Readers Write: Reducing Medicaid’s Fraud & Waste: Program Integrity Systems

Reducing Medicaid’s Fraud & Waste: Program Integrity Systems
By Gerald Maccioli, MD

Gerald Maccioli, MD, MBA is chief medical officer of HHS Technology Group of Fort Lauderdale, FL.

Medicaid, a cornerstone of healthcare support for low-income individuals and families in the United States, is a vital safety net. With an annual expenditure of approximately $824 billion in 2022, Medicaid ensures access to necessary medical services for millions of vulnerable Americans.

Like any large-scale government program, Medicaid is not immune to the challenges that are posed by fraud and abuse. Estimating the exact extent of Medicaid fraud, though, is challenging due to its clandestine nature and constantly evolving tactics used by perpetrators. However, some reports and estimates provide insights into the scale of the issue. For example, in 2020, the US Department of Health and Human Services (HHS) reported recovering $1.8 billion from fraud and abuse cases in healthcare, including Medicaid.

State Medicaid programs are determined to combat fraud when it does occur, and, ideally, prevent it before it happens in the first place. To that end, many Medicaid programs are looking to invest in robust program integrity systems to comprehensively address fraud, waste, and abuse. In this context, program integrity describes any of various oversight activities to ensure that Medicaid dollars are spent appropriately and accurately.

Like the healthcare industry itself, Medicaid fraud can be complicated, byzantine, and varied. The following is a description of six of the most common types of fraud that is associated with Medicaid.

1. Billing fraud. Healthcare providers, including physicians, clinics, and hospitals, may engage in billing fraud. This type of fraudulent activity involves submitting false claims or inflating bills for reimbursement. Common tactics include billing for services that were never provided, misrepresenting the cost of services, and engaging in other deceptive practices. Billing fraud not only diverts financial resources from the program but also reduces the availability of funds for legitimate healthcare services.
2. Identity theft. Fraudsters may employ identity theft tactics, such as using stolen or fabricated identities, to access Medicaid benefits. Identity theft can be perpetrated by both providers and beneficiaries, resulting in unauthorized use of healthcare services, prescription drugs, and medical equipment. This practice places undue strain on program resources and can lead to significant financial losses.
3. Phantom billing. Phantom billing occurs when providers bill for services that were never provided to beneficiaries. This fraudulent practice not only drains program resources but also can lead to suboptimal care for beneficiaries who do not receive the services they are billed for, putting their health and well-being at risk.
4. Kickbacks and referral fraud. Unscrupulous providers may engage in kickbacks or referral fraud, offering incentives to beneficiaries or other providers in exchange for Medicaid referrals. This unethical practice not only compromises the integrity of patient care but also diverts program resources for personal gain, diminishing the overall quality and efficiency of the Medicaid system.
5. Overutilization. Some beneficiaries may overuse Medicaid services, receiving unnecessary medical treatments or prescription drugs. This results in inflated healthcare costs and can deprive other, more deserving beneficiaries of necessary care.
6. Prescription drug fraud. The abuse of prescription drugs within the Medicaid system is a growing concern. Beneficiaries or providers may engage in the overuse or diversion of prescription drugs, leading to escalating costs and potential health risks.

To effectively combat the extensive scope of fraud and abuse in Medicaid, robust program integrity systems are indispensable for several compelling reasons:

1. Financial sustainability. Fraud and abuse divert scarce financial resources from Medicaid, reducing the program’s ability to provide essential healthcare services to those who genuinely need them. Effective program integrity systems are essential to protect the financial sustainability of Medicaid, ensuring that resources are available for legitimate healthcare needs and program expansion.
2. Quality of care. Fraudulent activities can lead to suboptimal patient care. Phantom billing and overutilization practices, for instance, can result in beneficiaries either not receiving necessary services or receiving services they do not require, compromising their overall health and well-being. Robust program integrity systems are instrumental in maintaining the quality and appropriateness of healthcare services.
3. Preventive measures. Program integrity systems include proactive measures that are aimed at preventing fraud and abuse. By identifying and addressing potential issues early, these systems act as deterrents to fraudulent activities and contribute to preserving the program’s integrity.
4. Legal accountability. Program integrity systems play a crucial role in identifying and prosecuting those involved in fraudulent activities. They ensure legal accountability for individuals or entities attempting to exploit the program, thereby acting as a powerful deterrent to fraudulent practices.
5. Public trust. A transparent and well-monitored Medicaid program is essential in building and maintaining public trust. When beneficiaries and taxpayers have confidence that their contributions are used judiciously and ethically, it enhances the program’s reputation and garners greater public support.
6. Program longevity. Effective program management is essential for the long-term viability and effectiveness of Medicaid. Robust program integrity systems help extend the lifespan of Medicaid, ensuring that it continues to provide essential healthcare services to those in need for generations to come.

In conclusion, the scope of fraud and abuse in Medicaid is extensive and multifaceted, presenting complex challenges that require vigilant attention and comprehensive solutions. Robust program integrity systems are not merely desirable but necessary for safeguarding the financial sustainability of the program, maintaining the quality of patient care, preventing fraudulent activities, ensuring legal accountability, building public trust, and securing the longevity of this crucial lifeline for low-income Americans.

Program integrity systems are a cornerstone in the fight against fraud and abuse, playing an indispensable role in preserving the Medicaid program’s integrity and the health and well-being of its beneficiaries.

Morning Headlines 1/29/24

Concerns over new laws that could end use of WhatsApp in the NHS

UK doctors warn that patient care will suffer under new laws that would limit their use of messaging apps such as WhatsApp and Signal for clinical use.

Core systems restored at Bluewater Health: CEO

Ontario’s Bluewater Health restores systems that have been down since an October 23 cyberattack, which affected five hospitals that had formed an IT shared services group.

Isaac Health Raises $5.7M in Seed Funding

Virtual and at-home brain health and memory care company Isaac Health raises $5.7 million in seed funding.

Monday Morning Update 1/29/24

Top News

UK doctors warn that patient care will suffer under new laws that would limit their use of messaging apps such as WhatsApp and Signal for clinical use.

A journalist’s BMJ article says that a law requires that encrypted messages be placed under government surveillance by the national communications regulator to look for harmful or illegal content, rendering patient data insecure.

A law also requires that messaging app security upgrades be approved, which could take months, leading major tech providers such as Meta, Apple, and Signal to threaten to withdraw services to the UK. Wikipedia has already said it will not be able to operate under a law that tracks user identities, actions, and content submissions.

Clinical informatician Marcus Baw, MBChB says that NHS should have built its own encrypted app that connects to its email system.

Reader Comments

From Industry Recruiter: “Re: LinkedIn an ageism. Here are my thoughts.” A summary of this recruiter’s list, sent in response to my comments last week:

• It’s ideal to include a headshot on LinkedIn, taken professionally within the past 10 years, but lack of a photo doesn’t dissuade them.
• List all relevant work experience, even if it goes back more than 10 years, if it adds credibility to the industry or job you are seeking.
• Listing more credentials never hurts unless you can show no real work experience with them.
• Include at least one bullet for each job in your summary that highlights a specific accomplishment.
• Don’t make the write-up so wordy that people can’t get a good review in a minute or two. Save descriptions of skills, such as teamwork or mentoring, for the resume.
• Ask for LinkedIn recommendations.
• It doesn’t hurt to publish LinkedIn articles, but that isn’t going to shift their view from the work experience.

From Unleaded: “Re: Epic Showroom. It brings together legacy partner programs such as App Orchard, Connection Hub, and Partners & Pals. It has four key parts: (a) Supply Shot for people support; (b) Health Grid, for providers connecting to the broader ecosystem such as payers, labs, and telehealth networks; (c) Products, a three-tiered partnership list that includes a list of all third-party apps, Toolbox for specific apps like Nuance DAX that follow Epic’s integration guidelines, and Workshop for companies like Abridge that are co-developing with Epic; and (d) Cornerstone Partners, companies like InterSystems and Microsoft whose software is used significantly by Epic.”

HIStalk Announcements and Requests

Poll respondents say that General Catalyst’s biggest challenge as a venture capital firm that is buying a non-profit health system is to either swing it to long-elusive profitability or hope that its losses are made up elsewhere in its portfolio.

New poll to your right or here: Which of the following forms of discrimination do you suspect had the strongest negative influence on your career in the past five years? It’s your best guess, of course, since companies and managers who discriminate aren’t usually stupid enough to brag about it.

How to support HIStalk with practically no effort:

• Sign up for spam-free email updates that I send when I post something new.
• Connect and follow on LinkedIn and join Dann’s HIStalk Fan Club. The first thing I do if someone wants a favor is to see if we are connected or if they are among the 4,195 fan club crew.
• Mention HIStalk to your colleagues and vendors.
• Share news, rumors, and intriguing insights.

Sponsors: complete my information form for ViVE and/or HIMSS if you are participating and I’ll include you in my online guide. In the immortal words of John Blutarsky, don’t cost nothin’.

