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.

The consumer wearables/wannabe medical devices just keep coming: Withings new ScanWatch captures ECG, respiration and blood oxygenation – and will have a CE mark. By the by, Withings has an interesting history – sold to Nokia and then bought back by the founder at presumably a fire-sale price.

Also filed under wrist-worn wearables, VitalTracer from Canada. Sounds like it’s still a year or two  from being market ready.

A couple of healthcare industry execs opine on Forbes: Healthcare Transformation Accelerates With Covid-19. No, not really. What you’re talking about is not healthcare transformation. It’s billing for different things in a fee-for-service model. Meaningful healthcare transformation is large scale value based care. It’s using technology to increase clinician productivity to lower the cost of healthcare delivery. Anything else is just going to keep jacking the cost up.

Related to that, CMS plans to tighten up on telehealth usage post-pandemic. Notably, it seems providers have been billing separately for every remote monitoring device used on a patient. Under the proposal, there would be a single reimbursement payment for a period of monitoring, regardless of how many devices were used. That would be much more in-line with value-based care. Allowing providers to bill separately for every device seems like a license to continue the over testing problems we already have.

In Singapore, researchers create a wearable that fits inside a face mask to monitor COVID-19 patients.

Much, much closer to home, researchers at Wayne State develop a wireless vital signs wearable for premies in the NICU.

Gaming the system, fraud, or just capitalism: 617,000 Medicare Advantage patients were adjusted into a higher risk group without their doctor present. Why does that matter? If they’re higher risk, the health plans get a larger payment from Medicare. In one case, those payments exceeded $50k for a single patient. But wait, it gets worse. Although 460 Medicare Advantage plans played this game, over half the money went to a mere 10 of them. So, gaming the system, fraud, or capitalism? Either way, it’s all coming out of our taxes.

A medtech company with some success among the Medicare Advantage world is CareSignal. Using automated phone calls and text messages to patients with chronic conditions, the company seems to deliver a pretty solid ROI.

Insurance startup Decent plays in an underserved niche, the self-employed – freelancers and the gig economy. By aggregating those individuals together, it can leverage economies of scale. But the most interesting part for me is that it leverages direct primary care, providing unlimited primary care to beneficiaries.

Cybersecurity concerns aren’t just for startups leveraging new technologies. The FDA issued a warning on Medtronic insulin pumps last year, now Philips is called out for vulnerabilities in patient monitors. 

I wrote about the demise of Proteus Digital Health back in June. Here’s a deeper look which fortunately pretty much comes to the same conclusion as my speculative opinion: As product strategists would say, lack of product/market fit.

I’ve come across smart bandages that detect infection before, but this one pumps ozone over the wound to prevent infection and help it heal faster.

Seven years old, but still relevant: As of 2012, providers in the US now have 10 administrators for every doctor. Since that overhead is mostly dealing with the complexities of health insurance, I doubt things have improved.

I came across Tytocare a few years ago and lost track of it. Now, University of Miami hospital is using it for remote monitoring of discharged patients. It’s quite an elegant, yet simple, telehealth solution, enabling loved ones to help in collecting diagnostic information at home. See it in action here. My only observation is Tytocare should sharpen it’s demo script. Not only does mom avoid a late night ER visit, but she most likely avoids a large bill too.

Gabbi, healthcare advice for women, by women.

Docs say “Reimbursement is the key” to growing remote patient monitoring. Which is stating the obvious really, because nobody is going to keep working at something they don’t get paid for. (Side note, it troubles me to keep seeing articles that say the pandemic is the catalyst for the telehealth revolution. Wrong. The pandemic AND providers getting paid for using telehealth is the catalyst). Anyway, back to the article…What is a tad discouraging is that the word “reimbursement” appears in the article four times. The word “value” – as in value-based care – zero times. So, the thinking is still very much focused on getting paid for doing stuff, not for delivering better outcomes at lower cost. We’re not going to get the best from telehealth if we see it as just another way to deliver healthcare as usual. It needs to be more than that. It needs to be a way to deliver better outcomes at lower cost.

Related to that, a UnitedHealth study found that primary care docs paid by capitation outperformed docs paid using traditional fee-for-service on quality metrics. Capitation with quality metrics is pretty much value-based care by another name. So value-based care can get us where we need to go, we just need to get out of first gear already.

And related to that….With a focus on value-based primary care for Medicare patients, Oak Street health IPO’s for $328m. Notably, the article illustrates the advantage of the value-based care model for both providers and patients. For Oak Street, it’s revenue held steady during the pandemic because it’s not dependent on appointments to bring in the cash. Unlike traditional fee for service, it’s subscription healthcare. So, as appointments dropped, Oak Street was able to use vans that were normally used for patient transport for food deliveries to its population instead. Which is exactly what it’s population needed to stay healthy at that time. It’s an all too rare example of aligned incentives in healthcare. Another, more expansive article here. It’s what value-based primary care looks like in my perfect world. 

