Health Care Executives Behaving Badly

In the midst of a pandemic during which health care workers proved themselves to be very bit the heroes we like to think of them as being, it’s sobering to be reminded that the system they work in is filled with perverse incentives that work against patients’ best interests.  Four pieces of excellent journalism – two from The New York Times, and two from Kaiser Health News -- this week brought that front and center. 

If you haven’t read them yet, I urge you to do so, but, while you might enjoy the writing, don’t expect to enjoy their content.

Credit: Kulture Hub

Let’s start with two articles in The New York Times “Profits over Patients” series by Jessica Silver-Greenberg and Katie Thomas: They Were Entitled to Free Care. Hospitals Hounded Them to Pay and How a Hospital Chain Used a Poor Neighborhood to Turn Huge Profits.  Both focus on “non-profit” hospitals – Providence, serving the northwest/west/southwest, and Bon Secours Mercy Health, serving Midwest/east/southeast (and Ireland). 

Providence used a program called Rev-Up, designed by McKinsey, to solicit payments from patients who should have been entitled to free care due to their incomes.  “Ask every patient, every time,” employees were instructed.  And, “If patients did not pay, Providence sent debt collectors to pursue them.”  The state of Washington thinks this happened to at least 55,000 patients.

Mind you, Providence gets huge tax breaks in part to support such free care, and claims that it provides some $1.9b in these kinds of “community benefits.”  The article notes: “Providence is sitting on $10 billion that it invests, Wall Street-style, alongside top private equity firms. It even runs its own venture capital fund.”  The article also points out that Providence’s charity care only accounts for 1% of revenue, versus an average of 2% for non-profits nationwide. 

Providence’s CFO told the reporters that the findings “are very concerning and have our attention.”  OK, then.  I’m not sure which would be worse: that the CFO was complicit in the scheme, or was truly unaware it was going on.

The second article focused on a Bon Secours Mercy Health hospital in Richmond (VA), Richmond Community.  It is an inner city hospital, serving a primarily Black population and now consisting mostly of an emergency room, yet it managed to the highest profit margins of any hospital in Virginia, some 44%, which yields over $100 million in profits.

It did so by using a federal program (340B) that allows certain hospitals to buy prescription drugs at greatly reduced prices, yet charge the full amount to insurers.  The hospitals are supposed to reinvest those profits into improving care and facilities, yet Bon Secours used them to invest in more profitable neighborhoods. 

“Bon Secours was basically laundering money through this poor hospital to its wealthy outposts,” one ER physician told the reporters. 

Bon Secours claims it has invested millions in the hospital and the community, but skeptics think it is more interested in real estate deals and the outlying hospitals.  After a merger with Mercy Health in 2018, Richmond’s former mayor said: “There was a major shift from being mission-oriented to being unashamedly, unabashedly profit-oriented.”

Both systems are not only non-profits, they’re also faith-based/mission organizations. We should expect better.

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Lauren Weber of Kaiser Health News focused on the dual pain of losing a baby and being sent to collections for the care in Shattered Dreams and Bills in the Millions: Losing a Baby in America. 

In one case, a couple had a baby with a congenital heart defect.  She survived some eight months, with the billing meter running the whole time.  The bills ultimately reached $2.5 million, a figure that proved to be incorrect, yet they still had a $4,000 deductible and several charges not covered by insurance.  Then they got the $26.50 collection notice. 

I mean, really?

Ms. Weber highlights two other couples whose surprise bills came just as they were undergoing that unique pain of losing a child.  Dealing with them cost time and emotional energy the families couldn’t spare. "I just wanted to be with Bennett; that's all I wanted to do," one mother told her. "And I just spent hours on these phone calls."

These bills “compounded their suffering during a time when they were just trying to process their loss.” Shame on the organizations responsible for that.

Finally, Ms. Weber also had time to report on Private Equity Sees the Billions in Eye Care as Firms Target High-Profit Procedures.  As many as 8% of ophthalmologists are in practices owned by private equity firms, and “Acquisitions have escalated so much that private equity firms now are routinely selling practices to one another.”

KHN’s analysis found: “Sixteen of the 25 private equity firms identified by industry tracker PitchBook as the biggest health care investors have bought stakes in optometry and ophthalmology practices.”

