#42 - Rearranging Alphabet 

Alphabet unifies health efforts, CVS wants to be prime, and more from the last two weeks in health and tech

Things That Happened

Feinberg goes west. David Feinberg, CEO of the Geisinger Health System, will reportedly be taking a job at Google “running healthcare” for the company. It seems this means that Feinberg will be coordinating strategy for all of Google’s health-focused projects, while ensuring communication and collaboration with these projects and Verily and other Alphabet health ventures. Feinberg becomes the latest in an increasingly long list of hospital CEOs getting jobs at tech companies with healthcare ambitions. 

Healthy collaboration. Ahead of Feinberg’s arrival, Alphabet is already taking steps to promote interconnectedness among its many disparate health projects. They’re holding a two day conference to pull together people working on all their health units. It seems, given Feinberg’s hiring and this sort of superficial unification of health efforts, that Alphabet might have some worries about their relatively scattered focus in healthcare. 

33 and maybe. 23andMe received FDA clearance to include section on their genetic reports indicating the status of 33 genetic variants that are associated with the efficacy of about 50 drugs. The clearance came with some pretty serious caveats, including that this is not intended to indicate drug efficacy or advise patients which drugs to take. They might as well have said it’s ‘for entertainment purposes only.’ 

Texting good news. 98point6, a telemedicine company with a focus on asynchronous text messaging (instead of video chats), just raised a $50 million series C round. While telemedicine is certainly a hot area for venture investment, 98point6’s text-based solution is far more in line with what patients want (to not be constrained by physicians’ schedules) and helps physicians better manage their own time as well. 

$2,019. Pfizer has indicated they’ll return to their regular schedule of price increases in 2019, after abating price changes for the second half of 2018 at President Trump’s request. 

CVTest. CVS is testing a membership model that comes with discounts and free delivery on both prescriptions and things purchased online. While Amazon has a much-vaunted logistics operation, it’s important to remember that CVS, Walmart, and Walgreens have untapped potential in their retail locations - namely using them as micro-warehouses and fulfillment centers. This is essentially what Instacart has done for grocery by layering a delivery operation on top of extant inventory. Amazon is racing to build a pharmacy operation to run through their logistics operation, while these chains just need to add a credible last-mile delivery service to their already operating pharmacies. 

Athenawealth. Responding to an HHS request for comments on anti-kickback laws, Athenahealth suggested changes to the laws that would allow doctors and hospitals to pay each other for patient health data. This certainly would be an interesting approach to smoothing the transfer of patient data, it’s always tricky, especially in healthcare, to unfurl the web of incentives to discover what sort of behavior new incentives would promote. 

Also, Athenahealth may finally have a buyer. Or two. 

Things To Read

“I’ve come to feel that a system that promised to increase my mastery over my work has, instead, increased my work’s mastery over me.” Atul Gawande dives into the problem of electronic medical records and their deleterious effect on physicians. While you may think you’ve read this story before, Gawande goes deeper than just complaints about face time with patients and ruminates on the nature of technology, process, systems, and group actions. This piece is botha survey of the current state of embrace of medical software, but also an important consideration of the role of technology in work. 

“A study of radiation oncologists found that only 5 percent thought that they might be affected by gifts. But a third of them thought that other radiation oncologists would be affected.” Aaron Carroll writes in the NY Times about how there are two problems with conflicts of interest: they are fairly widespread among physicians, and more troublingly, physicians seem to think they are above their influence. 

For three months’ supply the savings of $13,500 more than covers the $500 reward and transportation, typically less than $300 per person.” This is from a program implemented by a public employee health plan in Utah, who finds that for many treatments it’s far more cost effective to not just send patients to Mexico, but to pay them a cash reward to do so. 

While this is a particularly newsworthy example, healthcare has seen similar programs before. One prime example is SmartShopper, a service acquired into Vitals, that offers patients cash incentives for using the service to select providers that offer lower cost care. In a market where prices are highly differential and quality metrics are hazy at best, there’s opportunity for arbitrage, and plenty of money left over to incentivize patients to play the game. 

“We estimate conservatively that excluding coverage of pre-existing conditions results in 38% lower premiums relative to ACA-compliant plans.” The mechanisms by which short-term health plans save money are readily apparent, but the Kaiser Family Foundation dissects them to understand where the savings are coming from, and what policyholders are sacrificing for lower premiums. 

“I imagined us creating a Smart City of Privacy, as opposed to a Smart City of Surveillance.” That’s Dr. Ann Cavoukian, a privacy expert who recently resigned as a consultant for Sidewalk Labs in protest over their expansive data gathering policies. Sidewalk, an Alphabet subsidiary, is planning to build a prototype smart city in a Toronto neighborhood. 

Privacy will be an important issue as large tech firms, especially those who generate revenue through gathering user data, enter healthcare. It seems the predisposition for data gathering is baked into Alphabet’s DNA. What does this mean for Sidewalk spin-out Cityblock Health? And for Verily, and Google’s internal health tools? I expect privacy issues will be a core point of contention as Google gets more directly into healthcare. 

health care is still eating the economy, and that’s still cause for alarm.” Columnist Noah Smith examines the macro trends in health spending for Bloomberg and confirms that, yes, it’s really that bad. 

What color is your drug? Jacob Bell takes a look at how drug manufacturers - and their branding consultants - choose which color their pills will be. There are certainly heady waves of marketing bullshit, but perhaps some actual benefit to varied pill colors when it comes to compliance and safety (but that’s not why they choose the colors they do). 

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

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