HighRoads CEO Brian Kim talks next gen health plan product management

HighRoads helps health plans automate the creation of new products to help them get to market faster and more flexibly. It may sound like an arcane corner of the healthcare world, but in this podcast interview, CEO Brian Kim argues that his company’s platform is a game changer in the market.

Here’s what we discussed:

  • (0:15)What are the fundamental functions performed by health plans?
  • (3:40) Why has the process of defining and selling plans changed much more slowly than payment processing?
  • (10:29) What is needed to spur innovation on plan definition and selling within existing organizations?
  • (13:41) What’s the impact on these topics of action in Washington DC?
  • (15:46) What does HighRoads offer the market?
  • (18:02) Where are you getting the most traction?
  • (21:50) What can we expect on your road map over the next few years?

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By healthcare business consultant David E. Williams, president of Health Business Group.

Steward buys IASIS. I’m quoted in the Boston Globe

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Steward Health Care is taking control of IASIS Healthcare, which owns 18 hospitals in Western and Southern states. This deal follows on the heals of Steward’s purchase of eight hospitals in the midwest and Florida a few weeks ago.

Here’s what I told the Boston Globe (Steward merger would make it nation’s biggest private for-profit hospital system):

Some health industry analysts said the company has been ahead of others in investing in so-called accountable care.

The business model relies on payment contracts with insurers that are designed to encourage cost-efficient care, replacing the traditional fee-for-service model, which critics believe promotes unwarranted use of medical services.

“Steward is essentially betting that it can apply its model of accountable care and cost containment to a hospital system in other geographies,” said David E. Williams, president of the Boston consulting firm Health Business Group.

“This is a very interesting contrast with some of the mergers and acquisitions undertaken by the other major hospital systems in Massachusetts. While others have focused on bulking up to increase their market power over local health plans — which can drive up costs overall — the Steward/IASIS arrangement poses no such concerns,” he said.

As a scrappy, lower cost –and private equity owned!– community based system, Steward isn’t popular with the big, academic-based health systems in Massachusetts. Those systems may actually breathe a sigh of relief to see Steward turn its sights out of state.

There is some irony, though, that while the academics’ idea of innovation is to band together to maximize local market power and beat up on health plans, Steward is applying its expertise out of state, where it expects to improve the efficiency and effectiveness of the acquired assets. Brass knuckles style market power approaches are not part of Steward’s expansion playbook.

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By healthcare business consultant David E. Williams, president of Health Business Group.

How AHCA makes healthcare unaffordable

Some opponents of the Affordable Care Act (aka Obamacare) like to trash individual insurance policies sold on the exchanges for having out of pocket costs that make them too expensive to actually use and premium increases that make them too expensive to keep.

I’ve always been annoyed by this criticism because it doesn’t stand up to reality. That’s because the detractors ignore the cost sharing reduction (CSR) subsidies that sharply reduce deductibles and out-of-pocket payments for lower income individuals. More than half of individuals who buy coverage on the exchanges receive CSRs, so we are talking about a major part of the market.

As a new analysis by Avalere demonstrates, average deductibles for individuals at 100-150% of the federal poverty level (FPL) in silver plans are only $243 compared with $3703 for people who don’t qualify for CSRs. For maximum out of pocket costs, the figures are $978 and $6528 respectively.

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As for premiums, those increases have been absorbed by the federal government through increased subsidies for those who qualify and are not a deterrent to purchasing or renewing a plan.

Dismantling the ACA and replacing it with the American Health Care Act (AHCA) will eliminate the CSRs. The AHCA tax credits are stingier and not targeted based on need or premium cost. The enhanced flexibility plans have to modify benefits won’t make them more affordable, especially for those who actually need treatment.

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By healthcare business consultant David E. Williams, president of Health Business Group.

 

Trump presidency hurts economic growth

I disagree with the general sentiment that the Trump Administration is good for economic growth. While certain economic policies might be mildly positive, these are overwhelmed by negative economic and social policies, and by Trump’s disdain for democracy.

The Wall Street Journal’s survey of economists neatly sums up the conventional wisdom, concluding that the long-term growth rate of the economy could increase modestly –from 2% to 2.3%– if all of Trump’s agenda were implemented. The policies they focus on include infrastructure spending, rollback of regulations, and tax cuts. Even if we accept that these are the right things to consider, there are problems with the analysis:

  • Infrastructure spending, which if done right could provide the biggest boost, is unlikely to be enacted
  • Rollback of regulations may speed growth, but eliminating environmental regulations –as Trump has done– causes negative impacts on the environment that GDP doesn’t measure

But beyond this, we need to consider a variety of growth killers:

  • Dismantling Obamacare’s progress on universal coverage leads us back to “job lock” –where employees fear leaving their positions to start new businesses because they are worried about whether they or their dependents will be able to get insurance coverage due to pre-existing conditions. I started my business in 2001, well before Obamacare. When prospective entrepreneurs called me for advice, the number one concern about getting started wasn’t about business plans, financing, or hiring, but rather health insurance.
  • I put healthcare first (this is the Health Business Blog after all) but reducing immigration is what could really kill the economy. Consider:
    • Population growth drives economic growth; reducing net immigration directly slows growth
    • Many of the big job creating companies –think Apple, Google, eBay — were founded by immigrants. But we see this on a smaller scale, too. Of the four, fast growing healthcare companies whose boards I serve on, three were founded by immigrants (from Finland, Russia and Tanzania). Immigrants have higher rates of labor force participation and are more likely to start small businesses, too.
  • Erecting trade barriers hurts growth. Trade wars have no winners
  • There are a variety of non-economic policies and actions taken by Trump that are likely to harm long-term growth. I can’t think of any that help it. For example:
    • Undermining the rule of law and attacking democratic institutions such as the courts and Congress, while praising dictators. The US has long been a safe haven in economic and political crises due to its justified reputation for being a nation of laws, not men. Trump is throwing that away and is being abetted by the Republican leadership in Congress
    • Adopting harsher policies on incarceration for non-violent drug offenders, which reduces the workforce
    • Creating uncertainty on policy by flip flopping dramatically on. It’s hard to plan and invest in those cases

I’m convinced Trump harms growth. If I turn out to be wrong I’ll be the first to admit it.

Urgent care clinics just for cancer patients

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It’s tough being a cancer patient. The illness is serious and sometimes fatal, treatments can have serious side effects, and the fatigue and stress can be overwhelming. It gets worse when patients end up in the emergency room where they are exposed to people who may be contagious and encounter medical staff who may not know how to address the special needs of an oncology patient.

So I was heartened to read about urgent care centers specifically for cancer patients. Centers like the one at University of Texas Southwestern Medical Center in Dallas cater to the requirements of cancer patients. They provide same-day appointments, are open early and late, and coordinate with the rest of the patient’s oncology care givers. It’s a good example of patient-centered care.

Of course there are some strong economic incentives as well (hospitals aren’t doing this for their health, so to speak). Cancer patients are lucrative for hospitals –that’s one reason you hear so much advertising for cancer care. And hospitals are wise to treat their best customers well to encourage loyalty. In the value-based care era, we can also expect pressure for hospitals to improve outcomes, control costs and improve the patient experience of care. Urgent care cancer centers contribute to addressing all these goals.

It does raise the question of why only cancer patients get their own urgent care while the rest of the population has to put up with all the challenges and downsides of the regular healthcare system. Perhaps other parts of the healthcare system can learn from these urgent care centers and emulate them more broadly.

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By healthcare business consultant David E. Williams, president of Health Business Group.