#48 - Virtual Primary Affair

Secret prices could be revealed, and virtual primary care is the new cool model

Things That Happened

Gottleave. Scott Gottlieb is leaving the FDA, but his continued fights against tobacco and vaping are supported by the white house and will likely continue under his yet-unnamed successor. Eric Topol sums up the general feeling among people interested in health and tech:

Negotiated Crisis. HHS is considering issuing a rule that would require hospitals and insurers to publicly disclose their secret negotiated rates. While this will certainly garner legal challenges from both the hospital and insurance industries, it would doubtless be a good thing for everyone else who is concerned about the ceaseless upward spiral of the cost of care. 

Revealing actual negotiated prices - as opposed to meaningless charge masters - would essentially mean transparent pricing in healthcare services and a giant victory for people who like to know how much they’re paying for stuff they’re buying. What it wouldn’t do is recast the industrial incentives of both hospitals and insurers where increasing prices are a win on both sides of the negotiating table.(For more on that, I’ve written about the healthcare price death spiral). 

The Trump Administration is considering this action as a means of giving patients better information when they shop for the lowest priced care. But, as anyone who works in healthcare, or anyone who has used our healthcare system knows, even with perfect price information it’s still challenging to predict the bill you’ll receive, and the portion of that bill you’d actually have to pay after insurance pays their part. 

Price transparency is a big part of what’s needed to contain healthcare costs. The other key component: aligning incentives so when patients are healthier, payers make more money. 

Crossover Episode. Sherpaa, Jay Parkinson’s virtual primary care startup, has been acquired by Crossover Health, a firm that operates health clinics for employers. I’m a big fan of Sherpaa’s virtual primary care model. While many companies focus either on applying tech to care delivery or on reforming the business model of primary care, Sherpaa is solving one problem with another. They’ve used tech - specifically their semi-synchronous communication platform - to deliver primary care while completely throwing away the notion of the visit. While most startups pitch themselves as doing something completely different and better, Sherpaa seems to have actually followed through. I’m excited to see where this new combined entity goes. 

The Oscar Goes To… Business Insider is reporting that Oscar Health topped $1 billion in revenue in 2018. That’s great, but more importantly, they’ve improved their margins.“The company said it has managed to get medical costs under control, spending about 80.5% of the premium revenue it takes in from its members on medical care, down from about 95% the year before.” Growth is good, but if you’re a startup looking to get off the venture treadmill the safest bet is to build a business that can fund its own operations. This is a huge positive trend for Oscar. 

Telastock. Teladoc reported their full-year 2018 financials and things are looking up for the leading telehealth company. Total number of visits, their key metric, has grown 80% year over year. One of Teladoc’s bigger problems has been that while they can sell memberships to employers, they were struggling to get covered employees to actually use the service. Goosing engagement may be a worry of the past for them. 

But there is something troublesome for Teladoc’s long term prospects hidden in plain sight. Their key metric - number of visits - is a perpetuation of what’s wrong with the fee for service model. They are using technology as a way to make care better, but it’s in the same old, tired model that promotes utilization rather than actual improvements to care delivery. As soon as you shift to value based care, number of visits becomes a metric of failure rather than success. Jay Parkinson has a better idea here. 

Demanding Doctor. Continuing the conversation on what is good and what is bad in the world of telehealth, Doctor on Demand announced their new“virtual primary care” platform. It’ll aggregate all your data, play nicely with other providers in terms of information transfer, and allow you to see a doctor whenever you might need from the comfort of your own home. But, like Teladoc, they’re still centered around the notion of the visit. You can bolt on all the technology you like, but if you’re still utilizing a busted business model you can only get so far. 

Watch your BP. Samsung’s new smart watch purportedly has the ability to take blood pressure readings. It’ll be a beta testing feature and very limited in scope, but this is still a big leap forward in adding diagnostic testing to mainstream devices. You know, if it works.

Things To Read

Andrew Dunn wrote for Healthcare Dive about the questionable ethics at play when the VC arms of hospital systems invest in medical technology firms. There is little doubt that when these VCs are courting companies to take their investments they are promising some sort of access to the hospital. But it is also not well-proven that conflicts, where clinical staff might feel pressured to use a portfolio company’s product, actually play out in a way that harms quality of care. 

