HTN | Weekly Health Tech Reads | 9/17

September 17, 2023

Weekly Newsletter

Welcome to this week’s free weekly newsletter, where we share our perspectives on some of the key healthcare related news of the week.

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

Lessons learned from the Obamacare CO-OPs

HTN Slack Convo

Summary: This is a good overview from POLITICO on the history of the Obamacare ACA CO-OP plans, which kicked off with $2.4 billion going to 24 nonprofit insurers. Following the years of most of the plans shutting down, today, the only three remaining CO-OPs are reportedly now on better financial footing.

Mark Epstein's Reaction:

Mark Epstein, an HTN member and former CEO / President of True Health New Mexico and CMO for New Mexico Health Connections (one of the aforementioned CO-OPs), was gracious enough to share his key reflections on the news:

  • Don’t underestimate health policy’s impact on your biz model: There is a clear lesson here to never underestimate the power of health policy to significantly impact your healthcare business. While the CO-OPs were originally funded as a $6 billion program, some experts believe it had been doomed from the start as it was nothing more than table stakes to secure the much bigger prize – a key Senate vote for passage of the ACA. Healthcare is a vast industry (i.e. 20% of GDP). So, while it’s easy to assume you are hopping onto a massive oil tanker safe above the churning waters, you may actually be on a small skiff getting capsized in its wake. In this instance, the CO-OP program was that skiff in the wake of something bigger.
  • Understanding the importance of empowered key champions / advocates: Securing and maintaining champions is critical for the success of any business. This was especially true for the CO-OPs, whose existence was created by champions at the federal level. In the early years of the ACA, the support of those key champions was critical, particularly in the face of stiff competition in the marketplaces. This was made more challenging by turnover at HHS, CMS, CCIIO, and in the White House health advisory staff, which necessitated the constant management of relationships and advocacy demonstrating why the CO-OP program should continue and grow. NASHCO (National Alliance of State Health CO-OPs) worked hard in that effort, as pointed out in the POLITICO article, citing a study that demonstrated the downward pressures on premium pricing in states that had an Obamacare CO-OP. Yet, even with that convincing performance data, ultimately this couldn’t stop regulators from intervening and shutting down the CO-OPs. A confluence of factors including non-payment of the Risk Corridor funds, a flawed Marketplace Risk Adjustment model, and, yes, poor execution among several of the CO-OPs, made for too much of a headwind. The “powerfully convincing performance data” fell short and no amount of political chips could stop regulators from intervening and shutting down the CO-OPs.


Sharing a visual or two from the week that made us think

Source: Impact of the Medicaid Coverage Gap: Comparing States That Have and Have Not Expanded Eligibility, Commonwealth Fund

The Commonwealth Fund published an interesting article this week looking at the impact of the Medicaid coverage gap between states that have and have not expanded eligibility.

Lindsey Leininger’s Reaction:

Lindsey Leininger, PhD, HTN friend and Medicaid nerd, is a health policy analyst and faculty director of the Center for Health Care at Dartmouth’s Tuck School of Business. Prior to joining Dartmouth, she spent a decade designing and leading research projects for Medicaid agencies, both in academic and think-tank settings. She shares her reactions on the article:

The Affordable Care Act plugged most leaks in the insurance coverage bucket, but a few holes remain. Among the most notable: The lack of Medicaid eligibility for an estimated 2.2 million low-income adults living in the ten states that have not (yet) expanded eligibility.

A few important points to call out in recognizing the issue:

  1. How are these individuals faring relative to their peers in expansion states? The chart above tells the story: Individuals in non-expansion states are experiencing appreciable access to care deficits.
  2. A second particularly important finding is the impact of Medicaid expansion on low-income parents’ coverage. Specifically, parents in expansion states experienced a 15.3% percentage point increase in coverage. Many research studies have demonstrated positive spillover effects from parental insurance coverage to children’s coverage and access to care.
  3. As a result, the estimates in the chart above provide a likely lower bound of the benefits of adult Medicaid expansion to low-income families’ health and well-being.

Additional Reads:

Source: Becoming Less Usual: Understanding the Decline in the Number of People with a Usual Source of Care, Milbank

Milbank published a recent report examining trends in the use of a 'usual source of care' – defined as a health professional or care location where an individual can go if sick or in need of medical advice – among folks 50+ years of age, with a focus on racial/ethnic disparities and socio-demographic traits.

