There may be an opportunity to highlight increased revenues for the benefit of local government, since investor-owned hospitals pay taxes.
Remember: Every hospital, regardless of its tax status, must bring in more dollars than it spends in order to be financially healthy and reinvest.
In most communities, the conversion of a hospital from a not-for-profit to an investor-owned enterprise no longer stirs the heated debate that it did decades ago. Instead, you’re much more likely today to see not-for-profit and investor-owned hospital organizations working in partnership.
Renowned not-for-profit health systems such as Duke Health and the Cleveland Clinic have formed strong affiliations with investor-owned hospital companies. In these and other partnerships, not-for-profits and investor-owned organizations are working together to strengthen hospitals, invest in communities, and serve patients.
In fact, the issues facing investor-owned hospital systems during a partnership are the same as those faced by not-for-profit health systems during a partnership discussion: Local control and governance, cultural compatibility, charity care support, and commitment to local investment are leading hot buttons for both.
Still, the “conversion” of a not-for-profit to an investor-owned organization can represent a change that can raise questions and ignite unhelpful rumors.
To help you be prepared, start by answering these basic questions: What’s the difference? How are not-for-profit and for-profit (investor-owned) hospitals different from one another?
Here’s an overview: Independent, not-for-profit hospitals are, in a sense, owned by the communities they serve. The boards are usually comprised of local leaders and physicians. Excess revenues—profits—are fully reinvested into the community’s care after debt payments, payroll, and other expenses. Hospitals that join a regional or national not-for-profit health system, however, may or may not have a local board with a say in the direction of the facility and may or may not share their profits with the system. (In fact, if your local hospital is in financial trouble, the money flows into your hospital, not out of it!)
Investor-owned hospitals are, as you might guess by the name, owned by investors, who can be private individuals or stockholders. Investors traditionally benefit as the value of the company’s hospitals increases over time, through effective operations and local investments, and as the company overall grows by adding more hospitals.
Adding to this complexity is the trend for hospitals to pursue joint venture partnerships where ownership is shared by two or more organizations, including the “seller.” These partnerships call for strong and trusting relationships by every party. Communications is key to success.
Familiarize yourselves with these terms and issues as you move through a partnership. Be prepared for some myth busting.
That’s where the fundamental structural differences end. The driving forces of both organizations, however, are precisely the same:
Now, consider some specific questions you may hear related to the structure of a not-for-profit to investor-owned conversion.
When there are funds left over from a sale, they are often referred to as the proceeds. These proceeds exist once the hospital’s debt and any other obligations (e.g., a pension fund) have been paid.
The answer as to what happens to those dollars depends on the ownership structure of the selling organization and the terms of the transaction. Here are a few scenarios:
This is really a question of community commitment and may be an indicator of how much the community-based culture is or is not going to change under the new ownership. In most cases, a commitment to either a specific level of charity care or a guarantee to continue the hospital’s existing charitable mission and policy is written into the deal documents. Expect the question and know the answer.
An investor-owned hospital pays taxes that benefit local government. This question is an opportunity to highlight the added contribution as a distinct benefit of investor-owned partnerships.
In many cases, the fire department, police force, schools, parks, and other community assets will benefit on an annual basis from an investor-owned partner paying state and local property and sales taxes.
One cautionary note: In some cases, new hospital owners may seek appropriate tax incentives when entering a new community and investing in a hospital. Be sure you understand the local government strategic thinking before you answer the tax question.
Sen. Elizabeth Warren’s “Medicare for All” funding plan has come under fire from her rivals for the Democratic nomination, but some in her own party say her framing of the issue could ease the concerns of centrist voters.
The Massachusetts senator and leading Democratic presidential candidate said when she released her funding plan earlier this month that it “doesn’t raise middle-class taxes by one penny.”
She estimated that Medicare for All would require $20.5 trillion in federal spending and said that would be paid for with taxes that would directly fall on employers, corporations, wealthy individuals and financial institutions.
For Democratic strategists, Warren’s approach could be a way to soothe voters’ worries about Medicare for All while advancing key progressive ideas.
“The fact that she has devised a plan that would benefit middle class Americans without taxing [them] is certainly reassuring to a lot of people,” said Brad Bannon, a Democratic strategist who isn’t working for any of the presidential campaigns.