The larger story, in my opinion, is the question of why non-profit providers have enough cash lying around to launch hundred million dollar venture funds. Perhaps their prices are higher than they ought or need to be? 

“E-ambulance is keyed onto X-Road, and allows paramedics to access patients’ medical records, meaning that the team that arrives for your chest pains will have access to your latest cardiology report and E.C.G.” This isn’t a startup pitch. This is from a 2017 story in The New Yorker where Nathan Heller explores Estonia’s digital-first government and the effect that it has on their daily lives. Reading this as an American, my mind goes first to the terrifying thought that all my information would be digital and accessible to the bad actors who want to steal it. And then I remember that my information has already been stolen a few times this year in increasingly run-of-the-mill data heists. You have to wonder if the myriad benefits of a system like Estonia’s would outweigh the risks. 

Frank Chen, a partner at Andreessen Horowitz, compiled a written version of his late 2018 talk "Humanity+ AI: Better Together”. It’s a good read for framing how we should be looking at AI and the effect it’s likely to have on our work, lives, and society. 

Thanks for reading The Healthcare Handout, a bi-weekly update on tech and business in healthcare from Isaac Krasny. Criticize, praise, or otherwise get in touch with Isaac via isaac@healthcarehandout.com, or on twitter @isaackrasny

And remember, this machine runs on sharing. If you found this newsletter informative or thought-provoking, give it a boost by sharing with a friend or colleague. Or share a testimonial.

#47 - When your heart beats for Facebook

Facebook knows your bpm, ABJ tells all in court, and more...

Things That Happened

It’s still getting worse. Healthcare spending is still growing faster than the economy. See Axios for some good (and depressing) highlights, or find the full report in Health Affairs

And worse. Turns out some popular health apps have been sending data like heart rate readings and women’s period and ovulation schedules straight to everyone’s favorite social network, Facebook. While the initial blow back will be (rightfully) directed at the app developers and Facebook who participated in these illicit and unseemly transactions, the question will turn to the role of the app store. Apple’s recent push to craft themselves as a beacon of privacy will be compromised by the fact that, in this case despite their advertised promises, what you did on your iPhone didn’t stay on your iPhone. 

Discovery Health. Optum took to court a former employee who has joined the Amazon, Berkshire-Hathaway, JP Morgan joint venture out of fear he would disclose their trade secrets. More interestingly, ABJ had to disclose their business plans in open court. “The venture will oversee the $4 billion that Amazon, Berkshire Hathaway, and JPMorgan spend each year on healthcare for their roughly 1 million employees and dependents.” 

The focus will be on managing the benefits of existing employees, but you better believe if they figure out how to bend the cost curve for these 1 million people they’ll start selling the services to other businesses. There’s a fortune to be made in making healthcare cost less than a fortune. 

VAPI. Apple announced the VA will be joining its health records network, allowing 9 million VA patients to move their health records onto their iPhones. For the complete and growing list of participating providers, Apple keeps a list

A Bit Different. Fitbit is moving full-steam ahead on their transition away from being a consumer-focused company and into a health services company that uses proprietary devices to facilitate targeted health programs. The biggest clue this is happening: you can’t even buy their newest device unless it’s through your health plan.

Recoverily. Verily is partnering with a couple of provider networks to help treat patients addicted to opiates and “develop a tech-enabled campus conducive to promoting recovery and addressing the holistic needs of each individual.” The program, dubbed OneFifteen, will be centered in Ohio. It’s yet another collaboration for Verily where they bring technology and money and in exchange reap primary data from the front lines of care. 

Things To Read

“Consumers continue to go digital and are now doing so not just out of curiosity or for general fitness and well-being - but with the intention to address concrete health needs.” Rock Health’s report on digital health adoption in 2018 is a fascinating read for points on telemedicine, data sharing, and the above analysis of consumer usage of digital health tools. 

Since the early days of fitness tracking the question has always been whether these wearables would become clinically relevant. As I noted above with Fitbit’s strategic shift, and with things like the Apple Watch EKG sensor, it seems we’ve turned the corner to where these devices are becoming not just clinically relevant, but tools used by physicians and health plans to help patients manage specific conditions. 

