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February 14, 2019


Can you be your own doctor?

By Albert DiPiero MD MPH


If you are a creative entrepreneur but just don’t know where to start when it comes to healthcare, this article is your playbook. Here Wall Street Journal columnist Andy Kessler beautifully explains the failures of the current medical system and the process by which he become his own doctor: “A streak of misdiagnoses has led me and many others to take doctoring into our own hands.”  What Mr. Kessler is really saying is that the US healthcare system has bifurcated: there is a high-tech, expensive system for life-threatening specialized conditions. For that, go ahead and use the US healthcare system. But for wellness most doctors have nothing meaningful to provide to you. And Mr. Kessler takes this one step further by caring for himself for “nonvital care”: “I do an annual blood test for $199 through WellnessFX and get results on a smartphone app. A Bluetooth-connected cuff from Omron Healthcare tracks my blood pressure and even notes atrial fibrillation or irregular heartbeat. A Fitbit scale tracks my weight. Beautyrest Sleeptracker tells me my REM sleep duration. My Apple Watch charts my resting pulse and does a simple electrocardiogram. The more data, the better.” This is where entrepreneurs come in: Mr Kessler and the rest of us need many more tools and services to care for ourselves. The do-it-yourself care movement is just starting.


Read WSJ: It’s Time to Fire Your Doctor


Amazon health venture hires CTO

By Albert DiPiero MD MPH


The joint healthcare venture between Amazon-Berkshire Hathaway-JP Morgan Chase (ABJ) just announced the hiring of Serkan Kutan as its CTO. Mr Kutan was most recently chief technology officer at medical appointment booking company Zocdoc, and previously was an engineer at Amazon and at Microsoft. This announcement is significant because it suggests again that ABJ has much bigger plans than just providing the best and most affordable care for the employees of the three companies, although that alone would be an important accomplishment. Mr. Kutan comes from companies with significant consumer experience. Combine this with a large number of other openings posted for ABJ, suggesting hiring is further ramping up. The goal of ABJ and the strategy remains cryptic, which further increases the anxiety of legacy healthcare companies. All this should be great news for entrepreneurs: if ABJ broadens its purview as anticipated it will be on the search for the ideas and tool that address the greatest problems in healthcare.  


Read GeekWire: Amazon health care joint venture names Zocdoc executive as CTO, ramps up hiring



CVS explores new concepts in healthcare

By Albert DiPiero MD MPH


CVS - the drug store chain which is also one of America's largest retailers - is not waiting to see what Amazon is up to. CVS is pushing ahead transforming itself from retail drugstore to a health services company, much of this motivated by the threat posed by Amazon. CVS has now opened three concept stores, called “ HealthHUB” stores, in Houston. These stores are characterized by:

  • “...closed-off space for classes, such as yoga, as well as expanded space for health treatments.”

  • “More than 20 percent of the floor space at the concept stores is devoted to health care services, including wellness products and personalized care. Pharmacists in the HealthHUB will also make regular calls and in-person consultations with certain patients to help them stay on track with their prescription drug plans.”


In the meantime, “Traditional retail sales at CVS are increasingly less important to the company's finances.”  CVS has also recently acquired and integrated the health insurer Aetna and says it will use the insurer along with CVS stores to help patients “become healthier” and deliver more affordable care. This all reflects the growing intense competition between brick-and-mortar retailers and digital retailers, such as Amazon. CVS, I believe, sees health services as the way it can differentiate itself from Amazon and similar threats. Whether CVS Minute Clinics - which are located inside of CVS drug stores - can provide the type of care Americans want and need, remains to be seen. We have deep experience with on-demand clinics and have reason to believe that such clinics would have to greatly increase their scope of care and their throughput in order to succeed clinically or financially.  Bottom line remains: competition is increasing, and nontraditional providers such as drugstores are feeling the pressure and are moving into other areas of “care” leveraging their significant assets in neighborhood stores.


Read USA TODAY: CVS introduces new concept store with more health care, less retail



Hi from HIMSS19!

By Albert DiPiero MD MPH


I am at the annual HIMSS meeting in Orlando Florida this week. HIMSS is the Healthcare Information and Management Systems Society. A few quick thoughts:


  • The sheer volume of healthcare technology companies here is overwhelming

  • It is very difficult for any company to get real mindshare in these fields.

  • Although the creativity and innovation shows the dynamism of American healthcare, this conference also reveals the achilles heel of established companies: most of these companies are still working “inside” healthcare: population management, revenue cycle management, interoperability,  business continuity and disaster recovery - all of which is critical. But there remains surprising few consumer brands or tools that allow established health systems to unleash the power and freedom of the consumer.

  • Those companies that do offer tools for the consumer sound rather dated - still talking about “patient portals.”

