Rooting For Schumpter’s Gale

By KIM BELLARD

Not familiar with Schumpeter’s gale?  You may be more familiar with the term “creative destruction.”  Schumpeter’s “gale of creative destruction” is the inevitable “process of industrial mutation that continuously revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one.”  

We need a Schumpeter’s gale in healthcare.

What made me think of this was the news that Tik Tok became the most popular internet site in the world, surpassing even Google.  It reminded me that things sometimes do change; perhaps there is some hope for healthcare after all.

If you missed the news about Tik Tok – perhaps you were too busy on it or too busy ignoring it – it came last week in Cloudflare’s Radar 2021 Year in Review. Tik Tok was a fairly distant 7^th a year ago, well behind leader Google and #2 Facebook, but shot up in 2021. Tik Tok has gone from being simply silly short videos to a force in social justice, the job market, celebrity status, and mental health.  It plays a role in Gen Z/Gen Y’s lives that Facebook desperately wishes it did.  Facebook’s demographic issues had been well known, but Tik Tok surpassing Google?  

That’s the kind of change I wish we saw tech bringing in healthcare.

The dominance of “Big Tech” – a.k.a., Alphabet/Google, Amazon, Apple, Facebook/Meta, and Microsoft – is oft-discussed, and usually lamented, but we have to keep in mind that such dominance is typically transitory.  Twenty years ago Apple was an also-ran, Google was trying to be an also-used, and Facebook had yet to be invented.  Amazon had a market capitalization under $4b. Microsoft was still Bill Gates’ company, not the open-source, cloud-based, subscription-oriented company Satya Nadella pivoted to within the last decade.

In twenty years, maybe within ten years, that list of Big Tech companies will look very different.  Maybe it will be Web3, maybe the metaverse, maybe quantum computing or AI, or even something few of us have even heard of yet, but new waves will come and will bring new tech giants.  That’s why Apple is investing in “face computers,” Facebook is transitioning into Meta, and Google has a “moonshot factory.”  Those efforts and others may help keep them relevant, but the barbarians, so to speak, are still coming. 

Go back twenty years, on the other hand, and the big hospitals/hospital systems are pretty much the same.  Same for payors, pharma, medical device companies.  There have been mergers and consolidations, but the dominant companies then are mostly the dominant companies now – only more so.  That’s not how it is supposed to work.  That’s not how it works in tech.

In last week’s “On Tech Newsletter” in The New York Times, Shira Ovide flatly says “technology won.”  She explains:

Tech is more like a coat of new paint on everything than a definable set of products or industries. Health care is tech. Entertainment is tech. Schools are tech. Money is tech. Transportation is tech. We live through tech.

Technology is also in a liminal phase where the promise of what might be coming next coexists with the complicated reality of what is happening now.

You can certainly make an argument that “health care is tech,” and that much of that transition has happened in the last twenty years.  We have widespread electronic health records, minimally invasive surgeries, new types of cancer treatments, all sorts of 3D printed objects, CRISPR, greatly improved prostheses, VR treatments and training, and, of course, more types of digital health efforts than even today’s venture capitalists can throw money at.  

It’s all very impressive, but you’d get a lot of argument that our nation’s health is better as a result, that our experiences in the healthcare system are better as a result, or that our healthcare is any cheaper as a result.  None seems true. Tech, in healthcare, is a bolt-on; it adds costs, it removes more of the human touch, and it does not fundamentally reshape the healthcare system. 

Unlike the actual tech industry, tech in healthcare serves to further cement the position of the incumbents, not displace them. It doesn’t make the healthcare experience new, it just makes it seem “newish.”  TikTok is not going to dethrone Epic or The Mayo Clinic. People in healthcare aren’t too scared of the “what’s next” in tech.

Much has been made of the record-setting 2021 for digital health investments — $28b, which was double 2020 – but when I look at them I still don’t see an Uber or an Amazon, a company that is trying to break an existing industry.  I see a lot of innovators who think they can remedy some pain points, but within the existing system, and I see investors who mostly want their slice of the $4 trillion healthcare sector.  

I want to see tech innovators who look at our healthcare system and think, hmm, there’s too many people and places doing too many things for too much money – and, often, too late, after there is a problem. Who wants to bring the cost structure down, not 5-10% but to 5-10% of our current levels. Who wants health to be an ongoing process managed in our daily lives.  Who wants health tech – and the resulting healthcare — to be ubiquitous, invisible, and largely autonomous. Who doesn’t think we need to rely on millions of highly trained healthcare professionals (and whose training, in fact, becomes one of the cost problems in the healthcare system). 

Tik Tok would understand that. 

With all due respect, I’m not sure that David Feinberg, for example, would. People who have spent their professional lives in the healthcare system can often see how to improve it, but not to fundamentally reshape it, and almost never how to bring creative destruction to it.

I’m not expecting Tik Tok to revolutionize our healthcare system – but ByteDance or WeChat, maybe. An AI company?  Of course. A synthetic biology or nanorobotics company?  For sure.  By contrast, what CVS, Walmart, even Amazon are trying to do in healthcare are interesting, but, honestly, they’re like helping us hear the orchestra on the Titanic better: OK, but that’s not really the problem.  