“If these tools are going to be used to determine patient care ... they should meet standards of clinical benefit just as the majority of our drugs and diagnostic tests do.” That’s Ravi B. Parikh, co-author of a paper that calls for tighter standards and regulation of AI in medicine. Axios nicely lays out the different components of an issue that will no doubt be much discussed as technology continues to advance and machines get smarter. 

Here’s an interview with Dr. Sumbul Desai, Apple’s VP of Health, in which she reveals no new information about the company’s plans in health. 

Business Insider got a look at the deck Devoted Health used to divine $300 million from the pockets of venture capitalists without having so much as a single customer. Devoted’s strategy for controlling the cost of care is, in essence, very similar to other extant players in the space. They’ll act as both payer and primary provider, using relatively lower cost front-line care to reduce their policyholders’ need for more expensive specialty and hospital care. It’s actually fairly similar to other innovative primary care outfits like Iora Health, Aledade, et al. The question is whether these companies can implement this intrinsically sensible model before they’re crushed under the weight of VC growth expectations.

“In 2017, Health Care Service Corporation, which oversees Blue Cross Blue Shield plans serving 15 million members in five states, disclosed in its corporate filings that it spent $816 million on broker bonuses and commissions,” Marshall Allen continues turning over every rock in the health insurance industry for his series for ProPublica. This time his target is employer insurance brokers, most of whom are paid by insurers as a percentage of the premiums paid by employers. Yet another player in the health insurance game who benefits when premiums go up. 

And that’s a good summation from James Weinstein, the former CEO of Dartmouth-Hitchcock, of the unifying assumption underlying the strategies of most capitation-driven healthcare companies. Hospital-based care is expensive and oftentimes unnecessary, and removing it from the equation by providing more and better lower cost care can be a recipe for lowering overall costs and earning big profits while bending the healthcare cost curve. 

Thanks for reading The Healthcare Handout, a bi-weekly update on tech and business in healthcare from Isaac Krasny. Criticize, praise, or otherwise get in touch with Isaac via isaac@healthcarehandout.com, or on twitter @isaackrasny

And remember, this machine runs on sharing. If you found this newsletter informative or thought-provoking, give it a boost by sharing with a friend or colleague. Or share a testimonial.

#46 - Data, Data, Everywhere

Apple and Verily want your data, UHC won't share its data, and more...

Things That Happened

Data mine. UnitedHealth Care will stop sharing de-identified claims data with the Health Care Cost Institute, a research organization studying healthcare spending in America. Perhaps UHC decided that data was too valuable to give away for free. 

Blue suede sensors. Verily wants to walk a mile in your shoes. The company is trying to find someone to take them into the shoe business, specifically so they can load those shoes up with sensors that’ll gather health data. The company also recently got FDA clearance for EKG sensing on its study watch (currently in use as part of Project Baseline). More thoughts on what Verily is trying to accomplish below. 

500 million leaf clover. Clover Health announced $500m in new venture funding this week. Between this round, and the $500m recently raised by Devoted Health and Bright Health, that’s a billion dollars invested in just three insure-tech companies since… October. 

Watch your health. Aetna policyholders will be able to use an Apple Watch app - Attain - to track their activity and earn rewards (like getting reimbursed for the expense of the Apple Watch.) One key aspect of the deal: policyholders will be able to incorporate Aetna’s health records into their Apple health records. I suspect this is Apple’s main motivation in the deal, as it will allow them access to a rich trove of data that’ll provide a much more comprehensive experience for users. 

Selling candy and tooth fillings. CNBC reports that Walgreens and CVS are adding dental services to their roster of in-store offerings. While CVS is piloting integrations with SmileDirectClub, Walgreens is putting entire clinics inside their walls through a collaboration with Aspen Dental. 

Dental services is a huge market. It’s also one where both providers and consumers are accustomed to a standard retail experience (a much greater portion of dental is paid for with cash as compared with medical services). I wouldn’t be surprised if dental grows more quickly than medical services in terms of retail-integration. 

Things Worth Understanding

Comparing Verily to Apple, their shared ambition is to gather health data. Their strategies, however, are entirely different, and follow with their overall larger corporate genealogy. 