  • Bottom line: healthcare entrepreneurs have plenty of space to play, create, innovate

HIMSS19 Conference

Feburary 11, 2019

Movement is starting on transparent hospital prices - and CIOs are scared

By Albert DiPiero MD MPH


As of January 1, 2019, hospitals are required to post their “charge masters” - ie, price lists - online in a readable form, such as Excel. As has been discussed previously, the charge masters are indecipherable to the average consumer. But I continue to believe that forcing hospitals to post these charge masters is an under-appreciated bold action by the Trump administration which will result in unanticipated beneficial changes. Now we are already starting to see those changes: hospital CIOs are getting anxious about the implications. They and their hospital executive colleagues know that patients are not going to be satisfied with long, confusing lists of prices that only expose the folly of the medical billing system. They know that there is great “pent-up demand” for real information about prices that can be compared across hospitals. After all, we have now been trained by Amazon, Expedia, and numerous other consumer brands to compare and shop. So the CIOs realize they will have to develop real systems to enable shopping. And this makes them tremble. And if they don’t do it, the government may require it. Seema Verma, the CMS Administrator, said that the requirement to post the charge master “is a small step towards providing our beneficiaries with price transparency, but our work in this area is only just beginning.” She praised hospitals who were posting “cost calculators” that allow patients to determine their real out-of-pocket expenses. I believe that the forcing of price transparency will ultimately unleash entrepreneurs - probably those in start-ups outside the mainstream - to develop new pricing schemes and service offerings that truly reflect a modern consumer approach to the healthcare. That is what hospital CIOs and CEOs should really fear.


Read CIO: Consumer price transparency: The healthcare CIO's looming headache

How would Medicare for All really work?

By Albert DiPiero MD MPH


As the hype for Medicare For All ramps up ahead of the 2020 presidential election, it seems important and imperative to at least start discussing how this would work. There is now a draft version of a House Democrats' proposal, sponsored by Rep. Pramila Jayapal (D-Wash.). This Bill starts to provide specifics, as reported in Modern Healthcare:

  • Extensive power given to the Secretary of HHS who would oversee regional directors, who oversee all hospitals, healthcare facilities and physicians in specific geographic areas

  • All facilities would receive a lump-sum annual global budget (facilities mean hospitals, nursing homes, federally qualified health centers, home health agencies and independent dialysis facilities)

  • Physicians could seek to be paid a salary from hospitals or other facilities under the global budget; or they could continue under the current fee-for-service system ; such a fee schedule would be set by the HHS secretary;

  • Neither institutions nor physicians would be allowed to charge patients anything for their care

  • The bill proposes very generous benefits with no-cost sharing

  • “ The legislation goes on to detail industry profits, citing a single year's data showing nearly $20 billion in profits for insurers, $125 billion for the 20 largest drugmakers and $15.2 billion for for-profit hospitals. “


This is the first detailed salvo in what will be a long discussion over the next few years. Some initial thoughts: global budgets are are well-known and effective tool for controlling spending in many nations, especially for facilities such as hospitals. What I look for in these proposals: a) what is being optimized; and b) have the tradeoffs been surfaced. For example, will we give unlimited access with no cost sharing for all healthcare diagnosis and treatment? … and pay for it out of … reductions in reimbursements for the providers cited above (insurers, hospital physicians, drugmakers)? And since there is not an unlimited supply of providers, what would restrain overuse of the system? Versus allowing out-of-pocket expenses to restrain demand, thus allowing some people with the means to access care more easily and more rapidly than those with less means. The key to watch for and discuss in all these proposals are the tradeoffs and how honestly they are surfaced.  

In a new Mercatus Center study on the costs of “Medicare for All” , Charles Blahous estimates that Medicare for All would have to “ … immediately and dramatically cut provider payment rates by roughly 40 percent.” I cannot comment on the data here right now, but that would be a tradeoff that should be honestly surfaced.

The debate will continue, as it should.


Read Modern Healthcare: New Medicare for All draft bill sets a global budget model

Read Mercatus Center: Medicare for All: $32 Trillion in New Costs or $2 Trillion in Savings?


Voters want to keep private health insurance option

By Albert DiPiero MD MPH


When voters are asked if they support Medicare for All, only 13% are in favor of a true single-payer system that eliminates private insurance. Everyone agrees that “the system is broken.” But the solutions are confusing to voters. Poll results reflect the confusion and the plethora of views are also manifested in the proposals from various politicians. Key quotes include:


  • “32% favor “a universal, government-operated system that also would allow people to buy private, supplemental insurance.”


  • 25% favor offering all citizens a choice between private insurance plans and a government insurance plan,  a system that is often called the “public option.”


  • “15 percent of voters said they wanted the government to completely remove itself from paying for health care”


  • “14 percent said they want to keep the existing health care system intact.”


It's going to be a long few years before the next presidential election. If there is a winning healthcare solution, it will be one that convincingly acknowledges the broken current system and delivers “insurance security”  by providing a sustainable and definitive solution to the real fear at the back of the mind of every American: the nightmare of suddenly being left exposed to unexpected, insurmountable medical bills.


Read The Hill: Poll: Just 13 percent want 'Medicare for all' if it means end of private insurance

February 8, 2019

Why is telemedicine a dud with patients?

