Volume 21

#1 AI Keeps Getting Better With GPT-4. Are We Ready?

OpenAI, a company specializing in machine learning software, recently introduced its latest AI model, GPT-4, which is being touted for its exceptional stability and capabilities. The company claims that GPT-4 has achieved remarkable results in standardized testing, but is unable to fully match the intelligence of a human.

So What’s The Big Deal? As noted above, AI has been implemented in various industries, including healthcare. Diagnostic imaging is an example, but the technology may be extended to patient diagnosis and care. ChatGPT-4 has surprising accuracy for medical practice. Yes, it still makes mistakes, but its accuracy is improving. The question will be: Can physicians leverage this technology to avoid errors and improve diagnosis?

#2 Is A Medical Degree Better Than Google AI Search?

Major technology companies are competing to incorporate AI into their products. Google's Med-PaLM 2, an AI chatbot designed for the medical industry, is a "large language model" that has achieved a consistent score of 85% on medical exam questions, which places it at the level of "expert" physician. Use cases for the technology are still being discovered.

So What’s The Big Deal? The next phase of AI evolution in healthcare has just begun, but it is accelerating rapidly. As such, it is now clear regulation will need to catch up and medicine and healthcare technology will need to understand how to incorporate AI into their practices. There are clear benefits to this technology, but there are significant risks too. When patients self-diagnose via the web, physicians often joke, “Please don’t confuse your Google search with my medical degree.” Those words now may no longer be a joke.

#3 Do We Know The Full Ramifications Of The Failure Of SVB?

The aftermath of Silicon Valley Bank's fall into receivership will have long-lasting effects. The bank, located in Santa Clara, played a critical role in financing startups – and not just in the Bay Area, but across the entire United States. It was, for example, the primary financial institution for nearly half of all venture-backed U.S. startups, including 44% of technology and healthcare firms that went public in 2022.

So What’s the Big Deal? First, rising interest rates and the fact that large numbers of healthcare startups banked with SVB will slow deal speed and the flow of cash. Startups should prepare for longer due diligence and ensure their business plans are medically sound.. But there is also this: The combination of SVB's failure and continued job cuts in the tech sector provide a chance to start over and make changes in the tech space. My advice: if you are a healthcare startup or financing a healthcare startup, make sure you have clinician executives around the table to ensure feasibility.

#4 The Hits Keep Coming For Physicians

U.S. healthcare workers already are dealing with several challenges: financially-stressed hospitals, an increasing shortage of doctors, and a significant level of burnout. Now they will have to face a 2% reduction in Medicare payments. 2023 will be the first time in 20 years payments have fallen. But that’s not all: The American Medical Association says when inflation is taken into account, Medicare payments to physicians have declined 22% from 2001 to 2021! And, remember: this is happening while medical student loan debt and workloads expand.

So What’s the Big Deal? Physicians are already leaving the workforce faster than they are entering. With declining reimbursements and increasing workloads to make up the difference, physicians will likely continue to call it quits. And with a growing population, we could see widening access disparities in primary care and other specialties.

#5 So How Can Congress Solve What’s Ailing Physicians?

This week, I wrote a column highlighting the significant challenges and solutions to healthcare physician staffing. The United States is expected to experience a significant shortage of doctors, with estimates ranging from 37,800 to 124,000 by 2030. This shortfall will impact primary care, pediatrics, and psychiatry the most. The lack of physicians will make it even more difficult to provide healthcare to a burgeoning population, especially in areas with limited access to medical services.

So What’s The Big Deal? With more than 62% of physicians feeling burned out physicians fleeing the sector, Congress and lawmakers must act fast. The problem is multifactorial and the solutions are not easy. However, Congress can start by making licensing less burdensome, reducing medical school financial costs for primary care physicians, and accelerating the transition to value-based care payment arrangements.

#6 Investments In Women's Health Continues To Expand

The role of OB-GYNs is evolving. In fact, many are now expected to function as three-in-one providers. Almost half of these specialists consider themselves primary care providers and 84% of them prescribe anxiety and depression medication to patients since many women will not receive proper treatment otherwise. On top of this, it is estimated there will be a shortage of up to 22,000 OB-GYNs by 2050, putting both patients and providers under more pressure. That’s where companies like Iron Health come in. And they aren’t alone.

