UnitedHealth Group said revenues will hit between $243 billion and $245 billion in 2019. Year-to-date, profits are up 29 percent to $8.9 billion when compared to the first nine months of 2017. Excerpt pulled from the this Becker Hospital Review article.
That’s the magnitude of the health care industry for payers. And the payer pie will only get larger as consolidation such as recent – Aetna/CVS continues.
The World Medical Innovation Forum in Boston just wrapped after three days of insights on artificial intelligence in health care. While it didn’t disappoint in respect to buzzwords as is expected in AI conferences, it was the quality of the participants and their views on AI in health care workflows that made it notable. Here are twelve quotes directly from healthcare leaders.
On AI as a capability and adding immediate value
We realized having great medical devices is not enough, we need to connect them and make them interoperable. We operate on Adaptive Intelligence rather than Artificial Intelligence. Frans Van Houten. CEO, Philips
You will need to have capability to process structured (EHR) and unstructured (genomics) data, we can say we are more advanced in AI due to our work in oncology – aiding in virtual recruiting in clinical trials. Amy Abernethy, MD, PhD. CMO/CSO, Flatiron Health
Knowing about the range of products being developed now, in 5 to 10 years time, there will not be a single decision made in healthcare and medicine not influenced by AI. John Kelly, PhD. SVP Cognitive Solutions and Research, IBM
30-45% of each provider’s day is wasted in non-care related activities, AI can improve healthcare and reduce burnout. Peter Durlach. SVP Health Care Division, Nuance
On data generation and interoperability
We need to remove any remaining friction between insurers and providers when it comes to sharing data, we need free flow of information. Patrick Conway, MD. CEO, BCBSNC
Some doctors don’t want to be paid electronically. They are still sending paper faxes. Roy Beveridge, MD. CMO, Humana
Pharmaceutical companies are sitting on mountains of data on clinical trials. This data is still underutilized. Jackie Hunter, PhD. CEO, Benevolent AI
On data security, privacy and consent
When thinking of AI innovation, two considerations – medical requirements on devices as well as consumer privacy and security. Jigar Kadakia. CISO, Partners HealthCare
Facebook says we got consent from you. But then you don’t really know you signed consent. Consent needs to be clear – in healthcare. Noga Leviner. CEO, Picnic Health
On quality and trust of all these AI algorithms
How are we going to address quality. How is that algorithm performing and how does that impact health outcomes? Seth Hain. Director, Analytics and Machine Learning, Epic
There’s a difference between Big data and AI. Big data has informed and enabled’. What has AI done in drug development? Dr Thomas Lynch. EVP, R&D Bristol Myers Squibb
Garbage in, Garbage out. We have to de-toxify the data. Carl Kraenzel. CISO, IBM Watson Health
We have all heard the news by now of the Aetna and CVS Health $69B merger. What remains to be seen is the disruptive element. It’s business as usual. Or perhaps – economy of scale?
There was already a tie up as far back as 8 years ago. According to a 2010 WSJ article, Aetna contracted out long-term administration of its pharmacy-benefit business to CVS Caremark Corp in a 12-year agreement that offered prescription-drug discounts to some 10 million members.
As part of the arrangement for that deal, Aetna transferred 800 of its own PBM employees to CVS Caremark and retained 1,000 PBM employees. For such a tightly integrated deal, and the present day opportunity in drug costs, it was only a matter of time that the two companies merged.
Other opportunities in the merger is the ability for narrow networks in the benefit design. CVS minute clinics offering expanded/concierge options to Aetna self insured customers (large employers).
It is no longer a secret that these two firms are merging. Considering that their main competitors already have pharmacy benefit managers (PBM)- United – Optum Rx, Humana (it’s own PBM), and Aetna (CVS Caremark), it makes sense.
According to Fierce Pharma, the industry continue to speculate about Amazon’s intentions in the drug business. Besides its recent partnership with J.P. Morgan and Berkshire Hathaway to explore care plans with their employee population, what is clear is that creating a more efficient medicines supply chain is in its sights.
Digital health company, Clover which offers insurance to seniors in New Jersey, and now to parts of Georgia, Pennsylvania and Texas posted a $22M loss in 2017.
The company serving the lucrative and stable Medicare Advantage market made revenue of $267M that year according to Bloomberg
It only takes a quick reading of the chart from the Kaiser Family Foundation below to note why this market is lucrative. The Medicare Advantage market is now 33% of Medicare – that’s 19 million people served from just 7 million people in 1999. Average premiums are $36 per person.
With almost 50% of the market dominated by United Health and Humana per Figure 6 KFF,
Clover has some work to do. On the immediate list for the firm include focusing on it’s sickest customers – to drive down ER costs/use, getting it’s Medicare Stars Rating up towards the perfect ‘5’ score and negotiating narrow-er networks.
According to Bloomberg, after Roche acquired Austrian app, MySugr for $75M last June, the firm has been busy integrating it into it’s operations. Insurance payers increasingly are re-evaluating unit costs and margins and are thus cutting prices. Blood-sugar monitoring equipment looks like a safe bet to start. Chief Executive Officer Schwan notes – Payers have switched from simply reimbursing some strips to measure glucose, to value based model’.