Reader comments about Medicare’s conclusion that telehealth use has dropped of to nearly pre-pandemic levels led me to look beyond the headlines:

• The Medicare Telehealth Trends Report looked at the percentage of eligible Medicare beneficiaries who had at least one Part B claim for a telehealth encounter between January 1, 2020 and June 30, 2023, suggesting that the yearly percentage has dropped from 48% in 2020 to 34% in 2021 and 29% in 2022.
• The quarterly percentage jumped from 7% in Q1 2020 to 47% in Q2 2020, then settled into a 15% or so level from Q2 2022 until now.
• Medicare didn’t report pre-COVID numbers to provide a true baseline, but a previously reported GAO review said that 0.3% of Part B beneficiaries used telehealth services in 2016, so basically nobody used it until the pandemic shut down many practices and CMS started paying providers equally for in-person and telehealth visits.
• Medicare’s numbers cover only Medicare beneficiaries who signed up for the optional, extra cost Part B that covers physician visits and outpatient care, although most people enroll in both. I’m assuming that the report also covered traditional Medicare only and not Medicare Advantage, which jumped from 39% of all beneficiaries in 2019 to 51% in 2023, but that’s a guess on my part.
• We don’t know the percentage of providers who offered telehealth services from 2020 until now, or how many beneficiaries would choose a telehealth encounter if their regular provider offered it.
• We don’t know how many Medicare beneficiaries received telehealth services that weren’t billed to Medicare.
• The recently noted surge in Medicare-covered services such as procedures – which is tanking the share price of Medicare Advantage insurers – may have temporarily or permanently reduced the demand for telehealth services as patients returned for deferred office visits.
• We don’t know how many providers discourage telehealth visits for their patients, either because they don’t like doing them or they prefer an in-person visit where additional services can be offered and billed.

Webinars

None scheduled soon. Previous webinars are on our YouTube channel. Contact Lorre to present or promote your own.

Acquisitions, Funding, Business, and Stock

A Boston Globe article says that while CVS Health is generating record revenue and executing a healthcare center strategy that includes its Aetna insurance, CVS Caremark pharmacy benefits management, and Oak Street/Signify provider businesses, profits are down because its core business of drugstores suffers from lower payments, a shortage of pharmacists, general labor shortages that create customer lines, widespread store closings, and the perception of dirty and poorly managed locations. The company blames PBMs for their efforts to reduce prescription costs, one of which is its own CVS Caremark, which controls 33% of that market.

Announcements and Implementations

JAMA Network publishes an interview with UCSF’s Atul Butte, MD, PhD, who is chief data scientist over the entire University of California Health System:

• UC’s 11-year repository of Epic data covers 9.1 million patients across 10 hospitals, 1.5 billion drug orders, 40,000 cancer genomes, and 50 million medical devices.
• He says that health systems will want to undertake similar work to develop standard medical practices that reduce care variation.
• UC uses “leave one medical center out” cross-validation, where they leave out one medical center when performing analysis and then see if the conclusions from the rest pan out for that remaining hospital.
• The organization will work with drug and AI companies only if its own patients benefit.
• He foresees a day when EHR-trained AI can be deployed to doctors via order sets and decision support tools and even to patients, who might have their own decision support tool on their smartphone. He says that big health systems will probably developed their own branded AI assistant, but their data could be used to help hospitals that don’t have those resources.
• Butte says he personally uses AI to write letters of recommendation, emails, and programming code.

In England, surveyed NHS doctors report that physician associates, who are being used to replace doctors despite having completed only a two-year post-graduate program, are prescribing drugs illegally and missing critical diagnoses. Physicians object to the plan to regulate PAs alongside physicians, and doctors report that PAs – who are renaming themselves from “physician assistant” to “physician associate” — are introducing themselves as doctors to patients. Meanwhile, a physician X user doctor calls PAs “noctors” (not a doctor), with screen shots showing a Royal London Hospital PA who brags on signing DNR forms and conducting an Instagram poll to decide how to perform an exam.

Cardiologists recommend in JAMA Cardiology that clinicians be mandated to capture SOGIE data (sexual orientation and gender identity and expression) in EHRs to help researchers understand the cardiovascular health of LGBTQ+ adults.

Privacy and Security

Ontario’s Bluewater Health restores its hospital systems that have been down since an October 23 cyberattack that affected five hospitals that had formed an IT shared services group. The hospital says legal implications prevent it from saying which parts of Meditech remain down, but confirms that it will be replacing the 20-year-old system with Oracle Cerner by the end of the year.

In the UK, former prime minister Tony Blair and former Conservative Party leader William Hague call on NHS to sell de-identified patient data to AI companies to use for training to develop patient monitoring tools. They also envision an NHS app that would give patients access to their own information and capture more data to sell. They call for NHS to set up a new data trust company that would oversee privacy in commercializing access to the information.

Other

An NHS doctor who was flying to a skiing vacation responds to the flight crew’s call for a doctor to assess a 70-year-old passenger’s health problems. The plane wasn’t equipped with a pulse oximeter, so he used a crew member’s Apple Watch to determine that the woman had low blood oxygen levels, which he successfully treated with oxygen. He praised the Ryanair staff afterwards, adding a recommendation that all plans carry emergency physician kits that include tools for basic measurement, diabetes, blood pressure, and oxygen saturation. He luckily borrowed an older watch since a patent dispute has forced Apple to disable the pulse oximetry function that he used in recently sold Apple Watch models.

Sponsor Updates

• SnapCare will provide contract staff transparency in its workforce marketplace, where it will itemize pay rates, travel costs, a standard rate that covers benefits and payroll taxes, and the company’s fee, saving clients an estimated 15%.
• NeuroFlow publishes a two-part case study featuring the success EvolvedMD found using NeuroFlow’s technology as a part of its efforts to integrate behavioral and physical healthcare services for its customers.
• Frost & Sullivan recognizes Wolters Kluwer Health as an “Innovation & Growth Leader” in clinical decision support systems.
• Centerpoint Health leverages data from the EClinicalWorks EHR and its Healow no-show prediction AI model to improve its clinical workflows.
• Vyne Medical releases a new customer success story, “Streamlining Fax Operations: A Growing Medical Center’s Success Story.”
• Revuud shares its key highlights of its 2023 performance, including 16 new customers.
• Symplr publishes its “Provider Credentialing 2024 Guide.”
• Waystar will exhibit at the HFMA Minnesota Winter Conference January 30-31 in Minneapolis.

Blog Posts

• Modernizing your digital front door to serve both patients and staff (Notable)
• E-Cloud Automates Well-Architected Framework Reviews with MontyCloud (Optimum Healthcare IT)
• Five Best Practices for Using Credentialing Workflows – Part Two: Proactively Establish Ownership (QGenda)
• CMS prior authorization rule finally crosses the finish line (Redox)
• Best Practices for Upgrading Mirth Connect: A Zen Healthcare IT Discussion (Zen Healthcare IT)

Contacts

Mr. H, Lorre, Jenn, Dr. Jayne.
Get HIStalk updates.
Send news or rumors.
Contact us.

Morning Headlines 1/26/24

PC3 Health relocating in Jeffersontown with multimillion-dollar investment, adding high-paying jobs

Physician Care Coordination Consultants will use a $2.5 million investment to relocate its Louisville, KY headquarters, doubling its office footprint and hiring 21 new FTEs.

HHS releases voluntary cybersecurity goals for health care

HHS publishes voluntary Cybersecurity Performance Goals for healthcare, which are broken down into 10 “Essential” and 10 “Enhanced” goals.

Swift Medical Announces New Financing Round to Further Enhance Its AI-Based Wound Care Technology

Toronto-based digital wound care company Swift Medical will use $8 million in new funding to enhance its technology’s data security, interoperability, and device capabilities.

News 1/26/24

Top News

Humana shares dropped 16% on Thursday as the health insurer issued full-year earnings guidance that was half of Wall Street’s expectations.

The company, which primarily sells Medicare Advantage insurance, said that its medical expenses have soared as patients return to hospitals to undergo pandemic-delayed procedures such as hip replacements. It warned that the trend is not related to respiratory conditions and thus is likely to continue.

Shares in other insurers such as UnitedHealth Group and CVS Health also slid on the news as investors became concerned about increased medical costs in their Medicare Advantage business.

The company reports Q4 results: revenue up 18%, adjusted EPS –$0.11 versus $1.97, beating revenue estimates but falling short on earnings.

HUM shares are down 29% in the past 12 months versus the S&P 500’s 22% gain, valuing the company at $44 billion.

Reader Comments

From Copy Cat: “Re: Dana-Farber research cheating. When did it become OK to replace ‘cheating, plagiarism, and lying’ with ‘data falsification’ or ‘inadequate citation?’ Any chance us non-academic elites would get a similar reprieve after falsifying resumes or dissertations?” I’m far from an expert since I’ve co-authored only a few articles in peer-reviewed journals and my contribution was incidental, but I’m guessing it relates to intent and extent (did they do it intentionally for some personal benefit and did it affect the article’s conclusions). Sometimes it’s a gray area, such as when authors publish on a topic without citing the seminal work of a pioneering researcher that they most certainly have read even if not used directly. The Dana-Farber researchers appear to have faked scientific graphics, although whether they did so to prove an incorrect conclusion or because of some logistical reason wasn’t stated (but is being investigated). The conclusion is that it’s better to do your own double-checking of citations instead of letting some cheap seats observer catch your misbehavior, whether inappropriate or not and even if it sneaks by peer reviewers.

From Conference Escalator: “Re: HIMSS24. The exhibitor count seems pretty low.” My interest level isn’t high, but since you asked, I scrolled and counted about 650 exhibitors, compared to maybe 1,200 to 1,500 before COVID and the emergence of competing conferences. But on the bright side, the exhibit hall will probably have carpeted aisles this year.

