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In this week's Huddle:

• Is the “private-practice physician” life dead?
• A $300M company that offers little value.
• What’s being done about the “Family Glitch.”

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BUSINESS

The Death and Life of the “Private Practice Physician”

Is the “private-practice physician” life dead? Around three out of four physicians are now employed by a hospital, health system or corporate entity (PE firm or health insurer). I’d answer, “dead.” For now...

The Deets
The percentage of hospital- or corporate-employed physicians increased 19% over the last three years from 62% to 74%, likely due to pandemic pressures. 83,000 of the now 109,000 hospital- or corporate-employed physicians became employed by these organizations during the pandemic. 

What’s particularly interesting is the difference between hospital and corporate entity acquisitions:

• Hospitals acquired 4,800 physician practices since January 2019, a 9% increase.
• Corporate entities, like PE firms or insurers, acquired 31,300 physician practices since 2019, an 86% increase.

To Be Acquired or Not to Be Acquired
Pandemic pressures and the current labor and supply shortages have stressed physician practices both financially and mentally (burnout). An acquisition is a quick and lucrative way for physicians to shift the responsibility of running a practice to someone else. The benefits of shifting such responsibilities include:

• Financial risk protection
• Less administrative burdens (billing, compliance)
• EHR implementation
• More routine scheduling.

It’s great to have the above items taken care of so the physician doesn’t have to worry about them. On the flip side, the acquisition of physician-owned practices by a health system is associated with a slight decrease in income. Additionally, if acquired by a PE firm, the physician is no longer in complete control: they now have to abide by the PE firm’s profit-driven motives, which may include increased diagnostic testing or increased procedures.

My Thoughts
The age of medical graduates wanting to “start their own practice” is dead—for now. Health systems, PE firms and insurers (e.g., Optum) are beasts to compete with, and any new physician starting their own practice would get eaten alive by these entities.

However, I think the entity-employed physician trend may be on a pendulum. Right now, we’ve swung all the way to the right, where a supermajority of physicians are now employed by some other entity. I predict in the next couple of decades, we’ll see the pendulum swing back to the left as physicians crave the autonomy they once had, or want to experience it for the first time.

This means my peers and I will likely start out as employed physicians who leave the “corporate world” to “startup” their own practices. So here’s my million-dollar idea. Let me know if you want in. (Note, this would be a physician-first business, not a profit-first business).

HEALTH TECH

A $300M Company that Offers Little Value

Metabolic health company Levels raised $38M in Series A funding at a $300M valuation. Despite its grandiose valuation, I think the company offers little value to “healthy” individuals.

Background
Levels is a metabolic health startup that uses continuous glucose monitoring (CGM) to provide real-time feedback on how diet and lifestyle choices impact metabolic health.

“Metabolic health” is a pretty vague term, but it seems Levels is mainly focused on blood glucose to prevent metabolic dysfunction. How?

[By] empowering people with data about their own bodies, so they can take action to live a healthy lifestyle and feel their best.

The product is still in its infancy but is extravagantly expensive at $400 for the one-month program. That’s over a month of food expenses for me!

My Thoughts
The CGM product is a gimmick.

Unless you have type 1 diabetes or insulin-dependent type 2 diabetes, there’s no reason you need to be monitoring your blood glucose in real-time. If you have a working pancreas and insulin receptors, your body will predictably increase insulin and glucagon in response to blood glucose levels:

• After you eat a meal, blood glucose will rise. Insulin levels will consequently rise to decrease blood glucose.
• While you fast, blood glucose is low. Glucagon levels will consequently rise to increase blood glucose.

There, I told you everything the app will tell you after you eat or wake up.

And if you don’t want to take my word, go to your annual check-up (which is a free visit) with your primary care provider, who will accurately tell you your risk of developing type 2 diabetes based on your blood pressure, weight and lipid levels. I just saved you $400 this month. You’re welcome.

Moving on, Andreessen Horowitz (a16z), who invested in Levels, said the following:

Levels is an immediate answer for the metabolic health crisis, the defining health crisis of our era.

CGM is far from the “immediate answer” to the metabolic health crisis. To solve the metabolic health crisis, start with addressing social factors by increasing access to fresh foods, education, health and wellness programs and primary care physicians. That being said, the price of Levels is comical given their ambition to tackle metabolic dysfunction, which disproportionately affects low-income populations.

But, They Will Make Money
Whether the product should be used or not is one question. Whether the product will make money is another. This product will make money—a lot.

There is a massive market of fitness and health fanatics who will do and pay anything to stay at the forefront of their health.

Take a look at fitness wearable Whoop, whose annual subscription costs $300. I have a subscription, and I know about a dozen other Huddlers who have a Whoop, too. We love the health insights it provides us. The company is valued at over $3B.

I think Levels is worth its $300M valuation, but the actual value of its product is nil for those without diabetes. Here’s how I would go about deciding if I want to subscribe to Levels:

POLICY

The Glitch

5.1M Americans are caught in a “family glitch.” What the heck does that mean?

The Deets 
Under the Affordable Care Act (ACA), low- and middle-income Americans are eligible for premium subsidies in the ACA insurance Marketplace. Individuals and families are ineligible for such subsidies if they have another form of coverage, such as employer-sponsored insurance, that’s affordable and provides minimal value:

• Affordable = the cost of premiums for the individual employer-sponsored insurance plan is less than 9.6% of family income.
• Minimal Value = more than 60% of health expenses are covered by employer-sponsored insurance.