By Albert DiPiero MD MPH


Everyone is pushing telemedicine as the best solution for convenience and cost in healthcare. As this article notes, Walmart has reduced the cost of telemedicine visits for its employees from $40 to $4 per visit.  And “Eighty percent of mid-size and large U.S. companies offered telemedicine services to their workers last year, up from 18 percent in 2014…” (Telemedicine in this article mostly means patients connecting directly with a clinician through a secure video link).  In addition, drugstores such as CVS and Walgreens are “promoting apps that let customers connect to doctors,” and insurers such as Oscar are offering telemedicine visits for free to its members. But patients are not taking this up! Only 8 percent of eligible employees used telemedicine at least once in 2017, most recent figures show. What is going on? In a world of Amazon, Lyft, Netflix, why would people continue to drive into to mostly dysfunctional doctors’ offices in order to get care that could be one-click away, in the comfort of their homes? Based on our personal experience running clinical businesses that included telemedicine, I believe the reasons are multifactorial and hold real lessons for healthcare entrepreneurs: first, in the examples above, most telemedicine care is being pushed by employers, insurers and other companies (such as drug store chains) who are not the epitome of beautiful user experience. These pushers of telemedicine also have serious ulterior motives for fostering telemedicine, and I suspect patients sense that. In addition, telemedicine in these cases are provided by third-party companies that distinct from a patient’s usual source of care. In fact, we know that some insurers will not reimburse a patient’s primary care doctor for video visits because the insurer has an exclusive contract with a third-party telemedicine provider. Until telemedicine is fully integrated into a patient’s usual sources of care, I believe the barrier to trial and switching will remain higher. Next, barriers to implementation remain high: state laws and insurance reimbursement for telemedicine have not yet caught up with the technology. Insurers continue to oppose any expansion in supply of care through misguided beliefs that giving patients more care options will just lead to increased spending. Result: your doctor is not going to take up telemedicine. Finally, maybe video is not the killer app in this case. There are probably other version of “digital” delivery of care which should be explored. More on this later. But despite all of the barriers, I remain very bullish on the eventual future of digital methods of receiving care. For the appropriate clinical scenarios is better for patients, better for providers, and can be delivered at a reduced cost. Most of my faith in this method of care rests on my belief that healthcare entrepreneurs will address the challenges and invent a superb experience that is integrated into usual sources of care at a novel price. (This article is also a great source for list of the top providers of telemedicine vendors).

Read WashPost: Telemedicine’s challenge: Getting patients to click the app

Trump vows to end surprise medical bills

By Albert DiPiero MD MPH

The concept is just so strange: the fact that you can have excellent insurance, go to a facility that is in network, and the receive a “surprise medical bill” because one of the providers is out of network, and not covered by your insurance. Or even worse, you experience an emergency and are taken to an out-of-network hospital and receive care over which you have no control, and then receive a massive bill. The experience of devastating medical bills destroy all trust that people want to place in the healthcare system. But now the Trump administration has taken aim at surprise bills, and this is an area where bipartisan action stands a good chance of success. "We're going to stop all of it, and it's very important to me," said President Trump. Although it is not clear how this will happen, lawmakers on both sides of the aisle are now meeting to workout legislation, as indicated in these accompanying articles. And I have written previously on how, despite the chaos, this administration has put forth some radically creative proposals for dealing with some of the most intransigent problems in healthcare, including hospital pricing and prescription drug pricing. Surprise bills fits in a similar category, with 57 percent of Americans reporting an experience with a large unanticipated medical bill. This is also an area where the healthcare entrepreneur has significant ability to do some good through creative approaches to pricing, payment reform, and supply of different types of providers and methods of care.

Read California Healthline: Ideas To Curb Surprise Medical Bills Percolate With Rare Bipartisan Push

Read The Hill: Bipartisan senators ask industry for information on surprise medical bills

Read Modern Healthcare: Trump vows to end balance billing

I’m also tracking...


Slack and Stitch for healthcare

By Albert DiPiero MD MPH


As noted above, there are other digital methods of care possible besides video… What about Slack? Slack, a cloud-based team collaboration tool with messaging and chat features, seems to be setting up a move into healthcare. It has filed to go public and it has updated its security page by now stating it is “HIPAA Compliant”, according to a report in CNBC. We will have to wait and see what is it planning.  Another start-up, Stitch, is proclaiming to be messaging hub for healthcare providers. All this points to the growing realization that digital communication has massive potential in healthcare, whether directly between patients and providers or between providers. Errant communications lead to significant waste and patient dissatisfaction. But one has yet cracked the nut to truly make care better. Continue to watch this space and these tech competitors.


Read cnbc: Slack is setting itself up for the $3.5 trillion health-care sector

Record funding in healthcare, 2019

By Albert DiPiero MD MPH


This continues to be the golden age for the healthcare entrepreneur. Healthcare startups raised $2.61 billion in venture capital fundraising in January 2019, up 37% from the $1.9 billion raised during the same month last year. Top winners include


Read Forbes: Healthcare Venture Capital Funding Is Off To A Record Start In 2019


February 5, 2019


Amazon strikes fear into legacy health players

By Albert DiPiero MD MPH


In court proceeds UnitedHealth is suing a former executive for breach of a non-compete agreement and claiming he took with him confidential documents when he jumped to the new Amazon-Berkshire Hathaway-JP Morgan Chase (ABJ) health venture. But what is really happening here? As these articles reveal, some suspect that United is using the court to try to pry into the future plans of ABJ. Underlying all of this is a deep fear: legacy players in healthcare - such as United and its Optum division - are massive businesses and yet they feel incredibly vulnerable to technology powered consumer brands such as Amazon. As they should. Here are some key reasons: Optum runs a PBM and other businesses with $100 Billion in annual revenue last year! Yet…

“Optum is vulnerable because its customers — particularly employers — have little insight into its businesses….”“It is truly the most opaque of all black boxes in health care,” Mr. Turpin said. He added, “Amazon is lying in the grass and will someday pop up and do something disruptive around pharmacy.”

(And maybe even direct clinical care).

