DIGITAL HEALTH BRIEFING: Oscar Health develops transparent claims system - FDA takes on opioid epidemic - Health system streamlines workflow with CDS

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OSCAR HEALTH TEASES REVAMPED CLAIMS SYSTEM WITH GREATER TRANSPARENCY: US-based insurtech Oscar Health developed an innovative claims system with a greater focus on pricing transparency and flexibility, according to CTO Alan Warren. Oscar set out to modernize its system in 2017, seeking to provide its members with additional services, like cost estimates for various medical services and faster claims payments. The new system is being tested on a subset of claims before a wider release, according to CNBC. The announcement comes just months after Oscar secured a $165 million funding round to bring its reported valuation to over $3 billion.

Oscar's more transparent claims system increases its appeal to consumers and makes it more competitive against incumbents:

• Real-time claims approvals for providers can reduce admin expenses spent on claims disputes. Oscar's platform allows for real-time claims adjudication - the process of having a claim approved or denied by insurers. It also allows physicians to get paid at the time of the visit, potentially placing a dent in the hefty admin costs providers face due to insurance administration. For instance, providers spent around $8.6 billion on claims disputes in 2016, according to analysis by Change Healthcare.
• Patients can reduce out-of-pocket expenses and satisfy a desire for a more retail-like healthcare experience. Consumer expectations are shaped by their experiences in other industries, and nearly two-thirds of consumers expect a digital healthcare experience that's more like retail, according to NTT Data.

Transparency across all aspects of health is an increasingly common theme among health organizations and governing bodies, and we expect similar offerings from legacy payers. All signs are pointing toward more information and power in the hands of patients, who demand an improved consumer experience from their providers. And recent government initiatives have pushed hospitals to post the prices of standard services on their websites and have advocated for increased patient control of their healthcare records. In a changing landscape that places more emphasis on the patient, legacy systems will be forced to provide a transparent, consumer-driven healthcare experience.

FDA LAUNCHES DIGITAL HEALTH INNOVATION CHALLENGE TO ADDRESS OPIOID EPIDEMIC: The Food and Drug Administration (FDA) launched an innovation challenge to encourage the development of digital health technologies and diagnostic tests that help address the epidemic of opioid misuse and abuse. The challenge, which begins June 1, 2018 and will last four months, is open to products in any stage of development and grants developers guidance from FDA's review division.

By launching the challenge, the FDA incentivizes greater digital health innovation for opioid treatment, gets earlier insights into new technologies coming to market, and has a greater ability to steer the direction of opioid-related digital health tools. Solutions like medical devices and therapies, mobile apps, diagnostic tests, and clinical decision support software will help the FDA clamp down on the misuse and overprescription of opioids, and make it easier to identify those at risk for addiction. Reducing hospitalizations and preventing new opioid addictions could help mitigate healthcare costs caused by the opiod epidemic, which were more than $200 billion between 2001 and 2017, according to Altarum.

CLINICAL DECISION SUPPORT IN EHR HELPS CUT UNNECESSARY IMAGING TESTS: University of Virginia Health System physicians ordered significantly fewer unnecessary tests after integrating a clinical decision support (CDS) software into their electronic health records (EHR) system, according to Health Data Management. The software, which uses test-ordering criteria to give inpatient and emergency providers feedback on whether the imaging examinations they ordered were necessary, helped to cut the number of unhelpful diagnosis tests in half. Needless tests can bog down clinical operations workflow - they eat up clinician time spent ordering, conducting, and interpreting tests. Greater efficiency in ordering exams can help optimize hospital resources and maximize the productivity of different departments by decreasing patient visit time. Improved workflow can also help increase the volume of patients that hospitals and clinics treat, which can help to drive revenue growth.

Implementing CDS programs can also help health systems adjust to the emerging value-based care (VBC) reimbursement model. Under the VBC model, hospitals are paid for positive patient outcomes rather than the number of services rendered. Insurers, and government agencies like the Centers for Medicare and Medicaid Services, push for the VBC payment model, seeking to lower healthcare costs by promoting programs that require physicians to use "appropriate use" criteria to order certain diagnostic tests. As health systems respond to an emerging healthcare ecosystem that rewards service outcomes and value over volume, we expect more providers to deploy CDS tools that both work within and facilitate the adoption of the VBC reimbursement model.

DIGITAL THERAPEUTIC DEVICE FOR ASTHMA SECURES $20 MILLION: Propeller, a digital therapeutics company, announced a $20 million funding round led by Aptar Pharma, a producer of drug delivery devices like inhalers, injectors, and other dispensers, according to Forbes. Propeller produces FDA-approved sensors that clip on to customers' inhalers to record use. The sensor syncs with Propeller's app and sends users prompts to take their inhalations, and enables users to share their medication history with their physician. Aptar's investment also gives Propeller access to the pharmaceutical company's customer base and allows Propeller to develop other sensors compatible with more of Aptar's drug delivery devices, including injectables for severe asthma, according to MobiHealthNews.

For Aptar, the partnership offers an inroad to the ballooning global digital therapeutics market, which is projected to grow at an annualized rate of 21% between 2017 and 2025 to reach $9.4 billion, according to Grand View Research. Partnering with digital therapeutics offers pharmaceutical companies a way to improve the effectiveness and utilization of drugs they've already brought to market, which can alleviate the costly and time-consuming process of developing new drugs. Meanwhile, insurers and health systems are likely keeping an eye on digital therapeutics, too - a randomized control trial found Propeller boosted medication adherence by 21%. This could help insurers avoid some of the $300 billion in healthcare costs medication adherence causes each year due to patients not taking their medication, which leads to unnecessary hospitalizations, ER visits, and extra tests.

Propeller Health

IN OTHER NEWS

• Aultman Health Foundation became the latest health system to fall victim to a data breach, exposing as many as 43,000 patient records, including Social Security numbers and driver's license data, according to Healthcare IT News. The uptick in recent data breaches highlights a failure by providers to update legacy IT security systems.
• New Zealand healthcare IT company Orion Health posted a loss of NZD $40 million ($28 million) and cut nearly 200 jobs in the year preceding March 2018, according to Digital Health. Orion is conducting a strategic review that could prompt restructuring and the sale of one of its less successful businesses, like population health.
• Ava, a menstrual-cycle tracking bracelet that links with a mobile app, secured $30 million in a series B funding round, according to MobiHealthNews. Ava plans to use the funding for further research and to develop additional reproductive health management apps.