Apple, always optimizing for user experience, wants your health data as a way of enhancing the utility of their devices. Hardware is becoming less and less of a differentiation point for selling devices, and so they need to make the surrounding ecosystem of apple devices and services even stickier and more tightly integrated with your life. Knowing that your personal health data - both what you generate with your apple devices and your health records pulled via the health records API - is easily accessible in the apple ecosystem makes the decision to leave the ecosystem that much more complicated.

Verily on the other hand, doesn’t just want your health data; they want everyone’s health data. Much like their corporate progenitor Google, Verily is all about gathering as much data as possible and wringing insights out of it. They then take this data and insight to commercialization partnerships, like Onduo and Dexcom, where they can be put to use as a way to get products into the field that can collect even more data. 

If you were forced to sum up the comparative health strategies of Apple and Verily in a dangerously reductionist sentence, you could argue Apple is the full stack solution while Verily is the picks and shovels play. 

Things To Read

What’s your risk score? Mohana Ravindranath reports in ProPublica that companies have begun aggregating data to create “risk scores” that ostensibly tell physicians how likely you are to become addicted to opiates.

Ambrosia, the startup that promises to help you fight aging by infusing you with the blood of young people, has reportedly completed 150 infusions. I’m including the story here because it’s an interesting jumping off point into the big business of blood. If you’ve never considered how the blood donated by volunteers makes its way to the people who need it, start here in exploring this interesting and complex set of resource allocation, supply chain, and ethical problems. 

When non-profit insurers converted to being for profit, premiums increased. Here’s Leemore Dafny’s paper examining the role of insurance company ownership in health care costs. 

“Could the use of A.I. in medicine worsen health disparities?” Dr. Dhruv Khullar writes in the NY Times about how artificial intelligence is not a panacea for bias. This is abundantly evident once you understand the process by which machine learning models are created - they are imbued with the biases of their creators and the data on which they are trained. At their core, these models are no different than traditional programs - they produce the desired outcomes as dictated by the programmers.

“What's the actual evidence that M&A is an effective strategy?” David Willis unpacks and examines the reasons often cited for hospital mergers. Stripping away the various forms of operational “synergy” he finds the only reliable benefit to hospitals is increased market power when negotiating with payers. Given payers are consolidating as well, where does this spiral end? When you have effective monopolies among both payers and providers, who wins? Certainly not the patient.

Thanks for reading The Healthcare Handout, a bi-weekly update on tech and business in healthcare from Isaac Krasny. Criticize, praise, hire, or otherwise get in touch with Isaac via isaac@healthcarehandout.com, or on twitter @isaackrasny

And remember, this machine runs on sharing. If you found this newsletter informative or thought-provoking, give it a boost by sharing with a friend or colleague. Or share a testimonial.

#45 - Apple is a hardware/services company

Apple’s doing services, Omron’s blood pressure watch, and Verily, warily.

Things That Happened

Miscomprehend. My last newsletter, back in the heady days of 2018, discussed the implications of Amazon’s Comprehend Medical service. Should it work as described in their blog post, Comprehend Medical is the medical scribe of the future. Should it work as described. One intrepid Handout reader/cardiologist got in touch to say he’s been testing the new service and, while it’s better than previous attempts at automated documentation, it’s not living up to AWS’ promises. 

Watch your blood pressure. Omron’s blood pressure watch is now available for purchase. Don’t get me wrong; this is a technical achievement and will make it easier than ever before for people to regularly check their blood pressure. But don’t expect it to become more than a niche product for those who have $500 to spare and need to regularly check their blood pressure on-the-go. Let’s get excited when Apple puts the same functionality in their next watch. 

And in case you were wondering, Dr. Topol approves: 

Warily, Verily. Stop me if you’ve heard, but Verily raised a cool billion. You may be asking yourself: but what does Verily actually do? Their business model can best be described as collecting information. They’re gathering up data through partnerships and their own projects like Baseline. What they’re planning on doing with it? Anyone’s guess. Can collecting information be a lasting business model in health? We’ll have to wait and see. Here’s some of my speculation from March when Verily was rumored to be getting into the insurance business. And here’s a recent interview with Verily’s CMO Jessica Mega.  

