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Weekly Health Tech Reads
Elevance acquires BCBS LA but loses contract with BCBS MN, Tia and Cedars Sinai partner, a deep dive on hospital at home, & more
Kevin O'Leary & Amanda DiTrolio
January 29, 2023
This newsletter is sponsored by Particle Health
Particle Health, an API platform for healthcare data exchange, released an awesome white paper on the state of health information networks (HINs), how data from HINs can be leveraged, and what TEFCA means for the future. It also does a helpful job highlighting the role an API platform like Particle plays as an "on ramp" to these HINs, making life easier for providers looking to implement and use this data.
News:
Elevance reports earnings, announces an acquisition of BCBS Louisiana, and end of BCBS MN partnership
Among the other things that were discussed during earnings was Elevance’s acquisition of BCBS Louisiana and the end of its administrative services relationship with BCBS MN, where Elevance was providing claims administration and customer support services for BCBS MN’s Medicaid business. The BCBS LA deal seems worth watching to see whether this is a sign of upcoming consolidation in the Blues plans. Certainly, it’d be logical to see more consolidation here as Elevance seeks to catch up with UHG and Anthem. On the other hand, the BCBS MN contract ending highlights some of the challenges with al of this consolidation as the relationship appears to have suffered from serious implementation challenges. BCBS MN was fined over $13 million by the state of Minnesota for issues in the Medicaid business, including failure to pay claims in a timely manner for over two years. You might find yourself asking the question: “how does an insurer screw up paying claims this badly… for two years straight?” I have no answers for ya. But it does seem pretty remarkable that a $7.5 million fine for that violation wasn’t enough of a financial deterrent to prevent that issue.
Link (BCBS MN termination)
Amazon launches RxPass, a $5/mo generic drug offering for Prime members
Amazon made headlines this week announcing that for an extra $5/mo, Prime members can get as many generic medications they need for eighty common conditions. It isn’t necessarily a totally new concept, and articles like this one from Slate (h/t Sina Haeri) highlight why it probably isn’t a huge deal. Amazon isn’t the only one launching a program like this. Mark Cuban Cost Plus Drug Company is offering cheap generics and Walmart has a $4 generic prescriptions program as well. Of course, what does seem notable here is that this is Amazon, which counts 172 million Americans as Prime members. To put that in perspective, say you get all 172 million people paying the extra $5/mo, that’s a $10 billion annual revenue increase for Amazon.
CVS and Rush partner on ACO REACH
CVS and Aetna have long had relationships with health systems like Rush, and now it seems ACO REACH is creating an opportunity to deepen those relationships. The press release describes this as patients receiving care in MinuteClinics participating in ACO REACH will have access to Rush primary and specialty care for follow-up. Certainly it seems like a positive sign for ACO REACH stability when you see entities like this embarking on partnerships building on top of ACO REACH. Per the press release CVS currently manages 80,000 lives in the program and this partnership will give them access to another 35,000 potential lives.
Tia and Cedars-Sinai partner to deliver primary care to 100,000 women in LA
This is a fascinating partnership between the two organizations, and the Fierce Healthcare article does a nice job articulating the depth of the partnership. The target of serving 100,000 women in LA is notable in that it seems like that is likely most of the women that Cedars-Sinai serves. So it would seem Tia is really becoming the primary care footprint for Cedars-Sinai in Los Angeles for women. The article also highlights how closely the two organizations are working in terms of shared clinical leadership and co-developed clinical protocols. It’ll naturally raise some scalability questions when it seems the model is so tailored to one specific health system. But when you think about how health systems look to partner with medical groups in their local markets, it seems like Tia is setting itself up well to go deep as a leading medical group in a handful of markets with some meaningful health system partners. Will be interesting to watch how these relationships evolve over time.
