New kid on the Block: A tech giant’s spinout takes on urban health for the underserved
CityBlock and the challenge of Medicaid innovation
While Amazon and Apple have captured most of the public interest in the “big tech company enters healthcare” race this year, perhaps the more important development of the year happened without nearly as much fanfare. Sidewalk Labs, the urban innovation arm of Alphabet (aka Google) quietly spun its healthcare project into a new startup called CityBlock.
CityBlock aspires to be a socially integrated direct primary care-style model for underserved urban Medicaid populations, starting in New York City. At the simplest level, they’re betting they can build a partnership-enabled, utility-style approach to care delivery that will break even.
The model is in early days, with an anticipated 2018 launch, but here’s what we know thus far.
- It’s a membership model for Medicaid patients that contracts with local health plans and outpatient clinics. The value proposition for those groups is simple: Better returns and higher quality care.
- Local community integrations with agencies, non-profits, and resource hubs in their neighborhoods, as well as ongoing user experience research with local partners.
- A physical presence, built around brick and mortar hubs for clinical and social engagement, as well as a fleet of hired or partnered clinical and social staff.
- A homegrown tech stack, built around the “Commons” — a data integration platform built (and partnered) to enable a 2-way channel with clinical and patient apps, telehealth and chat features, and a multi-dimensional record of care that includes customized “member action plans” (MAP)
The details are still emerging, and yes, everything tends to look good on a launch website. But a couple of things are clear, even during these early days.
First, this is an important undertaking, both symbolically and practically speaking: A private sector, for-profit company (with Alphabet’s DNA in its blood) taking on the challenge of serving underserved populations head-on represents market maturation of population health management at a minimum, and a small evolution of the public-private social compact more broadly.
Second, as well-thought out and intensive as their planning efforts have been, the Cityblock team will face a tremendous set of challenges in building this into a sustainable business model, let alone a replicable and scalable one.
Taking on Social Determinants From the Outside In
The statistic that will drive the next wave of health system transformation has been echoing through the halls of every health innovation conference in the country: Only 20–30 percent of our health is actually determined by the clinical care we receive, and the rest is driven by where we live, who we spend time with, what we eat, where and how we work, and so on. This concept has been neatly hashtagged into the next innovation buzzword: social determinants of health, or SDOH. As is becoming clear, this carries two implications for would-be innovators and reformers across the three trillion dollar health industry and far beyond it.
One, any attempt to wrangle our nation’s ballooning epidemiology (and subsequent costs of care) will need to involve new methods, partners, and approaches from beyond the clinical world. And two, it should serve as a reality check for what we can really expect from our incumbent health systems. Translation: hospitals today are simply not able or willing to tackle SDOH on their own.
According to a recent report by Accenture, while 90 percent of hospitals collect some form of social determinants data, these efforts remain ad-hoc and unsystematic — a note in a patient’s file, or an undocumented phone call or handoff. The report found that only 30 percent of hospitals are putting this data into the EHR, due to technical limitations, a simple lack of higher order strategy, and in most cases, a lack of dedicated funding and leadership for these initiatives.
While it’s easy to malign hospitals for de-prioritizing the health of their communities, that doesn’t accomplish much, and it doesn’t recognize their own real-world challenges of financial solvency and culture change.
More broadly, as systems thinker Donella Meadows puts it, “The only way to fix a system that is laid out wrong is to rebuild it, if you can….Physical structure is crucial in a system, but rarely a leverage point, because changing it is rarely quick or simple. The leverage point is in proper design in the first place.”
Cityblock’s approach embodies the transition from talking to doing. Their board is stacked with national experts in the field of public health and systems reform. Their technology is built on data flow, not data capture. Simply put, Cityblock represents the progressive anti-hospital; instead of waiting for health systems to reach beyond their walls into the community, they’ve dropped an anchor and planted a flag outside of those walls as a starting point.
A Socially Integrated Model of Direct Primary Care
If it’s accurate to call Cityblock a socially integrated direct primary care (DPC) model, then the logical question follows: What might they learn from the broader DPC industry about supplying outpatient care as a bundled service?
