#25 - Get Yourself An English Robot Doctor

Amazon’s other healthcare play, Microsoft Healthcare’s growing team, robot doctors, and more. 

Greetings from Vermont, or as I’m calling it for the rest of the month, Belgium-West. I’ve boarded the Belgium bandwagon and am fully supporting the boys in argyle as they continue their Word Cup quest. The fries are good, the waffles are better, and the beer is the best. I’ll have some combination of the three on-hand Tuesday when they take on the French for a bid in the World Cup final. In the meantime, let’s see what happened in the world of healthcare… 

Things That Happened

Ricky Bloomfield@rickybloomfield

PSA: Health systems added to Apple Health in the last week:
- Cone Health (NC)
- Kaiser Permanente (OR and WA)
- Kreptowski Family Practice (OH)
- Lehigh Valley Health Network (PA)
- St. Luke's Health System (ID & OR)
- SUNY Upstate Medical University (NY)https://t.co/6Z1ubNton6

July 3, 2018
Apple continues to add more providers to their health records effort at a steady clip. My back of the envelope math has the newly added systems representing 45+ hospitals and 400+ practices, and the full list is much longer. I’m bullish on Apple’s health records API and argue that locking up patient data through the above relationships will enable them to parlay network effects into a thriving marketplace for iOS-based medical apps. Make no mistake: Apple is serious about healthcare.

Babylon Health made news last week when they published a paper claiming their AI chatbot could both pass the England GP exam and outperform physicians in a simulated diagnostic challenge. The UK startup provoked a fiery response from the Royal College of General Practitioners, who took the PR push from Babylon as a step towards replacing doctors with technology. You can read the paper here, but also read the thoughtful review from health informatics expert Enrico Coiera, who points out that the study hardly proved anything as it only presented the chatbot with cases it had been trained to solve. 

It seems an ill-considered strategy for Babylon to promote their tech in such a way that physicians feel threatened. Triage and diagnostic decision support could be a boon for physicians by helping augment and validate human decision making, but if physicians feel the AI is coming for their jobs they’ll resist it every step of the way.

HHS announced it will suspend risk adjustment payments to insurers for the time being in response to a lower court ruling that argued they’re unfair. These payments, which help balance the larger risk pool by distributing money to health plans with sicker patients, and collecting money from those with healthier ones, are key to stabilizing the individual marketplaces created by the ACA. Some are arguing it’s deliberate sabotage by the Trump administration, which has ways around the court ruling, while others aren’t sure what to think. 

Two things are certain: if these payments are suspended for a significant amount of time it could negatively affect people insured through the individual marketplaces. Second, HHS continues to err on the side of chaos and uncertainty when dealing with health insurance.

For a deeper dive on the subject try Jonathon Cohn’s story. 

Things Worth Understanding

Microsoft is putting some muscle into their healthcare efforts. Last week, the company announced the hirings of Joshua Mandel and Jim Weinstein to their newly created Microsoft Healthcare team. Mandel was lured away from Alphabet’s Verily, while Weinstein is most notably the former CEO of the Dartmouth-Hitchcock health system. 

This new Microsoft Healthcare team will unify the company’s many disparate projects in the healthcare space, most of which were already housed in the company’s Healthcare NExT initiative, which is not to be confused with the NeXT computer company founded by Steve Jobs in the 1980’s (Of course you wouldn’t confuse the two, but I’ll never pass up the opportunity to make the reference.) These projects are mostly focused on the use of AI in healthcare, often in combination with the cloud computing tools of the Azure platform. 

Mandel’s hire indicates a heavier focus on the health IT side of things and a greater emphasis on cloud services for health providers, while Weinstein’s addition means they want someone who knows how to speak the language of hospital administrators to sell them on all the new health-related cloud services Microsoft will be creating. 

This new team makes perfect sense in the larger context of Microsoft, which is going all-in on Azure. Satya Nadella, now in his fourth year as CEO, has recently completed his strategic shift away from a Windows-centric model. As Ben Thompson writes discussing the new strategy: “This, then, is Nadella’s next challenge: to understand that Windows is not and will not drive future growth is one thing; identifying future drivers of said growth is another.” 