HIStalk Announcements and Requests

A reader asked about expressing years of work experience on LinkedIn while avoiding ageism. My initial reaction is that LinkedIn content doesn’t matter since at best it will get you an interview where you might face age discrimination anyway. Still, you have to avoid being shut out by recruiters and HR people who perform the initial screening, and there’s little effort required to make a better first impression. My conclusions (and it would be great to hear from recruiters who use LinkedIn to find or vet job candidates):

1. Use a professional, contemporary headshot from years ago, or doctor your photo to look younger. Nobody will feel offended or duped. You could omit the headshot entirely like a resume, but I assume most employers are like me in finding it creepy if someone intentionally leaves out a photo.
2. List only work experience going back a few years or a couple of jobs. Nobody cares before then.
3. Highlight (or obtain, if necessary) technical skills that prove that you keep up as well as younger people. Take a quick course in ChatGPT, Excel, Python, or sales prospecting software to prove that you stay current. Likewise, remove obsolete credentials and irrelevant accomplishments, especially those that go back to the college years.
4. Punch up the summary to emphasize accomplishment rather than elapsed time, especially if you can back up your achievements with numbers.
5. Emphasize your ability to work with a team, mentor, and expend extra effort.
6. Have a younger executive review your profile and resume to make sure that you are using modern terms and aren’t listing experience that is actually detrimental to finding a job.
7. Ask for LinkedIn recommendations.
8. Publish occasional LinkedIn articles ongoing, not just when you are suddenly facing a job search.

Webinars

None scheduled soon. Previous webinars are on our YouTube channel. Contact Lorre to present or promote your own.

Acquisitions, Funding, Business, and Stock

Mercy Hospital – Iowa City and Altera Digital Health settle their contract dispute that stood in the way of the bankrupt hospital’s acquisition by University of Iowa Hospitals & Clinics. The hospital’s contract with Altera will be dissolved and Mercy won’t pay any amount owed, although it will pay $6 million as unsecured debt. Altera will sign a new contract with UIHC so that the hospital can keep using Sunrise with vendor support as required by the acquisition.

Sales

• The State of Pennsylvania launches PA Navigate, a Findhelp-powered online tool that connects state residents with community-based organizations, county and state agencies, and healthcare providers to address basic needs.
• NorthStar Care Community and Hospice of Michigan will expand their use of Netsmart’s CareFabric platform, including the MyUnity EHR for hospice, home care, and palliative care.

People

Clearsense hires Jason Rose, MHSA (AdhereHealth) as CEO and board member. He replaces founder Gene Scheurer, who will remain on the board.

Ochsner Health promotes Amy Trainor, RN, MHSA to SVP/CIO.

Emory Healthcare names Nitu Kashyap, MD (Yale New Haven Health) as chief health informatics officer.

Stacy Sand, MS (Healthwise) joins Get Well as VP of marketing communications.

Announcements and Implementations

Blue Spark Technologies, which offers the TempTraq Bluetooth-enabled temperature monitoring patch, launches VitalTraq, which uses a “selfie scan” that is taken with a smart phone’s camera to report heart rate, heart rate variability, blood pressure, and respiratory rate.

Black Book Research publishes the 2024 “State of the Global Health Information Technology Industry” report, which analyzes the response of 19,000 global health IT customers to rate 109 vendors on 18 key performance indicators. The 655-page research report can be downloaded instantly at no cost.

Fortified Health Security publishes its “2024 Horizon Report” on cybersecurity.

Government and Politics

A federal court denies the motion of Erlanger Health to dismiss a lawsuit that accuses the hospital of allowing surgeons to bill for overlapping surgeries that they didn’t perform and allowing residents and interns to perform procedures without proper oversight if patients lacked insurance. The lawsuit was brought by two orthopedic surgeons and Erlanger’s former CIO, Stephen Adams, MD. It claims that the health system allowed surgeons to share their Epic login information with unlicensed staff to make entries under their names, and when the privacy offer was overwhelmed with lists of inappropriate chart access, Erlanger limited the number of events that would be reported because of the risk involved. The lawsuit also claims that the death of a child who was placed under anesthesia for a MRI was initially blamed on an Epic flaw, but audit logs indicated that the CRNA left the room to complete charts and the CRNA student who remained then made a fatal medication ordering error.

U.S. News & World Report sues the city attorney of San Francisco, who has issued two subpoenas seeking information about the criteria it uses to create its “Best Hospitals” list, the possibility that high-ranking hospitals pay for the privilege, and that its rankings encourage hospitals to invest in specialties instead of primary care. The publication says the attorney is harassing it because he doesn’t agree with its rankings.

HHS publishes voluntary Cybersecurity Performance Goals for healthcare.

Sponsor Updates

• MRO earns Validated Data Stream designation in NCQA’s Data Aggregator Validation program.
• Healthcare IT Leaders adds health industry veteran Mary Mirabelli to its board.
• Surescripts customer Elation Health adopts the Surescripts Real-Time Prescription Benefit tool.
• Florida Digestive Health Specialists adds Sunoh.ai virtual scribing capabilities to its EClinicalWorks EHR.
• Health Data Movers releases a new episode of its “Quick Hits” podcast featuring Kunjan Divatia.
• Emanate Health (CA) adds to its suite of Meditech solutions, implementing the company’s Smart Pump Infusion Integration with the Baxter Spectrum IQ infusion system.

Blog Posts

• Streamlining Workflows and Improving Patient Outcomes with EHR Optimization (EClinicalWorks)
• Basic Needs Navigation to Help Families Thrive (Findhelp)
• How Outside In Thinking Can Drive Your Health Tech Company’s Top and Bottom Lines (Get-to-Market Health)
• On Justice Sandra Day O’Connor’s Important Message (HCTec)
• Time to Talk TEFCA: An Intro to the Interoperability Framework That’s Gaining Steam (HealthMark Group)
• Mastering excellence: A guide to effectively benchmarking your healthcare quality metrics with monthly benchmarking data (Inovalon)
• Increasing EMR Satisfaction Through Personalization (InterSystems)
• Exploring Primary Treatment Pathways for Atrial Fibrillation (Lucem Health)
• Are You Ready for HTI-1? (Medhost)
• Progressing complex pediatric care with Bethany Children’s Health Center and Meditech (Meditech)

Contacts

Mr. H, Lorre, Jenn, Dr. Jayne.
Get HIStalk updates.
Send news or rumors.
Contact us.

EPtalk by Dr. Jayne 1/25/24

I had dinner the other night with a group of family physicians. It was an interesting bunch. Three of them have left employed practice models to open their own primary care practices. One is practicing with the local visiting nurse association. Another is working as the medical director for a local hospice. Several are on faculty at residency training programs, and two of us are clinical informaticists.

As one can imagine, telehealth was a hot topic. One of the physicians who is employed by a local health system was complaining about how her organization has brought in a third-party vendor to perform urgent care telehealth visits. In particular, she feels that continuity of care has suffered. One of our colleagues mentioned a recent study that was published in JAMA Network Open that looked specifically at virtual visits that were performed by the patient’s own family physician compared to those that were performed by an outside family physician.

The authors looked at 5 million Ontario residents who met criteria for having a family physician and for having had a virtual visit. They concluded that visits with an outside physician were 66% more likely to be associated with an emergency department visit in the next seven days compared to those visits that were conducted by the patient’s own physician.

If you dig deeper into the results, they looked at a matched subset of patients and found that the changes of an emergency department visit in the next week was even greater for patients with “definite direct-to-consumer telemedicine visits.” They specifically excluded virtual visits that were performed by another physician in the same group as the family physician, since they “sought to contrast the highest-continuity virtual visits (own physician) with lowest-continuity virtual visits (outside of group).” The authors go on to conclude that the findings “suggest that primary care virtual visits may be best used within an existing clinical relationship.”

The authors noted that increased emergency department utilization that were associated with low-continuity visits suggest that “virtual visits may serve a triaging function, allowing for the identification of patients who would benefit from an in-person assessment.” It would be interesting to see a similar study performed in the US, since there are likely differences in service utilization due to the payment landscape here. When patients are worried about co-pays and emergency department costs, they often make different decisions than they might if they were part of a system where they were at less exposure for unexpected healthcare bills. The authors noted that one of the limitations of the study was the lack of ability to identify patients where access was an issue, such as hours of clinic operation, physician availability, or scheduling difficulties.

The next time I see them, I’ll have to get my family medicine colleagues to weigh in on “The Case of the Disappearing Thank Yous,” which was published in JAMA Health Forum earlier this month. It begins by detailing a physician’s dissatisfaction when her employer began to filter messages from patients that said, “Thank you.” Although some may feel that such messages represent clutter, including EHR vendors who have acted on client requests to suppress them, this physician found them meaningful.

It’s the classic case of whether the good of the one outweighs the good of the many, but the author went on to discuss other ways that he feels that appreciation of accomplishments is lacking in healthcare. As an example, he mentions that Medicare costs have stabilized and that important public health worth continues to progress despite the persistence of negative headlines.

He mentions what most of us already know – negative news tends to generate more clicks than positive news. It’s all about monetizing those eyeballs. He notes that “a failure to appreciate past victories can also jeopardize efforts to tackle the health challenges of the future,” especially in the setting of low trust for government agencies which includes those that are involved in public health.