Some quick context: DPC is a service that gives people easier access to outpatient care, particularly in urban markets where population density is high, and patients’ patience is low. The DPC movement rose to fever pitch last year, rallying excitement around the 1–2 punch of alleviating physician burnout and improving consumer experience, while pointing to business-friendly policies like health savings accounts to enable reimbursements.
2017 has proven a more challenging year for this space, with clear winners and losers emerging. Once-promising models have been forced to shut down due to challenges of working with venture capital firms, health plans, and employer customers. Other models have been forced to pivot away from employer clients in search of autonomy and sustainability. Some have pivoted into this concierge space, building completely virtual offerings targeting wealthy, employed millennials directly, complete with all the buzzwords expected by VC firms.
The takeaways here are that in competitive markets, health service providers experience ongoing pressure from both sides: a fickle membership that constantly changes jobs, insurers, doctors, cities; and a payer segment that is looking to keep costs down or even just develop their own concierge offerings. DPC vendors who have been able to find a steady membership base as well as a predictable stable of payers have been able to thrive — Iora Health in the Medicare and MA markets, and R-Health at the state level.
In that regard, Cityblock might face some small advantages. While Medicaid reimbursement is lower than private insurance or concierge care, the program tends not to face the same challenges with member churn as commercial populations. That creates a longer lever for cost-savings, driven by expanded opportunities for engagement, prevention, and condition management.
In Chicago, Oak Street Health is making it work as a successful DPC style primary care network with a fifty percent Medicaid membership. Ampersand Health’s CityLife division has opened up four clinics in Philadelphia, reducing ER utilization by 21 percent and medical spend by 9 percent. In Seattle however, Qliance ran a similar model for the state Medicaid program for nearly 10 years before succumbing to financial difficulties this summer, underscoring the challenges of doing business in the Medicaid space, and in healthcare delivery more broadly.
By combining virtual visits, a progressive data platform, transportation services, socio-behavioral support and more under one roof, Cityblock differentiates itself from both would-be clinical competitors and social agencies. In essence, they’re attempting to carve out a niche as an indispensable health utility model that plugs into existing infrastructure for reimbursement, traditional primary care clinics, and acute care facilities. Whether they can eke out a sustainable business model remains to be seen.
Is there an ROI in serving the underserved?
As a whole, the Medicaid program faces tremendous challenges, making it a challenging market to work in. A Chief Medical Officer at a large data services firm I spoke with recently offered some anecdotal signals that Medicaid-based investments is losing interest from investors, insurers, tech companies, and others, due simply to politics and tremendous market uncertainty with the current administration in DC.
Moreover, as a population, Medicaid beneficiaries also pose a tremendous challenge to care for. These folks tend to be sicker in a clinical context and more vulnerable socioeconomically, making them more difficult to engage with, reach, and communicate with at a system level.
Yet, simply ignoring these problems won’t fix them. State governments will have to figure out how to attain better clinical and economic outcomes for their Medicaid programs, regardless of how favorable the opportunity may be. CMS estimates that Medicaid patients use the emergency room (ER) at twice the rate of non-medicaid patients — while some of this may be justified among a sicker population, some of it is certainly avoidable. The California Healthcare Foundation recently released a new project to identify tech innovation opportunities in Medicaid, citing large markets, state-by-state innovation grants, and a huge potential to save money among other reasons for the private sector to get involved.
Moreover, the research indicates that there are obvious levers to act on. For example, we know that Medicaid patients face longer wait times than privately insured patients. This is where a DPC style offering that combines brick and mortar with virtual access might be able to make a dent, by catching small clinical problems before they escalate. Similarly, we know that when it comes to innovation, Medicaid programs themselves aren’t great at communicating and executing new programs, internally or externally. That seems like a set of problems that a modern-era startup rooted in design thinking and socially integrated technology might be better-equipped to take on than a public agency-administered program.
As an example of both the opportunities and challenges of this space, consider Columbus, Ohio, a city where one of the highest rates of infant mortality in the country is concentrated in a handful of neighborhoods. This classic ‘zip code over genetic code’ problem is exacerbated by high no-show rates for prenatal care appointments, which in turn is a fueled by dysfunctional Medicaid shuttle services. The city turned to CityBlock’s parent, Sidewalk Labs, who designed an SMS-driven engagement platform for pregnant women and new moms to communicate with clinical staff and drivers.