“What Warren’s plan does is giving voters bold change without raising middle class taxes,” Bannon added.
The plan has stoked controversy, with some critics questioning Warren’s claims that it will avoid raising taxes on the middle class.
A key component is payments that employers would make to the federal government, estimated to raise $8.8 trillion.
Some policy experts say that Warren’s proposed employer contribution is a tax that would ultimately be paid by workers. But others argue that burdens on the middle class wouldn’t go up because employers would be shifting from making payments to private insurers to payments to the federal government.
Supporters of Warren’s plan also note that the plan makes clear that Warren would eliminate premiums, deductibles and copays, which should be a relief for voters with questions about Medicare for All.
Adam Green — co-founder of the Progressive Change Campaign Committee (PCCC), which has endorsed Warren — said that “Warren’s Medicare for All financing plan is functionally like an $11 trillion tax cut for middle class families,” because it eliminates out-of-pocket health costs for workers and targets tax increases at the wealthy and corporations.
Warren is one of the leading candidates in the Democratic primary, and health care is one of the most prominent issues in the race. But her plan also came after she faced intense pressure to provide details on how she would fund Medicare For All.
She had avoided saying in debates whether she’d raise taxes on the middle class to pay for Medicare for All, leading to criticism from more moderate candidates such as former Vice President Joe Biden. Sen. Bernie Sanders (I-Vt.), the other top-tier candidate with a Medicare for All plan that would do away with private insurance, has said he would directly raise taxes on the middle class to pay for his plan.
Because Warren’s plan claims it won’t raise taxes on the middle class, it “takes some of the starch” out of attacks she’ll receive from Biden, Bannon said. It also “puts her up as a great selling point in the battle against Sanders,” he added.
The release of Warren’s plan also allowed her to provide answers to a question that debate moderators had consistently pressed her on, even as she rose in the polls and voters viewed her debate performances favorably.
“In each of the last debates, while pundits were obsessing about magic words around taxes, voters were consistently saying Elizabeth Warren won,” Green said.
Strategists also said they see Warren’s Medicare for All plan as an effort to reinforce that she is the candidate with detailed policy solutions.
Michael Fraioli, a Democratic strategist who had worked on Rep. Tim Ryan‘s (D-Ohio) now-defunct presidential campaign and is unaffiliated, said that Warren — who has used the slogan “I have a plan for that” — needed to provide details on her “signature issue” of Medicare for All.
Warren’s Medicare for All funding plan isn’t the only area where she’s taken steps to make her proposals for big changes to the economy seem more palatable to moderate voters. For example, Warren stresses that she’s a capitalist, unlike Sanders, who describes himself as a democratic socialist.
But it remains to be seen how effective Warren’s health care funding plan will be in easing the concerns of voters who have reservations about Medicare for All.
Some of the fiercest critics of her plan have been her more centrist rivals in the Democratic primary, such as Biden.
The proposal also has drawn criticism from some Democratic-leaning economic policy experts, in addition to many tax experts on the right. For example, Larry Summers, a key player on economic policy in past Democratic presidents’ administrations, argued in a Washington Post op-ed on Tuesday that “the combined tax impact of Warren’s various plans is extreme.”
Jim Kessler, executive vice president for policy at the center-left think tank Third Way, said he thinks Warren tried to ease people’s concerns with her funding plan, but “there’s a lot of skepticism out there by reasonable people.”
“It needs to hold up to scrutiny and I’m not sure it can,” he said.
GOP politicians have also already started to attack Warren over her Medicare for All plan.
Senate Majority Leader Mitch McConnell (R-Ky.) said on the Senate floor Tuesday that Warren’s proposal was “breathtaking.”
“In order to take away employer-sponsored insurance from 180 million Americans, Democrats want to kill American jobs and bring the economy to a screeching halt,” McConnell said.
Democratic strategist Craig Varoga said that Republicans will likely ignore the fact that Warren’s funding mechanisms are targeted on businesses and wealthy people, and instead hone in on her proposing around $20 trillion in tax increases.
“Republicans will not discuss the specifics of Warren’s funding mechanism, only the size of it, and they will reduce it to bumper-sticker simplicity, that it’s the biggest tax increase in American history,” he said. “It doesn’t matter whether that’s accurate or not, or how it polls 12 months before the election, that’s what they will say, and Trump will say it louder than anyone.”