This unified healthcare team, with innovativr AI projects and the safe, staid Microsoft brand behind it, is a candidate for one of those growth drivers Nadella needs to find. Healthcare is a $4 trillion industry, if you haven’t heard, and there’s a wave of new players entering into the healthcare technology game. Amazon Web Services is already in business with Cerner (and is also doing AI based cancer research, among other healthcare things), while Alphabet has multiple entrees to the space via Google Cloud Platform, Verily, and various other subsidiaries. And as I mentioned above, Apple is going after the patient side of the EHR.  Healthcare is a big growth opportunity for Microsoft, but also table stakes for a modern tech giant. 

This new initiative, of course, isn’t Microsoft’s first foray into the industry. Back in 2006, under the reign of Steve Ballmer, Microsoft acquired Amalga, which offered insights to hospitals based on their patient health data. The software directly competed with other solutions that also operated on the Microsoft platform, which drew the ire of third-party developers. Because this was the Windows-centric Microsoft of old, the platform came first. The company neglected Amalga before placing it in a joint-venture with GE in 2011, which Microsoft later divested from in 2016. (It must be noted that this JV had perhaps the worst name for a healthcare entity I’ve ever heard: Caradigm). This new-look Microsoft won't run into the same strategic logjam. 

In contrast to other AI-Infrastructure hybrid plays like IBM Watson (which I wrote about last week), it seems Microsoft is better positioned to do well. In that piece I noted that competitive advantage in AI is derived primarily from proprietary data and access to top talent.  While not the sexiest brand in the world of silicon, Microsoft can still pull top AI talent. As for data, their business model allows them to create partnerships and joint ventures rather than relying on services revenue, meaning they’ll get access to much better proprietary information. This AI work complements Azure nicely, and the company will be able to make a real attempt at building a cloud-first ecosystem in the world of healthcare. 

Things To Read

“As we increasingly rely on search and on social to answer questions that have a profound impact on both individuals and society, especially where health is concerned, this difficulty in discerning, and surfacing, sound science from pseudo-science has alarming consequences.” Renee Diresta writes in Wired about the abundance of misleading and dangerously incorrect online medical information, and how physicians are ill-equipped to combat the phenomenon. 

The issue of health misinformation is only a facet of the much larger problem of people using the internet to spread falsehoods. As Diresta asks in her piece, “how do we incorporate factual accuracy into rankings when no one is willing to be the ‘arbiter of truth.’” Twitter seems to be at least doing something, but it seems as futile a dropping a single sandbag into a rushing torrent. 

Amazon’s PillPack acquisition was a bold step into healthcare, but don’t discount the former-bookseller’s other, quieter moves in the industry. Rebecca Pifer writes in Healthcare Dive about Amazon’s efforts to make Amazon for Business friendly to healthcare provider purchasing workflows in a bid to grow their presence in the medical supplies market. Long term, they hope to disrupt the standard flow of centralized purchasing and actually save hospitals and health systems money in doing so. It’s a very “Amazon” strategy, which means they won’t stop iterating and refining until they get it right. 

Startup Of The Week

Circulation Health, founded in Boston in 2016, is a purpose-built solution for healthcare providers to order transportation for their patients. 

The Opportunity

The National Academies of Sciences estimates “that about 3.6 million Americans miss or delay non-emergency medical care each year because of transportation issues.” These people are also more likely to have chronic conditions that benefit from regular medical care. They also represent a huge missed revenue opportunity for healthcare providers, who can’t bill for patients who don’t show up. 

The Solution

Circulation Health built a solution geared specifically to the idiosyncratic needs of healthcare providers. While the original solution to the above problem was to help patients get home by calling a cab, and possibly even paying for the cab, with Circulation’s platform providers can schedule rides weeks in advance, and even set up recurring rides. They can also book wheelchair vans and non-emergent ambulance rides, in addition to tapping into the regular Lyft network of drivers. Circulation also gives the higher-ups analytic visibility into how much is being spent on transportation, and what their ROI is (hint, it’s always a fantastic ROI). 

The Prognosis 

Circulation is doing very well. They raised $10.5 million in their Series A last year, and have expanded to offering services in 45 states. They also just celebrated one million miles driven. By tightly integrating with the provider, Circulation puts itself in a position to control increasing provider demand for non-emergent medical transportation, and thus dictate the terms on which the transportation companies provide services. This means that Circulation is also in a superior competitive position with Uber’s healthcare-focused service, for example, which simply puts a new ordering interface on Uber’s standard service. 

Things I Listened To 

I wrote this week’s edition while listening to Workin’ with The Miles Davis Quintet (Spotify)

The Healthcare Handout is a free weekly newsletter by Isaac Krasny. You can find Isaac on twitter @isaackrasny.