The a16z Show - The Return of Home-based Healthcare

Starting point is 00:00:00 Hi and welcome to the A16Z podcast. I'm Hannah. This conversation is all about the rise of delivering health care to patients in their homes. This has been a growing trend over the whole previous decade, as we've been figuring out how to unbundle some of the care we get in hospitals and clinics, and deliver it in a home setting to chronically ill patients or seniors. And now, of course, with the impact of COVID-19, we have a huge sudden demand in the need for home-based care, as all of us try to figure out how to manage certain health care needs, at home. What do we truly need to deliver the right care to patients in their own homes? What do we gain and lose in home-based care versus institutional settings? What shifts of mindset and new logistical processes do we need now in order to best accomplish this? Joining me for this

Starting point is 00:00:46 conversation, in the order you will hear their voices, RFI-Kedar-C, CEO and co-founder of Tomorrow Health, a tech platform that delivers the products and services needed for home-based care, A16 Z general partner Julie U and Sachin Jane, physician, previous CEO of Caremore and Aspire Health, part of the founding team at CMMI, the Centers of Medicare and Medicaid Innovation, and now incoming CEO of the Scan Group and Health Plan.

Starting point is 00:01:12 So I thought maybe we could start by talking a little bit about where we are today and the big trend of home-based care and what exactly COVID is showing us with our ability to deliver it. You know, I think the first element that's interesting is just the history of how care became so bundled and where we are on this trajectory. For decades, up until the 30s,

Starting point is 00:01:31 a large proportion of health care used to be delivered at home. But with the development of more expensive forms of capital equipment and the horizontal and vertical consolidation of hospital systems, as the incentives changed, the way that health care was delivered was changed, we've seen increasing demand for home-based care from 90% of senior citizens wanting to age in place and overarching shift to value-based care. But we have not had to have, the critical infrastructure and capabilities to support that. And there's no question that COVID has exacerbated those challenges. I think it's so interesting that you say, well, actually what feels normal to us now is just the normal now, wasn't the normal always. So what is it about the infrastructure

Starting point is 00:02:11 that makes it so difficult to go back to that old normal where all care was home care? The most basic thing to consider is the sort of staffing model of healthcare. The scarcest resource that we have in healthcare is the clinician. And therefore, So much of how we've designed care models and payment models and just service delivery models in general has been let's optimize for the physician's time. And so for that reason, all of health care, like the general motion is like we go to the doctor. We schedule an appointment that fits the doctor's calendar such that we can literally physically drive to that practice and fit our world into that provider's time. And home health sort of flips that on its head entirely, which is the patient is the one that stays where they are. They are visited when they need. things the most. So the fact that the entire system has been really sort of optimized and to some degree ossified around this sort of provider-centric model that physically requires people to come to them, that's one of the biggest friction points right now is just how do you sort of upturn that and decentralize so much of what has been centralized. There's so much about the current care

Starting point is 00:03:14 delivery model that we just like forget how much we rely on manual in-person processes that assume that like you're face-to-face with a doctor in a clinic or a practice. Like what? I was just talking to one of my doctor friends who was like, we usually Xerox the insurance card in our practice when when people come in. And that's the only way that we can verify insurance. And so they had to like recreate an entire process of how do you collect insurance information from patients digitally and virtually. Same with like signatures. Like docu sign is not really a thing in healthcare. And so how many documents need to be signed and approved to submit prescriptions or just do general orders for things that patients need. I know a bunch of my physician friends who literally had to install DocuSign for the first time.

Starting point is 00:03:56 So just basic, basic things like that, where because we've sort of taken for granted the fact that we have these in-person encounters, there's a lot that needs to be re-balled just at the basic infrastructure level. Yeah, I mean, we have a system that makes absolutely no sense. We take the sickest, most frail, most vulnerable patients, people who should not be collecting and gathering in one place, and we put them all together in one place, and we make them travel through a lot of barriers, Getting to a physician's office is not particularly easy for a lot of the most frail and vulnerable patients. They may have mobility impairments. They may need transportation. And all for, in what is most cases a five to ten minute interaction with a clinician, much of which could have been done

Starting point is 00:04:36 over the phone or virtually or through video. I think we're about to see a huge shift in medical care from synchronous appointments, meaning the set of appointments that take care over long periods of time, to a place where we're going to have more asynchronous delivery in health care. Let's go back and look at when we compare the two care delivery settings, what is it that we gain and we lose in each of those two different settings? What are the pluses and minuses of home care versus in facility care in the landscape, the way we've come to it today? The home is a superior setting in almost every regard, right?

