#52 - Happy Quaranteaster
VCs had a big Q1, Apple and Google are... working together, and more
Before we get started…
The experiment continues: I’m still logging everything worth reading in healthcare tech and business - on a daily basis - over at healthcarehandout.com. Check it out.
Now, on to your regularly scheduled newsletter.
Things That Happened
Wait and VC. Rock Health reported that the first quarter of 2020 was at near-record levels for venture investment in digital health startups. While Rock Health’s definition of “digital health” is a big tent (including fitness focused apps, for example), the overall momentum at the intersection of tech and healthcare is real. It’s not surprising they’re also predicting a slow-down of funding as we progress further into the year - but not a stoppage. Venture firms operate on cash that’s already been committed (and is hard to pull back), and they reportedly have more of it than ever before.
Coronavirus has introduced heaps of uncertainty into the healthcare marketplace. It has forced government to unwind regulation at a blistering pace creating new operating opportunity for telehealth platforms and remote care startups. But at least right now this is all temporary. While some are bullish that we’ve reached a tipping point in remote care, the degree to which these new digital-friendly rules will persist remains to be seen. Health tech investors will likely remain overly cautious as the dust settles and they wait to see what the new landscape looks like.
Clinical Crisis. The net effect of COVID’s toll on the American healthcare providers has been a complete overwhelming of some, and desertion of the rest. Emergency room visits nationwide have dropped 30%, and primary care is especially hard hit - providers have shifted what they can to telehealth visits, but are reimbursed at lower rates for the activity. There are reports that small providers are among the largest groups seeking paycheck-protection relief loans, and with many providers facing difficulty actually accessing those funds, States are hoping to buoy critical Medicaid providers by paying them to stay open.
Hospitals are gaining access to government bailout grants and advanced payment from both CMS and private payers. Those government grants, however, are being allocated according to average Medicare billings and not accounting for which hospitals are being hardest hit by COVID. Hospitals with a payer mix that favors Medicaid, for example, could be left out in the cold.
Primary care and rural hospitals were already in a fight for survival before COVID, and we can expect that many of them won’t outlast the virus. It’s also likely we’ll see some major hospitals encounter trouble.
Contact Racing. Experts agree that the next phase of this pandemic, the one where we get to leave our houses, is reliant on a combination of large-scale testing and contact tracing. Essentially, we need to know who has the virus, and who they’ve come into contact with. While that testing program may continue to elude us, it would seem we’re seeing an outline of what contact tracing could look like.
Apple and Google announced Friday that they’ll integrate new operating-system level functionality enabling phones to engage in passive contact tracing via Bluetooth. Essentially, phones will create a log of every other phone they’ve been near for the past 14 days. In the event you test positive for Coronavirus, you now have a mechanism for notifying everyone you have potentially exposed.
There are a lot of rough edges around this plan - it’s opt-in, potentially compromises some privacy, and it’s driven entirely by private companies rather than government, but given it’s the closest anyone has gotten to implementing a national scale contact tracing solution, it could end up being the best we’ve got.
As for the testing side of the equation, this thread from Yale Health Economist Zack Cooper is a good starting place for understanding some of the financial reasons testing isn’t going well.
Fourth time around. Walmart is adding its third and fourth freestanding “Walmart Health” centers to Georgia this year. These centers include primary care, dental, vision, and even behavioral health in the form of counseling. They’re open 12 hours a day, they don’t take insurance, and their prices are both transparently listed and competitive with copays. While I doubt the decor is as midcentury-modern as a One Medical office, Walmart is quietly building a much more accessible version of comprehensive primary care.
Hims, Hers, and Ours. Hims wants to be more than just an online pharmacy for erectile disfunction and hair loss treatments. They’ve just launched telehealth in the form of online group therapy, through both their Hims and Hers brands. If this path - from generic viagra to a stated desire to become a full-fledged digital healthcare provider - sounds familiar, it’s because you read about how Ro is doing just that last month. It’ll be interesting to watch this trend develop and see how well these digital-first companies can compete against the brick-and-mortar retail giants also heading towards this space. Either way, it’s getting a lot easier for patients to access very specific types of healthcare.
New York, United. In my newsletter a few weeks ago (it feels like months) I wrote “it’s likely this global-scale challenge will be overcome by solving supply chain issues and improving clinical organizational design: remaking our entire healthcare infrastructure to meet this glut of demand.” New York has taken drastic measures to remake its healthcare infrastructure on the fly by essentially taking state control over all hospitals in the state. The NY department of health is now directly responsible for shifting resources - staff, equipment, and supplies - between facilities statewide. Will other states follow this playbook?
Things To Read
“These concepts have been around for 20 years and were built for this very purpose,” said Brownstein, the epidemiologist in Boston. “It’s a big disappointment that it went belly-up because of a lack of funding right before a global pandemic.” Brownstein is discussing the International Society for Syndromic Surveillance, a group established in the wake of 9/11 that set up an electronic surveillance system for understanding the spread of infectious disease in real-time without relying on testing. Christina Farr chronicles the history of the program.
“Using a mathematical model to predict the future is valuable for experts, even if there are vast gulfs between possible outcomes. But it’s not always easy to make sense of the results and how they change over time, and that confusion can hurt both your brain and your heart. That’s why we want to talk about what goes into a model of a pandemic.” The modeling experts over at FiveThirtyEight, who have themselves declined to model the spread of coronavirus, discuss why it’s such a challenge to accurately model infectious disease.
“At the same time that we confront the current crisis, we must plan for the future by putting in place tools to enhance our ability to conduct effective surveillance, containment, and case management. As incidence of COVID-19 declines, case-based interventions will again become an option. Building those capabilities now will enable us to move beyond the extreme and disruptive physical isolation measures in place across the United States.” If you’re hungry for some kind of actual, national-level plan for how we emerge from this crisis, look no further than this report. Farzad Mostashari, who you’ll recognize from the Farr article above as one of the originators of our original surveillance program, Scott Gottlieb, the former head of the FDA and one of the most rational voices throughout this current crisis, as well as three other public health experts worked together to create a comprehensive road map for how our country can overcome COVID.
This isn’t a dealz newsletter, but you can get Roy Porter’s The Greatest Benefit to Mankind: A Medical History of Humanity on your kindle for $3 right now. (That’s not an affiliate link - I just think it’s a good book).
Thanks for reading The Healthcare Handout, a regular 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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