This will be ugly and sad. Racism has cost this country $16 trillion over the last twenty years according to a recent Citigroup report. Much of this loss ($13 trillion) was attributed to discriminatory lending practices and the 6.1 million fewer jobs created as a result, while disparity in wages ($2.7 trillion) and discrimination in housing policies and lost income due to restricted access to higher education accounted for the balance. The report estimates that if these gaps were to be closed, an incremental $5 trillion can be added to U.S. GDP over the next five years alone. Obviously, this does not even begin to account for the extraordinary pain and suffering racism inflicts on our country, much less the dramatic implications to the health and wellbeing for those impacted by racism.
The dramatic increase in unemployment since the onset of COVID-19 has garnered significant attention. While the overall unemployment rate of 7.9% in September is down from the pandemic-high of 14.7% in April, this improvement masks the dramatic discrepancies in rates for minorities; according to the U.S. Bureau of Labor Statistics, white Americans are 7.0% unemployed while the Black unemployment rate is 12.1%. Somewhat jarring, last week Columbia University published an analysis showing that eight million more people are now living in poverty just since the expiration of the Cares Act three months ago, disproportionally hitting minorities.
The story is even more dire when looking at the “True Rate of Unemployment” as defined by the Ludwig Institute for Shared Economic Prosperity which presumes that one needs to earn a minimum living wage of $20,000 to be deemed employed. Under such a definition, Black unemployment is 30.4%, although an improvement from what was seen for the ten years after the Great Recession of 2008.
It is estimated that 100.6 million Americans are out of the labor force now, many of whom are from disadvantaged segments of the population. In fact, for those earning more than $60,000 annually, the unemployment rate is a mere 1.0% below where it stood at the onset of the pandemic. For those who make less than $20 per hour (equivalent to a salary of approximately $27,000), the unemployment rate is 17.5% below where it was in February 2020 according to Opportunity Insights. Shockingly, America’s billionaires net worth has increased more than $850 billion since April.
The difference in life expectancy between white and Black Americans is criminally high – nearly five years, even when adjusted for gender, according to the Centers for Disease Control and Prevention (CDC) data. While the underlying causes are complex and fraught with political overtones, this issue is now front and center as the country struggles with the pandemic.
Sutter Health recently published COVID-19 data that attributed the 2.7x increase in hospitalization rates in their hospitals for Black patients versus white patients to, in part, more advanced illness at the time of admission, arguably reflecting a cultural aversion to the healthcare system or challenges around adequate access. CDC data are even worse, tabulating a 5.0x higher rate of hospitalization, 2.3x greater mortality rate, and 3.0x greater infection rate for Black versus white Americans, respectively. This is particularly troublesome now with case counts spiking 17% just this past week and as winter sets in.
The Kaiser Family Foundation (KFF) forecasts that Medicaid roles will increase by 8.4% in 2021; in June there were 67.9 million Medicaid beneficiaries. It is quite clear that the pandemic is hitting minority and less educated segments of the population harder, often because they tend to be front-line essential workers and/or struggle with greater levels of unemployment. McKinsey recently estimated that as many as 10 million Americans will lose employer-sponsored health insurance due to COVID-19 by the end of 2021.
KFF also highlights the discrepancies in private health insurance rates by race: in 2018, white, Black, and Hispanic uninsured rates were 7.5%, 11.5% and 19.0%, respectively, which further exacerbates difficulties for minorities to access effective healthcare. The Affordable Care Act had a dramatic impact over the past decade as uninsured rates in 2010 were 13.1%, 19. 9% and 32.6%, respectively. This year the average family health insurance premium rose by 4% to more than $21,000.
While there is a heightened level of concern about the pace of coronavirus vaccine development, and whether there will be inappropriate political pressures applied to compromise long-cherished safety protocols, the Black community is expressing a particularly high level of skepticism. According to another KFF study, just under 50% of Black respondents would not take a free and safe vaccine, while only 17% would “definitely” do so. While further underscoring long-held distrust of the healthcare system, this phenomenon risks perpetuating the relatively poor health conditions experienced in many of those communities.
Recognizing this and the other numerous challenges introduced by the pandemic, the Healthcare Anchor Network (HAN) of 39 provider systems (many of whom are Flare Capital LPs) reiterated in September that racism is a public health crisis, putting forth a number of steps to chip away at these issues. First and foremost was a commitment to dramatically improve access to testing in underserved communities, as well as more robust inclusive hiring practices and greater spending with diverse suppliers and vendors.
