Scary Monsters, Take 2: Amazon, Berkshire Hathaway, JPMorgan Chase’s addressing employee healthcare

Shudders through the US financial markets resulted from Tuesday’s Big Reveal of an Amazon-Berkshire Hathaway-JPMorgan Chase combine. Ostensibly they will be “partnering on ways to address healthcare for their U.S. employees, with the aim of improving employee satisfaction and reducing costs” and setting up an independent company “free from profit-making incentives and constraints. The initial focus of the new company will be on technology solutions that will provide U.S. employees and their families with simplified, high-quality and transparent healthcare at a reasonable cost.” This and the Warren Buffett quote about ballooning healthcare costs being a “hungry tapeworm” on the American economy have gained the most notice. Mr. Bezos’ and Mr. Dimon’s statements are anodyne. The company will initially and unsurprisingly be spearheaded by one representative from each company. The combined companies have 1.1 million employees. Release. CNBC.

There is a great deal in those lead quotes which is both cheering and worrisome. To quote a long time industry insider in the health tech/med device area, “What this tells me is finally, enough pain has been felt to actually try to do something. We need more of this.” This Editor notes the emphasis on ‘technology solutions’ which at first glance is good news for those of us engaged in 1) healthcare tech and 2) innovative care models.

But what exactly is meant by ‘technology’? And will they become an insurer?

What most of the glowing initial comments overlooked was the Absolute Torture of Regulation around American healthcare. If this combine chooses to operate as an insurer or as a PBM, for starters there are 50 states to get through. Each state has a department of insurance–in California’s case, two. Recall the Aetna-Humana and Cigna-Anthem mergers had to go through the gauntlet of approval by each state and didn’t succeed. PBM regulation varies by state, but in about half the US states there are licensing regulations either through departments of insurance or health. On the Federal level, there’s HHS, various Congressional committees, Commerce, and possibly DOJ.

Large companies generally self-insure for healthcare. They use insurers as ASO–administrative services only–in order to lower costs. Which leads to…why didn’t these companies work directly with their insurers to redo health benefits? Why the cudgel and not the scalpel?

Lest we forget, the Affordable Care Act (ACA, a/k/a Obamacare) mandated what insurance must cover–and it ballooned costs for companies because additional coverages were heaped upon the usual premium increases. Ask any individual buyer of health insurance what their costs were in 2012 versus 2017, and that’s not due to any tapeworm. Forbes

Conspicuously not mentioned were doctors, nurses, and other healthcare providers. How will this overworked, abused, and stressed-out group, on whose shoulders all this will wind up being heaped, fare? And what about hospitals and their future? Health systems? The questions will multiply.

Disruption is now the thing this year. Of course, shares of healthcare companies took a beating today, many of which do business with these three companies: CNBC names Cigna, Express Scripts, CVS, Aetna (themselves partnering for innovation), and UnitedHealthGroup. Amazon uses Premera Blue Cross (a non-profit). 

Because of Amazon’s recent moves in pharmacy [TTA 23 Jan], there is much focus on Amazon, but the companies with direct financial and insurance experience are…JPMChase and Berkshire Hathaway.

An Editor’s predictions:

  • Nothing will be fast or simple about this, given the size and task. 
  • The intentions are good but not altruistic. Inevitably, it will focus on what will work for these companies but not necessarily for others or for individuals.
  • An insurer–or insurers–will either join or be purchased by this combine in order to make this happen.

Hat tips to Toni Bunting and our anonymous insider.

Breaking: Aetna-Humana merger blocked by Federal court

Breaking News from Washington Judge John B. Bates of the Federal District Court for the District of Columbia ruled today (23 Jan), as expected, against the merger of insurance giants Aetna and Humana. Grounds cited were the reduction in competition for Medicare Advantage plans, where both companies compete. “In this case, the government alleged that the merger of Aetna and Humana would be likely to substantially lessen competition in markets for individual Medicare Advantage plans and health insurance sold on the public exchanges.” The decision could be appealed in the US Appeals Court for the DC Circuit, or could be abandoned for different combinations, for example a rumored Cigna-Humana merger, or smaller companies in the Medicare/Medicaid market such as Centene, WellCare, and Molina Healthcare. Certainly there is money about: Humana would gain a $1 bn breakup fee from Aetna, and Cigna $1.85 bn.

