9/9/21 Weekly Update

Summarizing the week that was in the business of healthcare

Sep 09, 2021

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.

Pear's reSET-O DTx lowers costs, enhances quality of life in new study

We’ve talked about the nascent field of digital therapeutics a few times now, including the problems Pear Therapeutics and other companies face in commercializing their software-based therapies. The main challenge is market access, i.e. payor coverage and physician-generated prescriptions. There is not a lot of evidence that these therapies work in the real world, and most payors are loathe to cover them at any material reimbursement rate. Nevertheless, Pear, the leader in the space, marches on. The company just released a new analysis highlighting its ability to lower costs and improve quality of life over standard of care treatment alone for opioid use disorder. The analysis leveraged clinical data from a 2014 trial and showed that Pear’s reSET-O therapy in addition to standard treatment lowered costs by $1,014 and added 0.003 quality-adjusted life years compared with normal treatment alone. Treatment as usual was face-to-face counseling, buprenorphine, and rewards for negative drug tests.

Commentary: Digital therapeutics will likely continue to face a challenging path to commercial success and widespread adoption, but more analyses and studies can only help Pear and its competitors in their push for broader payor coverage. This will be an interesting area to monitor for clinicians and patients worried about the side effects of traditional pharmaceutical interventions for behavioral health and other chronic conditions.

Florida lab owner pleads guilty to $73M Medicare kickback scheme

We’ve covered a few fraud stories in previous posts, and here’s another compelling story of deceit and deception. Per the article, Leonel Palatnik, co-owner of Panda Conservation Group LLC, admitted to paying kickbacks to a telemedicine company in exchange for doctors to authorize medically unnecessary genetic testing. The details get even juicer. Michael Stein, owner of telemedicine company 1523 Holdings LLC, entered into a sham contract with Panda’s owners for IT and consultation services to disguise the kickback payments. In exchange for the telehealth services, the providers agreed to refer Medicare beneficiaries to Panda’s laboratories for medically unnecessary genetic testing. Palatnik is scheduled for sentencing Nov. 9 and faces up to 15 years in prison.

Commentary: First and foremost, stories like this are a reminder to play by the rules, especially when dealing with public payors (i.e. Medicare and Medicaid). This episode is also a good illustration of the potential for fraud around telehealth services in particular. Clearly, a similar scheme could be conducted via face-to-face visits, but virtual visits can quicken the pace of fraud and are a reason why some legislators are hesitant to promote reimbursement and access parity with in-person care.

Survey: 40% of health systems ramping up hiring efforts amid workforce shortage

In contrast to the immediate reaction to the Pandemic when health systems were laying off and furloughing employees by the hundreds, about 40% of facilities now say they are accelerating their hiring processes to meet surging demand, according to a new survey from Aon. Additionally, 93% of organizations are focused on both attracting top talent and retaining them through enhanced benefits packages. From the leader of Aon’s healthcare practice:

“The top priority in 2020 was to mitigate rising costs for the employer — understandably, given the financial shock that health systems were reeling from. Now, the pandemic has exacerbated a labor shortage that could impact patient care delivery, delay attainment of organizational objectives and accelerate burnout among clinical staff.”

On a related note, there was also a report that Providence Health System, the large West Coast-based provider, is looking to fill 17,000 jobs across its network. In addition to $1,000 retention bonuses to current clinical staff, the system said it is offering sign-on bonuses to front-line workers and referral bonuses of between $1,000 and $7,500 to current employees.

Commentary: The length of the pandemic has stressed clinical staff availability, particularly for nurses and home health aides. While hospitals and long term care facilities need to fill these positions, significantly higher salaries could potentially imperil health system finances, especially smaller, more rural community hospitals.

Report: Amazon gearing up for expansion of healthcare service

We’ve talked a lot about Google in recent issues. Now, it’s Amazon’s turn to make some healthcare news. Amazon began offering its Amazon Care service earlier this year to other companies in Washington state. According to Insider, the company is planning to expand to 20 additional metros this year and in 2022. As a reminder, Amazon Care consists of an app with virtual visits and the ability to chat with a nurse. If a clinician recommends an in-person visit, a mobile care nurse can be dispatched to that person’s home to collect lab samples, administer vaccines, and test for strep and other common conditions. The service also taps into Amazon’s capability to deliver medications to people’s homes.

Access to in-person services is currently limited to Washington state, Washington D.C., and Baltimore, but will expand to Philadelphia, Chicago, Dallas and Boston this year.

Commentary: As we’ve talked about with virtual-first clinical models, Amazon poses a threat to traditional urgent and primary care practices. We expect Amazon to continue to invest in the service to expand its clinical capabilities and ability to manage chronic conditions.

The Donut Hole