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Episode 6 of Healthcare Beans podcast
Cityblock Health is a unicorn startup serving high quality healthcare to low-income communities.
Episode takeaways:
(1) There are several high profile companies supporting the nation’s transition to value-based healthcare. Cityblock Health is at the forefront. Here’s a short list: Oak Street Health, Iora Health, Lumeris, and UniteUs.
(2) Managing healthcare spending for complex, low-income patients is not an easy task – many smart, dedicated people have tried and failed.
(3) Addressing the social determinants of health may be the determining factor for long-term success – not just for Cityblock Health, but for the entire sector.
~ James
Transcript
Hello and welcome to Healthcare Beans, I’m your host James Haven. In this episode, I’m going to focus on a rather interesting startup in value-based healthcare. On Healthcare Beans, I often talk and write about the many federal and state programs which address some really big challenges in healthcare (mostly around lowering healthcare spending or expanding access to good healthcare) and to be fair, the results of these government programs are kind of mixed.
Many of these programs fall under some sort of accountable care model and these models try to connect physician (or hospital) payment to patient health outcomes; to put it simply, this means good doctors are rewarded for delivering good care, and bad doctors are financially penalized.
But again, the results of these programs are mixed; many of them have not actually reduced the cost of healthcare (at least not in any significant way), and only a few programs show some promise in doing that in the near future.
Outside of government programs, there are many interesting and valuable developments in the private sector, and in the end, it wouldn’t be surprising if healthcare companies make some real lasting changes in terms of lowering the cost of healthcare and improving our health outcomes.
And the companies I’m currently thinking about use different types of data along with specialized care teams in order to manage (or drive down) healthcare spending. These companies (that I think are worth keeping an eye on) are Oak Street Health, Iora Health, Lumeris, Unite Us, and Cityblock Health. And I include these company names with links in the show notes, if you’re interested in learning more about them.
So with that, I’d like to dive more deeply into Cityblock Health. Cityblock is headquartered in Brooklyn NY, and operates across NYC, Connecticut, Chicago and Washington DC. The company specializes in delivering quality healthcare to low-income patients. Now, when you hear “low-income” a few key points come to mind.
Low-income patients often have more health problems than people with average incomes, and this is a well-known pattern coming out of numerous studies in Medicare and Medicaid. And because low-income patients have more health problems, they’re much more expensive to care for; they’re more likely to end up in the emergency room, and more likely to be hospitalized.
And perhaps most importantly, low-income patients have social service needs that are often unmet. And that could be a lack of transportation, or unstable housing, not having enough nutritious food, being socially isolated… so not having nearby friends or family – and studies have shown these types of social problems play a huge role in poor health outcomes.
Going back to Cityblock Health, the company just completed Series C fundraising and is currently valued at over $1 billion, so perhaps there’s an IPO in the near future. And early reporting suggests the company’s healthcare delivery model can reduce unnecessary health spending among complex patients. All in all, I’d love to invest in Cityblock Health if given the chance (it’s a very exciting company), but at the same time, it’s really important to understand just how difficult it is to truly reduce healthcare spending (emergency use or hospitalizations) for complex, low-income patients.
So here’s the backstory for managing complex patients in the United States. About 10 years ago, a new healthcare group called the Camden Coalition of Healthcare Providers began some innovative programs to address the social determinants of health in complex, low-income patients, and they demonstrated some very positive results in reducing the health costs for this population (at that time).
The broader healthcare community took notice of this and began similar programs across the country, with mixed results. Fast forward several years later, health researchers, out of MIT, conducted a randomized control trial for Camden Coalition’s delivery programs (essentially, there was a group of low-income complex patients who were included in the programs, compared with another group of similar patients were not included in the program). The result was that Camden Coalition’s model did not work; there was no real difference in healthcare costs between these groups. And this result was a complete gut punch to the national healthcare community!
Now, this doesn’t mean it’s impossible to reduce healthcare spending for low-income patients, but it does mean that the broader healthcare community does not have a standard approach/model to do this. That said, there are common ingredients for lowering healthcare spending that should apply to these complex patients which includes social service supports, so offering free or subsidized transportation so that patients can regularly make their doctor visits or pickup their medication when necessary or have their medication delivered; a healthy meals program for patients who cannot afford or access nutritious food; and if possible, providing housing benefits for homeless patients (something above & beyond a homeless shelter); and perhaps most importantly, low-income patients often suffer from some form of mental illness or substance use disorder – so having a very strong focus on behavioral health services is critical to providing good low-cost care to these patients.
And this is what you see when you look at the hiring pattern of a company like Cityblock Health; there’s a very strong focus on behavioral health specialists – social workers and nurse practitioners with a background in psychiatry. There’s also a strong focus on community health (they’re hiring community health partners), so integrating medical and social services, and this points to an emphasis on care coordination.
Now, it’s impossible to perfectly suss out Cityblock’s care model simply by studying their hiring patterns, but the expected ingredients are there – again, a focus on behavioral health; a focus on care coordination; and a reliance on nurses & nurse practitioners, rather than more expensive primary care physicians or physician specialists. And based on their latest funding round (I think they raised about ~$160 million) investors certainly believe in the care model offered by Cityblock Health.
Now, I don’t want to make things seem overly optimistic for Cityblock Health; their care delivery model seems to hinge on addressing the social determinants of health, which is not an easy thing to do. The key problem with integrating social determinants of health in standard care, is the actual provision of social services.
If those services are locally available through one or more non-profits, then Cityblock can leverage those resources. But if those local resources don’t exist, then Cityblock (or a partner of CityBlock) has to fund those services in some way, or simply not have them (which of course, is not ideal).
And the availability of social services varies across geography (so some areas have many non-profits or city & state-level programs that provide social services, while other areas have next-to-nothing); so that would mean Cityblock’s care delivery would also vary by geography – and I imagine scaling this company across different places in the US, especially where social service programs are absent, would be challenging.
And to be fair, this is not only Cityblock’s problem, health systems across the country have similar challenges with integrating social service delivery into their care models (essentially, how to fund social service supports for a patient population). Despite these challenges, I’m excited about this company and I hope they make a big impact on healthcare transformation.
Well, that’s it for today. If I learn any more about Cityblock Health, I’ll be sure to update the show notes on www.HealthcareBeans.com. Please leave a review on Apple podcasts when you get a chance, and share your thoughts or suggestions for future content, especially any healthcare startups you’d like to learn more about. As always, thanks for listening to Healthcare Beans; I’m your host James Haven. God Bless.