The Progressive Change Institute, also co-founded by Green, is planning in the coming days to make public the results of a poll, done in partnership with Public Citizen and Business for Medicare For All, that finds that a majority of registered voters support Medicare for All, both nationally and in battleground states.
However, a recent poll released by the Kaiser Family Foundation (KFF) and the Cook Political Report found that most Democratic voters in four key battleground states think Medicare for All is a good idea, but that most swing voters in those states view it as a bad idea.
Both the Progressive Change Institute and the KFF surveys were conducted before Warren released her funding plan.
Ashley Kirzinger, associate director for public opinion and survey research at KFF, said it is “yet to be determined” how the plan will resonate with the public, given that Republicans will use it against Warren but that people become more favorable toward Medicare for All when they learn it will eliminate their out-of-pocket costs.
“People are still learning how it works,” she said.
Kaiser Permanente, which just narrowly averted one massive strike, is facing another one Monday.
The ongoing labor battles have undermined the health giant’s once-golden reputation as a model of cost-effective care that caters to satisfied patients — which it calls “members” — and is exposing it to new scrutiny from politicians and health policy analysts.
As the labor disputes have played out loudly, ricocheting off the bargaining table and into the public realm, some critics believe that the nonprofit health system is becoming more like its for-profit counterparts and is no longer living up to its foundational ideals.
Compensation for CEO Bernard Tyson topped $16 million in 2017, making him the highest-paid nonprofit health system executive in the nation. The organization also is building a $900 million flagship headquarters in Oakland. And it bid up to $295 million to become the Golden State Warriors’ official health care provider, the San Francisco Chronicle reported. The deal gave the health system naming rights for the shopping and restaurant complex surrounding the team’s new arena in San Francisco, which it has dubbed “Thrive City.”
The organization reported $2.5 billion in net income in 2018 and its health plan sits on about $37.6 billion in reserves.
Against that backdrop of wealth, more than 80,000 employees were poised to strike last month over salaries, retirement benefits and concerns over outsourcing and subcontracting. Nearly 4,000 members of its mental health staff in California are threatening to walk out Monday over the long wait times their patients face for appointments.
“Kaiser’s primary mission, based on their nonprofit status, is to serve a charitable mission,” said Ge Bai, associate professor of accounting and health policy at Johns Hopkins University. “The question is, do they need such an excessive, fancy flagship space? Or should they save money to help the poor and increase employee salaries?”
Lawmakers in California, Kaiser Permanente’s home state, recently targeted it with a new financial transparency law aimed at determining why its premiums continue to increase.
There’s a growing suspicion “that these nonprofit hospitals are not here purely for charitable missions, but instead are working to expand market share,” Bai said.
The scrutiny marks a disorienting role-reversal for Kaiser, an integrated system that acts as both health insurer and medical provider, serving 12.3 million patients and operating 39 hospitals across eight states and the District of Columbia. The bulk of its presence is in California. (Kaiser Health News, which produces California Healthline, is not affiliated with Kaiser Permanente.)
Many health systems have tried to imitate its model for delivering affordable health care, which features teams of salaried doctors and health professionals who work together closely, and charges few if any extraneous patient fees. It emphasizes caring and community with slogans like “Health isn’t an industry. It’s a cause,” and “We’re all in this together. And together, we thrive.”
Praised by President Barack Obama for its efficiency and high-quality care, the health maintenance organization has tried to set itself apart from its profit-hungry, fee-for-service counterparts.
Now, its current practices — financial and medical — are getting a more critical look.
As a nonprofit, Kaiser doesn’t have to pay local property and sales taxes, state income taxes and federal corporate taxes, in exchange for providing “charity care and community benefits” — although the federal government doesn’t specify how much.
As a percentage of its total spending, Kaiser Permanente’s charity care spending has decreased from 1.29% in 2012 to 0.8% in 2017. Other hospitals in California have exhibited a similar decrease, saying there are fewer uninsured patients who need help since the Affordable Care Act expanded insurance coverage.
CEO Tyson told California Healthline that he limits operating income to about 2% of revenue, which pays for things like capital improvements, community benefit programs and “the running of the company.”
“The idea we’re trying to maximize profit is a false premise,” he said.