If we recognize the healthcare system in 2050, if some Schumpeter’s gale hasn’t blown the current version away and replaced it with something truly new, we will have failed.   

Kim is a former emarketing exec at a major Blues plan, editor of the late & lamented Tincture.io, and now regular THCB contributor

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THCB Gang Episode 76, Dec 23 1pm PT – 4pm ET

This is the last THCB Gang of what has been a long, grueling, but enthralling year. And every week (well almost every week) we have had a group from across the health care luminescence to discuss it.

Joining Matthew Holt (@boltyboy) on #THCBGang at 1pm PT 4pm ET Thursday for an hour of topical and sometime combative conversation on what’s happening in health care and beyond will be THCB regular writer Kim Bellard (@kimbbellard);  delivery & tech expert Vince Kuraitis (@VinceKuraitis); privacy expert and entrepreneur Deven McGraw (@HealthPrivacy); WTF Health host & Health IT girl Jessica DaMassa (@jessdamassa); and three occasional gang members making very welcome appearances–venture investor & soccer mogul Marcus Whitney (@marcuswhitney); surgeon & startup guy Raj Aggarwal (@docaggarwal); and health economist Jane Sarasohn-Kahn (@healthythinker).

And towards the end of the show we should have our now traditional (or 2nd time) visit from as many other gang members who can make it!

The video will be below but if you’d rather listen to the episode, the audio is preserved as a weekly podcast available on our iTunes & Spotify channels.

from The Health Care Blog https://ift.tt/32kAJuD

My 22 Oldest Jokes and Why they Still Matter in 2022

By IAN MORRISON

I have been studying American healthcare for more than 40 years and I have assembled a large number of one-liners over the years. As we enter 2022, I thought I’d share my 22 oldest jokes and why they still matter. 

Coming to America 

1. I grew up in Glasgow, Scotland.  In Glasgow, healthcare is a right, carrying a machine gun is a privilege. America got it the wrong way round. 

Gun violence continues to ravage the United States. We have more guns than people. Kids get gunned down in school playgrounds and classrooms routinely. It happened once in Dunblane, Scotland in 1996 when a local shopkeeper walked into Dunblane Primary School and opened fire, killing 16 5- and 6-year-olds and their 45-year-old teacher.  It so galvanized public opinion, according to Smithsonian Magazine:  “By the end of 1997, Parliament had banned private ownership of most handguns, including a semi-automatic weapons ban and required mandatory registration for shotgun owners”. 

Last time I looked, gun violence was the second leading cause of death in children in the US.  In America when we have mass shootings all we get are thoughts and prayers. 

And when it comes to healthcare as a right, even if we Build Back Better, it won’t be a right for millions of American residents, especially those who are undocumented. 

2. I am a Scottish Canadian Californian which gives me a unique perspective on healthcare (and all things to do with healthcare, including death and dying) because the Scots see death as imminent, Canadians see death as inevitable, and Californians see death as optional. 

This is one of my oldest jokes and it remains true.  In Silicon Valley, where I live, my affluent VC friends want to live forever and are working out and taking supplements to achieve that. In contrast, my British friend Dr. Richard Smith (former Editor of the BMJ) is sitting on the Lancet Commission on the Value of Death.  Enough said. (https://commissiononthevalueofdeath.wordpress.com/category/about-us/) 

3. Canada could have been the best country in the world: it could have combined American know how, British ethics, and French culture. Unfortunately, it got American culture, British know how and French ethics, a particularly nasty combination. 

Canada is still a great place, especially in contrast to a Trumpian America, but they have had their own issues with competence and corruption in recent years. 

4. As to why Americans can’t do Canadian-style healthcare: “I lived in Canada, I trained in health economics and health policy in Canada, my wife is Canadian, and most of my extended family live in Canada.  So the short answer is “You are not Canadian:  Canadians are different from Americans, they describe themselves as Unarmed Americans with Health Insurance.” (The latter part is borrowed).  

Despite all their troubles, including waiting times for MRIs and elective surgery, Canadians remain fiercely loyal to their healthcare system and view it more positively than their American counterparts do their own system.  https://leger360.com/surveys/legers-north-american-tracker-july-13-2021/ 

For Canadians their health care system is a proud point of cultural differentiation from Americans. 

5. Why do the French have the highest rated health system in the world? It has very little to do with their health system. The real reason is that the French walk, they drink red wine, and they get naked in the summer. Nothing will keep your BMI down better than getting naked in the summer. 

The French still smoke at higher rates than the US and consume more alcohol, and in recent years their diet has increasingly been Americanized by fast food, hypermarkets, and industrialization of cafes and restaurants.  Even though they had their own challenges with Covid, they have life expectancy above comparable countries, whereas America is far below that metric and going in the wrong direction. https://www.healthsystemtracker.org/chart-collection/quality-u-s-healthcare-system-compare-countries/ 

On Being a Health Consumer or a Patient 

6. (Healthcare) Quality is being in a waiting room with people who earn more money than you do. 