Meanwhile, ABJ says it will not be “profit-seeking” and it is focused on addressing the needs of its 1.2 million employees. But executives for ABJ would not promise that they would never complete with Optum or other established players in healthcare.

The current established companies in healthcare have no emotional connection to real customers, deliver no meaningful experiences and receive no love. This is the secret path to entrepreneur success in healthcare. You don’t need the bankroll of ABJ (thought that helps!). Start with a unique insight about the customer and go where the established companies will not dare to go, focusing on genuine experiences, emotional connections, and indispensable services for identifiable customers.  

Read NYT: Clash of Giants: UnitedHealth Takes On Amazon, Berkshire Hathaway and JPMorgan Chase

Read WSJ: New Details on Amazon, Berkshire Hathaway, JPMorgan Health Venture Emerge in Court Battle



Experts were wrong on this Trump policy

By Albert DiPiero MD MPH


The Washington Post, usually highly critical of the Trump administration’s actions in healthcare explains in this article that one of the administration’s key policies has not been the disaster predicted. The administration’s rule fostering “association health plans”, which allow small employers and self-employed individuals to band together to purchase health insurance outside of the ACA mandates, has helped more Americans get health insurance. After the announcement of new rules last year “health-care experts piled on with criticism, warning that it would lead to skimpy “junk” plans that do not cover all of the ACA’s essential health benefits.” Several recent reports, including by the CBO predict that these plans with result in insurance coverage for more than “1 million people annually who were previously uninsured.” It is still too early to determine the full effect of these plans within the complex dynamics of the insurance market. But innovation provides unexpected solutions. We have recently discussed previously the potential positive effects of increasing supply in healthcare and this is one positive example, for now.   


Read WashPost: Experts hated this Trump health-care policy. So far, they’re wrong

Read CBO: How CBO and JCT Analyzed Coverage Effects of New Rules for Association Health Plans and Short-Term Plans

The value added by primary care - not yet a game-changer

By Albert DiPiero MD MPH

The long debate about the true value of primary care continues. In the US, healthcare is organized around expensive hospitals and specialists. In most other countries, care is focused around outpatient generalist primary care providers. Does having a dedicated source of primary care lead to improved care and better value. That is the question this large, well designed study tried to answer by extracting and studying data from national surveys of over 70,000 people conducted between 2012 and 2014. Very briefly, people with a primary care provider seem to receive more high-value care in some categories, about the same amount of low-value care as those without a PCP, and they have higher positive experience. There is a lot to unpack here. Please read the entire study. But do these results merit changing policy to fund and encourage primary care? I think it depends on what is meant by primary care and what we are trying to optimize. In my reading, the results are positive but not overwhelming in favor of primary care. In addition, the study focuses on a very traditional definition where a respondent can name a specific provider as their usual source of care, ignoring how care is now a team sport. An accompanying editorial astutely points out that:


“Most of the quality process measures that showed significantly better performance do not require physician-level input, and those that do require it seem to fall short (eg, heart failure, asthma, and COPD care and antibiotic use) or prove no better (eg, low-value imaging, low-value medical treatment, emergency department use, and hospital admissions).”

Furthermore, ... “these results suggest primary care physicians are spending most of their time arranging prevention, performing screening, and offering counseling while their physician-level diagnostic and management skills seem to go unused…”


What does this mean for the entrepreneur? It is critical to focus on what goal one is targeting and not get side-tracked by labels, such as PCP. Care will definitely move from the hospital to the “phone” and to the home. This represents a massive opportunity for the innovators and the policy makers who are willing to deconstruct care, develop ways for non-physicians to provide care, move care outside of the hospital and the clinic, and develop novel payment structures that reward the right results.  


Read JamaNetwork: Quality and Experience of Outpatient Care in the United States for Adults With or Without Primary Care

Read JamaNetwork: Does Primary Care Add Sufficient Value to Deserve Better Funding?

February 1, 2019

Blockchain and healthcare

By Albert DiPiero MD, MPH


Most talk of how technology - specifically EMRs - will lower the cost of healthcare have come to naught. EMRs were touted as the magic bullet that would enable the rapid sharing of information, eliminating duplicative testing and reducing errors. Instead EMRs became a tool in more efficient coding and billing; interoperability never occurred; the government and health systems have spent billions of dollars with only marginal improvements in quality and safety;  while significant evidence points to EMRs’ role in “provider burnout.” Here however in this WSJ article is is a coherent and in my view more believable description of how blockchain technology could reduce costs and improve care, along with companies that are earlier movers in the space. What is most tantalizing for the healthcare entrepreneur is how this system is really built to turn control over to the consumer and how at its core it is addresses interoperability between many diverse systems. What strikes home especially is the mess of the current world of health-care-provider directories! Impossible to determine which doctor is in what network or at what clinic. If blockchain could solve that, that alone would be a gamechanger for patients and providers. It is still too early to tell, but the healthcare entrepreneur should definitely study and keep up on this.

