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June 10, 2021 Random Dots, Emerging Patterns

June 10, 2021

Random Dots, Emerging Patterns

The coolest news coming out of Washington DC this week was not political.

That was a dumb statement…political news out of DC just causes indigestion, which is never cool.

No, the Brood X Cicadas have returned.

There was a story from 17 years ago, the regular cicada cycle, of a ruined outdoor wedding in which the deafening insects were so loud that you could not hear the band. I guess that particular tip was not in the wedding planner’s guidebook. It is now.

Last week, the swarms showed up on the weather radar looking like a rainstorm west of the District. A billion insects, flying in formation, starts to look like a single thing.

OK, this is a stretch, even for me, but let’s connect the cicada swarm to some healthcare insights, if for no other reason than it gives us an excuse to make jokes about the bugs in DC.

As I shared last week, I continue to be struck by the fact that the healthcare industry increasingly has two sub-worlds that may not even know the other exists. On one hand, we have providers who are still firmly planted in a fee-for-service universe and think all of this ‘value-based care’ talk is from the same people that were all excited about UFO sightings by the Navy last month. On the other hand, we have those who are all in on VBC and think FFS is a musty old wing down at the healthcare history museum.

I’ve continued to think about that dichotomy. Like the millions of tidewater insects, there are a lot of individual dots in markets all over the country that come together to form both a value-based care swarm and a fee-for-service swarm. Both show up on our radar.

But like inflation, we then wonder of the two things are transitory and will eventually converge, or if two separate swarms are permanent.

See how many DC references I am working in this week? I should have a Sunday morning talk show.

We’re more than a decade now into a full-fledged effort to reform and remake the healthcare industry. We’ve had big policy changes; mega market moves; tons of investments; and a lot of innovation. The cicadas were last here not long after President Clinton waved the white flag and told Hillary to cease and desist with her healthcare committee and start making her own campaign posters. 17 years is a long nap, but I think they would agree a lot has changed since they last crawled out of hibernation.

Looking deeper at the current VBC v FFS divide will shed some light on how we got here and where we might be going.

Until next time…

June 3, 2021 What Color is the Blue Dress?

June 3, 2021

What Color is the Blue Dress?

A long time ago, silly memes and images circulated around the Internet for entertainment purposes, not to manipulate the market value of some parody cryptocurrency. One of the most famous, from 2015, was the lace dress that had people seeing two different colors – was it blue or gold – and arguing intensely with anyone who saw it differently.

Gosh, that seems to be a good metaphor for many things these days, doesn’t it? People looking at the same set of facts of drawing diametrically opposite conclusions. Fox and MSNBC; the appropriateness of wearing pajamas to the grocery store…a long list.

I was reminded of the dress debate because this week I was at my first in-person conference since the pandemic. A couple hundred healthcare entrepreneurs and equity investors gathered, sans masks, to blow smoke at one another. BS is an airborne pathogen, though not fatal.

Side report from the scene – hearty handshakes were everywhere; people remembered how to tie their dress shoes and operate a belt; someone’s corporate credit card still worked at the bar, where the real work got done. We extroverts were out and happy as a puppy finding bacon on the floor.

I’ve said here before that I like the insights from these gatherings more than other types of conferences because real people on both sides of the conversation are making real bets with their time and money based on what they actually believe about the future. It is easy to pontificate if all you are risking is your cool PowerPoint slides. We more believe you believe what you are saying when your chips are pushed to the middle of the table.

There are many observations that I could make from the conference, but the one that most stands out for me is the same one I made that last time I shared one of these reflections – when it comes to the debate between value-based care and fee-for-service economic models, healthcare is bifurcated as much as people were about the color of the dress.

In this room, the companies that are all-in on value-based care, making progress, proving their point, throwing dirt on the FFS dinosaurs.

In that other room, people with better mousetraps for some part of care delivery in every possible segment of the continuum. Yes, they all believe that how they will get paid for their mousetrap is evolving, but at the core – yes, with a quality bonus; yes, some things are bundled – the more they do the more they get paid.