No decision to date has been made in the Anthem-Cigna merger, but the general consensus of reports is that it will be denied by Federal Judge Jackson soon. [TTA 19 Jan]

Healthcare DiveBloomberg, Business InsiderBenzinga

Of course, with a new President determined to immediately roll back the more onerous regulatory parts of the ACA, in one of his first Executive Orders directing that Federal agencies ease the “regulatory burdens” of ObamaCare on both patients (the mandatory coverage) and providers, the denial of these two mega-mergers in the 2009-2016 environment may be seen as a capital ‘dodging the bullet’ in a reconfigured–and far less giving to Big Payers–environment. FoxNews

2016: will telehealth catch on or stagnate, due to factors out of control?

[grow_thumb image=”http://telecareaware.com/wp-content/uploads/2015/11/Robert-Graham-Center-logo.jpg” thumb_width=”150″ /]Updated. Reviewing the Robert Graham Center study summarized by Editor Chrys last week, René Quashie of Epstein Becker Green, perhaps the leading law firm in the health tech area, opines that despite the great progress made by telehealth (telemedicine/virtual consults, but also remote patient monitoring), “state legal and regulatory issues, reimbursement, and provider training and education continue to be serious barriers to wider adoption of telehealth. And until the landscape evolves to address these barriers, telehealth adoption is likely to stagnate despite the great promise of telehealth holds as a tool to improve quality and access.” Yes, that old FBQ* (actually the top two) continues to be as true now as five years ago. While in closing Mr Quashie puts his trust in the ‘pull’ factor of consumers and patients “who will continue to demand better access and more innovative delivery models outside the conventional office visit,” this Editor is far less sanguine, despite having used a virtual consult app recently. It was turned to more out of sheer frustration–time pressure (work, travel), being unable to secure a timely visit with a specialist (no one seems to be taking new patients!) despite good (non-Obamacare) medical coverage, and a condition which was eminently photographable (plus $40 at hand). National Law Review  * The Five Big Questions (FBQs)–who pays, how much, who’s looking at the data, who’s actioning it, how data is integrated into patient records.

Then again, if you read Health Populi and believe Gallup’s polling (based on a slightly skewed question), a majority of Americans aren’t thinking about delivery models or telehealth at all. They’re unhappy, and would like to hand the whole hot mess over to the government when asked if “government is responsible for ensuring that people have health insurance.” Yet the Affordable Care Act, now two years in, was supposed to do exactly that by forcing everyone to pay for a healthcare policy or else pay a punitive tax. Too many did the math; the tax penalty was cheaper, especially for those Young ‘n’ Healthy Invincibles with slim purses and other things to spend on. They were the ones who were expected to pony up premiums, use few services and generally prop up the system.

[grow_thumb image=”http://telecareaware.com/wp-content/uploads/2015/11/shockedshocked.jpg” thumb_width=”150″ /]Now the American populace are shocked, shocked to find that out-of-pocket costs are way up and access is down. The same Health Populi article cites Fair Health’s spring 2015 consumer survey, finding that 33 percent of American patients felt that their out-of-pocket costs were ‘much more than expected’, with an additional 17 percent in the ‘somewhat’ category–a total of 50 percent. The contradiction of government control versus spending (and actuarial) reality is, in this Editor’s opinion, not going to be solved easily or well.

As to the wisdom of government involvement, there’s another developing and embarrassing ACA Big Fail(more…)

Dr Topol’s prescription for The Future of Medicine, analyzed

The Future of Medicine Is in Your Smartphone sounds like a preface to his latest book, ‘The Patient Will See You Now’, but it is quite consistent with Dr Topol’s talks of late [TTA 5 Dec]. The article is at once optimistic–yes, we love the picture–yet somewhat unreal. When we walk around and kick the tires…

First, it flies in the face of the increasing control of healthcare providers by government as to outcomes and the shift for good or ill to ‘outcomes-based medicine’. Second, ‘doctorless patients’ may need fewer services, not more, and why should these individuals, who represent the high-info elite at least initially, be penalized by having to pay the extremely high premiums dictated by government-approved health insurance (in the US, ACA-compliant insurance a/k/a Obamacare)–or face the US tax penalties for not enrolling in same? Third, those liberating mass market smartwatches and fitness trackers aren’t clinical quality yet–fine directionally, but real clinical diagnosis (more…)

‘Explosive growth’ for telehealth and telecare at last?