Starting point is 00:05:12 For the patient, from a convenience perspective, for the clinician, because they're actually able to see the full context of the world in which the patient actually lives. And that context matters so much to the actual delivery of care. In the home visits I've done with patients, I'm able to actually open up their pill bottles and see if they're actually taking their medicines, who their family members are, what the social dynamics are, what kind of food they're eating. I'm able to open their refrigerator and talk to them about why that soup that they made is actually not good for them as opposed to good for them.

Starting point is 00:05:43 You can walk into a physician's office and you can fake a lot of things. And many people do. We all show up and we are our best selves when we go to our doctor's offices. Oh, yes, I'm taking my medications. Yes, I'm exercising. No, I'm not smoking anymore and no, I'm not drinking. You can actually go to someone's home and you can smell the smoke. You can see the empty bottles in the lived environment.

Starting point is 00:06:04 At the end of the day, you can't really fake it. So many clues to people's social context are not clues. They're hitting you over the head, actually, when you're delivering care in the home. The flip side of that, I'm curious to hear your thoughts actually, such as a physician, is the benefit of doing things in a central location is standardization and limiting the number of variables that you have to deal with as much as you can. I think all of us recognize that healthcare will always have some kind of centralized component, I mean, especially around things like surgeries and other sort of high-end procedures. But how do you think about, like,

Starting point is 00:06:33 the boundaries of that? And what have you seen in practice in terms of defining what that looks like? Yeah, I mean, I think there's an efficiency quality tradeoff when you get to the home, right? I mean, it is less efficient to see one patient in one home than to see a ward full of patients or to see an office full of patients. But I do think that we overly standardized things that don't necessarily need to be standardized sometimes in the name of standardization. And I think, you know, you wrote about this in a recent post about how the primary care chassis is broken. These are just these fundamental assumptions about the system that we need to kind of rethink. So let's talk about actually what it takes right now because all of a sudden we have this huge surge in demand for people who don't want to go to the hospital. for people who are putting off going to the hospital who have chronic conditions. What does it take

Starting point is 00:07:15 to truly manage care at home? And where are we seeing sticking points? What needs to change today for that to be effective? I think one of the challenges is we think about the home as one care setting. But in actuality, it's millions of different care settings. And that poses tremendous challenges for the logistics of the health care supply chain. So tactically, when we think about what are the core resources people need to manage health care at home, right? We talk about food, groceries, we talk about prescription drugs, we talk about medical equipment and supplies, and then we talk about physical clinical services, individuals delivering in the home. And we have seen an exacerbation of those existing supply chains across those key resource categories. Much has been

Starting point is 00:07:58 discussed around grocery delivery and prescription delivery. But until the last decade, much of the health care supply chain has not been routing to the home. It's been routing through retail locations, pharmacies and medical equipment shops. Tactically, thinking about medical equipment and supplies, we've got a distribution landscape today that is largely thousands of local retail mom and pop shops. And as we think about now, how do we get those resources to the home? We really have to architect how those logistics operate. So how does it normally go to getting what you need at the moment? In many ways, it's indicative of the lack of guidance that exists through many patient journeys in health care. Generally, what's going to happen is you'll be discharged from the hospital,

Starting point is 00:08:39 And in line with your care plan, you're going to be prescribed, a list of medical equipment and supplies. Oftentimes, you'll need to consult your insurance company to figure out where you can go to get these, and it's going to be a myriad of retail locations. You'll drive out to those with a prescription that might just say CPAP, and for the most part, are forced to navigate on your own across the 20 different varieties of CPAP machines. Wow. Understanding what might be needed for your condition, sleep apnea versus another condition, COPD. And so I think one piece of it is how do we streamline this process for patients and that's bringing together all these pieces. It is the logistic side of how do you get them the critical resources they need in the place where they're getting care.

Starting point is 00:09:18 But it's also the navigation and the coordination, working with insurance plans to help people navigate their benefits at a time when it's so confusing. And working to coordinate care across the various components of service providers operating in the home in a way that doesn't exist today. I think one of the biggest fundamental misconceptions that has invaded the healthcare industry over the last couple of decades is this notion of consumerism that puts a lot of pressure on patients and families when they're least able to actually be consumers to operate as consumers. And I think there's a version of the consumer where the consumer goes to the mall and they go to a lot of different stores and they shop. And there's also a notion of a consumer where when you need help, there is an organization that has already done all the homework for you that just makes it easy for you to get done what you need done. That is what healthcare consumerism needs to look like, where just the right thing just happened for people. Most people don't have preferences because they've never been sick before at home with three liters of oxygen. So they're really looking for the system to just work, right? They're looking for that oxygen to be at home. And so to say to someone, oh, here's some materials and we're going to give you a care navigation platform or a kayak for health care and you're going to be able to shop for where to get an MRI is so ridiculously pointless. Because at the end of the day, like if you're worried about whether

