THCB

Categories

Category: Matthew Holt

Matthew Holt is the founder and publisher of The Health Care Blog and still writes regularly for the site and hosts the #THCBGang and #HealthInTwoPoint00 video shows/podcasts. He was co-founder of the Health 2.0 Conference and now also does advisory work mostly for health tech startups at his consulting firm SMACK.health.

THCB 20th Birthday Classic: As I’ve always suspected, Health Care = Communism + Frappuccinos

• 1

By MATTHEW HOLT

Our 20th birthday continues with a few classics coming out. Back in 2005 I was really cutting a lyrical rug, and would never miss a chance to get that Cambridge training in Marxism into use. This essay about whether health care should be a public or private good has always been one of my favorites, even if I’m not sure Starbucks is still making Frappuccinos. And 18 years later the basic point of this essay remains true, even if many of you will not have a clue who Vioxx or Haliburton were or why they mattered back then!

Those of you who think I’m an unreconstructed commie will correctly suspect that I’ve always discussed Marxism in my health care talks. You’d be amazed at how many audiences of hospital administrators in the mid-west know nothing about the integral essentials of Marx’s theory of history. And I really enjoy bring the light to them, especially when I manage to reference Mongolia 1919, managed care and Communism in the same bullet point.

While I’ve always been very proud of that one (err.. maybe you have to be there, but you could always hire me to come tell it!), even if I am jesting, there’s a really loose use of the concept of Marxism in this 2005 piece (reprinted in 2009) called A Prescription for Marxism in Foreign Policy from (apparently) libertarian-leaning Harvard professor Kenneth Rogoff. He opens with this little nugget:

“Karl Marx may have suffered a second death at the end of the last century, but look for a spirited comeback in this one. The next great battle between socialism and capitalism will be waged over human health and life expectancy. As rich countries grow richer, and as healthcare technology continues to improve, people will spend ever growing shares of their income on living longer and healthier lives.”

Actually he’s right that there will be a backlash against the (allegedly) market-based capitalism — which has actually been closer to all-out mercantilist booty capitalism — that we’re seen over the last couple of decades. History tends to be reactive and societies go through long periods of reaction to what’s been seen before. In fact the 1980-20?? (10-15?) period of “conservatism” is a reaction to the 1930-1980 period of social corporatism seen in most of the western world. And any period in which the inequality of wealth and income in one society continues to grow at the current rate will eventually invite a reaction–you can ask Louis XVI of France about that.

But when Rogoff is talking about Marxism in health care what he really means is that, because health care by definition will consume more and more of our societal resources, the arguments about the creation and distribution of health care products and services will look more like the arguments seen in the debates about how the government used to allocate resources for “guns versus butter” in the 1950s. These days we are supposed to believe that government blindly accepts letting “the market” rule, even if for vast sways of the economy the government clearly rules the market, which in turn means that those corporations with political influence set the rules and the budgets (quick now, it begins with an H…).

Continue reading…

Happy 20th Birthday THCB

Hard to believe it but 20 years ago (Aug 12 2003) I started writing THCB! Somehow 20 years later it’s still here. Lots of changes over the years. Hundreds of people have written for THCB, thousands have been interviewed on it, and we’ve made a little dent in the world of health care.

Next week we will run some new articles, new interviews and re-run a selection of the greatest hits….

THCB Spotlight: Dexcare CEO, Derek Streat

According to their press release, “Dexcare is a care-access platform to manage the logistics of digital-care delivery. The platform enables healthcare systems to forecast and predict demand and manage how and where care is merchandized to consumers – throughout the digital ecosystem”. What does that mean? How does it compare to a bunch of other digital health companies trying to manager consumer operations inside providers? And having been incubated not that long ago at Providence, how has this demand generation and management service grown so fast. And why has Iconiq Growth just pushed another $75m worth of chips onto the poker table in front of them?