So What’s the Big Deal? The real story here is why women are seeking comprehensive care from a single provider. Instead of going separately to an OB/GYN, general practitioner, and psychiatrist for various medical needs, patients would rather go to a single place. Companies like Iron Health are responding to this sentiment by acting as extenders for the practice. Other provider practices should take notice because the trend is both a threat and an opportunity. For practitioners who straddle the primary care fence, extender services can expand their offerings and help keep patients. For specialists who remain too focused, patients may seek comprehensive, convenient care elsewhere.

#7 Healthcare Insurance Claims Rejections

According to internal documents and ex-employees of the company, Cigna physician reviewers rejected patients' claims without even reviewing their files. In fact, Cigna rejected more than 300,000 payment requests within two months last year. The physician reviewers took about 1.2 seconds on average to review each case. A former doctor who worked for the company said these physicians simply "click and submit" without any further investigation.

So What’s The Big Deal? Two things here:

The optics and the business practice are horrible for patients and providers and may even break the law in some states (California). Health care providers spend significant hours getting pre-authorizations for patients only to find those requests are rarely viewed. Patients are being denied life-saving medications and treatments. The result of this profit-focused business practice causes harm to multiple stakeholders.
Because of #1, congressional hearings will likely follow.

#8 What Caused Financial Losses For Hospitals? It’s Not All Staffing

According to proprietary data analyzed by Kaufman Hall, approximately 900 hospitals experienced negative median operating margins during the first half of 2022. The report also said revenue from financial investments, including income, decreased by 185% from 2021 to 2022.

So What’s the Big Deal? If policymakers want to make effective decisions that will benefit both hospitals and patients, they must first understand the main factor contributing to financial difficulties in hospitals. The decline in the stock market has had far-reaching effects, impacting not only retirement accounts but also large healthcare systems with investments. This factor is the primary cause of financial strain in hospitals. Hospitals also should consider whether they should have such significant financial exposure in the stock market.

#9 CVS To Close Signify Deal This week

CVS announced its acquisition of Signify Health, a home healthcare provider, will be complete this week, provided certain conditions are met. The acquisition, which was agreed to in September for a cash consideration of $30.50 per share, is valued at approximately $8 billion. CVS has not disclosed the remaining conditions that need to be met or waived for the deal to go through.

So What’s The Big Deal? Signify is expected to assist CVS in expanding its healthcare services strategy, growing in value-based care, and introducing new products for various payers. Signify already has more than 50 clients in the health plans industry. Perhaps, the bigger news, however, is antitrust regulators had few concerns about the acquisition. The march towards pay-viders and large hospital conglomerates continues.

#10 The No Surprises Act Whiplash Continues

After a court ruling in February, the Centers for Medicare and Medicaid Services (CMS) was supposed to stop making determinations about payment disputes related to the No Surprises Act, but the agency has now instructed arbitrators to resume determinations. Initially, CMS had paused disputes after a Texas judge's ruling that the dispute process was unfair and unlawful towards payers and providers.

So What’s The Big Deal? The No Surprises Act may be protecting patients, but it is clear who the true winners are: the payers. While arbitrators can resume their determinations, the outcome of the law remains exceedingly murky. As a result, providers continue to provide care to patients while payers hold on to reimbursements, awaiting arbitration.

Bonus: Match Day Results: A Mixed Picture

In the NRMP's largest Match to date, a record number of 42,952 applicants certified a rank order list, and 40,375 positions were certified. 2023’s Main Residency Match saw a total of 48,156 applicants, 481 more than the previous year. The increase from 2022 was mainly due to 707 non-U.S. citizen IMG applicants and 153 more U.S. osteopathic seniors. One surprise in the data: the number of U.S. MD seniors registered for the Match fell by 236 applicants from 2022. Additionally, the number of U.S. MD seniors certifying a rank order list also decreased from 19,902 to 19,748 seniors.

So What’s The Big Deal? Two things:

Emergency Medicine had its worst match day in history. Check out my thoughts on why.
Nearly 2,000 applicants did not fill in positions despite significant shortages projected in primary care medicine.

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Adam Brown