As opposed to….docs are partly dependent on patients to buy their own devices for remote patient monitoring. In a world where providers are at financial risk for the health of their population – such as an ACO – this wouldn’t happen. In that world, providers would invest in the devices directly  for its patients to avoid acute care costs further down the road. In the fee for services world, that’s less likely to happen because there is no financial incentive to do so.

PhysIQ is on a bit of a tear right now. In May, we saw a contract with the DoD, now it’s part of a plan to monitor discharged patients by NorthShore University HealthSystem.

Digital health continues to grow into mental health as well as physical: Quartet Health is working with SilverCloud Health to use it’s digital cognitive behavioral therapy tools. Also noteworthy, Ginger just added a series D funding round for $50m.

And a sign that telehealth is moving beyond the early adopter phase, Teledoc acquires Livongo. Interesting to wonder if this would have happened without the kick to telehealth from COVID. But investors were less than thrilled, in the short-term at least.

One Medical, a direct primary care startup, beats estimates, and will also offer telehealth only to enter new markets. More on the business model here.

There are a few companies out there developing radar-based vital sign monitoring. Circadia Health, Neteera, and MIT’s Emerald device to name a few. But apparently Google has papers lodged at the European patent office for something similar specifically for babies. 

Where Apple goes, Samsung often tends to follow: Samsung gets FDA clearance for EKG tracking on its watch.

New to me, smart apparel company Formsense looks for COVID-19 applications.

Lessons learned from a 15 year old ACO type model in Germany. One quote which you think would apply well to the US: “The message of taking responsibility for their own health resonates with communities that value self-reliance.”

More telehealth goodness: AHA study shows that telehealth home monitoring for infants that required cardiac surgery reduced mortality by 40%.

How telehealth fits into value-based care – especially when your community is a 75 mile boat trip from the mainland.

Somatix scores a win in senior living, monitoring residents at the Garden Spot retirement community in Pennsylvania.

Vital sign monitoring wearable company Current Health adds continuous glucose monitoring into the mix by partnering with Dexcom. With diabetes on the rise, and COVID-19 being more perilous for those with comorbidities, this looks like a smart play. The more relevant data you can bring into a single view for overworked nurses, the better.

Wildly controversial I’m sure: Uber offers to help out with contract tracing. So many perspectives….Many American’s would see this as an invasion of privacy no doubt. Although no doubt this data sharing is covered by the broad data sharing agreement that people just blindly swiped through when they signed up. In practice, this will cover a tiny fraction of the population – especially as Uber’s business is down by 80%. But also arguably, the sort of contact tracing action that will be necessary on a massive scale to beat the virus. Individual privacy versus public good, discuss. Personally, having lived in both Europe and the US, I can see the US struggling with the virus for longer than many European countries. The balance between individualism and the public good tilts toward public good in Western Europe.

In update #22, I noted that LifeSignals had gained the CE mark for its vital sign monitoring patch. Now, it has FDA clearance too.

New to me, Transformative gets a seed round for machine learning to predict cardiac arrest form existing monitoring technology.

Pandemic or not, digital health funding is still on a tear, with H1 funding being a record breaker. Two noteworthy trends for me. First, on-demand healthcare services are the most heavily funded. In case you needed to know why, InfiniteMD has a 200% growth in virtual consults. Disease monitoring – which would include remote patient monitoring – has the second highest funding. The fitness and wellness segment drops to fourth, having been one of the most funded segments for five years. I think that’s a fair reflection of how priorities have shifted over the last few months. Second, the emergence of healthcare systems as a source of funding is becoming stronger. Is that a good thing or a bad thing? Too early to tell I think. My concern is healthcare systems might be aiming to monopolize emerging technologies for their own profits, and that might ultimately slow broader adoption of new solutions. In other words, health systems could become even more vertically integrated than they already are.

CB Insights has a chunky report on digital health funding too. Taking more of a global perspective, this report highlights explosive growth in Asia. And, there are 46 healthcare unicorns, and only about half of them in the US – which is maybe not what we would assume.

Expected from Google perhaps, but not a company that’s been around for almost 200 years, Wolters Kluwer uses clinicians searches and other social media data to predict coronavirus hot spots.

Cutely named Sema4 raises $121m to push genomics and clinical data into practice – in areas such as precision oncology.

How long can this go on…? Employers aren’t happy with payers lack of transparency and foot-dragging on value-based care. The short answer is, as long as there are no viable alternatives. Direct primary care (DPC) is in its infancy, covering about 0.1% of the US population. Growing DPC is going to be really slow, as it’s very dependent on doctors making the change. And when docs do switch, they support far few patients by definition. Then there are startups like Oscar and Clover, that promise a different, more personal, but tech enabled experience. And opposing all that innovation, there’s lobbying by BCBS to maintain business as usual.

A proposal for really cheap biosensors from the University of Missouri: Pencil–paper on-skin electronics.

Solutions to the ills of healthcare don’t have to be complicated or expensive: Virtua Health cuts no-shows for oncology by 75% and improves inpatient bed availability by improving ED throughput.

