Weekly Health Tech Reads | 4/14/24

An investigative report on MultiPlan, Q1 funding report, a new CMMI model, and more!

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


The report here shines a light on MultiPlan’s screwy financial incentives. MultiPlan theoretically partners with payors to help employers manage out-of-network provider costs, which ends up in providers balance billing patients. Patients get stuck with massive bills, and providers and payors disagree over who the primary culprit is.

  • The article includes several helpful anecdotes and this graphic showing how MultiPlan benefits financially based on the more it saves employers:

Going Deeper:

MultiPlan’s business model pretty clearly has some concerning issues. The structural incentives seem out-of-whack, with both MultiPlan and insurers getting paid massive fees in exchange for MultiPlan negotiating down the cost of out-of-network care. The chart above provides a good visual breakdown of this dynamic. The article also provides a few other good examples that made me scratch my head, including ones where payors and MultiPlan made more for processing the claims than the provider made for providing care. That seems backwards, right?

At the same time, MultiPlan’s practices here are not exactly new news. In 2020, MultPlan was subject to a short report by Muddy Waters (link below), an investment firm that argued MultiPlan was on the verge of bankruptcy. The rationale behind the short position was that payors viewed MultiPlan as a “scam” — it was too conflicted of a middleman, and health plans were frustrated by MultiPlan’s payouts and balance billing. So much so that UHC was launching a competitor to MultiPlan. That startup at least in theory was intended to slash fees and protect patients from balance billing, both of which seem like good ideas to me.

It’s interesting to compare the two articles for the very different ways in which they paint the payor relationship with MultiPlan. It seems clear from both articles that MultiPlan’s business model has major issues. Yet the NYTimes article reads like payors are a complicit party happy to reap the benefits of MultiPlan’s pricing scheme, while the Muddy Waters article reads like payors, UHC in particular, are so fed up with MultiPlan’s scam that they are trying to kill it. So which is it?

Back to the NYTimes article, it’s worth stepping back and looking at this article as one small part of a massive contract dispute between payors and providers, with both sides disagreeing over who foots the bill when it comes to out-of-network care. The article seems to take a provider-centric point of view, highlighting the issues with the payor side, with relatively little discussion of the challenges on the provider side around out-of-network charges and surprise billing.

Given that, it’s not exactly surprising to hear that the American Hospital Association took this report as an opportunity to pen a letter to the Department of Labor urging an investigation into MultiPlan and its payor partners over these business practices (link below). I can’t help but feel like this all is yet another round in a massive PR fight between payors and providers to sway the public opinion of who is in the right and who is in the wrong when patients get stuck with massive bills. Unfortunately, regardless of the outcome of that fight, it seems like a foregone conclusion that patients will get stuck with massive bills — particularly for out-of-network care.

Other Links:

  • AHA letter to the DOJ. The AHA encourages the DOJ to investigate MultiPlan and its partners over “unconscionable” practices.

  • Muddy Waters Short Report on MultiPlan. An investigative report from a short seller in 2020 made the case that MultiPlan was on the verge of bankruptcy.

  • MultiPlan’s 2020 S-1. If you’re looking to better understand the MultiPlan business model, the S-1 is a really good resource from when MultiPlan went public via SPAC in 2020.


Compelling visuals that help convey data, trends, or topics

Rock Health Q1 2024 funding highlights the new normal for digital health startups

Rock Health released its quarterly digital health funding report and as usual, it is full of helpful insights on the funding market. The report feels like we’re back to a normal baseline level of activity after a hype-fueled 2021 and 2022. Total funding amount was down slightly versus 2020 and 2023, but deal volume was up slightly versus those years.

Commonwealth Fund compares primary care in US to nine peer countries, only 2% of providers report having “high” telehealth use

This Commonwealth Fund report comparing primary care in the US to nine other peer countries included several interesting charts. In many ways the US looked similar to other countries, but this chart on the adoption of telehealth in the US versus the UK was striking. There was one other really interesting chart as well highlighting the difference between the US and the other countries in terms of the percentage of PCPs who make home visits frequently or occasionally.

