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Sutter Health|Aetna adds Stanford Health Care to network

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The joint venture between provider and payer, which launched last year, has grown to about 50 plan sponsors across 15 counties.

Sutter Health|Aetna has added Stanford Health Care to its network of providers.

Sutter Health|Aetna is the joint venture launched last year between the Sacramento, California-based health system and the national insurer. It offers self-insured preferred provider organization health plans to businesses in the Northern California area.

It has grown to about 50 plan sponsors across 15 counties.

WHY THIS MATTERS

This represents another expanded partnership between a provider and payer, though this is in the commercial space.

Other recent partnerships, such as the one announced between Duke Health and Blue Cross Blue Shield of North Carolina, have capitalized on the Medicare Advantage market.

Stanford Health Care recently launched a Medicare Advantage plan with Lumeris called the Stanford Health Care Advantage, in northern California.

The partnerships allow providers and insurers to expand their reach and get access to population health data to lower costs and improve outcomes.
The addition of Stanford Health Care gives Sutter Health|Aetna’s network members in Northern California access to the network’s more than 1,500 specialists and nearly 200 primary care physicians throughout the San Francisco Bay Area.

THE TREND

With the addition of Stanford Health Care, the Sutter Health|Aetna joint venture features two nationally recognized healthcare systems and access to a Northern California network that includes 33 hospitals, more than 1,700 primary care physicians, more than 9,400 specialists, 74 urgent care locations and 25 walk-in clinics.

ON THE RECORD

“The inclusion of Stanford Health Care, with its physicians from across Stanford Medicine, to our high-quality network will not only expand the provider network for our plan sponsors and members, but also provide access to another highly ranked health care system,” said Steve Wigginton, CEO of Sutter Health|Aetna. “This addition will help us in our goal to create a unique offering for Northern California employers and their employees centered around a superior consumer experience and market-leading value.”

 

 

Ex-hospital exec sues DMC for wrongful discharge, retaliation

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https://www.detroitnews.com/story/news/local/michigan/2019/04/01/hospital-exec-sues-dmc-wrongful-discharge-retaliation/3337429002/?utm_source=Sailthru&utm_medium=email&utm_campaign=Issue:%202019-04-03%20Healthcare%20Dive%20%5Bissue:20208%5D&utm_term=Healthcare%20Dive

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The former top Detroit Medical Center cardiologist is suing the health system, arguing he was forced out of his job for complaining about alleged fraud at the health system, including unnecessary surgeries billed to Medicare and Medicaid. 

The wrongful discharge and retaliation lawsuit was filed in Detroit U.S. District Court by Dr. Ted Schreiber, who was recruited by the DMC in 2004 and developed a trademarked process to speed life-saving treatment for heart attack patients.  He also was the founding president of the new DMC Heart Hospital that opened with fanfare in 2014.

Schreiber’s accusations are “unsubstantiated,” a DMC spokeswoman said Monday night, and the health system continues to have a “culture of integrity.”

Heart Hospital shares facilities with Harper University Hospital that is poised to be terminated from the federal Medicare program in less than two weeks after failing inspections in October and December. Since Harper and Heart Hospital are considered a single facility by the Centers for Medicare Medicaid Services, both would be barred from the federal health insurance program for the elderly and disabled if Harper fails to pass an unannounced inspection by the April 15 deadline.

Michigan prohibits hospitals barred from receiving Medicare funding from participating in Medicaid, the health insurance program for mostly low-income people that is jointly funded by the state and federal governments. The two programs combined pay for 85 percent of Harper’s inpatient hospital stays, according to Allan Baumgarten, a Minneapolis-based hospital analyst.

The inspections in October and December were prompted by complaints from Schreiber and three other health system cardiologists who said they were forced from their leadership roles in retaliation for complaining about quality of care issues at the DMC. 

Cardiologists Dr. Mahir Elder and Dr. Amir Kaki filed a similar lawsuit last week in Detroit federal court, saying they were forced from leadership posts for complaining to leaders of the DMC about unnecessary surgeries, dirty surgical instruments and other problems. 