Admittedly, we were a bit surprised to see the above data showing that the number of seniors who report having a usual source of care has actually declined between 2014 - 2020. Given all the investment we've heard about over the last few years from insurers / care delivery folks focused on the senior market and giving seniors access to primary care, we would have expected to see the opposite trend.

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2023 Healthcare Provider IT Report: Doubling Down on Innovation, Bain & Company

Bain & Co. published its 2023 Healthcare Provider IT Report: Doubling Down on Innovation report looking at health system IT departments are thinking about technology investments.

The survey, collecting responses from 201 US healthcare provider executives, found that nearly 80% of respondents increased spending on IT and software in the past year. Further, only 6% of health systems have a generative AI strategy today, but nearly 50% are actively developing one or planning to in the future.


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

A recent Bloomberg report highlighted that Humana, Aetna, and Molina are all choosing not to renew contracts with senior care company Papa. This news comes after previous allegations against Papa of elderly abuse among its marketplace. There's some interesting Slack dialogue about how these contract losses for Papa are more likely related to those allegations than broader shifts in the MA marketplace.
Link / Slack

Digital therapeutics company Akili Interactive announced it will shift its core business away from a prescription pathway to selling its ADHD product directly to consumers over-the-counter. Additionally, the company plans to cut 40% of its workforce in efforts to extend runway into the second half of 2025. This follows a string of struggle in the DTx space, with prescription DTx pioneer Pear Therapeutics closing its doors in the Spring.
Link / Slack (h/t Samir Unni)

Retail giant Walgreens has partnered with primary care enablement platform Pearl Health to help providers move away from fee-for-service to value-based care. Lots of interesting dialogue in Slack about the rationale for Walgreens here, particularly given VillageMD's roots as an MSO itself. Seems like a significant endorsement of Pearl's tech platform by Walgreens.
Link / Slack (h/t Michael Ceballos)


A collection of notable startup financing rounds across the industry

Virtual sleep care startup, Gem Health, raised a Seed financing round, bringing its total capital raised to $5 million.
Link / Slack

Bold secured $17 million in Series A funding to continue its work in supporting healthy aging for older adults. The fresh capital will be used to expand with national and regional Medicare plans and provider groups, as well as grow its suite of clinical exercise offerings for its consumers.
Link / Slack (h/t Ariana Chehrazi)

Enterprise AI company, DeLorean, raised $7.55 million to grow its team and enhance its predictive analytics platform Medical AI, which supports clinicians and insurers with intervention recommendations, care management, and cost utilization.
Link / Slack (h/t Vickram Pradhan)

Mavida Health secured $1.5 million in pre-seed funding. The company is building a holistic mental health platform for mothers that offers a range of services - including one-on-one therapy, group therapy, family and couples counseling, and more.
Link / Slack

Medicare Advantage company SCAN Health has invested an undisclosed amount into hospice care startup, Guaranteed. The company currently operates across 5 states with plans to expand to Pennsylvania next.
Link / Slack

Co:Helm raised seed funding from Sequoia Capital to fuel growth of its LLM-powered co-pilot for automating clinical administration tasks.
Link / Slack (h/t Chuk Anyaegbuna)

Medication adherence company, Sempre Health secured $20 million to support growth of its life sciences and payor networks, as well as expand product offerings.
Link / Slack (h/t Evan Benkert)

Carenostics, an AI startup tackling undiagnosed and undertreated chronic disease, raised $5 million in Seed funding.
Link / Slack (h/t Matthew Holt)


A round-up of posts from the broader healthcare community this week that made us think

The healthcare labor shortage market map by Yuanling Yang and Enushé Khan

The investing team at SignalFire put together a solid market map of companies building across the healthcare labor shortage ecosystem. From staffing and labor marketplaces to training and upskilling to task automation, the article digs into a great collection of companies working to support healthcare providers.

Medicare Advantage Concept Validation Cheat Sheet by The Lionbird Team

This is a helpful GTM resource for startups selling to Medicare Advantage organizations, including answers to important questions on determining your company's value prop, plan for addressing barriers to adoption, and more.

The Market of Insights Into Sleep by Grayson Judge

A comprehensive overview of the sleep tech startup market landscape, looking at various categories - from trackers to diagnostics to tests and supplies.

How are digital health companies navigating ad trackers and HIPAA? (2023) by Chris Turitzin

We've seen the topic of ad trackers in digital health come up a few times across the community. This article is a helpful guide for marketers in healthcare to wade through the questions of "what do I do" in regards to HIPAA and tracking compliance.