEO of a company that is unusual by Bay Area standards, working in the world of Mobile Medicine that too few understand (“The sirens sound and your people show up…right?”)—there would be nothing to see because all the oxygen would have been spent talking about a hot new topic without fundamentals (or in the case of A.I. with declining fundamentals). Of course A.I. would be a bingo buzzword (“Take a shot!”) but I also expected boldface speakers reciting platitudes.

Boy was I wrong! Color me impressed! By dinner, my salty journalistic crust had washed away clean.  Instead, I confessed to my tablemates—an entrepreneur, an insurance professional, and Michelle Snyder, a lovely, ever-curious person who I first met a decade ago (wow!)—that DHIS West almost immediately inspired me to look back at the arc of our profession, and in so doing, to recognize how much change has really happened—even though, like so many fleeting loves in life, on a daily basis we are too close to see it. As Michelle said, it’s not moving fast enough—but it never will be for someone who is committed to improving the status quo. I suspect that for her, the deadline to achieve impact at scale in American and global healthcare will always be yesterday.

I later described to Ilana Brand, a business development executive in the area of digital health for the law firm Cooley, my own mental wellness and mission-motivation trick, which I have done for years and recommend to anyone who has been venturing for as long as I have: look back on those old slide decks from time to time to see how much has changed—and what remains the same. The through-line orientation to address problems in the market should ideally be consistent until they are solved—but a company cannot be stubborn either, lest an asteroid come. It must adaptive to changing realities while keeping its soul. Ideally, in hindsight, one sees ups, downs, fumbles and tackles, but always progressing toward the goal (and sometimes a Hail Mary pass is just what the digital doctor ordered).  I am writing this just days before Super Bowl LVIII (Go Niners!), so perhaps football offers an ideal entrepreneurial analogy after all.

What’s magical is to look back on the arc of change with a sense of wonder and gratitude for how far we have come when seen at a distance (as opposed to while in the trenches of innovation). It’s like watching the horizon bend in the distance while flying toward the sunset: we all know that the Earth is round, and if we get high enough, we can see so for ourselves. Yet that knowledge still pales against “Oh my gosh, look in the distance! The colors…the curve of our planet…how amazing to think we’re up so high.  No strings!”

Finally: we spoke, of course, of artificial intelligence—but not of generative A.I. per se. A dichotomy is forming: some think A.I. will be relegated, for the foreseeable future, to administration, where it will automate the paperwork that everyone hates and so it becomes both expensive and neglected. This approach has the added benefit of delaying the introduction of perceived “replacement” technologies into clinical settings (with pushback anticipated just like it was in Hollywood and elsewhere). The delay may serve to our collective benefit because A.I. has not yet come close to solving its hallucination problem.

Others (including me) believe we may be selling ourselves short—and I was further inspired by investor Ryan McCrackan, CFA, who described an optimistic future: as soon as something extraordinary proves itself, the instinctual corporate risk aversion, which often blocks great things from happening, will be proven to have overblown. Attention will quickly shift to all that could be possible. Then we’re off to the races, together, seeking and supporting meaningful improvements to under-attended sectors (“White spaces”) of health, safety, and life in general. Until then, we’ll embrace the most excellent irony that emerged post-pandemic, in conjunction with the Dawn of Artificial Intelligence: In both medicine and business, “relationships still matter.”

Jonathan Feit is the CEO of Beyond Lucid Technologies

Credits: thehealthcareblog

The post The Optimism of Digital Health appeared first on girgitnews.

By MIKE MAGEE

Not surprisingly, my nominee for “word of the year” involves AI, and specifically “the language of human biology.”

As Eliezer Yudkowski, the founder of the Machine Intelligence Research Institute and coiner of the term “friendly AI” stated in Forbes:

“Anything that could give rise to smarter-than-human intelligence—in the form of Artificial Intelligence, brain-computer interfaces, or neuroscience-based human intelligence enhancement – wins hands down beyond contest as doing the most to change the world. Nothing else is even in the same league.” 

Perhaps the simplest way to begin is to say that “missense” is a form of misspeak or expressing oneself in words “incorrectly or imperfectly.” But in the case of “missense”, the language is not made of words, where (for example) the meaning of a sentence would be disrupted by misspelling or choosing the wrong word.

