Larry Hanover

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he term “artificial intelligence,” or “AI,” conjures up different images for different people. Some think of older breakthroughs such as world chess champion Garry Kasparov losing in 1997 to IBM’s Deep Blue supercomputer. For others, it is the Netflix or YouTube algorithm whirring along in the background and offering suggestions of what to watch based on what you’ve viewed.

It’s difficult to grasp the pervasiveness and exponential growth capabilities of machine-learning algorithms. In the healthcare sector, programmers are working on advances that will improve patients’ well-being and insurers’ bottom line at the same time.

Some improvements may seem mundane, such as automating claims processing or using chatbots (virtual agents) to handle interactions with policyholders. Yet the financial opportunities for health insurers are far from humdrum. A 2018 Accenture analysis estimated insurers can save $7 billion in 18 months by using AI to automate core administrative functions — the equivalent of $1.5 million in operating income for every 100 full-time employees. And those figures don’t even account for the ability to flag potential instances of fraud.

Then there are the future possibilities of AI, such as orchestrating a seamless patient experience — from selecting specialists within an insurer’s network to prescribing of drugs upon discharge.

At Blue Health Intelligence (BHI), which provides clinical data expertise for Blues plans around the United States, programmers attacked the problem of high-cost claimants, defined as members having annual costs surpassing $250,000. This group comprises fewer than 2 in 1,000 of all claimants but it accounts for 9% of all healthcare costs.

Such patients tend to have rare and/or chronic diseases that involve frequent trips to the emergency department, expensive medications, and high-cost specialty care and testing. If an insurer can identify these patients early and intervene before their health worsens and healthcare costs spiral out of control, both patients and payers win, says Roxanna Cross, associate vice president for product management at BHI. “And it’s a perfect problem to be solved with AI,” Cross says.

How so? The calculations are so complex that human beings could never hope to tackle them through traditional methods, but computer programs analyzing massive data sets can. BHI used health insurance claims from 48 million patients, augmented it with U.S. census data, and identified 6,000 variables across clinical and demographic categories. It then applied machine learning to use the information to train models to identify high-cost claimants. The best model was so powerful that it succeeded even for patients with large gaps in their data history, including no prior information on high-cost claims, less than a full year of insurance enrollment and no data on pharmacy claims.

With such information, insurers can reach out to patients and physicians, collaborating to personalize care for those who might have obstacles such as gaps in care, limited mobility due to stroke, or not enough money for prescriptions, Cross says.

“When we have applied these models, we certainly have seen millions of dollars in potential cost savings for a relatively small cohort of patients because insurers have finite resources to manage the care for these high-risk, high-cost individuals, and we really want to guide them in a way that will improve the experience for both them and their families,” Cross says.

The BHI initiative is just one of many ways to use AI in healthcare. In April, digital-first healthcare company K Health, with investments from Blackstone Growth and Anthem, launched a joint venture called Hydrogen Health. Anthem already had invested tens of millions of dollars in K Health’s AI technology to create an app that helped users understand how doctors diagnosed cases in patients with similar symptoms in the past.

With K Health, the symptom checker is free, but patients also can chat with a doctor for less than a typical copay after answering basic questions about their medical background that are relayed to the physician, says Allon Bloch, a co-founder of K Health who will be the joint venture’s CEO.

“To give you a sense, a retail visit on K Health is $19,” Bloch says. “If you went to a doctor, assuming you’re insured, you’ll pay a copay of $25 to $40; your insurer will pay another $100. People go to a doctor about four times a year. Additionally, a lot of people go to the (emergency room) because their doctor is not available. So what do you do on the weekend? What do you do at night? What do you do if your doctor can’t see you in the next 24 hours? We all deserve a system where it should be 24/7, it should be intelligent, it should be proactive, it should be easy.”

The drive to use AI is moving ahead at breakneck speed. A 2018 Accenture survey of global healthcare executives found 72% of health leaders were piloting or planning AI adoption, 93% said AI projects were on their agenda, only 7% said they were minimally or not at all focused on it.