Despite enormous investments in what I call the quality police (the health industry agencies and actors who measure, manage, accredit, approve and regulate healthcare quality), the public still has a great deal of difficulty in judging health quality.   Consumers confuse choice with quality.  Patients are frightened and usually defer to their doctors when the chips are down.   Having gone through a serious healthcare surgery recently at Stanford, I would say a pretty good surrogate for quality is being in a waiting room with the affluent crowd.  

By the way, I used this line in a talk to venture capitalists a few years ago.  They looked at me with incredulity and nobody laughed, because nobody makes more money than they do. 

7. Good Health is a state of incomplete diagnosis (Borrowed).  

I credit my friend Bill Rosenburg, formerly of KPMG and Met Life with this line.  It was also widely circulated by my old mentor Bob Evans at UBC.  No matter the ultimate provenance of the joke, it is one of the best descriptors of modern medicine.   

If you look hard enough, everyone has something wrong.  Most cultures don’t bother finding out and it either resolves itself or it doesn’t. 

8. The Quantified Self movement is going to lead to a Frenzy of Cyberchondria, overwhelmed with false positives and the hyper worried well  

Do you really want to know your blood pressure in real time, all day long from your smart watch?  Does your doctor want 15 terabytes of data from your Peloton? Let me tell you: she does not.  

This technology can be incredibly helpful if we develop the right use cases, particularly in managing vulnerable folk.  Continuous monitoring of the buff seems like a waste of resources. 

9. It’s tough to be cost conscious when you’re unconscious. 

I used to tease the great Alain Enthoven with this line.  I’m all for more cost consciousness by consumers, but as Mike Tyson famously said: “Everyone has a plan until they are punched in the mouth.”  

10. How to pick a health plan  

Step 1.  Decide on the diseases you and your family are going to have in the coming year 

Step 2.  Find the best doctors and hospitals for those diseases 

Step 3. Identify which plans offer those doctors and hospitals 

Step 4.  Select the cheapest plan 

Step 5.  If there are no affordable plans with all the doctors and hospitals you want, go back to Step 1 and pick some new diseases 

This accurately describes how many Americans are asked to select health plan options whether in Exchanges, Medicare, employer sponsored coverage or even Medicaid. The joke tries to point to the absurdity of selecting a plan that meets your needs when by definition no one has perfect vision of their future health and disease.  (See Mike Tyson).  Maybe we should figure out a system to pay for care for people who need it, rather than paying for coverage that doesn’t cover what patients may need when they get sick. 

On the Role of Employers 

11. When it comes to healthcare employers are Cranky, Confused, Aimless and Spineless. 

The genesis of this line was a meeting in the early 1990s with the CEO of Baxter Vern Loucks and his leadership team.  My colleague Bob Leitman of the Harris Poll and I were presenting the results form our annual Healthcare Outlook surveys of consumers, physicians and employers.  We had too many slides and generated great discussion and so of course, we ran out of time.  As the meeting closed Loucks turned to me and asked what does the employer survey show in a nutshell: “When it comes to healthcare Employers are cranky, confused, aimless (I said)…..and spineless (Bob added)”.   

“Exactly” Loucks responded “you two are going to come with me next month to tell some other CEOs exactly that”.  Loucks was an ex-marine and a central casting CEO you would follow him anywhere.  

Loucks office called the next day and we were asked to appear in St. Louis at Emerson Electric in a couple of weeks time.  We waited in the board room and in walked Loucks with fellow CEOs Chuck Knight of Emerson Electric and Auggie Busch of Anheuser Busch. 

“Tell them what you told me” Loucks said.  “Employers are cranky, confused, aimless and spineless,” we said. 

Not missing a beat Auggie Busch said: “Yeah but we are not stupid.  Labor costs are a small part of our business, (we spend more on advertising) and healthcare costs are just 10% of labor costs”. We had a great discussion about healthcare.  Oh, and they did fire the benefit manager some months later, sorry. 

I am a long-time advisor to PBGH (Purchaser Business Group Health) which represents industry giants like Wal-Mart, Disney, Boeing and Apple and more than 40 others household names.  They are becoming much more activated in both purchasing and policy making as they deal with the consquences of Covid, and the reality that the healthcare provider “game” is completely dependent on self insured employers for their financial sustainability.  https://thehealthcareblog.com/blog/2020/05/19/the-end-of-the-game/ 

Stay tuned for more employer activation in 2022. 

On Obamacare and Replacing It 

12. On Republican Plans to Repeal and Replace Obamacare: “It’s like breaking up the Beatles where you just keep George and Ringo and expect it to sound good.” 

Mercifully, John McCain gave Repeal and Replace a thumbs down, but Republicans were close to repealing Obamacare and ripping out the essence of the program (the John and Paul) of raising taxes and subsidizing exchanges and Medicaid expansion. 

13. Republican policies are ideologically coherent, they’re just not actuarially coherent 

All of the Republican proposals to replace Obamacare were consistent with smaller government principles but they all fell short on affordability for consumers, reduction in the uninsured, and the resulting positive effects on health and financial security of the newly covered. 