Importantly, the HAN spotlighted that systemic racism uncouples the public health infrastructure from the private healthcare system, often leading to “generational trauma and poverty.” A profound characterization. A recent Wall Street Journal analysis of CDC data showed a strong link between racism and mental health: in the week following the murder of George Floyd in May, 40.5% of Black adults exhibited symptoms of anxiety and depression (a five-point increase from the week just prior). While somewhat similar to post-traumatic stress disorders, racism is chronic and on-going much like an injury, and should not be considered a disorder. Clinicians have now developed a “Race-Based Traumatic Stress Symptom” scale when evaluating minority patients.
Advances in healthcare technology hold profound promise to improve the health and wellbeing of those most afflicted by racism, particularly during such difficult economic times. According to a provocative analysis by McKinsey (below), many of the most seminal transformative reforms in healthcare have come on the heels of major recessions. Arguably, what has been unleashed on the U.S. economy by COVID-19 may lead to a dramatic restructuring of the healthcare industry, which could usher in a wave of significant innovation to improve conditions for those most disadvantaged.
Entrepreneurship has been one of the great elixirs in the face of such devastating economic conditions and is often looked upon as one approach to reduce economic disparities due to racism. Here, unfortunately, the record is mixed. Given how critical access to capital is, the evidence that racial discrimination compromised many minority groups from accessing emergency funding programs like the Payroll Protection Program (PPP) this past spring is particularly painful. According to the Center for Responsible Lending, 46% of white-owned businesses had accessed bank credit over the past five years (compared to less than 25% for Black-owned businesses) which meaningfully facilitated their ability to secure PPP loans from those same institutions.
Furthermore, a 2016 Federal Reserve Bank study found that only 40% of minority credit applicants secure the full requested amounts of credit when applying as compared to 68% for white-owned applicants. Consistently minority-owned companies pay higher interest rates and have more onerous borrowing terms according to the Department of Commerce’s Minority Business Development Agency. The financial landscape confronting Black-owned businesses is materially more hostile than what white-owned businesses face. Full stop.
Rock Health, a leading seed-stage healthcare technology investor (and partner of Flare Capital), recently conducted an extensive diversity survey. These sober findings further highlight the issues around access to capital for minority entrepreneurs. White and Asian founders were nearly twice as likely to backed by venture capitalists; 48% of Black founders bootstrapped their companies versus 25% of white founders. Of the nearly 250 founder respondents in the survey, 12% identified as Black but only a disappointing 5% of the 425 senior executives in those companies were Black. Just over 80% of Black respondents felt that the digital health sector was either the same or less inclusive from when they initially joined the industry. Obviously, much work is still to be done.
These issues are not at all lost on my partners and our firm. Since we started Flare Capital over six years ago, we have been committed to diversity and inclusion. In addition to simply being the right thing to do, it is the best thing for our business. We will make better investment decisions with a broadly diverse set of perspectives and experiences.
But as inclusive as we felt we were, it is time to do even better. There are systemic causes to these inequities in our industry that we can help address. Over the last four months, we developed a set of new initiatives (summarized below) that we implemented earlier this summer. In summary, we identified two broad dimensions that we are committed to improving upon more equitable access and accelerated career development. Structural challenges exist for many underrepresented entrepreneurs to meet with venture capital firms, much less successfully raise capital. These are fundamental problems that require deliberate, measurable steps from engaging with more diverse founding teams, recruiting more diverse management teams, and partnering with venture firms equally committed to diversity.
BIPOC = Black, Indigenous, People of Color
We recognize that it will take time and significant effort to address these inequities, and that success will be built, in part, upon many small victories. Arguably, Black Lives Matter is the largest movement in our country’s history. The New York Times recently estimated that between 15 to 26 million Americans likely participated in demonstrations since the death of George Floyd in late May. We are proud to be a part of that movement.
About Michael A. Greely
Michael A. Greely is the CoFounder and General Partner at Flare Capital Partners, a venture capital firm focused on investing in early-stage and emerging healthcare technology companies. Previously, Michael was the founding General Partner of Flybridge Capital Partners where he led the firm’s healthcare investments. Current and prior board seats include Aspen Health, BlueTarp Financial, Circulation, Explorys, Functional Neuromodulation, HealthVerity, higi, Iora Health, MicroCHIPS, Nuvesse, PolyRemedy, Predictive Biosciences, Predilytics, T2 Biosystems, TARIS Biomedical, VidSys and Welltok (observer).
The COVID-19 virus is ravaging the planet at a scale not seen since the infamous Spanish Flu of the early 1900s, inflicting immense devastation as the U.S. loses more than 200,000 lives and counting. According to CDC statistics, 94% of patient mortalities associated with COVID-19 were simultaneously suffering from preexisting conditions, leaving a mere 6% of victims with COVID-19 as their sole cause of death. However, while immediate prospects for a mass vaccine might not be until 2021, there is some hope among rural hospital health information technology consultants where the pandemic has hit the hardest.