Read WSJ: How Blockchain Could Help Lower Health Costs

Read Blockonomi: Harvard and Levi’s Join Forces to use Blockchain for Health & Safety


Apple Watch and Aetna Deepen relationship

By Albert DiPiero MD, MPH


Apple, Aetna and CVS said they are working on a new Apple Watch app that will tap into personal health data of Aetna’s members to make specific health and medical recommendations, such as exercise goals, and reminders for vaccines and refills. Some of this seems trivial or more or surface skimming. What is really going on here? This move indicates that Apple is going deep on personal health and medical applications. The app would also supposedly guide Aetna members to less expensive or medical test options based presumably on the member’s network and benefits. This app requires accessing the protected health information of members in order to make personalized recommendations. The fact that Apple is moving forward with both FDA-approved applications and applications based on personalized health history information is a great sign for healthcare entrepreneurs who have the creativity to launch innovative products based on the watch apps. The Apple Watch is an under-appreciated tool in both health and medical fields in my opinion.


Read NYT: Apple Watch, Using Aetna Client Data, Wants to Help You Be Healthy


Administration’s radical actions on drug pricing

By Albert DiPiero MD, MPH


Everyone is going after a common enemy these days: Big Pharma and high drug prices. The House and Senate have both stated that the days of unrelenting increases in drug prices are numbered. But it is the Trump administration that continues to make the moves in healthcare. The administration has proposed and implement a series of rules that I believe are underestimated in their radicalness and far reaching effects (see previous postings on requirements for posting hospital price lists). Here is another potential game changer. Rather than going at the drug makers directly,  (thought that may come soon), the administration is proposing limiting the rebates that drug makers give to the PBM middlemen in Medicare and Medicaid and directing those rebates to patients. These rebates are essentially legalized kickbacks. But that is about to change. By going after the hidden underbelly of the drug-pricing chain, the administration is taking on powerful adversary. Here are key quotes:

“The effort could disrupt the U.S. pharmaceutical industry. Under the current system, pharmacy-benefit managers, or PBMs, negotiate confidential rebates and discounts on many branded prescription drugs. Those deals aren’t always passed along to customers at pharmacies.”


“Rebates between Medicare plans and drug manufacturers have long been permitted because they aren’t barred under statutes prohibiting kickbacks to secure federal business. The new proposal could eliminate that protection by potentially subjecting the rebates to review under anti-kickback statutes.”


And the pharmaceutical companies may be supportive of this proposal!


“Drugmakers complain that they have significantly increased the rebates they pay to PBMs, but that the money doesn’t appear to flow through to consumers in the form of lower copays and deductibles.”


They key will be whether this leads lower prices and out-of-pocket expenses for the end user, ie the patient. There are counter arguments that the proposal will increasing premiums or that the lower prices will flow to a small number of patients. But I say better than nothing.


Read WSJ: Trump Administration Moves to Curb Drug Rebates in Medicare, Medicaid

Read KHN: Congress Wades Into Emotional Debate Over High-Cost Prescription Drugs

Read NYT: On Both Ends of Capitol, Both Parties Warn Big Pharma on Drug Prices

January 29, 2019

Key econ lessons for the Healthcare Entrepreneur

Albert DiPiero MD


This is required for the healthcare entrepreneur, from the  world-renowned economist, Tyler Cowen: “One of the worst tendencies in American politics is to restrict supply and subsidize demand. (The phrase is from the economist Arnold Kling.) The likely result of such policies is high and rising prices, restricted access and often poor quality. If you limit the number of homes and apartments, for example, but give buyers subsidies, that is a formula for exorbitant prices.”

The same applies - in spades - to healthcare. Buried in here is also the provocative, contrarian view that focusing on “increasing access” is not the Holy Grail that many make believe. This is one concept we learned from years of hard business reality knocks. What happens when we subsidize healthcare but then greatly restrict who can deliver care and in what setting? The converse also implies: what happens when we open the path to innovation, creativity and growth? As a life-long believer in the power of innovation, I recommend this to the healthcare entrepreneur: understanding the nuances and examples of this concept will help you craft worthy businesses that also get at the heart of the healthcare trap.

Read Bloomberg: Kamala Harris’s Disappointing Economics


Healthcare game-changer: the power of lists

Albert DiPiero MD MPH


The Trump administration has implemented a new rule that requires hospitals must publicly reveal their master price lists online. As I have written about before, I believe this will be a game changer for healthcare. Dave and I have deep experience with the power of transparency. (See here: Link to other  postings and articles on the topic we have written about on quality and pricing).  Even though today the lists of prices are a mess, incomprehensible to the average patient, this is just the start.


“But don’t dismiss the lists as useless. Think of them as raw material to be mined for billing transparency and patient rights.”

Posting prices will shine and bright light on the sordid business of pricing and discounts that create a profound barrier to price and quality competition and serve mostly to reinforce the status quo and protect the revenue of legacy players.  As California Healthline reports, the public postings already “Exposes Wild Fluctuation” in prices at hospitals just miles apart. Ultimately - and sooner than we think - this confusion will create deep internal conflicts, and healthcare entrepreneurs will come forward with services and prices that make sense to the average consumer. Let the revolution begin!

Analysis: Pulling Back Curtain On Hospital Prices Adds New Wrinkle In Cost Control

Read California Healthline: Transparent Hospital Pricing Exposes Wild Fluctuation, Even Within Miles


The Amazon Prime of healthcare coming soon - maybe!

Albert DiPiero MD MPH


The Seattle-based start-up 98point6 has raised huge dollars based on a story of becoming the “Amazon Prime of healthcare.” Read how 98point6 is pitching a story of blending an affordable subscription model with hightech tools that enable instant access to doctors. This company some real business and product cred: it is lead by CEO Robbie Cape, a former Microsoft executive, and its product leader is Rob Schwietzer, the former head of Amazon Prime. The company has raised raised $50 million from Goldman Sachs and reports that it has 160,000 members, either enrolled through their employer or paying for it out-of-pocket.