In his lawsuit, Schreiber said he brought concerns about physician competency and unnecessary and/or dangerous procedures to DMC peer review meetings in a bid to ensure that they were investigated. But his concerns were ignored by DMC and its for-profit owner, Tenet Healthcare of Dallas, according to Schreiber’s lawsuit.

“(T)he profitability of physicians was being weighed more heavily by DMC and Tenet executives than the physicians’ ability to provide services to patients within the standard of care,” Schreiber alledged in his lawsuit. “This policy resulted in an increase in unnecessary and/or risky procedures conducted by some physicians leading to bad patient outcomes and even patient deaths.”

The DMC continues to argue that Schreiber and the other cardiologists violated the company’s conduct code. The health system’s top priority is delivering “safe, high quality care to the people of Detroit,” said spokeswoman Tonita Cheatham.

“We have a culture of integrity, which means we don’t look the other way, we don’t condone inappropriate behavior of any kind, and we don’t compromise on our priorities,” Cheatham said in a statement.

“That also means we expect physicians to uphold our Standards of Conduct, including treating fellow physicians, nurses and staff members with respect and dignity.  We welcome the opportunity to present the facts underlying the claims made in the complaint.”

In the lawsuit, Schreiber indicated he also complained to Tenet and DMC leaders that some cardiologists were away from the hospital during times they were required to be on-site as members of Cardio Team One’s 24-hour on-call team. He also said he raised concerns about staffing cuts that resulted in poor nursing care for cardiac patients. 

Tenet Healthcare signed a three-year “corporate integrity agreement” as part of a $513 million settlement with the U.S. Department of Justice over allegations of a kick-back scheme involving involving four Tenet hospital subsidiaries in the South, according to Schreiber’s suit. The agreement required Tenet and all of its hospitals to self-report all complaints to the federal Justice Department.

“Senior management, including these Defendants, failed to do so and blatantly allowed legal violations to occur in order to generate more income by cutting medically necessary support and allowing unnecessary medical procedures, among other things,” the former cardiologist executive said in his lawsuit.

Schreiber referred a request for comment on the lawsuit to his attorney, David Ottenwess of Detroit.

“Tenet Healthcare, the current for-profit owner of the DMC, has been continually cited by the federal government for placing profits over people,” Ottenwess said. “Tenet has continued that course with its retaliation against Dr. Schreiber and others at the Heart Hospital who had the courage to question Tenet’s practices of profits over safety.”

 

Hospitals look to venture capital as R&D extension

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https://www.healthcaredive.com/news/hospitals-look-to-venture-capital-as-rd-extension/549854/

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Academic and nonprofit hospitals are increasingly embracing venture capital as a way to test new technologies, a shift away from the traditional reliance on developing in-house intellectual property.

Since their founding days, providers like Mayo Clinic and Cleveland Clinic have leaned heavily on investing in IP to test new products and services. More recently, players like Tenet, Trinity and Community Health Systems have become comfortable investing in externally-run funds. Now, hospitals of all sizes, types and tax status are giving corporate venture capital funds, where they invest directly in companies, a go.

Hospital fund managers perceive the financial risk in the same light they see other investments, except venture capital can offer hospitals more flexibility. It’s how health systems like Intermountain think of R&D.

Mike Phillips, managing director of Intermountain Ventures, told Healthcare Dive venture funds offer hospitals a chance to “double dip.” If an investment is successful, the outcomes are positive both clinically and financially.

Most don’t take the lead on investments, preferring to take a minority stake. Hospitals see venture as a way to bring in and test out new technologies.

“If they (the startup) can get a champion in the organization that really helps refine it, improve it, augment it, that is much more valuable than the money,” Mary Jo Potter, an investor and consultant in the field, told Healthcare Dive.

Potter cautioned against expecting too much too soon. It typically takes take 10 years to get an exit and even then, returns are most likely to be in the range of twice or triple the investment. Well over half of the health system-linked venture funds are less the five years old, Potter said.

UPMC Enterprises, the venture capital arm of University of Pittsburgh Medical Center, made $243 million when its population health management spinout Evolent Health went public in 2015, according to UPMC Treasurer Tal Heppenstall, and the nonprofit still retains stock.