On Medicaid 

14. Medicaid is bigger than France, It’s bigger than Wal-Mart 

Medicaid expansion has occurred over the last ten years in 38 states and more recent government action to fight Covid has further expanded Medicaid rolls in every state.  Build Back Better provisions, if enacted, would further expand eligibility for the program.  Even if BBB doesn’t pass, Medicaid will still be bigger than France in terms of number of enrollees and bigger than Wal-Mart in total revenue.  Massive Medicaid is the default program for an increasing number of poor, elderly and vulnerable populations, yet payment rates to providers are inadequate, this will be a central challenge for the future. 

15. It’s easier to get into Princeton than to get a Medicaid card in Texas. 

This is a true statement for childless adults, because like many other Southern states childless adults are not eligible for Medicaid.  And even worse, if you are in a category eligible for Medicaid but you earn more than $3,733 per year for a family of 3 (17% of the Federal Poverty Level), you are too rich to qualify for Medicaid in Texas.  Princeton has got to be easier to get into. 

On Business Models 

16. The prevailing metaphor for American healthcare is “Pimp my Ride” 

As I wrote back in 2005: 

“If you have teenage kids, you end up watching a lot of MTV or you have nothing to talk to your children about.  My kids are both in college now, but I have watched a lot of MTV in my time.  My favorite show of the moment is “Pimp My Ride”.  The show is in the genre of all makeover reality shows.  In this case a rapper host introduces a poor kid and their beaten up old car (the ride).   The car is taken from the young adult and transformed by a team from West Coast Custom (a body shop and customization company in LA).   

Each episode shows a different kid and a different car:  clapped out Pintos, beaten up Suburbans, and a plethora of ugly, weird, old and dilapidated camper/truck hybrids.  The process is always the same: they strip the car’s interior and install an unbelievable array of stereo equipment (woofers and sub-woofers included), video displays (even laptops) and the whole thing is topped off with an amazing paint job in vibrant blue or dazzling yellow, topped up with custom painted flames on the side.  They never seem to do anything to the engine, drive train, or chassis of any of these vehicles.    At the close of each episode the youngster is shown the transformed vehicle that has been “pimped” and they can never contain their excitement.  They are deeply grateful. 

The prevailing vision of quality in American healthcare is “Pimp My Ride”. 

We take a really bad chassis and engine and bolt on unbelievable amounts of high technology on a frame that is tired, old and ineffective.  We spend extravagantly on buildings, machines, drugs, devices, and people at West Coast Custom Healthcare.  The people who own the rides are very grateful because they don’t have to pay for it in a high deductible catastrophic coverage world, once you are over your deductible and ensconced in an American hospital the sky’s the limit.  It all looks great, has a fantastic sound system, and nice seats but it will break down if you try and drive it anywhere”. 

I rest my case. 

17. Really rich people don’t pay taxes, unless they have bad accountants 

I actually got this joke from my accountant.  He was correctly pointing out to me the fact that the ultra-rich have a wide variety of offshore and other tax avoidance schemes that are unavailable to even the ordinary affluent. 

18. One man’s waste is another man’s income.  Modern variant:  One man’s surprise bill is another man’s lucrative business model 

The whole surprise billing policy shenanigans has underscored the fact that many providers such as ER doctors and anesthesiologist (especially if they are private equity backed), air ambulance services and many others are completely dependent on surprises as their business model. Hospitals and health systems are often complicit in these models and it is why they are resisting the rules of adjudication of surprise bills which will inevitably reduce the economic yield from out of network activity. 

19. Managed Care Definition: An organized system of healthcare financing and delivery that takes the excess profits of hospitals, specialists, and drug companies and gives them to consultants 

Managed care been “berry, berry” good to me.  Managed care unleashed a gravy train for consultants that has continued for 30 plus years (with only minor perturbation by Covid).  The current managed care variants of value-based purchasing and population health still haven’t dealt with the fundamental question if managed care is so great why have American healthcare costs continued to rise faster and higher than anywhere in the world over the last 30 years and life expectancy and other indicators have gotten worse relative to our advanced country peers.   

20. At some point in the next five years the revenue from the Revenue Cycle Industry will exceed the revenue of the hospitals they serve in the financial management equivalent of the Rapture. 

We have armies of people faxing things to each other and in the modern version we have dueling robots where automatic upcoding by hospitals meets automated denials by health plans.  At some point the robots will explode and the health system will meltdown. 

On Disruption 

21. When smart Alec start up CEOs call me with a plan to disrupt American healthcare I give the same speech.  The American healthcare system is larger than the entire Italian economy and about as well organized.  So if you think you are going to disrupt healthcare it’s a bit like saying you are going to disrupt Italy. Good luck with that. 

US healthcare just edged out the German economy as the fourth largest economy in the world (it is actually twice the size of the Italian economy).  Such massive incumbency is not easily moved. The new disruptors with the massive resources thrown at them in 2021, also have massive burn rates which will be challenged in the next 24 months to deliver on the lofty promises.  I wish them well, we need the innovation. Ciao. 

On Being a Futurist 

22.  My definition of a futurist is an economist who couldn’t handle the calculus. 

I have been in the sweeping generalization business for more than forty years.  I like data and arithmetic, calculus not so much.  But I believe that if something is going to be a big deal in the future it has to start some time and be detectable to human beings without fancy mathematics.  Jokes can help tell those fundamental truths.   