Whole Lotta Whole Foods. WSJ is reporting that Amazon plans on adding new Whole Foods locations throughout the country. While the move is reportedly focused on extending the reach of their 2-hour delivery service PrimeNow, it’ll also put physical Amazon locations nearer to more Americans. If Amazon does decide to get into care delivery, these locations could serve as their beach-heads. 

Speaking of Corporate Care… CVS CEO Larry Merlo laid out the company’s vision for the future at the JP Morgan conference, and care delivery is a big part of it. Here’s his deck from the conference. They’re building a concept health hub in Houston:

Listlessly Listing Prices. A new law has gone into effect requiring hospitals to post their price lists online. Here’s the chargemaster from my local hospital. 500 pages, largely meaningless (to me) procedure and device names, and the prices themselves don’t reflect the discounts my insurer has negotiated, nor how much I’d actually owe after co-insurance, deductibles, etc. Let’s hope nobody is considering this progress. 

Things Worth Understanding 

It’s a fairly safe prediction that Apple will become much more of a services company in 2019. iPhone sales growth appears to have peaked amid a larger trend in mobile where hardware is no longer the key differentiator - it’s the power of a phone’s virtual assistant, the variety of its app offerings, and the larger device ecosystem in which it exists that increasingly drive demand for phones. 

One reason this is such a safe prediction is that Tim Cook has said as much: “You will see us announce new services this year. “ At least some of these services will have a health focus, as Apple grows on the base of their health records service and Apple Watch EKG. Don’t forget Apple has an expansive health lab and has “dozens of doctors” on staff to guide healthcare efforts. 

Ben Thompson and James Allworth dive into Apple’s uncertain future in the most recent episode of Exponent. In it, Thompson makes the argument that as the larger ecosystem becomes more important in defining the user experience of a device, Google and Microsoft, with their much closer ties to users’ calendars and professional lives, have a distinct advantage. Perhaps Apple is attempting to leapfrog these two by focusing on health, an aspect of our lives equally if not more important than scheduling, and one without a dominant digital player. 

Apple may see health as their wedge for creating a unique user experience. Specifically, they can become the consumer-oriented digital health platform that doesn’t yet exist. One thing is for certain: while we’ve been able to evaluate Apple’s moves in the past as those of a firm primarily focused on selling hardware, this may no longer be the case. 

Things To Read

Of the $1.18 billion invested in health tech companies in the fourth quarter of 2018, the vast majority, ~$900M, went to services companies. A whopping $500M is split between just Devoted Health and Bright Health, both of which are applying technology to improving insurance and care delivery. In this case, the market seems to be a solid indicator of systemic priority: the biggest problems to be solved in healthcare lie in the basics of how we deliver and pay for care. Mobihealthnews has the complete Q4 funding list

While we’re talking about venture capital, you probably saw this NY times piece on the many startups choosing to bootstrap rather than take venture investments. Especially for digital businesses, it’s easier to bootstrap than ever before; you can grow a business from minimum viable product to fully-featured powerhouse all while bringing in revenue to support operations and growth. But does this hold true in health? Given the predominantly b2b sales environment, and stringent regulations, it’s infinitely more difficult for digital health companies to develop iteratively and earn early revenue. Perhaps one of the reasons venture capital investment in health tech continues to grow is that it’s one of the sectors where venture investment is still nearly a requirement. 

Undeerwhelming-Horowitz. Ben Horowitz (of legendary VC firm Andreessen-Horowitz) interviewed Kaiser-Permanente CEO Bernard Tyson on the A16Z podcast. Sadly, these two have nothing more than a surface-level conversation about KP’s unique business model - if you’re looking for a meaty conversation on health, tech, and payment models, keep looking. 

And if you have any good healthcare podcast recommendations, please send them my way. I’m getting desperate. 

In case you weren’t convinced, here’s an article in JAMA talking about how and why personal health records are coming of age in the era of smartphones. 

Thanks for reading The Healthcare Handout, a weekly update on tech and business in healthcare from Isaac Krasny. Criticize, praise, or otherwise get in touch with Isaac via isaac@healthcarehandout.com, or on twitter @isaackrasny

And remember, this machine runs on sharing. If you found this newsletter informative or thought-provoking, give it a boost by sharing with a friend or colleague. Or share a testimonial.