Claims management improvements are ramping up but not without difficulty, according to a McKinsey & Company report from 2017. If original claims coming from hospitals aren’t digitized, there is no way to extract the data. Additionally, structured procedures need to be in place for reviewing claims and deciding when human intervention is required. Also necessary is a structured digitization of results and interventions, ideally including more than two years’ worth of data. Insurers falling short of those requirements are not ready for the leap.

AI can simplify many manual and paper-based processes in the offices of both physicians and insurance companies by utilizing natural language processing, allowing healthcare professionals to input information just by talking, says Mahi Rayasam, Ph.D., partner and leader of healthcare analytics at McKinsey. Such improvement can result in significant cost savings, but it can bring other changes, too. “Essentially, how can physicians be more patient facing and not paper facing?” Rayasam says. “Most of the processes that happen in the insurance industry or in the physicians’ offices in large hospitals — there’s still a lot of paper.”

Using AI to detect and prevent fraud is another way health insurers, as well as the federal government, can save money. In 2016, CMS built the Fraud Prevention System, using advanced analytics to identify, prevent and stop payments that match suspicious patterns. The system helped CMS prevent $527 million in losses to fraud in fiscal year 2016, according to a McKinsey report. In 2020, 56% of insurers surveyed by the Coalition Against Insurance Fraud indicated their company was using AI for fraud detection.

AI also can deliver improved interconnectivity among insurance companies, providers and members. Rayasam says AI could speed up the cumbersome process of patients obtaining prior authorizations, and physicians and patients could get updates on an authorization request through an app instead of a series of phone calls.

Rayasam foresees AI-supported scenarios that will improve the patient experience from start to finish. He gave as a hypothetical example his 1-year-old son having a medical emergency late on a Saturday night.

“What if there was an app that knows the situation I’m in and then recommends four or five locations close to me that are either physicians’ offices or urgent care centers, or emergency departments with no wait time?” Rayasam asks. “And it combines that information with the insurance plan that I have and then tells me if I go to location X, not only will I be able to be seen immediately but it will also cost me less from an out-of-pocket standpoint. And then it links to the doctor, who prescribes a medication. Perhaps the app then would be able to connect me to the pharmacy, and the drug is delivered automatically. Then the claim is adjudicated and the payment is made from my cash account.

“That’s kind of like end-to-end flow, where the technology is enabling a member to take care of their needs right from when they start thinking about it and to close the circle in terms of payments and claims. Today you have to do it in 10 separate transactions. Could you do it through one seamless way? That’s where things are moving.”

AI might also be a way to address healthcare equity issues. For example, two patients of the same age with heart disease and diabetes might both be identified as high-end utilizers of medical care, BHI’s Cross notes. However, claims data might identify someone from a low-income community with a history of lower claims costs. Reasons for those lower costs might include not seeing a doctor due to lack of funds, barriers to transportation or child care issues. In such cases, adjustments can be built into the algorithm to equalize their data.

Telehealth also will figure into cost estimates, Cross says. “I think AI can really help inform individuals who would benefit most from certain interventions, telehealth being one of those, particularly when we’re talking about behavioral health,” Cross observes. “The whole goal of AI is to help pair the right care at the right time at the right place with these high-risk, high-need individuals or the total population. And to intervene earlier.”

Larry Hanover is a freelance writer in southern New Jersey.

Articles

Artificial intelligence can help deal with everyday problems such as prior authorization and high utilization. But payers are 
also eyeing it for loftier purposes.  

Artificial Intelligence Saves Payers Time and Money 

Climbing the Career Ladder: Fourth of 10 profiles of healthcare executives and their careers.

Threats of violence and virulent anti-Semitism were the future for then-11-year-old Ramin Davidoff had his family stayed in the city of Urmia in northwest Iran as the nation’s revolution unfolded in 1979.

His parents, however, decided to flee for a month or two until the revolution subsided, and headed for northern Utah, where his uncle was attending Utah State University. The revolution dictated that the short stay would become permanent.