Other News

A round-up of other newsworthy items

CMMI launched a new mandatory episode-based alternative payment model, Transforming Episode Accountability Model (TEAM). It aims to enable hospitals to enhance care coordination and health outcomes for patients on Traditional Medicare undergoing select surgical procedures. As part of the bundle, hospitals will be required to refer patients to ongoing primary care to support establishing accountable care relationships. The new model was developed following lessons coming out of similar alternative payment models of the past, such as Bundled Payments for Care Improvement Advanced and Comprehensive Care for Joint Replacement. Link / Slack (h/t Joe Mercado)

  • CMS’s post in Health Affairs last week on its value-based specialty strategy is also a good read on this topic if you’re interested in learning more. It sheds some light into their various activities in the specialty care landscape and what models like TEAM are intending to accomplish. Link

Particle Health was removed by Epic from the Carequality network over concerns that data was being used for reasons beyond treatment purposes. This was highly controversial news in the interoperability space, with lots of different perspectives on what led to the events that played out, and which party is in the right / wrong. Brendan Keeler’s Substack post provided a really helpful overview of what’s gone on, the timeline, and various perspectives on the events of the week. Link

BCBS Massachusetts announced a new program boosting payments to independent primary care providers. Over 1,000 providers will have access to the $20 million earmarked for the program, with BCBS MA noting it could increase provider reimbursement by up to 30%. The press release mentions a few startups participating - Eden Health, On Belay Health Solutions, Carbon Health, and Firefly Health. Link

Inovalon and Harvard Business School published a new white paper looking at the impact of Medicare Advantage plan designs influence things like who enrolls in the plan, what utilization is, and more. It focuses a lot of attention on the differences between HMO and PPO plan designs, a factor that seems destined to get more coverage in the coming months as payors adjust their strategies in the MA market. Link

A new paper came out in NBER exploring the impact of RIP Medical Debt’s efforts to relieve medical debt in this country. Surprisingly (to me at least), the paper found that medical debt relief had no real positive impact. Link


Notable startup financing rounds across the industry

Grow Therapy, a mental healthcare platform, raised $88 million in Series C funding to expand its footprint and launch additional payer partnerships. Link / Slack (h/t Michael Ceballos)

NeueHealth, the VBC primary care provider that formerly was a division of Bright Health, added $30 million to its credit facility from NEA as it teeters on the brink of going under. Per the SEC filing, Neue secured the loan without shareholder approval because any delay in the financing would have threatened the viability of the business moving forward. Link

Cariloop, a caregiver support platform, raised $20 million. The press release mentions Cariloop’s clients include large employers like Proctor and Gamble and KPMG. Link

AlleyCorp, a tech and healthcare focused venture firm, raised a new $250 million fund. This fund is the first outside capital AlleyCorp has raised. It cites Venrock and Bessemer as role models, in that both started off as family offices that then took outside funding. Link

Writers Guild

Thought-provoking posts from the broader healthcare community

Today’s Most Timely Challenges in Value Based Care Enabled Specialty Networks: Our Survey by Primary Venture Partners
This LinkedIn post shares perspectives from a survey of twenty healthcare organizations on the biggest challenges in VBC specialty care. It includes some interesting insights - data sharing challenges between payors and providers, the lack of high-quality provider data, operationalizing referrals, and patient behavior.

The algorithm journey map: a tangible approach to implementing AI solutions in healthcare by Multiple authors; Duke Institute for Health Innovation
A team at Duke highlights all of the various steps it takes to implement an AI tool, in this case an algorithm for detecting sepsis. It’s a good reminder of how much goes into implementing new tech in hospitals outside of just the tech itself.

Featured Jobs

Head of Operations at Fella Health, a virtual obesity clinic for men. Link

VP, Product at Tomorrow Health, a platform connecting people with home medical equipment. Link

Senior Program Officer, AI and Health at the Gates Foundation, a nonprofit fighting poverty, disease, and inequity around the world. Link

Health Strategy Lead at Google, a company well-known enough that its name has become a verb. Link

VP of Client Success at CareBridge, a value-based provider of home and community-based services. Link

Contact us to feature roles in our newsletter.

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