Especially for healthcare workers who have really taken a beating over the last several years, it’s important to feel appreciated. Employers tried to say thank you by issuing challenge coins and sending pizza, but it’s time to figure out how to demonstrate appreciation in a meaningful way. I know I would like to grow old in a society with highly qualified nurses that love their jobs, but the chances of that being a reality are becoming smaller every day. Here’s a challenge to administrators to start figuring out what really matters and putting their money to work.

I’m always on the lookout for healthcare technology that has an interesting backstory. Habit Camera is a wireless camera that is designed to allow users to inspect areas of the skin that they might not otherwise be able to see. Daily skin inspection is important for many patients, including those with diabetes, limited sensation, or active wounds. The camera connects to a smartphone app to enable live viewing of high definition images as well as video and image capture for sharing with clinicians or caregivers. The company is led by a US Marine Corps veteran who was paralyzed while serving in Afghanistan. He and his wife run the company, which employs veterans and their family members to assemble the devices.

I particularly liked the answer to one of their FAQ questions, which asks, “Is my clinician going to look at pictures if I send them?” The response: “It depends! Your clinician may be interested in doing this, but some may not. If you can’t share an image or video with your clinicians, then it can be really hard to explain what you see over the phone. Until a clinician can see it with their own eyes, they probably will ask you to make an appointment and come into clinic. This can be a bit of a hassle, especially if you have to take off of work and drive far, so we hope that pictures and video can help reduce unnecessary visits. A picture is worth a thousand words.” I don’t care how much a company pays for its marketing experts; you really can’t portray the patient experience any better than that.

What technology vendors have the best messaging? Is there a particular one that you feel just tells it like it is? Leave a comment or email me.

Email Dr. Jayne.

Morning Headlines 1/25/24

Apollo Medical Holdings, Inc. Announces Planned Corporate Rebrand as Astrana Health

Tech-enabled practice management and optimization company Apollo Medical Holdings will rebrand to Astrana Health next month.

Health2047 Portfolio Company Heal Security Launches from Stealth with $4.6 Million Raised

Heal Security, a healthcare cybersecurity software startup spun out of the American Medical Association’s Health2047 venture arm, raises $5 million.

Mercy Iowa City and Altera Digital Health reach agreement

After months of legal wrangling, Mercy Iowa City and Altera Digital Health resolve to dissolve their software implementation agreement dating back to March 2021.

Healthcare AI News 1/24/24

News

WHO publishes recommendations for governments on using AI for public health and medical purposes:

• Give developers access to computing power and paid data sets if they agree to follow ethical principles.
• Use laws and regulations to ensure that health-related use meets ethical obligations and human rights standards.
• Assign a regulatory agency to assess and approve health AI applications.
• Require third-party post-release auditing and impact assessments.
• WHO also recommends that AI developers include potential users and stakeholders in their work, including patients, and design their products to perform well-defined tasks that can improve health system capacity and patient interests.

Amazon is reportedly developing Alexa Plus, a GPT-enhanced version of its voice assistant that will be able to conduct conversations similar to ChatGPT, but with a subscription required to help the company cover the costs of running the AI models. Insiders who are involved with a limited preview say that the new Alexa is good at conducting conversations, but it still gives overly long or incorrect responses and sometimes fails to provide the desired answer. Insiders worry whether consumers will prove willing to pay for a new Alexa version given the market struggles of the current one.

OpenAI signs its first partnership with a university, in which Arizona State University students and faculty will use ChatGPT Enterprise to create personalized AI tutors and to expand their work with prompt engineering.

Google adds experimental AI features to its Chrome browser for tab organization, theme creation, and a “help me write” feature for posting online comments or reviews.

In India, Apollo Cancer Centre in Bangalore launches the country’s first AI-Precision Oncology Centre, which will use AI for diagnosis, risk assessment, development of treatment protocols, identifying patients for targeted therapy and immunotherapy, and patient and family education.

Business

Amazon lists the ways that Amazon Pharmacy is using AI:

• Converting unstructured prescription data into standard categories, such as dose and frequency, to speed up prescription processing by 90%, reduce errors, and to provide clear patient instructions.
• Forecast drug demand to make decisions about which medications to stock and where to store them.
• Provide customers with real-time insurance estimates and look for better pricing within Amazon’s programs such as Prime savings, RxPass, or automatic coupons.
• Help team members answer questions by summarizing internal documentation and knowledge bases.
• Batch refills for efficient filling based on when the prescription is needed.

Research

Cedars-Sinai investigators develop an AI model to predict outcomes for pancreatic cancer patients using biomarkers. Developing the model, called Molecular Twin, also provided new insight into the high predictive value of plasma proteins. They say that their low-resource “parsimonious model” approach, which uses commonly available pathology specimens and clinical data, can impact clinical care and democratize the use of precision medicine for treating cancer.

Other

The business school of Washington University in St. Louis will offer a symposium titled “AI and Innovation in Healthcare” on Thursday. A keynote speaker is Centene CEO Sarah London, MBA, whose background includes healthcare analytics and revenue cycle jobs with R1 RCM, Humedica, and Optum. The event is free for either virtual or in-person attendees.

In India, scammers use AI to impersonate the voice of a woman’s brother-in-law, convincing her to send them a mobile phone payment $400 to pay his daughter’s emergency hospital bill.

Contacts

Mr. H, Lorre, Jenn, Dr. Jayne.
Get HIStalk updates.
Send news or rumors.
Contact us.

Morning Headlines 1/24/24

Top Harvard cancer researchers accused of scientific fraud; 37 studies affected

Top researchers at Harvard-affiliated Dana-Farber Cancer Institute, including its CEO and COO, are accused of falsifying published research articles by Photoshopping scientific graphics.

Turquoise Health Raises $30M Series B Financing, Expanding Healthcare Pricing Platform Offerings

Healthcare pricing transparency company Turquoise Health raises $30 million in a Series B funding round, bringing its total raised to $55 million since launching in 2021.

Medicare Telehealth Trends Report

CMS reports that telehealth usage by Medicare users has dropped nearly back to pre-pandemic levels through mid-2023.

EqualizeRCM Invests in TrilogyRCS, a Hospital RCM Company

Texas-based EqualizeRCM acquires competitor TrilogyRCS.

News 1/24/24

Top News

Top researchers at Harvard-affiliated Dana-Farber Cancer Institute, including its CEO and COO, are accused of falsifying published research articles by Photoshopping scientific graphics.

Research integrity experts identified 57 studies that appear to have been manipulated, with the organization acknowledging 37 of them and moving to retract six of those studies.

Some journals are using AI tools that can identify image tampering, which is apparently common among researchers.

Reader Comments

From Summa Cum Lotta: “Re: Summa. I am surprised how loss-making hospitals with high debt are still making huge investments in technology. How long would it have taken money-losing Summa to break even on an $850 million implementation of Epic? Executives making such decisions should be let go.” The cost seemed high to me, even though I got that number directly from Summa’s website in a transcript of an interview with the CIO and CMIO. Replaying the audio, CIO Elbridge Locklear, MBA actually said “eight fifty million dollars,” which sounds more like a verbal stumble rather than an odd way of intentionally saying “$850 million,” so I’m sure he misspoke. I went through Summa’s federal tax filings, which say they spent $50 million overall on the project. They paid Epic $12 million in 2022 versus paying their Epic host Mercy Health $13 million the year before, when they also paid Cerner $5 million. I’m surprised that Summa hasn’t corrected their own podcast transcription.

From GR_Buckeye: “Re: Epic. Has publicly published their Clarity data dictionary. Do you know why? They closely guard their IP and I can only assume that this was done as the result of some type of legal matter.” Epic published its EHI expert schema on its Open Epic interoperability information website. It was crawled by Internet Archive in February 2023, so it has apparently been there for some time.

From Watching Wins: “Re: learning from videos. You concluded that it shouldn’t be an either-or option between text and video since each have their audience. Why not use AI to create an HIStalk video of daily or weekly health tech news summary that you are already posting as text?” I could certainly do that pretty easily since I’ve researched available tools, but would anyone really watch or listen to a daily or weekly talking (AI) head video news digest?

HIStalk Announcements and Requests

A reminder to HIStalk sponsors: complete my information form for ViVE and/or HIMSS if you are participating and I’ll include you in my online guide

Dear everyone: please stop expressing your work history as “over” X years of experience. If you say “over eight,” then we know it’s not nine, and every person’s tenure is “over” the exact number, even if just by minutes. Trust me that nobody cares about your fractional years, but if your vanity requires, simply round up after the six-month mark to nine years. Related to that is expressing numbers in general — instead of “over 400 hospitals,” either give the actual number or just go with 400 since the distinction is not important.

Webinars

January 24 (Wednesday) noon ET. “Medication Management Redefined.” Sponsor: DrFirst. Presenters: Nick Barger, PharmD, VP of product, DrFirst; Caleb Dunn, PharmD, MS, senior product manager, DrFirst. Clinical workflow experts will paint a reimagined vision for e-prescribing that offers enhanced patient adherence, customizable clinical support, intelligent pharmacy logic, and data integrity and safety. Join this first chapter of an ongoing conversation about what medication management should be, how to deliver greater benefits today, and how to prepare for the future. Elevating your solution and customer benefits isn’t as hard, scary, or economically challenging as you may think.

Previous webinars are on our YouTube channel. Contact Lorre to present or promote your own.

