HTN Weekly Health Tech Reads 3/26
March 26, 2023
Oak Street and Interwell form a new kidney care JV called OakWell
The JV will focus on providing high quality primary care to patients with end-stage renal disease, starting in Chicago, Dallas, and Houston in Q3 2023. The press release is light on specifics, beyond noting that this JV will help provide coordinated care between a patients’s primary care team and a nephrologist when they’re on dialysis. It’s a logical move for Oak Street in managing its patients with ESRD, a condition where a nephrologist really needs to be the quarterback of care versus a PCP. As I mentioned in Slack, it seems like we’re going to see primary care orgs like Oak Street quickly expanding into more specialty models in 2023 and starting to look more like multi-specialty practices. The two logical places to target are: 1. complex conditions where patients really need another clinician as quarterback of care versus a PCP (ESRD, oncology, etc.) and 2. high volume conditions that go beyond the expertise of a PCP (cardiology, endocrinology, etc.).
As noted by Michael Ceballos in Slack, there’s a ton of interesting questions to ask about the implementation of this relationship - how attribution is happening, who is the quarterback of care for the patient, and how various aspects of Oak Street’s and Interwell’s respective models are turned on / off for patients in this JV. I’m bummed we won’t be getting more analyst calls / investor days for Oak Street to share out details here as it gets folded into CVS.
CareMax’s investor day highlights its shift to an MSO
CareMax’s investor day last week provided a really good look into a model that is attempting to execute on the play of both operating de novo clinics while building out an MSO for PCPs. You might recall that when CareMax SPAC’ed in 2021, its pitch was basically that it was a budget version of Oak Street for investors - a de novo clinic model at a lower valuation. Fast forward to today, and CareMax now looks like an MSO, leveraging the Steward transaction last year to drive substantial growth over the next several years.
The Slack thread linked below goes through many more details of the session - but it was a well done presentation from my perspective. In particular, it highlighted how CareMax is becoming more of a multi-specialty model, and how it needs to get to density in specific markets in order to contract effectively with specialists. It’s yet another sign of the theme articulated above about primary care groups increasingly looking like multi-specialty groups. I have a feeling we’re going to see lots more activity along the lines of Oak Street / Interwell, VillageMD / Summit Health, etc in 2023 as primary care orgs look to manage medical expenses and drive profitability in VBC contracts.
Gravie, a Minneapolis(!!!) based health insurance startup, raised $179 million
Gravie appears to be finding real traction offering a new transparent insurance plan for small and medium businesses. The general idea appears to be giving employees cost certainty over their coverage, with first dollar coverage and no copays for most services. Gravie now has ~1,200 employer customers.
Whole Foods founding CEO’s new startup acquires a telehealth business
John Mackey’s new startup, Love.life, has acquired a telehealth platform called Plant Based TeleHealth (yes, that is the company name). Patients looking for a holistic approach to wellness can sign up for 30 or 60 minute appointments for $175 or $350. As always, the question with these models is whether there are more than a few thousand people willing to pay hundreds of dollars out of pocket for a service like this.
The federal govt is proposing an overhaul of the organ transplant system
The system, which has historically been administered exclusively by the United Network for Organ Sharing, will invite other organizations to participate in the process. The article does a nice job highlighting the need for change here as transplant waitlists grow longer and longer and the previous system under UNOS had many issues.
Cognito Therapeutics raises $73 million to advance its neuromodulation device to treat Alzheimer’s
Bend Health, a pediatric mental health provider, launched with $32 million
Maven Clinic acquired Naytal to expand its virtual clinic for women in the United Kingdom
Reveal Health Tech raised $4 million to be an outsourced tech partner for healthcare orgs
A harrowing story of a provider in Alabama who provides abortions
It describes life for a provider at an abortion clinic in Tuscaloosa, Alabama. The article does a nice job providing context for the clinic - because it’s a college town you might think many of the clinic’s patients were college students. But most patients were low income Black women, many of whom couldn’t take on the financial burden of having a baby. Since the clinic opened in 1997, it has been burned to the ground, shot at, had a car driven through its front door, and threatened repeatedly. The previous owner of the clinic was sent anthrax. The clinic is now essentially out of business in the post Roe-v-Wade era, which now sees seven patients on its busiest day, whereas before it would see dozens of patients per week. When it was full, there’d regularly be protesters at the clinic, harassing patients to the point where it needed a volunteer to escort patients into the clinic. It’s hard for me to understand why we treat each other like this, although it’s not exactly surprising to see a dumb tweet playing a central role in this story.
