Weekly Health Tech Reads | 6/4/23

Papa’s marketplace issues, UHC walks back its colonoscopy prior auths, & more!


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August 1st is the CMS deadline to enroll in ACO REACH for 2024. As the enrollment deadline approaches, organizations considering participation may still have questions about the mechanics and financial implications of the model.

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Sharing our perspective on the news, opinions, and data that made us think the most this week


Summary: Bloomberg’s Priya Anand reviewed over 1,200 of Papa’s internal incident reports and found a number of disturbing allegations.The article highlights a few examples of these allegations, including a Papa customer who has filed a criminal complaint against a Papa Pal for criminal sexual conduct while the Pal was on the job. Papa Pals appear to receive very little on the job training, which invites questions about whether more oversight is necessary of the model, although Papa cites less than 1% of complaints are safety related. At least one health plan in New York has scaled back its rollout of Papa because of its concern about the health plans members receiving harassing phone calls from Papa Pals. Some Papa members are also harassing Papa Pals while they’re on the job.

Our Reaction:

  • This is a tough report to read, and it appears that Papa has some serious work to do to enhance safety policies and instill a sense of confidence that they’re adequately vetting and training Papa Pals. In some ways, the most depressing part of this article is that it feels so inevitable. We’ve all watched as Papa seemingly exploded during the pandemic, as it became almost synonymous with payor efforts to address loneliness in the senior population. At one point in 2021, Papa shared it added 25 health plan customers in a seven month span, which put it at over 65 payor customers at the time. Papa’s supply of Papa Pals was also increasing rapidly, as it reported receiving 10,000 – 15,000 applications a month to be a Papa Pal, and accepting 8 – 10% of those people. Investors were also chomping at the bit, as Softbank and Tiger both led investment rounds in Papa in 2021, resulting in a reported $1.4 billion valuation in November 2021. In hindsight, both of those investors appear to have signaled everything that went wrong in the healthcare venture investing world over the past few years. So in many ways it shouldn’t really be all that surprising to read a narrative about how Papa has struggled as it has scaled.

  • Given Papa is the high-flying venture backed startup, it makes for a good target for an article like this. We highly doubt Papa is the only organization providing home care for seniors that is struggling with serious issues like this. We imagine if you dig into lesser known home care agencies that these sorts of issues run rampant in the industry, which hints that the issue runs deeper than just the venture capitalists behind Papa having return expectations that aren’t aligned with the business.

  • One sentence that stood out to me in the article: “Another [former Papa employee] says they’d never use the service to care for members of their family.” Yeesh. For a company attempting to provide “family on demand”, that seems like a huge issue, assuming it’s at least somewhat representative of the current experience. It’s a good reminder that while we often hear news from companies about funding rounds and payor partnerships, that doesn’t actually necessarily tell us much about the experience for individuals. If you’re a payor customer of Papa, you have to be thinking long and hard about how to ensure you aren’t opening up your members to harassment or physical harm. The anecdote of the New York health plan scaling back its Papa roll out seems like a major red flag here.

  • More broadly, stories like these make me wonder what the lasting impact of the healthcare startup gold rush over the last few years will be. What do we do with these fallen unicorns that now appear to be struggling with living up to the lofty vision they set out to achieve? Our hope is that companies like this can emerge stronger from this period of resetting expectations, because certainly the problems they are trying to address don’t appear to be going away. Our worry is that with investors like Tiger and Softbank as major shareholders in the company, return expectations may not align with the necessary changes. It leaves the company in a really tough position. Will be interesting to watch how Papa adjusts from here.

Join the HTN Slack convo (h/t Jessica Bell van der Wal)


Summary: After receiving significant pushback from medical associations, UHC backed off its colonoscopy prior auth changes that were slated to go into effect June 1st. Instead, UHC is requiring clinicians to collect and submit data in order to be part of the Gold Card program it is rolling out next year. Medical associations still appear displeased at the data collection requirements and the administrative burden those requirements will impose. 

Our Reaction:

  • There’s some irony in all this news given UHC’s Gold Card program is the central thrust of its recent push to eliminate 20% of prior authorizations. It highlights the broader fight between payors and providers over decision making rights in terms of patients care. Understandably, UHG has an interest in making sure that services are clinically appropriate. Also understandably, providers think that they know what is clinically appropriate better than an insurer. The Gold Card model feels like a logical approach to try to solve this problem - for providers who meet the criteria, they avoid prior auths. But you can imagine why the medical associations as a whole aren’t too thrilled by these changes because presumably a lot of providers won’t be in this Gold Card program. It’s a good case study in the negotiating dance payors and providers are always doing with each other.

Other Reads:

  • UHG’s press release on the Gold Card program. Link.

  • UHG’s FAQ on the policy change. Link.