What does this really mean for healthcare entrepreneurs? It is way too early to comment on 98point6. The potential for such a model in concept is immense. But many have broken their swords and pocketbooks in  trying to transform healthcare by creating an affordable, accessible, high quality consumer brand. Here is the great news for the healthcare entrepreneur:

  • Healthcare remains one of our greatest economic and social challenges, so attention will remain high on this field.

  • Despite a regulatory and cultural environment that creates speed bumps and barriers to creativity, innovation is thriving in healthcare

  • See above posting regarding the possible mirage of easy healthcare access.

  • Venture financing is available for powerful ideas. this is the golden age for the  healthcare entrepreneur. (What type of financing is best for your business will be a topic of future postings here)


So start innovating!   


Read CNBC: Seattle start-up is building the Amazon Prime of primary care with $86 million in backing from Larry Fink and other big names

Read Forbes 2Nov2018: Healthcare Startups Have Raised More This Year Than in 2012 And 2013 Combined


January 21, 2019

A new way of living - and moving the clinic into the home

The days of the assisted living facility (ALF) may be numbered - or at least in for some major disruption. Innovators should study this and extrapolate the implications: the ability of smart technology to deliver “branded, on-demand” services, is ready for upending the market for care for older Americans. Many of the services and functions needed by older people can be easily delivered directly to the home. A recent study by The MIT AgeLab suggested surprising findings: “...for an older person who required higher levels of support, the cost of using on-demand services from home could actually be half the cost of the nation’s average monthly assisted-living fee.”

Other key excerpts:

  • “This new way of living, where countless branded services are provided on-demand and proactively to older adults and caregivers, is transforming the home into what the MIT AgeLab refers to as home-as-service.”

  • “The freedom the connected home provides for one to choose services a la carte, rather than being incorporated into the one-size-fits-all environment of the facility, is an enormous benefit not only for older adults’ wallets, but for their own sense of independence and personal control.”

  • “It does, however, upend the business model for assisted-living facilities. The assisted-living model has rested on the compelling assumption that the most affordable way to provide for the needs of older adults is to house them in one place. But in our new reality of smart technology and on-demand services, that may no longer be the case.”


What intrigues me just as much is the potential of bringing care directly to the home for a range or clinical and health services for people of all ages. This is not just for the elderly. The notion of going to a “doctor’s office”, clinic, or even a hospital I predict will soon feel quaint, or even archaic. We know companies working on this notion right now. The medical office will not stay the same after this.

Read WSJ: Why the Home May Be the Assisted-Living Facility of the Future

Read from MITagelab: Sharing is caring: The potential of the sharing economy to support aging in place


What diabetic test strips can teach the entrepreneur

Who knew about the “strange marketplace for diabetes test strips.” Great learnings here for the healthcare entrepreneur. Too strange to describe in full. Doctors, pharmacies, and of course PBMs are all entangled in this payment, rebate, and resale scheme. Better to read the whole piece.

Key quotes for the entrepreneur:

  • “Test strips are a multi-billion-dollar industry.”

  • “Some clinicians are surprised to learn of this vast resale market, but it has existed for decades, an unusual example of the vagaries of American health care.”

  • “ is generally legal to resell unused test strips…

  • “Mobile phones light up with robo-texts: We buy diabetic test strips!”

  • “It’s a tiny little piece of plastic that’s super cheap to manufacture, and they’ve managed to make a cash cow out of it,”


What other marketplaces can the innovator identify and develop or expose to really help patients, providers and policy makers.

Read NYT: The Strange Marketplace for Diabetes Test Strips


Knee replacement not a cure-all: how can entrepreneurs help

Healthcare entrepreneurs and innovators should take note of the research on total knee replacements. This work serves as a prototype for a particular type of challenge in healthcare today and reveals again how clinical care remains a very humbling field.

A summary of total knee replacement (TKR) in Kaiser Health News emphasizes how surgery can have three possible outcomes that we often forget: make things better; make things worse; or have no significant impact.  

Key findings include:

  • “One-third of people who have had knees replaced continue to experience chronic pain

  • “Up to 1 in 5 are dissatisfied with the results.”

  • In a 2017 study, “knee replacement has minimal effects on quality of life, especially in those who had mild arthritis.”  

  • Previous research suggests that “One-third of patients who undergo knee replacement may not even be appropriate candidates for the operation”


Yet the number of TKR are growing rapidly and are heavily marketed by hospitals and surgical centers. For many, TKR is a life-changing positive experience. But for others they are no better off. This work reveals the challenge of knowing what exactly helps people; on what to spend precious resources; and how difficult it is to “prove” which individuals benefit from a specific intervention. Entrepreneurs who understand these differences and can develop tools and techniques to surface these differences can help patients, providers, and policy makers and make a significant contribution to the healthcare system. There are many links here to other key research.

Read KHN: Up To A Third Of Knee Replacements Pack Pain And Regret


January 18, 2019

How to fund a start-up

This article has essential information for the healthcare entrepreneur who is planning a start-up. This is a topic we know well, and I believe that it applies especially to start-ups that plan to deliver clinical services: actually take care of patients. We are planning an extended piece on this topic. But for now study this, ponder, and choose wisely and carefully.