With “missense”, we’re talking about a different language – the language of DNA and proteins. Specifically, the focus in on how the four base units or nucleotides that provide the skeleton of a strand of DNA communicate instructions for each of the 20 different amino acids in the form of 3 “letter” codes or “codons.”

In this protein language, there are four nucleotides. Each “nucleotide” (adenine, quinine, cytosine, thymine) is a 3-part molecule which includes a nuclease, a 5-carbon sugar and a phosphate group. The four nucleotides unique chemical structures are designed to create two “base-pairs.” Adenine links to Thymine through a double hydrogen bond, and Cytosine links to Guanine through a triple hydrogen bond. A-T and C-G bonds  effectively “reach across” two strands of DNA to connect them in the familiar “double-helix” structure. The strands gain length by using their sugar and phosphate molecules on the top and bottom of each nucleoside to join to each other, increasing the strands length.

The A’s and T’s and C’s and G’s are the starting points of a code. A string of three, for example A-T-G is called a “codon”, which in this case stands for one of the 20 amino acids common to all life forms, Methionine. There are 64 different codons – 61 direct the chain addition of one of the 20 amino acids (some have duplicates), and the remaining 3 codons serve as “stop codons” to end a protein chain.

Messenger RNA (mRNA) carries a mirror image of the coded nucleotide base string from the cell nucleus to ribosomes out in the cytoplasm of the cell. Codons then call up each amino acid, which when linked together, form the protein. The protein’s structure is defined by the specific amino acids included and their order of appearance. Protein chains fold spontaneously, and in the process form a 3-dimensional structure that effects their biologic functions.

A mistake in a single letter of a codon can result in a mistaken message or “missense.” In 2018, Alphabet (formerly Google) released AlphaFold, an artificial intelligence system able to predict protein structure from DNA codon databases, with the promise of accelerating drug discovery. Five years later, the company released AlphaMissense, mining AlphaFold databases, to learn the new “protein language” as with the large language model (LLM) product ChatGPT. The ultimate goal:  to predict where “disease-causing mutations are likely to occur.”

A work in progress, AlphaMissense has already created a catalogue of possible human missense mutations, declaring 57% to have no harmful effect, and 32% possibly linked to (still to be determined) human pathology. The company has open sourced much of its database, and hopes it will accelerate the “analyzes of the effects of DNA mutations and…the research into rare diseases.”

The numbers are not small. Believe it or not, AI says the 46-chromosome human genome theoretically harbors 71 million possible missense events waiting to happen. Up to now, they’ve identified only 4 million. For humans today, the average genome includes only 9000 of these mistakes, most of which have no bearing on life or limb.

But occasionally they do. Take for example Sickle Cell Anemia. The painful and life limiting condition is the result of a single codon mistake (GTG instead of GAG) on the nucleoside chain coded to create the protein hemoglobin. That tiny error causes the 6th amino acid in the evolving hemoglobin chain, glutamic acid, to be substituted with the amino acid valine. Knowing this, investigators have now used the gene-editing tool CRISPR (a winner of the Nobel Prize in Chemistry in 2020) to correct the mistake through autologous stem cell therapy.

As Michigan State University physicist Stephen Hsu said, “The goal here is, you give me a change to a protein, and instead of predicting the protein shape, I tell you: Is this bad for the human that has it? Most of these flips, we just have no idea whether they cause sickness.”

Patrick Malone, a physician researcher at KdT ventures, sees AI on the march. He says, this is “an example of one of the most important recent methodological developments in AI. The concept is that the fine-tuned AI is able to leverage prior learning. The pre-training framework is especially useful in computational biology, where we are often limited by access to data at sufficient scale.”

AlphaMissense creators believe their predictions may:

“Illuminate the molecular effects of variants on protein function.”

“Contribute to the identification of pathogenic missense mutations and previously unknown disease-causing genes.”

“Increase the diagnostic yield of rare genetic diseases.”

And of course, this cautionary note: The growing capacity to define and create life carries with it the potential to alter life. Which is to say, what we create will eventually change who we are, and how we behave toward each other.

Mike Magee MD is a Medical Historian and a regular THCB contributor. He is the author of CODE BLUE: Inside America’s Medical Industrial Complex (Grove/2020)

Credits: thehealthcareblog

The post The 2024 Word of the Year: Missense appeared first on girgitnews.