With the chance to fully use his talents, Davidoff would soon be on a steep ascent that in January 2021 landed him as co-CEO of the Permanente Federation, a consortium of all the Permanente Medical Groups in the nation, supporting nearly 23,000 Permanente physicians.

“We were very fortunate to move to the United States, which really has become for me a land of opportunity, although at 11 I did not realize that,” Davidoff says.

Davidoff’s career path has been on an upward trajectory. He went to University of California, Irvine, for eight years, first as an undergraduate and then as a medical student, completed his residency training in urology at Kaiser Permanente Los Angeles Medical Center and chose to remain in the system.

“Medicine for me truly was, right from the beginning, about what’s best for the patient,” Davidoff says. “When that happens in training, then it stays with you, and I truly appreciated that brand of medicine.”

Davidoff never envisioned going into administration. His opportunity came at Baldwin Park Medical Center when he took on the role of physician director of risk management and patient safety. He saw it as a way to improve patient care more broadly by focusing on safety. Tearing down the pyramid structure that saw the physician at the top was part of his strategy. “I wanted it flattened, a system where every member of the team had an opportunity to have a say in the care,” Davidoff says.

Davidoff would rise to become assistant medical director. When he was elected to the Southern California Permanente Medical Group board of directors, which he now chairs, he suddenly had an additional perspective on care, this time from the governance angle.

“That was also a very important lens,” he says. “That’s where the strategy, the business, the finance, the competitive landscape — all the things that are important to run a higher-performing medical group — came into play.”

Davidoff was fortunate to be given nine months to transition into his role as co-CEO of the Permanente Federation. Unfortunately, it coincided with the pandemic.

“I’ve always focused on our people, but even more so in the early part of the pandemic,” he says. “These people have fear. They’re worried about coming into work, eventually getting infected and taking the infection back to their families. So there was a real importance of communication and being real and genuine with them, really being visible.”

The lesson of the pandemic, he said, was innovation. The system has pivoted toward telehealth and virtual work. Many patients who normally would have been hospitalized, it turned out, could be managed safely at home with monitoring systems.

Through it all, Davidoff says, the values he learned as a boy are the same ones he urges those in the medical field to follow today.

“There’s no substitute for working hard and to always treat your people kindly, professionally and respectfully,” he says. “That will allow them to be who they are in work environments and brings out the best in them.”

Ramin Davidoff, M.D., co-CEO of the Permanente Federation, has applied lessons he learned as a child. “There is no substitute for working hard and to always treat your people kindly, professionally and respectfully.”

Ramin Davidoff, M.D., Kaiser Permanente: Ascendant Path for True Believer in Team-based Care

hether marijuana is a gateway drug is debatable. But it has certainly opened the doors for a projected multibillion-dollar market for psychedelic drugs as treatments for a variety of mental health disorders.

Pushback against psilocybin (the active ingredient in magic mushrooms) and MDMA (3,4-methylenedioxymethamphetamine, known as ecstasy or molly) in the ’70s and ’80s culminated in their criminalization. But with the legalization of marijuana for medical use in many states in the ’90s and now a wave of legalization for recreational use, research into psychedelics for medical purposes is booming.

Author Michael Pollan wrote a book, “How to Change Your Mind,” that kick-started interest in psychedelics. Kevin O’Leary of “Shark Tank” is a big investor. The psychedelics market is projected to grow by 16.3% over the next eight years to nearly $7 billion by 2027, according to Data Bridge Market Research.

Now two recent studies published in prestigious journals are lending credence to psychedelics as a possible and entirely research-worthy way of treating mental health disorders.

 published the results of a phase 3 study that showed MDMA is effective in treating post-traumatic stress disorder. A few weeks earlier, British researchers reported results from a phase 2 study in 

 that showed psilocybin was considerably more effective than Lexapro (escitalopram), a selective serotonin reuptake inhibitor, in treating depression. Some of the researchers involved in that study receive support from companies developing psychedelics for medical use.