Ian Morrison, PhD is an author, consultant and futurist in Menlo Park, California 

from The Health Care Blog https://ift.tt/3ej112R

Not Just Token Tokens

By KIM BELLARD

I recently watched some of the recent Congressional hearings on cryptocurrency, and, boy, if there’s anything funnier than watching experts try to educate most members of Congress on anything crypto-related, it’s probably me trying to explain it.  I don’t own any digital assets, still don’t see the point of NFTs, and am not going to buy any real estate in the metaverse.  

All that being said, there’s something about Web3 that fascinates me.  Knowledgeable people are talking about Web3 “reinventing the internet,” “democratizing” it, giving people more ownership of/control over what they do on it.  It’s a counterbalance to how the internet – both the traffic and the infrastructure — has grown increasingly dominated by a few very large firms, such as Google, Facebook, or Amazon.

As the Web3 Foundation declares, Web3 is an internet where:

• Users own their own data, not corporations
• Global digital transactions are secure
• Online exchanges of information and value are decentralized

All that sounds very intriguing to me, especially as someone who has dim views of how healthcare likes to silo information, has placed too little value on patient ownership of their own data, and is rushing to centralize.

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If I’ve got this right, the heart of Web3 is the concept of distributed ledgers – a.k.a., blockchain. Information is not stored in one place, controlled by one entity, but across these distributed ledgers.  Activity – transactions, changes to the source information, etc. – updates the blockchain, preserving the history and verifying the activity across the distributed ledgers. Someone wanting to change or use your information without your permission faces a large challenge because of its distributed nature.

On the distributed ledgers, you can do transactions (e.g., buy/sell), use “smart contracts,” participate in social networks, and many other interesting activities. If trying to do anything quickly across a distributed network sounds daunting, Bloomberg reported:

Operating through a distributed network can be clunky, but the user experience is getting better. “It’s still early, but it’s been transformed in the last six months,” says Jonathan Dotan, founding director of the Starling Lab.

To assist, there’s a related concept of a “distributed app,” which is, I suppose, to Web3 as apps have been to Web 2.0.  There’s even a “dapp store” called DappRadar that claims to allow you to “discover, track & trade everything DeFi, NFI and Gaming.”

We are already seeing DAOs – decentralized autonomous organizations – to help create /run Web3. “I think DAOs will be as ubiquitous as companies, clubs, nonprofits, and different kinds of ‘official’ organizations today,” says Maria Shen, a partner at venture capital firm Electric Capital told Bloomberg.

There is an explosion of funding in blockchain-based startups; CB Insights reports $15b in 2021, up 384% from 2020.  In The Wall Street Journal, Christopher Mims notes:

Almost every company with “Web3” or “blockchain” in its pitch deck describes its mission as a user-centered quest to empower—and just as often, enrich—its users, making them owners and investors as much as customers.

That. Is. Intriguing.

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We can’t get away from Web3 without discussing tokens, which many associate with digital currency like bitcoin. That’s not entirely incorrect, but not quite right either.  Digital currencies are associated with specific platforms – e.g., bitcoin and Ethereum run on different platforms – but tokens are digital assets that transcend platform.

Cryptopedia says: “Tokens — which can also be referred to as crypto tokens — are units of value that blockchain-based organizations or projects develop on top of existing blockchain networks.”  It goes on to clarify:

• “Typically, crypto tokens are programmable, permissionless, trustless, and transparent.
• While crypto tokens, like cryptocurrency, can hold value and be exchanged, they can also be designed to represent physical assets or more traditional digital assets, or a certain utility or service.”

Tokens can be used, for example, like “voting shares” that help govern dapps or other structures.

This leads to something that Mr. Mims also discussed as one of the “inspired weirdness that is Web3”:

If money can become code, then money can be way more than a means of exchange; it can also do anything that other software can do.

This core insight, a sort of E = mc equivalence between money and software, is why true believers in Web3 think it could have a huge impact. Suddenly every activity humans engage in, from buying and selling a house to liking a post on social media, can be made part of a token-based financial system of a scale and complexity that makes today’s look like an antique.

I love the “E = mc² equivalence between money and software;” no wonder people are excited about Web3.

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Not everyone is a fan. For one thing, generating some blockchain takes tremendous computing power, which has a host of environmental impacts. For another, it can be a way for evading regulation, which could be a concern for fields like finance or healthcare.

Even more troubling, as Cornell professor James Grimmelmann told NPR:

Web3 is vaporware… It doesn’t make any sense.  The vision says the problem with the internet is too many centralized intermediaries. Instead of having lots of different applications and sites, we’ll put it all on blockchains, which puts it all in one place.

Web3 has to be bigger than blockchain.

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I don’t know what a Web3 for healthcare would be, but I have some ideas. Of course, the idea that we own and control our health records, storing them on blockchain and giving permission for them to be viewed/added to, should be tempting to anyone who has had to fight or access to their own records. That’d be a necessary but not sufficient component of a healthcare Web3.