Derek Streat has been around digital health for a while, having founded and sold an early Health 2.0 favorite, Medify. I took him through his market and what Dexcare does in a lot of detail, so hopefully you’ll find this look very educational, not only about Dexcare but also about the consumer market environment health systems are operating in. Matthew Holt

Sach Jain, CEO of Carrum Health talks to Matthew Holt

The concept of “centers of excellence” has been around for a few decades. Surely sending health plan members and self-insured employers’ employees to the best and most effective providers should improve health outcomes and save payers’ money? Sach Jain is CEO of Carrum which has been working on this problem, partnering with the best providers and aggregating that demand from employers…and putting it all on a state of the art platform. As you might suspect, it’s not as easy as it looks. Carrum raised $45m from Omers Ventures a few weeks back, on top of a decent raise from Tiger Global a couple of years back. So are they getting it right? Sach told Matthew Holt that they are for sure on their way….

Matthew’s tidbits: Obesity Summer

Every time I get around to sending out the THCB READER I add a short & usually not to sweet commentary on some aspect of health care.–Matthew Holt


I saw the obesity crisis up close this week. And by that I’m not just referring to my addiction to Salted Caramel with Pretzel Ice Cream, bad though it is. Instead I felt thin because I went to Disneyland. But while I tip the scales at a BMI of 30 if I’m lucky, I genuinely felt that looking around Disneyland more than 50% of the crowd were obese and many morbidly so.

The rest of my trip to Southern California was quite a contrast because I’ve been watching a girls water polo tournament. Those young women and most of their families, as you’d expect, look very different. In this crowd I am definitely on the other end of the spectrum.

Obviously there’s a big socio-economic difference between the Disneyland attendees and a crowd centered around a sport largely played by rich, white kids. But at a time where we are arguing about whether Ozempic and its fellow anti-obesity drugs should be available via insurance, we seem to have no other strategies to fight the nation’s slide to obesity.   

You’ve probably seen those photos of people on the beach in the 1960s where everyone is thin. I won’t claim to understand the science of what happened but clearly the prevalence of high fructose corn syrup and other highly processed food has much to do with it. As does the free rein food companies have had to advertise what are addictive products. I don’t know how we get to be a nation where everyone eats and exercises like a water polo player. But clearly we need significant changes in our agriculture and nutrition policies. We did it with smoking, so we know it can be done. If you don’t think we need it, I recommend a trip to Disneyland (and that’s the only reason I recommend one!)

Matthew’s health care tidbits: Time to get Cynical

Each time I send out the THCB Reader, our newsletter that summarizes the best of THCB (Sign up here!) I include a brief tidbits section. Then I had the brainwave to add them to the blog. They’re short and usually not too sweet! –Matthew Holt

Plenty of reason to worry about the future of American health care this week. The biggest for-profit hospital chain–HCA–was accused of aggressively pushing patients into hospice care, sometimes in the same room, in order to make their hospitality mortality numbers look better. Most of the leading benefits consulting companies were exposed as taking payments from PBMs–yup, the same organizations their employer clients thought they were negotiating with on their behalf. And one of the biggest names in digital health, Babylon Health, tumbled into destitution, taking billions of dollars with it and leaving uncertain the fate of the medical groups in California it bought less than two years ago. Even the most successful capitalists in health care — United HealthGroup and its fellow insurers — saw their stock fall because apparently outpatient surgery volume is ticking up. 

On the policy front the malaise is spreading too. The end of the public health emergency (remember Covid?) is being used as an excuse by the old  confederate states to kick people off Medicaid. Georgia and Arkansas appear to be bringing back work requirements, even though I thought CMS has banned them and every study has acknowledged that they are cruel and ineffective. About 20 million people got on to Medicaid during the public health emergency and KFF estimates up to 17 million may be kicked off, while over 1.7 million already have.

Finally an article by Bob Kocher and Bob Wachter in Health Affairs Scholar remins us that big academic medical centers are nowhere near ready for value-based care (VBC). Jeff Goldsmith has been vocal on THCBGang and elsewhere about how VBC is becoming a religion more than a reality. And I remind you that Humana’s MA program is still basically a Fee-For-service program in drag (even though that’s now illegal in their home state). 

I grew up in American health care expecting that eventually a combination of universal insurance mixed with value-based purchasing would lead to a series of tech-enabled companies doing the right thing by patients and making money to boot. With the managed care revolution, the ACA and the boom in digital health all firmly in the rear view mirror, the summer of 2023 is a lesson that you can never be too cynical about health care in America.

.