Ms. Weber writes that the private equity groups “buy up these practices — or unify them under franchise-like agreements — with the hopes of raising profit margins by cutting administrative costs or changing business strategies,” but the real upside comes from upselling patients:

For example, doctors can use lasers instead of cutting eye lenses manually, offer multifocal eye lenses that can eliminate the need for glasses, or recommend the astigmatism fix that Green said she was sold. Often, patients pay out-of-pocket for those extras — a health care payday unconstrained by insurance reimbursement negotiations. And such services can take place in outpatient and stand-alone surgery centers, both of which can be more profitable than in a hospital setting.

One Johns Hopkins analysis found that acquired practices got an extra 20% in their insurance reimbursements, as well as increased patient volume.  KHN’s own analysis found that private equity firms like to invest in doctors who are frequent prescribers of expensive macular degeneration drugs.  “The private equity model is a model that focuses on profitability, and we know they are not selecting practices randomly,” one expert told Ms. Weber.

This is not about care; this is not about patients.  This is about money.

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I’m not naïve.  I know there are profits in health care, and, generally, I’m OK with that.  A CEO of a non-profit I once worked for preached: “No margin, no mission.”  But there’s a line, or a slippery slope, when the margin becomes the mission.  When you’re sending struggling families to collections, when you’re overprescribing expensive drugs or services, when you’re laundering money from poor communities to wealthier ones – come on, you know that’s wrong. 

To the health care executives who develop, oversee, or benefit from them: we’re watching. 

Goliath, Meet David

I’m a sucker for underdog stories.  I love unconventional wisdom overthrowing conventional wisdom. I’m deeply suspicious of Big Tech, Big Oil, and big health.  I know unfettered competition is not always to my benefit but get nervous when I don’t really have many options. 

So when I read that Google is starting to worry about a threat to its search dominance, and that TikTok and other social media giants are scared of a rival start-up, well, count me in. I just wish it was health care goliaths that were worried.

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You probably use Google to search online.  “Google” has become a generic term for search, like Xerox was for photocopying.  Depending on the source, it’s share of search is north of 80%, probably closer to 90%, and it’s been that way for a long time. Larry and Sergey built a better mousetrap and the world, indeed, build a path to their door.

TikTok might change that.

Yes, TikTok again.  Face it, it’s hard to keep a finger on today’s culture without that finger pointing to TikTok. Last month the finger pointed directly to healthcare, this month it is pointing to search, and that’s what has Google nervous.

“In our studies, something like almost 40 percent of young people, when they’re looking for a place for lunch, they don’t go to Google Maps or Search. They go to TikTok or Instagram,” Prabhakar Raghavan, a Google senior vice president, said at Fortune’s Brainstorm Tech 2022. 

Credit: Olive Burd/BuzzFeed News

The New York Times proclaimed: For Gen Z, TikTok Is the New Search Engine.  The article discerns a sea change in search:

TikTok’s rise as a discovery tool is part of a broader transformation in digital search. While Google remains the world’s dominant search engine, people are turning to Amazon to search for products, Instagram to stay updated on trends and Snapchat’s Snap Maps to find local businesses. As the digital world continues growing, the universe of ways to find information in it is expanding.

The article describes how search on TikTok is different than on traditional search engines:

Instead of just slogging through walls of text, Gen Z-ers crowdsource recommendations from TikTok videos to pinpoint what they are looking for, watching video after video to cull the content. Then they verify the veracity of a suggestion based on comments posted in response to the videos.

That doesn’t mean, of course, that the videos are factually correct – not that other search engines are either – but Francesca Tripodi, an information and library science professor at the University of North Carolina, warned The Times: “You aren’t really clicking to anything that would lead you out of the app.  That makes it even more challenging to double-check the information you’re getting is correct.”  Lee Rainie of the Pew Research Center added that TikTok “is becoming a one-stop shop for content in a way that it wasn’t in its earlier days.”

Google should worry.

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Lest anyone think the world is just going to become all TikTok all the time, TikTok is scared of a two-year old French start up: BeReal.  BeReal, in case you hadn’t heard of it either, is a photo-sharing app whose key feature is that it randomly prompts users to take and share a photo, within two minutes.  It uses both front and rear camera to show both a selfie and where the user is. 

As BeReal describes it:

Everyday at a different time, everyone is notified simultaneously to capture and share a Photo in 2 Minutes.

A new and unique way to discover who your friends really are in their daily life.