Though the economic opportunity here is huge — at-risk infants cost city taxpayers $38k, as opposed to $4k for a healthy baby — the city remains in a bureacracy-laden planning phase and has not yet acted on Sidewalk Labs recommendations. As the saying goes, when it comes to public-sector innovation, private sector partners can only lead the horse to water.
Might Cityblock, launched to do more than simply advise cities and hospitals by pointing to the solutions, be able to bring a badly-needed, DIY, roll-up-your-sleeves mentality to urban health innovation?
Not Drawn to Scale
Most of the models Cityblock is emulating tend to be focused in one geographic market, and with good reason: In addition to navigating difficult public-sector environment, would-be innovators must invest in local talent, partnerships, and infrastructure. This makes cloning efforts across numerous cities a tremendous challenge. Health care is local, and so too is city government.
As outlined above, the DPC models that have been able to scale across geographies are typically venture-driven, focused on lucrative Medicare Advantage or tech-driven commercial markets. The underserved, who tend to be forgotten locally, were never on most VCs’ radars to begin with.
That’s not to say scaling is impossible. Healthify, one of the emerging leaders in the SDOH integration space, has methodically grown from state to state over the last three years. They’re not in the same genre as Cityblock, focusing more on virtual data services rather than in-person infrastructure. But their growth still offers insights into how scalability might work. For example, Healthify turned open referral standards to expand their resource directory from a handful of states to communities across the country.
More broadly, the zeitgeist in the US HealthIT and healthcare industries appears to be shifting ever-so slightly towards the community. Electronic medical records (EMR) providers announced their intention to shift towards community health records (CHR). The broader shift towards APIs and more interoperable standards will undoubtedly create more of an off-the-shelf toolkit for hospitals to integrate with their communities and impact SDOH. But while Cityblock’s partner-first approach with companies like Redox may make replicability a bit easier from one hospital partnership to another, they are not a tech company, and partnership is not a silver bullet for scalability.
In addition to the ‘how’ of scalability, a key question to consider might be the ‘where.’ CityBlock’s parent company, Sidewalk Labs, recently signed a historic contract with the City of Toronto to serve as a smart city partner, bringing funding, technology, talent, and vision. While this project is at an early stage, critics were quick to point out gaps in Sidewalk’s tech-centric vision — namely, affordable housing and services for the underserved.
Universal coverage in Canada hasn’t prevented socioeconomic health disparities from emerging in Toronto in areas of chronic disease, communicable diseases, and healthy behaviors. City officials and academics have recently been poking around the US for new approaches to innovate public health and primary care. The Sidewalk Labs deal was part of a bigger partnership that will see Google relocating its Canadian headquarters to the city. So while Cityblock has much to prove in its inaugural NYC launch, the stars may be aligning for a bolder public-private partnership a few hundred miles north.
A new era of urban health innovation
It is an exciting time for urban health innovation. The expectations and hopes are high for CityBlock — at least from this analyst, and several others I’ve spoken to. To be sure, the hype around smart cities and technology-centric models of urban reform deserves a healthy dose of skepticism, as do flashy, buzzword-laden, VC-driven models of reimagined primary care in search of a market.
The challenges of working in urban health are numerous, multifaceted, and extensively documented, both among the population CityBlock is serving, as well as the public and private organizations they’re working alongside: Dysfunctional behavior, financial challenges, misaligned incentives, gaps in trust, leadership, evidence, and vision, and more.
But CityBlock seems to have been designed from inception to be focused on addressing specific problems and laying specific groundwork. They’re internally funded, and thanks to Google’s deep pockets, they’ll be equipped to stay the course, and possibly scale if and when the opportunity arises.
Only time will tell how well they’re able to meet their mission — but if success comes down to planning and execution, they’re well positioned, led by a team of doers, with deep expertise in public health, state policy, and health systems change. They’re using technology as a screwdriver, not a sledgehammer, which evokes a pair of my favorite maxims from Dr. Jordan Shlain:
“Silicon Valley likes to move fast and break things; in healthcare, we have to move slow and not kill people.”
“Healthcare is a people business in need of technology, not a technology business in need of people.”
If Cityblock is able to make progress against the goals they’ve set out to face head-on, New York City will be a better place for its vulnerable citizens, while the rest of our cities will gain a compelling new model to consider.
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