#44 - The Sound of Cardiologists Everywhere Screaming

Apple’s EKG is out, AWS is going to fix EMR, and the medical school business model is dead

Things That Happened

The sound of cardiologists everywhere screaming. The Apple Watch EKG feature went live this week. Consumers seem to love it, while physicians are less enthusiastic. Want to scare a cardiologist? Show her this

Expanding Circles. Oscar Health is adding a new service tier to its small employer insurance offering. Circle Plus is an upgrade to the standard Circle plan, and includes expanded provider choice. Oscar’s narrow-network plans are one of their key strategies for containing costs, so this could indicate they’re finding it difficult to court employers to their plans. Most healthcare consumers associate the quality of a health plan with the breadth of choice of in-network providers and the size of the deductible, so offering a costlier plan with more choice may be enough to convince employers, and their employees, that Oscar is a viable option for employer-sponsored insurance.

Rideshare Healthcare. Lyft hired Megan Callahan, the former Chief Strategy Officer at Change Healthcare, to run their healthcare business. Given her experience at Change, Callahan is an expert on the billing and revenue side of healthcare. And that’s why Lyft, and other ride-share firms, are so interested in the area of non-emergent medical transport; much of it is billable to insurance companies. And even when it isn’t directly reimbursed, it’s still well worth it for a physician to provide transport when it earns them a visit fee they wouldn’t have seen if the patient didn’t show up for the appointment.

More reason to stare at your phone. Researchers at Stanford designed a machine learning algorithm to detect depression using video recorded from a conversation with a physician using a smartphone. While it’s still very much in the research phase, it’s demonstrative of the reality that our smartphones are, and will be, excellent diagnostic sensing tools. 

Share it on Facebook. The initial products of the FastMRI collaboration between NYU medical school and Facebook have emerged in the form of an open sourced set of MRI data and baseline machine learning models. Facebook claims in their blog that it’s the largest MRI data set ever open-sourced. 

Psychiatry in Aisle 5. Walmart, continuing their inexorable march towards healthcare dominance, is piloting an in-store behavioral and mental health clinic in a single store in Texas. The clinic is focused on less complex mental health diagnoses, and will refer patients to standard mental health practices should they require more complex care. It’s essentially the same model Walmart is already employing with medical care. 

Robots giving you medication? Pillo, the automated pill dispenser slash chatbot, is now available for purchase. The major question Pillo’s executive team should be sweating is whether Pillo offers an experience superior enough compared with PillPack and an Amazon echo dot ($30 total cost) to justify the huge price delta. Pillo starts at $500, and has a $40/month subscription fee starting in year 2. 

Things Worth Understanding

Last week Amazon Web Services announced a new HIPAA-compliant service that employs deep learning to interpret and structure physicians’ notes. 

In tangible terms, AWS Comprehend Medical will take physician visit notes and output a structured list including, according to the AWS blog post, “patient diagnosis, treatments, dosages, symptoms and signs, and more. “ Should it work as advertised, and for the purposes of this piece we’ll give AWS the benefit of the doubt, this would allow physicians to return to taking notes as they please and not concern themselves as much with the formatting and structure of their EMR.

It almost sounds too good to be true.

EMRs are a huge problem point for physicians. They’re time consuming, difficult to navigate, and pull physician focus away from patients. When there’s 15 minutes to complete a patient visit, it’s a zero-sum game, and the EMR is winning. 

Comprehend Medical isn’t the first solution to the problem. Atul Gawande explored a number of fixes in his recent piece in the New Yorker: medical scribes who are trained to take notes for the doctor live during the visit, and even an elaborate system in which the visit is recorded and transmitted to a physician in India who creates the medical notes, then sends them back to the physician. Those are fine as band-aids, but they don’t scale. 

Comprehend Medical has the potential to make the interface layer of the EMR user friendly by allowing the user to dictate the terms on which information is inputted rather than the other way around. It’s similar to the promise of the voice interface - you should be able to ask Alexa your weird question, and the burden is on Alexa to figure out what you want. The machine must learn how to respond to your input, rather than the user learning how the machine likes input. 

What’s more interesting here is that it seems AWS has found a way around one of the major strategic problems facing big tech companies as they enter healthcare.