Matthew Johnson, Ph.D., associate director of the Johns Hopkins Center for Psychedelic & Consciousness Research, says to be prepared for explosive growth. “When I started 20 years ago, you knew (pursuing psychedelics) might be career suicide,” Johnson says. “Since then, it’s been a bit of a risk, but the data keep speaking for themselves.”

Researchers need to be careful. In a pilot study on smoking cessation with psilocybin that Johnson was involved in, there were four to eight hours of therapy as preparation, and two people had to be in the room monitoring the patient during treatment. “A person, even though it’s physiologically very safe compared to many compounds, can feel like they’re going to die,” Johnson says. “There has to be a trusted person to say, ‘We’re here with you; just keep breathing, trust, let go and be open.’”

Jason Luoma, Ph.D., CEO of Portland Psychotherapy, has focused his research on people struggling with shame and found MDMA effective. “MDMA tends to create the experience of feeling a sense of love, a sense of connection with other people, and that is pretty profound,” he says.

Luoma adds that despite the myths, psilocybin has no addictive potential, and MDMA’s potential is low. Approvals of psychedelics probably will need to be associated with FDA risk evaluation and mitigation strategies (REMS) to ensure no off-label uses, in Luoma’s opinion: “The big fear is people who are really, really antidrug will pick up the one adverse reaction that happened out of 10,000 patients and … blow it up and essentially harm the whole research agenda.” 

Research and investment are increasing into psilocybin and MDMA as treatments for several mental health disorders.

Psychedelics Take a Long, Strange Trip to Respectability

Five years ago, Prime Therapeutics, a fast-growing pharmacy benefit manager (PBM) owned by 19 Blues plans, realized that its portfolio of leased office spaces had grown expensive and unwieldy. The company’s leaders decided to consolidate its four Twin Cities offices at a gleaming new headquarters in nearby Eagan, Minnesota, and keep seven floors of offices at a location in another suburb.

An analysis had revealed that much of the existing space went unused, so company executives designed the Eagan building with flexible workspaces to encourage collaboration and meeting spaces that could be made smaller or larger as required, says Kim Gibson, assistant vice president of real estate and facilities at Prime. They suspected telecommuting would become a growing trend and felt the new building could accommodate such a transition, she says.

Then the pandemic hit. A change intended to be gradual took place almost instantaneously and worked out better than expected. In a mid-2020 poll, almost all (93%) of Prime’s employees said they were faring well at home, and two-thirds wanted a hybrid arrangement that would allow working remotely part time when the Prime offices eventually reopen.

Thus was born the “hub and home” strategy. Prime recently announced that employees will work from home 50%-65% of the time when reopening occurs, rotating into the office on set days of the week or month. With teams sharing spaces, Prime will be able to vacate the Bloomington offices by mid-2022 when the lease expires, reducing its footprint by one-third.

“To be an employer of choice, we’ve got to listen to our employees and bring the work to them, and I think this hub-and-home model does that,” Gibson says. “I would even say that if we didn’t offer something like this, we might be losing out on talent in the future. I’d say it’s critical to our future. I would suspect other organizations are considering the same.”

Indeed they are. Many health insurers and PBMs have not announced plans, but those contacted by 

® indicated that they are either proceeding with or contemplating remote and hybrid work schedules.

“They’re definitely not planning to get everyone back in the office,” says Lisa Slattery, vice president of accreditation and recognition operations for the National Committee for Quality Assurance (NCQA), the nonprofit accrediting organization for health plans. “We hear some will be selling off properties, reducing footprint and continuing a lot of work from home. A lot of leaders didn’t think things could be as effective from a work-from-home perspective, but they’re seeing this is a viable solution that was accelerated by the pandemic.”

Companies in the healthcare industry that do not involve direct patient-clinician interactions are a microcosm of what is happening nationally. Target Corporation, headquartered in Minneapolis, announced that it will shed nearly 1 million square feet of office space, shifting 3,500 employees into other buildings and having many work from home. Michigan-based Ford Motor Company has announced plans to shed a significant office space.