Starting point is 00:10:42 you have cancer or not, the last thing you want to know is whether you need to go to MRI down the street or MRI at my hospital, you just want to be affordable, you want it to be reasonable, you want it to be done right. And fast. And the truth is you don't have the time or mental capacity to start to think about these things. And I think, again, I think the people who've introduced the notion of consumerism into healthcare had a really good intent, but didn't think through all the very significant scenarios where you get home and, like, your whole world has changed. Lots of parts of the healthcare system are organized to talk about cost sharing and cost shifting

Starting point is 00:11:17 and skin in the game and responsibility for the consumer. We've kind of let our political ideology actually shape how we think about our consumer ideology. Yeah, and a lot of what we're describing, if you kind of zoom out the lens, is just like a massive supply demand mismatch problem that characterizes all of health care, right? And the notion of limiting your ability to get access to care based on your geography and what's available within a five-mile radius of your home, sort of artificially constrains the problem to a great degree. But that, in fact, is how so much of health care has been architected because of the lack of ability to tap into virtual resources, to have digital ways of engaging

Starting point is 00:11:56 providers who might be across state lines, et cetera, not to even mention all the regulatory constraints that have prevented that explicitly from taking place. And so, you know, all these sort of like micro contributors to this exacerbation of the supply demand mismatch problem is really what's led us to this sort of tipping point, unfortunately driven by a pandemic. We're seeing that the way that this system has been designed is explicitly not what we need right now to make all this work. The people who were sick before are still sick and people are still getting sick. And these crazy stories that we're reading in like the New York Times and Wall Street Journal about like, oh, all of a sudden there's no more heart attack patients. It's like, yeah, they're probably

Starting point is 00:12:33 people out there and we're just telling them to literally not comfortable at all. They're just at home alone. No, they're actually dying at home alone. I mean, we're going to look at the social security data in three to six months and we're going to look back and we're going to see that we had unprecedented numbers of deaths at home. There are countless patients right now who are avoiding actually getting care because they're terrified of getting this disease. And, because we've created a system where it's actually really hard for them to otherwise seek or access care. We're having conversations with our parents and our siblings. We're saying, you know, mom or dad needs care and we're arguing about whether the care need is great enough for them to potentially risk getting COVID-19.

Starting point is 00:13:13 And because it's an assumption that you can't do it at home effectively, right? That's right. I have a parent who's nearing the time in his life when he may need dialysis, and we have to monitor his creatinine very closely over the next couple of months. I asked his primary care physician. I said, is there a way to get his labs done at home? Because he's the type of person could potentially get exposed to someone having COVID-19 and have a catastrophic outcome. And the reality was a simple thing like a phlebotomist and a home lab draw,

Starting point is 00:13:44 it has been impossible to organize. I actually say we haven't been able to get it done. And so these are the kind of radical common sense things we need to start talking about. health care, which is like, you know, do we really need sick people traveling into settings with a high risk of contracting communicable disease? We don't. Do we need people who have mobility impairments traveling for an hour for a six-minute appointment? We don't. I think relationships will always be at the center of how health care is delivered. I think the very active receiving health care is a very vulnerable and human and personal act. But I think the reality is that innovation

Starting point is 00:14:16 needs to kind of move very far in the direction of enabling the unsexy boarding stuff, like how do you get a wheelchair into someone's home right after they've had a stroke. That stuff, the more interesting stuff for people who actually want to change care, outcomes, and the cost equation at the end of the day. I can say firsthand managing my mother's care a number of years ago, she was recovering from a couple of months on a ventilator and inpatient stay. She came home and she needed a wide range of medical equipment, supplies and services to get back on her feet. Leaders of oxygen, mobility equipment, osteomy and wound care supplies, physical and respiratory therapy. And having been in the industry for years, having been in a family of physicians, I can't tell you how difficult

Starting point is 00:14:57 and challenging and opaque that process was, understanding based on her clinical conditions, what were the products, the supplies, the resources that were needed for her, navigating across over a dozen different providers to do that and spending hours, you know, sitting there, faxing forms back and forth between a discharge manager, a physician, an insurance company for prior authorizations, or to see how much her insurance would cover. But most painful, of all, it resulted in us having to admit her back to the hospital three times in the first month. And so incredibly disruptive to her care and tremendously costly of the system at large. We're not actually empowering the patient. We're burdening the patient. And when we get to a point

Starting point is 00:15:36 where somebody has to type into a Google search bar, what is the right XYZ for my mom, my dad, my child? We as health care providers have failed because it's our job to recognize the different challenges that are faced at every step of that journey and to truly bring those together such that is much more reasonable and common sense for someone facing that. So we've talked about sort of increasing different ways of access with like telemedicine, we've talked about some of the regulatory changes, some of the incentives that need to change. But very tactically, when you talk about those CPAP machines, you know, how are we starting to see what are the tools that we can use now?