Matthew’s health care tidbits: Hedge Funds that Do Health Care on the Side

Each time I send out the THCB Reader, our newsletter that summarizes the best of THCB (Sign up here!) I include a brief tidbits section. Then I had the brainwave to add them to the blog. They’re short and usually not too sweet! –Matthew Holt

Lots of news about bad behavior in health care this week, with real shots about patient & staff safety at home care company Papa, and Grail misinforming 400 people that they had cancer. But the prize for tone deafness this week comes from another very well funded health care provider system being heartless to its poorest patients. 

This week it’s Allina, a Minnesota “nice” system which actually amended its Epic system so that clinicians could literally not book appointments or provide care to patients who owed Allina money. Clinicians on the sharp end of this were so appalled that they went on the record about their own employer to NY Times’ reporter Sarah Kliff. The most egregious example was a doctor unable to write a prescription for a kid that had scabies–an infectious parasitic disease–who was sharing one bed with two other kids!

Of course Allina also is on the low end of charity care provision (below 1% of revenues). In contrast ten employees make more than $1m a year and another 10 make more than $500,000. 

We all know about egregious private equity funds investing in payday loans and other scummy outfits that prey on the poor. Turns out that if you let a non-profit hospital become beholden to its financial, rather than moral, north star, it starts to behave in a similar manner. Allina, of course, had a smidge under $4bn in its “investment reserve” at the end of 2021. It’s by no means special. UPMC has over $7bn in its reserves (unclear if this includes the investments it has made in startups), while Ascension has a formal private equity fund that controversially paid its former CEOs over $10m as part of its $18bn reserves.

Somehow having hedge funds that provide a little health care service on the side doesn’t leave the best taste in the mouth for how we should be organizing this health care system.

Matthew’s health care tidbits: Health care pricing is cray-zee

Each time I send out the THCB Reader, our newsletter that summarizes the best of THCB (Sign up here!) I include a brief tidbits section. Then I had the brainwave to add them to the blog. They’re short and usually not too sweet! –Matthew Holt

It’s no secret that health care pricing has been out of whack for a very long time. This past week PBMs and pharma manufacturers were in front of congressional committees trying to defend the indefensible–how much drugs cost and why? Hospitals have been required to publish their fictional price lists (their chargemasters) for a few years now and more recently have been instructed to reveal what they actually get from health plans for specific procedures. You would assume that this would move overall pricing pressure down to the “best price” but that effect seems to not be happening. At least not yet. This week also did see the bankruptcy of PE-backed (or should that be PE-toppled) emergency staffing corporation Envision. But that was more because its business model depended on surprise billing and not being in insurer networks.

More typical is the recent dispute in which primary & urgent care chain Carbon Health went public with its fight against Elevance subsidiary Anthem Blue Cross in California. While it was in-network Carbon claims that it received less than Medicare rates from Anthem, while its large delivery system competitors were getting 2-4 times Medicare rates.

This sounds about right to me. Late last year I had two identical telemedicine visits for back pain with specialists. One in a private practice, another with a doctor from UCSF–my local academic medical center. Before you troll me, they were both offered to me last minute, I didn’t know which doctor would be available if I needed a procedure, and it’s always good to get a second opinion. Plus I had blown through my deductible by then so they were free to me!

My insurer paid $795 to UCSF and $219 to the private doctor. So for exactly the same thing one provider got more than 3&½ times what the other did.

There’s still lots of chatter about the growth of value-based care, but even within Medicare Advantage there’s lots of fee-for-service, and it even pops up in places it’s supposed to be dead-–like Geisinger. We are nearly 20 years on from the Bush Administration talking about transparency as the solution to health care costs yet the opacity and confusion around pricing is as bad as it’s ever been. Yes, we know some of the numbers, but the US is a long way from seeing the invisible hand working its magic and making the same thing cost the same amount across health care. The only place where that happens is under the neo-Stalinist central pricing of Medicare. Not that that seems to work well either. 

There’ll be a couple more years while the “new” transparent plays out in the market, but don’t expect too much of a revolution. Then likely we’ll try something else.