This sunny summertime prediction by Ephraim Schwartz, an editor-at-large for enterprise tech publication InfoWorld, outlines five main reasons why:

  1. Healthcare is broken, and because it is, finally there’s the financial commitment from providers.
  2. The base of home telehealth devices is now fairly large at 3 million in the US so that the projection by 2018 of 10.3 million in the US and 19.1 million worldwide doesn’t look improbable (Berg Insight).
  3. Cellular and digital phone networks are now ubiquitous. The conversion of existing POTS devices which account for 70 percent of existing telehealth users is underway. Mobile is driving developers to create smartphone health apps and devices. (more…)

Medicare dis-incentivizes home health care in ACA’s name (US)

When it comes to home health care, the C in CMS (Centers for Medicare and Medicaid Services) should perhaps stand for ‘contradiction’. According to recent reports appearing in the pre-holiday ‘dead zone’ of late last week, CMS has decreed that it must save, as part of a four-year plan under ACA, $58 million (0.3 percent) in fiscal 2015 (starting 1 Oct) from home health agencies which were formerly touted as a great way to save money. To put this in perspective: in 2013, Medicare paid about 12,000 home health agencies $18 billion to provide services to 3.5 million patients. In the US, Medicare has always had more restrictive rules for home and community-based services (HCBS); state-administered (but Federally subsidized) means-tested Medicaid still pays for the vast majority of long-term care (well over 60 percent, according to another Federal agency, Housing and Urban Development [HUD]), which strikes many observers as one pocket to another. So where are the contradictions?

  • Conundrum #1: CMS has emphasized post-discharge, post-acute care as part of reducing acute care costs, exemplified in the penalty for 30-day same-cause readmissions. Nursing home expenditure is at least three times more costly than in-home LTC (a conservative estimate used by HUD).
    • But CMS plans to cut Medicare home health funding in total so fewer people may receive it at all or less of it even if needed. What will be their alternative, and the effect on outcomes? (more…)

Disruptive innovation in healthcare hasn’t begun yet: Christensen

Clayton Christensen, as many of our readers know, pioneered a theory of disruption in business models and a three-step cycle of innovation (empowering, sustaining and efficiency, now quite broken indeed). With two other writers, he applied these theories to healthcare in the 2009 book ‘The Innovator’s Prescription’ which this Editor heard co-author Jason Hwang, MD present in 2009 at the Connected Health Symposium and at a private meeting in 2011. One would think that we’d be well into disruption, which is part of the empowering innovation cycle and which the authors championed in the book as underway.

The surprise at the end of this Mobihealthnews article on his recent presentation at “Better Health” in Boston, a McKesson-sponsored meeting series, was not what constitutes disruption, but that it has not really started yet, four years later. This will be much to the surprise of many successful and unsuccessful companies (Misfit ShineZocDoc, Zeo, 23andMe) and health plans which have stoutly touted their products and services as The True Disruptors. Sorry, you may be only a part of the Big Shift: decentralization. Decentralization will push out parts of healthcare off the hospital (more…)

Fast takes for Friday

Changes at Center for Connected Health, DecaWave’s chip, Happy Hackers  Healthcare.gov

Center for Connected Health executives to head Portuguese ‘body dynamics’ company in US. Associate Director Joseph Ternullo, who over the years was one of the key organizers of the Connected Health Symposium, is leaving Partners HealthCare/CCH after 17 years to lead the US subsidiary of Kinematix (formerly Tomorrow Options) located in Boston. This was announced by email to CCH contacts today. Kinematix in October raised $2.6 million in Series B funding from Portugal Ventures. Heading the US board is another Partners HealthCare alumnus, Jay Pieper, formerly CEO of Partners International Medical Services. Kinematix’s two products focus on sensor-based monitoring for foot health assessment and to prevent pressure sores and falls.  Release. Boston Business Journal….ScenSor senses you to 10 centimeters. A 6 x 6 mm chip (more…)

The train, plane and car wreck that is Healthcare.gov and Obamacare

If the ACA and Healthcare.gov were Boeing or Airbus aircraft–they would have been grounded on 3 October.