  • STAT summarizing the pushback UHG received leading to the reversal. Link


Summary: Chrissy Farr and Sami Inkinen provide an overview of the current state of GLP-1s, highlighting both the benefits of the drugs in terms of tackling obesity, but also the challenges they raise from a cost perspective. It suggests pairing the drug treatment with lifestyle interventions and also risk-stratifying patients who need the drug to help save on costs.

Our Reaction:

  • This just feels like the story of American healthcare doesn’t it? A new miracle medication comes out that does amazing things for people, but has the potential to bankrupt the system. Feels like we’re in a brief period of uncertainty where nobody knows how insurers are going to handle this, but the insurers don’t actually seem all that worried about it. For them it feels like just another blockbuster drug that they’ll need to figure out how it fits into the model. We’re quite sure that this won’t bankrupt the system by itself, and we’re equally as sure that we also won’t see material savings, either.

Other Reads:

  • This Fierce Healthcare article highlights how employers are attempting to address the demand for GLP-1s. Link

  • One of the biggest cost issues with these drugs is that it appears you may need to stay on them indefinitely if you want to maintain the weight loss, as this Business Insider piece explores. Link.


Summary: Don Berwick and Michelle Williams penned a piece in Time last week suggesting that health systems have an obligation to address social drivers of health in their communities. It suggests that hospitals should target spending 2% of their annual budgets on addressing social drivers, partnering with local community organizations, and identifies ten areas where health systems should be investing.

Our Reaction:

  • We’d love to see hospitals and health systems investing 2% of their annual budgets on SDoH initiatives. The initiative cited in the article about Kaiser’s $400 million fund to support the creation of 30,000 low income housing units by 2030 seems like a good example of the potential. Yet for every Kaiser effort, it feels like we see more efforts from systems like Wellstar choosing to invest in building innovation centers and $100 million venture funds while shutting down hospitals that serve low income patients. We’re not sure that without some sort of regulatory intervention that systems like Wellstar are going to choose to act any differently.


Summary: A McKinsey survey of nurses provides a look into what the job entails. It finds that 45% of the two million inpatient nurses (out of 4.2 million nurses in the US) suggested they plan on leaving their position in the next six months. The survey looks at how nurses spend their time, and how technology can be leveraged to free up time, both supporting increased job satisfaction and also helping to solve a broader workforce shortage.

Our Reaction:

  • The turnover number is stunning to think about almost 1 million inpatient nurses changing jobs before this fall. It’s perhaps not surprising but still wild to see that in a typical 12 hour shift, nurses are only spending <7 of those hours on patient care, with 46% percent of their time being spent on a variety of other tasks. McKinsey’s suggestions that task delegation and technology could help solve some of these issues doesn’t seem like it should be all that controversial.


A round-up of other newsworthy items we noticed during the week

STAT discusses how physician frustration is leading to uptake of Nuance’s AI-based clinical documentation product. Not surprisingly, Nuance appears to be taking advantage, charging somewhere between $399 - $1,700 per provider based on the size of the system, although its not totally clear what the pricing model is. Link / Slack (h/t Samir Unni)

Oak Street Health announced it is expanding into four new states this year, including Arkansas, Iowa, Kansas, and Virginia. This will put it at 25 states by year end.Link / Slack (h/t Duncan Reece)

Compass Medical, a 80 provider group in southeast Massachussetts, shut down without notice this week leaving 70,000 patients without access to their PCP.

The NY TImes dives in to Allina Health’s policy of not providing care (in its clinics) to patients who owe it more than $4,500.

Link / Slack (h/t Manas Kaushik)

BJC HealthCare and Saint Luke’s Health are planning a merger, creating a 28 hospital health system across Kansas, Missouri, and Illinois.Link

Liquid biopsy company Grail incorrectly notified 408 patients that they may have cancer. According to Grail, the erroneous letters were due to a software configuration issue with its telemedicine provider, PWNHealth. As a result of the error, MassMutual has paused its pilot program and US life insurer Principal is reviewing its relationship with Grail.Link / Slack

California healthcare organizations are jockeying to position themselves to receive an outsized portion of the $19 billion capital infusion into Medi-Cal.

Friday Health Plan’s Georgia subsidiary has been placed into receivership by the Georgia Insurance Commissioner, following a similar move in Texas recently.

VBC kidney care startup Strive raised $166 million from CVS Ventures and NEA. The press release notes Strive currently manages $2.5 billion of annual medical spend across 80,000 patients and 600 nephrology partners.

Link / Slack (h/t Kevin Wang)

Carrum Health raised a $45 million Series B to expand its center of excellence model for employers.Link

Axuall, a “workforce intelligence” platform for health systems, raised $20 million. Investors include Intermountain Ventures, University Hospitals Ventures, and Hartford HealthCare.

Hyro, a conversational AI platform for health system call centers, raised $20 million. The press release notes Mercy Health, Baptist Health, and Intermountain are all clients.

Develop Health, a platform for streamlining prior auths, raised a $1.8 million pre-seed round.

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