When we talk about control over data, we start with metadata. These are vast stores of data on what people are searching for online, data about data.
Google and Meta Platforms (Facebook) use metadata to control advertising. Metadata lets advertisers reach specific consumers for the same price as the general network. The aggregation and organization of markets, once done through journalism, no longer pays.
The same techniques, applied to content, led us to Trump. Victims stay within a walled garden of propaganda. Facts can never get in. People don’t just vote based on this. They refuse vaccines, buy guns, and die. He who controls the data makes the rules.
Streaming is extending this to TV. Google’s YouTube (and the YouTube TV cable replacement) know what you watch, thus what you might buy. They’re gaining enough inventory to kill the TV networks, although TV doesn’t know that yet. Amazon and its IMDB, an ad-supported streamer, can also know what you’re buying, and what you might buy. It can sell this data, and ads based on it, to its own merchants so no dollar ever leaves Amazon’s service. Control of data becomes control of the market.
Thus, the technology press now hates the “Cloud Czars.” The companies whose cash flow built the modern Internet, with all its wondrous deflation, are now “big tech.” It’s why we make such a big deal out of online “privacy.” Finding customers and convincing them to buy is getting too easy, too cheap, and the business is in too few hands.
But there’s another side to the story.
It starts with your health data. Technically, you own it. Whenever you want, you should be able to download a Personal Health Record from any provider. In practice, the Electronic Health Records from which your PHR might be built are controlled by doctors. The sweet, sweet stimulus cash of the HITECH Act, passed a decade ago as part of Obamacare, went to vendors chosen by doctors, who now keep as tight a hold on it as they did the old paper records.
Thanks to Obamacare, and the compromises made necessary to pass it, doctors still don’t have to color inside the lines. They don’t have to prescribe the cheap, generic medicine. They can make you buy the expensive stuff, even if you’re on Medicare. They don’t have to offer just the treatments that make the most sense. They can sell expensive “alternate” treatments and, since they’re doctors, insurers are obliged to pay. There are some limited controls. Such clinics might be deemed “out of network” and even the most well-insured bankrupted into paying their half the cost. Sick people are desperate, we listen to doctors. It’s always been this way.
American health care costs so much because it’s not an integrated system. You go to a doctor, she sends you to a specialist, and you’re never made aware of the business relationships that let them (and the drug salesmen who call on them) fleece you.
Managed care aims to do something about this.
Centene has gained some traction by buying enough medical practices, and specialty clinics, so patients stay within their network, putting data into Centene’s hands. Since they’re paying the salaries, Centene can make doctors stay within the lines, using standard practices and drug formularies. They can fire those who break the rules. This lets Centene handle Medicare and Medicaid contracts at a profit, something most private physicians insist is impossible.
But the revolution is going slowly. Centene still has a miniscule share of the health insurance market, and just a small share of Medicare patients.
Now comes a story I recently did for InvestorPlace.
Clover Health started life as a SPAC, sponsored by promoter Chamath Palihapitiya. I dumped on it. The stock is down 66% since it came public.
But there is something to see here. It’s called the Clover Assistant. CTO Andrew Toy describes it as a clinical support program, built within a managed care company. It delivers first class, state of the art connections between doctors and Medicare patients. Chamath’s pitch was Medicare Advantage, an add-on to regular Medicare bought by middle class Baby Boomers like me. Toy says he’s contracting with health care providers who serve Medicare patients. Clover brings patients and insurance revenue. Clinics bring care and share the data.
Over the last year, Clover has given away iPads, delivered low-cost virtual visits, and provided help in getting COVID vaccine appointments. Toy says the most important thing policy makers can do to control health care costs is to deliver reliable broadband to everyone.
Medicare has tighter cost controls than any other U.S. health care program save the VA, which is single-payer. The savings are welcomed by providers. When offered by Centene as part of the Obamacare exchanges, they’re welcomed by patients.
But the key is this. Data gives Clover the control over spending that Centene has, without having to buy out clinics.
It also illustrates an important point, one made first by the success of the Czars. He who has the data rules, and data is most powerful when part of a system.