Imagine, if you will, a future where anytime you interact with the healthcare system, that interaction is not only stored in a blockchain record that you control, but also earn tokens for that interaction.  Imagine all the data from your fitness or other trackers also going into that blockchain record, and earning more tokens. Image all those tokens giving you voting rights in the governance of that healthcare system. 

We’re not at Web3, and we’re not going to be there anytime soon.  Moreover, experts predict, it’s less about Web3 supplanting Web 2.0 as becoming incorporated into it. Still, as Esther Crawford, a project manager who is helping Twitter orient towards Web3, told NPR: “For a long time, Web3 has been very theoretical. But now there is a surge of momentum to build.”  Ignore it at your own risk.

I can’t wait to see who is going to build what Web3 for healthcare.

Kim is a former emarketing exec at a major Blues plan, editor of the late & lamented Tincture.io, and now regular THCB contributor.

from The Health Care Blog https://ift.tt/3H3bCeE

Matthew’s health care tidbits: #DigitalHealth valuations

Each week I’ve been adding a brief tidbits section to the THCB Reader, our weekly newsletter that summarizes the best of THCB that week (Sign up here!). Then I had the brainwave to add them to the blog. They’re short and usually not too sweet! –Matthew Holt

For my health care tidbits this week, it’s time to bring up the disconnect between the continual collapse of #DigitalHealth stock prices and the continued increase in private sector investment and valuation in the same sector.

All of nine months ago, way way back in March 2021 market leader Teladoc hit a stock price of $308. Last week it hit a low of just under $90. Meanwhile several companies have IPOed or SPACed this year and almost all of them have seen their stock fall dramatically. For example, pioneer online mental health company Talkspace is now at a market cap of under $300m. This week a different mental health company Cerebral which was only founded in January 2020 raised $300m at a private valuation of over $4 billion. Yes they could have bought out Talkspace for that amount! In October Medicare Advantage plan Devoted Health raised money at a $12 billion valuation which exceeded the market cap of rivals Clover, Bright Health and Oscar–each of which has more members.

So what’s going on? Part of this is the wash of money still going into venture funds. Interest rates are historically low, while inflation is picking up, so that money has to go somewhere. Additionally some of the companies that SPACed out were probably unable to get such a good valuation in a private round. But it can’t be that all the 50 or so public companies are lower quality than the private ones. That indicates that either the private valuations aren’t real (because there are so many protections built into the deal for investors), or that the private and public valuations are going to get closer together. There is of course one more possibility–some of the private companies may pursue M&A and buy out some of the public ones. But in any event, this current arbitrage cannot last forever.

It’s not unlikely the public stocks may pick up. But we’ve seen private and public market bubbles before and the aftermath isn’t usually pretty.

from The Health Care Blog https://ift.tt/3mhv6nK

“Playing Doctor” – A Cautionary Tale From Health IT Pioneers.

By MIKE MAGEE

Warner Vincent Slack, MD, a pioneer of medical informatics, was a Professor of Medicine at Harvard Medical School in the Division of Clinical Informatics. When he died in 2018 at age 85, his memoriam read:

“For over 50 years, Dr. Slack conducted pioneering research on the use of computers in the medical world and was one of the founders of medical informatics. His goal was to empower both doctors and patients by improving the communication between them.”

Followers of Dr. Slack have labored hard over the past half-century to design solutions that will strengthen rather than weaken the bonds of the patient-physician relationship. But as he suggested at multiple points throughout his career, this goal becomes exponentially more difficult if politicians are allowed to “play doctor” with citizens’ lives.

His awareness of the fallout of the Terri Schiavo “right to die” case, beginning a dozen years after his seminal publication of  “Patient Power: A Patient Oriented Value System”, likely cast a long shadow on his optimistic vision. The case spanned 15 years, as it rode the poor health and disability of one unfortunate woman literally into her grave with devastating consequences for all concerned. 

As the Supreme Court readies itself to serve up opinions in the Texas vigilante and Mississippi abortion cases, the Schiavo case remains a cautionary tale that deserves a careful review. Here’s a quick summary:

• Theresa Marie Schindler was born in a Philadelphia suburb on December 3, 1963.
• Terri married her husband, Michael in 1984 and moved to Florida to be close to her parents. 
• On February 25, 1990, suffering from an eating disorder, she collapsed in the lobby of their apartment, was resuscitated, and hospitalized.
• Her husband, Michael, was made legal guardian on June 18, 1990. Two physicians independently declared her in a “permanent vegetative state.” A gastric feeding tube was inserted.
• In mid-1993, Michael signed a Do Not Resuscitate (DNR) order.
• In May 1998, he filed a petition to remove the feeding tube.
• The parents challenged the removal in court and lost. The tube was finally removed on April 24, 2001.
• The parents charged Michael Schiavo with perjury, and a judge ordered the tube reinserted 2 days later.
• On September 17, 2003,  the appellate judge ordered the feeding tube removed for a second time.
• Operation Rescue/Right to Life extremist Randall Terry began daily public demonstrations at the care facility.
• The Florida legislature passed “Terri’s Law”, allowing Gov. Jeb Bush to order the feeding tube surgically reinserted for the third time.
• On May 5, 2004, “Terri’s Law” was declared unconstitutional.
• Senator Mel Martinez’s (R-FL) political career was damaged irreparably when memo’s revealed he played politics with the issue.
• Senator Bill Frist’s hopes for the presidency went up in smoke on March 17, 2005, when he declared on the Senate floor, “I question it (vegetative state) based on a review of the video footage which I spent an hour or so looking at last night in my office.”
• President Bush transferred the case to Federal Courts. The Federal Court agreed with prior State Court Appeals.
• Terri Schiavo’s feeding tube was removed a final time on March 24, 2005. She died at a Pinellas Park hospice on March 31, 2005.