Acquisitions, Funding, Business, and Stock

Healthcare pricing transparency company Turquoise Health raises $30 million in a Series B funding round, bringing its total raised to $55 million since launching in 2021.

The annual health IT market review of Healthcare Growth Partners finds that:

• M&A and buyout deal volume returned to pre-COVID levels in 2023 from their low in Q4 2022.
• Although valuations did not catch up, EBITDA-based valuations have held steady throughout
• Investment activity continued to fall through 2023, dropping to $9 billion from its all-time high of $29 billion in 2021.
• HGP’s HIT Index gained 3% last year versus 25% for the S&P 500 and 45% for the Nasdaq.
• HIT Index stocks whose returns were worse than negative 60% for the year include Streamline Health, Invitae, Pear Therapeutics, GeneDx Holding, NantHealth, Bright Health Group, Cue Health, and UpHealth.

In Wisconsin’s Chippewa Valley, HSHS Sacred Heart, St. Joseph’s, and Prevea clinics will close, with HSHS blaming “a mismatch in the supply of and demand for local healthcare services” and its failure to find a partner.

Sales

• The CDC will use de-identified EHR data from health system collective Truveta for respiratory virus surveillance and research projects involving maternal and pediatric healthcare.
• South Carolina-based specialty pharmacy Palmetto Pharm selects Inovalon’s ScriptMed Specialty pharmacy management software.
• Innovaccer incorporates Wolters Kluwer Health’s Health Language terminology software into its data-based offerings.

People

Ryan Royal (Interviewstream) joins Upfront Healthcare as CTO.

Definitive Healthcare names founder, former CEO, and current Executive Chairman Jason Krantz, MBA as interim CEO upon the departure of Robert Musselwhite.

AMC Health names Zebadiah Kimmel, MD, MBA (Medically Home) chief product officer and promotes Jon Shankman, MBA, MPH to chief analytics officer.

Anatomy IT names Patrik Vagenius (Flywire) chief commercial officer.

Mount Sinai Health System (NY) names Bruce Darrow, MD, PhD interim chief digital and information officer upon the departure of Kristin Myers, MPH, who has joined Northwell Health (NY) as chief digital officer.

1upHealth hires Andrea Kowalski, MBA (Tebra) as chief product officer.

Kyruus hires Harshit Shah, MS (Spring Health) as CTO.

Announcements and Implementations

Amazon reportedly offers One Medical providers access to virtual consults with Amazon Pharmacy pharmacists as part of a pilot project geared towards improving outcomes for high-risk patients, particularly seniors.

The Liver Cancer Collaborative in Australia uses Aridhia’s Digital Research Environment technology to help researchers share data and collaborate on projects.

UCSD Health researchers find that a real-time alert that is powered by the Composer deep learning training library accurately predicted patient sepsis in the ED and reduced mortality significantly. The nursing alert was presented as an Epic Best Practice Advisory, but the authors note that the Epic’s own Sepsis Score has not demonstrated comparable results.

A new KLAS report finds that physician and nurse burnout has stabilized, but remain higher than pre-pandemic levels. Both groups suggest improving staffing and getting executives to listen to the concerns of clinicians and patients. Coming in at #3 for doctors is improving EHR efficiency, while for nurses, it is increasing pay.

Government and Politics

A federal appeals court upholds Martin Shkreli’s lifetime ban from the drug industry and a requirement that he pay $65 million in restitution. His company bought a decades-old drug for treating a rare condition, immediately raised the price 4,000%, and prevented other companies from obtaining samples of the drug that would have allowed them to sell generics. His lawyer had argued that while the “pharma bro” has since served prison time for financial crimes, those weren’t related to the drug industry, suggesting that the courts “should encourage real geniuses like Mr. Shkreli to work in the industry.” Shrekli responded via X that he is the only person in the US to ever be sued as a monopolist, says he followed the same playbook as AbbVie and many other drug manufacturers, and warned every executive that they can be held jointly and severally liable for antitrust actions that are levied against their companies.

Other

CMS reports that telehealth usage by Medicare users has dropped nearly back to pre-pandemic levels through mid-2023.

In Bangladesh, a private hospital director is arrested after demanding that parents of a newborn pay their $365 bill, and upon hearing that they didn’t have the money, sold the baby.

Sponsor Updates

• Pinnacle Family Care (NC) improves efficiency using the EClinicalWorks AI assistant for Prisma.
• Censinet releases a new Risk Never Sleeps Podcast, “Future-Forward Healthcare with Sherri Douville, CEO & Board, Medigram.”
• CloudWave will sponsor the MUSE Social (Southern California) Community Peer Group Event February 1 in Covina.

Blog Posts

• Understanding Prospective, Concurrent, and Retrospective Reviews (AGS Health)
• Data-driven tools and strategies for self-service healthcare analytics (Arcadia)
• Building a Greener Healthcare System with Data Analytics (Dimensional Insight)
• Bridging Healthcare Data Gaps with Clinical-Grade AI (DrFirst)

Contacts

Mr. H, Lorre, Jenn, Dr. Jayne.
Get HIStalk updates.
Send news or rumors.
Contact us.

Morning Headlines 1/23/24

Amazon Pharmacy is Piloting A Consultation Program With One Medical, Further Bolstering Amazon’s Healthcare Ecosystem

Amazon reportedly offers One Medical providers access to virtual consults with Amazon Pharmacy pharmacists as part of a pilot project geared towards improving outcomes for high-risk patients.

CMS Announces Model to Advance Integration in Behavioral Health

CMS will test a new technology-enabled Innovation in Behavioral Health Model that is designed to help community-based practices better coordinate behavioral healthcare with physical and social care services.

Ransomware gang claims responsibility for Christmas attack on Massachusetts hospital

The Money Message ransomware group claims that it has stolen 600GB of data from Anna Jaques Hospital, and that it has information related to parent system Beth Israel Lahey Health.

Curbside Consult with Dr. Jayne 1/22/24

Many organizations are focusing their healthcare IT and clinical investments on Social Determinants of Health. This could include configuring patient portals to gather relevant information, enhancing EHR workflows to allow clinicians to view and act on patient-specific factors, and looking at the data from a population-based perspective.

For some organizations, the return on investment that is needed to gather the data is clear. For example, a community health center might be the recipient of a grant that provides funding for gathering the data and taking steps to improve outcomes based on that data. For others, the return on investment might be less obvious.

A recent article in JAMA Health Forum reviews the need for benefit-cost analysis as organizations look at making investments in care related to social determinants of health. The authors note that there are many examples of the links between social factors and health outcomes in the literature and that organizations have responded by focusing on those with the strongest links. However, adding benefit-cost analysis to the review process would allow comparison of different interventions to determine which would be likely generate the most benefit.

This approach would allow greater understanding of the importance of spending your healthcare dollars in the right place, with the authors noting, “An effective intervention to address a minor risk factor may generate much larger net benefits than a less effective intervention targeted at a major risk factor.” We all have examples of health systems and other care delivery organizations that have fallen under the spell of shiny objects and then struggle to get return on their investments.

Sometimes those projects are more exciting than others and might bring more publicity, but there may be less clarity around how they will actually improve health or reduce morbidity and mortality. On the other hand, certain interventions can have tremendous outcomes, but aren’t seen as exciting. For example, how many people think that nutrition education is sexy? Talking about balanced meals or food deserts or the benefits of community gardens certainly isn’t as exciting as seeing your orthopedic surgery practice mentioned on the wall of the local baseball stadium, that’s for sure. But which one is likely to drive improved health outcomes for the long haul?

The authors discuss this in the context of organizations that focus their attention on return on investment goals that have short time horizons. This leads to failure of visualization of potential long-term gains. We see this with payers denying expensive therapies that may lead to savings many years down the road, when the patient might be on Medicare and offer no calculable benefit for the payer. The authors summarize this: “In contrast, benefit-cost analysis is generally conducted from a societal perspective and considers benefits and costs across all sectors and populations and over extended time horizons with appropriate discounting of future benefits and costs.”

This got me thinking about how we sometimes don’t give full consideration to the longer-term impacts of the healthcare IT projects that we are doing. Leaders are often under the microscope to show positive financial outcomes almost immediately after a project goes live. They are expected to demonstrate shocking reductions in costs or dramatic increases in revenue, and projects that fail to deliver such splashy results may be at risk for being canceled, or even worse, placed on pause and left in limbo. With complex processes, however, it might not be appropriate to push for a dramatic change.

When there’s a significant change happening, I’m a big fan of using pilots to make sure that process “improvements” aren’t going to create unintended problems. However, the pressure to constantly deliver results may make technology leaders less likely to consider piloting or a slower rollout of change.

Alternatively, an intervention might deliver significant results, but then teams move on to other projects, preventing forward movement in the cycle of continuous improvement. In other situations, the maintenance phase is skipped and processes slowly drift back to inefficiency, ultimately eliminating long-term gains.

If organizations focused more on longer-term analysis and ensuring sustained change, would it make a difference in the projects they select? Unfortunately for many, being able to target long-term goals is a luxury given the fact that a results-oriented culture actually means one of immediate results rather than truly designing models that will be sustainable for the long haul. We see this phenomenon often with the rip-and-replace approach to solutions, when we know in our hearts that the organization never spent the time, effort, or money that was needed to make the first solution successful.