Credit: BeReal

BeReal was Apple’s #1 download this summer, and has some 56 million downloads, with the US its biggest market. It even riffed on Facebook’s initial strategy of going after college campuses, through its ambassador program.  

TikTok and other platforms have noticed. “The fear of the incumbents is that this becomes the next TikTok,” said Mark Shmulik, an analyst for Bernstein, told The Washington Post. “So they’ve all scrambled to launch their own version.”

Just last week TikTok announced TikTok Now – “a daily photo and video experience to share your most authentic moments with the people who matter the most” – and Instagram is working on IG Candid Challenges, which The Verge labeled a “murder clone,” since its sole purpose is to replicate BeReal.  Snapchat was quicker off the mark, rolling out its Dual Camera feature last month, “a new way for Snapchatters to capture multiple perspectives at the same time – so everyone can be part of the moment, as it happens.”

It remains to be seen if the goliaths can crush BeReal by simply cloning its features, or if one of them will simply acquire it, as Meta did with one-time rivals Instagram and WhatsApp.  But, as Mr. Shumulik told WaPo, “They’ve certainly caught lightning in a bottle with an idea.” 

As WaPo put it:

BeReal’s success reveals an appetite among social media users for more authentic, intimate forms of expression, and shows that Davids can still shake up a sector dominated by global Goliaths. At the same time, the scramble by those Goliaths to copy core features of an app that doesn’t even have a way to make money yet underscores the uphill battle that upstarts face just to survive.

BeReal claims: “We want an alternative to addictive social networks fueling social comparison and portraying life with the goal of amassing influence.” Perhaps that will be enough.  

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Healthcare is full of Goliaths; pick your favorite (or, rather, your most hated): e.g., pharma, med device manufacturers, national health insurers, EHR vendors, for-profit hospital chains or even your local non-profit hospital monopoly/duopoly.  They’re entrenched, they’ve been entrenched for a long time, and their dominance is, if anything, growing.  Health care is big business, and that business is full of big players.  

It also isn’t like Tech, much less like social media, where an entrepreneur with a good idea and some cool tech can capture that lightening in a bottle and shoot to dominance quickly. It’s too fragmented, too byzantine, too regulated, skeptics and insiders would both say.  A David would have no chance. 

Well, I’m not giving up hope. I’m looking for the thing that will make current EHRs look like the clunky billing engines they are. I’m looking for the thing that will prove hospitals to be vastly oversized.  I’m looking for the thing that will break the physician monopoly.  I’m looking for the thing that will democratize prescription drugs.  I’m looking for the thing that will rewrite healthcare’s financing.

I’m rooting for the underdog. 

Start the Revolution Without Us

Well, as usual, there’s a lot going on in healthcare.  There’s the (potential) Amazon – One Medical acquisition, the CVS – Signify Health deal, and the Walmart – United Healthcare Medicare Advantage collaboration.  Alphabet’s just raised $1b.  Digital health funding may be in somewhat of a slump, but that’s only compared to 2021’s crazy numbers. Yep, if you’re a believer that a revolution in healthcare is right around the corner, there’s a lot of encouraging signs. 

Credit: about digital health

But I was in a Walmart the other day, and my thought was, these people don’t look like they care much about a revolution in healthcare. In fact, they don’t look like they much care about health generally.  That’s not a knock on Walmart or Walmart shoppers, that’s an assessment about Americans’ appetite for changes in our health care. 

That’s not to say we like our healthcare system.  A new AP-NORC survey found that 56% felt that the US did not handle healthcare well (curiously, 12% thought we handled it extremely/very well – huh?).  Prescription drugs, nursing homes, and mental health rated especially low.  We’d like the government to do more, but not, it would seem, if it means we pay higher taxes.

Credit: the Simpsons

Much of what is wrong is our own fault. We know that we eat too many processed foods, that the food industry scientifically preys on us to target our weaknesses for fat, sugar, and salt, that we’d rather sit than drive and drive than walk, and that we are poisoning our environment, and, in turn, ourselves.  Given a choice between short term benefits versus long term consequences, though, we’ll eat that Oreo every time, literally and metaphorically.

What started me down this grim train of thought, oddly enough, is a new article in The Atlantic by Jennifer A. Doudna: “Starting a Revolution Is Not Enough.”   Dr. Doudna’s focus was, naturally, on the CRISPR revolution, but some of her points apply more broadly.  