The fact that four in ten U.S. adults have two or more chronic conditions indicates that our most vulnerable members of the population are also the ones at the greatest risk of succumbing to the pandemic. From consultants laboring alongside healthcare administrators and providers, all must pay close attention to patients harboring 1 of 13 chronic conditions believed to play major roles in COVID-19 mortality, particularly chronic kidney disease, hypertension, diabetes, and COPD.
Vulnerable rural populations must be supervised due to their unique challenges. The CDC indicates 80% of older adults in remote regions have at least one chronic disease with 77% having at least two chronic diseases, significantly increasing COVID-19 mortality rates compared to their urban counterparts.
Health behaviors also play a role in rural patients who have decreased access to healthy food and physical activity while simultaneously suffering high incidences of smoking. These lifestyle choices compound with one another, leading to increased obesity, hypertension, and many other chronic illnesses. Overall, rural patients that fall ill to COVID-19 are more likely to suffer worsened prognosis compared to urban hubs, a problem only bolstered by their inability to properly access healthcare.
Virus Helping Push New Technologies
COVID-19 has shown the cracks in the U.S. healthcare technology system that must be addressed for the future. As the pandemic unfolds, it’s worth noting that not all lasting effects will be negative. Just as the adoption of the Affordable Care Act a decade ago spurred healthcare organizations to digitize their records, the COVID-19 pandemic is accelerating overdue technological shifts crucial to providing better care.
Perhaps the most prominent change has been the widespread adoption of telehealth services and technologies that connect patients with both urgent and preventive care without their having to leave home. Perhaps the most prominent change has been the widespread adoption of telehealth services and technologies that use video to connect patients with both urgent and preventive care without their having to leave home.
Even if COVID-19 were to fade away on its own, the next pandemic may not. Furthermore, seasonal influenza serves as a reminder that healthcare is not a skirmish, but a prolonged war against disease. Rather than doom future generations to suffer the same plight our generation has with the pandemic, now is the time to develop innovative IT strategies that focus on protecting our most vulnerable citizens by leveraging existing healthcare initiatives to focus on proactive responses instead of reactive responses.
On the Right Road
While some of the most vulnerable people are the elderly, rural residents, and the poor, the good news for them is that CMS has long advocated the use of preventive care initiatives such as Chronic Care Management (CCM) and Remote Physiologic Monitoring (RPM) to track these geriatric patients. To encourage innovation in this sector, CMS preventive care initiatives provide generous financial incentives to healthcare providers willing to shift from conventional reactive care strategies to a more proactive approach focused on prevention and protection. This should attract rural hospital CEOs who have been struggling even more than usual because of the virus.
These factors led to the creation of numerous patient CCM programs, allowing healthcare executives and providers to remotely track the health status of geriatric patients suffering from numerous chronic conditions. The tracking is at a rate and scope unseen previously through the use of electronic media. Interestingly enough, the patients already being monitored by CCM programs overlap heavily with populations susceptible to COVID-19. To adapt existing infrastructure for the COVID-19 pandemic is a relatively simple task for hospital CIOs.
As noted earlier, one growing CCM program that could be retrofitted to deal with the COVID-19 pandemic are the use of telehealth services in rural locations. Prior to the pandemic, telehealth services were one of the many strategies advocated by the CDC to address the overtaxed healthcare systems found in rural locations.
Better Access, Funding and User Experience for Telehealth
Today, telehealth is about creating digital touchpoints when no other contact is possible or safe. It offers the potential to expand care to people in remote areas who might have limited or nonexistent access, and it could let other health workers handle patient screening and post-care follow-up when a local facility is overwhelmed. As a study published last year in The American Journal of Emergency Medicine affirms, virtual care can cut the cost of healthcare delivery and relieve strain on busy clinicians.
Telehealth has also gotten a boost from the $2 trillion CARES Act stimulus fund, which provides $130 billion to healthcare organizations fighting the pandemic. The effort also makes it easier for providers to bill for remote services.
The reason for the CDC and hospital administrators’ interest in telehealth was that telehealth meetings could outright remove the need for patients to travel and allow healthcare providers to monitor patients at a fraction of the time. By simply coupling existing telehealth services with CMS preventive care initiatives focused on COVID-19, rural healthcare providers could detect early warning signs of COVID-19.
Integration Key to Preemptive Detection
This integration at a faster and far greater scale could mean much greater preemptive virus detection through routine telehealth meetings. The effect of telehealth would be twofold on hospitals serving rural and urban health communities. It could slow the spread of COVID-19 to a crawl due to decreased patient travel and improved patient prognosis through early and intensive treatment for vulnerable populations with two or more chronic health conditions.