In 2010, Dr. Slack wrote, “Dialogue between physician and patient continues to be the mainstay of clinical medicine.” Clearly, not all health technology innovators share this narrow focus. Much of today’s emphasis is on securing patient autonomy by enabling faster and more accurate prescriptions, rapid information sharing, reduced paperwork, reduced unnecessary tests, increased reliable follow-through, and privacy and security of information. 

But Slack argued that flawless information management is no substitute for the guidance and advice of a trusted professional when faced with a complex life and death decision. Such was the case in the Schiavo end-of-life debate ensnarled for 15 years in our nation’s courts. A more current example of malign interference is the attempt by Governor Greg Abbott to allow citizen vigilantes to insert themselves into complex individualized decisions by women facing an unintended or unwanted pregnancy.

Health information technology should be both assistive and transformational. Dr. Slack’s contemporary, Canadian-born American biomedical engineer and educator, Edward (Ted) Shortliffe MD. Ph.D. echoed this same theme in an address to the American Philosophical Society in Philadelphia in 1991. He said, “Any effort to anticipate the effect of information technology on relationships between patients and physicians must be viewed in this larger context of social change. Both doctors and patients will be very different… if there is any resulting dehumanization, it will occur because we allow it to happen, not because there is something inherently dehumanizing in the technology itself.”

Must HIT innovators now insert themselves directly into contentious contemporary issues such as abortion rights? No. But Slack would argue that the opportunity for HIT innovators to continue to design products that fully empower contemporary patients does solidly align with the patient’s rights movements, and requires an element of social awareness and engagement in the issues of the day.

Mike Magee, MD is a Medical Historian and Health Economist, and author of “CodeBlue: Inside the Medical Industrial Complex.“

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Health in 2 Point00, Episode 245| Bright Health, Innovaccer, Cadence, Ophelia, and Apti Health

Today in Health in 2 Point 00, Jess and I talk about the plethora of notable deals in the Healthcare Space. Bright Health gets $750 million with notable investment from Cigna; Innovaccer gets $150 million, bringing their total up to $375 million; Cadence gets $100 million, bringing their total up to $141 million; Ophelia raises $50 million, bringing their total up to $64 million; and Apti Health raises $50 million, bringing their total up to $65 million.

-Matthew Holt

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THCB Gang Episode 75, Dec 16 – 1pm PT – 4pm ET

Joining Matthew Holt (@boltyboy) at 1pm PT 4pm ET Thursday for an hour of topical and sometime combative conversation on what’s happening in health care and beyond will be — medical historian Mike Magee (@drmikemagee); patient safety expert and all around wit Michael Millenson (@MLMillenson); futurist Jeff Goldsmith; fierce patient activist Casey Quinlan (@MightyCasey); and policy consultant/author Rosemarie Day (@Rosemarie_Day1)

You can see the video below live at 1pm/4pm or it’s kept here for posterity. If you’d rather listen than watch, the audio is preserved as a weekly podcast available on our iTunes & Spotify channels

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BREAKING: Innovaccer CEO on Healthcare Cloud Startup’s $150M Raise & $3.2B Valuation Announced Today

BY JESSICA DaMASSA, WTF HEALTH

Health tech infrastructure startup, Innovaccer, announced its $150M Series E and newly assigned $3.2B valuation today, and I’ve got CEO Abhinav Shashank with the essential intelligence on how this company is pursuing health IT’s holy grail: the single patient health record.

This is a story of cloud technology’s uptake in healthcare, which has lagged behind other sectors like banking and retail in terms of industry-wide adoption. Abhinav tells us that the “economic incentives” are finally aligned for cloud to really take-off in healthcare, as the technology will be critical to any models where care is longitudinal instead of transactional and a singular view of a patient’s clinical data, labs, scans, and claims will be essential to healthcare organizations taking on more risk.

So what, exactly, does Innovaccer do? What’s the work, and how do they get paid? Who has access to the data they’re landing in the “Innovaccer Health Cloud”? Will patients one-day be able to access this single record themselves? And, what stops Epic or Cerner from just doing this and owning the space outright? No detail left unexplored in this one and – for the benefit of those of us who are not very plugged into the IT underpinnings of the EHR – Abhinav breaks it all down for us in a way that even us non-techie health tech market watchers can understand!

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The Eisenhower Principle

By KIM BELLARD

I’ve finally come to understand why the U.S. healthcare system continues to be such a mess, and I have President Dwight Eisenhower to thank.

