Welcome to The Donut Hole’s weekly summary. The news doesn’t stop. Lucky for you, we are here to help you take in the week that was in the business of healthcare.
Mental health giants Headspace and Ginger to merge into $3 billion company
Headspace and Ginger, two of the more prominent companies in the increasingly competitive behavioral health space, recently announced plans to merge. The combined entity will benefit from the complementary capabilities of each company. Headspace is primarily known as a D2C (direct-to-consumer) offering for self-directed meditation and other mindfulness exercises while Ginger is a B2B (business-to-business) offering for text-based coaching and video-based therapy and psychiatry. The press release claims that the combined business will reach nearly 100M people across 190+ countries through its D2C business and 2,700+ enterprise and health plan customers.
Commentary: This merger highlights the continued vendor, health plan, and employer focus on behavioral health since the start of COVID. The emergence of large, sustainable vendors in this space should help address access challenges at the low acuity end of the market and could provide additional resources for overstretched primary care physicians to help address basic behavioral health conditions. That said, don’t expect much innovation from these vendors for people with severe depression, anxiety, schizophrenia, bipolar disorder, addiction, or other more serious behavioral health conditions.
Mayo, Verily strike two-year partnership to build decision support tools
See! We told you Google would maintain a significant presence in healthcare even after the dismantling of the Google Health business unit! Google subsidiary Verily is working with Mayo Clinic to build clinical decision support tools with an initial focus on cardiology and diabetes management. Seeing current tools as too “one size fits all,” Mayo and Verily plan to design the software to surface records on a patient that would be relevant to that case and pull in recommendations from Mayo Clinic’s subspecialists on medication, dosing, and tests to order. The goal of the software is to provide clinicians with all the information needed to make an informed decision without directing the user to a specific outcome.
Commentary: This is an interesting partnership in that it focuses on leveraging technology to increase the effectiveness of clinicians rather than promoting specific, rigid care algorithms (i.e. replacing the physician, or at least physician judgement). Solutions like this still need to prove their effectiveness in the real world, but this should be music to clinicians’ ears and could potentially help reduce physician burnout.
Five Decades Later, Medicare Might Cover Dental Care
Dental benefits are not generally covered by Medicare and many people on Medicare do not have any dental coverage at all. And while many Medicare Advantage plans now include dental services, the scope of dental benefits varies widely and is often quite limited, resulting in high out-of-pocket costs among those with serious dental needs. That all may be about to change. Policymakers are now discussing options to make dental care more affordable by broadening dental coverage for people on Medicare. The specific proposals vary but are aligned around adding dental, vision, and hearing benefits to Medicare Part B. Kaiser Family Foundation (KFF) accumulated some highlights (or lowlights) on the status quo:
47% of Medicare beneficiaries (24M people) did not have dental coverage as of 2019
Average out-of-pocket spending on dental services among Medicare beneficiaries who had any dental service was $874 in 2018. 20% of Medicare beneficiaries who used dental services spent more than $1,000 out-of-pocket on dental care
In 2021, 94% of Medicare Advantage enrollees in individual plans (plans open for general enrollment), or 16.6M enrollees, are in a plan that offers access to some dental coverage
Commentary: We applaud efforts to increase access to dental services. The current system is broken for Medicare beneficiaries, particularly those of color. KFF noted that 68% of black Medicare beneficiaries did not visit a dentist in the past year, compared to 42% of while beneficiaries. It will also be interesting to see the impact on Medicare Advantage enrollment if Medicare integrates coverage for dental, vision, and hearing. Including those services is a core selling point for MA plans today.
Report: Uninsured rate holds steady at 11% during pandemic despite job losses
According to a new report from the Robert Wood Johnson Foundation (RWJF), the uninsured rate held steady during the Pandemic as public coverage increased. In the first true test of the post-Affordable Care Act health insurance safety net, it appears the system largely works. Between March 2019 and April 2021, the share adults reporting employer-sponsored insurance declined from 65.0% to 62.3% percent, a decrease of approximately 5.5M adults. Over the same period, the share reporting public coverage increased from 13.6% to 17.5%, an increase of approximately 7.9M adults. The national uninsured rate held steady at 11%. As you might expect, states that expanded Medicaid under the ACA have fared better than states that haven’t. 37.7% of adults with low incomes in non-expansion states were uninsured in 2021, compared with only 14.5% of such adults in expansion states.
Commentary: The U.S. still struggles with too many uninsured and underinsured individuals, but these stats are great news in that they demonstrate the effectiveness of the insurance safety net put in place by the ACA. Moving forward, the clear priority should be pushing all states to expand Medicaid. Beyond that, there are a range of policy proposals to further dent the nation’s uninsured rate, including Medicare-for-all, expanded Medicare, and public options via ACA exchanges. It will also be interesting to see the impact of increasingly public coverage on health system margins. As a reminder, Medicare and Medicaid reimburse providers at significantly lower rates than commercial payors.
Hospital volume recovery on shaky ground amid Delta, Kaufman Hall reports
The surge of Delta variant cases is once again putting pressure on provider organizations. Per a recent Kaufman Hall report, hospitals experienced a decline in volumes and financial margins in July, suggesting that patients might again be delaying non-urgent care due to virus concerns. Specifically, outpatient revenues fell 2.0% and operating room minutes fell 5.9% from June to July. Nevertheless, providers are still in much better shape than they were in 2020. July outpatient revenue was still up 21.6% year-to-date compared to 2020. Adjusted discharges were up 8.7% and emergency room visits were up 5% in July compared to 2020.
Commentary: Undoubtedly, COVID is still significantly impacting hospital operations. It is noteworthy, though, that the effect has been particularly acute in the South, where vaccination rates are significantly lower. We hope all eligible individuals get vaccinated and take common sense steps to protect themselves and others. Until then, no hospital will truly be able to function like normal.
Other news you may like:
Cityblock Health teams up with Blue Cross NC to serve Medicaid, MA patients in North Carolina
Fitbit launches newest wearable with stress management features
K Health Acquires Mental Health App Trusst for On-Demand Text-Based Therapy
Unvaccinated COVID-19 hospitalizations costing US healthcare system billions, KFF says
Have a great week!
— Hannah and Caleb Bank, Co-founders
Want to know more about who we are? Read our “About” page!
Follow us on Twitter to never miss an update!
Have any comments, questions, or suggestions?
If you’re not already a subscriber, sign up now so you don’t miss the next update!