The organization is different from many other health systems because of its integrated model, so comparisons are not perfect, but its operating margins were smaller and more stable than other large nonprofit hospital groups in California. AdventHealth’s operating margin was 7.15% in 2018, while Dignity Health had losses in 2016 and 2017.
Tyson said that executive compensation is a “hotspot” for any company in a labor dispute. “In no way would I try to justify it or argue against it,” he said of his salary. In addition to his generous compensation, the health plan paid 35 other executives more than $1 million each in 2017, according to its tax filings.
Even its board members are well-compensated. In 2017, 13 directors each received between $129,000 and $273,000 for what its tax filings say is five to 10 hours of work a week.
And that $37.6 billion in reserves? It’s about 17 times more than the health plan is required by the state to maintain, according to the California Department of Managed Health Care.
Kaiser Permanente said it doesn’t consider its reserves excessive because state regulations don’t account for its integrated model. These reserves represent the value of its hospitals and hundreds of medical offices in California, plus the information technology they rely on, it said.
Kaiser Permanente said its new headquarters will save at least $60 million a year in operating costs because it will bring all of its Oakland staffers under one roof. It justified the partnership with the Warriors by noting it spans 20 years and includes a community gathering space that will provide health services for both members and the public.
Kaiser has a right to defend its spending, but “it’s hard to imagine a nearly $300 million sponsorship being justifiable,” said Michael Rozier, an assistant professor at St. Louis University who studies nonprofit hospitals.
The Service Employees International Union-United Healthcare Workers West was about to strike in October before reaching an agreement with Kaiser Permanente.
California legislators this year adopted a bill sponsored by SEIU California that will require the health system to report its financial data to the state by facility, as opposed to reporting aggregated data from its Northern and Southern California regions, as it currently does. This data must include expenses, revenues by payer and the reasons for premium increases.
Other hospitals already report financial data this way, but the California legislature granted Kaiser Permanente an exemption when reporting began in the 1970s because it is an integrated system. This created a financial “black hole” said state Sen. Richard Pan (D-Sacramento), the bill’s author.
“They’re the biggest game in town,” said Anthony Wright, executive director of the consumer group Health Access California. “With great power comes great responsibility and a need for transparency.”
Patient care, too, is under scrutiny.
California’s Department of Managed Health Care fined the organization $4 million over mental health wait times in 2013, and in 2017 hammered out an agreement with it to hire an outside consultant to help improve access to care. The department said Kaiser Permanente has so far met all the requirements of the settlement.
But according to the National Union of Healthcare Workers, which is planning Monday’s walkout, wait times have just gotten worse.
Tyson said mental health care delivery is a national issue — “not unique to Kaiser Permanente.” He said the system is actively hiring more staff, contracting with outside providers and looking into using technology to broaden access to treatment.
At a mid-October union rally in Oakland, therapists said the health system’s billions in profits should allow it to hire more than one mental health clinician for every 3,000 members, which the union says is the current ratio.
Ann Rivello, 50, who has worked periodically at Kaiser Permanente Redwood City Medical Center since 2000, said therapists are so busy they struggle to take bathroom breaks and patients wait about two months between appointments for individual therapy.
“Just take $100 million that they’re putting into the new ‘Thrive City’ over there with the Warriors,” she said. “Why can’t they just give it to mental health?”
Each year billions of federal dollars are up for grabs as insurers compete to score a star rating high enough to earn a lucrative financial bonus in the Medicare Advantage program. Last year, more than $6 billion in bonuses were awarded to various types of privately run MA plans.
Obtaining a bonus is especially important as plans use that funding to sell supplemental benefits, or extra perks that can be enticing to shoppers and can attract more people to their rolls.
However, the bonus program is costly and has been pegged as an area ripe for trimming, according to a 2018 Congressional Budget Office report that suggested changes could help reduce the federal deficit.
Still, insurers take the stars program seriously and devise strategies to snag higher scores. It stokes competition among plans and promotes robust benefit offerings as issuers are forced to use some of those dollars on supplemental benefits such as dental or vision.
“There is not a silver bullet,” for a stars strategy, Dustin Grzeskowiak, an actuary for consulting firm Milliman, told Healthcare Dive.
However, highly rated plans often have a few characteristics in common, he said.
Top-rated plans tend to be part of a company with an overall culture of supporting and championing the stars program. Sophisticated data-driven strategies are also key, along with member outreach.