Dr. Doudna is justifiably proud of all that CRISP has already accomplished, but:

I also feel a continual sense of urgency: Are we dreaming big enough? Moving quickly enough? I think back to the advent of the cellphone—another groundbreaking technology in our shared memory. For those of us lucky enough to have experienced it, the untethering of communication from a landline was a seminal moment. But who could have predicted that this once niche and luxury technology would become so ubiquitous as to outnumber the human population, creating new economies and changing the way we live?

That’s my fear about all of the supposed revolutions in healthcare: I’m pretty sure we’re not dreaming big enough, and we definitely aren’t moving quickly enough. 

With CRISPR, Dr. Doudna believes:

Ensuring that CRISPR reaches its full potential for clinical applications and beyond will require an even higher level of intentional building with diverse and dedicated collaborators. Governments, universities, and investors will need to make significant and sustained investment in cutting-edge science at labs and at biotechnology companies, as well as investments in infrastructure and manufacturing to ensure that this work is scalable.

All that could also be talking about AI, nanotechnology, robotics, VR, or any of the other long list of innovations that have the potential to revolutionize healthcare.  We’re a long way from finishing the science, much less bringing it to play into our healthcare system and, more importantly, into our everyday lives.

Credit: Emerging Europe

Technology is not enough. In a New York Times op-ed about the Amazon-One Medical acquisition, Libby Watson asserts:

Any company claiming its innovation will revolutionize American health care by itself is selling a fantasy. There is no technological miracle waiting around the corner that will solve problems caused by decades of neglectful policy decisions and rampant fraud.    

Similarly, Dr. Doudna worries about potential abuse with CRISPR: “How do we ensure that those in need have access when people or companies with money and power cut in line?”  That is, unfortunately, how our healthcare system has worked in recent decades, and perhaps always. They will not accede to change easily. 

It’s worth remembering that most revolutions fail.  They start too soon, they don’t have enough popular support, they face vested interests that are too firmly entrenched, or their timing is simply off.  Americans are proud of our own revolution, but too often we forget that most of the colonists did not support it, that we needed strong allies, that a few key leaders were pivotal, and that it took both some luck and some blunders from our opponents to ultimately succeed.

In healthcare, we have to remember that, while a majority of us aren’t happy with our healthcare system, only a minority of us are pushing for big changes.  Only a minority of us are actively engaged in our health on a daily basis. We say we’re unhappy about costs but what we really mean is that we want someone else to pay the costs. We grumble about how expensive they are but don’t really want our doctors or local hospitals to take revenue hits.  We hate pharma and health insurance companies, but only until we need them. 

The vested interests in our healthcare system aren’t you and me; they’re the people who are first in line for care and for whom money is never any issue. They’re the medical/industrial complex, including those local doctors and hospitals, who profit from the existing system. We’re not going to have a revolution without them being disrupted, and few of us are quite ready for that. 

A revolution in healthcare isn’t our existing system but with some newer technologies; we’ve been incrementally doing that for a long time.  A revolution in healthcare would actually look different, would deliver care differently, would impact our health differently, and hopefully would be financed differently. 

As Dr. Doudna says, in reference to CRISPR but with application to other revolutionary technologies: “When facing progress of this magnitude, the first step toward adoption must be societal buy-in.”  No, we’re not quite there yet.  Worse yet, I’m not quite sure what will get us there.

There’s a famous quote – variously attributed to Albie Sachs, Bill Ayers, and Leon Trotsky – to the effect: “All revolutions are impossible until they happen. Then they become inevitable.”   I still believe that a revolution in healthcare is inevitable, but have to admit that we’re still in the stage when it seems impossible.

Putting the "e" in DNA

The Wall Street Journal had a great article a couple days ago that tickled my fancy on two fronts: DNA, and the deep ocean.  Both fascinate me. It introduced me to a term I’d not heard before but have now discovered is a thing: “eDNA.”  It’s something I suspect we’ll be hearing more about, and a technique we’ll be using much more, in the years to come.

Credit: USGS

The article, Finding New Drugs From the Deep Sea via ‘eDNA’, talks about a different approach to discovering potential sources of new medicines: “environmental DNA,” or eDNA.  As the US Geological Survey describes it: “Environmental DNA (eDNA) is nuclear or mitochondrial DNA that is released from an organism into the environment.” You may not want to know this, but “Sources of eDNA include secreted feces, mucous, and gametes; shed skin and hair; and carcasses.”

