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AI & HEALTHCARE
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What California Lawmakers Did to Regulate Artificial Intelligence |
California legislators recently sent Gov. Newsom more than a dozen bills regulating artificial intelligence, testing for threats to critical infrastructure, curbing the use of algorithms on children, limiting the use of deepfakes, and more. Observers say whether passed bills get vetoed or signed into law may depend heavily on industry pressure, in particular accusations that the state is regulating itself out of competitiveness in a hot field. Debates over the bills, and decisions by the governor on whether to sign each of them, are particularly important because California is at the epicenter of AI development, with many legislators making pledges this year to regulate the technology and put the state at the forefront of protecting people from AI around the world.
Without question, Senate Bill 1047 got more attention than any other AI regulation bill this year - and after it passed both chambers of the legislature by wide margins, industry and consumer advocates are closely watching to see whether Newsom signs it into law. Introduced by San Francisco Democratic Sen. Scott Wiener, the bill addresses huge potential threats posed by AI, requiring developers of advanced AI models to test them for their ability to enable attacks on digital and physical infrastructure and help non-experts make chemical, biological, radioactive, and nuclear weapons. It also protects whistleblowers who want to report such threats from inside tech companies. (https://calmatters.org/economy/technology/2024/09/california-ai-safety-regulations-bills/)
According to ChatGPT 4o, major tech investors and companies like Andreessen Horowitz (a16z) have been vocal in their opposition, arguing that the bill could stifle innovation, particularly for startups, due to its stringent requirements for high-cost AI models. a16z has expressed concerns about an "emergency shutdown" provision that they believe could negatively impact open-source AI models.
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AI Linked to Surge in Medicare Advantage, Commercial Claims Denials: AHA |
Administrative costs now account for more than 40% of hospitals' total expenses for delivering patient care, with a significant portion driven by the rising number of care denials stemming from the growing use of artificial intelligence tools by insurers. Between 2022 and 2023, claims denials surged by an average of 20.2% for commercial plans and 55.7% for Medicare Advantage plans, according to a Sept. 10 brief from the American Hospital Association. "One factor driving this growth is the increased use of machine learning algorithms and other artificial intelligence tools," the AHA wrote. "Poor applications of these technologies can result in automatic denials of care without consideration of a patient's individual clinical circumstances or review from a clinician or plan medical director as required."
Although the 2024 Medicare Advantage final rule provided some guidance around payment denials and practices, the AHA emphasized that AI-driven denials remain a serious issue. In its guidance, CMS raised concerns about the potential for AI tools to perpetuate discrimination and bias. As software technologies evolve rapidly, CMS has sought to clarify the distinction between algorithms and AI. Algorithms are defined as a "decisional flow chart of a series of if-then statements," while AI refers to a "machine-based system" that can make predictions or decisions based on human-defined objectives. Payers can use algorithms to support coverage decisions, but they are responsible for ensuring that these tools comply with CMS's coverage requirements. (https://www.beckershospitalreview.com/finance/ai-linked-to-surge-in-medicare-advantage-commercial-claims-denials-aha.html)
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Bay Area Surgeon Says AI is Advancing Rapidly into Hospitals & ORs |
As a leading vascular surgeon at Marin Health Medical Center, Dr. Allan Conway is pioneering the use of artificial intelligence to treat aneurysms, known as the silent killer. Dr. Conway is using state-of-the-art AI technology called Cydar Maps, which creates a detailed 3D image of the patient's anatomy. "Before, we had to do a lot of X-rays, inject a lot of X-ray dye to show us this map. Now we know exactly where the aorta is, we know where the aneurysm is," Conway said. The AI images of the aneurysm are projected onto the operating room screens, giving doctors a clear view of the problem in real time. The healthcare industry is on the brink of a technological revolution, with AI poised to reshape decision making before, after, and even during surgical procedures. (https://www.cbsnews.com/sanfrancisco/news/bay-area-surgeon-says-ai-is-advancing-rapidly-into-hospital-operating-rooms/)
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AI Boosts Power of EEGs, Enabling Neurologists to Quickly, Precisely Pinpoint Signs of Dementia |
Mayo Clinic scientists are using AI and machine learning to analyze EEG tests more quickly and precisely, enabling neurologists to find early signs of dementia among data that typically go unexamined. In new research published in Brain Communications, scientists at the Mayo Clinic Neurology AI Program demonstrate how AI can not only speed up analysis, but also alert experts reviewing the test results to abnormal patterns too subtle for humans to detect. The technology shows the potential to one day help doctors distinguish among causes of cognitive problems, such as Alzheimer's disease and Lewy body dementia. The research suggests that EEGs, which are more widely available, less expensive and less invasive than other tests to capture brain health, could be a more accessible tool to help doctors catch cognitive issues in patients early. (https://newsnetwork.mayoclinic.org/discussion/ai-boosts-the-power-of-eegs-enabling-neurologists-to-quickly-precisely-pinpoint-signs-of-dementia/)
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HEALTHCARE & GOVERNMENT
