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Weekly Health Tech Reads
Our reflections on CVS / Oak, AARP inks a new partner, & more
Kevin O'Leary & Amanda DiTrolio
February 19, 2023
This newsletter is sponsored by Elation
Elation, an EHR platform for primary care delivery models that recently was named a 2023 Best in KLAS Award Winner, announced this week that it is extending its billing capabilities by acquiring Lightning MD. It’ll be combining Lightning’s billing and revenue cycle capabilities into the Elation product offering this summer, moving it toward an all-in-one solution that helps primary care practices achieve financial success while delivering high-quality patient care. That is a vision we can get behind!
News:
AARP picks Luna as its exclusive in-home MSK partner
This appears to be the third deal of its kind that AARP has signed, lending its trusted brand name to a healthcare org, with the other two partners being Oak Street Health for primary care and UnitedHealthcare for Medicare Advantage. Look no further than the CVS / Oak Street deal to see the power of the AARP relationship with seniors - Oak Street’s partnership with AARP was mentioned more than once by CVS as a key validation point of Oak’s model. That said, it appears this licensing is a pretty good business for AARP (this Fortune article highlighted well how licensing generated AARP over $1 billion in revenue in 2020). It naturally makes you wonder how the conflict of interest is managed in the process between picking the best vendor for members versus the only who is willing to pay the most.
Better Medicare Alliance joins the chorus coming out against 2024 Medicare Advantage rate cuts, Becerra calls out “industry hacks”
BMA and Avalere suggest that the 2024 Advance Notice changes would potentially cause a reduction in member benefits to the tune of $540 per year. This pushback is already clearly causing ripple effects in DC, with HHS secretary Becerra lashing out against “industry hacks and their allies” that are claiming that CMS is making cuts to MA. The image below from the article highlights how different major metro areas will be impacted differently. Areas like Houston and Dallas - which happen to be areas of significant MA primary care activity - seem to be hit particularly hard. This is setting up to be a major challenge for the MA industry, and Becerra’s statement seems to indicate there is serious pushback in DC already happening.
Colorado health system Centura Health will soon be no more
CommonSpirit Health and AdventHealth, which jointly created Centura Health in 1996 as a management entity for 20 hospitals primarily in Colorado, have decided to end their partnership and manage their hospitals independently. It seems like a rather unceremonious end to a partnership that lasted almost thirty years. For those outside of Colorado, you might recall Centura as the health system that helped launch Bright Health.
Doximity is rolling out a ChatGPT tool helping providers automate prior auth letters
ChatGPT seems destined to catapult up the Gartner Hype Cycle curve at an impressive speed. Using ChatGPT to automate preauths and appeals on behalf of providers actually seems like a pretty good, slightly comical, first use case. Although at the end of the day, it seems like this just adds another pain point that further erodes trust between payors and providers, which seems like the wrong direction to be heading.
Privia Health forms an ACO in Connecticut with Community Medical Group
The two entities will create the largest Clinically Integrated Network in Connecticut with over 1,100 providers across 450 locations. 430 of those providers are PCPs. The CIN will care for 180,000 patients, of which 29,000 are in Medicare (and 10,000 are in MSSP). The Slack dialogue includes some interesting details here about CMG and how it is a good example of an ideal partner for a platform like Privia - its a group of high quality independent clinicians who have room to improve in terms of being “clinically integrated”.
More deets on the North Carolina State Health Plan decision emerge
It appears that Aetna and BCBS NC were extremely close in price, with Aetna bidding $17.522 billion versus BCBS NC’s bid of $17.505 billion to manage the 740,000 members on the plan for five years, yet Aetna won in part because of claims processing issues BCBS NC has had. BCBS NC doesn’t come out looking great here, but neither does the state treasurer calling out BCBS NC for being a “sore loser”. The most interesting part of the article is when the state treasurer suggests that despite trying hard for the last six years to reduce premiums for plan members it has been unable to do so. It’s pretty remarkable that is the case given the aggressive efforts they’ve taken to drive reference based pricing in NC.
North Carolina moves closer to expanding Medicaid in the state
A bill for Medicaid expansion passed the NC house and will now move over to the senate, which would make it the 40th state to expand Medicaid.
ONC releases first set of QHINs under the health information exchange framework TEFCA
The first set of QHINs include six vendors: CommonWell Health Alliance, eHealthExchange, Epic, Health Gorilla, Kno2, and Konza.
TwentyEight Health, a virtual care model for reproductive and sexual health, raised $8.3 million
TwentyEight is focused on building a virtual care platform that is inclusive for medically underserved communities, including lower-income and BIPOC individuals. The release includes data suggesting 55% of their members are on Medicaid and 58% are BIPOC. Very cool.
Thatch, a benefits management platform for startups, raised $6 million
IncludeHealth raised $11 million for its virtual MSK platform
Opinions
Our take on key strategic questions posed by CVS / Oak Street
We published our perspective for HTN members on the key strategic questions we’ve been asking ourselves following the announcement of the CVS / Oak Street deal last week. Those key questions include:
What if the Golden Age of MA profitability is coming to an end? It seems to us that change is afoot as CMS looks to rein in profitability here.
Why did Humana reverse course in the MA primary care market? Humana essentially seeded the MA primary care startup market and then reversed course and build its own model. Not hard to imagine that they decided against paying through the nose for clinics.
How confident should we be in Oak Street’s J-Curve? Oak Street has demonstrated incredible consistency moving clinics along its J-Curve, but we think there’s a lot of reason to be skeptical about these results moving forward.
What becomes of Oak Street inside of CVS? The cultural change here seems like a large looming question. Oak Street has grown with a very talented clinical and business team. Is it going to be able to continue to recruit (and retain) this level of talent inside CVS?
A good overview on startups addressing end of life needs
HTNer Vickram Pradhan does a nice job breaking down various areas of end of life care and some of the startups addressing various needs.
Perspective on Advance Notice
HTNer Erica Everhart shared a good summary of the changes being articulated by MA Advance Notice, diving into the issues posed by the changes to risk scoring methodology among other things.
Verma suggests that the “Medicare Status Quo Can’t Last”
The political debate around funding Medicare is clearly heating up and as usual features surface level arguments about nuanced topics, all couched in big picture language I doubt anyone would disagree with. It’s going to be fascinating to watch how this all plays out on the political stage as no politician wants to be the one seen as cutting healthcare for seniors.
Data
Depressing data on maternal disparities in the US
This NYTimes article highlights recent research from NBER highlighting the state of maternal health outcomes in the US and the disparities across those outcomes. The chart below was particularly striking to us, highlighting how preterm births increase dramatically for richer individuals while infant mortality rates are lower. The article also goes on to show the drastic difference between Black women and white women - even the richest Black women have the same outcomes as the poorest white women. As the article notes, it provides a stark reminder of the rather depressing challenge that US healthcare faces with respect to making high quality healthcare accessible for all.
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