Squarely focused on value-based care, Nutrimedy is kicking off a clinical trial to help people get in shape prior to total knee or hip replacement (TKA/THA). This would be attractive to providers taking financial risk, either as an Accountable Care Organization, or through a bundled payment for an episode of care. Medicare’s latest bundled payment experiment runs through 2023. I don’t have the numbers handy, but in Medicare’s prior bundled payment program hip and knee replacements were by far the most popular bundled taken on by providers. That’s because it was a relatively low risk way to dip a toe in the water of bundled payments. So, long story short: If Nutrimedy can cut the cost of rehab and complications by getting people in shape before surgery (pre-hab) that’s a cost saving for those taking financial risk. So, the provider will keep more money in its pocket.

A longer read: How to fine tune Medicare’s alternative payment model (eg. ACO’s and bundled payments) to grow participation.

Another shift in the primary care landscape, Walgreen’s aiming to move away from pharmacy to become a “health and wellness destination” by bringing primary care practice into the store. Mostly targeted on underserved populations, so that’s a win-win. I don’t have the data, but I imagine a growing percentage of prescriptions and OTC meds are now fulfilled by mail order or online. In other words, the traditional pharmacy is a dying business. Better then to evolve and wrap a service layer around your product business.

CMS calls for a renewed commitment to value-based care. Contrast with the acknowledgement that the Medicare trust runs out in 2026 from my last update. And why call for it in a press release…? Medicare and Medicaid combined spend is a trillion dollars a year…don’t write a press release, use your muscle to make it happen.

Or, maybe it is…? CMS proposes to make COVID-19 telehealth changes permanent for home health agencies. I hesitate to say it, but this could be the silver lining to the pandemic. First, CMS makes the reimbursement for telehealth and remote monitoring permanent, so providers start using it routinely. That helps manage the pandemic in the short-term. Most likely, in the medium term, this will cost CMS more, because in-person visits will return at some point. When they do, the healthcare business being what it is, many providers will bill for both remote monitoring and in-person visits if they can do so. But then, as full capitation kicks-in (eg. ACOs) and providers are carrying financial risk, they will see remote monitoring and telehealth as a way to cut costs and keep more money in their pockets. So maybe this is the way we get to value-based care that delivers both better outcomes *and* lower costs. 

Philips partners with Biointellisense for in-home vital signs monitoring. I imagine the big attraction for Philips was the 30 day life of the device. Philips’ recently released in-hospital wearable is fully disposable, and good for up to 5 days. In the home, that shorter life is inconvenient for patients, and also more costly, everything else being equal. Surely no coincidence either that providers get paid for a 30 day remote monitoring period under the reimbursement codes introduced 18 months ago. So, Biointellisense is very smart, because it’s just as important for medtech companies to focus on how they will get paid as it is to deliver clinical value. Deliver a 25 day device when providers get reimbursed for 30 days of monitoring and you’ll find yourself with a dud on your hands.

A first for EarlySense I think, providing patient monitoring for a detox center in Texas. Acute care hospitals, skilled nursing, and long term care are where the company has mostly scored in the past as far as I know.

Can surgery analytics be used for operating room performance enhancement? Of course! But you have to be willing to take action on the insights you get from the data. And that’s usually the hard bit.

Not to beat on insurers any further, but….profits surged at UnitedHealth. The culprit apparently is the cancellation of elective surgeries that is pushing many hospitals to the brink. The fact that hospitals are so dependent on elective surgeries for revenue is another story. A functioning healthcare system just shouldn’t be that way.Amazon tries direct primary care clinics for its employees. As the article notes, not the first company to do this by any means. Some tech companies have been doing this for a long time as “a benefit”. A benefit that also minimizes working time lost to doctors visits. But I think this is a growing trend. There’s a growing realization that primary care via health insurance doesn’t work. There’s no reason that preventative care should go through insurance. First, insurance just adds a margin to something that really isn’t an insurance risk, it’s routine maintenance. Second, insurers have no incentive to spend on preventative care, it’s just a cost to them.

Another glimmer of hope for Medicare ACOs, almost 70% are using, or plan to use, home health agencies. Related to that, some concern that value-based care is going to drive smaller home health agencies out of business. That’s because smaller providers don’t have the resources to adjust to new processes and deal with the reporting burden that comes along with it. That’s unfortunate, but probably necessary. Don Berwick argued a decade ago that healthcare needed to move on from being a cottage industry to become more industrialized. That is more repeatable, more scalable, more efficient. That article is 10 years old, and we’re still mostly waiting for that.

But, on the subject of driving care processes through data, differences in care for the over 80’s having a total hip replacement. Not many as it happens, but good that somebody studied it.

Vitls gets FDA clearance for a 6-day wireless wearable with continuous remote monitoring. Looks like the company is seed funded and runs a very small team. So it’ll be interesting to see what the go-to-market model is, because the company doesn’t seem to have the resources to go it alone..

Not too many startups focus on the less wealthy end of the healthcare business, but here’s one: CityBlock Health raises $54m to bring primary care and behavioral health to low-income communities. Especially important, the company includes a focus on the all important social determinants of health. More on the company’s business model here.