Can we trust ChatGPT to get the basics right?

by MATTHEW HOLT

Eric Topol has a piece in his excellent newsletter Ground Truth‘s today about AI in medicine. He refers to the paper he and colleagues wrote in Nature about Generalist Medical Artificial Intelligence (the medical version of GAI). It’s more on the latest in LLM (Large Language Models). They differ from previous AI which was essentially focused on one problem, and in medicine that mostly meant radiology. Now, you can feed different types of information in and get lots of different answers.

Eric & colleagues concluded their paper with this statement: “Ultimately, GMAI promises unprecedented possibilities for healthcare, supporting clinicians amid a range of essential tasks, overcoming communication barriers, making high-quality care more widely accessible, and reducing the administrative burden on clinicians to allow them to spend more time with patients.” But he does note that “there are striking liabilities and challenges that have to be dealt with. The “hallucinations” (aka fabrications or BS) are a major issue, along with bias, misinformation, lack of validation in prospective clinical trials, privacy and security and deep concerns about regulatory issues.”

What he’s saying is that there are unexplained errors in LLMs and therefore we need a human in the loop to make sure the AI isn’t getting stuff wrong. I myself had a striking example of this on a topic that was purely simple calculation about a well published set of facts. I asked ChatGPT (3 not 4) about the historical performance of the stock market. Apparently ChatGPT can pass the medical exams to become a doctor. But had it responded with the same level of accuracy about a clinical issue I would be extremely concerned!

The brief video of my use of ChatGPT for stock market “research” is below:

Matthew’s health care tidbits: The drug model for DTx was wrong

Each time I send out the THCB Reader, our newsletter that summarizes the best of THCB (Sign up here!) I include a brief tidbits section. Then I had the brainwave to add them to the blog. They’re short and usually not too sweet! –Matthew Holt

If you were to look at pharmaceuticals in the US you might make three observations. 1) They are the most important way health conditions are helped, cured or eradicated. 2) The way they are delivered to patients (via pharmacies) is very badly integrated with the health care delivery system. 3) They are way too expensive.

OK, so those are my observations not yours but I think you’ll agree they’re all true.

Now I am going to tell you that we’ve developed a technology that lives in your phone that has the same impact as a drug, if not better. It will cure your depression, insomnia, pain, even maybe Alzheimer’s. And because it is a software product, not a drug you ingest, it has no (or at least few) dangerous side effects. And because it’s software and easy to distribute to millions of people, it can be cheap. Wouldn’t it be a great idea for the people managing health conditions—a patient’s clinical care team—to directly integrate this technology into the care they are delivering?

Some of the people building these technologies agreed, but most of them decided that they liked the current model of prescription pharmaceuticals. They built these cool technologies and decided to distribute them via physician prescriptions and charge for them like pharmaceuticals. To do that, they had to get FDA approval for their “Prescription Digital Therapeutics” (DTx) via expensive clinical trials. Additionally, of course, they hoped to get government-backed monopoly status–called patents in the pharma business.

In general in health care, the FDA regulates things that go into the body and may cause damage. The rest of clinical medicine has great latitude for experimentation, technique and technology development, and allows others to copy what works.

The companies heading down the Prescription DTx route also used the business model of regular pharma and biotech companies. They raised large amounts of money up front, applied for patents, went through the FDA clinical trial process, and hoped to charge significant amounts per patient once their DTx were approved and prescribed.

None of them seemed to care that if they succeeded, their DTx would necessarily only be accessed by a small population at great cost. None of them seemed to notice that their DTx were usually an electronic distillment of teaching, patient advice, coaching therapy or other activities that look more like extensions of traditional clinical care, as opposed to ingested pharmaceuticals.

Many of these companies are now in deep trouble. They raised money when it was cheap or even, like Pear and Better Therapeutics, took advantage of the SPAC vehicles to IPO. Now they have found that they cant get their DTx through the FDA process quickly enough or aren’t seeing the prescribing numbers they needed to make their products a success. Since the digital health stock crash, it’s very hard for them to raise more money. Pear Tx this week announced it was trying to sell itself.

My hope is that we get a reset. I want digital therapies that are extensions of clinical care to be widely used and widely available as part of the care process, and for their care to be integrated into clinical care –rather than to be prescribed and then delivered by some third-party. And, because they are software and because software scales, I want them to be cheap. Hopefully that is the future of DTx.

On second thoughts, that wouldn’t be a bad future for regular pharmaceuticals either!