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Almost 50 Million Americans Have Had an ACA Plan Since 2014 |
The United States Treasury Department announced, on September 10, that almost 50 million people have obtained healthcare coverage through marketplace exchanges created by the Affordable Care Act since its enactment more than a decade ago. The Department data show that one in seven Americans have been or are covered by the law. (https://www.forbes.com/sites/joshuacohen/2024/09/10/affordable-care-act-reaches-milestone-of-50-million-covered-under-the-law/)
MEANWHILE, the Biden Administration recently awarded a new round of $100 million to Navigator organizations that help underserved communities, consumers, and small businesses find and enroll in health coverage through HealthCare.gov. Navigators can also assist people in helping enroll in or renew Medicaid and Children's Health Insurance Program coverage. (https://www.hhs.gov/about/news/2024/08/26/biden-harris-administration-awards-100-million-navigators-help-millions-americans-especially-underserved-communities-sign-up-health-coverage.html)
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Prop 35 Explained: A Permanent Tax on Health Insurance Providers in California |
Proposition 35 asks California voters to make permanent a tax on health insurance providers, also known as managed care organizations. The measure also sets rules around how the state uses the money collected from that tax. Since California has expanded those who are eligible for Medi-Cal, health care providers have complained the state reimburses doctors, nurse practitioners and others too little for providing services to Medi-Cal patients. The measure requires the state to use the money collected from the tax to be used only to reimburse those Medi-Cal providers for primary, specialty and emergency care plus family planning, mental health and prescription drugs.
Earlier this year, state lawmakers and the governor agreed to use funds from a temporary MCO tax to pay for some state health care costs broadly, as California grappled with a budget deficit in the tens of billions of dollars. As a result, Medi-Cal provider reimbursement rates were not as high as some groups were expecting. The proposal would restrict the state's ability to do that in the future. The federal government would also be involved and would provide revenue to the state as a result of the tax, and would need to ultimately approve this as well, (https://www.kcra.com/article/proposition-35-tax-health-insurance-providers/62120787)
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Health Systems Advocate for Telehealth Prescribing Flexibilities |
Healthcare organizations, along with companies like Amazon, have written letters to Congress and the White House, urging them to safeguard pandemic-era flexibilities that allow for remote prescribing of controlled substances. Specifically, the organizations are calling on House and Senate leaders to include a two-year extension of these flexibilities in an end-of-year legislative package. Additionally, they are urging the Biden Administration to collaborate with the DEA and other relevant agencies to use existing authorities to extend these flexibilities. (https://www.beckershospitalreview.com/telehealth/health-systems-advocate-for-telehealth-prescribing-flexibilities.html)
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White House to Require Insurers Pay for Mental Health the Same as Physical Health |
Health insurers will be required to cover mental health care and addiction services the same as any other condition under a highly anticipated final rule from the Biden administration. Essentially, any financial requirements and treatment limitations like copays, coinsurance and visit limits imposed on mental health and substance use disorder benefits can't be more restrictive than the ones that apply to all medical and surgical benefits. (https://thehill.com/policy/healthcare/4869189-health-insurance-mental-health-addiction/)
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PAYERS, PROVIDERS & CONSUMERS' NEWS & TRENDS
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UnitedHealthcare Launching 'Gold Card' Program to Skip Prior Authorization |
UnitedHealthcare says it will launch a national "Gold Card" program in an effort to improve the prior authorization process. Set to launch October 1, the program is part of the company's efforts to "modernize the prior authorization process and simplify the healthcare experience for consumers and providers." Ultimately, the expectation is that Gold Card provider groups will see a reduction in their total prior authorization request volume, according to UnitedHealthcare. The company "will apply the state criteria first, as required, for the applicable line of business, and then the UnitedHealthcare Gold Card program will take effect for qualifying care provider groups and codes where it does not conflict with state requirements.". (https://www.medpagetoday.com/special-reports/features/111826) (https://www.uhc.com/news-articles/newsroom/gold-card)
MEANWHILE, Aetna aims to automate about 30% of utilization management requests by the end of the year, according to Chief Medical Officer Dr. Cathy Moffitt. (Modern Healthcare)
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How the Ransomware Attack at Change Healthcare Went Down: A Timeline |
A ransomware attack in February, on UnitedHealth-owned health tech company Change Healthcare, likely stands as one of the largest data breaches of U.S. health and medical data in history. Months after the data breach, a "substantial proportion of people living in America" are receiving notice by mail that their personal and health information was stolen by cybercriminals during the cyberattack. Change Healthcare processes billing and insurance for hundreds of thousands of hospitals, pharmacies and medical practices across the country. As such, it collects and stores vast amounts of highly sensitive medical data on patients in the U.S. Through a series of mergers and acquisitions, Change became one of the largest processors of U.S. health data, handling between one-third to one-half of all U.S. health transactions.