One group is trying to figure out how to reward people for what does NOT happen to the patient; the other is trying to get MORE of their thing to happen for patients.

And both are right.

The payer of the bill is changing, moving downstream to care givers – health systems and primary care physicians – who are driving a lot of change. But there is a still a big role for wrench-turners who will get paid for (better) wrench-turning.

May 27, 2021 A Memorial Day Reminder

May 27, 2021

A Memorial Day Reminder

Without doubt, the past 14 months have been predominantly, overwhelming about change. Those strange eyes staring out from over all the masked faces have been filled with bewilderment about all the change. Or the shock of having just sneezed a big, gooey mess into their mask.

But mostly it is about the change.

It seems my conversations these days are dominated by navigating the return-to-work minefield, questions about the permanence of telemedicine, or the latest entry into healthcare by one of the big tech giants that has already eviscerated retail and advertising and most everything else and now is turning with hungry eyes to gobble us up.

Good grief, the pace has been dizzying and shows no sign of relenting.

But, for a variety of seemingly unrelated reasons, I have been reminded these last few weeks about what has not, and will not, change in healthcare. And that is worth pondering for a few minutes as we head into the long holiday weekend.

170 years ago, French writer Jean-Baptiste Alponse Kerr wrote, because writers write stuff, ‘plus ça change, plus c’est la même chose.’

Now, if you don’t know French you might think old Jean-Baptiste was ahead of his time and was telling the Reddit crowd to buy AMC stock and screw the hedge funds. Meme…chose…take that, Wall Street!

But, that was not what he was saying.

From that phrase, we get our idiom, ‘the more things change, the more they stay the same.’ The literal translation is closer to, ‘the more it changes, the more it is the same thing.’

Which gets me back to the personal reflection I want to leave you to ponder as you stand over the BBQ grill this weekend, beer in hand, waiting on your ribs…

Yes, healthcare delivery is getting disrupted in ways we never imagined. One new player summed up their strategy as ‘digital first,’ meaning patients will increasingly engage initially via a glass screen. And for many parts of healthcare, that is probably going to be true.

But, as events of the last few weeks reminded me, the most essential, most important, more valuable parts of healthcare involve a human – a doctor, nurse, someone else – looking another human in the eye, laying hands on them – having a face-to-face conversation with a patient, who has come, trusting their provider to help address a real and deeply personal issue.

This coming weekend we remember the women and men who served us in war. But I, for one, will also remember those who have, in this weird ‘war,’ donned their masks and shields (and not a video chat) to remind us that the more healthcare changes, the more it is still about the same thing – providers doing their thing to take care of their patients.

We thank you and raise a toast in your honor.

Have a great weekend.

May 20, 2021 Dr. Google Really Will ‘See’ You Now

May 20, 2021

Dr. Google Really Will ‘See’ You Now

Go to Google and type ‘sci fi movies about the machine taking over the world’ and you will see that we’ve been fascinated by this idea for a long time.

That I would ask Google a question about artificial intelligence machines taking over is more than a bit ironic, isn’t it? That the machine had me a long list of decent answers in 1.08 seconds suggests the wild visions of sci fi filmmakers of 50 years ago don’t look so fantastic today.

Well, this post is not going to be a classic like Blade Runner, but here’s another story about the march of the ‘algo’ (hip for ‘algorithm’ – just here to help), and this one starts to get a little close for some of our readers.

Google – yes, Google has already taken over my blog – announced this week its new AI dermatological assistant. The technology resides in Google Search and requires a person to upload three pictures of their ‘what is that icky rash’ skin condition and then answer a few questions. Then, bingo presto, the AI will suggest the likely condition.

[Insert your own selfie joke here.]

Google clearly states this is not a medical diagnosis and it is only suggesting potential diagnoses. It also says it won’t target ads based on the results. Yeah, right. If I burp in front of an open browser, I get Pepto Bismol ads for a month.