Most tech giants - Facebook, Amazon, Apple, Microsoft, Google - have been built using user experience as their key strategic focus. When shopping at a competitor’s website is as easy as clicking to the next tab, Amazon has always had to focused from top-to-bottom on the customer experience. In healthcare, where consumers have diminished agency to make purchasing decisions (because of information asymmetry, and because they often don’t directly foot the bill), user experience isn’t nearly as much of a wedge - if consumers aren’t the ultimate deciders, then you don’t have be as concerned about keeping them happy. Thus tech companies’ greatest strategic advantage, and the central thesis around which their operations are organized, doesn’t hold true in healthcare. 

One would think that EMRs, which are primarily used by physicians, would need to win physician approval to gain customers. The worst kept secret in health IT is that EMRs are billing systems first, and clinical record keepers second. As the multi-million dollar contracts for hospital EMRs are being negotiated it’s quite obvious from the outcomes that user experience is not a major factor in the decision. 

With Comprehend Medical, however, Amazon has found a way to so dramatically improve user experience for physicians that it can, in fact, act as a wedge. It’s not just that Comprehend will make the physicians’ life easier, but that it will make them happier, more efficient, and could even help health systems avoid expensive intermediary solutions like scribes. 

If Comprehend ends up being the blockbuster it could be, it will put Amazon in a position to dictate the market. They could use it was the killer-feature exclusively available on an AWS electronic medical records, or they could simply sell it as a service to existing EMR players as a way to lure them further into using AWS as their complete platform. Given EMRs are headed in the direction of more customization for different specialties, AWS might be avoiding this product headache and positioning themselves as the common foundational infrastructure on which all EMRs are built. 

Things To Read

“The key to a successful recovery after illness may be a less stressful, more supportive, more humane experience during the hospitalization.” Austin Frakt wrote this week in the NY Times how hospital standard operating procedures like regular vitals checks and blood draws get in the way of patients’ sleep. Consider this another side-effect of the fact that patients’ aren’t the hospitals customers; health plans are. 

of the 100 doctors who received the most compensation from device makers in 2015, conflicts were disclosed in only 37 percent of the articles published in the next year.” Turns out that doctors are pretty bad at reporting when they have a conflict of interest when they publish their research. This comes from another barn-burning investigation from ProPublica. What’s more concerning: doctors aren’t reporting their conflicts, or that there’s so much money flowing to physicians from industry?  

“Many schools provide streaming video of canned lectures, which can be accessed at any time, and do not require the physical presence of students or a professor in a lecture hall.” Milton Packer writes for MedPage Today about the circuitous history of medical education, and the odd state of things today. Perhaps, like the rest of higher education, the model is due for some updating. 

What the market will bear. Johnathon Rockoff followed a new Pfizer cancer drug from clinical trial to launch with a focus on how the drug gets its list price. He unveils a finely-tuned process for discovering the price that will maximize sales without being too low as to leave money on the table. He also notes that little consideration is given to the cost of developing the drug, which is how the industry typically justifies high prices. 

Orphan bugs. In more drug pricing woes, the GAO has concluded an investigation into the orphan drug program and found… problems. Many orphan drug approvals are for drugs already on the market as mass-market drugs, the FDA doesn’t always independently verify the patient population numbers submitted by drug companies, and orphan drugs average prices are 5x higher than those of their mass-market counterparts. The findings suggest the program, in addition to incentivizing pharmaceutical companies to make drugs for small populations, is also incentivizing questionable behavior from pharma. 

“You don’t have to go as far as full integration.” That’s Walgreens CEO Stefano Pessina discussing his company’s recent joint-venture with Humana. This interview makes it sound as through the two ended up together because neither wanted an acquisition, and are willing to explore all the collaborative alternatives that would garner them the benefits of combined market power, short of a full merger. 

Thanks for reading The Healthcare Handout, a weekly update on tech and business in healthcare from Isaac Krasny. Criticize, praise, hire, or otherwise get in touch with Isaac via isaac@healthcarehandout.com, or on twitter @isaackrasny

And remember, this machine runs on sharing. If you found this newsletter informative or thought-provoking, give it a boost by sharing with a friend or colleague. Or share a testimonial.

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