Digital Health Innovators are Setting their Sights on Medicaid—Can the Private Sector Improve Healthcare?
Digital and mobile technology hold the promise of innovating the way healthcare is delivered and potentially improving the health and wellbeing of patients. From cognitive behavioral therapy apps to diabetes management tools to wearables that monitor heart rate, digital innovation is already beginning to changing health and social care delivery.
In fact, there have been several media reports about fitness trackers, literally, saving people’s lives due to the tracking of abnormal heart rates. According to a recent article in the Atlanta Journal Constitution, when an 18-year-old woman felt out of breath, the Apple Watch she was wearing notified her to take a breath, and tracked a spike in her heart rate to 120 beats per minute, then 130. The watch then notified her to “Seek medical attention.” After being admitted to the hospital, doctors discovered the woman’s kidneys were barley functioning and she was diagnosed with alport syndrome, a genetic condition characterized by kidney disease.
Stories like this one show the promise of digital health to enable earlier health interventions and to improve people’s health status, yet in order for digital health innovation to profoundly transform healthcare the key is getting these digital health tools into the hands of people who need them the most, often the older, poorer and sicker in the population. Typically, the latest and greatest digital health tools, such as the Apple Watch, with a starting price for a series 3 watch at $329, tend to be used by younger, healthier consumers as well as consumers at a higher social-economic level.
During a health innovation conference at the Massachusetts Institute of Technology (MIT) back in December, I listened as three state Medicaid leaders shared their perspectives on this disparity and the challenges of developing digital health tools to help the most vulnerable patients. As I reported in an article about the conference, Daniel Tsai, assistant secretary, MassHealth, and the Medicaid director for the commonwealth of Massachusetts, said during the conference, “On the consumer side, with the Medicaid population, we’re thinking about the most complex, highest-cost individuals. The things that we’re worried about are less the kinds of things that an app can help to address. We need to make sure someone has housing and food. I would be excited to see consumer engagement digital health tools that could help on those things, but I don’t know what that would look like.”
What’s more, Jason Helgerson, Medicaid director, State of New York Department of Health, noted the need for more technology innovation to truly transform healthcare. “I’m not saying [technology] is going to be a pure panacea, but it has to be part of the solution.”
In the past few years, technology startups and investors have shown increasing interest in building digital tools and services targeting programs for low-income patients and the more vulnerable populations. And recent announcements just this past week at the HLTH Conference in Las Vegas offer further proof that some of the leading minds in the private sector have set their sights on improving care in Medicare and Medicaid and addressing social determinants of health.
As Healthcare Informatics Editor-in-Chief Mark Hagland, who attended the conference, noted in a recent article, Andy Slavitt, former Centers for Medicare & Medicaid Services (CMS) Administrator, announced the launch of a new venture capital firm, called Town Hall Ventures, that intends to “invest in healthcare technology and service companies transforming care delivery to America’s most vulnerable populations.” According to a press release, Hagland reported, the firm is being “built on a foundation of broad and deep expertise in building companies to improve care in Medicare, Medicaid, risk-based care, complex conditions and in addressing social determinants of health. These areas of focus touch almost 120 million Americans and approximately $1.2 trillion in annual healthcare spending.”
This is an intriguing announcement that, hopefully, will result in promising solutions addressing healthcare disparities. The new venture firm is a continuation of a building trend, as many other startups have already started to make inroads in this market. These startups have attracted significant funding from investors, and the success of these companies will demonstrate that there is a profit opportunity in targeting lower-income, high-risk patients, as Medicaid alone covers 70 million patients.
For example, Healthify, which launched in 2013, works with people on Medicaid and Medicare in 30 states and uses technology to identify the social determinants of health impacting patients’ health. The company’s platform connects patients with needed resources, such as food or housing. The company announced in July that it had raised $6.5 million in venture capital funding.
Another startup, WelbeHealth, aims to coordinate care for frail elderly patients and, last year, the company announced it had raised $15 million in a Series A venture capital round. The company is working to launch several innovative value-based care models, including Programs of All-Inclusive Care for the Elderly (PACE), to serve the most vulnerable dual eligible populations. PACE covers healthcare services for patients at least 55 years old who have been deemed by their state’s Medicaid office to be eligible for nursing homes.
As another example, Bright Health, a health insurance startup, originally launched to target the individual health insurance markets created by the Affordable Care Act (ACA) and has since expanded into the Medicare markets in Colorado, Arizona and Alabama. The company, which offers its members an integrated technology experience, closed on $160 million in venture capital in a funding round last year. And there’s also Circulation, a startup that works with hospitals and health systems to provide on-demand non-emergency medical transportation for patients.
And things really start to get interesting when a tech giant like Google potentially enters the mix. There has been speculation that Google’s sister company, Verily, is eyeing a move into health insurance, specifically managed care. And last fall, Sidewalk Labs, an “urban innovation group” within Google parent company Alphabet, spun out a startup called Cityblock Health that aims, according to its website, to “build a scalable solution to address the root causes of health for underserved urban populations.”
Writing in a blog post, Iyah Romm, co-founder and CEO of Cityblock Health, contends that venture-backed startups can be a powerful tool for driving change in healthcare because they have “the agility to challenge long-entrenched systems." Romm wrote that Cityblock will provide Medicaid and lower-income Medicare beneficiaries access to “high-value, readily available personalized health services” by applying “leading-edge care models that fully integrate primary care, behavioral health, and social service.”
These innovators and entrepreneurs face tremendous challenges navigating an industry as complex as healthcare, with hurdles such as payment model development, regulatory frameworks and data privacy concerns. But, as developers enter this market, it brings the promise that their disruptive innovations will do more than just trickle down to the most vulnerable populations, but will in fact be expressly designed for those patients and will really start to address the underlying social and environment factors of health.
It seems that there’s a confluence of factors at work here—the ongoing movement to value-based care, which requires managing populations on a budget, the advancement of technology tools that enable more efficient care coordination and the ongoing awareness of the social determinants of health—and these trends are likely pushing the private sector to focus on the medically underserved.
Only time will tell if these private sector-led efforts will be successful, long-term, in what they are trying to do—improve the health of vulnerable populations and lower healthcare costs—but it’s definitely an exciting trend that bears watching. Can the private sector cure what ails our healthcare system? Share your thoughts by either commenting below or send comments to @HeatherLandi.
