Trends and Opportunities for Health Tech in the Safety Net
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Telehealth Secrets Conference 2018 by VSee Speaker: Hong Truong (Health Care Foundation) More info here: vsee.com/conference
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Trends and Opportunities for Health Tech in the Safety Net
- 1. October 2, 2018 Trends and Opportunities for Health Tech in the Safety Net Hong Truong, California Health Care Foundation
- 2. 2 The California Health Care Foundation is dedicated to advancing meaningful, measurable improvements in the way the health care delivery system provides care to the people of California, particularly those with low incomes and those whose needs are not well served by the status quo. We work to ensure that people have access to the care they need, when they need it, at a price they can afford. Mission
- 3. 3 The Innovation Fund at the CHCF Health care delivery + technology + investment + grantmaking + Medicaid? ► We invest in emerging companies whose target customers provide health care in the safety net: Providers, payers, and health systems that provide health care to Medi-Cal enrollees. ► We offer flexible inexpensive financing coupled with market navigation and safety-net operation expertise. Our portfolio companies leverage our experience and relationships to drive market results and impact.
- 4. 4 The medicaid “market” is large 18% 15% 52% 15% Health Insurance Coverage by Type (2015) Medicaid Medicare Employer based Direct purchase 50.9 54.9 61.7 62.4 2012 2013 2014 2015 Medicaid Enrollment (millions) 23% growth Source: US Census, Health Insurance Coverage in the United States: 2015
- 5. 5 Most of Medicaid has already shifted to managed care Source: Kaiser Family Foundation’s State Health Facts Total Medicaid Managed Care Enrollment: % of State Medicaid Enrollment, United States, 2007-2015
- 6. 6 Note: “Other” includes: dental, mental health, audits/lawsuits, EPSDT, Medicare payments, state hospital/developmental centers, miscellaneous services, recoveries, and Drug Medi-Cal 18% 20% 58% 58% 56% 23% 23% 24% 19% 0% 20% 40% 60% 80% 100% FY2005-06 FY2010-11 Fy2015-16 Medi-Cal expenditures by service category Other FFS Managed care Total spending $33 B $52 B $92B Most payments are value-based
- 7. 7 Tip #1: Take a value-based approach (and invest in data and analytics) California Health Care Foundation Source: Deloitte, The Road to Value-Based Care, 2015.
- 8. 8 Greater prevalence of chronic conditions and poor mental health 11% 7% 32% 36% 26% 38% 18% 12% 19% Fair/Poor Health Fair/Poor Mental Health >1 Chronic Condition Selected characteristics of adults <139% FPL Uninsured Medicaid Employer Source: What Difference Does Medicaid Make: Assessing Cost Effectiveness, Access, and Financial Protection under Medicaid for Low-Income Adults, May 2013, Kaiser Commission on Medicaid and the Uninsured.
- 9. 9 Costs are concentrated at the top 9% 36% 48% 73% 100% 0 10 20 30 40 50 60 70 80 90 100 1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 55 58 61 64 67 70 73 76 79 82 85 88 91 94 97 100 CumulativepercentofTotalSpending Percent of Population by Share of Total Expenditures Medi-Cal Spending Distribution Department of Health Care Services Analysis Top 5% generated 52% of spending Top 1% generated 27% of spending Source: Understanding Medi-Cal’s High-Cost Populations, March 2015, California Department of Health Care Services
- 10. 10 Tip #2: Focus on populations with complex needs California Health Care Foundation Contribution to Total Health Expenditures by Individuals, 2015
- 11. 11 More care is delivered in community clinics Source: California’s Health Care Safety Net: A sector in Transition, January 2016, California Health Care Foundation
- 12. 12 Access to providers is challenging 63% 62% 52% 36% 87% 86% 81% 45% SURGERY MEDICAL SPECIALTIES GENERAL INTERNAL MEDICINE PSYCHIATRY Physicians Accepting New Patients by Coverage Type, 2013 Medi-Cal Medicare Source: Physician Participation in Medi-Cal: Ready for the Enrollment Boom?, August 2014, California Health Care Foundation
- 13. 13 Tip #3: Scaling the workforce California Health Care Foundation Age of Physicians, Select States vs. U.S., 2014Physicians Reporting Difficulty Obtaining Referrals, California, 2015 Source: CHCF, Physician Participation in Medi-Cal: Supply or Scarcity? 2015. Source: CHCF, California Physicians: Who They Are, How They Practice, 2017.
- 14. 14 Summary 1. Take a value-based approach World is moving towards value (albeit slowly). The message will always resonate Share risk - removes reimbursement constraints and is a differentiator (because it’s hard!) Robust data and analytics capabilities are a must have 2. Focus on populations with complex needs You can be focused yet make more impact Remember, these are smaller populations, but still very big dollars 3. Scale the workforce There is an inherent shortage in workforce, leading to a shortage in access Use technology via telemedicine or find workflow efficiencies to get scale Changing workflow is hard, it’s ok to provide human services and reap the benefits of scale yourself
- 15. 15 We practice what we preach!
- 16. 16 Thank you! Hong Truong CHCF Health Innovation Fund @chcfinnovations htruong@chcf.org
Editor's Notes
- Private foundation with a $750M endowment. Put out between $30-$45M in grants each year. What do we do with that money? I’ve highlighted key components of our mission Advancing meaningful, measurable improvements in healthcare Esp for those of low income or not well-served by the status quo. – read this as primarily the Medicaid and uninsured populations in California. As a foundation, we use our flexible, private funds to fund research, programs, convenings – and as I’ll talk about, advancement of for-profit solutions – in specific topics that we think have high potential to bring more access and high-value healthcare for the underserved in California.