 

As Elizabeth Ann Brown wrote in Science this summer:

In the last decade or so, environmental DNA, or eDNA, has revolutionised marine and aquatic research by allowing scientists to sample “an entire ecosystem” with a litre of water… It’s a relatively cheap, noninvasive, and simple technique that can be modified to study any form of life, and it often requires less time and labour to employ than previous methods.

For decades scientists have searched for interesting new organisms/molecules that might be useful in developing drugs for humans.  Nature is, after all, a master chemist, and evolution has featured a continual battle between organisms – developing toxins to kill or disable other organisms, developing defenses against those, and so on ad infinitum.  Researchers go to rainforests, they dig in soil, they search in trash; anywhere you can find life (and that’s pretty much everywhere) there are likely to be organisms, some of which may have developed interesting molecules. 

Credit: FISHBIO

 

The thing is, we’re just scratching the surface.  Literally.  The ocean is estimated to account for 99.5% of all living space on earth.  One doesn’t have to go too far underwater for it to get dark and have pressures that would crush a human.  It has been said before, but we know more about the far side of the moon than our ocean floors. We wonder about discovering alien life on other worlds but don’t have any concept of how alien lifeforms in the ocean are.

 

We’ve developed submersibles that can reach the ocean floors, but they’re expensive to operate, have severe limitations about how long they can stay submerged, and have difficult time capturing and bringing back viable specimens.  The WSJ article talks about a more flexible approach: “ocean-going robots with onboard DNA-sequencing gear.” Kobun Truelove, senior research technician at the Monterey Bay Aquarium Research Institute, told WSJ:

The ultimate goal is an underwater vehicle that collects environmental DNA samples, sequences them and then sends the data back to the lab.  We would like to set up a network where you would have these autonomous vehicles out there sampling and then basically be getting the data back in real time.

More than 1,000 compounds derived from marine organisms have shown potentially useful medical properties, according to the article, with 15 drugs so developed already approved and another 29 in clinical trials. “We’re not starting with the chemical,” Bradley Moore, professor of marine chemical biology at Scripps Institution of Oceanography, told WSJ. “We are starting with the DNA that tells me all the genes that encode for the production of one of these chemicals.”

 

Of course, there’s a lot to be done between now and the new world. The fully functioning submersible “lab in a can” is still a few years off.  More problematic is that compounds are often produced in response to threats or other environmental conditions; “We need to study these interactions in situ because it’s almost impossible to replicate them in the lab,” said Katherine Duncan, senior lecturer in marine microbial ecology at the University of Strathclyde.

 

In the meantime, eDNA is being used in a number of other contexts. Looking to see if invasive carp are present but don’t want to wait until someone catches one?  Use eDNA. Want to document biodiversity on Mt. Everest?  Use eDNA. Want to do a microbial census for an entire ecosystem?  Use eDNA. Want to know how many species have DNA on the tea or spices you buy in the grocery store?  Use eDNA (hint: it is a lot more than you suspect). Even trying to identify some of the estimated 41,000 missing crew members from WWII underwater crashes?  Use eDNA.

 

There’s a lot of hype these days about how AI is going to revolutionize drug discovery, but for the foreseeable future AI may be helpful but not critical.  Adityo Prakash, CEO of Verseon, told Datanami that, compared to all the compounds in nature, all the compounds that drug companies might be testing are trivial: “You realize, you’re not even fishing in a tidepool.  You’re fishing in a tiny little shot glass.” 

 

We’re going to need to go fishing in the ocean to find those future medicines, and we’ll need to use eDNA.

The use for eDNA that I started wondering about is in helping decipher our microbiome.  We’ve been aware of it for a couple decades now, had projects like the Human Microbiome Project, and have come to conclude that its cells outnumber our own, But we don’t know what many/most of them are, we don’t know the effects that most of them (or their absence) have on us, and can’t culture most of them outside our bodies.  Whatever knowledge of our microbiome we have gained primarily has been from people in developed nations; “It is clear that our understanding of the ‘human’ microbiome does not include most humans,” one scientist admits.

It seems like something eDNA could help shed light on.

Last year I wrote about the potential wastewater monitoring has for tracking our health, at both a population and a personal level.  We should be taking advantage of that, and we should be figuring out how to use eDNA at scale to help us better understand the world around us.  And maybe to find the next generations of miracle drugs.