Healthcare Startups and Policy

Independent of your politics, it’s time to make understanding the requirements of the world’s largest healthcare customer and influencer a priority for your startup.

It has never been easier or more important for entrepreneurs to comment, follow, and track healthcare policy, and yet far too few put the effort in, missing large opportunities and left paralyzed by the risk of big changes.

As an administration change comes to the United States, too many organizations will be caught flat footed on the impact of legislation change and are deaf to new opportunities for growth and revenue, including recent legislation and guidance published before the election. Additionally, as leaders in our space, we must continue to ensure we promote and provide ethical, compassionate, and affordable treatment of patients.

The US Government is the largest payer in the world; whole companies are built on providing technology, services, and care in areas like Medicare and the VA. Of course, the government also sets critical policy on regulatory concerns that govern medical devices, software, and drug development. Even small changes in programs this influential have lasting effects and create massive opportunity. It may seem dry and uninteresting, but there is no better way to see the future in healthcare, long before it’s laid bare in the press or discussed on some trade show panel.

Healthcare policy change is neither unexpected or, on it’s face, negative. Change in healthcare policy happens all the time at the state and federal level — and not just with the major legislation like HIPAA, HITECH, and the ever-evolving, incredibly nuanced ACA. If the discussion of the future of healthcare policy has dominated the conversational landscape, let it also be the call to action to be more involved in setting and commenting on policy.

We don’t know much about what the Trump administration’s policy will consist of, other than a general disdain for the ACA. Understand, however, the ACA is so wide reaching, saying it will change is as imprecise as saying you work in “healthcare.”

There are two good sources of information that give us some idea of where things may go. The GOP’s “Better Way” document on Healthcare from June, 2016, and the administration’s GreatAgain.gov website provide some insight into what new policy might look like. Additionally the 21st Century Cures act and the AEI Whitepaper on health policy also provide insight on to Republican-led healthcare reform.

If you have not read the Better Way document or the Great Again website, you need to stop and take it in right now. You need to talk it through in the comments below. You need to be debating it with friends and employees.

This is not about politics. This post is not political and takes no political position, but as a community, we have no excuse for not doing everything we can to prepare for the changes that might be coming.

As a healthcare entrepreneur you’ll need to get past the slogan “repeal and replace” and get into the weeds. One of the more likely areas that may affect startups and opportunity is changes to the Center for Medicare and Medicaid Innovation (CMMI) which was part of the ACA (which, if you want to get technical, was part of the ACA that changes section 1115A(a) of the Social Security Act…..I know, I know. Trust me, that’s all just confusing legislative mumbo jumbo.)

The Better Way document makes it very clear that the GOP plans to repeal CMMI by January 1, 2020, and to move control over payment model experimentation back to the CMS leadership — at a minimum — and preferably to Congress. Recently 179 members of Congress sent a letter to HHS questioning CMMI’s authority, which, if you are a startup dependent on payment reform — including bundled payments (BPCI because everything has to be an acronym) — you need to be paying attention to changes coming to the future of CMMI.

Even the FDA is up for change — the GreatAgain.gov site has “Reform the FDA” central to its platofrm. Some have taken this to mean a gutting of the FDA budget, but at the same time the Better Way plan document talks about incorporating patient experience data into drug discovery and approval, attacking the approval backlog, using EHR (and other data) in the FDA process, and improving clinical trial recruitment. We have nearly 4000 drugs in the approval backlog. Sounds like opportunity to me! Much of the thinking around FDA reform was covered in the 21st Century Cures Act. We can approach this with fear of the unknown or embrace the opportunity in these documents. I urge you to consider them like Requests for Proposals or problem statements — what could you build to tackle those problems?

For existing, revenue-generating companies, it’s also important to know the “safe” areas, such as HITECH and HIPAA, especially if that legislation helped in your growth or is key to your market. The Health Information Technology for Economic and Clinical Health (HITECH) Act was part of the American Recovery and Reinvestment Act of 2009, ushering in an age of EMR technology and meaningful use. If you are a company that is primarily focused on taking advantage of elements of the HITECH act — for example, Practice Fusion — you need to be able to quickly articulate that the HITECH act is NOT the ACA. Further, it’s likely much of HITECH will be left untouched. The money ($30 billion, give or take) is already spent. That’s not to say meaningful use won’t be under attack — it may — but it certainly doesn’t match threat to the ACA. Don’t assume people involved with your company, including investors, employees, or consumers, understand that difference. The same goes for HIPAA. Take a security/encryption startup like recent 500 Startups graduate PauBox, which is out raising money for their HIPAA compliant email solution. Technically nothing changed the morning after the election, but they need to project that understanding and clarity to a fearful market.

So, more specifically, what can a healthcare entrepreneur do, today, to start to make understanding policy part of your process?

1. Read the GOP plan and the GreatAgain.gov page, including the linked legislation. Use GovTrack to see what legislation is being put forward to vote and who is voting on it.
2. Read the 21st Century Cures Act and AEI policy white paper as some of the most recent indications of what the House of Representatives and Republican influencers are thinking about Healthcare.
3. Understand MACRA — while I didn’t have time to touch on it here, it was passed with significant support in Congress, was masterfully crafted by Andy Slavitt and the team at CMS, and enjoys bipartisan support. If you serve providers in any way, it’s mandatory reading.
4. Comment on legislation and guidance. Start off easy — when is the last time you visited the FDA’s Comment on Guidance website and sent in feedback? Never, you say? Fix that. Right now. If you want to get really crazy, check out draft guidance. I’d suggest the Software as Medical Device, it’s a real page-turner.
5. Stay focused on the patient experience and the provider workflow. No matter what policy is passed, if your solution is not adopted by patients, or fundamentally gets in the way of physician workflow, it’s not going to be adopted.
6. Remember: nothing beats outcomes. There are a very small number of healthcare IT startups with true financial and clinical outcomes — in many ways the jury is still out on most of “Digital Health.” The market will support things that work and are proven. Measure, publish, prove. It’s the foundation of all meaningful change.
7. Policy does not only happen at the federal level. If you are a telemedicine company or attempting to do anything interesting in pharmacy back-office, issues like reciprocity and licensure are incredibly important, and are still controlled by state lawmakers.
8. BONUS: For fun, listen to the Politico Pulsecheck podcast — Dan Diamond is outstanding as the host, and the guests are all top notch. It’s outstanding — well, other than him calling Bijan Salehizadeh “Beej” throughout the October 13th episode. Seriously, though, both the podcast and the Pulse tipsheet are how you should start your day. Plus, Dan’s got a super-soothing voice, perfect for these challenging times.
9. BONUS 2: Similarly, TechTonics from my friends David and Lisa should be on your playlist — it’s less policy, more human/industry/story focused. Lisa’s blog Venture Valkyrie is also must-read material. However, full disclosure Lisa has 100% more swearing, and is 50% less soothing than Dan. Pace yourself.

Challenges for insurance startups like Clover, Stride, and Oscar will soon become obvious and probably substantial — but most of the changes to the ACA and other policy over the next four years are likely to affect your startup in nuanced and subtle ways — including creating many new opportunities. Change, as they say, is the only constant.