Let’s Explain the Family Glitch  
Say Jane has a spouse and two kids. Jane’s employer offers insurance with an annual $6,000 family premium (the individual annual premium is $1,300).

Together, the family makes $50,000 per year. Her annual premium of $6,000 is more than 9.6% of her family income. So, do Jane and her family qualify for premium subsidies? No.

They do not qualify for premium subsidies because the insurance is technically “affordable,” according to the above definition!

• The individual coverage premium—$1,300—is less than 9.6% of the family income! 

That’s what’s weird about this subsidy qualification rule: determining who qualifies for subsidies depends on the affordability of the annual premium for individual coverage, no matter if you have a family plan.

The Solution
The Biden administration proposed an updated rule to fix the family glitch: an “affordable” family insurance plan means the annual premium for a family plan (not individual plan, as it’s been) must be less than 9.6% of family income.

My Thoughts
An estimated 710K of the 5.1M Americans affected by the glitch will enroll in the ACA marketplace if the proposed rule goes through. Since those mainly affected by the family glitch are young and relatively healthy, the Marketplace insurance risk pool would be healthier and premiums should decrease (as discussed last week!).

However, things may get messy. For example, you can imagine cases where one person maintains individual employer-sponsored insurance while the rest of the family enrolls in the ACA Marketplace with premium subsidies. In that case, families would deal with two premiums, two deductibles and different in-network providers. It can get even messier if both spouses maintain their employer-sponsored insurance and only the children enroll in the ACA Marketplace. That’s just a lot...

Anyway, if the proposed rule goes through, it’ll cost around $45B over the decade. This amounts to ~3% of what has been spent under the ACA since its inception.

OUTSIDE THE HUDDLE

• At least 22 McKinsey consultants assigned to Purdue Pharma had also consulted for the FDA. Some did so simultaneously. These details come from a House Committee on Oversight and Reform report, shining a new light on McKinsey’s role in the opioid crisis.
• Medical device maker Inspire’s implantable hypoglossal nerve stimulator has shown promising results for treating sleep apnea in children with Down syndrome. The nerve stimulator may be an effective alternative to current sleep apnea treatment, which includes CPAP during sleep or extensive surgery to remove the tissue blocking the airway.
• Dr. Sachin Jain, CEO of Scan Health Plan, wrote about why lowering the cost of insulin is only half the equation. The other half includes focusing on preventing type 2 diabetes, which can also be highly cost-effective.
• Toothbrush company Quip is getting deeper into the dental care space by acquiring Toothpic, a dental telehealth company. The future of the dentist might just be in your bathroom.
• The HHS has issued a warning regarding an infamous ransomware group named Hive, best known for their unique double tactic of holding information for a ransom and also threatening to leak it. We’ve been covering the rise in ransomware attacks for a while now, and probably won’t stop any time soon. These attacks can have huge impacts on the health care system from increased costs to direct patient harm.

HUDDLE HITS

• 🥕 Diet: To fast or not to fast? A new study found that both fasting with calorie restriction and calorie restriction alone are effective weight loss methods. I cover the highlights here.
• 📺 What I’m Watching: The top 5 David Attenborough moments.
• 🍪 Dessert: Levain Bakery cookies. Omg.
• 😽 Good News: My chunky cat Callie lost a pound! (I hope the Vet’s scale was correct).

HEALTHCARE JOBS

Here are some jobs that I’m curating for the healthcare industry. Use this link to submit your role to be featured if you’re looking to hire.

Internal Medicine Physician, Nurx

Propel Physicians, working with Nurx, is looking for Physicians eager to be at the forefront of a new model of care delivery that leverages telemedicine to challenge the status quo in healthcare and achieve outcomes not possible with conventional office-based practice.

Clinical Impact Assessment Manager, Teladoc

As manager, you’ll be responsible for the day-to-day management of the Impact team including quality, operational efficiency, and ensuring the efficient, accurate analysis and costing of all cases sent to Impact.

Clinical Care Navigator, Lyra Health

As a Care Navigator, you’ll be doing the important, meaningful work of managing crises, providing in-the-moment telephone support to clients with complex behavioral health issues, ensuring client safety, and connecting clients to high-quality, evidence-based providers and facilities.

THE WEEK AHEAD

• Monday: American Hospital Association Annual Meeting. Some hot topics will be discussed from CMS reimbursement to addressing labor and supply constraints. [In-person, D.C.]
• Tuesday: KFF’s The Health Wonk Shop: The Future of Mental Health Coverage & Access. [Virtual]
• Wednesday: National Association of ACOs Spring Conference. Data is iffy surrounding the efficacy of accountable care organizations. This conference will discuss strategies to improve. [In-person/Virtual]
• Thursday: 2022 Annual Employee Health Care Conference. Topics will range from managing employee mental health to virtual care. [In-person, NYC]
• Friday: Johns Hopkins Health Policy Forum. Dr. Gawande will discuss the most pressing challenges in the development and implementation of health policy. [Virtual]

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Keeping it simple, 

— Jared

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