Fortnightly Healthtech Update #32

It’s all good: Medicare ACOs saved $1.2bn in 2019. At least it’s all good until you remember that annual Medicare spend is north of $750bn. I’ll save you the trouble of doing the math, that’s 0.16% shaved off the total budget. We’re eight years into the Medicare Shared Savings Program, Medicare’s primary accountable care experiment. I think it’s fair to say we still have a long way to go.

The other big Medicare value-based payment experiment, bundled payments, is struggling against a headwind too. Major changes coming to bundles and target prices because it’s been bleeding cash so far. This includes a move to make bundles mandatory, instead of allowing providers to cherry pick. A few years ago, Medicare tried to make comprehensive joint replacement (CJR) bundles mandatory. It didn’t end well.

An ultrathin sensor for blood oxygenation, has potential for ear buds among other things, the developers feel. For me though, I think the better applications might lie in better monitoring of chronic conditions. The benefits of SpO2 monitoring for healthy people and wellness applications are not obvious to me. For patients with asthma or COPD though, easier, less obtrusive monitoring to establish baselines and oxygenation during episodes, absolutely.

Also on the wearability theme, porous silicone to allow wearable sensors to transmit sweat.

Should be good for both patients and cost savings, Medicare finalizes new care models for those managing kidney failure. This model encourages home dialysis, which, given how much time dialysis takes, is a massive improvement in quality of life. It’s like giving someone their life back. Note that Fresenius and Davita have almost 7,000 outpatient dialysis centers between them. So a move to home dialysis is a clear existential threat. Fair to say that Fesenius saw the writing on the wall when they acquired NxStage in 2019. 

Another CMS experiment, the ET3 model for emergency services is back on the schedule for January 2021. ET3 aims to provide more flexibility for EMS, moving beyond the typical stabilize and transport to an emergency room. ET3 adds options such as transport to a primary care doc, and providing treatment in place, to the standard EMS charter. The ultimate goal is to deliver a better patient experience at lower overall cost. Note that some providers (such as Northwell) have been doing this for a while as a CMS pilot with good results.

Rita Numerof at Forbes has a point: Why should hospitals get a bailout for a failed business model.

In case you missed it, the MedCity INVEST Digital health virtual conference has come and gone, with some interesting startups showcased. I’d missed that Current Health had relocated its HQ from Edinburgh to Boston. Also missed that it had made significant improvements in form factor and (presumably) comfort, from this to this.

Wellness sleep monitoring has become a niche market over the last few years. Now from MIT, BodyCompass is a contact-less, camera-less solution that uses RF to track body movement and posture during sleep. Designed for the home, but there are applications for this in long-term care and skilled nursing I think. When patients are (mostly) immobile in bed, nurses have to turn them periodically to prevent pressure ulcers. Wearables from companies like Leaf Healthcare have been designed to help nurses track who they need to move, when. That can deliver both better patient care and more productive nursing. No reason off the top of my head why BodyCompass couldn’t provide the same kind of insights.

McKinsey has been writing a lot about healthcare lately, which is probably no coincidence. The latest article is making healthcare more affordable through scalable automation. As you’d expect from McKinsey, it’s well researched, thoughtful, and has data behind it. And the research found plenty of scope for automation, especially in payers. With probably 700,000 people employed in the healthcare insurance industry, that’s a lot of middle class jobs at risk. The Kaiser Family Foundation pushes further, describing a single payer system as a healthcare overhaul could kill 2million jobs, and that’s OK. So estimate a $100k annual cost for a fully loaded employee, that’s an overhead cost of $200bn every year. Or $1,670 per US household if you prefer. That’s a lot of groceries. In reality, incumbents are never going to let those jobs evaporate. Which is where tech innovation and startups come in, deploying technology from the get go in place of admin labor. Direct primary care practices typically avoid insurance, slashing their admin costs. Oscar Health uses a mobile app to cut admin costs, and provide a better customer experience. Amazon is piloting a virtual care first model for its employees. Rock Health has written a longer piece about what it calls next generation providers and payers.