On the first day of the J.P. Morgan Healthcare Convention, “[T]he reply to the last word query of life, the universe and every little thing is 42.” Acknowledge that well-known line? No, it’s not one thing from ChatGPT, it’s Douglas Adams’ “The Hitchhiker’s Information to the Galaxy of Healthcare.” Effectively, not healthcare…for that you need to be right here in San Francisco for the 42^nd version of this convention. It was certainly an intriguing day, for even with out main bulletins, there have been very clear indicators and portents of our coming yr within the healthcare business.

First, synthetic intelligence (AI) is clearly right here and certainly might be transformational. Essentially the most jam packed, standing room solely session of the day was NVIDIA Company, presenting for its fifth yr. What did NVIDIA focus on? Accelerated computing and generative AI that they predicted will allow a brand new class of generative AI laptop aided drug discovery instruments that may create a large growth of drug discovery analysis and improvement. By digitizing (and imaging) biology and representing it and chemistry in a pc by means of a generative AI system that may be educated in days, not years, it is going to permit for design, testing for unwanted side effects and pathogenicity, sorting of compounds with a number of filters to check for skill to fulfill a number of aims and understanding of cell interplay and gene expression. NVIDIA, which is investing in chosen buyer companions, additionally predicted that laptop aided drug discovery can generate a trillion greenback firm. On the healthcare providers facet, NVIDIA talked about GI Genius, which has an FDA authorized AI-assisted endoscopy machine that gives real-time identification and determination help to the supplier conducting the endoscopy. NVIDIA additionally predicted that the wearables business might be facilitated by the massive compute energy and generative AI capabilities now accessible. Wearables in flip will generate a deluge of personalised knowledge that may in flip be analyzed provided that there may be ample compute energy, similar to equal to the life sciences resolution NVIDIA is offering that permits for modeling of a tissue with 6,000 targets that creates six terabytes of knowledge per pattern. It’s not value accumulating all of the personalised knowledge from wearables until we are able to course of and analyze it, and now it appears to be like like we could also be beginning to get there.

However, AI was not talked about solely by NVIDIA. Somatus, a kidney care firm, talked concerning the problem of figuring out early stage kidney illness in sufferers – a troublesome problem – which, if attainable, can doubtlessly end result within the delay or halting of decline into finish stage kidney illness. Somatus is trying to make use of AI to generate automated prediction of price mannequin occasions. It is a crucial goal, as sufferers with kidney illness usually have a number of power circumstances which can be troublesome and costly to deal with, until earlier recognized and addressed. For instance, based on Ikenna Okezie, CEO of Somatus, 90% of power kidney illness sufferers have hypertension, 65% have heart problems and 50% have diabetes, with 10-12 drug prescriptions from a number of suppliers being frequent. Somatus usually supplies care within the residence in 2-3 hour visits, which along with its payor knowledge, danger adjustment knowledge and lab knowledge, can be utilized to foretell the presence or development of power kidney illness. This is a vital objective, as Hemant Taneja of Common Catalyst, along with Mark Harrison, the previous CEO of Intermountain Healthcare, listed the identical goal final Fall on the HLTH convention of discovering early kidney illness sufferers when asserting the launch of their Healthcare Transformation Firm (within the context of shifting a well being system to world danger to align with preventive care to cut back the burden and systemic price of power illness circumstances). The Somatus mannequin is an attention-grabbing one, because it takes a complete individual strategy to kidney care, that decreased the medical loss ratio (MLR, the comparability of medical prices to whole income, and ideally beneath 85% for Medicare sufferers) for kidney care sufferers by 21.9%, which is a outstanding quantity. 

Cleveland Clinic’s presentation in the present day centered partly on the potential for developments in personalised and individualized most cancers care within the subsequent 5 to 10 years. To assist that, Cleveland Clinic this yr partnered with IBM to place a quantum laptop on its important campus devoted to the biomedical sciences. That is a part of Cleveland Clinic’s computational infrastructure and its new “innovation district” that will revolutionize most cancers care. Cleveland Clinic’s care mannequin is to offer prime quality advanced care to its sufferers by means of multidisciplinary groups, which strategy is also what works nicely with main Medicare Benefit and PACE packages. Extra on the Cleveland Clinic tomorrow.

Oncology was usually talked about in the present day. It is without doubt one of the increased margin focus aims for a lot of well being programs on a go-forward foundation (along with musculoskeletal illness (MSK), which I’m skeptical as to since many MSK/ortho procedures are actually shifting out of the ORs into ASCs, similar to joint replacements, on a decrease unit price foundation and in ASCs usually not owned by the hospitals or solely partially owned by the hospitals). So let’s check out what was stated about most cancers in the present day at J.P. Morgan’s convention.

A panel titled “Most cancers Moonshots Throughout the Continuum” famous that for mid-size and bigger employers in the present day, most cancers is the main price of care. Karen Knudsen, MD, CEO of the American Most cancers Society, famous additionally that roughly 42% of cancers associated to addressable or preventable human behaviors (a scary thought, however then once more keep in mind that smoking cessation public well being promoting and packages has resulted in an roughly 30% lower in most cancers deaths up to now thirty or so years). We will make a distinction if we as a society select to behave. Cervical most cancers additionally has considerably declined on account of the HPV virus vaccine.

