Ziegler’s Andrew Colbert on the importance of efficiency for driving growth in healthcare.

Digital Health

Spotlight on Prior Authorization, Humata Health

Digital health’s flavor of the week was prior authorization, which has clearly been leaving a bad taste in people’s mouths.

Humata Health took center stage by adding $25M in unlabeled funding to advance its AI prior auth automation suite for payors and providers. 

• CEO Dr. Jeremy Friese was president of Olive’s payor business before forming Humata to acquire the PA assets after the company was forced to wind-down, and dealt with the headaches of prior auth first-hand during his time practicing at Mayo Clinic.

• The round was led by Blue Venture Fund (representing the majority of BCBS plans) and LRVHealth (investing on behalf of nearly 30 health systems), which sends a strong signal about Humata’s ability to support both sides of the prior auth equation.

MedPAC’s annual report to Congress did a great job highlighting the prior auth inefficiencies that Humata set out to solve:

• 95% of PA determinations by Medicare Advantage plans in 2021 were “fully favorable.” In other words, the plans approved nearly all treatments deemed necessary by providers at full coverage.

• Further, after providers appealed an initial PA denial, MA plans reversed their decision and fully approved the PA request in 80% of cases. That means all of the manual labor and staff hours results in the same outcome 99% of the time.

Right on cue, the AMA put out its own physician survey on the topic, finding that the average physician fields 43 PA requests per week that require 12 hours of staff time to resolve.

• Two-thirds didn’t believe that PA decision criteria are evidence-based, and nearly all reported that PA increases burnout. 

• Most physicians also agreed that PA increases overall utilization as patients are forced to pursue less effective treatments or schedule additional appointments after PA delays.

The Takeaway

You’d be hard pressed to find a single payor or provider that thinks prior authorizations are perfect in their current state, and regulators are starting to take notice. Bipartisan leaders recently reintroduced legislation to mandate electronic processes for streamlining PA, following a final rule from CMS in January with the same goal.

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The Wire

• Recalculated MA Star Ratings: Medicare is planning to recalculate its quality ratings for Medicare Advantage plans to ensure more accurate assessments, a somewhat surprising turn of events that’s set to give a nice boost to top MA players. The recalculations aim to reflect true plan performance while giving beneficiaries better information, and apparently there won’t be any downward adjustments based on the new methodology. Analysts expect the revised ratings to result in over $1 billion in additional bonuses to payors, impacting 60 Medicare contracts covering more than a million members.

• Pomelo Lands $46M: Virtual maternal care startup Pomelo Care landed $46M in Series B funding to improve pre- and postnatal care through earlier interventions. At a time when US maternal outcomes trail all other high-income countries, Pomelo is getting in front of complications before they escalate by using data to identify patient risk factors and using them to deliver medical, social, and behavioral services as soon as possible.

• Teen Prediabetes Linked to SDOH: A new study in JAMA Network Open suggests we should be screening adolescents for diabetes based on social determinants of health, which we can address, rather than unmodifiable factors like race. After analyzing data from 1,563 obese teens (8.5% with elevated hemoglobin A1C), researchers identified a higher prevalence of prediabetes among those with food insecurity (4.1%), public health coverage (5.3%), and low income households (5.7%) – independent of race and ethnicity.

• Cancer Equity Compass: In other SDOH news, a new tool called the Cancer Equity Compass from the Harvey L. Neiman Health Policy Institute can reveal county-level overlap between cancer disparities and social determinants of health. The tool displays the relationship between metrics like screening, prevalence, and mortality alongside social determinants such as education, income, and pollution. It focuses on the four most common cancers: breast, prostate, colorectal, and lung.

• DTx Has Better Days Ahead: Although several digital therapeutics frontrunners have taken stumbles, an industry update from Behavioral Health Business made some good arguments for why the segment’s best days might still lie ahead. The article breaks down several of the hottest DTx topics, including the missteps that have plagued developers, the areas that offer the most potential to pharma, and why seeking FDA clearance might not be the best idea for many businesses.

• Gen X Cancer Jump: Incidence of invasive cancer jumped more among members of Generation X than any other generation since 1908. An analysis in JAMA Network Open found that Gen X cancer incidence was higher than Baby Boomers for most cancers with the exception of lung cancer in both men and women, cervical cancer in women, and liver and gallbladder cancer in men. The authors said the results were surprising given the decline in tobacco smoking and success of screening, attributing the results to sedentary lifestyles and greater carcinogenic exposure.

• PatchRx Connect Launch: PatchRx announced the launch of PatchRx Connect, which embeds real-time medication adherence data directly into clinicians’ existing care management platforms. PatchRx Connect includes access to the PatchCap universally-fit smart pill bottle cap, an API that allows providers to embed the data into their own systems (plus a web app for those that prefer preconfigured dashboards), and remote enrollment made possible by PatchRx’s DTC shipment capabilities.

• The Cost of Hypochondria: A STAT op-ed from the founder of employee wellness platform New Ocean Health shared a first hand account of the struggles faced by hypochondriacs, and how the illness anxiety disorder is a direct cause of higher healthcare costs. Although hypochondria affects only a small fraction of the population (estimates vary widely from 1% to 8%), the condition often leads individuals through a cascade of unnecessary medical tests, potentially costing the healthcare system upwards of $100 billion every year.

• Telehealth Use Tapers Off: The National Health Interview Survey confirmed that virtual care utilization has seen a steep decline since its pandemic heyday, with the percentage of adults who had used telehealth in the past year dropping from 37% in 2021 to 30% in 2022. The falloff hasn’t been equally distributed: seniors were the biggest telehealth adopters in 2021 (43%), but the following year’s ~30% drop in telehealth use among patients over the age of 65 brought their utilization in line with younger generations. The most frequent telehealth users now include women, people with college degrees, and urban residents.

• Marigold Series A: Telemental health provider Marigold Health closed an $11M Series A funding round to build out its anonymous social network where patients battling mental health and substance use disorders can engage in peer-based support. Marigold’s SUD programs are currently available in Delaware, Rhode Island, and Massachusetts, with the new capital planned to fuel expansion to at least four additional states by the end of next year.

• Cognizant + Google: Cognizant is rolling out its first set of health solutions that leverage Google Cloud’s AI tech, which focus on addressing four high-cost workflows: marketing operations, call center operations (including appeals and grievances), provider management, and contracting. The new software is the direct result of Cognizant and Google’s expanded partnership that was first announced in March.

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