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THCB Reader - Hospital system concentration & a ton of articles & interviews


THCB Reader

April 11 · Issue #145 · View online

Everything you always wanted to know about the health care system. But were afraid to ask.

These past two weeks have seen a lot of action on THCB. Kim Bellard writes about robots and RNA Computers, Blake Madden breaks down Optum’s $6.4 billion acquisition of LHC group, Mike Magee explains how Ukraine’s Secret Weapon is “Moral Superiority,” George Halverson critiques MedPAC’s new analysis of Medicare Advantage in part 1, part 2, and part 3. Ben Wheatley talks about 988 and 988, and the Justice System’s involvement in Mental Health Crises, and Travis Good explains how Health Care organizations must prioritize cybersecurity before undergoing digital transformation.
Interviews! For WTF Health, Jess DaMassa talks with PBM startup Rightway GEO Jordan Feldman and Chief Pharmacy Officer Scott Musial about their 15000 employer client base and how the business is now even winning over health plans who are tired of working with the ‘Big Three PBMs.’ She also interviews Well Health CEO Guillaume de Zwirek about why Well Health wants to stay unknown and chats with the Co-Founders of the Advancement League, Alex Maiersperger and Antwan Williams.
Jess and I have done three episodes of Health Tech Deals in the last two weeks: deals include Brightline, Brightside, OssoVR, Podimetrics, AmplifyMD, IntelyCare, Avi Medical, Eleos Health, EverNow, VivoSense, Clarify Health, Season, Altoida, nirvanaHeath, and Pluto.
Health Tech Deals and also #THCBGang (which has been off the last 2 weeks but is back this week on Thursday) are also available as podcasts with an easy click on Apple or Spotify.

For today’s health care tidbits, there’s an old chestnut that I can’t seem to stay away from. I was triggered by three articles this week. Merril Goozner on GoozNews looked at the hospital building boom. Meanwhile perennial favorite Sutter Health and its price-making ability came up in a report showing that 11 of the 19 most expensive hospital markets were in N. Cal where it’s dominant. Finally the Gist newsletter pointed out that almost all the actual profits of the big health systems came from their investing activities rather than their operations.
None of this is any great surprise. Over the past three decades, the big hospital systems have become more concentrated in their markets. They’ve acquired smaller community hospitals and, more importantly, feeder systems of primary care doctors. Meanwhile they’ve cut deals with and acquired specialty practices. For more than two decades now, owned-physicians have been the loss leader and hospitals have made money on their high cost inpatient services, and increasingly on what used to be inpatient services which are now delivered in outpatient settings at essentially inpatient rates. Prices, though, have not fallen – as the HCCI report shows.
Health Care Cost and Utilization Report from HCCI
Health Care Cost and Utilization Report from HCCI
The overall cost of care, now more and more delivered in these increasingly oligopolistic health systems, continues to increase. Consequently so do overall insurance premiums, costs for self insured employers and employees, and out of pocket costs. And as a by-product, the reserves of those health systems, invested like and by hedge funds, are increasing–enabling them to buy more feeder systems.
Wendell Potter, former Cigna PR guy and now overall heath insurer critic, wrote a piece this week on how much bigger and more concentrated the health plans have become in the last decade. But the bigger story is the growth of hospital systems, and their cost and clout. Dave Chase likes to say that America has gone to war for less than what hospitals have done to the American economy. That may be a tad hyperbolic, but no one would rationally design a health care environment where non-profit hospitals are getting bigger and richer, and don’t seem to be able to restrain any aspect of their growth.
Follow me on Twitter @boltyboy and THCB at @thcbstaff for more similar insights/nonsense (and even the occasional sensible idea)! Enjoy! – Matthew Holt
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From Jess DaMassa & WTF Health...
The Next Next-Gen PBM? Healthcare Navigation Biz Rightway On Making The Pivot
Well Health Wants To Stay Unknown: The White Label Platform Behind Provider-to-Patient Text Messages
Why Aren't You Part of The Advancement League?
#HealthTechDeals Episode 19: Brightline, Brightside, OssoVR, Podimetrics, AmplifyMD
#HealthTechDeals Episode 20: Clarify Health, Season, Altoida, nirvanaHealth, and Pluto
#HealthTechDeals Episode 21: IntelyCare, Avi Medical, Eleos Health, Evernow & Vivosense
Follow @THCB on Twitter, Linkedin
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Listen to THCB’s Podcasts on iTunes or Spotify
Subscribe to Health Tech Deals on Youtube
Subscribe to WTF Health on Youtube
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