Starting point is 00:16:16 It's really three things. The first is the logistics side. And that is a combination of of real-time supply demand matching and N-10 supply chain management, working across logistics providers from manufacturers to distributors and providing a level of visibility that we haven't had before, particularly to support that last mile once we actually engage the patient, which is where things tend to fall apart. The second is the reimbursement side, which to get this right, really means aggregating across hundreds and hundreds of different health plan, benefit designs and catalogs to really recognize what is covered for a specific patient, what is the financial contribution that they're going to owe, and doing that work on their behalf.

Starting point is 00:16:57 And the third is really creating that seamless experience that we've come to expect in other industries, and both for patients, but also for caregivers, for other home health services aids, for other organizations that are delivering care to patients, and providing a level of visibility and coordination that has not existed before. And I think it all starts for how we pay for things. How we pay for things shapes the delivery. It shapes the documentation. It shapes the documentation burden.

Starting point is 00:17:26 It shapes the burnout factor. And what we're, I think, going to start to see over the next couple of months and years is a rapid acceleration into more care delivery models where patients who need care at home will get care at home. If they need care through email or through video visits, they'll get that. And then if they need to be seen in person, they'll get that as well. But right now, we deliver what we pay for, and that ends up being a really irrational way of actually organizing and structuring such an important foundation for our society. If we can start to kind of reshape

Starting point is 00:17:58 how the dollars flow, then all of our assumptions are going to change, and the chassis is going to look very different to the point of your article. And I think, you know, lots of magical things will start to happen. Yeah, I would say the other thing that we need to sort of energize is this notion of social determinants of health and the non-clinical factors that contribute to our well-being, how well we are able to come out of a disease state, or what's contributing to our inability to do so and our deterioration to do, especially the underserved, the underprivileged folks who are living in crowded homes in places that don't have access to good food, and also happen to likely be the folks who are quote-unquote necessary workers who have to go out to work and put their other residents at risk.

Starting point is 00:18:40 All those factors are things that really are just not a accounted for in the traditional care models. This whole COVID experience is going to just shut the light on the fact that that absolutely needs to be a part of, even like a tactical, like the standard medical record needs to account for those aspects of the situation of the patient, which it absolutely does not do today, let alone how can we actually change those situations and actually address some of those needs such that we put patients in the best place possible. But I think what I keep thinking about is that we're still describing an environment where patients are essentially, potentially alone their homes. So how do you compensate for that aspect of the support that that broader ecosystem and

Starting point is 00:19:20 network, the emotional support, the human element as we begin to try and sort of shift towards a home-based model? There's a number of healthcare organizations around the country that think about the medical office as a social gathering space that people come to on a daily or regular basis. you look at a lot of pace programs, and then the health care is integrated into their social space. And I think, you know, we have to think about making sure that there is a mechanism to check up on people who are socially isolated. You know, a lot of health plans are now moving towards this institutional special needs plan model, which are health plans that are focused on people are either homebound or institution bound. And a lot of the models there look like people going into the home on a regular basis to check up on people,

Starting point is 00:20:08 oftentimes weekly or sometimes even daily. That's enabled, again, by risk-based models where, you know, we're looking at the total cost of care for these folks and say, it's far cheaper to send a nurse practitioner into someone's home every week than for them to go into the hospital every six weeks. And that trade-off and that calculus starts to make sense when you start to take a much more personal view of people. My favorite story related to that, I heard of one of the towns somewhere across the country using the spare capacity of their 911 department to do outbound calls to seniors who lived by themselves, like just to talk. That's amazing. Part of the idea was also not just to provide companionship, but also to obviously, you know, sort of identify cognitive decline or like if the person wasn't

Starting point is 00:20:49 answering after multiple calls, obviously they could send someone in and escalate. But that gets to the point that we mentioned earlier about breaking down the barriers of what we today call health care and thinking creatively about people who are already in our communities where capacity, exist where the types of resources that should be providing this kind of companionship are probably already out there and sitting around idle in many cases. And how can we sort of insert those kinds of things into a care model? What I really would like us to do is have a more grassroots movement in our industry around actually really addressing these things in a deep and more basic way. There's a great paper by Will Shrank from Humana and Chantanthaniu Agarwal from NQF,