Here are some key excerpts that give you an overview:


  • Josh Haas, the co-founder of Bubble, a software-writing start-up, told the group that he and venture capitalists “were pretty much totally on different wavelengths” about the trajectory of his business.

  • By encouraging companies to expand too quickly, Mr. Denbow said, venture capital can make them “accelerate straight into the ground.

  • The end goal is to sell or go public, producing astonishing returns for early investors.

  • But for every unicorn, there are countless other start-ups that grew too fast, burned through investors’ money and died - possibly unnecessarily.

  • Now a counter movement, led by entrepreneurs who are jaded by the traditional playbook, is rejecting that model. While still a small part of the start-up community, these founders have become more vocal in the last year as they connect venture capitalists’ insatiable appetite for growth to the tech industry’s myriad crises.

  • “The V.C. path forces you into this binary outcome of acquisition or I.P.O., or pretty much bust..”


Read NYT: More Start-Ups Have an Unfamiliar Message for Venture Capitalists: Get Lost


Crowdfunding for medical care - innovation or tragedy

It has come to this: the kindness of strangers to fund medical care through crowdfunding. Sites such as GoFundMe and YouCaring have helped users raise millions of dollars over the years to help cover medical care. YouCaring reports that “close to half of its 350,000 active campaigns are related to healthcare and the fastest-growing category is fundraisers for cancer.” GoFundMe, the leader in crowdfunding started out to help people achieve their dreams, funding weddings and holidays. But the site has fully embraced the move to healthcare and now claims to be the number one site for “Medical, Illness & Healing fundraising.” It’s revealing and painful to read how this trend is portrayed in the foreign media (see the article from the Financial Times):  “The business of healthcare turned the sick into consumers. Now crowdfunding is turning patients into products.” “Privacy is one thing successful fundraisers have to sacrifice,” as they market themselves. But there are also clues here to the deep pain-points in healthcare for the entrepreneur who wants to change the system: part of the of the attraction of crowdfunding, according to those who who have used it and talk about it, is that it gives people a sense of control - control over a system that is impersonal, complex and incoherent, especially when it comes to prices and outcomes. There is something deeply galent in how these individuals innovated for themselves in a time of crisis. The other perspective is the article in Entrepreneur India that argues that crowdfunding is a welcome mainstream tool and needed innovation to provided “healthcare for all” in a country that spends only 1.2% of GDP on healthcare and where 80% of the population doesn’t have health insurance.


Read FT: Why are so many Americans crowdfunding their healthcare?

Read KFF: GoFundMe CEO: ‘Gigantic Gaps’ In Health System Showing Up In Crowdfunding

Read Entrepreneur: Here's How Crowdfunding Can Provide Healthcare For All


Watch the states for creativity, opportunities and risks

The new year has brought a flurry of activity at the state and local level to address the healthcare crisis: proposals that healthcare entrepreneurs should track closely. California’s new governor, Gavin Newsom, is on a tear, prepared to spend large dollars to ensure greater insurance over and more support to families paying for it. In Washington state, Governor Jay Inslee is proposing a state offered “public plan.” And in New York City, Mayor Bill de Blasio of New York announced a plan to guarantee everyone has access to healthcare: “We are saying the word guarantee because we can make it happen.” As the federal government appears increasingly paralyzed, states probably are the best place for creative maneuvers in healthcare. Entrepreneurs, study the proposals carefully. Even the states and governments with recent  surpluses (Californian and New York City) will face enormous budgetary challenges in fulfilling their healthcare goals. None of the plans specifically addresses how care is organized and delivered. Without addressing how, where, and by who care is delivered, there is no meaningful solution. This is where innovators and entrepreneurs care make a major positive contribution.


So have a look and study these closely:


Read NYT: Opinion Can States Fix the Disaster of American Health Care?

Read NYT: De Blasio Unveils Health Care Plan for Undocumented and Low-Income New Yorkers

Read Governing: Can California and NYC Afford Their Near-Universal Health-Care Plans?

Read State of Reform: Washington Governor announces proposal for public health care option


January 16, 2019


“Passive” healthcare may deliver more results than incentives and action-oriented options

How should the innovator think about incentives and market forces with regard to behavioral change?  Employer-based wellness programs continue to proliferate and incentives flow to get people moving and eating right. Even Congress is proposing to reward people (through tax breaks) for joining gyms and and allowing money in health savings accounts to be used for buying exercise equipment. The intersection of wellness, health benefits, and clinical care is an area of hot investment and perennial entrepreneurial efforts. But does any of this work? Austin Frakt and Gilbert Benavidez argue that we favor action-oriented programs, but there is no evidence that they deliver on their promise. The incentives just support people who are already action-oriented and have the means and the personalities to reap the benefits. In order to help the greater population, they propose, we should provide “passive” programs that automatically enroll people, and reduce the complexity of over-abundant choice, mimicking 401k programs. I love the contrarian nature of the proposal. More tangible examples would help make a stronger case. But health entrepreneurs should consider the implications. There is more here to read and study.


Read NYTimes: Why a ‘Passive’ Health Approach Can Produce the Most Action

Read Forbes: The Ways & Means Committee Would Borrow $100 Billion To Expand HSAs And Subsidize Gym Memberships

Read: The Dubious Empirical and Legal Foundations of Wellness Programs

The innovator and opportunities in health insurance

Too much to go over here, but do explore this thoughtful discussion.