Wherever you reside in the over 150 countries TTA is read in, if you need more convincing that the US Government is unable to be successful (and Editor Donna is being restrained and charitable) at 99 percent of everything contained in this misbegotten Act, all one needs to do is read our previous coverage and this latest update in the Daily Mail along with their links to their own previous coverage. Are you sure it’s going to be fixed within weeks, Mr. President? This is Obamacare website riddled with garbled messages today

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Except in the minds of White House and HHS planners, the obvious solution would be to STOP: halt the enrollment process, suspend the ACA implementation, restore the right to current coverage for the millions who have been blocked from renewing their current individual coverage and take the entire website down. Rethink all the elements including the coverage structure and the website, send it back to Congress for relegislating and implement a program that works sometime in 2015 IF a way can be found. But no, Americans get piecemeal fixes on a website and system that increase the vulnerability of personal information to hackers and identity theft–and coverage they cannot afford. (And this is only in the individual and small group market. Wait till it applies to large employers–other than unions which have been exempted.) (more…)

Healthcare.gov’s broken UX guidelines

[grow_thumb image=”http://telecareaware.com/wp-content/uploads/2013/10/now-panic-and-freak-out.jpg” thumb_width=”150″ /]Given the broken Healthcare.gov website, perhaps a silver lining lesson some of us can take from it, as we (in the US) wait and wonder, is what user experience (UX) usability guidelines it broke. From UX research/consultancy Nielsen Norman group is a ‘count the ways’ to ten. (A difference–the pictures of real people have been removed and replaced with cartoons, with wags bemoaning the loss of the anonymous ‘Obamacare girl’ on the home page, not depicted here.) The contention here is that the account setup is unnecessarily complex and may be contributing to the backend technology failure. HealthCare.gov’s Account Setup: 10 Broken Usability Guidelines  Hat tip to former EIC Steve Hards. (more…)

700+ cybersquatters on Healthcare.gov, state exchanges

The Washington Examiner estimates that there are 700 or more ‘cyber-squatters’–the dodgy websites that have URLs close to a well-known name–on the Obamacare Healthcare.gov and the 14 state (plus District of Columbia) sites. Identity theft moves to a new and obvious level when it’s no hacking required. All thieves need to is to put up a legitimate-appearing website with the appropriate language and forms that ask for your name, address, income, date of birth and Social Security number, which is apparently what Obama-care.us does. “[Obama-care.us] is so well deceptively designed that I had to research the owner to verify that it wasn’t a government site,” said a retired cybersecurity industry expert.” According to the article, 3,000 people have visited it. What is normal for major sites is to ‘buy around’ the name in multiple domains, alternate search terms and even misspellings and using them to redirect. This is another standard business practice that somehow they neglected to check off the list at HHS. Example: a long-established and legitimate site, Healthcare.com, is so close in name that it alone is capable of siphoning off 30 percent of normal traffic–and they never were approached to sell. Which considering that the real website doesn’t work….  Obamacare launch spawns 700+ cyber-squatters capitalizing on Healthcare.gov, state exchanges  And more on the Lucky Men ‘laughing all the way to the bank’ behind Healthcare.com from VentureBeatPreviously in TTA: The sea of security ‘red flags’ that is Healthcare.gov

150 Health 2.0 presentations online

Last month’s Health 2.0 three-day conference in San Francisco appears to be almost totally on video, with presentations ranging from 5 minutes to over 1/2 hour. The 15 pages include demos, keynotes and interviews. Warning–don’t use the categories at the upper right hand corner or the sidebar to try to sort through them, because these group together multiple meetings by topic. Everything you wanted to know about Quantified Selfing, patient communities (PatientsLikeMe, Medivizor), HIT, EMRs, employer wellness programs (Keas), discussing end of life care (Blaine Warkentine’s Vimty) as well as other ‘unmentionables’ like vulnerability, caregiving, social support, death, sex, taxes. Quite a few on the US health insurance exchange which was going to lead Americans to The New Healthcare Jerusalem in a few days. Somehow GetInsured.com manages to calculate possible individual insurance savings in two-three screens, though you have to call about insurance. Tim Kelsey, the NHS National Director for Patients and Information, announces £1 billion in a technology fund hereHealth 2.0 San Francisco 2013.