This integrated combination would shift standard reactive care to patient infections to a new monitoring methodology that proactively seeks out infected patients and rapidly administers treatment to those most at risk of mortality. This new combination of preventive care and telehealth services would not only improve patient and community health but would relieve the financial burden incurred from the pandemic due to the existing CMS initiatives subsidizing such undertakings.
In conclusion, preventative care targeting patients with pre-conditions in rural locations are severely lacking in the context of the COVID-19 pandemic. By leveraging CMS preventive care initiatives along with telehealth services, healthcare providers can achieve the following core objectives.
First, there are financial incentives with preventive care services that will relieve the burden on healthcare systems. Second, COVID-19 vulnerable populations will receive the attention and focus from healthcare providers that they deserve to slow the spread through the use of early detection systems and alerts to their primary health provider. Third, by combining with telehealth service, healthcare providers can efficiently and effectively reach out to rural populations that were once inaccessible to standard healthcare practices.
Cautionary tales are timeless. Take for example Aesop’s Fables, from 620 BC, which included the advisory, “Be careful what you wish for lest it come true.”
Trump and the Republicans who oppose the ACA take heed. You may be inadvertently taking the entire collusive Medical-Industrial Complex down a rabbit hole.
In the opening salvo to the Amy Coney Barrett hearings, House Speaker Nancy Pelosi seemed to be anxious for the fight. Her view of Trump’s strategy? “The president is rushing to make some kind of a decision because … Nov. 10 is when the arguments begin on the Affordable Care Act…He doesn’t want to crush the virus. He wants to crush the Affordable Care Act.”
With no health plan replacement on the shelf, death star Republicans have been struggling to bury this ever more popular piece of legislation for ten years.
In the process, they’ve alienated not only those who believe health care is a right rather than a privilege, and those who support protections for pre-existing conditions, but also those against deceptive skimpy health insurance, those who believe transgender Americans deserve care guarantees, those who demand access to affordable drugs, those who have their under age 26 adult children covered on their family plan, those opposed to cuts in coverage of contraceptives, and those in favor of federal funding of Planned Parenthood clinics.
As Kaiser Health News Washington correspondent, Julie Rovner, recently wrote, “With the death of Ruth Bader Ginsburg, the ACA’s future is in doubt.” In a case now known as California v. Texas, set for presentation to the Supreme Court in just a few weeks, 21 attorneys general (AGs) led by California are seeking clarity on a challenge by Texas led Republican AGs to declare the ACA unconstitutional based on a weak technicality.
Experts like University of Michigan law professor Nicholas Bagley have sounded the alarm that Barrett’s confirmation could mean the deciding swing vote on the case. He writes, “Among other things, the Affordable Care Act now dangles by a thread.”
But charter members of the Medical-Industrial Complex (MIC) aren’t lining up with Mitch McConnell. America’s Health Insurance Plan (AHIP), the lobbying arm for the big insurance companies, says a Trump win here would cast “a long shadow of uncertainty over ACA-based investments and denies health insurance providers, states, individuals, and other stakeholders of much needed clarity.”
The AARP, with its own proprietary Part D pharmaceutical plan, says a bad decision here “plunges millions of Americans into an abyss of prolonged uncertainty because they do not know if they will lose access to life-sustaining health care coverage and consumer protections.”
The American Hospital Association, the Catholic Health Association of the United States, and the Association of American Medical Colleges issued a joint warning that a Trump/McConnell victory here could “have serious, perhaps irreparable, consequences for hospitals and the patients they serve.”
Why would charter members of the MIC be spurred to such progressive, public-spirited action against their very own free-market allies, you might ask.
The answer lies in the “What if?” What if Republicans actions in the Supreme Court on November 10th succeed in throwing American health care into full-throttled chaos in the middle of a pandemic now slated to result in 400,00 plus American casualties by February, 2021…and Joe Biden wins control of the executive and legislative branches of government?
Here are two possible scenarios:
1.Biden rolls back the Trump regulatory actions thus far enacted, and the Democratic Congress reinstates the ACA mandate (the technicality that led to the claims of unconstitutionality of the ACA) thus negating the effects of the negative Supreme Court decision. Medicaid extensions in the 12 remaining purple (formerly red) states proceed. At the same time Biden approves extended eligibility to enroll in a voluntary public option.
2. Biden takes a good hard look at the ACA, and at the Republican led legal challenges that will continue unabated with tacit support for the MIC status quo – and says, “Screw it. I’m going Medicare for All.”
Mike Magee MD is a Medical Historian and Journalist at the University of Hartford. He is the author of Code Blue: Inside the Medical Industrial Complex. ((Grove Atlantic/2019)
A U.S. district judge blocked a rule by the Department of Health and Human Services that would end anti-discrimination provisions protecting transgender patients. In his decision, U.S. District Judge Frederic Block said that the rule violated a recent Supreme Court decision protecting LGBTQ workers’ rights.