Heppenstall, who also leads UPMC Enterprises as president, told Healthcare Dive the health system plans on spinning out two companies by the middle of this year. That would bring its count to five as part of its “renewed focus on the translational science space” — finding business applications for medical research.

In February, the fund participated in a $15 million investment in data analytics company Health Catalyst. UPMC will pilot Health Catalyst’s products in-house.

Early entrants

Ascension seeded its first venture fund with $125 million in 1999, making its first investment ($8.4 million in radiation system TomoTherapy) two years later. Eventually, Ascension decided to bring in limited partners to help close the fund.

Ascension Ventures now currently manages $805 million across four funds.

Kaiser Permanente Ventures is an active investor in its own right. The venture arm of the hospital system manages $400 million in assets over four funds, with 28 exits, according to CB Insights.

Early adoption of CVC by health systems like Ascension and Kaiser paved the way for health systems that want to give venture a try, but want to start slow as limited partners. In recent years, deal flow is ramping up at a healthy clip.

Deals involving at least one provider-backed venture fund totaled nearly $1.3 billion in 2018, according to PitchBook, an all-time high — and on track with overall corporate venture capital participation in the healthcare sector, which CB Insights reports having jumped 51% to $10.9 billion last year.

Newly-seeded funds are springing up in health systems across the country. Providence St. Joseph Health, one of the largest health systems in the country and most active in the venture space, announced its second $150 million healthcare venture capital fund in January, managed by its venture arm Providence Ventures. Providence Ventures’ first fund was launched in 2014.

Starting small

Like many smaller health systems establishing themselves as new players in venture capital, Intermountain made its foray into the space as a limited partner in larger funds managed by Heritage Group and Ascension.

Large firms “have a lot of understanding in how to help manage young companies and get them through the business end of growing their company. We can help on the clinical end,” Phillips said. “We definitely rely on the other folks investing … to both learn from and be a good partner to the companies we invest in.”

Intermountain formally launched its first $80 million venture fund this year.

While the health system recognizes the risk, Phillips argued many hospitals have institutional knowledge most investors don’t. That, in theory, allows them to mitigate some of that risk.

Intermountain’s portfolio is comprised partially of the companies the hospital system spun out of R&D. That’s not uncommon for nonprofit and academic health systems that have traditionally focused on developing IP in-house. As of 2017, 90% of Cleveland Clinic Ventures’ portfolio was invested in IP owned by the health system.

IP is the bread and butter investment for most academic and nonprofit health systems, helping to bring in some return while allowing physicians, who often develop those patents themselves, to retain some benefit.

Mayo Clinic, for example, says it has generated $600 million in revenue from licensing its IP since 1986. The health system has recently rolled its venture activity into its R&D arm under the name Mayo Clinic Ventures. Nevro, a device company the system spun out in 2014, has a current market cap of $1.32 billion.

Hospital executives like to say CVC is a complementary tool to R&D, that it’s another way to tinker — that the money doesn’t matter as much as the ability to improve quality and decrease cost does. That may be true, but at the end of the day it’s an investment, and hospitals have to hope it yields a positive return.

If there’s a chance an investment can lower the cost of care, increase quality and improve clinical care, Phillips said, the bigger risk is not giving it a shot.

 

Advocating for evolution, not disruption, in healthcare

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Advocating for evolution, not disruption, in healthcare

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Healthcare doesn’t shatter and reanimate as the terms “disruption” and “disruptive innovation” suggest. It evolves. Even groundbreaking technologies in history show the transformation happening over time and with continuous building upon prior advances.

Late last year, the Christensen Institute’s Rebecca Fogg wrote about disruption accelerating in healthcare, priming of the pump for new capitated health plans and new delivery models. It is certain that leading consultancies have expressed a surging desire to disrupt in their business intelligence work and their analysis holds some insight for business leaders. But the truth about what our healthcare system will look like over the next 20 years is far from determined — and “disruption” will certainly not be the optimal path.