I saw another example of this shortsightedness in my community earlier this month. A local hospital that was looking to reduce headcount decided to shutter its medical weight management clinic. Given the obesity epidemic in the US, this doesn’t seem to make much sense at first glance. However, in our community bariatric surgery is seen as more exciting than medical weight management, primarily because it generates higher operating room utilization and therefore greater hospital revenues.

Unfortunately, patients now have fewer choices and might be pushed towards interventions that aren’t right for them. It would be interesting to look at the modeling of both service lines looking at a three-year, five-year, and 10-year horizon to examine not only which one is more favorable from a revenue standpoint, but which one is likely to deliver the best clinical outcomes. I wonder if they even looked that far.

Other organizational cuts occurred in pediatric and women’s health service lines. That looks like it will create a significant gap in services for local families. It will be interesting to see if other hospitals in the area are able to increase access in the service lines that were cut or whether families will just be left with longer waits for services that were already scarce at times. Even without a detailed analysis, I can’t imagine that making it more difficult for women and children to receive care is in the best interests of the community in the long term.

The organization is classed as a non-profit, so we will see the community benefit statements they put out over the next couple of years, detailing their efforts to serve the underserved. I suspect they hope that no one is looking, and given the way that other hospitals in the area behave, I doubt anyone is.

Is your organization looking at the longer term or bigger pictures, or is the focus on delivering results in the next two quarters? Leave a comment or email me.

Email Dr. Jayne.

Morning Headlines 1/22/24

HHS-OIG Issues Notice of Exclusion to Founder and CEO of Theranos, Inc.

HHS OIG bans Theranos founder and federal inmate Elizabeth Holmes from participating in federal healthcare programs for 90 years, the same exclusion it gave to former Theranos President Sunny Balwani.

Hospital IT help desks targeted by sophisticated social engineering schemes

The American Hospital Association warns that offshore hackers are impersonating hospital revenue cycle employees to have their passwords reset by the hospital IT help desk, using stolen information about the employee to answer security questions.

Steward Healthcare’s financial issues could spell catastrophe for the state

Massachusetts regulators worry that Steward Health Care’s financial problems may force it to close hospitals, with the resulting loss of jobs and access to care.

Monday Morning Update 1/22/24

Top News

Massachusetts regulators worry that Steward Health Care’s financial problems may force it to close hospitals, with the resulting loss of jobs and access to care.

Steward operates 33 hospitals in nine states, nine of them in Massachusetts. It is one of the top employers and taxpayers in towns where it operates hospitals. It has 30,000 employees nationally and operates 25 urgent care centers and 107 skilled nursing facilities.

The real estate company that bought and then leased back some of Steward’s hospital buildings says that the company is $50 million behind in rent payments.

Steward, which gets 70% of its revenue from Medicare and Medicaid, says that community hospitals in Massachusetts are paid less than academic medical centers. It has asked for state help with the cost of caring for Medicaid patients and undocumented immigrants.

Reader Comments

From Industry CEO: “Re: HIStalk. The first thing my earliest investors advised me to do as a founder was to read HIStalk every day. So I have, for many years. My team and I think really highly of HIStalk.” Thanks. These comments give me a push since I sit alone at keyboard each day, and even when I emerge into the wild, I decline to divulge my HIStalk identity because who cares anyway. I’m happy to leave it as a blank screen in an empty room with someone occasionally reading over my shoulder.

HIStalk Announcements and Requests

Attention HIStalk sponsors: complete my information form for ViVE and/or HIMSS if you are participating and I’ll include you in my online guide. Also attention non-sponsors, because it’s not to late to get signed up for exposure for the other 359 days of the year when the exhibit halls go dark and attention is more focused.

Twice as many provider decision-makers would rather learn about companies by reading a document or web page instead of watching a video, which is about the same percentage of those who aren’t provider decision-makers. I agree with commenter B. Efficient, who says that it shouldn’t be either-or — they won’t even look at video alone because it’s inefficient and often ends up being an advertisement, but a text-based overview with video detail such as screenshots is the way to go.

New poll to your right or here: what will be General Catalyst’s biggest challenge in its plan to buy Summa Health?

Thoughts About General Catalyst Acquiring Summa Health

Venture capital firm General Catalyst promised to buy a non-profit health system when it formed Health Assurance Transformation Corporation (HATCo) in October 2023. The firm says that it evaluated several acquisition candidates, but it said last week that it has been talking to Summa for nine months, so perhaps that was always its choice.

Summa’s Advantages to GC

• It is relatively small and can be acquired at a reasonable price.
• Its market is geographically compact.
• Its size allows changes to be implemented faster.
• Summa has acute care hospitals, a rehab hospital, a physician network, and a small health insurance business.
• It has been successful as an early participant in value-based care.

GC’s Health Assurance Network

GC had already formed its Health Assurance Network of health systems – their “partnership” terms have not been announced — that includes HCA, Jefferson, Intermountain, WellSpan, Banner, UC Davis, UCI Health, UHS, and others. Its goals:

• Pair startups with health systems to develop and scale products.
• Share best practices.
• Move from sick care to wellness via population health.
• Explore new care models.

Acquisition Financials

Three-hospital Summa recorded a $57 million loss on $1.5 billion in revenue in its most recent tax filing.

GC said with the original announcement that it would spend $1 billion to $3 billion for its acquisition. For-profit companies that buy non-profit health systems usually pay slightly less than 1x revenue, so GC will likely spend at least $1 billion. HCA paid $1.5 billion for North Carolina’s Mission Health, whose revenue and bed count were nearly identical.

Summa’s CEO says the health system’s financial challenges, which include $800 million of debt, didn’t give it a lot of options. He says that Summa has been seeking a partner for more than 10 years, Summa announced plans to sell itself to Beaumont Health in late 2019 until COVID caused both parties to change their minds.

GC will need to finance the deal. It has $25 billion of assets under management, but probably not $1 billion in cash sitting around. The financial details of the transaction will come out when they look for investors or lenders, or perhaps before then in the likely event that the information leaks out. The resulting leverage and carrying costs, not to mention extraction of resources to give the buyer immediate reward, often bring down acquired health systems that were already struggling.

GC Says It’s Not a Typical Private Equity Acquisition

GC makes it clear that as a venture capital firm, it won’t follow the model of a private equity acquisition, where the goal is to cut costs (often recklessly) to increase profits to allow a quick flip of the business. However, it could be argued that this transaction is more like PE than VC, other than GC’s assurance that it is in for the long haul:

• GC is buying a mature business that has stable revenue, not a high-potential startup whose success is not assured.
• It is acquiring a 100% share rather than partial ownership.
• GC may or may not become actively involved in Summa’s management.

For-Profit versus Not-for-Profit

For-profit companies own a significant percentage of US hospitals, but as their core business rather than one of several business lines. GC is an investor with no experience running a health system. Regulators have grown wary of what happens after the deal is done, when the acquirer may close locations, let quality slide, sell real estate to generate cash, or shut down money-losing core community services such as obstetrics to move into high-profit ventures such as ambulatory surgery centers.

For-profit status could make it easier to raise capital, but with significant downsides:

• They lose the tax benefits.
• They lose the 340B drug discount program, which can be a big profit-booster.
• They will need to renegotiate contracts.
• They will need to retire or refinance Summa’s $800 million of debt, probably at higher interest rates as a for-profit.

Operational Challenge

GC has promised that Summa’s executive team, employee base, service lines, and name won’t change. That may be challenging if profits don’t materialize, especially when most Summa executives have no experience running a for-profit hospital. Continued losses might be hard to swallow even if Summa helps GC make money from its other investments. The business structure will be important for the availability and cost of financing.

Buying a Software Sandbox

GC is buying a sandbox for its health tech portfolio companies. The original participants in GC’s Health Assurance Network are:

• Commure (interoperability and data).
• Tendo (analytics).
• Transcarent (connecting consumers with providers).
• Olive (process automation, but the company has been shut down).

GC may also be eyeing the value of Summa’s data for AI training.

GC will need to track the value that Summa adds to its portfolio companies, especially if the health system keeps losing money, to determine if its investment is paying off.

Health System and Software Companies Sharing an Owner

GC portfolio companies benefit from bypassing the “death by pilot” process in being implemented and measured at a health system that is a fellow portfolio company. That could generate convincing proof-of-concept studies. It could also backfire if Summa’s core business struggles despite using corporate-mandated software.

Epic

Summa previously ran on Mercy Health’s shared instance of Epic, then spent $850 million in late 2022 to launch its own instance. UPDATE: That number came from a Summa interview in which CIO Elbridge Locklear, MBA says what sounds like $850 million and remains transcribed that way on Summa’s website, but tax filings say they spent $50 million, suggesting that he may have stumbled verbally.

GC companies will have a leg up on Epic integration. That assumes that GC doesn’t run into issues with Epic’s willingness to work with a health system whose parent company also owns many dozen health technology competitors. The health system cannot risk having Epic shut its system down over IP concerns or contract renegotiation, and walking away from an expensive Epic contract to self-develop software would be unprecedented and risky.

Your Thoughts

I’m interested in your opinion. Leave a comment or message me.

Webinars

January 24 (Wednesday) noon ET. “Medication Management Redefined.” Sponsor: DrFirst. Presenters: Nick Barger, PharmD, VP of product, DrFirst; Caleb Dunn, PharmD, MS, senior product manager, DrFirst. Clinical workflow experts will paint a reimagined vision for e-prescribing that offers enhanced patient adherence, customizable clinical support, intelligent pharmacy logic, and data integrity and safety. Join this first chapter of an ongoing conversation about what medication management should be, how to deliver greater benefits today, and how to prepare for the future. Elevating your solution and customer benefits isn’t as hard, scary, or economically challenging as you may think.

