Health Business Blog

Health care business consultant and policy expert David E. Williams share his views

CVS Aetna merger goes through. I’m quoted in Chief Executive

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Hand it over!

The combination of CVS and Aetna will work out great for the investment bankers and members of senior management who are able to cash out. Beyond that I’m skeptical about what value this colossus will add to the health care equation.

When the deal was announced I expressed skepticism about the rationale (CVS + Aetna. Are we sure this adds up?)

If the idea is to get health insurers to offer plans that favor retail clinics, why not just contract with those plans? Aetna is a big company but as a national plan its market share in many geographies is relatively modest. Often –like here in Massachusetts– the local Blue Cross has the biggest market share. If CVS is big and powerful enough to actually buy Aetna, surely it can get that company and others to come to terms on retail clinics.

Now that the deal is done, Chief Executive asked me for my take. (CVS-Aetna merger approved by DOJ: What CEOs should know). They put me, quite rightly, in the “skeptical” category and quoted some of my concerns.


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

Whatever happened to consumer directed health plans?

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A sad story for consumers

“Consumer directed health plans” were all the rage in the mid 2000s. The big idea was that if patients had ‘skin in the game’ in the form of greater financial participation in the cost of their care, they would use their well honed shopping skills to find the best deals and thereby drive costs down and value up. Employers embraced the idea, since it could reduce their costs and keep employees happy.

There was a general acknowledgment that patients would need better information and tools to transform into consumers, and there was plenty of optimism that these would be made available.

But now as Kaiser Health News reports (High-Deductible Health Pans Fall From Grace In Employer-Sponsored Coverage) employers are going back to more traditional plans.  There are a few interesting things to note:

  • No one uses the term “consumer directed” anymore. There’s an acknowledgment that this term became a euphemism for cost-shifting
  • Employers tweaking health insurance offerings is not going to solve the healthcare cost problem in this country
  • Employees don’t like the plans and in a tight labor market employers have to abandon them

Kaiser reports that:

Because lots of medical treatment is unplanned, hospitals and doctors proved to be much less “shoppable” than experts predicted. Workers found price-comparison tools hard to use.

Not all “experts” jumped on the consumer directed bandwagon. Back in 2007 I attended the World Health Care Congress where I heard people gushing about the benefits of consumer directed plans. They used employer sponsored 401(k) plans as a model of how employees would take responsibility once offered compelling products, information and customer service from companies like Fidelity and Vanguard.

But as I pointed out at the time in “What if the consumer can’t hack it?” employees had actually done poorly with 401(k)’s, investing too little, choosing low return investments, concentrating their holdings in their own company’s stock, etc. As I wrote:

In my view, 401(k)s are a lot simpler for employees to understand than health care. In a 401(k) you can make one or two decisions and then be on auto-pilot. For example, just contributing the maximum amount and picking a target-date retirement fund is about all that’s really needed. Results can be easily and objectively measured over time and compared with benchmarks. We’ll never be able to do that in health care.

I don’t totally discount the 401(K) analogy but we should at least acknowledge that the 401(k) experience has been far from perfect and that health care is going to be a harder nut to crack.

Looks like I was right.

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

 

Social network for cancer patients: Interview with Belong’s CTO Irad Deutsch

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Irad Deutsch

Belong.life bills itself as the largest social network for cancer patients and caregivers. With over 100,000 participants, Belong is approaching the scale at which it can generate meaningful insights, and leverage machine learning and artificial intelligence to create a “hyper-personalized” experience.

I spoke recently with Irad Deutsch, Chief Technology Officer. He described how his personal experience as a caregiver led him to co-found the company, and talked about what makes Belong valuable and differentiated.

Overview:

  • (0:12) What are some of the main unmet needs for cancer patients and caregivers? Why was there a need for Belong in the first place?
  • (2:15) What, specifically does Belong do for patients that they can’t get elsewhere?
  • (4:23) How are providers and payers involved with Belong? Is this mainly a branding and cost-saving tool for them?
  • (7:03) What about pharmaceutical companies?
  • (8:00) You recently released a cancer fatigue survey. Why did you conduct that and what did it show? Any real surprises?
  • (10:08) You talk a lot about big data and machine learning but it’s not readily evident how those play in to Belong. Can you explain?
  • (12:50 What is the company’s business model?

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

Health Wonk Review is up at Xpostfactoid

Xpostfactoid hosts the Map of Malfunction issue of the Health Wonk Review. He describes it –accurately– as “a smorgasbord of smart takes on the morphing ACA marketplace; various dysfunctions (and one or two functions) of U.S. health care; and political wars over Medicare and the ACA.”

You may be glued to your seat today for the Kavanaugh hearing, but you can read the Review when you take a break.

John McCain: A Healthcare Legacy

We don’t normally think of Senator John McCain as a healthcare leader, and yet he played a significant role over the years in various policy matters. CareCentrix CEO, John Driscoll and I pay tribute in a short edition of #CareTalk.