On the not-so-good information facet, prostate most cancers is rising 5 p.c yr on yr in incidence and can account for one-third of all new most cancers diagnoses in america. And, there’s a rising development of early onset colon most cancers in america, which is regarding as a result of the inhabitants affected by it’s youthful than when colonoscopy screening “finest practices” commenced. What’s inflicting this wave of colon most cancers in individuals of their twenties and thirties? Eating regimen associated, plastics associated or one thing else totally?

The Moonshots panel, which included Vineeta Agarwala, MD of Andreessen Horowitz (a16z), talked concerning the want for oncology navigators to rework and enhance the affected person expertise with oncology, to get sufferers to the precise specialist or facility the primary time and with the precise prognosis and remedy plan. As a facet notice, a current different convention with the CFOs from Memorial Sloan Kettering, MD Anderson and Fred Hutchinson Most cancers Facilities famous that most cancers sufferers who went to a non-academic or non-cancer heart web site, similar to a group hospital, for most cancers remedy had a 40% increased price of care and a 40% increased incidence of mortality. Yikes! The place’s my navigator after I want them?

Dr. Agarwala talked about how efficient navigation, similar to that being undertaken by Thyme Care, can scale back the entire price of care and be supportive of each affected person and payor pursuits. A current research by Thyme Care confirmed worth for oncology navigation in any respect levels of the illness. This permits for efficient payor/supplier alignment that’s in the perfect curiosity of the affected person and enchancment of well being fairness. CMS is supporting affected person navigation within the 2024 Medicare charge schedule with cost for sure oncology affected person navigation providers. It is going to be attention-grabbing to see how this program is put in force by suppliers.

AI additionally is meant to make our lives simpler, proper, similar to getting computer systems to fill out these types and enter the identical info we now have to jot down again and again when going to the physician. Phreesia brought about me to rethink that in the present day. Phreesia, which manages entry (affected person scheduling and registration) and income cycle administration at level of service for what they report as nearly 10% of U.S. affected person visits, spoke of the advantages of shifting extra duties to the affected person by means of know-how. Somewhat than workplace employees looking for and getting into affected person info, the unpaid affected person can try this, with the additional benefit based on Phreesia’s CEO of acquiring extra info from the affected person than the workplace employees might present. That extra info permits for a greater understanding by the physician of the affected person’s scenario and issues, a greater affected person go to, and higher entry for Phreesia to such knowledge, which permits it to raised perceive the affected person, higher automate responses to affected person wants and in addition create extra services and products to promote by means of its pipeline to its supplier shoppers. Phreesia additionally now could be offering a community and useful resource to assist sufferers discover and schedule appointments with specialists. 

One other theme of the day was the growing price of doing enterprise in healthcare. MLRs and healthcare expenditures have been trending upward this yr as famous earlier within the yr by UnitedHealthGroup and Humana. At this time, CVS famous that its MLR could exceed its 2023 steerage of 86%, which adopted agilon’s steerage final week of upper prices as nicely. These numerous bulletins over the course of the yr typically have been met with inventory worth drops, however the lack of visibility to those elevated prices actually shouldn’t be stunning. In accordance with the Advisory Board, greater than 70% of all Medicare Benefit downstream funds to suppliers nonetheless are in some type of charge for service (FFS) cost, and aren’t danger or capitation based mostly. As such, FFS funds can range, in contrast to month-to-month capitated funds to main care physicians or specialists, and expense development surprises can happen. The soiled little secret of the risk-based Medicare Benefit program is that there nonetheless isn’t a lot danger there to the suppliers, and till we transfer extra towards that goal, we received’t have actual payor/supplier alignment or efficient whole price of care discount.

CVS did notice, on the optimistic facet, that they anticipated about 800,000 new Medicare Benefit members for 2024, with about one-third of them being twin eligible (Medicare Benefit/Medicaid, or Medi/Medi) and the twin progress being totally on HMO contracts (which may permit for more practical price containment). Duals are inclined to have increased income than common enrollment Medicare Benefit members, which is useful, however additionally they can have increased prices (relying on geography and behavioral well being burdens). 

Curiously, the CVS progress was reported to be about 75% coming from “switchers,” i.e., Medicare Benefit members switching from one well being plan to a different, fairly than “age-in” members who’re new to Medicare. Switchers can doubtlessly be higher managed and doubtlessly at decrease MLR price. What wasn’t talked about was the persevering with affect on the switching of Medicare Benefit members by brokers and area advertising organizations (FMOs),which has created market volatility within the final two to a few years. CMS has proposed new guidelines that may revamp compensation to brokers and FMOs which, if adopted, could scale back a number of the bigger membership shifts and volatility and assist stabilize membership.

As stability of membership is a key aspect in selling power care administration, we now have to consider the steadiness between affected person selection, market economics and creating sufficient stickiness to have the ability to make ample progress in illness state administration that creates a return for each the affected person and the payor. For instance, why do we now have to have annual open enrollment? Why not each two, three or 4 years for a healthcare insurance coverage coverage time period? Think about how a lot advertising spend could be saved with long run insurance policies, to not point out the truth that well being plans might preserve membership lengthy sufficient to raised pay for and justify preventive care and different investments of their members’ well being. Why are we as a society permitting for such short-term considering – is it simply because public corporations must report financially every quarter and yearly, so there’s an curiosity in creating short-term motion of each members and inventory costs? One thing for CMS and all of us to ponder! 

Extra on Medicare Benefit headwinds, well being plan woes, hospital mergers and acquisitions and different market circumstances in tomorrow’s weblog!