TechCrunch recently published an article that provides a timeline of what has happened since the ransomware attack began. Here is a summary of their timeline:
- February 21, 2024: First report of outages as security incident emerges
- February 29: UnitedHealth confirms it was hit by ransomware gang
- March 3-5: UnitedHealth pays a ransom of $22 million to hackers, who then disappear
- March 13: Widespread disruption across U.S. healthcare amid fears of data breach
- March 28: U.S. government ups its bounty to $10 million for information leading to ALPHV capture
- April 15: Contractor forms new ransom gang and publishes some stolen health data
- April 22: UnitedHealth says ransomware hackers stole health data on a "substantial proportion of people in America"
- May 1: UHG CEO, Andrew Witty, admitted to Congress that Change wasn't using MFA on a Citrix portal used for remote access at Change
- June 20: UHG starts notifying affected hospitals and medical providers what data was stolen
- July 29: Change Healthcare begins notifying known affected individuals by letter
(https://techcrunch.com/2024/08/17/how-the-ransomware-attack-at-change-healthcare-went-down-a-timeline/)
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Scientists See Aging 'Waves' at 44 and 60 |
A growing body of research says the aging process might resemble rolling hills more than a slow and steady climb. Age-related changes - slowing metabolism, wrinkling skin - pile up over time but may crescendo at specific points in your life. In a study published in the journal Nature Aging in August, a team of Stanford scientists described "waves" of aging, where major biomolecular shifts happen in the body around ages 44 and 60. (https://www.wsj.com/health/wellness/feeling-suddenly-older-scientists-see-aging-waves-at-44-and-60-1a3fd814?mod=hp_featst_pos4)
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Cedars-Sinai Raises $1 Billion to Support Care & Research |
Los Angeles-based Cedars-Sinai has raised $1 billion in a fundraising campaign to support medical research, clinical care and academic leadership. The health system launched its fundraising campaign in 2018. In the last three years, these single donations enabled Cedars to reach the $1 billion milestone mark: The Shapell Guerin Family Foundation's $100 million-plus gift established the Cedars-Sinai's Cuerin Children's; the estate of Susanne and Ervin Bard gave $143 million to support the health system's advanced health sciences pavilion; and Jim and Eleanor Randal gave $100 million in June to fund advances in surgery. (https://www.beckershospitalreview.com/finance/cedars-sinai-raises-1b.html)
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HEALTHCARE INVESTMENT TRENDS
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Kaiser Permanente & Partners Launch Habitat Health PACE Program with $50 Million Capital Investment |
Habitat Health has been operating in stealth mode for several months, while its economic founders, Kaiser Permanente, Andy Slavitt's Town Hall Ventures, and New Enterprise Associates forged the vision for a PACE (Program of All-Inclusive Care for the Elderly) to launch, initially in Sacramento and later Los Angeles, in collaboration with local community partners. Their Co-founder and CEO, Matthew Bennett, previously served with The Cigna Group for over 14 years, most recently as SVP, Care Delivery (Evernorth). MEANWHILE, Kaiser Permanente has announced its exit from the skilled nursing business, with the closure of its last facility, the Post Acute Care Center in San Leandro. (Modern Healthcare, LinkedIn)
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Four Key Areas for Healthcare VC Investments |
After analyzing 4,000 venture capital-backed deals, Flare Capital has identified four key areas for healthcare VC investments, primarily focusing on transformative healthcare technologies and services. Their investments emphasize: Digital Health: Including mobile solutions, telemedicine, and healthcare analytics to improve clinical outcomes. Value-Based Care: Supporting technologies that help healthcare systems shift to value-based models, which prioritize better care at lower costs. Big Data and AI: Investment in big data analytics and AI to enhance decision-making, reduce inefficiencies, and improve patient outcomes. Infrastructure for Healthcare Delivery: Focusing on secure and scalable platforms that enable more efficient healthcare delivery models. Flare Capital's recent funds are dedicated to early-stage companies addressing these areas, reflecting the growing demand for innovative models that integrate advanced technologies into healthcare. (Becker's)
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