At Kaiser Permanente, there is a disciplined structure around star ratings, Agnes Strandberg, senior vice president of Kaiser’s Medicare program, told Healthcare Dive.
Her team is focused on reviewing data, key metrics and predictive analytics to understand emerging trends among members. The focus on analytics also helps identify best practices throughout the organization’s regions, which is a hallmark of integrated health systems, Strandberg said.
A core pillar for California-based Kaiser is ensuring a consistent member experience across all those regions, which requires a lot of training, she said.
Being an integrated health system provides an important foundation for these goals, Strandberg said.
For example, when a Kaiser member walks into a clinic for a visit, the receptionist may remind the patient they’re due for a mammogram and attempt to go ahead and schedule one. The pharmacist also is there not just to fill prescriptions but to play a role in advancing a member’s health. Staying current on screenings such as mammograms are an important metric that play into the star ratings.
The health plan and its clinicians are essentially playing for the same team and not at odds with one another, which can be the case for other non-affiliated payers and providers.
All told, Kaiser garnered five-star ratings for seven of its health plans in the most recent ranking, the most of any payer. Together the seven plans cover more than 1.5 million people.
Overall, only 23 plans out of 401 received the top grade, according to CMS.
Another top performer was Bloomfield, Connecticut-based Cigna.
Cigna’s Florida plan was one of 23 plans to earn a perfect score of five stars. The plan, Healthspring, covers more than 48,000 seniors throughout the sunshine state.
“You just don’t think that that plan would ever get enacted?” interviewer Andrew Ross Sorkin asked Clinton at The New York Times DealBook Conference.
“No, I don’t. I don’t, but the goal is the right goal,” the former secretary of State responded.
“I believe the smarter approach is to build on what we have. A public option is something I’ve been in favor of for a very long time,” Clinton said. “I don’t believe we should be in the midst of a big disruption while we are trying to get to 100 percent coverage and deal with costs.”
Amid the raging health care debate among the Democratic presidential candidates, Clinton, the party’s 2016 nominee, appears to line up more with former Vice President Joe Biden and South Bend, Ind., Mayor Pete Buttigieg, who are pushing for an optional government insurance plan, rather than Warren and Sen. Bernie Sanders (I-Vt.), who are pushing government insurance for all.
Clinton, though, tried to shift the debate back to highlighting the contrast between Democrats and Republicans, pointing to the fact that the GOP is trying to repeal the Affordable Care Act, including backing a lawsuit currently in the courts to overturn the entire law.
“Yeah, we’re having a debate on our side of the political ledger, but it’s a debate about the right issue, how do we get to health care coverage for everybody that we can afford?” Clinton said, noting the GOP is “in court right now to strike the entire law down.”
Headlines at HLTH 2019 included a peek behind the curtain at the secretive healthcare division of tech giant Google from ex-Geisinger CEO David Feinberg, Uber’s newly inked deal with Cerner and a preventive health push by Facebook sparking renewed data privacy concerns.
On the government side, outgoing head of CMS’ innovation center Adam Boehler suggested industry will be pleased with his replacement and CMS Administrator Seema Verma promised further Medicaid deregulation and “humility” in government.
But the four-day conference last week also covered some broader themes, including retail’s presence in the industry, the rise of telehealth and voice tech and the challenges of interoperability. Here are six of the biggest takeaways from Las Vegas.
Executives from Walmart and CVS taking to the main stage at HLTH to tout their initiatives.
Walmart’s VP of transformation, Marcus Osborne, talked up the company’s first health superstore in Dallas, Georgia, which opened this fall. The center provide patients with primary care, dental care, vision care and psychiatric and behavioral health counseling, with the goal of providing an integrated healthcare experience in the traditionally underserved area. Lab services and imaging are available on-site, as are nutrition and fitness classes.
“When you give consumers options, they engage more,” Osborne said. “The healthcare system is designed to be complex when it should be simple.”
A primary care visit at Walmart Health Center costs a flat fee of $40. For an adult, getting a dental checkup and cleaning costs $50, and an eye appointment is $45. Therapy services are $1 per minute.
The store pits the Bentonville, Arkansas-based retailer directly against CVS Health, which is expanding its own health-focused clinics, called HealthHUBs, to 13 new markets by the end of next year.