Non-functional Obamacare exchange websites? $500 million estimated to date. 2014? Priceless. (US)

Updated/Revised for breaking news and analysis, 12-14 October (US). Much new information noted in dark blue. (Grab your tea or coffee…this is a long one as this story rolls on.)

The mainstream reports continue to build that both the Federal HealthCare.gov site, which provides health exchange enrollment for 36 states, and many of the state-run health insurance exchanges (14 plus District of Columbia) are a nightmare of programming glitches and simply don’t work. It is not the demand–which has been high but not unanticipatedly so with an initial 8 million hits–but more disturbingly, the programming appears to be is unsound.  “Computer experts” quoted by CBS This Morning are making statements like “It wasn’t designed well, it wasn’t implemented well, and it looks like nobody tested it,” going on to say ” It’s not even ready for beta testing for my book. I would be ashamed and embarrassed if my organization delivered something like that.” A more technical dissection of the site’s multiple system architecture problems is provided by Reuters here, with the best quote “The site basically DDOS’d itself,” he said. (DDOS–distributed denial of service, a hacking technique but here, the website overwhelmed itself!) 

Counting the cost

A rough calculation of the cost has been made on a tech website, Digital Trends. Andrew Couts (who is pro-Obamacare) ran some public numbers on the IT cost of setting up the Federal part of the exchanges and add in associated 2012-13 costs, and arrives at $500 millionnot including the $2 billion to build out and operate the exchanges in 2014 (General Accounting Office). Larger numbers north of $600 million have been bandied about, but this Editor will go for now with Mr. Couts’ perhaps low estimate which has been supported by more mainstream reporting. (more…)

Data insecurity in Obamacare insurance exchanges (US)

[grow_thumb image=”http://telecareaware.com/wp-content/uploads/2013/10/keep-calm-and-enter-at-own-risk-3.png” thumb_width=”175″ /]The warning that should appear as the main page of 50 state health exchanges.

Subsumed under the ‘government shutdown’ (affecting in reality a distinct minority of Federal government employees) is the significant concern that the state-based online exchanges now selling individual insurance, effective 1 Jan 2014, much trumpeted under the Affordable Care Act and baked into it two years ago, already present significant vulnerabilities in securing the vital data of millions: Social Security number, date of birth, addresses, tax and earnings information. These state-based exchanges are also dependent on information from a Federal data ‘Hub’ which “acts as a conduit for exchanges to access the data from where they are originally stored.” (HHS Office of Inspector General report August 2013, page 2) If improperly secured, this opens up other Federal agencies to further upstream identity theft mayhem.

Already information is in the hands of thousands of call center staff and so-called ‘navigators’ who may or may not have gone through security verifications. Insurance customer information has already leaked outside of exchanges (see below). (more…)

US government takes a pause, medical device tax repeal effort does not

The partial shutdown (except essential services) of the Federal Government due to the missed budget deadline will mean some suspension of services and furloughed people (with the far more important debt limit/default deadline looming in mid-October)–but no year long postponement of the unready-for-prime time Affordable Care Act (ACA). What is surprising is the bi-partisan support, separate from the budget wrangle, for eliminating the medical device excise tax, (more…)

Telehealth Soapbox: Medical device tax finally under fire; implications many (US)

[grow_thumb image=”http://telecareaware.com/wp-content/uploads/2013/09/gizmodo-the-top-10-rube-goldberg-machines-featured-on-film-rube-goldberg.jpg” thumb_width=”180″ /]A key part of the Rube Goldberg (or Heath Robinson)-esque funding of the Accountable Care Act (ACA, a/k/a Obamacare) is a punitive medical device tax of 2.3 percent levied on gross sales (not profits) of hip, knee, cardiac implants, many dental materials, diagnostics such as scanners, radiotherapy machines, catheters and more. Since it went into effect on 1 January, it has raised $1 billion according to the Medical Imaging & Technology Alliance, the Advanced Medical Technology Association and the Medical Device Manufacturers Association in July–for a program that does not start till 2014. According to The Hill, senior Senators Orrin Hatch, Barrasso and Hoeven are pushing for a repeal amendment to be attached to the stopgap spending bill. The reasons why the tax deserves to be tossed out on its ear are: (more…)