Pearl Health raised $75 million for its PCP enablement platform
Pearl appears to be seeing a lot of growth both in its provider and patient panels, as the article cites Pearl went live in 2022 with 4,000 Medicare lives across 75 physicians at 25 practices. Today it is at 40,000 Medicare lives across 804 physicians at 120 practices. It seems like 2023 is going to be a very active year for provider enablement platforms as there is a massive land grab to sign up practices to be their VBC enablement partners.
Angle Health raised $58 million for a new insurance offering for employers
Ryan went way deep on this funding announcement on Slack, looking at the model (copay only / no deductibles + a care navigation component) and asking some questions about future strategy here. Lots of interesting considerations regarding whether Angle will stay focused on fully-insured or move to self-insured, what will risk selection and future rate increases look like, and how closely tied this will be to Cigna both from a network perspective (Angle is renting Cigna’s network) and from a balance sheet capital perspective.
Elaborate Health raised $10 million to help interpret lab results
This is an interesting new idea coming out of issues caused by the 21st Century Cures Act where patients are receiving lab results before their providers have a chance to review.
Mighty Health raised $7.6 million for a wellness program for people aged 50+
Opinions
A deep dive on the history and current state of hospital at-home (HaH) models
This is a fascinating deep dive on the history of HaH for folks who are unfamiliar with the work going back decades of folks like Bruce Leff. It’s a good reminder that while we have a tendency to talk about these sorts of care delivery innovation as new concepts, they’re actually decades old concepts. Then, of course COVID came along as a catalyst. CMS created a waiver where hospitals could get reimbursed the same for HaH as an inpatient stay. And now we see this program catching on seemingly overnight. If you’re at all interested in learning about the HaH market, this is a great spot to start.
A summary of how employer market sales is changing rapidly
This article touches on how digital health sales to employers is becoming a much harder pitch as employer priorities shift and they increasingly are questioning the ROI on point solutions. Julie Yoo’s quote in the article sums up the challenges well: “Benefit managers are having a ‘come to Jesus’ moment around pricing,” Yoo said. “A lot of these digital health companies got these amazingly lucrative per-member per-month contracts where they got paid regardless of who is using the product… Now employers are like, ‘Why did we do that?’”Link / Slack
Seven burning questions on commercial prices for healthcare services
This was an interesting read in Health Affairs about key questions that needed to be addressed when thinking about commercial healthcare prices in the US. It raises a number of interesting questions, including how digital services will be priced, and the problematic tendency to do so on the fee-for-service chassis. Also interesting is. the question about how many dollars are now flowing outside of the claims systems in terms of quality bonuses and shared savings. Obviously if more dollars are not being included in claims, it makes claims based analyses rather meaningless.
The end to continuous enrollment on Medicaid is going to have real world impacts for patients
A good read highlighting the practical impacts of the ending of the PHE on Medicaid enrollment as states start redeterminations and make patients fill out paperwork to enroll in Medicaid. Link
Perspective on alternative payment models for FQHCs
This Health Affairs piece provides an interesting history lesson on how FQHCs have gotten paid, and considerations for alternative payment models moving forward.Link
A look at how hospitals are increasingly billing for patients for messaging their providers
Data
A study suggests prior auths maybe are a net positive
In case you’re the special type of nerd who wants to read a 36 page paper with 59 pages of appendices on the nuances of how prior auths might be good, this paper is for you. It suggests prior auths are beneficial because they reduce spending on drugs by more than they increase paperwork costs for providers.
JAMA study suggests slightly improved quality of care in health systems but substantially higher prices
Health systems do see marginal improvements in quality of care, but the cost of care is substantially higher in systems. The article has a number of interesting charts categorizing characteristics of physicians and hospitals, including this one showing the breakdown of health systems by size.
DiMe’s new directory of virtual first care companies
It’s a solid list of 100+ companies, although it highlights some of the challenges defining what virtual first means. It’s a bid odd to see organizations like CVS and One Medical on the list, which seem very much oriented around in-person care.
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