Disruption is, well, disruptive. It leaves in its wake complicating debris that trend towards more disorder. Consider that disruption’s synonyms include breakdown, collapse, disarrangement, disturbance, havoc, upset,… Is this what we actually want or need? Healthcare doesn’t shatter and reanimate, it evolves. Over 200 years ago, for example, the invention of the stethoscope ushered in a series of generational discoveries that transformed public health, general health, and overall life expectancy through the enhancement of insight into pathophysiology underlying human symptoms.  The new technology was groundbreaking, but the transformation happened over time and with continuous building upon prior advances. This evolutionary system works remarkably well. To disrupt it, to disarrange it, does not make sense.

At the center of Fogg’s argument is interest in different models that seem to be on the increase. The data does not fully support this view or serve as evidence of a pending wave of disruption. What we see instead are repeated ripples.

Take the “wave” of HMOs initiated in the 1970s. The ramp was supposed to be significant — combining financing and care delivery would be genuinely transformative. And yet the model’s penetration over 20 years only reached about 15 percent nationwide, and even now (data as of 2016) has only increased to 31.6 percent.

Further, in 2014 and again in 2018, Rand Corporation explored health payment constructs. Its most recent report on this work is a great representation of both our progress and stagnation: Findings suggest that in the window between initial engagement around alternative payment models (such as value-based care in 2014) and follow up (in 2018) little in the way of significant change has occurred. While we have seen plenty of perceived “disruptive models” emerge, we’ve also witnessed models championed as “disruptive” fall away.

The rise, plateau, and sometimes decline of various broad modernization initiatives is common and should be expected. The whole effort is hard.  We do not have any magical ability to foretell the future.  And we do a poor job of grasping the evolutionary nature of healthcare and the timelines of its change. Sure, we see pockets of capitated plan models that work, locations where the ACO makes sense, incidences where bundles show promise. But we are not primed for disruption that will change everything, or even most things, tomorrow. Rather, we are primed for a series of experiments, discoveries, and adaptive evolution. This is OK.

Three points stand out significantly in charting the realistic course of healthcare change moving forward:.

  1. The road is long.
    Understanding that healthcare evolution is a journey and not a rapid-shift prospect is important. There are a variety of considerations, one of which is contemplating the measures of success in the future state. Part of the failure of using payment models as a measurement for transformation is rooted to how blunt a tool payment structures are in producing desired outcomes. Consider recent disruption in payment models on the music industry. Whether you pay per song or via subscription has little bearing on the quality or appeal of the music itself. And with music, we can at least gauge direct feedback from users of the delivery systems to determine perceived value, effectiveness, and overall adoption. The feedback loops for what is working in healthcare are more complicated and difficult to master, and a great challenge to the value-based care revolution has been a lack of good measures. This is due, in part, to the framing of systematic structural levers as the core issue. That we cannot measure what holds value has little to do with whether a service is paid for through a capitated structure or through FFS. That’s not to say that payment structures do not alter incentives and change care behaviors, but whether one option is better than another is not the right question. This shouldn’t be discouraging. Evolution requires contemplation and development and new measures addressing different disease needs, delivery models, and technological capabilities. But all this takes time. It’s no use oversimplifying the nature of the beast.
  2. The substrate matters.
    It is essential to consider what is working and where. Solution sets for physicians and individuals, as well as the healthcare system as a whole, must be a mix of scaled capabilities and regional deployments. The recent study by Jha, et. al. in JAMA showed how breaking down traditional arguments about our health system is important to ensure we are understanding its problems and potential precisely. Among other things, the study shed light on the point that we have 50 different systems within our system from which to learn. The sheer variety state to state — not only in demographic and disease needs, but also in how treatment and services are paid for — enables enormous opportunity for innovation and testing. A relatively untapped resource lies in exploring what is working and why within these individual substrates. Breaking down the national system to a function of its parts would be a productive exercise for creating an adaptive mechanism for a “learning” healthcare system that evolves and advances more productively.
  3. The status quo is a threat to be managed.
    If healthcare innovators want to be “disruptive,” they need to take on the entirety of a complex, multi-faceted, multi-trillion-dollar industry. Clay Christenson writes of the velocity of history in his Innovators Dilemma. Being caught unawares is a great risk, akin to missing the new train when it leaves the station and you stuck on your old platform. That’s a powerful motivator. But in healthcare, the profits (and there are significant profits) create a ruthless resistance to any alteration of the status quo. So new trains don’t get to run on the current system’s tracks, rendering them irrelevant. Or they seem impactful, but run on the same schedule and under the same power, making them more or less lipstick on the proverbial pig. The introduction of change to the system must aim to be holistic, and include the critical voices of all stakeholders — predominant businesses, physicians, patients, investors, government and upstarts alike.