Brick-and-mortar behemoths’ attempts to position themselves as the front door to healthcare are spurred by the increasing push of consumerism in healthcare.
“With the emergence of this retail health consumer, we’ve got to make healthcare more integrated than it’s been for several years now,” CVS CEO Larry Merlo said.
But engagement is notoriously tricky, and consumerism can only take the industry so far. Healthcare startups providing a new way of accessing or managing care, like digital chat startups allowing consumers to talk via text with a remote physician or chronic care management companies, are struggling to establish trust with the consumer.
Hank Schlissberg, president of care manager Vively Health, a subsidiary of DaVita that assumes full risk for its population, compared the sea change in the industry to what’s happened with companies like AirBnB.
“I sleep in someone else’s bed. I shower in their shower. And we’ve convinced ourselves that’s totally normal,” he said. “All I want to do is provide people with free healthcare. And convincing people of that is much harder than we expected.”
Natalie Schneider, VP of Digital Health for Samsung, agreed, telling Healthcare Dive consumers are “routinely irrational” and don’t act in their own best interests. But “we’re seeing policyholders, health plans and others in healthcare not only account for this irrationality, but also capitalize on it” through incentives like providing a reward immediately following a healthy behavior.
The wearables trend is a key example, experts said. Payers and providers alike are increasingly turning to the tech in an effort to engage consumers in wellness, fitness and preventive care activities. However, the ROI of trackers, whether from Apple Watch, Fitbit, Samsung or others, is still unproven.
“We’ve seen a lot of technologies and they’re often not that smart and very rarely wearable,” Tom Waller, who heads up the R&D lab of athleisure retailer lululemon, said. “We’re still patiently waiting for that perfect contextualization of data that will give us both a physical and emotional insight, and that we can use to augment an existing behavior to nudge someone in the right way.”
“At the end of the day, these patients are consumers, and consumers have been trained over the last 10 years to decide what quality they want, to decide when they want it and how they want to get it,” Robbie Cape, CEO of primary care startup 98point6, said. “Healthcare hasn’t caught up to that.”
Two rules to halt information blocking from HHS are expected to be finalized any day now. Despite the regulatory pressure, industry is “still a ways from true interoperability,” said Ed Simcox, CTO and acting CIO of HHS, due to a slew of factors like a lack of economic incentive for EHR vendors.
The rules would impose a slate of new requirements on healthcare companies. Payers in federal programs would have to provide their 125 million patients with free electronic access to their personal health data by the end of next year; healthcare companies would have to adopt standardized application programming interfaces allowing their disparate software systems to communicate; and any player found information blocking could be fined up to $1 million per violation.
Google Cloud’s director of global healthcare solutions, Aashima Gupta, warned that although the government might mandate new standards, that doesn’t mean industry will be able or willing to immediately adhere to them.
Additionally, the government is still playing catch-up to technology, and interoperability is no different, Pranay Kapadia, CEO of voice-enabled digital assistant Notable, told Healthcare Dive. The rules are the “right thing to do, and then there’ll be an evolution of it, and then there’ll be another evolution of it.”
”This problem is much bigger than big tech or government or health systems or innovators,” Gupta said. “It’s an ecosystem problem. No player can do it alone.”
Despite the private sector’s uncertainly, Don Rucker, the head of the Office of the National Coordinator for Health IT, said interoperability had fostered price and business model transparency in every other U.S. industry over the past few decades.
“Healthcare is just about the last one to resist,” Rucker said. “I don’t think that will be much longer.”
Telehealth was unsurprisingly a big focus at HLTH, with themes touching on expansion to complex care needs, followup visits and chronic care management and barriers like state physician licensure.
It’s an “efficiency mechanism” that can help a lot in areas like primary care, Teladoc COO David Sides told Healthcare Dive.
Voice-enabled tech was another focus of chatter in Las Vegas. The technology, which allows physicians free use of their hands while enabling them to take notes or write a script, for example, is currently experiencing heavy hype from industry and Silicon Valley as a way to streamline the heavy EHR and documentation requirements on physicians.
Talking is an “important element to how people interface with things,” Notable’s Kapadia said. “You have to think of things from a human perspective.”
Suki also announced at HLTH it expanded its relationship with Google’s cloud computing business. The digital assistant’s CEO, Punit Soni, told Healthcare Dive industry could expect to hear about two “very, very large deployment announcements” with health systems in the near future as providers become more comfortable levering the software to cut down documentation time for clinicians.