I’ve been paying close attention to our healthcare system for, I hate to admit, over forty years now. It has been a source of constant frustration and amazement that – year after year, crisis after crisis – our healthcare system doesn’t get “fixed.” Yes, we make some improvements, like ACA, but mostly it continues to muddle along.

Then I learned about President Eisenhower’s approach to problems:

That’s it!  All these smart people, all these years; they didn’t know how to solve the problem that is our healthcare system, so they all took the Eisenhower approach: enlarge the problem.  Let our healthcare system get so bad that not addressing it no longer is possible.

If, indeed, there is such a point.

The actual Eisenhower quote is more nuanced than the above version. It was:

Whenever I run into a problem I can’t solve, I always make it bigger. I can never solve it by trying to make it smaller, but if I make it big enough, I can begin to see the outlines of a solution.

I guess we’re not yet at the point when the outlines of a solution are clear (Bernie Sanders notwithstanding). 

Instead, we’ve been chipping away at the problem, trying to make it smaller. For example:

• Employer-sponsored health insurance tax preference (WWII)
• Hill-Burton Act (1946)
• Medicare/Medicaid (1965)
• Federal HMO Act (1973)
• Stark Physician Self-Referral Law (1989)
• DGRs (1983) & RBRVS (1992)
• CHIP (1997)
• Medicare Modernization Act (2003)
• Affordable Care Act (2010)

I could add a plethora of non-legislative efforts, largely private-sector driven, such as second surgical opinion (1970’s), PPOs (1980’s), centers of excellence (1980’s), disease management (1990’s), value-based purchasing (2000’s), or digital health (2010’s).  Each was well-intentioned, each was expected to make a dent in a problem, and each was subsumed into the maw of our healthcare system.  

But we still pay way more than any developed country for our healthcare system, for health outcomes that put us, at best middle of the pack. Tens of millions of us still lack health insurance, in part because some states refused to expand Medicaid and in part because people still can’t afford/don’t see the value of health insurance, despite subsidies. Health inequities abound, particularly for people of color. 

Yes, some of the best care in the world can be found here, but most people shouldn’t expect to receive it – it takes luck, money, and/or the right location. Our malpractice system penalizes physicians without protecting most victims of malpractice.  “Public health” has at best been ignored (like most other of our infrastructure) and at worse seen as some sort of Communist plot.

One might have thought that a global pandemic would make the problem big enough. We’ve got over 800,000 people dead already, we’ve overwhelmed many of our hospitals, we’ve burned out large numbers of our healthcare workers, we’ve exposed the fragility of our healthcare (and other) supply chains. Yes, we’ve thrown trillions of dollars at the pandemic, yes, our scientists have developed very effective vaccines in record time, but too many people refuse mitigation measures that might finally bring it to an end. 

Yet still the outlines of a solution continue to elude us. It seems there is no health problem so big that we can’t turn into a political issue, not even a pandemic.

Even before the pandemic, we were facing epidemics of chronic diseases, such as diabetes and obesity, as well as gun violence, opioid addiction, and mental health. We know we should address these, we know we could, but mostly we just shake our heads and offer “hopes and prayers.” 

How many Americans will have to go bankrupt from the cost of healthcare they received? How many Americans will have to suffer or die from the care they didn’t receive – or from the care they did receive? How embarrassed are we willing to be about our health disparities? How reluctant do people in other countries have to get about living/visiting here due to the risk of getting caught up in our healthcare system? 

In Gen Z’s lifetimes, much less those of millennials or Baby Boomers, the problems in our healthcare system have grown from huge to unfathomable.  When it comes to healthcare, we’ve let the problem get big enough. It’s been enlarged to the point it is hurting us, our economy, and our futures. 

Yet here we are, still fumbling for solutions.

It’s possible that the pandemic will cause our healthcare system to collapse and force us to take action on fundamental reforms. More likely, due to the valiant efforts of our healthcare professionals, it will survive this too, and the pandemic will just be one more insult added to our injury. 

It’s possible that when health spending reaches 20% of GDP – as it is projected to do by the end of the decade – we’ll decide we’d had enough, but I remember when we thought 10% was the limit. 

It’s possible that we’ll suddenly recognize that, hey, our declining mortality – which is not all due to COVID — is a real problem, but that’s probably too slow and subtle an indicator for us to act.

By now, we shouldn’t just have shadows of solutions. By now, the problem is so big that solutions should be crystal clear to everyone. But they’re not.

We shouldn’t be surprised. We’re very good at kicking the can down the road. We should be very concerned about the national debt, but we add to it blithely. We should be terrified of the impact that climate change is already having and how much worse it will soon be, but addressing it would require us to make too many changes. 

Our infrastructure is aging, brittle, and outdated, but even the recent Infrastructure and Investment Jobs Act is much smaller than it really needed to be. The racial wealth gap is a consequence of shameful historical patterns, yet continues to widen; it is not survivable for a democracy.

We’ve learned only half of Eisenhower’s adage: we’ve got the letting the problem get bigger part down, but we’ve forgotten the part about how/when to come up with solutions.

Where’s Eisenhower when we need him?

Kim is a former emarketing exec at a major Blues plan, editor of the late & lamented Tincture.io, and now regular THCB contributor.

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