Amid the flurry of articles and analysis expounding the grandiosity of ever-imminent healthcare disruption (just around the corner), a nod to Darwin and the observable nature of our actual healthcare system and a scientifically based understanding of evolution seems appropriate.

 

 

 

Americans’ healthcare paradox: ‘angst’ on costs, overconfidence on quality

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https://www.healthcaredive.com/news/americans-healthcare-paradox-angst-on-costs-overconfidence-on-quality/551876/

Dive Brief:

  • More than three in four Americans expect healthcare costs to increase over the next few years and result in “significant and lasting damage” to the U.S. economy, according to a survey by nonprofit West Health and Gallup. And 69% were “not at all” confident policymakers will fix the situation.
  • Given the choice between a 10% increase in income or a complete five year freeze of healthcare costs, 61% of people said they’d choose the latter, in line with the almost half of Americans concerned that a major health event would lead to bankruptcy for their family. In the past year alone, 12% have borrowed money to pay for care and 10% had foregone treatment due to cost.
  • However, although just 39% of those surveyed were pleased with the U.S. healthcare system as a whole, 64% were satisfied in how it worked for their households. Roughly half believe the quality of U.S. healthcare is either the “best in the world” or “among the best.”

Dive Insight:

Frustrations faced by Americans in paying for healthcare are understandable given that the U.S. ranks first among the 36 OECD developed nations in healthcare cost per person.

But their belief in the supremacy of the U.S. healthcare system is misplaced at best.

The U.S. ranks 31st among the OECD group in terms of infant mortality, a key indicator of overall quality, and a depressing 28th in overall life expectancy.

While healthcare is more regulated in nearly every other developed country, mammoth bills pack a bigger punch because they can come out of nowhere in the U.S. Some 47% of Americans reported never knowing what a visit to the emergency room will cost before receiving care. Just 19% of respondents said they “always” knew their out-of-pocket costs before visiting the ER.

Outpatient surgery, visits to a physical therapist or chiropractor, and check-ups and physicals didn’t fare much better, with only 17%, 23% and 39% of respondents respectively saying they always knew their out-of-pocket costs at those sites of care.

Obfuscation of prices may lead to “risky and unhealthy behavior,” according to the West Health report. It found 41% of Americans surveyed reported forgoing a visit to the ER over the past year due to cost concerns.

And this fear over costs is affecting people at every rung of the socioeconomic ladder. West Health and Gallup found the concern wasn’t just unique to people struggling financially — it was consistent up to the top 10% of earners.

“Angst is a very appropriate word to use when you see the data,” Mike Ellrich, healthcare portfolio leader at Gallup said at the West Health Healthcare Costs Innovation Summit on Tuesday.

Political debate over fixing this problem has centered of late on drug prices, surprise medical bills, pre-existing conditions and lowering insurance premiums, which are rising faster than income. And CMS has prodded providers and payers to make out-of-pocket costs more transparent for patients.

But Americans largely don’t think politicians will be able to fix the problem, with more than two-thirds of Republicans and Democrats alike not at all confident that elected officials will be able to achieve bipartisan legislation to lower costs.

However, perceptions of quality diverged among party lines. West Health and Gallup found 67% of Republicans view the U.S. healthcare system as delivering the best or among the best care in the world. Just 38% of Democrats agreed.

“I’m all for patriotism, but this is a disconnect from reality,” Ellrich said. “This issue is not red or blue.”