A slew of players rolled out initiatives targeting social determinants of health in Las Vegas.
Uber Health is now available for providers to schedule non-emergency rides for their patients via Cerner’s EHR platform in a bid to provide better access to transportation for underserved populations. The one-year-old NEMT division of San Francisco-based Uber has roughly 1,000 partnerships across payers, healthcare tech companies and providers such as Boston Medical Center.
“You need to develop a benefit that serves the needs of your distinct population,” Jami Snyder, director of Arizona’s Medicaid and CHIP programs, said. The state recently partnered with ride-hailing company and Uber rival Lyft to provide rides for eligible Medicaid beneficiaries.
Kaiser Permanente rolled out a food insecurity initiative to connect eligible California residents with CalFresh, the state’s supplemental nutrition assistance or food stamp program. The integrated, nonprofit health system plans to reach out via text and mail to more than 600,000 Kaiser Permanente health plan members with a goal of getting 100,000 enrolled in CalFresh by spring 2020.
If the program is successful, Kaiser plans to expand it to the rest of the country, CEO Bernard Tyson, noting “healthcare across the ecosystem of health plays a very small part” in outcomes. “Things like behavior, genetics and where you live has a bigger impact.”
On the preventive health side, Facebook launched a consumer health tool. Users plug in their age and sex in return for targeted heart, cancer and flu prevention measures, with information supplied by healthcare groups like the American Cancer Society.
The pilot for the $7 billion tech behemoth will be evaluated for six months to a year before being expanded to other preventable conditions to make consumers their “own health advocates,” Freddy Abnousi, Facebook’s head of health research, said. “The lion’s share of health outcomes is driven by social and behavioral variables.”
CVS is similarly working to combat SDOH factors by leveraging its reams of consumer data, Firdaus Bhathena, the retail pharmacy giant’s CDO, told Healthcare Dive. If someone doesn’t pick up their prescription, “there’s a number of ways we can engage with them,” including by text message or speaking to services in the local town, to see if transportation to the pharmacy, a lack of funds or some other issue is stopping the person from receiving the medication they need.
Much of the industry runs today like non-healthcare companies ran 50 or 60 years ago, according to entrepreneur Mark Cuban.
“For that reason, they’re ripe for disruption,” Cuban said at HLTH.
Investors and startups alike are taking note. Venture capitalists, eager to fund new medical solutions and methods of care delivery, pumped $26.3 billion into more than 1,500 healthcare startups in just the first 10 months of 2018.
Providers looking to invest in new solutions or acquire startups are looking for a relatively mature corporate structure and an alignment with existing priorities in-house, according to Dan Nigrin, SVP and CIO at Boston Children’s Hospital.
“It starts with our organizational strategy,” agreed Rebecca Kaul, VP at the MD Anderson Cancer Center. An attractive startup presents “something that really drives change,” she said. “If you’re pitching a solution that isn’t at a given time part of our strategy, it may not be the right time for us to connect.”
Highmark Health CEO David Holmberg told Healthcare Dive its physicians lead system-wide conversations in what areas need investment. “Ultimately, that’s how you’ll get things to scale.”
Intermountain Healthcare is similarly interested in ways to manage and inject value into its operations. “We’re not interested in point solutions,” Dan Liljenquist, SVP of the Salt Lake City-based nonprofit provider said, adding he deletes and blocks emailed pitches he receives. “We’re interested in technologies that obviate the need for clinical interventions, that help people solve their own problems, and the way to do that is not a point solution but in a systemic, creative way.”
Payers have similar priorities and seek out companies to invest in that could provide value down the road. Cigna Ventures, which recently invested in precision medicine company GNS Healthcare, looks for new tools across the areas of insight and analytics, digital health and retail and all-around care delivery and enablement, for example.
“We’re looking for companies that are innovative and looking to solve important problems,” Tom Richards, global strategy and business development leader at Cigna, told Healthcare Dive, noting most companies start with a more focused solution and then expand.
For example, chronic disease platform Omada Health, which raised $50 million in a 2017 funding round led by Cigna Ventures, started with diabetes, but has since expanded its care management services to hypertension, Type 2 diabetes and behavioral and mental health.