NYTimes dives into the latest on the MA advance notice debate
The article covers a lot of ground that has been covered elsewhere, including much of the data highlighted in MedPAC’s recent report about how these changes are really targeted at a handful of plans and conditions that are being diagnosed at higher rates in MA but aren’t leading to different treatment. The chart below does a nice job highlighting the differences in diabetes coding. It is interesting to see CMS double down at the end of the article, suggesting that the argument that these changes will hurt vulnerable populations is bunk because of the point about these codes not leading to different treatments. Which certainly seems like a very valid argument. Although, if the net effect of these changes is to reduce the profitability of some payors and providers who are delivering care to vulnerable populations, it’s not hard to imagine that vulnerable populations will still be the ones who are negatively impacted by these changes. Essentially, this feels like an argument over who to blame for that outcome - do you blame CMS because they’re pulling back on payments to payors, or payors because they’re reducing benefits for members in order to continue driving profitability. Doesn’t really matter who you blame, the outcome is still a bummer, presuming vulnerable populations are indeed negatively impacted by this.
It’s also worth noting the nugget in here that UnitedHealth Group and Humana are the two payors fighting this change the most according to congressional staffers. At the same time, Humana’s CEO shared publicly last week that he thought his organization was well positioned to do well as a result of this change. Those two sentences seem to directly contradict each other, no?
The AHA argues that it’s actually payors who are to blame for medical debt
On Monday, the AHA released a blog post refuting the recent Urban Institute report showing that 15% of adults have past-due medical debt, with 73% of those people owing some or all of that debt to hospitals. The AHA’s argument is that the Urban Institute didn’t look at 1. the rise of short term plans and sharing ministries with inadequate coverage, and 2. the rise of HDHPs shifting costs to consumers. It blames consumer debt on the failure of the insurance market to provide proper coverage, and suggests we should restrict the sale of HDHPs, lower cost sharing, and eliminate deductibles and co-insurance. Which, sure, that sounds like a good idea. Let’s all get insurance coverage from models like Gravie or Surest, that’d be cool. Yet, I have a sneaking suspicion the AHA won’t be all that happy with that either given the costs of hospital care are the primary thing we all need to solve for here.
Milliman’s overview of the Kidney Care Choices model
Milliman shared this report that provides a helpful overview of Medicare’s Comprehensive Kidney Care Contracting (CKCC) program. If you’re looking to better understand the CKCC model and its implications for participating providers, check this out.
WSJ explores startups using generative AI in healthcare
The article covers the efforts of startups including Abridge, Atropos, and Syntegra, which are all working in different ways to apply AI to use cases in healthcare. As the article notes, this batch of startups has been around for several years now, although the release of ChatGPT has made the space significantly more popular recently.
CareOps discusses how virtual care companies are looking at standardizing care operations
The article includes a number of interesting quotes from care delivery startup leaders about how they think about standardizing processes.
Elion shares an overview of TEFCA
Provides a nice overview of TEFCA and the first six QHINs.
Our latest market conditions survey highlights a challenging fundraising environment for early stage founders
Since we did our last market conditions survey 8 months ago, it’s clear that the reset has trickled down from the public markets all the way to early stage founders. Fundraising is now a much tougher proposition, as founders shared that they’re seeing investors set a much higher bar to make an investment. The good news is that many companies report having solid cash positions, as the chart below indicates.
A paper on scaling models that integrate behavioral health into primary care
This paper by NEHI does a nice job highlighting the current state of efforts to integrate behavioral health into primary care and the Collaborative Care Model. It’s a good, very in depth, read on the topic.
- Accompany Health, an in-home primary care provider, is hiring a Director of Value-Based Care Operations. Link
- Molina, a managed care company, is hiring a VP of Healthcare Services. Link
- Optum Serve, the federal health services business of Optum, is hiring an SVP of Growth, Product, & Strategy Enablement. Link
- Seven Starling, a mental health platform supporting parents during pregnancy and beyond, is hiring a Senior Manager - Operations. Link
- Vori Health, a virtual first MSK provider, is hiring a VP of Operations. Link