A survey conducted by PwC in November and December 2020 showed that fewer than 1 in 5 executives wanted to return to the office as it was pre-pandemic. Most (87%) executives expected shifts in their real estate strategy, including consolidations, although many said they would open new satellite locations. Results of a June 2020 Gartner Inc. survey showed that 82% of company leaders intended to permit remote arrangements some of the time as employees return to the workplace.

Blue Cross and Blue Shield of North Carolina is among the handful of companies talking openly about upcoming shifts in their real estate. The company has allowed some office lease spaces to expire and will make real estate decisions based on how employees are working, not on cost.

“We do not anticipate ever going back to the traditional, pre-pandemic way of thinking that being in the office every day is necessary and/or expected,” the company said in a statement. Employees will work remotely at least through June.

Independence Blue Cross faces a major crossroads. In June 2020, it paid $360 million to repurchase its Philadelphia headquarters building, which it sold to Prudential Insurance Co. in the 1990s. The 45-story tower — the city’s eighth tallest building — houses 2,500 employees. Officials say they are not ready to announce plans.

“We are committed to this region and here for the long term,” the company said in a statement. “Purchasing our building at 1901 Market St. last summer was a further demonstration of that commitment.” The company did say employees would return in a phased approach.

Other companies are similarly reticent, perhaps to keep their options open. Optum, the PBM and care services subsidiary of UnitedHealth Group, said in a statement that they are “using this time to listen to our employees at all levels of the organization to best understand their preferences for the post-pandemic work environment. We are not rushing into any long-term decisions.”

A spokesperson for Centene Corporation, a publicly traded health insurer with headquarters in St. Louis, says the company will begin returning a small number of employees to the office Sept. 13. Employee schedules will include remote and in-person time as well as flexible start and end times.

Erin Feigal, Prime Therapeutics’ chief human resources officer, says that a key part of the reopening plan involved a team designed to connect with employees, collect feedback and ensure that employees felt ownership of the hub-and-home approach. “It was an evolutionary process,” she says.

As a result, 2,200 workers local to Minnesota will cycle through the single Eagan campus, including 700 shifting over from Bloomington, Gibson says. Each team will have its own hub area and can adjust the space as needed on in-office days. Some workstations were replaced with team-centric furniture so that teams can shift tables, whiteboards and video systems and collaborate as best works for them.

Companies looking to follow Prime’s lead should test their technology and have it ready to operate efficiently across divisions, Gibson says. That means getting laptops into employees’ hands and adequately training employees to use video technology. “Gaps in technology will hurt you as an organization if you don’t get that right,” Gibson says.

The other key area to address is expectations, she says. “You have to address new working norms, understanding what expectations are — to show up online every day,” she says.

NCQA, which is headquartered in Washington, D.C., is dealing with the pandemic realignment not only in its role as an accrediting organization but also internally. The organization was unintentionally almost pandemic-ready, says chief operating officer Tom Fluegel. Two-thirds of employees were either part- or full-time remote before COVID-19 hit, and NCQA was preparing to offer an all-virtual option to health plans undergoing accreditation review. By having companies send screenshots and other documentation electronically, the organization has been able to perform accreditation work without conducting onsite visits.

Pattie Graves, human resources knowledge adviser for the Society for Human Resource Management (SHRM), says the healthcare sector and industries in general that perform office work are on the same wavelength. Companies are regularly making inquiries to SHRM about transitioning to hybrid work plans, and she sees no turning back: “I think it’s going to be the future.”

There’s no going back to the ways of working before COVID-19’s arrival, say many in the industry. Insurers and PBMs are reducing their footprint as work becomes part remote, part in person.

Larry Hanover

Articles

Artificial Intelligence Saves Payers Time and Money

Ramin Davidoff, M.D., Kaiser Permanente: Ascendant Path for True Believer in Team-based Care

Psychedelics Take a Long, Strange Trip to Respectability

It Will Not Be Your Pre-pandemic Office