Starting point is 00:21:28 where they talk about a social risk adjustment score that would actually modify payment for Medicare Advantage beneficiaries, I think that's what we need. We need, you know, to really take into account people's life circumstances when we think about their health care spending and stop seeing health care spending and social spending in separate buckets from the societal perspective and take a far more integrated view of people. Organizations are introducing benefits like 10 meals when somebody leaves the hospital. That's great for those 10 meals. But what happens after meal 10, And those are the kinds of things that we need to start thinking much more about. Well, so, I mean, if you could wave a magic wand,

Starting point is 00:22:05 what are the larger sea change things that you haven't heard enough light be shined on that we need to start shifting to get this reality of home-based care? Yeah, I mean, my view is we tend to kind of think about these terms in broad brush, like what can we do for everybody? And the truth is that these are highly personal circumstances. I think we end up forgetting how stressed out and how challenged people are in that moment that they're making that transition from hospital to home, they really oftentimes just need someone to hold their hand. And that person, if you're in a good health care system,

Starting point is 00:22:37 and if you're working with a progressive payer, you know, sometimes it's a case manager or care manager who is your godsend. Too often there's this like luckiness quotient, like do I have someone involved in my care who actually cares? That's one of these problems that we really need to solve for. All of a sudden, you start actually doing things like maybe they had a home care attendant or a care manager who actually solved all these problems for them as opposed to leaving them hanging. And then in the middle of the night, you know, the oxygen stops working. You have nowhere to go and you're kind of bouncing back to the hospital. Most people don't know that the most expensive part of health care is actually a hospital stay. The average hospital day in Southern

Starting point is 00:23:14 California, it costs like $3,000. So three or four days in a hospital times four stays, you know, you start to get into big money. That could pay for a home care attendant for a whole year. That's a more personalized approach. It's what I've called for. for years radical common sense, just because we act like solving these problems is going to require some sort of moonshot. It's not. It's going to require getting into looking at people as people and actually solving problems for people. I think some of these challenges have come through clearer during this crisis than ever before. One of the clients that we've served recently was an 88-year-old man who had just been discharged after 16 days on a ventilator in a New York hospital.

Starting point is 00:23:56 And here he was sent home with his wife with tremendous need for respiratory equipment, mobility equipment, supplies, and most of all guidance and support, none of which was available from the hospital, from his insurance company, from the providers to which he was directed. And I think when we talk about the unbundling of the system, that's one of the things that we miss. It's the oversight. It's the education, it's the guidance, that when you go home, all of that disappears. And so his wife was then burdened with calling over a dozen different providers to try to figure out someone who could service her. But given the situation, no physical therapist would come to their home. No one could work to get them the equipment they needed. We were

Starting point is 00:24:35 able to work with this family to not only navigate their insurance benefits, but the next day, get them the respiratory and mobility equipment that they needed, and on the phone with them daily since, as this gentleman has gotten back on his feet, regained his strength, and been on the path to recovery. It's not about thinking about the siloed components of his care. It's about the holistic objective. And I think that's one of the problems too often in the health care system is we say, my job is just to provide the drugs, my job is just to provide the equipment, my job is just to provide the service. I think we all have to remind ourselves what's the holistic goal that we all report to, which is ultimately enabling these individuals and their families to manage care and to stay healthy and safe at home. And I think when we respond to that higher objective, some of these natural elements of collaboration and closing the loop and filling in the gaps become a lot more common sense. we should all view the silver lining of what's happening right now as an opportunity to really rethink that the parts of our care models that were broken and are not working right now, processes that we have historically architected around an assumption that humans will be in front of other humans

Starting point is 00:25:42 and that we can apply software to essentially digitizing and automating and virtualizing many of those existing workflows, many of which are, by the way, not the highest order things that the humans who are doing those processes should be doing, The thing that's actually missing in today's healthcare equation is the empathy and the human support for the patients who are sick. And part of the reason why they have been able to receive that is the very people who we hire into the rules that should be doing that are off doing administrative tasks. One of the themes we've been discussing is thinking about these individuals and their care holistically.

Starting point is 00:26:14 I think it doesn't have to be necessarily a clinician or a formal caregiver or somebody providing care that's engaging these individuals, right? It's just putting them in an environment where they can have that communication, they can feel that empathy, they can feel that support. Unfortunately, that is what has become so absent from our health care system. And having some form of support and advocacy is what is truly empowering to these individuals against the conditions that they're battling and the emotional difficulty that comes with that. Thank you guys so much for joining us on the A16D podcast. Thank you.

The a16z Show - The Return of Home-based Healthcare

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