- I stole this slide from my colleague Melissa. At first when I saw it I though, “what do we, the Innovation Fund, have to do with birds? Next.” As I continued to plagiarize her content, I figured out that she meant to say is, we’re an odd bird. That’s us in the grey. And it is true. We are social impact investors. That’s not a new concept, but what is potentially new is that we deliberately work with the safety net, which I’m sure few entrepreneurs think about as their beach head market. We are like a middle child – we go between overachieving and overactive digital health venture capital market looking for hot, profitable companies, and the often black sheep market of FQHCs, community clinics, rural hospitals and Medicaid health plans, whose heart is in the right place but is largely misunderstood. So we invest in emerging venture-backed companies that see it in their business to be in the safety net. We help them derisk their entry into the safety net by providing flexible financing (equity or debt, with wrap around grants) and we help them navigate the market and establish the right relationships to advance their business. What I want to do with you today is to make the case that the trend arrows are pointed in the right direction and opportunities are abound in the safety net.
- Medicaid is the largest public insurance program and the most common form of insurance coverage after employment-based coverage. In 2015 Medicaid provided health care coverage to an estimated 62 million people. You’ll see higher statistics based on partial year enrollment, but said most simply about 1 in 5 Americans , 1 in 3 Californians, are Medicaid beneficiaries. Growth in enrollment tops 20% since 2012 – as you know largely due to changes made by the ACA which expanded eligibility to adults with incomes up to 138 percent of the federal poverty level (FPL). To date, more than half of states have opted to expand.
- Most Medicaid beneficiaries are in some form of at-risk, managed care programs Among Medicaid Health Plans nationally, 77% of members are enrolled in MC; in California, over 80% of beneficiaries are covered by MC Medicaid managed care provides for the delivery of Medicaid health benefits and additional services through contracted arrangements between state Medicaid agencies and managed care entities, such as MCOs, that accept a set per member per month (capitation) payment for these services, or with providers responsible for coordinating a defined set of services. Under managed care, the state pays a fee to a managed care plan for each person enrolled. In turn, the plan pays providers for all of the Medicaid services an enrollee may require that are included in the plan's contract with the state. Incentives are aligned and one organization is responsible for total cost of care. For entrepreneurs – you can find the customers and the customers care about cost AND quality, and have flexibility to try new things.
- Most Medicaid beneficiaries are in some form of at-risk, managed care programs Under managed care, the state pays a fee to a managed care plan for each person enrolled. In turn, the plan pays providers for all of the Medicaid services an enrollee may require that are included in the plan's contract with the state. (Among Medicaid Health Plans nationally, 77% of members are enrolled in MC; in California, over 80% of beneficiaries are covered by MC ) 165 plans operate ONLY in 1 state Only 9 plans operate in 4 or more states – centene, Molina, United, Humana
- Medicaid is further along in shift to managed care. Has lessons and innovations to offer. This shift will require payers to manage populations and risk in unprecedented ways. Providers will need to deliver care in more comprehensive and coordinated ways. Graphic: Deloitte report on value-based care readiness. What capabilities are needed as you move toward full capitation? Notice lots of new, advanced capabilities required on provider side around pop health, data, analytics. https://www2.deloitte.com/content/dam/insights/us/articles/value-based-care-market-shift/DUP_1063_Fig.6.jpg https://www2.deloitte.com/insights/us/en/industry/life-sciences/value-based-care-market-shift.html
- We know that Medicaid beneficiaries are more likely than those with employer-based coverage to have multiple chronic conditions, including mental health and substance use disorders Source: Coughlin T et al, What Difference Does Medicaid Make: Assessing Cost Effectiveness, Access, and Financial Protection under Medicaid for Low-Income Adults. Kaiser Commission on Medicaid and the Uninsured, May 2013, MEPS data
- Consistent with other research, a small percentage of individuals account for a large share of Medi-Cal’s total spending. Department of Health Care Services analyses indicate that, in 2012 – The most costly 1% of the Medi-Cal only population accounted for 27% of all spending And the most costly 5% accounted for over 50% all spending on Medi-Cal eligible individuals.
- Across health care, we are failing to effectively care for patients with complex needs and it is incredibly expensive. Complex patients often have both behavioral health and chronic health needs Source: Kaiser Family Foundation analysis of Medical Expenditure Panel Survey, Agency for Healthcare Research and Quality, U.S. Department of Health and Human Services.
- Care happens in different physical locations than for private pay consumers – more Medicaid beneficiaries get their primary care in community health centers than individual doctors offices, for example. In California, there are 176 FHQC organizations with 1454 sites - and there has been a 66% increase in sites since 2012. (Plus Look-Alikes: 22 organizations with 98 sites) US: 1,300 FQHCs, 9,000 care sites of care, serving ~23m people CA: 175 FHQCs, 1,400 care sites, serving ~8m people Provide primary care and a range of services: mental health, specialty care referrals, dental, labs, imaging, vision, pharmacy, transportation, access to insurance coverage support
- Access to providers is challenging. A recent CHCF survey of California physicians indicates that that participation by providers in the Medi-Cal program declined from 69% in 2013 to 63% in 2015 WHILE Medi-Cal enrollment increased by 39 percent. In 2013, adult Medi-Cal enrollees were more than 2x as likely as those with employer-sponsored insurance to report lacking a usual source of care (18% vs 8%) and 3x more likely to report trouble finding a doctor (6 vs 2% or specialist (5 vs 2%)
- Our health care workforce faces shortages. Limited access to care, especially in behavioral health and in rural areas, will only worsen as workforce ages. Rural areas being hit hard by opioid epidemic also seeing exacerbated shortages of BH services.