Previous webinars are on our YouTube channel. Contact Lorre to present or promote your own.

Acquisitions, Funding, Business, and Stock

23andMe CEO Ann Wojcicki says that tech investors who understand its consumer genetics testing business don’t like the burn that is involved with its drug development side, while pharma investors don’t understand its consumer business. She declined to say if the company might split into two companies, but notes that it is selling customer genetics data to drug companies under non-exclusive relationships, one of which just yielded a $20 million, one-year contract. ME shares have lost 94% of their value since the company went public via a SPAC merger in June 2021 at a valuation of nearly $4 billion, now $340 million. 23andMe reported in January that hackers had exposed the information of 6.9 million people who had activated its DNA Relatives sharing feature.

Today I learned from LinkedIn about Veritas Data Research, which appears to have solved the longstanding healthcare data problem of not knowing if a patient/consumer has died. The company’s Fact of Death captures over 90% of US deaths, usually within a month. Tuva Health is partnering with the company, saying that it’s surprisingly hard to know whether a patient survived or not because CDC’s data takes up to a year to published, is available only to researchers, and becomes less reliable as more people choose to die outside the hospital. The use cases for providers include creating better population health and risk models and eliminating the embarrassment of sending bills and marketing communications to people who have died. Veritas has just added Cause of Death, which allows researchers to identify whether deaths may not be related to their study topic. The two founders previously co-founded Universal Patient Key, a healthcare data de-identification service that was acquired by Datavant in 2018.

People

Darcy Nett (Wellbe) joins HealthX Ventures as principal.

Announcements and Implementations

FDA clears DermaSensor’s AI-powered handheld device for detecting skin cancer.

Optum seeks EHR/PM vendors to test its prior authorization inquiry API.

Government and Politics

HHS OIG bans Theranos founder and federal inmate Elizabeth Holmes from participating in federal healthcare programs for 90 years, the same exclusion it gave to former Theranos President Sunny Balwani.

Privacy and Security

The American Hospital Association warns that offshore hackers are impersonating hospital revenue cycle employees to have their passwords reset by the hospital IT help desk, using stolen information about the employee to answer security questions. They then ask to have a cell phone with a local area code enrolled, which allows them to defeat multi-factor authentication to log on to financial systems to send money to their offshore accounts.

Other

Epic CEO Judy Faulkner tells a fun story about opening the first buildings of its new campus in Verona, only to find that the entrances to their underground parking lots were too short for fire trucks. They had to buy the Verona Fire Department a new truck, which Carl Dvorak drove over with the sirens and lights on. Judy sat in the back with her white Samoyed dog, to which they had affixed black spots made of construction paper to make him look like a Dalmatian.

Unrelated, but bizarre. The founder and CEO of a large Chicago-based ERP software company dies and its president is seriously injured during a company celebration in India. The two executives were leading the audience in singing while hanging from a cage that was suspended above the stage when its chain broke, tumbling them 15 feet to the concrete stage.

Sponsor Updates

• Spok staff pack gift boxes for patients and gift bags for nurses at Inova L.J. Murphy Children’s Hospital in Virginia.
• CereCore International hires Andrew Hine (Babylon) as managing director.
• EClinicalWorks shares a new customer success story, “Boosting Wellness Visits & Incentive Revenue in Healthcare.”
• Nordic releases a new Designing for Health Podcast, “Interview with David K. Butler, MD.”
• Optimum Healthcare IT publishes a new case study, “ServiceNow Clinician Connect EMR Help.”
• SBI’s Growth Advisory Podcast features Symplr CEO BJ Schaknowski and President Nicole Rogas.
• The American Journal of Nursing awards Wolters Kluwer Health with eight Book of the Year awards.
• Waystar will exhibit at ASA Advance 2024 January 26-28 in Las Vegas.

Blog Posts

• Healthcare Revenue Cycle Management: What to Expect in 2024 (Nym)
• The Importance of Governance in Large-Scale On-Call Software Implementations (QGenda)
• Patient Care in 2045: Predicting the Singularity of Life-Changing Medications (and More) (Surescripts)
• Your Complete Guide to Meditech Expanse (Tegria)
• Pharmacist POV: Patient Safety with Meditech Expanse Pharmacy (CereCore)
• Strategies for Effective Revenue Cycle Automation – Start Small (VisiQuate)

Contacts

Mr. H, Lorre, Jenn, Dr. Jayne.
Get HIStalk updates.
Send news or rumors.
Contact us.

Morning Headlines 1/19/24

Our Acquisition of Summa Health

General Catalyst signs a letter of intent to acquire Akron-based non-profit health system Summa Health, pointing out that the acquisition shouldn’t be considered as “another private equity deal” because it will not focus on cost reductions or a quick flip.

West Coast health tech company bringing dozens of jobs to new River Market headquarters in KC

Health data interoperability platform vendor Hart will move its headquarters from California to Kansas City, MO.

New database of more than 83,000 surgical outcomes aimed at advancing research and training artificial intelligence algorithms now online

UCLA Health creates Medical Informatics Operating Room Vitals and Events Repository (MOVER), a de-identified database of 83,000 surgical outcomes from UCI Medical Center’s Epic and former SIS system that approved researchers can use at no cost to test AI algorithms.

Visibly Launches Real-Time Video Consultations Through Merger With EyecareLive

Online vision testing company Visibly acquires EyecareLive, which offers a similar test along with video visits with optometrists.

News 1/19/24

Top News

Venture capital firm General Catalyst signs a letter of intent to acquire Akron-based non-profit health system Summa Health.

GC formed Health Assurance Transformation Corporation, HATCo, in October 2023 to lead a technology-driven transformation from “sick care” to health assurance, which focuses on helping people stay well, reducing cost, and increasing accessibility. General Catalyst said at that time that it planned to acquire a health system to demonstrate the value of its approach, which includes the involvement of some of its healthcare technology companies.

General Catalyst’s health assurance portfolio includes more than 100 companies.

The company says that the acquisition should not be considered as “another private equity deal” because it will not focus on cost reductions or a quick flip.

Summa Health has three hospitals, 1,027 licensed beds, and 8,500 employees. Its most recent financial report shows a loss of $57 million on revenue of $1.5 billion. It will convert to a for-profit system under its new owner.

Beaumont Health signed an agreement to acquire Summa in December 2019, but the organizations backed out in May 2020.

Summa executives expect the acquisition to close by mid-summer.

Webinars

January 19 (Friday) 1 ET. “Unlocking Reliable Clinical Data: Real-World Success Stories.” Sponsor: DrFirst. Presenters: Alistair Erskine, MD, MBA, CIO/CDO, Emory Healthcare; Jason Hill, MD, MMM, associate CMIO, Ochsner Health; Colin Banas, MD, MHA, chief medical officer, DrFirst. Health system leaders will describe how they are empowering clinicians with reliable patient data while minimizing workflow friction within Epic. They will offer real-world experience and tips on how to deliver the best possible medication history data to clinicians at the point of care, use clinical-grade AI to infer and normalize prescription instructions in Epic, and encourage patient adherence to medication therapies for optimal outcomes.

January 24 (Wednesday) noon ET. “Medication Management Redefined.” Sponsor: DrFirst. Presenters: Nick Barger, PharmD, VP of product, DrFirst; Caleb Dunn, PharmD, MS, senior product manager, DrFirst. Clinical workflow experts will paint a reimagined vision for e-prescribing that offers enhanced patient adherence, customizable clinical support, intelligent pharmacy logic, and data integrity and safety. Join this first chapter of an ongoing conversation about what medication management should be, how to deliver greater benefits today, and how to prepare for the future. Elevating your solution and customer benefits isn’t as hard, scary, or economically challenging as you may think.

Previous webinars are on our YouTube channel. Contact Lorre to present or promote your own.

Acquisitions, Funding, Business, and Stock

Reuters reports that the private equity owners of Netsmart Technologies are planning to offer the company for sale, hoping to attract offers of more than $5 billion.

PointClickCare acquires CPSI subsidiary American HealthTech, which offers long-term care management software. CPSI had stopped development of the product after deciding to divest the business.

Online vision testing company Visibly acquires EyecareLive, which offers a similar test along with video visits with optometrists.

Health data interoperability platform vendor Hart will move its headquarters from California to Kansas City, MO.

SeamlessMD co-founder and CEO Joshua Liu, MD raises interesting points (and creates a fun graphic) about General Catalyst’s planned acquisition of Summa Health and its use of the health system as an incubator for its many health tech businesses:

• Will they try to build an EHR? (leading to my corollary question – how does Epic feel about one of its customers, which the CIO says spent $850 million to move from a shared instance of Epic to its own Epic system in 2022, being bought by a VC firm that has ownership in healthcare software vendors?)
• Will Summa make its own technology decisions or will GC force them to use products that its portfolio companies sell?
• How will staff react to having the health system’s goals set by a financial firm?
• Will startups that aren’t part of General Catalyst avoid working with Summa out of intellectual property concerns?
• Will GC bring in entrepreneurs in residence and incubate new companies?
• Will Summa develop innovation fatigue given the focus of its new owners?