Essential learning for the healthcare innovator.

Some key excerpts:

  • Learn about the  “uninsurability” of most healthcare today

  • Learn how employer-sponsored health insurance distorts the structure of care in the US and makes consumers passive and weak in their medical decision making

  • The case for “Universal Catastrophic Coverage.”

Also check out the informative linked reading list


Listen to EconTalk: Ed Dolan on Employer-Sponsored Health Insurance

Jon Stein, entrepreneurial superstar: launching a business from the ground up

Should you build a company from scratch in a highly regulated segment of the economy at the worst possible time? Is it possible to work outside of the regulations and requirements that stifle innovation in the legacy industry? How to succeed in an industry that talks about the importance of  the personal touch between the client and the professional, yet where the professional and the industry seem opaque and self-serving? It’s not healthcare, but do study this classic story of entrepreneurialism. The parallels to healthcare are stunning and instructive. I went back and enjoyed again this segment on how Jon Stein founded and grew the financial services company, Betterment.


Listen: How I built this - Betterment



January 14, 2019

Using the “Netflix model” to pay for highly expensive treatments

Louisiana announced that it would try a new model to pay for highly effective but extremely expensive treatments in its Medicaid population. The state proposes to pay a subscription fee to a drug company in order to get an unlimited access to the drug for hepatitis C, as opposed to paying for each prescription. This subscription model is being dubbed the Netflix model. Here is an example of a public private partnership that just might work. The new drugs to treat hepatitis C are highly effective and can cure an individual of the disease.  But treatments costs around $90,000 per patient, which means most states can afford to treat only a limited number of people per year using public dollars. The goal of subscription model would be to get a price point where the drug makers have incentives to treat as many people as possible. Louisiana is still in negotiations with drug makers. The challenge is that “The profit-maximizing price [for the drug company] is very rarely the one that maximizes public health..." We believe subscription models are an underappreciated technique in healthcare business innovation. Where else could this innovative model be applied?

Read WashPost: Louisiana adopts ‘Netflix’ model to pay for hepatitis C drugs

The impact of venture backed digital health companies on disease and cost

A recent study in the journal Health Affairs examined whether digital healthcare companies have had any impact on disease burden or healthcare costs as demonstrated through published research in peer-reviewed journals. Digital health represents a rapidly growing sector of US healthcare. Globally consumers will spend $49 billion on digital health solutions by 2020. In 2017, $6 billion in venture funding went to digital health companies. The companies in this sector include “including genomics and sequencing, analytics and artificial intelligence, biosensors, telemedicine, mobile applications, digital medical devices for diagnosis or treatment of disease, and population health tools,” and they hold great promise in addressing some of the greatest medical and social challenges of our times including disease burden and the cost of care. The study focused on the top 25 privately held digital health companies in terms of private equity funding. (These companies studied included Jawbone, Privia Health, Accolade, PatientsLikeMe, Doximity, Sharecare, Lumos Labs, to name a few on the list). However, the authors, “found no studies that evaluated effectiveness in terms of reducing cost or improving access to care. Furthermore, clinical effectiveness studies with a high level of evidence were uncommon.” The authors surmise that part of the challenge may be the regulatory burden required to conduct studies on patients with diseases as opposed to developing digital technologies “only for maintaining or encouraging a healthy lifestyle,” which falls outside of the scope of FDA regulation. These findings highlight the importance of creating a business and regulatory environment that encourages exploration and innovation and helps companies test their products in rigours, randomized controlled trials in settings of significant disease burden when applicable - so that society can gain the most from this innovation. There is much more there to read and consider.


Read Health Affairs: Top-Funded Digital Health Companies And Their Impact On High-Burden, High-Cost Conditions


Pharma is big target in 2019 for Congress

Prescription drug pricing is the rallying cry in Congress this year. Sen Bernie Sanders and Democratic colleagues have put forth three major bills to lower or control the costs of prescription drugs: these bills “would allow importation of cheaper drugs from Canada, allow Medicare to negotiate drug prices and strip monopolies from drug companies if their prices were above the average price in other wealthy countries.” Although pundits believe there is zero chance any of these bills become law, the clamor for change on prescription drugs may trigger some unanticipated surprises. The pressure from Congress and from President Trump is putting the drug makers in an irreconcilable position. As one author noted: Washington wants drug prices to fall. Wall Street wants stock prices to rise. Last year, the drug makers kept their price increases to a minimum. But as of January 1, 2019, they have returned to their usual playbook of regularly increasing prices. Drug companies are surprisingly reliant on price increases for their revenue growth. One analyst calculated that “nearly two-thirds of the sales growth from the 45 best-selling drugs in the U.S. was attributable to price increases between 2014 and 2017.”  This phenomenon is due in part to a system of third party insurance that pays for many drugs that should really be paid for by consumers directly. The insurance system builds in a mechanism to sustain price increases that encourage manufacturers to produce drugs with very minimal marginal benefit, but a guaranteed revenue stream with annual built in increases. How many of these medications would we buy and at what price if we had to pay ourselves?

Read The Hill: Sanders, Dems unveil sweeping bills to lower drug prices

Read Bloomberg: Big Pharma Is Caught Between Wall Street and Trump on Drug Prices