Drew Hodgson, healthcare delivery and national practice leader at Willis Towers Watson

Digital Health

The “Prove It” Era of Digital Health

A few different articles have been published over the past month on the topic of employer priorities, and they all seem to be getting at a similar point: we’re entering the “prove it” era of health vendor partnerships.

Over the last decade, a hot labor market created an enthusiastic audience of employers looking to attract talent through new health benefits. Now, with premiums on the rise and a looming recession, these same employers are paring down their offerings with a heavy focus on integration and cost control.

Nearly 90% of employers are planning to make changes to their health vendor partnerships this year – only 46% did so in 2022 – and 55% intend to do the same with their wellbeing programs (per WTW survey results).

In a recent Modern Healthcare article, Andreessen Horowitz General Partner Julie Yoo said that “benefit managers are having a ‘come to Jesus’ moment around pricing.” If the last few years revolved around giving employees plenty of options, the next few will be “hyper-focused on return on investment.”

• Yoo made the point that companies that take on risk-based contracts will be looked upon more favorably to employers going forward. 

• By delegating more risk to providers, employers can lower costs and will be incentivized to keep patients out of high-cost settings.

The other major trend that’s coming up in these conversations is vendor fatigue, with the term “point solution” quickly becoming derisive among benefits managers and investors.

• Even compelling one-off solutions are having their sustainability questioned if there isn’t an integration and navigation component backing them up. 

• Business Group on Health CEO Ellen Kelsay said that “a lot of these companies come and talk about the merits of their own solution in a vacuum. They’re not paying attention to what success will look like for the patient and the employer.”

The Takeaway

There’s very little slack left in the system for nice-to-have offerings that aren’t driving quality or lowering costs. Point solutions in that bucket are going to have to start taking a close look at potential M&A partners or different distribution channels. The good news is that the flip side of that coin is also true. For companies that can demonstrate a healthy ROI with a comprehensive offering, this is shaping up to be a great time to get solutions in front of employers.

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The Wire

• Humana and ChenMed VBC: (Coincidentally?) Announced on the same day as CVS’ acquisition of Oak Street, Humana signed a five-year agreement with senior-focused primary care provider ChenMed to provide in-network care for Humana’s Medicare Advantage members at all ChenMed locations (120 medical centers across 15 states). The agreement isn’t a new contract for either party, but “continues the long-standing relationship that has existed between the two companies for decades.”

• Physician Turnover AI Prediction: A Yale-developed AI algorithm was able to predict physician turnover based on their EHR data with 97% accuracy, findings that could help health systems intervene before physicians decide to leave. Although there was room for improvement in the model’s sensitivity and specificity (64%, 79%), the AI gave good insight into the top variables contributing to turnover risk: physician length of employment, their age, the complexity of their cases, and the demand for their services.

• Memora + Virtua: Memora Health is partnering with New Jersey-based Virtua Health to simplify complex care management across the system’s 350 facilities. The Memora platform will provide two-way communication between patients and their providers outside of the hospital, intelligent triage of questions to care team members, and an EHR integration for automated data capture. Virtua will first implement the platform into programs for colonoscopies, specialty pharmacy, and congestive heart failure, with expansion into other use cases planned for later this year.

• Bankruptcies on the Rise: Healthcare company chapter 11 bankruptcy filings were up 84% in 2022, according to a new report from Gibbins Advisors. Senior care and pharmaceutical companies accounted for nearly half of the filings, with just two hospital bankruptcies filed in 2022 (vs. 10 in 2019). Bankruptcies rose significantly throughout the year – 3x more filings in Q4 than Q1 – and Gibbins expects venture dependent startups and rural hospitals to face mounting financial pressures as 2023 rolls on.

• PCP Mental Healthcare: A Health Affairs study found that adult primary care visits are increasingly addressing mental health concerns, with the share of these visits climbing from 10.7% in 2006 to 15.9% in 2018 (per the 2006–18 National Ambulatory Medical Care Surveys). Considering that the pandemic likely accelerated this trend even further, the authors conclude that there’s an immediate need for new integrated behavioral health codes that enable PCPs to adequately address patient mental health.

• CarePort and HAPevolve Team Up: CarePort, powered by WellSky, and HAPevolve are teaming up to connect Pennsylvania hospitals with CarePort’s end-to-end platform that bridges acute and post-acute EHRs to streamline care transitions. CarePort’s platform will give Pennsylvania providers better access to its network of over 2k hospitals and 130k post-acute providers across the US to optimize care across multiple settings.

• November Telehealth Use: Fair Health’s Monthly Telehealth Regional Tracker showed that telehealth use rose 1.9% in November, accounting for 5.3% of total visits. The increase follows a holiday uptick in COVID-19 cases that ranked it as the third most frequently diagnosed condition during the month after falling out of the top five diagnoses completely during fall.

• HHS Roadmap for End of PHE: With the pandemic public health emergency slated to end on May 11, HHS sent a letter to US governors with a roadmap for easing the transition. An attached fact sheet outlined the major areas impacted, most notably the end to Medicare and Medicaid waivers, many provider flexibilities, and the ability to prescribe controlled substances via telemedicine without an in-person interaction.

• Ada COVID Care Journey: Ada Health and Pfizer collaborated on the launch of a digital care journey that helps people understand if they have factors that place them at high risk of progression to severe COVID-19 before connecting them to an independent telehealth provider for evaluation and treatment if needed. Users can access the Ada COVID-19 Care Journey via a dedicated website or by using Ada’s app to perform self screening.

• Economy’s Medication Impact: iPrescribe’s latest survey of 1k healthcare consumers painted a bleak picture of medication adherence in the US, with 35% of respondents rationing or skipping medications due to high costs. Concerns related to the economy have caused many patients to try and prolong their prescriptions by taking them at a lower dose than prescribed (20%), stopping them altogether (15%), and getting medications filled at a larger dose so they can split their pills in half (14%).

• Healthcare State of the Union: Healthcare was a recurring theme throughout President Biden’s 7,300-word State of the Union address last week. Becker’s rounded up 10 takeaways from the speech, most of which centered around what seemed to be a victory lap for a pandemic that “no longer controls our lives,” capping prescription costs for Medicare patients, and progress with the Cancer Moonshot initiative. Abortion was also mentioned 72 times during the address, with the president vowing to veto any national ban that crosses his desk.

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