Here is a little more detail…

Currently, dermatologists recognize and treat about 3,000 conditions. Right now, Google’s AI is nearly as good as the dermatologists, but only on 26 conditions, so the docs don’t have to rush out and start driving for Uber today. There are another 400+ conditions the deep learning system is working to identify.

But – and here is where it gets interesting – the 26 conditions (e.g., eczema, psoriasis, acne) represent about 80% of the skin issues seen by primary care providers. And the Google machine is more accurate than both primary care physicians and nurse practitioners.

Much of the diagnostic work of dermatology involves visual pattern recognition, an area where AI is making great strides. We’ve been hearing for some time now about this type of AI progress in radiology, which has a similar cognitive recognition process.

For now, these tools are being positioned as assistants to clinicians and patients. Helping primary care providers, whose scope of practice requires them to know not only the difference between a basal cell carcinoma and dermatitis, but also some orthopedics and some mental health and some oncology and some everything else, more accurately diagnosis could be a good thing.

Just remember that there are a lot of people with a lot of money in companies like Google working to automate some of the things in your day job.

May 13, 2021 So You Want To Be A Healthcare Executive Podcast

May 13, 2021

So You Want To Be A Healthcare Executive Podcast

Tim is away from his desk this week so we thought this might be a great opportunity to share one of his recent podcast appearances!

On this episode of the So You Want To Be A Healthcare Executive?, hear how Tim got started in healthcare, as well as the twists and turns that have occurred in healthcare during his career.

May 7, 2021 Your Free Cup of Coffee

May 7, 2021

Your Free Cup of Coffee

Most of the time these days, we worry about fishy mail of the electronic kind. But there is a piece of physical mail many people are now getting that looks like a scam but is legit. Don’t toss it too quickly.

Last October, the Blue Cross Blue Shield Association (BSBSA) agreed to a $2.7 billion antitrust settlement and those potentially impacted are starting to receive notices about how to file for their share. Before we get to what in this settlement might really matter, let’s do some simple math in case you got a card and think you are about to buy a load Dogecoin stock and retire.

The $2.7 will quickly drop to about $1.9 billion after lawyers (everyone is after the lawyers) and administrative fees. Then this settlement covers about 12 years and the 35 independent companies that make up the BCBSA collectively cover about 100 million Americans. That means your payment might cover a cup of coffee, and I mean a real cup of coffee, not one of those $7 Starbucks drinks that have 28 words in the name.

$2.7 billion sounds like a big number and makes for a good headline. Does this really matter, especially when the cost is amortized over that much time and that many organizations? The settlement dollars? No, that doesn’t matter a lick.

But something else happened this week related to the settlement that just might.

The BCBSA companies have historically been ‘independent’ in only a laughable use of the term. The group is clubbier than the NFL owners meeting. By joining the BSBCA, each of the 35 companies got exclusive rights to use the Blues-branded business in their territories.

‘You independently dominate over there, and I will independently dominate over here. See? We are not the evil UnitedHealthcare.’

Humans being humans, over time, the self-interest of the 35 companies has threatened the club.

Some have gobbled up others. Anthem is the bully with 40 million of that total 100 million covered lives.

And several have launched lines of business NOT carrying the Blues brand as way to steal some growth outside their BSBCA territories. To prevent total cannibalization, the Association had a rule that at least two-thirds of each company’s revenue had to come from Blues-branded business. That is what changed this week that might matter in the long run.

As part of the settlement, the Association dropped the two-thirds rule. Theoretically, and hopefully, that means these companies will increasingly compete across markets. As many have a very dominant position in their markets that allows them to dictate pricing both upstream to employers and individuals, and downstream to providers, any additional competition is welcome.

The move is based on the premise that greed will trump group affiliation as a driving motive. A few millennia of human history give optimism to that idea. We shall see.

Note, a major provider class action suit against the Blues is still alive, one that could have a real financial bite. Keep watching that one.