Sales

• The Association of Community Mental Health Centers of Kansas will implement Netsmart Population Health Platform across 26 members that are transitioning to the Certified Community Behavioral Health Clinic model.

People

Roswell Park Comprehensive Cancer Center hires George ”Buddy” Hickman, MS (First Health Advisory) as chief digital and information officer.

Vasanth Balu (Excela Health) joins Bozeman Health as CIO.

Kevin Shiotelis (CorTech) joins Healthcare IT Leaders as CFO.

Consensus Cloud Solutions promotes Johnny Hecker to chief revenue officer and EVP of operations.

Announcements and Implementations

Hospital-at-home technology vendor Biofourmis adds in-home services to its platform, allowing providers to order, schedule, confirm, and track in-home services and diagnostics.

Epic launches Showroom, which lists products and services that can be used with Epic.

Nuance announces GA of DAX Copilot embedded in Epic, which it says has a 150-hospital waitlist.

NYC Health + Hospitals adds Findhelp’s social services referral platform to Epic. Completing Epic’s SDoH screening tool will trigger resource recommendations from Findhelp, which staff can also search directly for community-based resources and create closed-loop referrals.

UCLA Health creates Medical Informatics Operating Room Vitals and Events Repository (MOVER), a de-identified database of 83,000 surgical outcomes from UCI Medical Center’s Epic and former SIS system that approved researchers can use at no cost to test AI algorithms.

A University of Michigan survey finds that 7.5% of people aged 50 to 80 have used an online-only provider and 60% of those received a prescription, but two-thirds of them didn’t tell their regular provider. The authors express concern that online providers don’t have access to the patient’s health history and medical records, making it challenging to screen for drug interactions. Respondents said they used online services because of convenience or lack of access to a regular provider, with only 10% saying they used an online service because of discomfort talking to their regular provider about topics such as mental health or sexual issues.

Privacy and Security

Bluewater Health, which is part of a five-hospital shared services group that remains down from an October 23 ransomware attack, will replace its 25-year-old Meditech system with Oracle Cerner by the end of 2024. The hospital has cancelled 8,000 diagnostic imaging appointments. It planned to move to Cerner in 2013, but delayed the project.

Other

Patent troll SynKloud Technologies sues Epic, claiming that MyChart violates a 2005 patent that it bought in 2019 that describes a personal alarm system for seniors.

Sponsor Updates

• EClinicalWorks customer DePaul Community Health Centers (LA) adds Sunoh.ai ambient listening technology from ECW to its V12 EHR.
• CereCore offers revenue optimization assessments to help health systems maximize financial performance despite increased denials.
• Meditech signs its 100th Expanse MaaS customer, with 37 hospitals signing on in 2023 alone.\
• Experity will host its third annual Urgent Care Connect Conference February 13-14 in Austin.
• Black Book Research survey-takers rank Verisma as the leading vendor for release of information, audit management, and revenue integrity solutions for the fourth consecutive year.
• Fortified Health Security names Joan Edens (Vaco) documentation and quality assurance specialist.
• ThoroughCare integrates Healthwise’s educational healthcare content with its care coordination software.
• Inovalon releases a new podcast, “Data Insights and Impact Across Healthcare.”
• Linus Health publishes the results of a new study, “Digital Clock and Recall is superior to the Mini-Mental State Examination for the detection of mild cognitive impairment and mild dementia,” in Alzheimer’s Research & Therapy.

Blog Posts

• 7 Patient Engagement Solutions to Help Patients and Practices in 2024 (EClinicalWorks)
• 4 Ways to Maximize Government Reimbursements (FinThrive)
• AI in Contact Centers: What Makes it a Game-Changer? (Five9)
• The 5 Stages of Adopting Intelligent Virtual Care (AvaSure)
• Improving Clinician Workflows and Data Insights (InterSystems)
• Identifying Advanced Adenomas Helps to Prevent Colon Cancer (Lucem Health)
• Healthcare Trends 2024: Three Topics to Keep on Your Radar (Medhost)
• Responding to disaster at Brockton Hospital (Meditech)

Contacts

Mr. H, Lorre, Jenn, Dr. Jayne.
Get HIStalk updates.
Send news or rumors.
Contact us.

EPtalk by Dr. Jayne 1/18/24

The Lown Institute has released its 2023 Shkreli Awards, highlighting “the worst in healthcare profiteering and dysfunction.” The selection panel includes clinicians, journalists, patient advocates, and health policy experts.

In case anyone doesn’t recognize the name, the award is named after so-called “pharma bro” Martin Shkreli, who earned notoriety and scorn by purchasing the rights to manufacture a well-known antiparasitic medication and jacking up its price by 5,000%. Full descriptions along with the judges’ comments can be found on the Lown Institute website, but the winners are below. Given the nature of the activities, I can only imagine what was going on in those that didn’t make the cut.

1. Columbia University interferes with patients filing sexual assault complaints against one of its physicians.
2. Stunning CEO salaries at nonprofit hospitals (CommonSpirit Health is specifically called out, but they’re far from alone).
3. Pharmaceutical companies claim that price negotiations for Medicare drugs are unconstitutional.
4. Hospitals partner with private equity-backed companies to offer high-interest medical credit cards with rates up to 26%.
5. Vascular specialist allowed to continue to practice despite discipline in numerous states and failing to be able to write the essay needed to pass an ethics course.
6. GlaxoSmithKline hides evidence that its heartburn medication Zantac may cause cancer.
7. Indiana cardiologist accused of implanting unnecessary cardiac stents, including 80+ stents in a single patient.
8. Hospitals “dump” homeless patients who are unable to fully care for themselves.
9. Device manufacturer Medtronic incentivizes surgeons to implant devices in patients that may not benefit, all in the name of education.
10. Lehigh Valley Health – Cedar Crest Hospital threatens to medically deport a comatose patient receiving expensive care

From BlackBerry Forever, iOS Never: “Re: BlackBerry. I appreciated the picture of your old-school device. I also had the Torch and it was the best of both worlds – touch screen with a keyboard. Did you see the buzz about add-on keyboards at the Consumer Electronics Show?” Clicks Technology is offering the keyboard, which comes in either “Bumblebee yellow” or “London Sky,” which is decidedly grey. The accessory connects via the standard charging port and will start shipping on February 1. I haven’t met anyone who is remotely interested in buying one, so if you like the idea, feel free to weigh in. Personally, I loved the tactile BlackBerry keyboards and could type on them way faster than a touchscreen model. The roller ball mouse thing, not so much. There have to be others out there like me, so we’ll see if this results in an appreciable number of sales.

Another reader clued me in that BlackBerry is exhibiting at CES 2024, accompanied by a Monty Python-esque “I’m not dead yet” meme. Indeed, the company even has a website highlighting its participation, and it looks like it’s mostly tied to automotive technology. I have to admit I haven’t followed the company since my former employer killed off its BlackBerry server back in the day.

Other interesting items coming out of CES include the Withings BeamO multiscope device. Although it reminds me a bit of an early generation Wii remote, it’s designed to quickly produce vital signs data for use during non-office healthcare encounters. It can deliver temperature, oxygen saturation, heart rate, and electrocardiogram data that can be sent to healthcare providers using an app. Withings has an application in for FDA approval of certain features, such as detection of atrial fibrillation. The device is expected to hit the shelves in July and will retail for $250.

Speaking of cool devices, I see all kinds of wearables out on the trail and at the local YMCA. A recent Stat opinion piece calls for a “data diet” to help curb the growing obsession with data. I’m sure there’s a boom in sales during the early part of the year as people seek digital help tracking their progress towards various New Year’s resolutions and annual goals. The article confirms this, noting that fitness app downloads are more than a third higher in January than at other times. It also notes that the fitness tracking industry rakes in $45 billion annually and that there are 400 personalized nutrition companies out there. The article questions the role of fitness trackers in trying to curb the obesity epidemic and the increase in chronic diseases. It suggests that we’re tracking the wrong data, and that in order to harness technologies like AI to better use our data, we need higher-quality data in the first place. The author shares vignettes of several patients gaming their fitness trackers, one sitting in a meeting but waving his arm trying to clear an alert telling him to move. It will be interesting to see how the fitness tracking movement evolves and whether we start getting better data or just more mediocre data.

I’m always looking for interesting new companies and was excited to run across CareLuminate. Their premise is straightforward: if one understands how nurses feel about the care being delivered in their workplaces, one can better understand clinical quality and help reduce healthcare costs. CareLuminate can help those who are paying for healthcare (such as employers) steer their workers towards facilities with higher quality. The company’s founders have background in clinical outcomes and industry research, coming from the nursing world and from KLAS Research and specifically its Arch Collaborative. By interviewing nurses directly, the company generates independent and current data that they note hasn’t been “gamed” by health systems. Some of the measures captured in interviews and through available data include nurse perceptions of care safety, patient satisfaction, infection rates, and readmission rates. I’ll be watching them closely to see how they gain traction in the industry. They’re worth checking out.

Speaking of checking companies out, I was happy to book my first celebrity Booth Crawl for HIMSS24. Since I’ll be the only member of the HIStalk team in attendance at the show, I feel particularly responsible to capture the glitz, glamour, and exhaustion of the event. It’s my first time to schedule a booth crawl on the opening day of the exhibit hall when people are fresh and should be eager to chat.

What are your hopes for the HIMSS24 conference? Is there anything you’d recommend as can’t miss opportunities? Leave a comment or email me.

Email Dr. Jayne.