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Health Economy Trends | CVS Breakup
October 3, 2024
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Together with
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“One of the often-missed problems with patient engagement is that you get patient engagement. You have to make sure you have the infrastructure to handle that.”
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InteliChart Director of Product Solutions Will Cantrell
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Trilliant Health just released its 2024 Trends Shaping the Health Economy Report, delivering a unique perspective on the healthcare market through the lens of supply and demand.
The fourth edition of the report builds on the core findings from the previous three:
- 2021: Healthcare is a negative-sum game.
- 2022: Every part of the health economy will be impacted by reduced yield.
- 2023: The victors in healthcare’s negative-sum game will be those who deliver value.
This year’s 164 page analysis is organized into eight sections, each examining a significant macro trend and supported by a wide collection of data-driven stories:
- 1) The healthcare system is disproportionately expensive. Despite spending nearly 2X more on healthcare than peer countries, utilization has remained largely unchanged, while increasing 7% in peer countries since 2000. U.S. outcomes are also far worse. (Page 11 Chart)
- 2) Health status continues to decline. We’re seeing higher volumes of early onset cancers in patients under age 45 for breast (+6.6%), colon (+10.0%), and kidney (+2.1%) between 2018 and 2023. (Page 22 Chart)
- 3) Government regulation is failing to produce value. This one’s a mixed bag. Regulating cigarettes decreased usage by 30%, but mandated reporting of quality measures hasn’t yielded enough improvement to offset the cost of reporting. (Page 46 Chart)
- 4) The value of tech advancements is uncertain. Since 2018, multiple AI CPT codes have been introduced, but utilization remains infrequent and concentrated among cardiac conditions such as coronary artery disease and ECG cardiac dysfunction. (Page 77 Chart)
- 5) Supply constraints are correlated with inadequate yield. The decrease in practicing physicians from 2019 to 2023 resulted in a -0.9% workforce reduction. Notably, 31.3% of physicians changed practice location over that time period. (Page 89 Chart)
- 6) Forced consumerism has fostered fragmentation. Over 14% of patients with commercial coverage go out-of-network for behavioral health services, versus just 2% for physical care. (Page 111 Chart)
- 7) Lower-cost care settings can offer better value. New treatment paradigms often start in the hospital but shift to new settings over time (due to new tools, reimbursement reform). How long will that continue? (Page 125 Chart)
- 8) Employers are better equipped to demand value. Employers have historically been relatively passive in managing healthcare costs., but new transparency requirements compel them to change that. (Page 148 Chart)
The Takeaway
Trilliant’s report showcases the fact that the inputs of the U.S. healthcare system, as measured by cost, exceed the outputs, as measured by the actual value received by Americans. As Trilliant’s Head of Research Sanjula Jain puts it, “every stakeholder can – and must – deliver more value to their customers.”
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- CVS Considers Breakup: CVS insiders revealed to Reuters that the company is considering breaking up its various businesses as investors push for a turnaround. That could include separating its stagnating retail pharmacy operations from Aetna (which has been struggling since doubling down on Medicare Advantage recruitment then failing to control medical costs) and offloading Oak Street Health (which has so far only been piling up losses). The future home of its Caremark pharmacy benefit manager is also up for debate after several key customers jumped ship within the past few years.
- OpenAI o1 Doesn’t Work in Healthcare: A fantastic article in Sergei Polevikov’s AI Health Uncut went viral for its brutally honest take on using OpenAI’s new o1 Strawberry model in healthcare: it should be a crime. Strawberry hasn’t just inherited its predecessor’s habit of confidently lying when it misdiagnoses, but takes it a step further by generating plausible rationalizations for inaccurate diagnoses. Funnily enough, Strawberry also managed to get the cherry-picked medical example wrong during its launch, and the article turns the model into a punching bag with plenty more examples.
- Centivo Lands $75M: Employer-focused health plan startup Centivo raised $75M to enhance its in-house virtual primary care practice and mental health services. Centivo helps employers trim healthcare costs by ~15% through its three-part solution: (1) the aforementioned Centivo Care primary care practice, (2) direct contracts with ACOs in 18 markets, and (3) member engagement and plan administration platform. The funding follows Centivo’s May acquisition of Eden Health, which bolstered the platform’s mental health capabilities while expanding its reach to 160+ employers.
- Health Equity’s Impact on GDP: Deloitte published a report suggesting that health equity improvements could add $2.8 trillion to the U.S. GDP by 2040. These improvements could also help generate $763B for U.S. businesses by preventing 5M people from prematurely leaving the workforce, with Deloitte estimating that health inequities already cost $7B due to missed work, $45B due to reduced productivity, and $63B due to unemployment. Cited research shows that various chronic conditions and cancers have disproportionate burdens on people from marginalized backgrounds, resulting in a 10-70% productivity loss.
- GenAI Lags in Patient-Facing Apps: Pitchbook’s Emerging Tech Future Report shared the research firm’s updated outlook on generative AI in healthcare, underscoring the tech’s relatively slow adoption across patient-facing applications relative to use cases like drug discovery and development. The report also calls out a handful of areas ripe for GenAI transformation, including “care search and navigation, virtual musculoskeletal (MSK) care, and mental health care delivery.”
- Hospitals Not Disclosing AI Messages: Over 15k providers across 150 health systems are now using MyChart’s AI tools to draft replies to patient messages, but officials at many of these organizations told the New York Times that they don’t disclose the AI use to patients. Experts are worried that the trend could cause clinicians to miss potentially dangerous errors buried within the generated text, and that it’s also putting patient relationships at risk since they probably won’t be too happy when they find out that messages they thought were from their doctor weren’t even written by a human.
- Swiss Army Surgery: The Royal Sussex Hospital in Brighton, England is under fire after a surgeon used his Swiss Army knife to open a patient’s chest during cardiac arrest, claiming he couldn’t find a sterile scalpel. While the patient survived, colleagues called the surgeon’s actions “questionable” and were “very surprised” that he couldn’t locate proper tools, noting that he typically used the knife to cut his lunch. Documents also revealed that the surgeon recently performed three low-risk surgeries where all patients died.
- Wolters Kluwer + Wellsheet: Wellsheet is partnering with Wolters Kluwer Health to integrate evidence-based content from WKH’s UpToDate clinical decision support solution into Wellsheet’s Smart EHR UI. This collaboration embeds UpToDate’s lab and clinical calculator interpretations directly into the Wellsheet application, granting clinicians seamless access to high-quality information directly within their existing workflows. The duo is ultimately aiming to reduce cognitive overload for physicians by streamlining the content delivery process.
- Telehealth Satisfaction Discrepancies: J.D. Power’s annual Telehealth Satisfaction survey saw patients give a score of 730 out of 1,000 to direct-to-consumer telehealth platforms while payor-provided telehealth notched a lower score of 708. The highest scores across both buckets came from Medicaid beneficiaries and younger patients. Conversely, the lowest scores came from Medicare beneficiaries and Baby Boomers, with the discrepancy stemming primarily from differing generational preferences on care convenience and tech usage.
- Pomelo’s Doula Play: Pomelo Care acquired The Doula Network following the recent completion of its $46M Series B fundraise. The acquisition grows Pomelo’s maternal care coverage to 15M+ people, including over 1 in 6 Medicaid beneficiaries. By integrating doulas into its full-spectrum pregnancy care model, Pomelo said that it’s looking to improve health equity as patients under doula care during labor are 2X less likely to experience birth complications and 4X less likely to have a low-birth-weight baby.
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